Since our blog post on January 31, USDA announced that the FY 2012 Conservation Reserve Program general sign up period will be March 12-April 6.  According to today’s press release, “contracts on an estimated 6.5 million acres will expire on Sept. 30, 2012″ and this sign up will attempt to fill as many of those acres as possible.

Conservation Reserve Program

On Wednesday, February 1, USDA will announce that a Conservation Reserve Program (CRP) general sign-up will be held this year.  This is the third general sign-up since 2006.  Acting Under Secretary for Farm and Foreign Agricultural Services (FFAS) Michael Scuse will make the announcement during a media call tomorrow morning.

According to a media advisory, “over the past three years, USDA has enrolled more than 8 million acres of private working lands on nearly 120,000 farms into CRP.  At the same time, CRP has restored more than two million acres of wetlands and two million acres of riparian buffers.  Each year, CRP keeps more than 600 million pounds of nitrogen and more than 100 million pounds of phosphorous from flowing into our nation’s streams, rivers, and lakes. Moreover, CRP provides $1.8 billion annually to landowners—dollars that make their way into local economies, supporting small businesses and creating jobs.”

USDA has not yet released information about the sign up period, though last year it fell between mid March and mid April.

The last general sign-up enrolled over 2.8 million acres across the country.  More detailed information on the 41st sign up is available in an earlier blog post.  You can expect more information on this year’s sign up following the press call tomorrow.

The announcement of the general sign-up will increase the projected CRP funding level over the course of the upcoming 2012 Farm Bill.  It could therefore be a significant with respect to the crafting of the conservation title of the new farm bill.

Conservation Stewardship Program

Also in the news today, the Chief of the Natural Resources Conservation Service (NRCS) at USDA announced that NRCS will have to turn away more than 40 percent of Conservation Stewardship Program (CSP) applicants this year due to limited program funding.

In an interview with Brownfield Ag News today, the Chief stated, “We were stunned with the size of this…. Over 19 million acres have been offered for sign-up in the Conservation Stewardship Program.  We’ll be able to take about 10.8 [million acres], so it’s going to be way over-subscribed, we’re going to have about eight or nine million more acres offered than we can take.”

Typically, NRCS enrolls roughly 12.8 million acres in the program each year, in accordance with the per year level provided by the 2008 Farm Bill.  Even under that acreage cap, demand for the program far outstrips supply.  The enrollment process will be even more competitive in FY 2012 because funding for the program was reduced by Congress in the FY 2012 Agricultural Appropriations Act.

In the coming weeks, we will publish more details on the FY 2012 CSP sign up, including the number of applicants as well as state level data.

Farmers and ranchers who submitted applications and are thus part of the 19 million acre pool will have between now and sometime in March to complete the CSP Conservation Measurement Tool with their local NRCS staff.  The CMT measures environmental benefits and used both to rank the producer proposals and to determine the size of the CSP payment.  Applicants with the highest environmental benefit scores will be the ones admitted to the program.  NSAC will publish the scores associated with particular conservation activities as soon as NRCS releases that information.

NSAC’s Farmers Guide to the Conservation Stewardship Program can help producers sort through some of the details of the program as they move through the steps of the enrollment process.

A new Center for Rural Affairs report released finds that rural areas in the Great Plains and Midwest continue to lose population and are caught between “bookend generations” – the youngest and the oldest – with a demographic valley in between.

The report, Age Distribution on the Great Plains, is the second in a series of briefs examining data from the 2010 Census.  The analysis covers a 10 state region that includes North Dakota, South Dakota, Nebraska, Kansas, Minnesota, Iowa and selected counties in Colorado, Montana, Wisconsin, and Wyoming.

The chart below outlines the age distribution of the region’s population by county type.  Metropolitan counties are those officially designated as part of a Metropolitan Statistical Area; micropolitan counties are based around a core city or town with a population of 10,000 to 49,999; and rural counties are those with a population center of less than 10,000 and not a metropolitan or micropolitan county.

As the chart shows, rural areas of the region hold their own with the youngest population group.  The proportion of each county type of residents 19 and younger is essentially the same.  But as the youngest residents turn 20 and age into their 30s and mid-40s, the prime working years, rural populations compared to urban populations begin to lag.  This is a significant illustration of the lack of economic opportunities in many rural places in the region.  And older population groups are where rural and more urban areas significantly begin to diverge.  Nearly half of the region’s rural population is 45 and older, and nearly one in five rural residents of the region is 65 and older – both figures significantly greater than urban and smaller city areas of the region.

None of this is really news.  Rural areas have been aging and young, working age adults have been moving to cities for decades.  For much of the past century rural America’s greatest export has been its children.  But the age distribution of the region’s population has significant implications for the region both immediately and in the long-term, implications that are growing more serious and more difficult to address as the decades progress.

The relative youth of the urban areas of the region affects the economics of the entire region.  Investment to create economic opportunities is likely to flow into urban areas of the region to capitalize on the youth and education of the population.  Conversely, the aging of rural areas of the region and the relatively large population of the youngest residents means rural areas must focus on a different set of issues that are critical to those “bookend generations” such as health care and education.  This reality is a long-term demographic and policy challenge facing rural areas of the region.  How rural areas provide these services that are necessary for communities to thrive while simultaneously shrinking in population may be the fundamental question for decades in rural parts of the region.

In order to reverse – or at least mitigate – these demographic trends, it is crucial for rural communities and public policy to find new, innovative ways to create rural economic opportunities and revitalize rural economies.

A 2007 Center for Rural Affairs analysis demonstrated that USDA and Congress have severely oversubsidized the biggest and most powerful farms while consistently underinvesting in rural economic development, spending twice as much on subsidizing the 20 largest farms in each of 13 leading farm states as it invested in rural development programs to create economic opportunity for millions of people in thousands of towns in the 20 rural counties with the most out-migration in each respective state (the full report – An Analysis of USDA Farm Program Payments and Rural Development Funding In Low Population Growth Rural Counties, a.k.a. Oversubsidizing and Underinvesting… can be viewed or downloaded at: http://www.cfra.org/node/603).

Federal contributions to rural development have been plummeting for years – almost one-third of the USDA Rural Development budget has been cut since 2003.  And Congress recently made further cuts to already bare-bones rural development programs.  For example, one-quarter of the funds for the popular Value-Added Producer Grants  as well as all the money for the Rural Microentrepreneur Assistance Program was taken away in the most recent agricultural appropriations bill passed by Congress and signed into law.  Yet,  only 1.7 percent of the USDA budget is for rural development, equaling about $40.68 for every rural resident.

The Center for Rural Affairs proposes that instead of continuing the “Brain Drain” trend, a Rural Renewal Initiative should be created in the next farm bill and Congress should commit at least $500 million over five years to a Community Prosperity Fund that the Secretary of Agriculture could spend in existing rural development programs.  New opportunities are arising in broadband, renewable energy, food systems and ecotourism, and this investment could breathe new life and capital into communities suffering population loss.

Morevoer, this investment could be fully paid for by tightening the limits on farm payments received by the largest farmers – a policy the Center for Rural Affairs has advocated for many years.  It could also be paid for by reducing direct farm payments by just 2 percent.  Though $100 million dollars per year is small in the context of farm bill spending, it would represent a significant and much-needed increase for rural development.

The appropriations package, which is being referred to as a “megabus,” does not include the FY 2012 Agriculture appropriations bill, nor does it include the Transportation-Housing and Urban Development or the Commerce, Justice, and Science appropriations bills.  These three bills were signed into law on November 18.  We previously reported on the funding levels contained in agriculture appropriations bill.

The “megabus” would provide nearly $1 trillion in discretionary funding to a number of departments, including Defense, Education, Health and Human Services, and the Environmental Protection Agency (EPA).

The government is currently operating on a short-term continuing resolution, which expires today.  In order to prevent a government shutdown, the Senate will need to follow the House’s lead and send the megabus to the President’s desk before midnight.  As a safeguard, however, the House also passed a one-week continuing resolution that the Senate can pass if it needs more time to consider the spending package.  The continuing resolution would expire on December 23.

Interestingly, the appropriations megabus was accompanied by two separate bills in the House – the first provides $8 billion in disaster aid for FY 2012, and the second to offset that spending with a 1.83 percent across-the-board cut to all discretionary spending programs, including all of the discretionary agriculture programs.  The House passed the disaster funding bill by 351-67 and the offset by 266-165.  The Senate is expected to support the disaster spending bill but vote against the across-the-board cut.  Hence, the disaster aid funding will become law and will not be offset, but those in the House and Senate who wanted to be on record in support of offsets will have been given that opportunity.

EPA Funding

Overall funding for EPA was cut by $233 million from FY 2011 levels.  Key EPA programs that provide states and tribes with resources to address clean water issues, including agricultural pollution, were cut $118 million from their FY2011 enacted levels, as follows.

FY2011 Enacted          FY2012 Omnibus

Section 319 Grants:                                                  $175.5 mil                    $164.8 mil
Clean Water State Revolving Fund:                              $1.522 bil                     $1.469 bil
Drinking Water State Revolving Fund:                        $963.1 mil                    $919.4 mil

A number of programs focused on improving specific waters saw funding increases, including funding for the Great Lakes, Chesapeake Bay, San Francisco Bay, Gulf of Mexico and South Florida.  EPA Funding for Puget Sound, Long Island Sound and Lake Champlain was decreased.

Environmental Riders with Agricultural Implications

An even bigger political issue in the EPA appropriations was not money but policy “riders.”  While appropriations bills are technically intended to deal with funding only, appropriators sometimes attach policy riders to their bill to make policy on particular hot button issues that are technically the province of authorizing committees.  The House in particular loaded up their appropriations bills with anti-environmental regulation riders.  Below is a list of riders that were dropped, and the one among the several included in the final bill that involves agriculture.

Not included:

1. Attempt to bar the Army Corps of Engineers from updating its regulatory guidance relating to the Clean Water Act.  NSAC joined over 170 organizations on a letter, circulated by the Clean Water Network, to Senators that opposed this rider.

2. Attempt to block the EPA from implementing water quality standards in Florida, an issue that focuses on nutrient standards.

3. Attempt to prohibit the reintroduction of salmon in the San Joaquin River in California and an attempt to defund the court ordered settlement regarding water supply and environmental restoration of the San Joaquin River.

4. Attempt to block EPA from protecting Endangered Species from dangerous pesticides.

5. Attempt to eliminate requirements for chemical companies and agricultural producers to obtain Clean Water Act permits for pesticides entering waterways.

6. Attempt to block EPA from developing or implementing regulations related to ammonia emissions.

7. Attempt to block EPA from regulating greenhouse gases through the Clean Air Act and from issuing certain Clean Air Act regulations.

Included:

Language that was also in FY2010 Appropriations that blocks the EPA from implementing any regulations that requires the reporting of greenhouse gases from manure management systems.

Federal Trade Commission:  Voluntary Guidelines for Child Nutrition

The Obama Administration has proposed voluntary guidelines under which the food industry would limit its advertising to children to those foods and drinks that make a meaningful contribution to a healthful diet and limit children’s intake of sodium, fats and added sugars.  The Food and Drug Administration, Centers for Disease Control, and USDA participated in preparing the guidelines, which will be over seen by the Federal Trade Commission (FTC).  The guidelines are contained in a draft report entitled “Interagency Working Group on Food Marketed to Children: Preliminary Proposed Nutrition Principles to Guide Industry Self-Regulatory Efforts.”

Although the guidelines are voluntary, the food industry contends that the guidelines are a “backdoor regulation” that would ban food advertising to children.  The Omnibus Appropriations bill includes a rider offered by Representative Jo Ann Emerson (R-MO) that blocks completion of the draft report unless the Interagency Group working on the Report meets the requirements of a January 2011 Executive Order No. 13563. The Executive Order provides principles for federal regulators including the use of the best science, public participation, identification of the least burdensome methods for achieving their goals, and consideration of the benefits and costs, both quantitative and qualitative, of the regulation.  Consumer advocates contend that the Interagency Working Group has met requirements of the Executive Order, except the cost-benefit analysis and that the additional delay posed by preparing the analysis is unwarranted for voluntary guidelines.

NIFSI broadly addresses food safety issues encountered throughout the entire food procurement process- from on-farm production to consumption.  The initiative’s projects take an integrated approach to food safety by combining university research with classroom education and outreach to a diverse set of groups, including consumers, producers, federal agencies, and food service workers.

Several of the funded projects include:

• Fort Valley State University, Fort Valley, Georgia- $100,000.  This project aims to improve processing operation methods in small and very small meat plants to enhance meat product safety.

• University of Georgia, Athens, Georgia- $535,725.  This project will update and maintain the current National Center for Home Food Processing and Preservation website and conduct research on the safe and appropriate use of the home-style atmospheric steam canners for small batch canning.

• University of Massachusetts, Amherst, Massachusetts- $424,878.  Through this partnership, university extension faculty and staff, county educators, local farm-to-preschool programs, early child care educators and local agricultural organizations in Massachusetts and New Hampshire will collaborate to identify and improve fresh produce safety knowledge and practices of staff, educators, and parent volunteers.

• Tennessee State University, Nashville, Tennessee- $100,000.  This project will determine the occurrence of antibiotic resistant Clostridium difficile in poultry and pork products and the farm environment and develop and distribute educational materials on improving management practices to limited resource poultry and pig producers.

Unfortunately the FY 2012 agriculture appropriations bill that was signed into law by President Obama on November 18th zeroed out the budget for NIFSI for this fiscal year.  In the current budget environment, this may well be the last round of grants that NIFA will administer for the program which in recent years has been funded at $10-15 million a year.  Interestingly, while this funding was eliminated for 2012, funding for the Food and Drug Administration to enforce the new Food Safety Modernization Act, which is intended to be science-based, was increased by approximately $50 million.

To see a full listing of grant recipients, click here.

Noting that the process this year was unusual and accelerated, the Chairwoman noted “we did important reforms” and “achieved a tremendous amount.”  She indicated her plans to take the next steps to “put together the final workings of the farm bill” next year and to pass a bill “as soon as possible.”

In her concluding comments, Stabenow reiterated “We won’t start from zero.  We have expedited the process by flushing out the areas where we really need to do more work.”

Her view contrasted to a degree at least with the Ranking Member of the Senate Committee, Pat Roberts (R-KS), who earlier during the same conference reiterated his view that the bill prepared for Super Committee consideration should be scrapped with bill development starting  over again in a more normal and open process.

Peterson’s ‘Hail Mary’ Pass

A third member of the ‘big four’ who worked on the bill this year, House Agriculture Committee Ranking Member Collin Peterson (D-MN), also addressed the Farm Journal Forum crowd.  Peterson suggested a long shot approach, using the farm bill prepared for the Super Committee as an offset for the so-called “doctor fix” to Medicare, one of four or five big spending issues that Congress is trying to pass before the holidays.  The proposed $23 billion in farm bill savings over ten years is nearly identical to the one-year cost of the doctor fix, which seeks to stave off a big reduction in Medicare payments to physicians.

Peterson said that both he and Committee Chair Frank Lucas (R-OK) have let it be known to their colleagues that the farm bill offset is an option they would consider.  Peterson indicated that he was a likely ‘no’ vote on any of the remaining big spending issues for the year  (payroll tax cut, unemployment insurance extension, doctor fix, Alternative Minimum Tax patch, etc.) though he and other Agriculture Committee members might lean the other way if the farm bill — plus a deal to exempt the farm bill from any later automatic cuts — was made part of the package.

Lucas did not address the Forum.

The general reaction in the room to Peterson’s trail balloon was that is was extremely unlikely to happen.

On farm bill timing for next year, should that come to pass, Peterson suggested that the entire bill could be worked on and adopted in both houses and a House-Senate conference by May.  He generally agreed with Stabenow that the bill prepared for the Super Committee should serve as the foundation.  Peterson said the dairy provisions are pretty much agreed to by all parties involved and are basically finished in his view.  He said he would urge Lucas and Stabenow to make at least that section of the bill public.

Conservation Title

All three congressional speakers were united in their generally very favorable comments on the draft conservation title.  All three noted it was an area where most of the hard work is already finished and that they are pleased with the outcome.

Stabenow described the conservation title in terms of creating “five buckets” or five “tools,” those being working lands programs (Environmental Quality Incentives Program, Conservation Stewardship Program), regional partnerships (targeted, competitive cooperative conservation projects), a consolidated easement program (with a wetlands component and an ag lands component), the Conservation Reserve Program, and a fifth bucket that was a grab bag of remaining programs that do not fit in the other categories.

NSAC Policy Director Ferd Hoefner addressed the Forum as part of a panel that included representatives of the Risk Management Agency and the National Corn Growers Association.  His remarks also focused in part on the conservation title, noting the many positive features of the draft bill as well possible places for further improvements.

Hoefner also took issue with an earlier speaker at the conference who suggested that farm programs were taking a disproportionate budget cut hit relative to conservation programs.   Correcting the record, Hoefner noted that in fact the percentage cut is nearly identical when looking at the farm bill alone, but the cut is actually substantially disproportional the other way, against conservation, when including changes to farm bill mandatory spending made by Congress in the annual appropriations bill.  That issue was one of several that he suggested as areas for further improvements within the conservation title.

Hoefner also noted that NSAC’s support for the farm bill would hinge in part on the re-establishment of effective targeting and conservation compliance with respect to commodity and crop insurance programs.

He also suggested there are now a short period of a few months in which to craft robust, forward looking credit, rural development, agricultural research, and other titles of the farm bill that necessarily received short shrift during the accelerated process of preparing a bill for Super Committee consideration.

The 13th annual Farm Journal Forum was hosted with support from the Howard G. Buffett Foundation.  The forum heard from Buffett and former Secretary of Agriculture Dan Glickman among other speakers.

The House approved the measure 298-121 and the Senate did also on a 70-30 vote.

The final FY 2012 agriculture appropriations bill provides for $19.8 billion in discretionary spending, which is $350 million below last year’s level and $2.5 billion below the President’s request.

For a comparison of the final bill, known as a Conference Report, with the original House and Senate bills, you can download the latest version of our annual appropriations chart.

Visit our most recent blog post from November 15 for a detailed summary of FY 2012 funding levels.

The House-Senate conference report on the final measure is also available online.

In addition the agriculture appropriations bill, the minibus includes the Commerce-Justice-Science and the Transportation-Housing and Urban Development funding bills as well as a new continuing resolution, which extends FY 2011 funding levels through December 16, 2011 for programs that have not received an FY 2012 appropriation.  The current continuing resolution keeping the government funded expires on November 18.

The final FY 2012 agriculture appropriations bill provides for $19.8 billion in discretionary spending, which is $350 million below last year’s level and $2.5 billion below the President’s request.

For a comparison of the negotiated bill, known as a Conference Report, with the original House and Senate bills, you can download the latest version of our annual appropriations chart.

Raid on Conservation Programs

The final FY 2012 bill cuts more than $927 million from farm bill mandatory conservation, on top of the half billion dollar cut contained in the FY 2011 agriculture appropriations bill.  If we include the renewable energy programs, this number jumps to approximately $1.2 billion.  Conservation and renewable energy were the primary farm bill mandatory programs cut.  Commodity, crop insurance, and export subsidies were left unscathed, as was the SNAP (food stamps).

The final FY 2012 agriculture appropriations bill cuts the Conservation Stewardship Program (CSP) by $75.5 million, roughly 9 percent, relative to its FY 2012 farm bill-mandated level.  This cut will reduce the size of the 2012 CSP sign-up by more than 30 percent.

The final bill also cuts the Environmental Quality Incentives Program (EQIP) by $350 million, or 20 percent.  The Wetlands Reserve Program (WRP) and Grasslands Reserve Program (GRP) are cut by roughly $200 million (32 percent) and $30 million (25 percent), respectively, while the Farm and Ranch Lands Protection Program (FRPP) and the Wildlife Habitat Incentives Program (WHIP) are cut by $50 million (25 percent) and $35 million (41 percent), respectively.  As in both the House and Senate bills, the Voluntary Public Access and Habitat Incentive Program (VPA-HIP) was zeroed out.

Taken together with what is rumored to be at least a $6 billion 10-year cut to conservation programs, the cuts to farm bill conservation programs would total $9 billion, or nearly 15 percent, considerably more than the proposed 10 percent cut to commodity and crop insurance subsidies in the pending farm bill deal.  NSAC has consistently said it will oppose a farm bill with a disproportional cut.

If one assumes that continued pressure on the agricultural appropriations bill from the $1 trillion reduction in appropriations over the next ten years approved by Congress in August will tend to keep forcing cuts to mandatory conservation, and if one further assumes that  the lackluster performance of the Agriculture Committees in defending their own mandatory spending during consideration of the FY 2012 appropriations bill will continue, it would then appear safe to say, based on the evidence at hand, the actual cut to conservation programs being contemplated now by the combined forces of the Appropriations and Agriculture Committees would be vastly higher, closer to $15 to $20 billion of ten years, or approaching a 30 percent cut.

In addition to the cuts to mandatory conservation funding, the bill cuts the Natural Resources Conservation Service’s (NRCS) conservation operations budget that pays for technical assistance by $44 million to $828 million.  NRCS uses conservation operations money to provide technical assistance to farmers and ranchers in the development of conservation plans and enrollment in conservation programs.  Lack of adequate technical assistance funding has become a chronic problem at USDA.

Energy Programs Slashed Too

A number of mandatory renewable energy programs were also cut in the conference bill.  Spending on the Biomass Crop Assistance Program (BCAP) is capped at $17 million, which is a 62 percent cut below the $45 million in remaining (unobligated) FY 2012 funds.  The Renewable Energy for America Program (REAP) received only 31 percent ($22 million) of its farm bill-mandated funding.

Rural Development and Farm Loans

The final bill makes significant cuts to a number of critical programs that create jobs and help rural communities thrive.  The bill cuts the Value-Added Producer Grants (VAPG) program to $14 million, roughly 35 percent of its authorized level and 26 percent less than what went out the door in 2011.  Surprisingly, the conferees chose to adopt the House proposal to zero out the Rural Micro-entrepreneur Assistance Program (RMAP) completely in FY 2012, despite existing grantees being due technical assistance funding based on their micro lending to date.  The Rural Business Enterprise Grants program was cut by 37 percent to roughly $24 million, while the Rural Business and Industry (B&I) loans program was cut by 17 percent relative to FY 2011.  With the B&I cut, approximately $41 million will be available in FY 2012 for loan guarantees for local and regional food enterprises.

The final bill funds direct operating loans at close to $1.05 billion, as requested in the President’s budget.  Unfortunately, it also matches both bills’ funding for direct farm ownership (DFO) loans at $475 million, which is 27 percent lower than 2010 levels.  The FY 2011 agriculture appropriations bill first reduced the DFO loan program level from $650 million to $475 million.  Not surprisingly, this has resulted in a $129 million backlog of approved applications for DFO loans, nearly half of which are beginning farmers.  The chances of real estate deals remaining in play after long delays in receiving approved loans are slim, resulting in the loss of new farming opportunities.

Research, Education, and Extension

Fortunately, the conference report maintains level funding for the Sustainable Agriculture Research and Education (SARE) program at $19.2 million.  As has been the case for many years, this does not include the $10 million requested by USDA to launch the SARE federal-state matching program.

Funding for the Organic Transitions Research Program and the Agriculture and Food Research Initiative (AFRI) was also maintained at FY 2011 levels.  Farm bill mandatory funding for the Organic Research and Education Initiative (OREI), Specialty Crop Research Initiative (SCRI), and Beginning Farmer and Rancher Development Program (BFRDP) were left intact.

Finally, the bill funds the National Sustainable Agriculture Information Service program (popularly known as ATTRA) at $2.25 million in FY 2012.  While not the $2.8 million funding level the program has maintained for many years, it is $2.25 million more than the zero dollars the program received in FY 2011 and thus an important step forward.  We are glad to see that this incredibly important program has been revitalized.

GIPSA Rule Travesty

One of the biggest travesties of all in the conference report is the Conference Committee’s handling of the livestock and poultry fair competition and contract reform rule, widely known as the “GIPSA rule” after the name of the agency (Grain Inspection, Packers and Stockyards Administration) that issued the proposal.  The rule was mandated by the 2008 Farm Bill.

The final appropriations bill bars any rule to eliminate the activist court-fashioned requirement that farmers and ranchers prove an injury to market competition from unfair or deceptive practices used against them as individuals by packers and processors; proposed rules that give definitions to unfair, unjustly discriminatory and deceptive practices or abuses; proposed rules to give definition to the prohibition on undue or unreasonable preferences; and proposed rules requiring packers and processors to make available sample production contracts.   The bill also prevents any final rule or interim rule from being published or otherwise implemented if the rule concerns the poultry tournament system.

The conference bill also prohibits the implementation of any of the proposed rules if the annual cost to the economy of such rules exceeds $100,000,000, while potential benefits will not be considered.  If its costs do not exceed $100,000,000, the bill allows the remaining poultry rules to be implemented, if the rules are published in the Federal Register no later than December 9, 2011.  This means if OMB can get its act together in time, anything left by the Report of the Final Rule sent to OMB for consideration by USDA might squeak under the wire.  The Report requires a 60-day delay after publication before this rule could be become effective.

Background Maneuvering by USDA on GIPSA Rule

To understand the complex nature of the stipulations in the appropriations bill it helps to know what USDA proposed last week.  Just as the appropriations conference was about to start, USDA announced that it had sent some of the GIPSA rules proposed by the agency in June 2010 to the Office of Management & Budget (OMB) as a Final Rule.  These rules focus on the poultry sector and include provisions in the 2008 Farm Bill concerning suspension of delivery of birds by poultry processors, measures addressing additional capital requirements, such as improvements to poultry houses, required after growers enter producer contracts with poultry processors, measures concerning notice for breach of contract, and requirements for processors to provide sample swine and poultry contracts.

USDA also sent to OMB, as an Interim Rule open to additional comment, the provision from the proposed rule on poultry tournament systems, which are used by the processors to compare poultry growers against each other in determining payment for their birds.

USDA decide to completely drop several provisions from the fair markets for livestock portion of the proposed rule, including a ban on packer-to-packer sales and the use of a single buyer at livestock auctions, as well as requirements for packers to retain records about the basis for pricing.

Finally, USDA announced it was still considering and, therefore, delaying finalization of other measures in the proposed regulations including eliminating the need for farmers and ranchers to prove injury to competition in markets for their products in addition to showing that they had been injured by a deceptive or unfair practice.  These core sections of the rule would be revised and issued as new proposed rules, starting the long rulemaking process all over again.

The conference agreement follows the USDA announcement closely, with the major change being upending the reform of the tournament system.  Otherwise, the agreement allows for the contract reform provisions that are in the process of becoming final to proceed, and then effectively kills everything else.  Many observers feel this is not a coincidence but rather something orchestrated ahead of time by the Administration and the industry giants, though we are unaware of any specific evidence of such collusion.

Local and Regional Food Systems

As we previously reported, the House bill contained an amendment offered by Virginia Foxx (R-NC) to strip all FY 2012 funding for USDA’s Know Your Farmer, Know Your Food Initiative (KYF2).  This was a misguided attack on an initiative that does not even have its own budget, but rather coordinates various programs and activities across multiple USDA agencies that work with farmers and ranchers producing for local and regional markets.  We are happy to report that the Conference Report does not include the Foxx amendment.

At the same time, however, it does retain some anti-KYF2 language that first showed up in the House agriculture appropriations report.  The Conference Report directs USDA to post on its website prior to any travel primarily related to KYF2, information including the agenda and the cost of such travel.  It also directs USDA to submit to Congress, within 90 days of enactment of the bill, a report on the impacts of KYF2 over the previous two years, as well as justification for spending on the initiative in the fiscal year 2013 budget explanatory notes.

As we reported when the House language was first released earlier this year, we are increasingly concerned about this ideologically driven and misguided attack on a growing and increasingly popular segment of American agriculture.

We hope that USDA goes one step beyond the new Conference Report requirement and also documents agendas and travel costs for all USDA travel primarily related to conventional national and multinational commodity markets as well.  Such a dual track reporting system would actually be quite educational!

Earlier Appropriations Actions

The House passed its agriculture appropriations bill in June of this year.  That bill included a $3 billion, or 14 percent, cut to discretionary spending for U.S. Department of Agriculture (USDA) and the Food and Drug Administration (FDA).  The House bill also included a $1 billion cut to mandatory conservation programs.

The Senate passed its agriculture appropriations bill in early September, proposing to cut $192 million from discretionary programs and taking roughly $742 million, or 12 percent, from farm bill mandatory conservation programs, on top of the half billion dollar cut contained in the FY 2011 agriculture appropriations bill.

Our previous reporting included full descriptions of the funding levels for conservation, rural development, credit, and research programs contained in the House bill and in the Senate bill.

After the Senate completed its bill, the House and Senate conferees were selected and the two sides went to work on a negotiated bill.  The Conference Report must now be sent back to both the House and Senate for a final vote before FY 2012 funding levels are set.

Agricultural Appropriations — As we reported last week, the agricultural appropriations bill for FY 2012 is in “conference” between the House and Senate.  With the House off this week for another one of their frequent recesses, the conferencing to settle differences between the two bills has been left to congressional staff, who are attempting to finish the draft bill by this evening so that the House and Senate member conferees can sign off on it early next week.

The “minibus” package of three appropriations bill that agriculture is part of will also very likely be carrying a critical provision to extend the current “continuing resolution” (CR) that is keeping the government funded while Congress tries to finish up the appropriations bills for the fiscal year that already started on October 1.  The current CR expires Friday, November 18, so passing the minibus with the extension of the CR and having it signed by President by Friday night is a must.  Hence, one way or the other, the agricultural funding bill should be law by the end of next week.

We have huge issues at stake in the appropriations bill.  Key among them are whether the House position will prevail to stop USDA from doing its job of issuing rules to improve marketplace fairness for livestock producers, to cut nearly all funding for the 2012 Conservation Stewardship Program enrollment, and to slash funding for Sustainable Agriculture Research and Education, Value-Added Producer Grants, and Rural Micro-entrepreneur Assistance, or whether the reverse Senate position on each of these issues will carry the day.

Farm Bill — Nearly another week has gone by since our last farm bill update, and while there has been much debate in the interim, mostly around the size and scope of commodity production subsidies, nothing in the overall architecture of the spending cuts has changed to the best of our knowledge.  The bill, which the leaders of the House and Senate Agriculture Committees had promised to deliver to the Joint Select Committee on Deficit Reduction (better know as the Super Committee) on November 1, is now nine days late and counting.

This week’s major drama centered around spokesperson for a Democratic Senator from a wheat state calling the commodity title package currently on the table as a result of negotiations between Senate Chair Debbie Stabenow (D-MI) and House Chair Frank Lucas (R-OK) a “boondoggle for corn growers” and “dead on arrival” while at the same time arguing for more funding for subsidies and better regional balance.  There have also been criticisms of a special deal for cotton that removes cotton growers from payment limits, income eligibility tests, and conservation requirements.  Payment limit issues related to the proposed new dairy program are also a bone of contention.  The lack of unanimity on the commodity title has led in turn to further negotiations, but as of this writing, no new breakthroughs, at least none that have been made public.

Super Committee -- The super quick farm bill process we have experienced for the past two months is premised on aiming for its inclusion in the deficit reduction bill that the Joint Select Committee on Deficit Reduction (or Super Committee for short) is to report to the full House and Senate by Thanksgiving.  This week there has been another exchange of proposals from the Democrats and from the Republicans on the Super Committee, with both plans rejected almost instantaneously by the other side.

The Democrats reduced the overall size of the proposed package from $3 trillion to $2.3 trillion in part to scale back the tax reform and tax revenue increase portion of their plan to $1 trillion in an attempt to make it more palatable to the other side.

Earlier in the week, the Republicans on the Committee offered a $1.2 trillion package, with $600 billion in tax reform, tax revenue increases, increased government fees, and proceeds from the sale of public property.

Both sides contemplate cuts to mandatory programs like Medicaid, Medicare and the farm bill as well as additional cuts to discretionary spending, but they are far apart on the details.  The single biggest difference, however, remains in the tax and revenue area.

Next week would appear to be a make or break week for the success or failure of the Super Committee process, unless the statutory deadline of November 23 to report a deficit reduction bill should get changed in the interim.

We attempted to explain the various scenarios in our Super Committee report last week.  In a nutshell, should the farm bill deal fall apart, but the Super Committee succeed in producing a bill, the cuts to the farm bill will presumably be determined either by the Super Committee or more likely by the top House and Senate leaders.  Should the farm bill deal come together and be reported to the Super Committee, but a Super Committee deal then fall apart, the farm bill will presumably then be punted back into 2012, the year in which it was intended to be written in the first place, though it is unclear under what budget rules it would be operating under at that point.

So, there it is, the quick summary of the three legislative processes.  In sum, all in all another fun week in Washington!

The program grants authority to the Secretary of Agriculture to administer grants to assist agricultural employers and farmworkers by improving the supply, stability, safety, and training of the agricultural labor force.  Such grants may be made to eligible entities for use in providing services to assist farmworkers who are citizens or otherwise legally present in the United States in securing, retaining, upgrading, or returning from agricultural jobs.

Currently, $4 million in funding is available to the program from prior year appropriations.  No funding, however, was made available by Congress in FY 2011 and none is expected in the FY 2012 agricultural appropriations bill that is expected to be finalized next week.

The training and services offered through the ACE grants program will benefit growers by contributing to the establishment of a more skilled pool of workers.  Farmworkers who undergo the training and services offered through the program should have enhanced employment opportunities, with the prospect of obtaining better paying positions on the farm and expanded job opportunities due to their improved skills.  Since hired farm laborers will have greater incentive to remain in agriculture,  they will be less likely to leave farm work for other occupations, leading to increased stability within the agricultural sector.

Comments on the interim rule must be received by the agency on or before December 8, 2011 to be assured of consideration.

To submit comments on the interim rule, please visit the Federal e-rulemaking portal and follow the instructions for submitting comments.  Comments may also be submitted to the program leader, Christine Chavez at christine.chavez@osec.usda.gov.  Be sure to include Regulatory Information Number (RIN) number 0503–AA49 in the subject line of the message.

For more information regarding the rule, such as comment submission, economic analysis, definitions, and eligibility requirements to obtain funding through ACE grants, please refer to the Federal Register posting.

The Conference Committee is considering the FY12 agriculture appropriations bill as part of an appropriations “minibus,” which includes the Commerce-Justice-Science and the Transportation-Housing and Urban Development funding bills as well as the agriculture bill.

The conference began at 5:00pm yesterday but ended abruptly after only ten minutes of introductory statements when the House members left to vote on an unrelated bill.  There are likely to be staff-level meetings today and over the weekend, with the conferees resuming their negotiations on Monday.

NSAC delivered a letter to the House and Senate conferees yesterday outlining our appropriations positions.  In the letter, we voice our opposition to the major cuts contained in both the House and Senate bills, but also urge the conferees to reject any cuts deeper than those included in the Senate bill.  We recommend an increase in the appropriation for direct farm ownership loans, given the very long waiting list in 2011, and strongly urge a rejection of any amendment that would prevent USDA from implementing the GIPSA (Grain Inspection and Packers and Stockyards Administration) rule.

Visit our previous blog posts for detailed descriptions of the House agriculture appropriations bill and the Senate agriculture appropriations bill.