Weekly Update – May 4-8, 2009
May 12th, 2009
Organic Initiative Funds Now Available!
First Sign up Period: May 11 – May 29
In dialogue with NSAC, USDA’s Natural Resources Conservation Services (NRCS) has reserved a special $50 million pool of funding for a new Organic Initiative under the Environmental Quality Incentives Program (EQIP). The Initiative, announced on Tuesday May 5 by USDA Deputy Secretary Kathleen Merrigan, will provide payments and technical assistance to transitioning and existing organic farmers who adopt NRCS conservation practices used in organic production systems.
The program will be available in every state and county. Sign up begins for this special pool of funds on Monday, May 11th and continues through May 29th. Given the short sign up period we’ll need all hands on deck to get the word out. An NSAC alert to producers is here. Feel free to modify it any way you like and send it out over your networks.
A number of NSAC member organizations will be providing assistance to farmers with questions about the program: Midwest Organic and Sustainable Education Service, Organic Farming Research Foundation, Northeast Organic Dairy Producers Alliance, National Center for Appropriate Technology, Center for Rural Affairs, Agriculture and Land Based Training Association, Practical Farmers of Iowa, Kansas Rural Center, Florida Organic Growers.
For more details on the Organic Initiative see this NSAC staff memo and this memo from NRCS Chief Dave White.
Value-Added Producer Grant Program Request for Proposals Issued: See story under USDA News below.
Obama Releases Full Budget – NSAC Priorities Rate Great, Bad, and Ugly: On Thursday May 7 the White House issued it full budget proposal for FY 2010. Coming one week after Congress approved its own FY 2010 budget resolution, the White House budget remains $10 billion higher than the budget Congress will actually work with in preparing its annual appropriations bills.
Several sustainable agriculture priority programs fared quite well in the new budget proposal. The new Rural Microentrepreneur Assistance Program created by the 2008 Farm Bill with NSAC’s strong support would see its funding rise from the $4 million provided directly by the farm bill to $26 million. We expect a request for proposals for the $4 million available in FY 09 to be out in the next month or so. If approved by Congress, the program will then grow dramatically next year, helping to spur growth in jobs through small rural business development.
Staying in the rural economic program arena, the budget included an equally impressive increase in funding for the Rural Cooperative Development Grants program, a program that provides funding to cooperative training centers. If the President prevails, the program would increase for just under $6 million a year to nearly $14 million, allowing the program to add centers and more comprehensively provide assistance on a nationwide basis.
The Value-Added Producer Grants program, while given an increase in the budget request, faired far more modestly, slated to receive $22 million rather than the $19 million available this year. VAPG has long been an NSAC priority, including our successful drive to have local food products and mid-tier value chains added as program priorities, along with a stronger priority for small and mid-sized farms and beginning and minority farmers in the 2008 Farm Bill.
The Rural Energy for America Program (REAP) on the other hand would see its funding rise above the authorized level (technically not allowed, but Congress often ignores budget rules in these situations). The President proposed $128 million for REAP next year, compared to the $60 million this year and a total combined authorized level of $85 million.
The new Beginning Farmer and Rancher Individual Development Account pilot program would be fully funded at $5 million under the President’s proposal. The IDA pilot was another NSAC 2008 Farm Bill initiative.Program guidelines are under development by USDA’s Farm Service Agency (FSA) in hopes that Congress will follow through with full appropriations. It will be exciting to get this new initiative off the ground in a variety of pilot states.
Also at FSA, the budget request goes a long way to make up for the huge shortfall in Direct Farm Ownership Loan funding in 2009. Loan volume under the President’s request would reach $393 million in FY 10 versus just $222 million this year. Money has run out for 2009 despite a large waiting list for loans. NSAC hopes to convince Congress to add emergency funding for DFO loans in the 2009 supplemental appropriation bill (see story below).
Guaranteed ownership and operating loans were allocated modest increases in the Obama budget, though subsidized guaranteed operating loans were cut in half. In another first time request in response to the 2008 Farm Bill, the President’s budget would provide $150 million in Conservation Loans to farmers, split evenly between guaranteed and direct loans. Conservation loans was another NSAC farm bill plank, though we have reservations about one aspect of the final farm bill language which removes some otherwise applicable features that target the loans to small and mid-sized farms.
There is also good news to share related to NSAC 2008 Farm Bill priority programs that receive mandatory (direct) funding. Often in the past, the White House and Congress have used the appropriations bill to reverse or modify decisions made in the farm bill, and this year is no different (more below). But, just one year after the Senate attempted to slice funding for a variety of our priority programs (a move that we ultimately saw reversed), we can be glad that no cuts are proposed for the Conservation Stewardship Program (CSP), Beginning Farmer and Rancher Development Program, Outreach to Socially Disadvantaged Farmers and Ranchers, Organic Research and Extension Initiative, Farmers Market Promotion Program, Seniors Farmers Market Nutrition Program, and Community Food Grants. Combined that represents just over $1 billion in resources, or over $300 million not counting the CSP.
Turning to research and extension, the news is bad to mediocre. While organic, specialty crop, beginning farmer, and minority mandatory spending would be left intact by the White House proposal, discretionary programs remain a level funding, despite very significant increases in non-agricultural research in other government agencies. This is the continuation of what is now a long-term trend, with food and agriculture research winding up at the bottom of the heap as increased science dollars flow to health, energy, and other parts of the government research efforts.
Not only would the Sustainable Agriculture Research and Education (SARE) program remain stuck at $19 million under the Obama request, but even the larger Agriculture and Food Research Initiative (AFRI) would stay constant at $201.5 million. Organic Transitions research and extension is also held constant at $1.8 million. One other level-funded program is nonetheless a bit of a bright note. The ATTRA sustainable agriculture information service program would remain at $2.6 million, but given consistent proposals to do away with the program under the Bush Administration, it is a welcome relief to see the presidential request for funding.
Yogi Berra might say it was déjà vu all over again — a new Administration but the same tired old strategy of balancing the agricultural funding request on the back of farm bill conservation programs. Like the preceding Administration, President Obama is proposes to slash mandatory spending for farm bill conservation programs through the backdoor of the appropriations process to the tune over $750 million. In size order, the White House wants Congress to cut the Wetlands Reserve Program by $438 million, Environmental Quality Incentives Program by $250 million, Wildlife Habitat Incentives Program by $43 million, Farmland Protection Program by $30 million, and Agricultural Management Assistance program by $5 million.
The new team uses the same excuse as the old – the farm bill increases spending for these programs unrealistically. To that tired old canard the new team adds a new wrinkle – the farm bill and the USDA regulatory process has made some of these programs less attractive, and therefore they project demand is projected to go down. Obviously this claim begs the question of why they are not fixing the problem areas through regulation and guidance rather than creating a self-fulfilling prophecies of doom.
Escaping the meat axe are the Conservation Reserve Program, Grassland Reserve Program, Chesapeake Bay Conservation Program, Agricultural Water Enhancement Program, and, as noted above, the Conservation Stewardship Program.
First Edition of NSAC Annual Appropriations Chart: The first version of our annual appropriations tracking chart, with full details on our priority programs and others that we track each year, can be viewed here. This initial version includes the President’s requests, with blank columns for upcoming House and Senate action in June and July. Also next week on the NSAC website you will find a revised version of our testimony to the House appropriators as well as our Senate testimony.
Big Picture Look at Ag Budget: There is a lot that could be said about the budget proposal for food, agriculture rural development, and FDA but space does not permit a full explanation. Boiling the story down to its basic components, however, we can make the following quick observations.
Relative to the FY 2009 agriculture appropriations, the President would spend an additional $1.4 billion, a 6.5 percent increase. That number actually masks the full spending increase, however, because it does not account for the $750 million-plus bank robbery of the farm bill conservation programs, a figure about $500 million higher than in FY 09. So the full extent of increased discretionary spending in the White House proposal would be about $1.9 billion.
The biggest increase, once again, is for the Women, Infants, and Children (WIC) program. WIC funding is projected to climb another $917 million over and above the historically unprecedented $6.9 billion in 2009, itself a near billion dollar increase over 2008. These huge increases are due in part to the recession, in part to food price inflation, and in part to increased outreach to eligible but non-participating families. Out of the entire agricultural appropriations bill, this single program would receive 35 percent of total available funding under the President’s proposal.
Readers may recall the effort by the sustainable agriculture community to secure addition funding for the WIC program as part of the economic recovery (stimulus) bill. That effort resulted in a contingency fund of $400 million that can be used for WIC in 2009 and 2010 and should negate any negative impacts on the agricultural bill should WIC costs increase even faster than anticipated. While the effort on the stimulus bill successfully contributed to a final 2009 bill that kept all of our priority farm bill mandatory programs completely intact, it would appear we could easily find ourselves back in a very similar spot for the 2010 bill unless we roll up our sleeves and fight hard again this year.
Though it does not count against the agricultural appropriations bill, the budget also projects an increase in the Supplemental Nutrition Assistance Program (food stamps) of over $7 billion, to $61.4 billion, a stunning 55 percent increase in just two fiscal years.
The other big discretionary funding winners in the President’s budget are Food and Drug Administration and the Commodity Futures Trading Commission, both slated for substantial increases. The agricultural appropriations bill includes both of those agencies plus the Farm Credit Administration, in addition to all of USDA not including the Forest Service. The Food Safety Inspection Service would also increase by 5 percent under the Obama proposal.
Settlement Funds for Pigford Claims Included in Obama Budget: On Wednesday, March 6, President Obama made a special announcement that he would include $1.25 billion in his FY 10 budget to settle remaining claims in the Pigford lawsuit cases for African American farmers.
The day before Senators Chuck Grassley (R-IA) and Kay Hagan (D-NC) re-introduced legislation (S. 972), the Pigford Claims Funding Act of 2009, to ensure that African American farmers that successfully filed claims as a result of the 2008 Farm Bill, will receive settlement money.
The 2008 Farm Bill included $100 million to reward successful petitioners. The $1.25 billion in the Obama budget includes the $100 million from the 2008 Farm Bill. It is unclear, however, where the Obama Administration intends to take the additional funds from. They have indicated it will not come out of the allocation for agricultural spending, but have not indicated what pot of funding will in fact be used, causing great concern among appropriators on Capitol Hill. Hopefully further elaboration will be coming soon. This funding has been a very long time coming, and we are hopeful the proposal will prove credible and politically possible.
Farm Program Cuts to Pay for Child Nutrition – Round Two: Repeating identical proposals already previewed in the Obama budget framework announcement from late February, the full budget explains again that the President proposes a $1 billion a year increase in mandatory spending for child nutrition and school feeding programs, to about $17 billion a year, with the funding offset coming from scaling back crop insurance subsidies, phasing out direct payments under the farm commodity programs for farms with gross sales over $500,000, adopting a $250,000 hard cap on annual commodity payments per farm, and ending the cotton storage program.
As we have reported previously, a portion of this debate played out in the Senate Budget Committee markup of the FY 2010 budget resolution, with a proposal to adopt the hard cap, introduced by Senator Grassley (R-IA) defeated and a counter-proposal by Senator Conrad to cut back crop insurance payments passing.Both amendments proposed to use the several hundred million savings to help fund child nutrition increases.
Action on commodity payment limitation reform will actually occur first not in Congress, but within the Administration. This summer the Secretary and the President will have to decide whether they are going to close loopholes and reform the payment limitation rules administratively, saving money and targeting and restoring a degree of integrity to the programs.
EPA Budget: Sometimes budget numbers can be truly eye-popping. Such is the case with the Obama proposal for the Environmental Protection Agency. The EPA would receive a truly stunning 38 percent funding increase (nearly $3 billion), to $10.5 billion, in the White House proposed budget. Nearly half of the total ($5.1 billion) would be for water-related programs, with land restoration weighing in at $1.7 billion and air quality and climate change at $1.1 billion. Also slated for additional spending are enforcement programs, which would total $0.6 billion and provide funding for 30 new staff positions in civil and criminal enforcement, including a dozen positions related to poor communities.
The biggest single winner at EPA was the state revolving fund for wastewater treatment, nonpoint source pollution control and watershed management. The program would jump from $690 million to $2.4 billion in one year, though the program also already took in some $4 billion in the stimulus bill. The state revolving fund for drinking water is slated for $1.5 billion in 2010, up from $671 in 2009. The EPA request also includes $475 million for Great Lakes clean-up and $35 million (a bit less than the farm bill’s Chesapeake Bay clean up funding) for Chesapeake Bay water quality improvement efforts.
To implement and enforce the new rule for mandatory reporting of greenhouse gas emissions from large sources in the US, the budget request asks for $17 million. The budget also calls for a $21 million increase to test higher percentage biofuel blends and new engine designs to handle those blends. Also requested is $5 million to provide analysis relevant to the proposed greenhouse gas cap and trade programs, including the very tricky business of offset verification.
A summary of EPA’s 2010 budget proposal is available at http://www.epa.gov/budget/2010/2010bib.pdf
Feingold-Gillibrand Measure for Farmer Loan Restructuring: The housing bill, passed by the Senate on Wednesday, May 6, includes an amendment offered by Senator Russ Feingold (D-WI) and Kirsten Gillibrand (D-NY) that requires the Congressional Oversight Panel for the Troubled Asset Relief Program (TARP) to examine whether lenders that have taken bailout funds should help farmers and ranchers restructure their loans. The result of the examination could extend the foreclosure mitigation program already available for home owners to farmers and ranchers. The Feingold-Gillibrand amendment was supported by RAFI-USA, NSAC, National Family Farm Coalition, National Farmers Union, and other national farm organizations.
Supplemental Appropriation Marked Up: The full House Appropriations Committee approved a $97 billion supplemental emergency appropriations bill on Thursday May 7. The full House will take up the bill this coming week. Most of the bill provides supplemental funding to wage the wars in Iraq and Afghanistan, though it also includes $10 billion for State Department programs and $2 billion to deal with pandemic flu concerns. So far, other than the flu, domestic emergency spending has been kept off of the bill, though many Members are known to want to have a chance to add domestic provisions.
The Senate intends to take up the bill sometime prior to the Memorial Day recess.
NSAC is continuing to encourage appropriators to add about $50 million in emergency funding for direct farm ownership and operating loans. The economic and financial crisis, compounded by low prices in some segments of agriculture, has resulted in unprecedented demand on resources. Even with funding added in the stimulus package, FSA is out of money and waiting lists of farmers looking for assisted credit are growing.
USDA Confirmation Hearings: On Thursday, May 8, 2009, the Senate Agriculture Committee held confirmations hearings for Krysta Harden, Obama’s nominee for USDA Assistant Secretary for Congressional Relations, Perlie S. Reed, nominee for Assistant Secretary for Administration, Rajiv Shah, nominee for Undersecretary for Research, Education, and Economics, and Dallas Tonsager, nominee for Undersecretary of Agriculture for Rural Development. The nominees were reported out of Committee but have not yet been scheduled for Senate floor consideration.
Committee Chairman Tom Harkin (D-IA) asked for and received from Rajiv Shah assurances that if confirmed he would work to provide Congress with the best scientific information available on nutrition standards in the process of reauthorizing the Child Nutrition Act.
Joint Hearing on Animal Identification System: On Tuesday, May 5, the House Agriculture Subcommittee on Livestock held a joint hearing with the Homeland Security Subcommittee on Emerging Threats to review the National Animal Identification System (NAIS). The hearing was essentially a replay of the Livestock Subcommittee’s March 11 hearing on the same topic, with Republicans arguing that the costs and threat to producers’ privacy of mandatory NAIS would be too great, and Democrats urging that mandatory NAIS is essential for public health, and even national security. Dr. John Clifford, USDA’s chief veterinarian responded to concerns over the cost to producers of participating in NAIS by saying that Secretary Vilsack is reaching out to small, minority, and beginning farmers to ensure that the system will not excessively burden them. You can read the witness’ testimony here.
Value-Added Producer Grant Funding Available: On Tuesday May 5, the 2009 Notice of Solicitation of Applications (NOSA) for the Value-Added Producer Grant was posted in the Federal Register. The VAPG program enables eligible agricultural producers to develop businesses that produce and market value-added agricultural products. For more information about what constitutes value-added, please see this section of NSAC’s Guide to the 2008 Farm Bill. The NOSA stipulates $100,000 as the maximum amount for planning grants and $300,000 for Working Capital Grants. There are two reserved funds for beginning and socially disadvantaged farmers and ranchers and for mid-tier value chains and an expedited process for proposals that are less than $50,000.
Unfortunately, there are some serious flaws in the NOSA, beginning with a 45-day application turn-around for both of the reserved funds and 60 days for regular applicants. The NOSA misses the clear intent of the Farm Bill to specifically give priority to projects that support beginning and socially disadvantaged and small and medium-sized family farms and ranches and creates unnecessary roadblocks to encouraging the development of sustainable local and regional food systems.
NSAC is working to get an improved NOSA re-issued within the next two weeks but we encourage groups to start working on applications because there is no guarantee that we will be successful. For more information about the NOSA or for information on NSAC’s response please contact Kate Fitzgerald at email@example.com
BCAP Moving? On Tuesday May 5, President Obama created an Interagency Biofuels Working Group and issued a directive to USDA Secretary Vilsack to accelerate investment in biofuels. Readers can view the full announcement here and here.
Of particular interest to NSAC was inclusion of a statement that within 30 days “guidance and support” would be issued for the 2008 Farm Bill’s Biomass Crop Assistance Program, an NSAC priority program. It remains unclear to us, as it does to staff at the Farm Service Agency, just exactly what this means. Currently FSA is in the midst of hiring a BCAP program manager and contracting out an environmental assessment of program options. The new 30-day requirement superimposed on that current state of affairs leaves things a bit up in the air, but our hope is it gives new support to the NSAC position that the program should move forward on an experimental basis through a Notice of Funding Availability process, even as the environmental assessment and rulemaking process continues.
Nominee for USDA Under Secretary for Natural Resources and Environment Announced: On Tuesday, May 5, President Obama announced that he is nominating Homer Lee Wilkes as Under Secretary for Natural Resources and Environment. The Under Secretary has authority over the Natural Resources Conservation Service (NRCS) and the U.S. Forest Service. Dr. Wilkes has been with the NRCS for 28 years and currently serves as the Mississippi State Conservationist. He holds a Bachelors, Masters of Business Administration and Ph.D. in Urban Conservation Planning and Higher Education from Jackson State University. The appointment breaks with tradition, as the Under Secretary position usually goes to someone with a forestry and Forest Service background.
New GIPSA Administrator Appointed: On Wednesday, May 6, USDA Secretary Vilsack appointed J. Dudley Butler to serve as Grain Inspection, Packers and Stockyards (GIPSA) Administrator. Butler is a Mississippi attorney and cattleman who has specialized in representing farmers and ranchers opposing large agricultural corporations in lawsuits, mediations, and arbitrations involving production contracts and other agricultural matters. He also served on a task force whose report led to passage of the Mandatory Price Reporting Act.Mr. Butler has been a frequent participant and helpful resource to the Competition Committee in which NSAC and several NSAC members participate.
Reminder: CSREES Webinar on Family Farm Entrepreneurship May 11, 2:00 – 3:30 pm Eastern: To participate, log on to http://connect.extension.iastate.edu/csrees/. Background information is available at http://sustainableagriculture.net/wp-content/uploads/2009/04/csrees-meeting-announce.pdf.
EPA’s Releases Renewable Fuel Standard Proposal: On Tuesday, May 5, the Environmental Protection Agency (EPA) Administrator signed a proposal for a life cycle analysis to evaluate the comparative greenhouse gas (GHG) emission reductions for different biofuels compared to the baseline GHG emissions from petroleum fuels in 2005. The life cycle analysis is required by the Energy Independence and Security Act of 2007.
EPA will be taking comments on the proposed rule for 60 days after its publication in the Federal Register. A prepublication copy of the proposed rule and additional information is available on the EPA website.
The EPA proposal includes a factor for GHG from indirect land use changes. This includes clearing of land for food production which may occur when acreage suitable for food production is used for biofuel production.The EPA proposal includes two options for assessing GHG emissions: (1) a 30-year assessment and (2) a 100-year assessment.
Corn ethanol using the most common production methods fails to meet the standard for “renewable fuel” under the 30-year assessment of GHG emissions. Even under the 100-year assessment, corn ethanol is hard put to meet the renewable fuel test under the proposal, with a projected 16 percent improvement over gasoline . However, existing corn ethanol plants and those already under construction would be grandfathered in under the EPA proposal.
Soybean diesel shows a small GHG increase in the 30-year assessment and is just over the 20 percent GHG reduction level in the 100 year assessment. EPA does not plan to grandfather biodiesel plants, only ethanol plants.
Ethanol from sugarcane meets the renewable standard under both assessments. The big winner is cellulosic ethanol produced from switchgrass which involves putting land in perennial vegetative cover.
House Ag Committee Hearing on EPA Proposal: On Wednesday, May 6, 2009, the House Agriculture Conservation Subcommittee held a hearing on the proposed life cycle analysis for biofuels. Testimony from the hearing can be viewed at http://agriculture.house.gov/hearings/statements.html.
Subcommittee members contended that there are too many uncertainties in calculating GHG emissions from international changes in land use patterns that result from increased use of U.S. land for corn ethanol production. House Agriculture Committee Chairman Collin Peterson (R-MN) accused EPA officials of being “in bed with the oil industry” and demanding to know why indirect emissions would be considered in the case of biofuels, but not for oil and gas.
Margo Oge, Director of EPA’s Office of Transportation and Air Quality, acknowledged that the science of calculating indirect land use effects on greenhouse gas emissions is “immature,” but maintained that it is the best science currently available, and that it would be against EPA’s statutory mission to ignore it.Chairman Peterson concluded by saying that “he is off the train” and will not support any climate change legislation.
At the Senate hearing to confirm several political appointees to USDA on Thursday (story above), Senator Lugar (R-IN) also slammed EPA’s proposed rule. He requested the new appointees for rural development and research to “take this message to USDA: it is ludicrous on its face to suggest that farmers growing corn in the US are responsible for cutting down Brazilian forests.” A video of Lugar’s remarks is at http://agriculture.senate.gov/
University of Michigan Graduate Students Assess Corn Ethanol and CRP: On Thursday May 7, the National Wildlife Federation hosted a presentation of the results of a study conducted by graduate students in the University of Michigan’s Natural Resources and Environment Program which looked at the impact of corn ethanol production on the Conservation Reserve Program (CRP) in the Prairie Pothole Region. The study used GIS software to map “hotspots” of corn plantings and habitat loss in the Prairie Pothole Region of four Midwestern states: Iowa, Minnesota, North Dakota, and South Dakota.
These maps informed a statistical analysis that found decreases in grassland bird populations in areas experiencing high increases in corn plantings. The authors recommend that government incentives for corn ethanol production be reduced, particularly the incentives for blending requirements, which drive demand for corn ethanol. They also recommend that rental payments for CRP acreage be increased and that ‘sodbusted’ land be made ineligible for farm bill payments. For a copy of the study, please contact Greg Fogel: firstname.lastname@example.org
Non-Hormone Beef Deal: This week the EU and the US reached a tentative deal, subject to approval by EU member states, that would call off US trade retaliation for the EU’s refusal to import US beef that has been treated with additional hormones and growth promotants. In return, the EU would increase the amount of non-hormone treated beef imported from the US duty free. The decade-old EU ban has been a continuing source of controversy. The latest resolution of the dispute, if approved, will be a boon to US producers who raise cattle without added hormones. The American Farm Bureau Federation, however, blasted the agreement as inconsistent with sound science and world trade rules.