Stakes are high for agriculture during special session to fix budget

ON THE FARM

November 11, 2007|By TED SHELSBY

Farmers have a big stake in the special session of the General Assembly called by Gov. Martin O'Malley to close a $1.7 billion state budget deficit.

Money for agricultural land preservation would be cut drastically, and funding for cover crops would be slashed if lawmakers are unable to reach an agreement on new revenue sources to close the gap, said state Agriculture Secretary Roger L. Richardson.

His warnings were included in a letter to farmers alerting them to some of the proposed reductions and how agriculture would be affected.

At the top of his list was the potential loss of funds for the Maryland Agricultural Land Preservation Foundation's easement program. An estimated $24 million in state transfer taxes dedicated to the land preservation organization could be diverted to the general fund, Richardson said, preventing the permanent protection of about 4,000 acres of farmland.

But the potential impact goes further. The reduction also would prevent counties from offering matching funds that could protect another 1,000 acres.

"We know that some of the 5,000 acres would be lost to development forever, impacting growth planning, the loss of agriculture infrastructure, the loss of open space and impacts on soil and water quality," he said.

During the legislative session that ended in April, lawmakers gave agriculture land preservation a high priority and approved $70 million for the program. Maryland's farmland preservation programs are considered among the best in the nation. State and county plans have preserved more than 400,000 of the state's 2.1 million acres of farmland.

Other ways that Richardson said the budget deficit could affect agriculture include:

A $2 million reduction in the cover crop program.

A cut of this magnitude would eliminate 50,000 acres from the program. Cover crops are considered the most cost-effective way for farmers to prevent soil erosion.

They also go a long way toward improving the health of the Chesapeake Bay by drawing excess nutrients from the soil after summer crops have been harvested.

A cover crop, such as rye, is planted after farmers harvest corn and soybeans. The rye grows through the winter and absorbs excess nitrogen from the fertilizer and manure used during the summer growing season.

A 43 percent, or $1.5 million, reduction to the Maryland Agricultural and Resource-Based Industries Development Corp. (or MARBIDCO).

This program is an economic development tool designed to help farmers and rural businesses with low-interest loans and grants. It works in the same way that other state incentive plans have helped hundreds of larger companies expand or locate new plants in Maryland.

Richardson said that any cuts in MARBIDCO funding would diminish its ability to help young farmers and those seeking to diversify their operations.

A 10 percent reduction in staff at the Department of Agriculture, an elimination of 44 positions.

A staff cut would reduce the department's ability to assist the agricultural industry and protect citizens and the environment through regulatory activities, Richardson said.

Oil affects food costs

Farmers are getting more than their fair share of the blame for the higher prices we are all paying for food at the grocery store, according to a recent report.

With oil prices predicted to reach $100 a barrel, the federal government has been promoting the production of ethanol, a gasoline extender made primarily from corn.

As a result, the price of a bushel of corn has nearly doubled since late 2005 to $4 a bushel.

Corn has many uses. Livestock and poultry farmers use it for feed. It is made into cereal and corn syrup, which is used as a sweetener in many products, including soft drinks.

While the price of corn has been a factor in rising food costs, energy costs have been a greater factor.

This is the conclusion of a recent study by John Urbanchuk, an agriculture economist at LECG LLC, a legal and economic consulting group in Wayne, Pa.

A $1-a-gallon increase in the price of gasoline would result in an increase in food prices that is twice that resulting from a $1 increase in the price of a bushel of corn, Urbanchuk said.

Oil impacts food prices in a variety of ways. It is used in the production of fertilizer, to power farm equipment and for food packaging. It is also used in the transportation of food.

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