Agricultural Review

A Billion Here, A Billion There

Professor William C Bailey
Chair, School of Agriculture
Western Illinois University
Macomb, Illinois

Some of you may remember Pekin, Illinois native Senator Everett Dirksen.   The famous line – “A billion dollars here, a billion dollars there, pretty soon you are talking about real money” has long been attributed to him. Those words remain as true today as when first spoken nearly half a century ago. With that preface, let’s turn our attention to the US School of Agriculture’s (USDA) 2008 budget, introduced to the world this week.  USDA wants to spend $89 billion next year.  In the big picture of President Bush’s budget, that really isn’t much money, despite Senator Dirksen’s suggestion.  In fact, USDA’s budget was only about 3% of the President’s $2.9 trillion budget.  While one billion is difficult to comprehend, try one trillion.  What would Senator Dirksen have said about a trillion dollars?

So, how does USDA intend to spend 3% of the President’s budget?  USDA has set out some key policy and management goals that provide some guidance.  As I go through the list of those goals, feel free to stand up and salute at any time: enhance America’s competitiveness and sustainability, improve the quality of life, protect our food supply, improve the Nation’s health and protect the environment.  Well, for only $89 billion, any success in meeting those goals seems like a real bargain.  But, as the diplomats said, the devil is in the details.  Let’s peel off another layer from USDA’s 2008 budget onion and see what we can see.

USDA tacked $500 million (point 5 in Washingtonese) onto their budget for the new Farm Bill.  Keep in mind that no one knows, or even has a hint, of what will be in the Farm Bill.  However, USDA took the approach, based on decades of precedent, to anticpate that the new legislation will cost more than current law.  So much for 2008 budgetary concerns. 

Despite the general euphoria sweeping across Illinois corn and soybean country about good commodity prices, the USDA budget indicates that upland cotton and sugar producers are suffering from low prices.  Price support money going to sugar producers will increase from $4 million in 2007 to $302 million in 2008.  Payments to cotton producers are expected to equal that paid to feed grain farmers and constitute nearly one third of all commodity program payments.  This means cotton farmers will receive about $70,000 from the USDA, per farm, under the proposed budget with feed grain farmers getting less than $6,000 per farm.  While who gets the most money from the government is not necessarily a sign of success, it is certainly one way to keep score.  The tremendous imbalance of government payments going to the cotton sector, when compared to the remaining 99% of American agriculture, is staggering.

In its efforts to enhance America’s international competitiveness, USDA puts its money where its mouth is by increasing its 2008 export credit funding by nearly 25% over 2007 levels.  In contrast, while indicating it wishes to improve the quality of life in rural America (I think Western Central Illinois qualifies), funding levels requested in 2008 are actually less than that allocated in 2006.  If a decline in funding levels is seen as a way to improve things in rural America, think how good things could be with even less government money.

USDA will face a variety of challenges as it moves along the long path to obtain the money from Congress to implement its programs.  I wish it the best of luck.