The farm bill headed for a vote in the House later this week would increase federal spending by $2.4 billion over the next five years in the energy title alone, the Congressional Budget Office said today.
CBO's "cost estimate report," released today, puts the total spending for the five-year reauthorization of farm, energy, conservation and nutrition programs at $286 billion.
House Agriculture Committee Chairman Collin Peterson's (D-Minn.) bill finds $607 million in savings over the next five years, according to CBO. The total bill, including the "en bloc" amendment that would bump up spending for many programs, advances $5.8 billion in spending increases that need offsets to comply with House budget rules. Peterson expects those offsets to come from the Ways and Means Committee and the energy bill the House approved earlier this year.
Conservation programs would see a $3.8 billion increase, most of which would go to the Environmental Quality Incentives Program and the Wetlands Reserve Program, according to CBO. The bill saves $703 million over the next five years by putting off new enrollments in the Conservation Security Program until 2012.
The numbers fall in line with most of the estimates Peterson was citing throughout the farm bill markup last week.
Within the energy title, CBO said a provision that would let the Agriculture Department sell sugar for ethanol could cut the cost of the sugar support program by $107 million. But economists from the Agriculture Department have said the provision will overall mean net costs to the government.
The federal government currently assists sugar growers with a price-support program and controls on sugar import amounts. Next year, the North American Free Trade Agreement will allow Mexico to export its sugar to the United States in unlimited amounts.
The committee's farm bill requires the government to buy surplus sugar from U.S. producers then sell it to ethanol plants. CBO estimated cost savings because of the sales, but USDA officials say selling the sugar will not likely make up for the cost. The bill also raises the price support for sugar.
"The sugar program will still cost over a billion dollars," USDA chief economist Keith Collins said in an interview. "Basically, this is just shifting the cost."
Collins estimated an influx of sugar into the U.S. ethanol market would not have big effects on corn prices. "The tremendous demand for corn and corn ethanol is growing," he said.
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