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President’s FY 2020 Budget: Sustainable Agriculture Perspective

March 19, 2019


Cover of the President's FY 2020 budget.
Cover of the President’s FY 2020 budget.

For each year President Donald Trump has been in office, he has put forward an annual budget request to Congress that included substantial cuts to federal food and farm programming. This year was no different. Last week, the President released his fiscal year (FY) 2020 budget, which recommended slashing the U.S. Department of Agriculture’s (USDA) budget by 3.6 billion dollars (a roughly 15 percent cut compared to FY 2019 estimated levels). The proposed cuts include both discretionary funding, which is set through the annual budget and appropriations processes, and also proposed legislative changes and cuts to programs authorized and funded in the 2018 Farm Bill.

In passing a 2018 Farm Bill that included $1.8 billion in additional spending (relative to baseline over the next 5 years), Congress recognized that American family farmers needed support in combating a sluggish farm economy and unexpected losses stemming from extreme weather. However, farmers aren’t the only ones who would suffer if the President’s budget cuts were enacted. The proposed budget would also make extreme cuts to conservation programs, agricultural research, food safety assistance, and nutrition programs, and would have devastating impacts on families and communities across the country, both in rural and urban areas.

Thankfully,  the real power of the purse resides with Congress, not with the President. However, the President’s budget proposal does serve an important purpose by telegraphing the priorities of the Administration and giving the nation insight into what programs and initiatives they might be willing to support. As one of the leading advocates of federal policies that support sustainable agriculture, the National Sustainable Agriculture Coalition (NSAC) was extremely disappointed and concerned by the Administration’s FY 2020 request. NSAC therefore urges Congress to do as they have done the past two years running, and reject the President’s shortsighted proposals as they begin drafting their FY 2020 appropriations bills.

Budget Overview

Each year, the first step of the annual appropriations process is for the President to release a budget request to Congress that presents the framework of the White House’s vision for the next fiscal year. The President released some details of his budget last week, and followed up this week with the remaining details on the Administration’s full slate of funding proposals for the next fiscal year.

The President’s budget includes cuts to both discretionary and mandatory funding (also referred to as Changes in Mandatory Program Spending, or “CHiMPS”). Within NSAC’s top funding priorities, some of the most severe cuts to discretionary funding were made to the Sustainable Agriculture Research and Education (SARE) program, the Food Safety Outreach Program (FSOP), and rural development programs. The budget includes cuts as high as fifty percent for both SARE and FSOP (compared to FY 2019 levels), and eliminates discretionary funding for nearly all rural business development programs, including the highly popular Value Added Producer Grant (VAPG) program.

Among the most draconian CHiMPS in the President’s budget was a proposal to eliminate all funding for the Conservation Stewardship Program (CSP), the nation’s only comprehensive conservation program supporting long-term conservation activities.

In addition to funding threats from CHIMPS, farm bill programs may also face additional budget cuts through “sequestration” – automatic funding cuts mandated by Congress in the Budget Control Act of 2011. Every year since 2013, the White House Office of Management and Budget has determined, by formula, the size of the sequestration cut. Generally, the funding cut is set between six and seven percent, and applies across the board to all non-exempt federal programs – including many mandatory farm bill programs. Food and nutrition assistance programs, crop insurance subsidies, and the Conservation Reserve Program (CRP) are all exempt while commodity, conservation, trade, rural development, research, renewable energy, horticulture, and beginning, minority, and veteran farmer programs are all at risk of further automatic cuts.

The sequestration rate for FY 2020 has not yet been set, therefore it is not reflected the President’s budget proposals.

Unpacking the President’s FY20 Budget

In this post, NSAC outlines the Administration’s proposed FY 2020 budget as it pertains to the sustainable agriculture community. Issue areas covered in this analysis include:

Conservation

The Administration’s budget proposal includes sweeping cuts to federal conservation programs, undermining the work of Congress to uphold and strengthen these programs in the 2018 Farm Bill. Additionally, for the last two fiscal years, Congress has stood strong in rejecting any cuts to mandatory conservation funding through the appropriations process. It is disappointing that the Administration would continue to propose cuts to these vital conservation programs that help tens of thousands of farmers each year to enhance their soil, reduce water pollution, and protect wildlife habitat and other natural resources.

Although the farm bill did make some changes to conservation spending, including cutting funding for CSP, it maintained current funding levels across the overall Conservation Title. The 2018 Farm Bill also retains both CSP and the Environmental Quality Incentives Program (EQIP) as stand-alone working lands programs, and made important policy improvements to increase each programs’ flexibility, access, and conservation benefits. Flying in the face of Congress’ effort to sustain the nation’s progress on agricultural conservation, the Administration recommends that CSP be eliminated out right. If enacted, this would prohibit farmers from enrolling in any new CSP contracts, resulting in a cut of more than $7 billion over the next 10 years.

The budget also proposes a $40 million annual cut to the Agricultural Conservation Easement Program (ACEP). In the recently passed farm bill, Congress chose the opposite path – choosing to almost fully restore cuts made during the 2014 Farm Bill by increasing ACEP funding to $450 million per year for agricultural and wetland easements. The Administration’s budget recommendation would result in approximately 15,000 fewer acres protected by agricultural easements through ACEP.

The President’s budget also puts forward several legislative recommendations that would undermine the Conservation Reserve Program (CRP). The budget proposes to eliminate all funding for incentive payments, which are critical to support the continuous CRP (CCRP) enrollment option, and reduces all rental payments to 80 percent of the average county rental rate. This level of rental payments for CCRP would be 10 percent lower than the rate authorized by the farm bill. 

Lastly, the President’s budget includes a proposal to cut more than $70 million (10 percent) from FY 2019 levels for Conservation Technical Assistance (CTA). CTA funding supports NRCS field staff in working one-on-one with farmers to develop and implement conservation plans that address how to best conserve resources on their farms. Staff capacity to do this work at NRCS is already extremely limited; the proposed cuts would effectively cripple CTA’s ability to support NRCS in providing on-the-ground conservation support to farmers.

Nutrition Assistance

In this year’s budget, the Administration continues previous attacks on anti-hunger and nutrition programs, which are critical to feeding rural and urban children, seniors citizens, and families all across the country. Despite the fact that Congress has repeatedly rejected sweeping cuts to the Supplemental Nutrition Assistance Program (SNAP), the President has requested the program’s budget be slashed by $220 billion over 10 years.

Included in the proposed SNAP cuts are provisions to tighten restrictions and work requirements for struggling unemployed and underemployed individuals. In the recently passed 2018 Farm Bill, Congress soundly rejected a similar proposal to restrict SNAP benefits. Congress also rejected the Administration’s proposed “Harvest Box” program, an attempt at weakening SNAP and replacing some of its benefits with the Administration’s unproven new program model. The program was so criticized by experts and SNAP stakeholders alike that Congress refused to even authorize a pilot for the Harvest Box program in the farm bill. The fact that the President would continue to push forward proposals already long-dismissed by Congress suggests that his proposed budget is more about posturing than policymaking.

In addition to the Administration’s attack on SNAP, the White House also recommends a $1.7 billion cut to school feeding programs over ten years. This cut is proposed to be achieved through changes to the highly successful Community Eligibility Provision. If approved, this change would undoubtedly complicate any potential efforts to move forward with a new Child Nutrition Act Reauthorization during this Congress.

Research and Food Safety

At first glance, the President’s budget seems to increase funding for agricultural research. The Agriculture and Food Research Initiative (AFRI), for instance, receives $500 million in funding – an $85 million increase from what Congress appropriated for FY 2019. The budget also includes $50 million to fund new competitive grants to modernize research facilities at Land-Grant Universities.

Upon closer inspection, however, the budget proposes a net decrease to ag research funding – including cuts to key programs that support sustainable and organic research and farming. One of the most dramatic cuts made was to the long-standing Sustainable Agriculture Research and Education (SARE) program, the nation’s only farmer-driven research program. Funding for SARE was slashed to $19 million, a cut of almost 50 percent. In FY 2019, SARE funding reached a record level $37 million, making progress towards the $60 million authorized in the farm bill and supported by others within the broader research community.

Additionally, the budget proposes to:

In addition to the draconian cuts to ERS, what is perhaps more telling is just what research activities would be halted under the President’s plans and what would actually remain of what has become a world renown statistical institution. Not only would the size of the agency shrink, but the scope of research would be whittled down to mostly commodity forecasting. All other economic policy analysis would be terminated, including research on international trade, agricultural research investments, food security, bioenergy and renewable energy, drought resilience, local and regional food markets, beginning farmers, rural economy, food safety, conservation programs, and food and nutrition assistance.

Additionally, the budget requests a staggering $25 million to relocate ERS and its sister research agency, NIFA, outside of the Washington Capital Region. Despite inclusion of report language in last year’s funding bill directing USDA to provide a detailed cost-benefit analysis and justification for such a move, the Administration made no attempt to placate the many concerns of those raised both by Congress and the broader research community.

While almost certain to be rejected by Congress, the President’s proposals shine valuable insight into the motives behind the Administration’s plans to reorganize and relocate the agency. Counter to the claim that this move will save taxpayer dollars while also protecting the integrity of USDA research, it is now crystal clear that the move is undoubtedly a politically-motivated attempt to eliminate altogether the very agency responsible for evaluating (and perhaps casting doubt upon) the President’s policies and the health of our country’s food and agricultural economy.

NSAC and our allies have long been rallying against this misguided relocation – and now evidently an outright elimination – of USDA’s core research agencies and will continue to urge Congress to halt this ill-conceived attempt to eliminate critical research.

Beginning and Socially Disadvantaged Farmers

The 2018 Farm Bill included hard-won provisions that will provide much needed support for training and technical assistance for beginning and socially disadvantaged farmers into the future. The most significant change was the establishment of the Farming Opportunity Training and Outreach (FOTO) program, which combines and permanently protects the Beginning Farmer and Rancher Development Program (BFRDP) and the Outreach and Assistance to Socially Disadvantaged and Veteran Farmers and Ranchers Program (aka “Section 2501”).

Given the overall trajectory of the President’s budget, we were relieved that no mandatory funding was cut from FOTO. However, no additional funding was proposed to restore both programs to their historic funding levels, as NSAC has advocated. The 2018 Farm Bill provides FOTO with $30 million in grant funding for FY 2020 – split evenly among BFRDP and 2501. This amounts to a $5 million cut to both BRFDP and 2501 compared to historic funding levels under the 2008 Farm Bill. NSAC has recommended that an additional $10 million in discretionary funding, split equally between the two programs, be allocated for FOTO in FY 2020. This would restore both programs to their historic funding levels.

Rural Development

Rural development programs fell to the same fate in the President’s proposed budget as so many others. Despite clear opposition from Congress and core stakeholders, the President continues to press for draconian cuts. The Administration’s FY 2020 budget proposes to eliminate nearly every single discretionary investment in rural business development programs, including funding for the: Rural Business Development Grants program, Rural Cooperative Development Grants, the Appropriate Technology Transfer for Rural Areas program, Rural Energy For America Program, and the Value-Added Producer Grants (now a subprogram of the new Local Agriculture Market Program).

There is, however, one bright spot in the President’s budget when it comes to rural development programs: a proposed increase of $80 million (from $920 million to $1 billion) for the Business and Industry Loan Guarantee Program. This program is a critical source of investment capital for rural business development and includes a five percent set-aside for local and regional food projects. A funding increase of $80 million for the program would result in $50 million for loan guarantees to support local and regional food system business investments in rural communities.

Local and Regional Food Systems

Not surprisingly, given the President’s approach to SNAP, his budget proposal also moves to eliminate all funding for the Farmers Market Nutrition Program for Women, Infants, and Children (WIC-FMNP). WIC-FMNP is a critically important program that helps vulnerable populations across the country access healthy food. Eliminating WIC-FMNP would increase hunger and lead to declining health outcomes for the American women and children who are supported by this vital program.

The budget does not, however, propose to eliminate any of the mandatory farm bill funding for the Food Insecurity Nutrition Incentives Program or the new Local Agriculture Market Program (LAMP). As aforementioned, LAMP includes VAPG as a subprogram, as well as the Farmers Market and Local Food Promotion Program (FMLFPP). However, the budget does not request any discretionary funding for LAMP generally or FMLFPP specifically. As part of its packaging under LAMP, FMLFPP received a nearly 20 percent cut to its annual funding. NSAC plans to continue working with our champions in Congress to restore this cut through the FY 2020 appropriations process.

Farm Loans

The President’s budget maintains funding for FSA farm ownership loans at FY 2019 levels, proposing $2.75 billion for guaranteed loans and $1.5 billion for direct loans. FSA loans assist farmers who are unable to secure credit from private lenders necessary to purchase farmland.

However, the President also proposes to decrease financing for farmers to cover annual operating costs. The budget includes roughly $3.2 billion for direct and guaranteed operating loans – nine percent less loan financing than FSA is authorized to provide in FY 2019. Most of this decrease will be to guaranteed loans, and under the President’s plan, commercial banks would have a harder time securing an FSA guarantee for loans they are unwilling to make otherwise.

The decrease in support for annual operating costs is particularly concerning given the prolonged economic downturn, Undoubtedly, decreased access to credit will have the most devastating effect on those least able to financially weather the current economic storm. Provisions in the 2018 Farm Bill would further exacerbate the reduction in credit availability as the bill increases the total amount of loan financing any one farmer can receive.

In practice, this means that FSA is now able to make or guarantee much larger loans, which will mean fewer loans for smaller operations – especially if the pot of total loan funding shrinks. Under the President’s proposal, it’s inevitable that fewer farmers would be able to access the FSA financing necessary to keep their farms in business. NSAC is deeply concerned about the impact that these higher loan limits will have on small and medium sized family farms, as well as beginning farmers and farmers of color.

In a recent farm bill implementation listening session, we delivered our concerns and recommendations directly to USDA. NSAC will continue to urge Congress to reject the President’s proposed cuts, and to instead ensure that FSA has the funding they need to meet anticipated loan demand in the coming year.

Crop Insurance and Commodities

Significant reforms are recommended in the President’s proposed budget when it comes to the delivery of crop insurance and commodity programs; several of which were not included in the 2018 Farm Bill. Core reforms proposed by the White House include:

  • Reducing the average premium subsidy for crop insurance from 62 to 48 percent.
  • Limiting commodity, conservation, and crop insurance subsidies to those users that have an Adjusted Gross Income (AGI) of $500,000 or less.
  • Capping underwriting gains at 12 percent.
  • Tightening commodity payment limits, including eliminating the separate payment limit for peanut producers.
  • Limiting eligibility for commodity subsidies to one manager per farm.

While NSAC supports efforts to reign in egregious subsidy loopholes, we disagree with the slash and burn approach taken by the budget in lieu of applying targeted reforms to crop insurance premium subsidies. If Congress were to move forward with the President’s proposals, subsidies would be cut for all farmers no matter the size of their operation. Such a heavy-handed approach could ultimately unravel the farm safety set. Throughout the farm bill debate, NSAC has advocated for a more precise approach to reform that would increase access to risk management options available to farmers while also ending the era of unlimited crop insurance subsidies.

Given the immense protests from the agricultural community regarding the President’s crop insurance and commodity proposals, it’s hard to imagine that appropriators would seriously consider opening up the farm bill to enact them. NSAC plans to continue our reform work through the farm bill implementation process, and to urge the Administration to close egregious loopholes with regard to payment limits and the definition of “actively engaged” in agriculture.

What’s Next?

As the annual appropriations process moves forward, it is critical to remember that the President’s budget proposal is exactly that – a proposal. Congressional appropriators are under no obligation to take all or even part of the President’s recommendations. As agriculture appropriators have shown in past years, they are more than willing to strongly reject the President’s proposals. NSAC and our members will be working to ensure that Congress once again rejects the President’s proposed cuts, and that they preserve sustainable agriculture’s hard-fought 2018 Farm Bill wins.

In the coming weeks, the House and Senate Agriculture Appropriations Subcommittees will host hearings with USDA officials, giving them the chance to present views on the President’s budget proposals. These hearings will effectively kick-off the congressional appropriations process. Following the drawn out appropriations fight of FY 2019 (which triggered the longest government shutdown in history), we hope that appropriators will be determined to move forward with the FY 2020 process as quickly as possible.

Before the appropriations subcommittees can write and release their individual FY 2020 bills, however, they will have to increase the annual discretionary spending caps for both defense and non-defense programs. Congress previously raised the budget caps for FY 2018 and FY 2019, and will need to do so again in order to prevent automatic spending cuts

As the FY 2020 appropriations cycle continues to move forward, NSAC will work with Congress to ensure that we build upon, rather than undermine, investments in food and agriculture programs – including the progress made by food and farm advocates in the 2018 Farm Bill.


Categories: Budget and Appropriations


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