April 4, 2014
This week, the House Agriculture Appropriations Subcommittee held hearings on the Obama Administration’s FY 2015 funding requests for three USDA mission areas – Food Safety, Rural Development, and Marketing and Regulatory Programs, which includes the Agricultural Marketing Service (AMS) and the Grain Inspection, Packers and Stockyards Administration (GIPSA). The Senate Agriculture Appropriations Subcommittee also held a hearing to examine the Administration’s budget request for the Food and Drug Administration’s (FDA).
The Subcommittees will consider USDA’s requests as they write their funding bills for the year. In addition to considering the Administration’s FY 2015 budget requests, the Subcommittees have received requests from Members of Congress, and from outside groups and individuals.
FDA Commissioner Margaret Hamburg testified before the House Agriculture Appropriations Subcommittee last week and before the Senate Subcommittee this week. At both hearings, Members of Congress asked a number of questions about the implementation of the Food Safety Modernization Act.
Members at both hearings raised concerns about FDA’s request to collect user fees, which Congress has rejected for the past three years and will likely reject again. NSAC continues to oppose a “one-size-fits-all” approach to user fees.
At the House hearing, Representative Chellie Pingree (D-ME) flagged that the public comment period on the FDA re-proposals will likely coincide with the busiest time of year for farmers. FDA plans to release their re-proposals in early summer 2014. Commissioner Hamburg acknowledged this point but said that different crops grow at different times of year, and that it would be very difficult to work around the growing season.
Chairman Robert Aderholt (R-AL) expressed concern about FDA presence on farms, and Commissioner Hamburg assured him that FDA presence on farms would be scarce, would not be “heavy-handed,” and would mostly be handled by state agencies.
At the Senate hearing, Ranking Member Roy Blunt (R-MO) opened his comments emphasizing the point that one size does not fit all with respect to regulation of farms and businesses, and later asked questions about why FDA is not just re-proposing all of the draft regulations instead of just sections of the regulations later this year. Commissioner Hamburg responded that FDA has had a very open process for public input and has to meet a number of congressionally-set and court-ordered deadlines for finalizing the rules. She added that the agency is focusing on a set of targeted issues and that the agency is committed to getting the rules right but in a timely way.
Senator Thad Cochran (R-MS) emphasized the importance of having robust exemptions and modified requirements for small family farmers that sell through direct-to-consumer venues such as farmers markets.
We reported earlier this week on questions raised by Representative Pingree and Senator Collins (R-ME) about the animal food regulations.
Marketing and Regulatory Programs
Organic Crop Insurance – Ranking Member Sam Farr (D-CA) began the hearing by asking AMS Administrator Anne Alonzo to explain how her agency’s collection and reporting of organic production data is related to the Risk Management Agency’s (RMA) ability to develop appropriate crop insurance indemnity rates for organic products.
Administrator Alonzo highlighted one program in particular – the Market News program, which seeks to enhance reporting on organic production, marketing, and pricing data, and is a key part of the Organic Production and Market Data Initiative. NSAC is requesting $300,000 in FY 2015 for AMS to continue its organic market reporting as part of the initiative.
Administrator Alonzo explained that RMA does not yet have the data that it needs on organic production in order to develop accurate “price elections” for crop insurance for organic products. AMS has updated its digital records system so that RMA can easily access organic records. According to Administrator Alonzo, more data is needed, however this streamlining will “help RMA categorize the true value of organics and calculate payout rates.”
Organic producers have long faced a disadvantage because organic price elections have not been established for most insurable organic crops. This means that should an organic producer suffers a loss, he or she would receive a payout rate at the conventional price, which is generally considerably lower than the organic price. USDA has issued organic price elections for a few organic crops, but not all.
The 2014 Farm Bill directs USDA to complete the series of organic price elections by the 2015 crop insurance year. This timeline (the 2015 insurance year starts in July 2014) is likely too quick to expect USDA to be able to fully comply, but the message was nonetheless delivered that rapid acceleration is both needed and expected. At an RMA hearing last week, NSAC urged that agency to have a comprehensive strategic plan in place by later this year that will result in completion of a full organic price series by the end of 2016.
Packers and Stockyards Act Enforcement — In addition to AMS, the Marketing and Regulatory Programs mission area includes the Grain Inspection, Packers and Stockyards Administration (GIPSA). As part of last year’s agriculture appropriations bill, representatives of big meat packers successfully lobbied to insert a rider to prohibit USDA from implementing basic contract protections for livestock and poultry farmers who are contracting with meat packers. The rider bared USDA from doing such things as prohibiting meat packers from retaliating against farmers who choose to report discriminatory practices and contract abuses to USDA or their Members of Congress.
That rider lasts for one year, so will expire on September 30 of this year. NSAC strongly opposes the inclusion of the meat packer rider in FY 2015 appropriations legislation. None of the Subcommittee members present at the hearing spoke in favor of the rider. Representative Pingree, on the other hand, spoke out in support of USDA’s effort to implement basic contract protections for these farmers.
“GIPSA ensures enforcement against discriminatory practices and protects against monopolies,” Pingree stated. “Your budget requests an increase to $24 million to ensure fair trade practices. Thank you for the request.” NSAC commends Representative Pingree for standing up for farmers in Maine and across the country.
Local Food Systems – At various points in the hearing, Representative Pingree, Ranking Member Farr, and Representative Jeff Fortenberry (R-NE) talked with Under Secretary Ed Avalos and Administrator Alonzo about the rapid growth and importance of local and regional food systems. Administrator Alonzo highlighted USDA’s work on food hubs, farmers markets, and marketing of locally produced products.
Representative Fortenberry noted, “I come from an area that some of the highest production agriculture in the country, like cattle. At the same time, there’s a growing interest in local food production, which is connecting rural to urban, family to the farm, and creating new opportunities for micro entrepreneurs. This is all very exciting and this growing trend is an important part of USDA’s policy initiatives.”
Rural Development Under Secretary Doug O’Brien began his testimony by talking about the important work that USDA is doing to support the rapidly growing local and regional food sector. O’Brien noted that between 2008 and 2011, local food sales in the United States grew by $2 billion. To support this growth, USDA invests in rural communities through programs like the Value-Added Producer Grants (VAPG) Program. NSAC is requesting $15 million in discretionary funding for VAPG in FY 2015.
Much focus was given to another critical rural development program – the Rural Microentrepreneur Assistance Program (RMAP). RMAP provides microloans as well as business training and technical assistance to owner-operated businesses with up to ten employees. It is specifically targeted at very small business development. NSAC is requesting $3.3 million for RMAP microloans and technical assistance grants for FY 15, in addition to the $3 million the new farm bill makes available for 2015.
For a second year in a row, the Administration’s budget request recommends that Congress combine the RMAP grant component with several other rural development programs. Congress considered this proposal during the FY 2014 appropriations process and during farm bill proceedings, and in both cases, wisely rejected the consolidation proposal.
Representative Sanford Bishop (D-GA) and Representative Fortenberry both spoke to the importance of RMAP, and spoke in opposition to the consolidation proposal. Representative Fortenberry noted that very small businesses are by far the leading job creators in rural America. He pointed to USDA data that shows that RMAP has helped rural business owners create or save thousands of jobs across the country.
Both Fortenberry and Bishop highlighted the grant component of the program and expressed concern that it would be undermined if wrapped into a consolidated “mega grant” program. “Your proposal would merge the grant programs and there’s going to be a lack of focus,” Bishop said. “RMAP grants provide the best bang for the buck. They will get lost in the wash. We need to make sure that the focus remains and that the funding gets out to these intermediary lenders.”
Subcommittee Chairman Aderholt also voiced opposition to consolidating the grant programs.
Next week, the House Agriculture Appropriations Subcommittee will hold its final FY 2015 appropriations hearing. In an effort to move the appropriations process forward, the Subcommittee will hear testimony from USDA’s Farm Service Agency, Foreign Agricultural Service, Risk Management Agency, and Natural Resources Conservation Service in a single hearing on Tuesday, April 8. The Senate Subcommittee will not hold any additional hearings.
We will continue to monitor and report on the process as Congress gets closer to writing its FY 2015 agriculture appropriations bills.
Categories: Budget and Appropriations, Commodity, Crop Insurance & Credit Programs, Competition & Anti-trust, Food Safety, Local & Regional Food Systems, Organic Farming, Risk Management, Rural Development