Dan Murphy   |   Updated: March 31, 2011  

With the continuing urgency of dealing with the federal deficit, and a high-profile caucus of congressional conservatives primed to slash and burn spending for the government’s upcoming fiscal year, there is serious momentum for an attack on both the Defense Department and USDA programing.

Why? because that’s where the money gets spent. those two departments represent the largest chunks of federal allocations overall, and thus are prime targets for budget hawks eager to make good on 2010 campaign promises to rein in federal spending.

As far as military expenditures, that’s a discussion for another day, but suffice to say that virtually every serious thinker across the political spectrum understands the need to somehow, some way scale back our foreign occupations and the enormous costs associated with them.

The coming assault on the farm bill is far more problematic. there are two key areas that loom large in any scenario aimed at scaling back the size and scope of federal farm supports in 2011:

First is ethanol. Initially seen as a wonderful way to ramp up domestic production of a renewable energy source, while reducing foreign oil dependence, the impact of diverting massive amounts of feed corn to ethanol impacted food and feed prices for everyone not raising corn or operating an ethanol blending plant.

Even the idea that ethanol would help keep a lid on gasoline prices is now suspect. A recent study by the National Renewable Energy Lab and McKinsey & Company concluded that the use of ethanol keeps U.S. retail gasoline prices about 17 cents per gallon lower.

Really? with prices surging past $4.00 a gallon? That’s a savings of about 4%. Big deal.

Even such staunch supporters as Sen. Chuck Grassley (R-Iowa) have felt the need to go on the offensive to protect federal ethanol mandates and subsidies, issuing a statement earlier this month that said, “for more than 100 years, the fossil fuel industry has had a monopoly on our transportation fuel. They built the market. They own the infrastructure. They weren’t about to use a product they didn’t manufacture, own or profit from. So Congress created a tax incentive to encourage big oil to use the product and make it available to their consumers. It was paired with an import tariff to make sure that only domestic ethanol receives the benefit of the tax incentive.”

Got that? It’s all about “encouraging” Big Oil to switch to ethanol and make sure the profits stay in the States.

Which isn’t true on either account.

In 2010, about 12.8 billion gallons of ethanol were blended in domestic fuels, used mainly for transportation. But many critics of the nearly $6 billion in subsidies that taxpayers paid to oil companies to blend in ethanol point out that simply increasing overall automobile and light truck fuel efficiency by just 2 miles per gallon would accomplish similar savings on the consumption of gasoline.

Of course, an average reduction of 2 mpg isn’t something automakers can wave a magic wand and get done overnight, but there is no doubt that ethanol subsidies are going to eventually end up on the chopping block—ideally as a rational reduction, rather than a decapitation. But if cutting ethanol subsidies can be traded for maintenance of other farm programs, that may be a net gain for producers specifically and agriculture in general.

The other prime target is crop subsidies. portrayed as “massive giveaways” to “corporate farmers,” USDA’s big-ticket programs to maintain a farm safety net are likely to undergo budgetary surgery next year. Whether that ends up as cosmetic surgery or radical amputation depends on the political tides, but more so on the level of involvement of producers and farmers, who need to make the case that the farm bill is about food security and robust rural economies, not about handouts to fat cat farmers.

Yes, there will likely be cutbacks in farm programs, probably across the board. That’s what Americans voted for last year—smaller government and reduced spending—and that’s what they’re going to get. But not only are support payments and crop insurance programs and conservation initiatives vital to food production over the long term, but near term, with corn stocks are at their lowest levels since the mid-1990s—just two weeks’ worth of grain currently in storage—this is no time to sacrifice farm productivity for a feel-good hatchet job on federal spending that supports food and feed production.

And that’s before even making the case for the importance of public sector research in agricultural science and biotechnology; for investments in rural development and agricultural diversity; for serious support of localized, on-site renewable energy initiatives; and for continued support of overall agricultural productivity to maintain the affordable food supply we currently take for granted.

Taking anything that’s historically been part of USDA’s farm bill for granted next year would be a colossal mistake.

Dan Murphy is a veteran food-industry journalist and commentator

<a href="http://www.dairyherd.com/dairy-news/latest/Commentary-Fighting-for-the-farm-bill-118988119.html?ref=119tag:news.google.com,2005:cluster=http://www.dairyherd.com/dairy-news/latest/Commentary-Fighting-for-the-farm-bill-118988119.html?ref=119Thu, 31 Mar 2011 14:38:08 GMT 00:00″>Commentary: Fighting for the farm bill