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House Funding Bill Falls Short for Sustainable Agriculture

April 14, 2016


Photo credit: sdmicrofinance.org

Image credit: sdmicrofinance.org

On Wednesday, April 13, the House Agriculture Appropriations Subcommittee passed its funding bill for fiscal year (FY) 2017. Overall, the bill provides $21.3 billion in discretionary funding, which is $451 million below the FY 2016 enacted level and $281 million below the U.S. Department of Agriculture’s (USDA) budget request for FY 2017.

When taking into account USDA’s request that appropriators leave mandatory farm bill funding for conservation programs intact, the actual cut relative to the total USDA request is closer to $640 million. The cuts to farm bill funding, made by ripping open the 2014 Farm Bill, are intended to partially offset the shortfall in the Subcommittee’s allocation (more on that below).

This post breaks down the House Subcommittee bill as it pertains to key sustainable farm and food priorities. For a snapshot of how House appropriators came down on spending for individual programs, you can download our updated annual appropriations chart here.

Big Picture

Late last year, Congress and the White House agreed to a two-year budget deal that set overall discretionary spending caps for FY 2016 and 2017. For FY 2017, the agreement allowed for $15 billion in additional spending over previously set caps for government-wide discretionary programs, bringing the grand total to $1.07 trillion.

Under budget rules, once the overall spending level is set, the Appropriations Committees allocate separate spending caps to each of their subcommittees, including the Agriculture Appropriations Subcommittees.

Given last year’s budget deal, the National Sustainable Agriculture Coalition (NSAC) was hopeful that the specific spending cap for agriculture appropriations in the House and Senate in FY 2017 would be at least level with last year’s overall spending level, or even slightly higher.

Unfortunately, both the House and Senate Appropriations Committees allocated hundreds of millions of dollars less to their respective Agriculture Appropriations Subcommittees this year, relative to enacted spending.

As mentioned above, the House Subcommittee bill provides $21.3 billion, down $451 million from last year. Spending by the Senate Subcommittee is capped at $21.25 billion in FY 2017; however, unlike the House cap, the Senate cap does not account for funding for the Commodity Futures Trading Commission (CFTC). When anticipated funding for CFTC is accounted for in the Senate number, the spending cap becomes $21.5 billion, which is $250 million below last year’s overall enacted funding level.

Details

Below is a detailed breakdown of what’s included in the House bill as reported by the Subcommittee related to:

Research, Education, Extension, and Food Safety Outreach

We are pleased that the bill meets USDA’s request for an increase in discretionary funding for the Agriculture and Food and Research Initiative (AFRI), from $350 million to $375 million. However, this does not include any of the $325 million in new mandatory funding that the Administration had requested for the program. Mandatory funding for AFRI would need to be provided through the farm bill, under jurisdiction of the Agriculture Committee, and would therefore fall outside of the purview of the Appropriations Committee.

Despite this increase in agricultural research spending, we are surprised and disappointed to learn that the bill includes no new funding for the Sustainable Agriculture Research and Education (SARE) program, which is the only USDA competitive grants research program with a clear and consistent focus on sustainability and farmer-driven research.

The increase for AFRI notwithstanding, the lack of an increase for SARE and other competitive research programs demonstrates an alarming lack of support for sustainability and for increasing USDA’s competitive research funding portfolio as a whole.

In order to meet future productivity challenges, farmers need cutting-edge research that is easily accessible, regionally appropriate, and farmer-tested; and that’s exactly what the SARE program does. SARE serves as an important complement to AFRI, identifying innovations and opening new lines of research, which AFRI funds can then further. Last year, Congress recognized this and increased funding for SARE from $22.7 million to $24.7 million. NSAC will continue to work with appropriators as the bill moves forward and fight to secure an increased investment in agricultural sustainability research that meets USDA’s request for $30 million for SARE in FY 2017.

While the bill increases food safety enforcement funding for the Food and Drug Administration (FDA) by $33.2 million, it provides no funding increase for the Food Safety Outreach Program (FSOP), also known as the National Food Safety Training, Education, Extension, Outreach and Technical Assistance program. The FDA recently finalized new, expansive food safety regulations for farmers and food processors under the Food Safety Modernization Act (FSMA), making this training and education program critical to ensuring that producers, wholesalers, and processors are prepared to comply with the new rule.

Unfortunately, the House Subcommittee bill provides no increase over last year’s level of $5 million, which is insufficient to cover training needs of farmers across the county. Regardless of how much more money gets appropriated for FSMA implementation and enforcement overall, without adequate farmer training, the FSMA regulations will fall far short of the goal of improving food safety by failing to work with small and mid sized producers and processors.

The bill maintains level funding of $4 million for the Organic Transitions research program.

Socially Disadvantaged and Veteran Farmers and Ranchers

We are disappointed that the Subcommittee bill includes no new funding for the Outreach and Technical Assistance to Socially Disadvantaged and Veteran Farmers and Ranchers Program, also know as the “Section 2501” program. The 2501 program provides competitive grants to our nation’s community-based organizations, land grant universities, and cooperative extension, to develop and strengthen innovative outreach and technical assistance programs and other resources targeted at historically underserved producers.

NSAC joined USDA in requesting $10 million in discretionary spending for 2501 in FY 2017, which would restore total program funding to its historical level in order to meet the increased demand for outreach and technical assistance by military veteran farmers, and other underserved producers.

Just last week, more than 100 organizations from around the country delivered a letter to appropriators, urging them to meet the Administration’s request for $10 million in discretionary funding for the 2501 program.

We will continue to work with appropriators to secure additional funding for 2501 as the appropriations process moves forward.

Rural Development and Farm Loan Programs

The bill increases funding for Direct Farm Operating Loans from $1.25 billion to $1.46 billion to meet the growing demand from beginning farmers and others who typically lack access to commercial capital. While the increase is a good start and matches the USDA’s request, more recent data suggests that FSA will be out of 2016 funding for direct operating loans by June. Absent a supplemental appropriation, a backlog will mount, requiring a higher 2017 funding level than initially requested. Without a more substantial increase, the current level of loan refinancing could crowd out new beginning farmer lending. NSAC will therefore urge appropriators to get updated figures and adjust the program level as the legislation continues to be debated.

The bill also renews last year’s funding level of $1.5 billion for Direct Farm Ownership Loans, as requested by USDA and supported by NSAC.

We are very pleased to report that the bill meets NSAC’s requests for both the National Sustainable Agriculture Information Service (also known as “ATTRA”) and the Value-Added Producer Grants (VAPG) program, despite the lack of any funding increases in the Administration’s budget request for FY 2017.

The bill increases funding for ATTRA from $2.5 million to $2.75 million, and funding for VAPG from $10.75 million to $15 million, a level that it has not achieved since FY 2014. We commend the Subcommittee for recognizing the vital importance of both of these programs.

ATTRA serves millions of producers and conservation professionals each year. The new funding will be used, in part, to support ATTRA’s Armed-to-Farm program, which assists returning military veterans. Grants through the VAPG program help farmers acquire working capital and conduct marketing and feasibility studies to develop and expand farm-and food-related businesses. Visit our earlier post for more information about USDA’s current request for VAPG applications for FY 2016.

Unfortunately, the Subcommittee bill provides no discretionary funding for the Rural Microenterprise Assistance Program (RMAP) despite an increased request from the President for FY 2017. Although the 2014 Farm Bill provides $3 million in mandatory farm bill spending for RMAP in FY 2016, this amount will be insufficient to maintain the program’s current level of service .

As in previous years, the Subcommittee bill provides no funding for the Beginning Farmer and Rancher Individual Development Accounts (BFRIDA) program. BFRIDA is designed to help beginning farmers and ranchers finance their new and growing agricultural businesses through business and financial education and matched savings accounts. The President requested $1.5 million for BFRIDA grants in FY 2017, which is the level NSAC has championed as well.

Conservation and Energy Programs

Despite receiving half a dozen letters from hundreds of groups urging full funding for USDA conservation programs, the House Subcommittee bill once again launched an assault on the Conservation Title of the 2014 Farm Bill.

The subcommittee bill reduces the FY 2017 enrollment for the Conservation Stewardship Program (CSP) by 20 percent, from 10 million acres to 8 million acres. This equates to a ten-year cut of roughly $315 million from farm bill baseline funding. The bill also cuts the Environmental Quality Incentives Program (EQIP) by $323 million, or nearly 20 percent, and the Agricultural Management Assistance program by 40 percent, or $4 million.

The cuts to CSP and EQIP would also result in a $46.5 million cut to the Regional Conservation Partnership Program (RCPP) because RCPP draws its funding from CSP and EQIP, among other programs.

We are deeply troubled by these cuts, which will have a direct impact on farmers, ranchers and foresters who are trying to conserve soil, water, and other resources on and around their land. We are also highly critical of the Subcommittee’s re-opening of the farm bill. This back-door tactic is a disgraceful workaround, which undoes the agreements Congress made after three long years of work on the Agricultural Act of 2014.

On top of cuts to conservation, the House Subcommittee bill once again slashes farm bill mandatory funding for the Biomass Crop Assistance Program (BCAP) by 88 percent, from $25 million to $3 million.

Fortunately, the bill leaves the 2014 Farm Bill’s $50 million in funding for the Rural Energy for America Program (REAP) intact, and provides a very small amount of additional discretionary funding for loan guarantees as well.

While the cuts in the House bill are very troubling, this is by no means the end of the road for the FY 2017 appropriations process. Conservation programs are a priority for hundreds of organizations across the country, a priority for the Administration in FY 2017, and priority for 33 Senators who recently delivered a letter to the Senate Agriculture Appropriations Subcommittee. As the appropriations process progresses, we will continue to work with our partners to defeat these reckless cuts.

On the discretionary spending side of the ledger, we are pleased that the bill includes a small, but important, increase in funding for USDA’s Conservation Operations account – from $850.9 million to $855.3 million. This is a good start, but still falls short of USDA’s request of $860.4 million for FY 2017.

Conservation Operations funding ensures that the NRCS can help producers assess their operations, develop conservation plans, and enroll in conservation programs. Farmers and ranchers depend heavily on the direct, on-the-ground conservation technical assistance (CTA) that is funded through the Conservation Operations account.

Legislative Riders

In recent years, the annual appropriations bills have become dumping grounds for dozens of policy riders, which should normally be the purview of policy authorizing committees, not the spending committees. Legislating on spending bills has historically been frowned upon, but lately has become more the rule than the exception.

Protecting the Rights of Livestock and Poultry Farmers — As expected, the House Subcommittee bill does not include what is known as the “GIPSA rider”, which for the last four years has denied poultry and livestock farmers basic protections under the Packers and Stockyards Act.

The Packers and Stockyards Act of 1921 is the nation’s primary statute providing basic protections for livestock and poultry growers against fraudulent, deceptive, and retaliatory practices by meatpackers and poultry integrators. Between 2012 and 2015, the GIPSA rider prevented USDA from advancing its fair competition and contract reform rule, which it began to finalize in December 2011.

In the coming weeks and months, it is possible that some members of Congress may attempt to reinsert an anti-farmer rider into the agriculture appropriations bill on behalf of the few, powerful corporations that dominate the chicken industry. NSAC is committed to working tirelessly with our partners to keep the rider out, so that USDA can finally protect contract farmers by preventing retaliation by meatpackers and integrators against those who speak out about contract abuses.

Nutrition and School Meals — Like last year, the House Subcommittee bill attacks attempts at progress in childhood nutrition in a number of ways. The bill renews policy riders to limit new sodium limits and whole grain requirements for school meals, restricts regulation of partially hydrogenated oils, and once again delays a new menu calorie labeling requirement for certain retail food establishments.

Cigars — The bill includes language to restrict FDA’s regulation of cigars, language to which Democrats are expected to strongly object. Recall that last year, the House Subcommittee unsuccessfully attempted to win appropriations language that would restrict FDA regulation of multiple products, including e-cigarettes and cigars.

Cotton — The Subcommittee bill does not direct the Administration to declare cottonseed an oilseed for the purposes of qualifying for subsidized crop insurance, nor does it provide USDA with any new authority to offer additional subsidies to cotton producers. USDA has already indicated that it is moving forward under existing authorities to provide new subsidies to be delivered to cotton farmers via cotton ginners. Last year’s appropriations package also reinstated marketing loan commodity certificates – a feature of farm programs that ended in 2009 – and reversed farm program subsidy limits, thereby allowing mega cotton farms to collect unlimited subsidies through this mechanism.

Next Steps

The full House Appropriations Committee will take up the Subcommittee bill next Tuesday April 19 at 10:30am. We expect the Senate Agriculture Appropriations Subcommittee to debate and vote on its version of the bill later this month. Once both bills have passed out of full committee, the bills would normally move on to floor consideration in the House and Senate. This year, however, it is more likely that the two houses will simply begin to negotiate funding levels and policy riders once the full committees have acted. The product of those deliberations then being rolled into a large government-funding bill at the end of the year.

It is our hope that the agriculture appropriations bill for FY 2017 will be negotiated and passed by the full House and Senate. Barring that outcome, we hope that at minimum the bill is wrapped into a larger funding package toward the end of the fiscal year. However, given the constricted timeline due to the elections and other constraints, it is certainly within the realm of possibility that Congress will simply pass an extension (known as a “continuing resolution”) of last year’s levels and riders.

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

For a full breakdown, download our updated annual appropriations chart here.


Categories: Budget and Appropriations


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