“Dead on arrival” is what many in Congress called the President’s fiscal year (FY) 2018 budget request – which included a discretionary funding cut of 21 percent ($47 billion over 10 years) to the US Department of Agriculture (USDA) – when it was released earlier this year. This week’s FY 2018 funding bill from the House Agriculture Appropriations Subcommittee didn’t quite reject all the President’s proposals to cut vital programs, but it did provide $4.6 billion more in total funding than the President’s request. Overall, the bill provides $20 billion in discretionary funding for USDA and the Food and Drug Administration (FDA), which is still $876 million below the FY 2017 enacted level.

The National Sustainable Agriculture Coalition (NSAC) applauds the Subcommittee for rejecting many of the draconian cuts proposed by the Administration, for example by leaving farm bill funding for conservation programs fully intact. However, we remain concerned about several of the proposed cuts in the House bill and will continue to work with appropriators to address those concerns.

Below, we detail important wins and concerning cuts to programs that matter for sustainable agriculture research, rural development, conservation, and beginning, socially disadvantaged and veteran farmers and ranchers. NSAC will continue to advocate to protect these important programs as the FY 2018 appropriations process moves forward.

For a full breakdown of the bill, you can download our updated agriculture appropriations chart.

Big Picture

At today’s mark up of the bill, members of the Subcommittee – as well as the Chair and Ranking Member of the full Appropriations Committee – all made mention of the major challenges in developing this year’s appropriations bill given the limited availability of funds, as well as the extremely short timeline within which the Subcommittee has had to complete its work.

The Subcommittee’s appropriations allocation was just barely over $20 billion for FY 2018, which is 5 percent lower than the FY 2017 allocation, resulting in cuts having to be spread across many of the program accounts within the Subcommittee’s jurisdiction.

While today’s passing of the bill out of Subcommittee does get us one step closer to final funding levels for FY 2018, it is important to note that Congress still has not set its overall spending limit (for the entire discretionary budget) for the year. The House Budget Committee is currently in the process of crafting a budget resolution for FY 2018, which would include a topline discretionary spending cap, known as a “302A” allocation; however, it is not yet known if or when Congress will consider that budget resolution. If the 302A diverges greatly from what is anticipated, it will likely put the entire appropriations process in peril as the House attempts to finish bills and negotiate with the Senate.

Under normal budget rules, the House Appropriations Committee needs to wait for the overall spending cap to be set in order to set the individual spending allocations for each of its 12 subcommittees, including the Agricultural Appropriations Subcommittee. However, because the Budget Committee has not yet set the 302A for FY 2018, appropriators are agreeing to subcommittee allocations bill by bill rather than setting all 12 at the same time. Without a budget deal for FY 2018, appropriators face the possibility of triggering automatic cuts – known as sequestration – if the twelve appropriations bills end up cumulatively exceeding whatever the Budget Committee ultimately sets as the 302A.

The Nitty Gritty

There are several significant wins in the House Agriculture Appropriations Subcommittee bill, as well as some deep cuts to sustainable agriculture programs. Below we summarize the good and the bad, and discuss where things go from here. 

• Conservation and Energy
• Farm Loans
• Rural Development
• Research and Food Safety
• Socially Disadvantaged and Veteran Farmers
• Other Issues and Legislative Riders

Conservation and Energy

In a major win for the conservation community, the House Subcommittee’s bill includes no cuts to farm bill mandatory spending for the Conservation Stewardship Program (CSP) and the Environmental Quality Incentives Program (EQIP), USDA’s premier working lands conservation programs.

We are pleased that appropriators heard the message from NSAC, our allied organizations across the country, and other members of Congress that any cuts to these programs would have devastating impacts on farmers and ranchers, who use them to address resource concerns on their lands. We commend Subcommittee Chairman Robert Aderholt (R-AL), Ranking Member Sanford Bishop (D-GA), and the other members of the Subcommittee for protecting these programs during the appropriations process. We extend particular thanks to Congressman David Young (R-IA) for taking extra steps to make the case for CSP and EQIP early in the bill drafting process. Preventing appropriations cuts to farm bill mandatory spending is all the more essential in the final year of a farm bill (FY 2018 is the final year of the 2014 Farm Bill) because any cuts in FY 2018 appropriations legislation will carry forward into the baseline that will be used to determine funding levels for the next farm bill.

The Subcommittee also rejected the President’s proposal to gut Conservation Technical Assistance (CTA), which farmers rely on for direct, on-the ground conservation planning support. The House bill proposes $859 million for Conservation Operations, including $760 million for CTA. We applaud appropriators for recognizing the importance of technical assistance and conservation planning. 

The protection extended to USDA’s conservation programs, unfortunately, was not extended to federal energy programs. The Subcommittee’s bill cuts farm bill mandatory funding for the Rural Energy for America Program (REAP) by over 80 percent. REAP provides grants and loans to farmers and businesses for energy efficiency improvements and purchase of wind, solar, or other renewable energy systems. It also provides support for farmers’ energy audits and renewable energy development. In gutting REAP, the Subcommittee is undermining USDA’s primary tool for helping farmers and ranchers reduce energy costs by conserving and producing energy on their land. Additionally, the bill eliminates all remaining funding for the Biomass Crop Assistance Program (BCAP).

Farm Loans

We are disappointed to see that the Subcommittee mirrored the President’s proposal to reduce funding levels for farm loan programs; the bill includes major cuts to Farm Service Agency (FSA) Direct Operating Loans and Guaranteed Farm Ownership Loans. These proposed cuts come at a time when demand for these loans is at its highest, as the persistent downturn in the farm economy has meant that more farmers are struggling to secure credit from commercial banks and are therefore turning to FSA loan programs for assistance.

The bill cuts Direct Operating Loans from $1.53 billion to $1.3 billion, and Guaranteed Farm Ownership Loans from $1.96 billion to $1.39 billion. If enacted, these cuts will prevent thousands of farmers, including beginning farmers, from securing the credit that they need to purchase and operate farms and equipment in FY 2018. Given the dramatic downturn in the farm economy, now is not the time to be restricting farmer access to crucial credit and loan programs – especially for new farmers who are left with few other options to finance their farm expenses.

At today’s Subcommittee markup, Congresswoman Chellie Pingree (D- ME) highlighted the severity and potential impact of these cuts in her remarks. She noted, “these are critical pots of money for my district and I don’t know where they are going to go if the money isn’t there.”

Members of Congress, as well as farm and agriculture groups, have already called for a continuation of existing funding levels in order to meet the pressing demand for FSA loan support. NSAC will work with appropriators, our members, and our allied partners to close the lending gap by extending the increased funding levels provided in last year’s FY 2017 funding package.

Rural Development

Rural development programs also take a serious hit in the Subcommittee’s draft bill, though the cuts are nowhere near as severe as proposed in the President’s FY 2018 budget request. The bill cuts discretionary funding for the Value added Producer Grant Program (VAPG) by 33 percent, from $15 million to $10 million. While we are relieved that the Subcommittee did not follow the request of the President and completely zero out all mandatory and discretionary funding for VAPG, the reduction is still a severe blow to the farmers and ranchers who use the program to help them plan, develop, expand, and promote their farm- and food-related businesses. It is also concerning for rural communities, as they directly benefit from the jobs and economic stimulus created by VAPG-supported businesses.

Additionally, the bill only includes $2.5 million (down from $2.75 million) for the Appropriate Technology Transfer for Rural Areas (ATTRA) program, which provides practical, cutting, edge information to farmers, extension agents, and others. We are disappointed that the Subcommittee would seek to eliminate the $250,000 increase that they just recently approved in the FY 2017 bill. This funding is critical to support the continued operation of ATTRA’s Armed to Farm program, which helps returning military veterans learn to farm and enter the field of agriculture.

Research and Food Safety

The Subcommittee’s FY 2018 appropriations bill makes significant cuts to key agricultural research programs, despite repeated statements by members of both parties that greater investment in agricultural research is desperately needed.

USDA’s flagship on-farm research program, the Sustainable Agriculture Research and Education Program (SARE) is cut by $2.3 million (9 percent), which returns it to its FY 2016 funding level of $24.7 million. In FY 2017, Congress recognized the importance of on-farm research and demonstration by increasing funding for SARE. At the FY 2016 level, the program was able to fund only seven percent of eligible research and education pre-proposals. Bringing program funding back down to $24.7 million would hamstring investments in cutting edge research, and make it even more difficult for farmers and ranchers to develop solutions to the many new and existing challenges that they face. NSAC thanks both Representatives Pingree and Mark Pocan (D-WI) for raising concerns about the shortfall in SARE funding during the markup today.

The Organic Transitions (ORG) research program, which was zeroed out in the President’s budget request, is given level funding of $4 million in the House bill. This is consistent with its funding levels in recent years.

After two straight years of $25 million increases, the Agriculture and Food Research Initiative (AFRI) received no increase in the House’s appropriations bill, meaning it would continue to be funded at $375 million for FY 2018. The President’s FY 2018 budget request included a seven percent cut to AFRI.

Another NSAC priority program, the Food Safety Outreach Program (FSOP), also receives level funding ($5 million) in the House bill. NSAC had recommended that the program be funded at $10 million, given that FY 2018 is the first year that many farms will have to comply with the Food Safety Modernization Act (FSMA) and additional trainings and outreach is sorely needed. With over 100,000 farms that could potentially be impacted by FMSA in the coming year, the current funding level of $5 million is not nearly adequate to ensure that small farmers and processors have the training that they need to comply.

Socially Disadvantaged and Veteran Farmers

We are disappointed that the Subcommittee’s bill did not include any increase in funding for the Outreach and Assistance for Socially Disadvantaged Farmers and Ranchers and Veteran Farmers and Ranchers (also known as the “Section 2501 Program”). The Section 2501 Program is the only farm bill program dedicated to addressing the specific needs of minority farmers, and was expanded in the 2014 Farm Bill to also serve military veterans. It supports institutions and nonprofits that provide critical resources, outreach, and technical assistance to serve these historically underserved producers.

The program was reauthorized in the 2014 Farm Bill at $10 million per year in mandatory funding for fiscal years 2014 – 2018. This is half of the funding that had been available each year prior to 2014, despite the fact that the 2014 bill also expanded the program’s mandate to include serving military veterans. In an effort to get the program back to the level it needs to adequately serve socially disadvantaged farmers and veterans, NSAC, our partners, and members of Congress have advocated for an additional $10 million in discretionary funding for 2501.

We are disappointed in this portion of the House’s bill and hope that the Senate will support socially disadvantaged and veteran farmers in their bill. NSAC will continue working with our partners and members of Congress to push for much needed additional funding in FY 2018.

Other Issues and Legislative Riders

Like the final FY 2016 and FY 2017 appropriations packages, the House FY 2018 bill excludes a number of controversial policy riders that had been proposed in previous funding cycles:

• No GIPSA Rider – We are pleased that the House subcommittee bill does not include what is known as the “GIPSA rider,” which has previously been used to stymie USDA from finalizing basic protections for poultry and livestock farmers under the Packers and Stockyards Act.
• No Organic Livestock Welfare Rider – This rider has previously been proposed in order to prevent USDA from finalizing animal welfare rules for organic production systems that would implement a comprehensive set of animal welfare standards for certified organic production of animals and animal products.

It is possible, however, that the aforementioned policy riders will emerge as amendments in the full House Appropriations Committee mark up; we will therefore continue to monitor and track any developments. The bill does include the following policy riders: 

• School Nutrition Standards – The bill would change some of the school nutrition standards (e.g., stricter sodium targets would be delayed, schools could be exempt from whole-grain standards, and low-fat flavored milk would be allowed).
• SNAP Rule Delay – The spending bill would delay USDA’s final regulation that required convenience stores that accept Supplemental Nutrition Assistance Program (SNAP) dollars to stock a wider variety of healthful foods.
• Chinese Chicken – Within school meals, the bill also would prevent processed poultry imported from China to be served in school meals. Additionally, the bill outlined a list of verification and re-inspection requirements for USDA food safety officials to follow.
• US Iron and Steel – The bill would require rural water, wastewater, waste disposal, and solid waste management projects to use iron and steel produced in the United States.
• Protection from Trans-Fat Lawsuits – As included in previous years, this provision would give some industry cover from litigation against the continued use of trans fats.

Next Steps

Now that the House’s agriculture appropriators have passed their draft out of Subcommittee, the bill’s next stop will be the full House Appropriations Committee. There hasn’t yet been a date scheduled for that mark up, but we expect it will occur within the next few weeks.

The Senate’s Agriculture Appropriations bill is expected to follow a similar path early next month. Once both bills have passed out of their respective appropriations committees, they would, in regular order, move on to floor consideration in the House and Senate. However, given the limited time between now and the end of the fiscal year (September 30), it is quite likely that the two chambers will begin negotiating funding levels immediately after their full committees have acted. These negotiations would eventually be folded into an omnibus spending bill, which is a combination of multiple subcommittee bills.

Given the fact that both the House and the Senate’s work on their 12 appropriations bills is already months behind schedule, due in large part to the late release of the President’s budget request and the absence of budget resolutions, it is extremely likely that Congress will have to pass a short term continuing resolution to avoid a government shutdown on October 1, which is when FY 2017 funding expires.

We will continue to monitor and report on the appropriations process as it moves forward, so stay tuned for further updates.

For a full breakdown of funding levels included in the House’s FY 2018 draft bill, download our updated annual appropriations chart here.