(Feb. 20) ARLINGTON, Va. — Brushing off suggestions that the 2002 farm bill should be extended rather than rewritten for 2007, Agriculture Secretary Mike Johanns said Feb. 16 that the next farm bill needs to be “equitable, predictable and beyond challenge.”

Johanns addressed a crowd of about 1,500 Feb. 16 at the 2006 Agricultural Outlook Forum and said an inclusive farm policy will ensure broader support for coming trade agreements.

While some farm lobbyists and members of Congress believe the farm bill should be extended in its current form in view of the uncertain status of world trade talks, Johanns said farm bill listening forums indicate the need for new policies, including the need for more attention to specialty crops.

“The value of specialty crops is now equal to the value of program crops,” he said.

Yet growers of five program crops — corn, wheat, soybeans, cotton and rice — receive 90% of agricultural subsidies, he said.

Johanns said members of Congress have indicated to him that the administration’s trade agenda could be in jeopardy if the needs of the specialty crop industry are not addressed.

“We owe it to all those who took the time to attend farm bill listening sessions. … We are not waiting for result of the Doha Round to propose those things that we believe are the right course for the future of rural America,” he said.

Also addressing the morning session Feb. 16 were Keith Collins, chief economist at the U.S Department of Agriculture; J.B. Penn, USDA’s under secretary for Farm and Foreign Agricultural Services; and Ambassador Robert Portman, U.S. trade representative.

Both Penn and Portman mentioned bilateral and multilateral trade talks, but neither revealed new progress in Doha Round WTO trade talks.

FARM DIP

Despite damage from hurricanes, rising energy costs and barriers to beef exports, Collins said U.S. farmers “climbed the wall of worry” in 2005 to produce record farm income. A substantial increase in government payments helped, he said.

Collins told the forum the U.S. farm economy faces more challenges this year, with higher energy and lower government farm payments anticipated. Farm income is forecast at $65 billion, down $18 billion or 22% from 2005.

In fact, the USDA projects government payments to farmers will decline from $23 billion in 2005 to less than $19 billion in 2006. The expected decline in farm income to what Collins called average levels will be offset by a 6% increase in farm real estate value.

On the positive side, Collins said, U.S. producers will benefit from continued economic growth at home and abroad. The U.S. economy is projected to expand at a 3.5% rate this year, while non-U.S. world economic growth is projected at 3.3%.

Overall trade of U.S. agricultural products is expected to record a narrow surplus this year, Collins said. U.S. agriculture exports are forecast at $64.5 billion, up $2 billion from last year. U.S. farm exports have increased every year since 2001, he noted.

Meanwhile, U.S. agricultural imports are projected at a record $63.5 billion, leaving an agricultural trade surplus of $1 billion. Collins said the trade balance would continue narrowly positive in coming years.

Cash receipts for horticultural crops continue to be a strong growth market for U.S. agriculture, he said.

At $49 billion, U.S. specialty crops now roughly equal the value of program crops. Collins said horticultural products in 1980 equaled only 50% of the value of program crops.

In a baseline projection released at the forum, the USDA said U.S. imports of horticultural products (fruits, nuts, vegetables, greenhouse and nursery products, essential oils, beer and wine) are forecast to continue to outpace exports.

U.S. horticultural imports are projected to grow by about 4% annually, while U.S. horticultural exports are expected to grow about 3% a year, the USDA said.

Meanwhile, the agency said the production value of U.S. horticultural crops is forecast to grow by 2.3% annually over the next decade.