The discretionary spending adjustment would temporarily bring the House spending level in line with the Senate level and with the levels agreed upon by both chambers in the Budget Control Act of 2011.  This leaves open the possibility that the House Appropriations Committee will re-issue its allocations to each appropriations subcommittee, including the Agriculture Appropriations Subcommittee.

The allocations determine how much each appropriations subcommittee can spend on its respective funding bill for the year.  The House Appropriations Committee’s current allocation for the agriculture appropriations bill is $19.4 billion, which is $1.4 billion below the Senate allocation.

The adjustment also means that the Subcommittee will now have the option to produce a FY 2013 appropriations bill that more closely parallels the Senate bill, which was written to Budget Control Act levels and which the Committee passed on April 26.

The modification was included as part of the Sequester Replacement Act, which, combined with a budget reconciliation package, would stop most of the $109 billion in automatic cuts set to occur in FY 2013 (known as the “sequester”) and replace them with $300 billion in cuts over 10 years.

The House Budget Committee today passed both the Sequester Replacement Act and the reconciliation package with a party-line vote.  The full House is expected to pass both bills before the end of this week.  However, neither is likely to become law, as both would have to be approved by the Senate and the President.

As a reminder, the reconciliation package includes $33 billion in cuts to the Supplemental Nutrition Assistance Program.  While this measure will die after House passage later this week, the basic sentiment of increasing cuts to the SNAP program will be debated anew as part of House Agriculture Committee markup of the 2012 Farm Bill.  House markup could happen in late June.

We were pleased to report late last month that the Senate annual agricultural funding bill includes funding increases to several critical programs, including the Sustainable Agriculture Research and Education program and the Value-Added Producer Grants program, both of which are NSAC appropriations priorities.  The bill also steers clear of cutting the Conservation Stewardship Program.  Our work moving forward will be to ensure that the House Agriculture Appropriations Subcommittee produces a FY 2013 funding bill that builds upon these improvements.

In recent years, FSA has increased its scrutiny of loans to poultry and hog producers who raise their animals in vertically integrated systems under production contracts with poultry processors or meatpackers.  FSA realized that the integrators in these systems could control and manipulate the conditions under which these producers operate and put them at risk of defaulting on FSA loans.

In 2009, FSA issued a Notice to its state and country offices requiring that staff look more closely at the business plans submitted by poultry contract growers to assess whether the performance assumptions in a plan are realistic in light of the ability of poultry integrators to manipulate a grower’s operation.  The Notice stated that when a producer’s business plan depends on income from other sources in addition to income from land owned by the producer, the producer’s income must be dependable and likely to continue.

FSA found that, especially for new loan applicants, a contract with a poultry integrator that guaranteed only a single flock – a flock-to-flock arrangement – was not dependable.  The agency determined that for a poultry production contract with a new applicant to be considered dependable, the contract must:

• be for a minimum period of 3 years;
• provide for termination based on an objective “for cause” criteria only;
• require that the grower be notified of specific reasons for cancellation; and
• specify a minimum number of flock placements per year.

In 2010, USDA expanded the guidance with to cover loans to hog contract producers.  In a November 2010 Notice, the FSA also provided an additional requirement for loans to poultry and hog producers – that the production contract “provide assurance of the producer’s opportunity to generate enough income to develop a cash flow budget and repay the loan.” The assurance is required to be stated in the contract, which must incorporate requirements, such as minimum number of poultry flocks or hog “turns” per year, minimum number of bird or hog placements per year, or similar quantifiable requirements.”

In April 2012, FSA issued an Amendment to the Handbook for the Farm Loan Program that reaffirmed the guidance on loans to contract poultry and hog producers.  The Amendment also extended the guidance to loan applicants requesting funding to expand their poultry or hog operation by adding more houses or barns or buying more land to increase the size of the operations.  The production contract must at least cover the facilities financed with guaranteed funds.

USDA’s concerns about the dependability and continuation of the income of contract producers are valid.  In the 2011 Packers and Stockyards Annual Report released in March 2012, the Packers and Stockyards Administration concluded that poultry growers are particularly susceptible to extraction of income by integrators after the contract is executed.  Poultry growers and hog growers can be trapped in a contract by high rates of investment in their facilities and low rates of compensation in the production contract.  This gives integrators the opportunity to extract even more wealth by requiring upgrades to houses and barns after the contract is signed.

The PSA Report estimated that poultry growers are losing equity at a rate exceeding the loss of equity due to inflation.  Based on a per farm asset value for 2009 of $624,047, the gap on earnings to inflation represents an annual loss on equity of $16,903 per farm.  The median return on equity from USDA Economic Research Service data for growers that were earning 90 percent of more their gross income from production contracts is negative (-0.509) when averaged over the 7 years from 2003 to 2009.

USDA is to be commended for continuing its policy of requiring that poultry and hog contracts must demonstrate dependability and likely continuation before providing farm program loans to producers.  But much more must be done to ensure that all poultry and livestock farmers, both those with production contracts and independent producers, receive a fair return on their investments.

The Grain Inspection Packers & Stockyards Administration (GIPSA) regulation issued in November 2011 made some improvements.  Congress, however, blocked additional improvements via a legislative rider on the agricultural appropriations bill last year.  The Senate appropriations bill past last week removes that rider, but action now turns to the House, where action on agricultural appropriations for FY 2013 is expected in the next month.  NSAC urges Congress to cease blocking implementation of the comprehensive GIPSA regulation required under the 2008 Farm Bill.  Continuation of the rider, among other things, will put taxpayers on the line to bail out loans benefiting the integrators.

We are thrilled to report the bill approved by the Appropriations Committee endorsed the Administration’s proposal to fund for the first time the Sustainable Agriculture Federal-State Matching Grant Program as a new component of the Sustainable Agriculture Research and Education (SARE) program.  Combined, the Committee bill provides for $22.7 million for SARE, including $3.5 million for the matching grant initiative.  The latter was authorized by Congress, along with the rest of SARE, back in 1990, but to date it has never received an appropriation.  The Committee’s proposed funding level represents a long overdue 18 percent increase in funding.

We are also glad the Committee endorsed the Administration’s proposal to increase spending for the Value-Added Producer Grants program by $1 million to $15 million.  This is still $5 million less than the long-term funding level for the program and $25 million less than the 2002 Farm Bill provided for the program, but at least a modest step back in the right direction.

In the conservation part of the bill, we are delighted the Committee chose to reject the Administration’s proposal to cut a portion of farm bill mandatory funding for the Conservation Stewardship Program (CSP).  We strongly oppose backdoor efforts in the appropriations bill to reduce mandatory farm bill funding for conservation and applaud the Committee for keeping CSP funding intact.

The Committee bill also steered clear of cuts to the Farmland Protection Program, the Wetlands Reserve Program, and several other conservation programs.  However, they did propose to cut $350 million out of the farm bill mandatory funding level of $1.75 billion for the Environmental Quality Incentives Program, the same amount as in FY 11 and FY 12.  Also cut was farm bill funding for the Wildlife Habitat Incentives Program, down $12 million from the farm bill level of $85 million, a smaller cut than made in the FY 12 appropriations act.

We are also pleased to report the Senate Committee did not include the legislative rider from the FY 12 appropriations act that acts to prevent USDA from doing its job to ensure fair competition in the livestock and poultry marketplace.

The Committee also:

• includes a big bump up for the Agriculture and Food Research Initiative, a quasi-competitive research, education and extension grants program, from $264 million currently to $298 million, a 13 percent increase;
• keeps direct and guaranteed farm ownership and operating loan funds constant at FY 12 levels; NSAC has requested an increase for direct farm ownership loans targeted to beginning farmers and ranchers;
• allows $3 million in remaining 2008 Farm Bill funding for the Rural Microentrepreneur Assistance Program to be spent in 2013; we had advocated for additional discretionary funding but none was granted; and
• maintains level funding or very modest increases for a variety of other programs we follow closely including ATTRA, Organic Transitions Research, IPM Regional Centers, Office of Advocacy and Outreach, Local and Regional Food Enterprise Loan Guarantees, State Mediation Grants, Conservation Operations including Technical Assistance, and others.

For more details, see the NSAC Appropriations Chart on our website, which is now up-to-date with Senate Committee action.

For general details on the bill refer to the Committee’s summary.

To read about the big conflict between House and Senate spending levels for 2013, read our earlier post.

Today, the House Appropriations Committee set its own discretionary spending allocations, but rather than abide by the spending caps agreed to by both the House and Senate in last year’s Budget Control Act, it lowered them an additional $19 billion.

On the Senate side, the allocation allows the Senate Agriculture Appropriations Subcommittee to provide discretionary funding of $20.785 billion for USDA and FDA programs.

The House allocation, as it passed today, caps House Agriculture Appropriations Subcommittee discretionary spending on USDA and FDA programs at $19.4 billion, roughly $1.4 billion below the Senate level.  (The House Democrats put forth an unsuccessful amendment to peg the agricultural allocation at $21.1 billion).

To put this $1.4 billion in perspective, the entire discretionary spending appropriation in FY 2012 for the Food Safety Inspection Service was $1 billion.  The difference is also more than all discretionary spending for the Animal and Plant Health Inspection Service and over half of all rural development spending in FY 2012.

As the House and Senate move forward with their respective agriculture appropriations bills, they will be moving on very different paths.

The Senate Appropriations Committee is scheduled to mark up its agriculture appropriations bill tomorrow morning.  We do not know much about the Chairman’s mark, which has yet to be released; however, funding levels for most programs are expected to be very close to if not the same as last year’s levels.

On the House side, the future of the agriculture funding bill is much less clear.  The House Agriculture Appropriations Subcommittee has yet to set a date to mark up its bill.  An allocation this low complicates matters, making it extremely difficult for the members of the Subcommittee to do their work.  Moreover, President Obama has said that he will veto any spending bill that does not conform to the levels set out in the Budget Control Act.

More likely than not, the House’s unwillingness to abide by the agreement struck in 2011 will lead to a rancorous and drawn out fight over vastly different spending bills come the end of the fiscal year.  We hope that, instead, the two chambers are able to reconcile their bills in conference at the Budget Control Act level and pass something that supports and enhances rather than undermines important rural development, research, conservation, and beginning farmer programs.

Stay tuned for a detailed analysis of the FY 2013 Senate Agriculture Appropriations Bill after it is released tomorrow.

The agricultural appropriations slice of the pie was set at $23.357  billion, nearly the same as the fiscal year 2012 level.  About $2.5 billion of that total will likely go to the Food and Drug Administration, with most of the balance to USDA.

The decision to stay with the Budget Control Act levels were agreed to without any great debate or rancor, as were the allocations to each of the twelve appropriations subcommittees.  The vote was 27-2, with only Republican freshmen Jerry Moran of Kansas and Rob Johnson of Wisconsin voting in the negative and with Senate Minority Leader  Mitch McConnell (R-KY) in the affirmative.

This is in marked contrast with the House, where the Republican leadership has decided to skip past the Budget Control Act and instead cut spending by $19 billion below what the deal they reached in Act and $15 billion below current year levels.  The House-set levels also weight the sub-allocations far more heavily toward military spending than the control act provided.  Those decisions now puts the House and Senate appropriations process on a path to a possible train wreck come the end of September when the current fiscal year comes to a close.

Senate Appropriations Chair Daniel Inouye (D-HI) said today that the level of appropriations instructions approved today are nearly $43 billion less than the total for 2010.   Said Inouye, “By adopting the proposed Committee allocations for this year, in real terms, we will have committed to reducing discretionary funding by 15.5 percent compared to what we appropriated in fiscal year 2010.”

It is not known yet exactly when markup will occur on the FY 2013 Agriculture Appropriations bill, but it is expected to happen within the next couple of weeks.  We will alert readers to that event and the resulting spending decisions.

The letter notes that since 2002, “the Conservation Title has been uniquely and disproportionately targeted for appropriations cuts” and calls on the Appropriations Committees “to recognize the importance of agricultural conservation programs by rejecting cuts to mandatory Farm Bill conservation programs” in the fiscal year (FY) 2013 appropriations bill.

“In the face of ever-tightening discretionary spending caps, the pressure for [changes in mandatory program spending] CHIMPS will only grow stronger,” the letter reads.  “Mandatory funding levels for farm bill programs are agreed upon by Congress during the Farm Bill reauthorization process; it is unacceptable to continue to slash these programs yearly during the appropriations process.”

Over the last several weeks, both the House and Senate Agriculture Appropriations Subcommittees have held hearings with witnesses from a number of USDA’s mission areas.

Visit the NSAC blog to read more about these recent hearings and the FY 2013 appropriations process.

Both Subcommittees are expected to move forward in the coming months with a markup of their respective agriculture funding bills.

Individual funding requests by Senators and outside groups were also due yesterday.  You can download and read our FY 2013 appropriations testimony on our annual appropriations webpage.

Six Senators attended the hearing yesterday – Chairman of the Subcommittee Herb Kohl (D-WI), Ranking Member Roy Blunt (R-MO), John Hoeven (R-ND), Jerry Moran (R-KS), Mark Pryor (D-AR), and Sherrod Brown (D-OH).

Secretary of Agriculture Tom Vilsack began his testimony by discussing the importance of USDA programs to promoting rural development, ensuring access to adequate credit, providing necessary conservation technical assistance, conserving critical natural resources, and supporting the rapid expansion of local and regional food systems.

In response to a question for Senator Sherrod Brown about the closure of Agricultural Research Service (ARS) facilities, Secretary Vilsack suggested that USDA and Congress look into ways to allow for the transfer of land from USDA to beginning farmers that are looking to acquire land.  This is not currently part of the Beginning Farmer and Rancher Opportunity Act (BFROA), but is a very interesting idea that we hope will be developed further by USDA.

Toward the end of the hearing, Senator Hoeven and Secretary Vilsack discussed the Rural Energy for America Program (REAP), and the Senator’s and Secretary’s interest in using REAP money to subsidize oil and gas companies to install ethanol blender pumps at gas stations.  Despite USDA’s own decision to obligate $4.3 million in REAP funding to 65 REAP projects for blender pumps in FY 2011, Vilsack pointed out that the House included a prohibition on federal subsidies for ethanol blender pumps and infrastructure in its FY 2012 appropriations bill.  This particular use of the program was also discussed and explicitly rejected in the conference committee to finalize the 2008 Farm Bill.  NSAC opposes this new unauthorized use of the REAP program.

Conservation Funding Letter

On Friday, March 30, 19 Senators wrote to the Agricultural Appropriations Subcommittee urging full funding for the farm bill conservation programs.  In recent years, the appropriations bill has used backdoor methods to cut mandatory farm bill funding for conservation to the tune of $1.5 billion in just the last two years.  The letter aims to reverse that trend, noting big environmental challenges, high farmer demand, and economic growth and job opportunities.

Led by Senators Michael Bennet (D-CO) and Chris Coons (D-DE), the letter was also signed by former Agriculture Committee chairmen Tom Harkin (D-IA) and Pat Leahy (D-VT) as well as Dick Durbin (D-IL) and Chuck Schumer (D-NY) from the majority leadership.

Two Houses Divided

With the adoption of a budget resolution this week in the House of Representative, passed with only Republican votes, the two houses of Congress are setting off to work on their respective appropriations bills for the year with different assumptions about the amount of money they have to work with.  The Senate subcommittees will be working with the funding levels agreed to last summer in a bipartisan, bicameral agreement between the House, Senate, and White House.  The House subcommittees, however, will be working from a new funding cap $19 billion lower than what was agreed to and adopted into law through the Budget Control Act.

This difference very likely ensures another few weeks or month of high drama in September and then again in December, when Congress tries to reach a final agreement first on a continuing resolution keeping the government funded past the September 30 end of the fiscal year and then possibly on a final bill during the lame duck session of Congress after the elections.

NSAC will continue to monitor and report on the appropriations process as it unfolds.  We expect both the House and the Senate Agriculture Appropriations Subcommittees to mark up their appropriations bills in the coming months; beyond that, however, it remains to be seen whether the bills will be passed individually, folded into a omnibus package, or dropped in favor of a long-term continuing resolution based on current year funding levels.

Click here to read our earlier post on the FY 2013 appropriations process.

On Tuesday, March 20, the National Sustainable Agriculture Coalition (NSAC) delivered its fiscal year (FY) 2013 agriculture appropriations testimony to the House Agriculture Appropriations Subcommittee.  The testimony includes NSAC’s FY 2013 appropriations requests for critical conservation, rural development, marketing, research, credit, and beginning and minority farmer programs.  We will deliver matching funding requests to the Senate Agriculture Appropriations Subcommittee next week.

You can visit our annual appropriations webpage to download and read the testimony.

Senators have until March 30 to deliver food and agriculture funding request letters to Senator Herb Kohl (D-WI), Chairman of the Subcommittee.  The deadline for member letters in the House was March 20.

While there is no set timeline, both subcommittees are likely to mark up their respective agriculture appropriations bills in the next few months.

House and Senate Budget Committee Action on Discretionary Spending

On Wednesday, March 21, the House Budget Committee passed its FY 2013 budget resolution, which sets a top-line funding cap for discretionary spending in FY 2013.  The budget resolution caps discretionary spending at $1.028 trillion, which is $19 billion less than the top-line number that Congress agreed upon for FY 2013 in the Budget Control Act of 2011.  That Act set up a series of automatic cuts, known as “sequestration,” which would begin to take effect in January 2013.  The House budget resolution aims to replace the sequester for FY 2013 (but not for the following nine years) with an alternative set of cuts, including the extra $19 billion generated by further reducing the discretionary spending cap and much larger savings from mandatory programs, including Medicaid, Medicare, and the farm bill.

If the House passes the budget resolution, which they are expected to do next week, the House Appropriations Committee will have to conform to this extremely limiting spending cap.  The next step for the House Appropriations Committee will be to use the top-line cap to set sub-allocations (also known as 302b allocations) for the various appropriations subcommittees, including the Agriculture Appropriations Subcommittee.  The sub-allocation will determine how much money the Subcommittee has to work with when setting FY 2013 spending levels for discretionary farm bill programs.

The Senate will also be moving forward with its appropriations bills.  Senator Kent Conrad (D-ND), Chairman of the Senate Budget Committee, filed a “deeming resolution” on Tuesday, which allows the Appropriations Committee to begin work on its FY 2013 bills.  Unlike the House, however, the Senate will use the spending cap agreed to by the House, Senate and White House in the Budget Control Act of 2011 to determine its sub-allocation to the Senate Agriculture Appropriations Subcommittee.

The House budget action to renege on last summer’s budget deal, assuming passage when it reaches the House floor next week as seems likely, puts the two chambers at odds over the funding bills.   It thus quite possibly sets the stage for another showdown over a potential government shutdown at the end of September, this time just in advance of national elections.

House Hearings on Farm and Research Programs

Meanwhile, the House Agriculture Appropriations Subcommittee held two hearings this week, the first on USDA’s FY 2013 budget requests for the Farm and Foreign Agricultural Service mission area, and the second on the USDA’s requests for the Research, Education, and Economics mission area.

At the first hearing, the Subcommittee raised a number of questions about the Conservation Reserve Program (CRP).  The President’s budget requests a CRP enrollment of 30 million acres in FY2013.  FSA Administrator Bruce Nelson testified that there are now 29.7 million acres in the CRP, down nearly 20 percent from FY2007.  About 18 percent of the acres are in the continuous CRP conservation buffer and special wildlife practices component.

Earlier in the year, USDA announced a new highly erodible land initiative and a new grasslands, wetlands and biodiversity initiative to target enrollment of land in the continuous CRP.  In addition, CRP contracts on about 6.5 million acres are scheduled to expire at the end of September 2012.  USDA has opened a new CRP general sign-up, which began on March 12 and will end on April 6.  The Administrator emphasized, in response to questions from Subcommittee Chairman Jack Kingston (R-GA), that CRP not only conserves resources and increases water quality but also supports recreational businesses and jobs in rural areas.

Administrator Nelson also noted that USDA suspended the CRP Transition Incentives Program (TIP) in February because over $20 million of the $25 million provided in the 2008 Farm Bill has been expended.  The CRP-TIP offers two additional years of CRP payments to retiring landowners who agree to transition their expiring CRP acres to a new or socially disadvantaged farmer who enters the land into production using sustainable growing practices.  Referring to CRP-TIP as a success and “a great tool” in the conservation toolbox, the Administrator noted that FSA is now reviewing about $1 million in pending requests for contracts in addition to the 1,500 contracts already obligated.

Issues concerning beginning farmers and ranchers and socially disadvantaged farmers and ranchers (SDA) were also covered at the hearing.  In FY 2011, 63 percent of FSA direct lending, just over $1 billion, went to beginning farmers.  FSA also assisted beginning farmers with an additional $735 million in credit through loan guarantees in FY 2011.  Since FY 2006, FSA has increased its lending total to beginning farmers by 63 percent.

Representative Sanford Bishop (D-GA) emphasized the importance of FSA loans to socially disadvantaged farmers and requested a state-by-state breakdown of such loans.  He also questioned whether the funding provided to the USDA Office of Advocacy and Outreach is sufficient and urged that the Office do more outreach.

Following the Farm and Foreign Agricultural Service hearing, the Subcommittee examined the President’s FY 2013 request for the programs that fall within USDA’s Research, Education, and Economics mission area.

A number of questions were asked about the Agriculture and Food Research Initiative (AFRI) and Sustainable Agriculture Research and Education (SARE) program.  Representative Cynthia Lummis (R-WY) voiced her concern that only 30 percent of AFRI funding is going to the foundational program.  Currently, 70 percent of AFRI grants are administered through the “challenge area” component of the Initiative.  In line with Rep. Lummis’ comments, NSAC has advocated for a better balance between foundational grants and challenge area grants.  Similarly, Rep. Sanford Bishop (D-GA) urged USDA to ensure that increased funding for AFRI does not come at the expense of funding for other grant programs that offer more opportunities for smaller projects to successfully compete for funding.

Rep. Sam Farr (D-CA), Ranking Member of the Subcommittee, noted with favor that the Administration has requested money for the federal-state matching grants component of the SARE program for FY 2013.  Rep. Farr asked the witnesses to explain how this component would enhance the keystone sustainable agriculture program at USDA.

The USDA witnesses at the hearing noted that the state matching grant component would allow the agency to integrate sustainable agriculture into the state experiment stations and extension service in order to serve and reach small and mid-sized farmers across the country.  USDA Undersecretary of Research, Education, and Economics, Catherine Woteki, explained that there has not been any meaningful increase in funding for sustainable agriculture research in a decade.  In fact, despite its $60 million farm bill authorization, the entire program was funded at just $19.2 million in FY 2012.

NSAC will continued monitor the appropriations process and will you apprised as events unfold.

Last year, ATTRA fans nationwide were shocked when the program, also known as the National Sustainable Agriculture Information Service, had its Fiscal Year 2011 funding completely eliminated.  Thankfully, and in part due to the vocal objections of so many users of its services, Congress reinstated the program’s funding in FY 2012, though at the lower level of $2.25 million as opposed to $2.8 million in 2010.

Even after Congress committed the funds, it took months for the funds to actually be released. In early March the check finally arrived so the program can return to full functioning.  The ATTRA staff want you to know that their doors are open again and encourage you to be in touch with them once again for your sustainable farming information needs.

Among many audiences who benefit, ATTRA’s resources are of particular assistance to beginning farmers.  One such farmer, Dana Jokela, who works at Featherstone Farm in Rushford, Minnesota, says that “ATTRA has been invaluable in helping me as a beginning farmer.  It has articles written by knowledgeable researchers and farmers in many areas of production and marketing.” Similarly, Alissa Moore, farm manager at Well Spring CSA in West Bend, Wisconsin, did four consecutive internships that she found using ATTRA’s directory of sustainable farming internships and apprenticeships before coming to manage Well Spring CSA.

Please visit ATTRA’s website to take advantage of these valuable resources, now that their doors are open once again.

The four hearings covered the President’s budget requests for four USDA mission areas: Rural Development, Marketing and Regulatory Affairs, Natural Resources and Environment, and Food Safety.  Hearings for the Farm and Foreign Agricultural Services mission area and Research, Education, and Economics mission area have been scheduled for later this month.

The first hearing, which occurred on March 1, focused on rural development.  Judith Canales, Administrator of the Rural Business-Cooperative Service spoke about the importance of the rural development programs, including the Value-Added Producer Grants (VAPG) program, Rural Business Enterprise Grants (RBEG) program, Rural Microentrepreneur Assistance Program (RMAP), and Rural Energy for America Program (REAP).  In her written remarks, Canales states “USDA is revitalizing rural communities by expanding economic opportunities and creating jobs for rural residents to promote investment[…] and build a link between local production and local consumption.”

In response to a question from Rep. Sanford Bishop (D-GA) regarding improving and expanding upon the Rural Microentrepreneur Assistance Program in FY 2013, Administrator Canales explained that the Administration’s FY 2013 request of $3.4 million in discretionary funding for the program would support $22.5 million in loans and create or save more than 3,000 jobs.  Rep. Bishop noted that RMAP is able to leverage a small amount of money to create a major impact in rural America.  During the same exchange, Administrator Canales also spoke to the importance and effectiveness of VAPG, noting that the program is targeted at small business development and consistently contributes to farmer-led job creation in rural areas.

VAPG provides competitive grants to producers, groups of producers, or producer-owned businesses or cooperatives to develop value-added producer-owned enterprises. VAPG grants can be used for business planning and feasibility studies as well as for working capital.  Since 2001, the program has provided 1,541 grants totaling more than $210 million to all 50 states.  Despite being a key part of a proven job-creation strategy, VAPG has been cut by more than 30 percent in the last two years.  We hope that Congress does not continue this trend in FY 2013.

Following the rural development hearing, the Subcommittee held a hearing on March 6 to consider the President’s FY 2013 budget request for USDA’s Marketing and Regulatory Affairs mission area.  One of the issues that arose at the March 6 hearing was USDA’s implementation of the Grain Inspection, Packers & Stockyards Act (GIPSA) rule.  USDA implemented pieces of this rule last year, but was cut of at the knees on the rest of it by last year’s agriculture appropriations bill.  Unfortunately, two members of the Agriculture Appropriations Subcommittee spoke out against the rule on behalf of the anti-competitive meatpacking industry.  USDA will have an opportunity to implement the remaining portions of this fair competition rule in FY 2013 so long as it is not once again limited by the agriculture appropriations bill.

Subcommittee Ranking Member Sam Farr (D-CA) spoke up in support of a number of NSAC appropriations priorities related to organic production.  In particular, Rep. Farr noted the importance of maintaining funding for the National Organic Certification Cost-Share Program and for organic price data collection and reporting by the Agricultural Marketing Service, National Agricultural Statistics Service, and Economic Research Service.

The Subcommittee held two more hearings last week, one on March 7 and another on March 8.  Both Under Secretary Harris Sherman and Natural Resources Conservation Service (NRCS) Chief Dave White testified at the March 7 hearing on the President’s budget requests for the Natural Resources and Environment mission area.  Chief White began by discussing the agency’s Streamlining Initiative.  He noted that while the Initiative will result in increased efficiencies, NRCS must ensure that those efficiencies do not limit the agency’s ability to provide technical assistance to producers.

Within the agriculture appropriations bill, the Conservation Operations account is the primary discretionary funding mechanism used to support technical assistance for farmers and ranchers.  This is discretionary funding is paired with technical assistance support from mandatory conservation program spending, which does not come from the Appropriations Committees, but rather from the Farm Bill itself.  While appropriators do not provide mandatory funding, they do have the ability to limit it and have done so repeatedly in recent years.

In order to provide adequate technical assistance to producers across the country, NRCS needs more boots on the ground; and while the Streamlining Initiative will work toward this goal, it will do little so long as the Conservation Operations account is underfunded and mandatory conservation spending is undercut.

The Administration’s FY 2013 budget request includes a $347 million (roughly 20 percent) permanent cut to the Environmental Quality Incentives Program (EQIP).  Subcommittee Chairman Jack Kingston (R-GA) asked Undersecretary Sherman to explain how this Change in Mandatory Program Spending (CHIMPS) would play out on the ground.  Undersecretary Sherman noted that the CHIMPS would lower the level of activity in the program and “would delay the work that needs to be done.”

Representative Farr then asked Chief White to touch on the issue of reattaching highly erodible land and wetland conservation requirements to subsidized crop insurance.  This has become an increasingly important issue in recent years, with support from a broad array of groups, including NSAC, the National Farmers’ Union, American Farmland Trust, National Wildlife Federation, and many others.

Basic conservation requirements to protect against soil erosion and wetland drainage have been a condition of receiving farm subsidies since 1985.  This conservation requirement has dramatically reduced soil erosion on farmland and protected wetlands, keeping land productive and important natural resources intact.  Today, the biggest farm subsidy paid by U.S. taxpayers is for crop insurance.  With this shift in the prominence of crop insurance and with proposed changes to the farm safety net that will accelerate this shift, many groups and farmers around the country believe that compliance should be reattached to crop insurance subsidies, as it was up until 1996.  Chief White noted that he recognizes the importance and understands the rationale, but noted that in the end it is up to the House and Senate Agriculture Committees to decide.

Following this exchange, Rep. Farr asked Chief White to discuss the FY 2012 Conservation Stewardship Program (CSP) sign up, which ended in January, and to comment on the improvements that NRCS made to the program for FY 2012.  Chief White noted that demand for the program this year was incredible high and that the agency significantly increased the transparency and functionality of the Conservation Measurement Tool, which NRCS uses to enroll, score, and rank producers who apply for the program.  See this earlier post about the recent Senate Agriculture Committee hearing on conservation for more detailed remarks by Chief White.

The House Agriculture Appropriations Subcommittee will hold two more hearings next week.  A hearing on the Administration’s requests for the Farm and Foreign Agricultural Services mission area and Research, Education, and Economics mission area will be held on March 20 and March 21, respectively.  We will report on the results of those hearings shortly thereafter.