Archives for May, 2010
Congress Yet to Finish on Pigford, Farm Credit, Child Nutrition Funding
Friday, May 28th, 2010
Last week we reported on several major pending pieces of legislation. At that time, two bills — the so-called tax extenders bill and the emergency supplemental appropriations bill — seemed like they might be resolved by today, the beginning of the congressional recess week for Memorial Day. Alas, while progress was made on both this week, final resolution will now not occur until after the Memorial Day recess is over.
Today the House passed a $115 billion version of the extenders bill, pared down from the earlier nearly $200 billion version. Action came too late for the Senate to take up the bill, however.
The Senate meanwhile last night passed its $59 billion version of the emergency supplemental appropriations bill, but House Appropriations Committee markup of their $84 billion version of the bill was postponed in light of all the action on the House floor on the extenders bill.
With final action on both bills extending into June and the likelihood of significant differences between House and Senate bills, it could easily take several more weeks to reach resolution.
Tax Extender Bill
The tax extender bill as passed by the House retains the three big items related to agriculture — $1.15 billion for the Pigford II USDA settlement with black farmers who faced USDA discrimination, the $1.5 billion agricultural disaster package, and the $868 million one-year extension of the biodiesel tax credits. Unless removed or modified during Senate floor action the week of June 7, these will become law when the final bill is passed.
In the meantime, the $80 billion cut to the bill to pare it down to a $115 billion measure — a cut primarily made to accommodate ‘Blue Dog’ Democrats — will be the cause of a good deal of advocacy during the coming recess week. The cuts included scaling back the number of years for fixing doctor payments under Medicare and eliminating emergency assistance to state governments and COBRA health insurance benefits for laid off workers. Chances are the Senate will consider amendments to add back some or all of those Blue Dog-instigated changes.
The House passed the measure in an unusual two-step fashion. By a vote of 215-204, it passed everything except for the Medicare physician payment fix, which was then voted separately on a 245-171 vote. The Senate will likely re-unite the measures.
Supplemental Appropriation
With respect to the emergency supplemental appropriation, the details of the House bill that will now be marked up after recess were released on Wednesday. Like the Senate version, the bulk of the bill is for the wars in Iraq and Afghanistan plus funding for veterans and aid to Haiti.
For agriculture, like the Senate bill, funding is provided for desperately needed supplemental farm operating loans. The House bill provides enough appropriated dollars for USDA to provide $850 million in loans and loan guarantees. The Senate version, approved yesterday, would provide $950 million. The offsetting cuts to provide funds for these additional loans also differ – the House bill would rescind previously appropriated but unused funds within Farm Service Agency accounts, while the Senate bill would scale back the Biomass Crop Assistance Program.
NSAC supports the emergency farm credit money and we remain hopeful that Congress can finish action on the supplemental after the recess without significant further delay.
In a related note, USDA’s Farm Service Agency today posted a new webpage that specifies how much money is left in each of its rapidly dwindling farm credit accounts and includes frequently asked questions section to help farmers understand the funding situation and what happens as funds expire.
Discrimination Cases
In news related to congressional consideration of funding for the Pigford II settlement, on Thursday government lawyers and lawyers for Native American farmers jointly asked for and received from U.S. District Court for D.C. a continuation until July 29 of the discussion period to work out a settlement in the Keepseagle v. Vilsack case. Also this week, USDA and the Justice Department announced the establishment of a $1.13 billion fund at Justice that would be used to make payments to women and Hispanic farmers who can prove they were discriminated against by USDA. All four discrimination cases pending against USDA thus moved somewhat closer to resolution this week.
Child Nutrition
Switching to the Child Nutrition Act reauthorization measure, three important things happened this week. First, a bipartisan letter from 53 Senators was sent to the Senate Democratic and Republican leaders urging them to take up the $4.5 billion bill approved unanimously by the Senate Agriculture Committee earlier this year.
Second, as part of a defense bill, the House approved, 341-85, a non-binding “sense of Congress” resolution that the child nutrition bill should be funded at the $10 billion level requested by the Obama Administration, noting that hunger and obesity are impairing military recruitment. An earlier letter signed by 221 House Members also endorsed the $10 billion number.
Third, the House Education and Labor Committee announced that after recess a child nutrition bill will be released that will serve as the vehicle for a Committee mark-up later in June. We expect that bill, like the Senate counterpart, to include mandatory funding for the Farm to School program, an NSAC priority.
Whatever the level of total funding in the emerging House child nutrition bill, the big issue will be how to pay for it. The Senate measure uses a controversial cut to farm bill conservation funding for about half of its offset. That cut is facing stiff opposition in the House. However, if the House bill emerges out of Committee with a bigger price tag than the Senate bill, as seems likely, that will make the job of finding offsets even harder. Attention will focus on the Ways and Means Committee and closing egregious tax loopholes as way to fund better school meals for more children.
Final passage of the child nutrition bill will be a race against time in an election-year shortened congressional calendar. Hopefully this week’s letters, resolutions, and mark-upl announcements bode well for a summer in which the pace picks up considerably.
30 Days To Comment on VAPG Rule
Friday, May 28th, 2010
The long anticipated proposed rule for the Value-Added Producer Grant (VAPG) program was published in today’s Federal Register. The comment period for the proposed rule is only 30 days with comments on the regulatory provisions due by June 28, 2010.
We expect the announcement of VAPG awards from the 2009 competition next week, and will post those results when we know them. The 2008 Farm Bill added provisions for local food and mid-tier value chains and strengthened provisions on small and medium-sized family farms and beginning and socially disadvantaged farmers and ranchers which will hopefully be reflected in the types of awards made next week.
To assist with public comment on the proposed rule, NSAC will post an analysis and talking points next week. There are several remaining major sticking points in the proposed rule that will require an outpouring of comments to help ensure they get fixed.
VAPG has been operating very successfully without a rule since its inception in 2000, issuing competitive grants to farmers, groups of farmers, and farm cooperatives to create or develop value-added producer-owned businesses.
However, the Obama Administration has signaled that they will not issue a Notice of Funds Available (NOFA) in 2010 until the rule process is complete. This decision would have been fine had the rulemaking been completed in a timely fashion. Now, however, two years after passage of the farm bill, we are already eight months into the fiscal year and only at the proposed rule stage. Completing the rulemaking, issuing the NOFA, allowing adequate time for proposals to be written and submitted, evaluating submissions, and making awards all in the four months left in this fiscal year is close to impossible. Nonetheless, we will continue to urge the bureaucracy to move faster, though will insist that the NOFA include a reasonable amount of time for proposals to be written and submitted.
Comments on the proposed rule may be submitted online here; by mail to Branch Chief, Regulations and Paperwork Management Branch, U.S. Department of Agriculture, STOP 0742, 1400 Independence Avenue, SW., Washington, DC 20250–0742; or by courier to Branch Chief, Regulations and Paperwork Management Branch, U.S. Department of Agriculture, 300 7th Street, SW., 7th Floor, Washington, DC 20024.
For more information, contact Andrew Jermolowicz at USDA, (202) 720–7558, CPGrants@wdc.usda.gov.
Rural Microentrepreneur Assistance Program Rule is Out with NOFA to Follow
Friday, May 28th, 2010
Today’s Federal Register included the interim final rule for the Rural Microentrepreneur Assistance Program (RMAP), one of NSAC’s 2008 Farm Bill priority program. The interim rule goes into effect on June 28, 2010, but the USDA will be taking public comments until July 27, 2010.
RMAP is a new program created in the 2008 Farm Bill to provide entrepreneurs in rural areas with the skills to establish new businesses and continue operation of existing rural microenterprises. It provides loans and grants to Microenterprise Development Organizations (MDOs), which in turn provide technical services and distribute microloans to rural microentrepreneurs.
NSAC expects that the Notice of Funds Available (NOFA) will be announced in the next week or two. There is currently $13 million available for awards to MDOs. That funding amount is combined from fiscal years 2009 and 2010.
We are delighted the interim rule is finally out and that the NOFA will not be far behind. However, that delight is tempered by the fact the interim rule has major flaws with respect to the technical assistance and training elements of the program that could hamper its effectiveness.
We will be issuing an alert with talking points for public comments in the near future.
Public comments may be submitted online here; by mail to Branch Chief, Regulations and Paperwork Management Branch, U.S. Department of Agriculture, STOP 0742, 1400 Independence Avenue, SW., Washington, DC 20250–0742; or by courier to Branch Chief, Regulations and Paperwork Management Branch, U.S. Department of Agriculture, 300 7th Street, SW., 7th Floor, Washington, DC 20024.
Funding for Energy Audits and Renewable Energy Development Assistance
Friday, May 28th, 2010
On Thursday, the USDA Rural Business-Cooperative Service announced the availability of $2.4 million dollars in competitive grants for energy audits and renewable energy development assistance to agricultural producers and rural small businesses as part of the Rural Energy for America Program (REAP).
State, tribal, and local governments, universities, rural electric cooperatives, and public power entities are eligible to apply. Applications are due by 4:30 p.m., local time on July 26, 2010. Applications may be submitted electronically at Grants.gov or to your Rural Development State Office. To obtain application materials, or for questions about the application, contact your Rural Development Energy Coordinator — the full list of contacts is available in the Federal Register notice, here.
REAP is composed of several types of grants and guaranteed loan programs. The notice of funds referenced above is the second of three stages of implementation. The first notice in late April announced $87 million in grants and loan guarantees for projects to develop and/or construct renewable energy systems and energy efficiency improvements. The application process for these grants will remain open until June 30, 2010.
The final piece to be implemented will be grants for the study of renewable energy feasibility. The Federal Register notice also notes that the Agency intends to publish a proposed rule on REAP that will revise the current program to include these renewable energy feasibility study grants, and add a new section on the energy audit and renewable energy development assistance grants.
Mobile Slaughter Units and Untapped Markets
Tuesday, May 25th, 2010
On Tuesday USDA’s Food Safety Inspection Service (FSIS) published a compliance guide to help operators of mobile slaughter units understand the regulatory requirements that pertain to them. It should also be must reading for entrepreneurs considering building a mobile slaughter facility.
FSIS is requesting feedback on the guidance by July 26 and will incorporate comments and revise the guidance as warranted.
Mobile slaughter units (MSU) are a response to the increased demand for high quality, locally produced and specialty meats at a time when consolidation in the meat processing industry has made it less flexible and responsive. Mobile units can process smaller quantities of meat humanely and cost effectively and their mobility allows them to provide services closer to where the animals are raised. Creating opportunities to process meat locally retains dollars in rural communities where they can generate additional economic activity.
Coincidentally, the New York Times Sunday Magazine featured a story on a new mobile meat unit in the Northeast, sponsored by Glynwood. The piece by Christine Muhlke is cleverly titled “Movable Beast.”
USDA on Tuesday also released a preliminary study documenting where there are large concentrations of small meat and poultry producers without access to processors. Recognizing the untapped economic potential of this sector, USDA’s Know Your Farmer, Know Your Food initiative highlights available grant and loan programs and FSIS now offers several resources for small and very small meat processors on its website, including the Small Plant Help Desk.
Organic Research RFA Focuses on Environmental Services
Tuesday, May 25th, 2010
USDA is making $4.7 million available through the Organic Transitions integrated research, education, and extension program to fund projects examining environmental services provided by organic agriculture that contribute to climate change mitigation and support soil conservation.
The Request for Applications (RFA) prioritizes two areas of much-needed research:
1. Documenting and understanding the effects of organic practices on soil quality, erosion, and carbon sequestration; and
2. Developing improved technologies, methods, models, and metrics to document and optimize the environmental services and climate change mitigation ability of organic farming systems.
In general, the Organic Transitions program provides a specialized complement to the more general purposes of the Organic Agriculture Research and Extension Initiative (OREI) and, unlike OREI, can fund the development of formal education activities (e.g., curriculum development).
The focus of this year’s RFA on environmental services and climate change mitigation is timely given the ecological basis for organic systems and the significant role that organic agriculture is poised to play in combating climate change.
Unfortunately, the program was entirely eliminated in the President’s FY 2011 budget proposal, and unless Congress rejects the cut, funding for organic research will be significantly diminished. With this proposed cut, funding for organic research would be approximately 1.3% of the budget of USDA’s National Institute of Food and Agriculture, despite the fact that 3.5% of food products sold in the U.S. are sold under the organic label.
To stay informed and take action on preventing these cuts, sign-up for NSAC’s action alerts.
The deadline for submissions to ORG is July 1, 2010. To access the Organic Transitions RFA, click here.
Moving Legislation – What’s in it for Food and Agriculture
Friday, May 21st, 2010
With the financial regulation bill approved in the Senate and moving to conference with the House-passed bill, and with the one week Memorial Day recess just a week away, several key legislative items are starting to move quickly. A brief review follows, highlighting what is in the bills for food and agriculture.
Budget Resolution – A full-fledged congressional budget resolution outlining spending and deficits for next year and beyond now seems totally dead in the water. When Congress fails to pass a budget resolution, the alternative is a so-called “deeming resolution” specifying spending levels for the following fiscal year. Unlike the budget resolution, the deeming resolution does not include funding and deficit projections for the 5 and 10 years following, making it a somewhat easier vote in an election year at a time of high deficits.
The latest read on the deeming resolution is that it would likely freeze domestic discretionary spending in 2011. There will very likely be an attempt to attach it to the supplemental appropriations bill (see below). If the deeming resolution cannot hitch a ride on must-pass legislation in the very near future, it is also possible there may be an informal agreement to simply accept its spending outlines as a given. One way or the other, an agreement must be reached so that the appropriations committees can start in on their annual funding bills.
Once the overall spending outline has been agreed to, the appropriations subcommittees will battle over how big a slice of the overall budget pie they will receive to work with. Agriculture did fairly well in that respect last year, but with the likelihood of a freeze, the bidding could prove tougher this year. The subcommittee allocation, which should be set in early June, will be the first key determinant in the ability of the food and ag spending bill to respond to sustainable agriculture priorities. NSAC is encouraging agricultural leadership to fight for a fair allocation.
Supplemental Appropriations Bill – Both houses of Congress will be taking up the $60 billion supplemental appropriations bill (H.R. 4899) next week. In addition to emergency funding for the war in Iraq and Afghanistan and for a variety of US natural disasters, the Senate version of the bill includes an important funding increase for direct and guaranteed farm operating loans and guaranteed farm ownership loans. Without the supplemental funding, USDA’s Farm Service Agency will run out of loan funds next month for the rest of the year.
Also included in the Senate bill is an $18 million appropriation for emergency forest restoration for lands damaged by natural disasters. The bill pays for the $31.6 million cost of increasing lending authority by $950 million and the $18 million forestry item by cutting spending for the Biomass Crop Assistance Program (BCAP) by $50 million, capping BCAP at $552 million for the year. BCAP was originally intended to be a fairly small program, but spending for it has skyrocketed under a very broad interpretation of the law by USDA. NSAC strongly supports the credit provision.
The major debates on the supplemental bill will center on fights over costs and how much of the bill or new additions to the bill — including an upcoming move to add $23 billion for emergency support to keep teachers from being laid off due to local budget cuts — should be offset with spending reductions in other programs.
Tax Extenders Bill — The $200 billion “American Jobs and Closing Tax Loopholes Act” (H.R. 4213) is also moving rapidly toward floor consideration in both houses. It extends a wide variety of targeted tax expenditures as well as unemployment benefits. The bill also carries emergency aid to local government, emergency disaster relief, a summer jobs program, a multi-year postponement of the scheduled cut in Medicare physician payments, and a major reform in the size of fees recovered from oil companies in the wake of oil spills.
For agriculture, the bill includes $4.6 billion to pay for settlements in the Pigford (black farmer) and Cobell (American Indian) lawsuits. NSAC supports the inclusion of the long overdue funding for the settlements.
The bill also includes a $1.5 billion agricultural disaster relief package, including the controversial $1 billion in supplemental direct payments to producers with a 5 percent or greater lass in production.
In the tax extenders portion, the biodiesel production tax credit, small agri-biodiesel producer credit, and biomass diesel tax credit are all extended for one year, at a cost of $868 million. The charitable deduction for contributions of food inventories is extended for a year ($78 million cost).
Portions of the bill, including many big ticket items, have exemptions from “pay-go” rules and hence do not have to be offset under current congressional rules. Other parts of the bill do, however, need offsets, and that is where the “tax loophole” closing part of the bill’s title comes from.
The bill would force investment fund managers to pay regular rather than capital gains rates on a portion of income receive as “carried interest,” stop employment tax avoidance by professional service businesses, and close a wide variety of abuses of the foreign tax credit system for multinational corporations. Together, the loophole closers yield close to $60 billion in offsets.
With many politically important provisions expiring in coming weeks, there will be huge pressure to get this bill finished before the Memorial Day recess, so there should be lots of action next week.
Child Nutrition and Food Safety Waiting in the Wings – While the supplemental and tax extender bills, along with House-Senate conference on financial regulation, are front and center right now, waiting in the wings for Senate floor time after the recess are the Child Nutrition Act re-authorization bill and the Food Safety Modernization Act. There are no promises at this point for floor time for either measure, though both regularly appear on lists of bills needing floor consideration this year. Either or both of them could possibly be on the Senate floor between the Memorial Day and July 4 recess weeks, though nothing at this point is certain.
In the meantime, a draft of the House version of the Child Nutrition bill is expected next week, with markup in the House Education and Labor Committee expected sometime during the month of June.
USDA releases comprehensive Local Food Systems Report
Friday, May 21st, 2010
This week, USDA’s Economic Research Service (ERS) released a comprehensive report on Local Food Systems drawing together findings from the existing academic literature and ERS analysis. The report is divided into five main sections:
- local food definitions
- characteristics of local food suppliers
- demand for local food from consumers and institutions
- government programs and policies affecting local food systems
- and existing research on the benefits of local food systems.
As acknowledged in the first section of the report, “local” is difficult to define; because of this, the report tends to uses direct-to-consumer and direct-to-institution markets as a proxy for measuring and evaluating the market for local food.
Much of the report covers well-trodden ground; it outlines the growth of direct markets for local food citing evidence like the growth in farmers markets and CSA programs; it describes the typical suppliers of local food: small, located in metro areas, generally selling produce, and often engaged in other entrepreneurial activities such as agritourism, value-added products, or alternative energy production.
The section on “Barriers to Market Entry and Expansion” begins to move the conversation beyond the traditional focus on direct markets to the challenges to scaling up local food. The report highlights farmer capacity for marketing activities and quality assurance, supply chain infrastructure like storage facilities or processing plants, recordkeeping, and regulatory uncertainties as some of the major barriers to increasing supply to match market demand.
The section on programs and policy outlines some federal, state and local level policies that might impact markets for local food, but does not include a deep analysis of these policies to-date and does not include analysis of policies that might hinder the development of local food systems.
The final section of the report reviews existing research on the benefits of local food systems in the four main areas of economic development, health and nutrition benefits, food security, and effects on energy use and greenhouse gas emissions. It also mentions that local food systems have the potential to generate a number of public benefits beyond the four areas identified, including in the area of food safety.
In general, ERS concludes, there are a number of gaps in the research on the effects of local food systems; for example, research on the economic benefits of local food often doesn’t take into account the cost of substituting local products for the alternative. The effects of local food systems could also be “difficult to discern” because of their proportionally small share of the national food market.
The report ends with a call for further investigation: more research on these topics will “help to determine situations when supporting local foods can support policy goals.”
NSAC continues to work on policy to support the development of local and regional food systems. Click here to access our Guide to USDA funding for Local and Regional Food Systems.
Farmers Market Directory Registration Deadline Extended
Wednesday, May 19th, 2010
USDA has extended the deadline for registering farmers markets for inclusion in the National Farmers Market Directory until June 4, 2010. The Directory is used by the general public and has also become an important tool for policymakers and researchers. The deadline extension is part of an effort to ensure the count is accurate as possible. Go to this USDA webpage for complete details on how to register a market.
The 2010 edition of the Directory will be released in late summer or early fall 2010.
In 2009, the Directory recorded 5,274 markets, a remarkable 13 percent increase over the preceding year and 185 percent increase over a decade earlier.
DOJ/USDA Announce May 21 Workshop on Competition in the Poultry Sector
Sunday, May 16th, 2010
The Department of Justice and U.S. Department of Agriculture have announced the schedule and panelists for the May 21, 2010 joint workshop on competition and regulatory issues in the poultry sector. The workshop will be held in Normal, Alabama at the Ernest L. Knight Reception Center at Alabama A & M University from 9 am to 5:15 pm. Those planning to attend should register at the workshop website.
NSAC is pleased to see that two of the Workshop panels will include poultry growers. A morning panel includes a discussion among current growers, former growers, and government officials on poultry contract terms and control of inputs that affect grower compensation by the large poultry processor-contractors. Also on the panel is Genell Pridgen of Rainbow Meadow Farms in Snow Hill, North Carolina, a farm that has been in her family for seven generations. Currently, Genell, her husband, children, and parents live and work on the farm. They have transitioned from tobacco and poultry contract production to raising pastured livestock and poultry, which are direct marketed. Genell will address the effects of the concentration of processing companies on independent poultry producers.
A second panel includes poultry growers, academics, poultry processors and others who will address changes in poultry production and enforcement under the Packers & Stockyards Act. The Rural Advancement Foundation International (RAFI-USA) website for Contract Agriculture Reform has detailed information and factsheets on the problems facing contract poultry growers in dealing with large vertically integrated poultry processors.
Additional information, including submitted public comments and transcripts for past workshops and information on future workshops can be found at the Department of Justice Antitrust Division’s agriculture workshop website. While no streaming webcast will be available, transcripts will be available for May 21 workshop at a later date on the Antitrust Division’s website. Individuals seeking more information on the workshops should contact agriculturalworkshops@usdoj.gov.