June 24, 2011
On Thursday, June 23, the Senate Agriculture Committee held a hearing with heads of four USDA mission areas to talk about possibilities for streamlining USDA programs, rooting out inefficiencies, and measuring performance. The hearing also touched on ongoing efforts to crack down on fraud and abuse.
In one of the harder hitting lines of questioning, former Committee Chair Saxby Chambliss (R-GA) pressed USDA Under Secretary for Rural Development Dallas Tonsager on why the farm bill’s Rural Energy for America Program (REAP) was suddenly being used to subsidize the installation of blender pumps at gas stations. USDA announced in April that ethanol blender pump subsidies are now an eligible use for REAP, a program established to help farmers improve on-farm energy efficiency and adopt renewable energy technologies.
Chambliss noted that particular use of the program was discussed and explicitly rejected in the conference committee to finalize the 2008 Farm Bill, and also pointed out that the Department of Energy’s Clean Cities Program is already funding the same infrastructure. He also noted that the regular purposes of REAP were very popular among farmers and the program is already oversubscribed.
In response to the Chambliss questions, Under Secretary Tonsager noted that the Department’s lawyers cleared the new use for the program. Tonsager also justified the program expansion as something that is important for gas consumers.
In introducing the hearing, Chairwoman Debbie Stabenow (D-MI) explained the special need in times of budget pressures to look toward streamlining and efficiencies to not only save money, but also make programs more effective and user-friendly. She brought up conservation programs as an example, asking rhetorically, “We have some 20 different conservation programs. Do we need 20?” Tonsager also mentioned the difficulty of managing some 40 rural development programs.
The urge to streamline or consolidate programs is understandable and very likely a good idea, though of course the devil is in the details and the danger lurks that streamlining and consolidation could become just a fancy name for substantial disinvestment.
From the vantage point of the USDA witnesses at the hearing, while they have some authority to explore administrative efficiencies, improved program evaluation, and stepped up enforcement to prevent abuse, they do not have the authority to consolidate programs. All of those conservation programs and rural development programs mentioned in the hearing, for instance, were authorized by Congress – some recently, some in the distant past – and all of them are funded by Congress each year in the annual appropriations bill. Major changes, then, would need to be made legislatively.
Under Secretary for Natural Resources and the Environment Harris Sherman addressed NRCS’ streamlining initiative that will use advanced information technology improvements to allow its field staff to spend more time in the field rather than in the office. Sherman explained that when fully operational, the initiative will allow field staff to spend three-quarters of their time in the field as compared to not more than 40 percent currently.
Sherman also answered a question about the Conservation Stewardship Program (CSP) from Ranking Member Pat Roberts (R-KS) by noting the on-site verification process being used in implementing the 2008 Farm Bill’s Conservation Stewardship Program has cleared up problems related to farmer self-verification in the implementation of the original 2002 Farm Bill’s Conservation Security Program. Those problems were not widespread, but did result in some ineligible payments being made in some areas of the country. Those payments to ineligible producers from the original CSP are being recovered.
A second panel followed the USDA witnesses and included a farmer. Brent Blankenship, a wheat grower from Washington State farming over 10,000 acres, participates via multiple business entities and joint ventures in the commodity program, revenue insurance, Conservation Reserve Program, CSP, and in 2008 in the disaster program.
He estimates that interactions with USDA take as much as 25 percent of his management time. He urged more effort to regularize eligibility standards and payment limits across program and agency lines. He also endorsed the notion that FSA should run the sign-ups and issue the payments for conservation programs rather than NRCS, noting that FSA allows multiple payment limit eligibilities for the same farm with respect to commodity subsidies whereas NRCS caps CSP at a maximum of two contracts and payment eligibilities per farm.
That last point illustrates an interesting point with respect to the “streamlining” debate. The difference in per farm payment limitation rules between commodity programs and CSP is not primarily a matter of lack of administrative coordination or integration, but rather a policy choice made by Congress in the farm bill. Stricter limits apply to CSP as a matter of law, not discretionary administrative choices. The preference for change in administering agency may then in part be a proxy for a different issue – how best to cap the various forms of farm financial assistance and to target limited dollars in a sound manner.