Conservation Reserve Program

The Senate Agriculture Committee’s version of the farm bill cuts the Conservation Title by $6.37 billion over ten years.  Roughly 60 percent of the cut to conservation ($3.8 billion) comes from the Conservation Reserve Program (CRP).  The program’s total acreage cap is ratcheted down over five years from its current level of 32 million acres to 25 million acres.  To a significant degree, this reduction tracks changes in CRP enrollment expected as a result of market forces, though with the declining cap the opportunity for new general sign-ups would be relatively small.

Beyond reducing the acreage cap, the Senate bill makes a number of substantive changes to the program.

We are happy to report that funding for the CRP-Transition Incentives Program (CRP-TIP) for beginning farmers was doubled from $25 million in the underlying draft bill to $50 million over five years.  The increase came by way of an amendment by Sen. Mike Johanns (R-NE) that was accepted as part of the revised bill issued by Chairwoman Debbie Stabenow (D-MI) and Ranking Member Pat Roberts (R-KS) on April 25.  The program ran out of funds this year due to high demand and would have likely done so again in less than two years had funding been kept level at $25 million.  The push by Sen. Johanns brought it closer to what is needed over the five-year farm bill.

CRP-TIP offers a special incentive of two years of extra CRP rental payments to owners of land that is currently in the CRP but returning to production, who rent or sell to beginning or socially disadvantaged farmers and ranchers who will use sustainable grazing practices, resource-conserving cropping systems, or transition to organic production.  Unfortunately, the new Committee bill does not include measures to further strengthen the program that had been proposed in the Beginning Farmer and Rancher Opportunity Act (BFROA).

The Committee-approved bill adds grassland to the list of lands eligible for CRP enrollment, so long as the land is located in an area historically dominated by grass, is made up predominantly of plants suitable for grazing, and can provide habitat for ecologically significant animal and plant populations.  It reserves 1.5 million acres within the program for enrollment of such grasslands, and gives a priority for enrolling land with expiring CRP contracts.  NSAC advocated for a provision to encourage expired CRP acres to remain in grass-based agriculture under a long term or permanent grassland easement.  While the change in the bill does not accomplish this, it is a decent second best alternative to conserve environmentally sensitive CRP grasslands.

The Senate Committee bill also waives the 25 percent rental rate reduction for grazing livestock on CRP acres when the livestock are owned by beginning producers.  This provision was originally filed as an amendment by Senators Amy Klobuchar (D-MN), Mike Johanns (R-NE), and Max Baucus (D-MT) and was subsequently included in the revised draft bill issued by the Chair and Ranking Member on April 25.  NSAC does not have a position on this provision, though we do worry some about possible abuse.

Environmental Quality Incentives Program and Wildlife Habitat Incentives Program

The bill combines the Environmental Quality Incentives Program (EQIP) and the Wildlife Habitat Incentives Program (WHIP) into a single program and cuts total funding by $1.605 billion, or approximately 8.7 percent.  This cut is significantly smaller than the 10 percent cut included in the draft farm bill from last year.

As has always been the case for EQIP, 60 percent of the consolidated program’s funding goes to livestock operations, including but not limited to infrastructure expenditures for concentrated animal feeding operations (CAFOs).  The new merged program also includes a 5 percent set aside for wildlife in lieu of WHIP.

The statutory language that led to creation of the EQIP Organic Initiative did not change.  Attempts to improve program operation and coordination were turned back, as were efforts to equalize the payment limits applied to organic and non-organic producers.  Organic farmers are limited to $80,000 in EQIP payments over a five-year period, whereas all other farmers are entitled to up to $300,000 in the same time period.

Both the Beginning Farmer and Rancher and Socially Disadvantaged Farmer and Rancher set asides within EQIP and CSP are retained at five percent.  Efforts to increase the percentage to 10 percent were turned away, despite evidence that the set-asides have succeeding in helping to level the playing field for underserved segments of agriculture.

Within the 5 percent set-asides for socially disadvantaged farmers and ranchers, the Senate bill creates a new preference for farmers and ranchers who are veterans.  It also adds veteran farmers to the list of eligible applicants (along with beginning and socially disadvantaged farmers) who can receive an increased cost-share rate.  NSAC worked for the inclusion of the veteran farmer provisions and we applaud Senators Max Baucus (D-MT) and Mike Johanns (R-NE) for successfully spearheading the effort.

The advanced EQIP cost share for Beginning, Socially Disadvantaged, and Limited Resource Farmers and Ranchers is also retained at 30 percent, as opposed to 50 percent proposed by the Beginning Farmer and Rancher Opportunity Act.  Having the cash on hand to make the full expenditure in advance of receipt of the cost share is a significant barrier to participation by farmers with limited ability to pay.

The Senate bill makes two significant changes to the EQIP Conservation Innovation Grants (CIG) program.  First, the bill eliminates a special carve out for projects that address air quality concerns on agricultural operations.  Second, it establishes a new requirement that directs USDA to report to Congress on CIG project funding and results, and on efforts to integrate project findings into USDA’s conservation efforts.  This was an NSAC proposal, and we applaud Chairwoman Stabenow and Ranking Member Roberts for including it in the Senate bill.

Regional Conservation Partnership Initiative

Like the draft farm bill prepared for the super committee last year, the Senate bill combines the Cooperative Conservation Partnership Initiative (CCPI), Agricultural Water Enhancement Program (AWEP), Chesapeake Bay Watershed Initiative (CBWI), and Great Lakes Restoration Initiative (GLRI) to create a single regional partnership program.  The CCPI and its predecessor Partnerships and Cooperation Initiative were originally moved forward into the farm bill arena by NSAC.

While the CBWI and AWEP had a combined baseline of $1.1 billion through 2012, the new regional partnership program has a $1 billion baseline, equating to a $100 million or slightly less than 10 percent cut.  Like the current CCPI, 6 percent of EQIP and CSP funds are reserved for the regional partnership program.  However, unlike the current CCPI statute, which splits funding authority between the states (90 percent) and national (10 percent), the new bill splits the authority between national (50 percent), states (25 percent), and “critical areas” (25 percent).

Whereas the super committee draft specifically identified these critical areas, the new Senate Committee bill directs the Secretary to identify not more than eight such areas.  According to the legislative language, a critical area will: (1) include multiple states with significant agricultural production; (2) be covered by an existing regional, state, binational, or multistate agreement; (3) have water quality concerns; (4) have water quantity concerns; and, (5) be subject to regulatory requirements that could reduce the economic scope of agricultural operations within the area.

Unlike current law and the earlier draft of the farm bill, the Senate version of the bill explicitly lists nutrient management as an eligible activity under the program.  The language was filed as part of an amendment to be offered by Senator Sherrod Brown (D-OH) and was subsequently included in the April 25 revised draft bill.  This is an important, albeit relatively small, step toward more comprehensive nutrient management policy in the farm bill.  The regional partnership program also has an easement option through the Agricultural Conservation Easement Program, which is described below.

The new bill makes a significant step forward by strengthening the 2008 Farm Bill provision to allow for program rule flexibility with respect to local partnership programs.  The new provision, including by the Chair and Ranking Member, clarifies that only basic rules regarding appeals, payment limits, and conservation compliance are not able to be waived.  Other program rules can be modified if NRCS determines such changes would help fulfill the purposes of the partnership project.

Less clear is the status of funding for technical assistance under the program.  While it is clear NRCS may provide technical assistance to farmers under special partnership projects, in the case where the partners provide the assistance, it is not entirely clear whether any portion of the funding for such assistant may come from NRCS.  This issue if perhaps the key remaining issue for state and local farm and conservation organizations hoping to participate in this innovative program delivery mechanism.

Combined Easement Program

On the easement side of the Title, three programs – the Wetlands Reserve Program (WRP), Grasslands Reserve Program (GRP), and Farm and Ranch Lands Protection Program (FRPP) – are combined into a single easement program with two branches.  The first branch combines FRPP and GRP into an ‘agricultural lands easement program.’  The second branch consists of a wetlands easement program very similar to the WRP.

Nationally, no less than 40 percent of the program funding can go to the agricultural lands easement program.  While this does leave some room for USDA to increase that proportion, the split between wetland easements and agricultural land easements is expected to be 60/40, respectively, when the program is implemented.  Each state conservationist, though, can request an adjustment to better reflect the needs of their state.

The funding for the new combined easement program will now all be denominated in dollars rather than acres per year.  The program is provided with $3.2 billion over the next ten years and unlike the current WRP and GRP, the new funding is permanent funding rather than temporary.  This is a significant improvement, though the flip side is that the overall funding levels for all three underlying programs will be signficantly less than what it has been per year in the last farm bill cycle.

Within the agricultural land easement program, we are very happy to report that the purpose of the program now includes the promotion of agricultural viability for future generations.  This change was part of the Beginning Farmer and Rancher Opportunity Act and was pressed forward last week on an amendment by Sen. Pat Leahy (D-VT) that was accepted and included in the revised draft bill presented by the Chair and Ranking Member on April 25.

This is a big step forward toward ensuring that beginning farmers and ranchers are able to participate in the program and that the program itself aims to keep working farms in business over the long term.  We will continue to explore opportunities to include additional provisions to advance this important concept that were part of the Beginning Farmer and Rancher Opportunity Act as the farm bill process moves forward.

Other Changes to the Conservation Title

The bill does, however, decrease funding for the Voluntary Public Access (VPA) program by 20 percent to $40 million over five years.  While funding for VPA was reduced relative to the last farm bill, it was actually increased relative to the draft  bill released on April 20.

The Senate bill includes a new provision that requires USDA to promulgate a single initial application for participation in all USDA conservation programs.  This change was first proposed in an amendment filed by Senator Dick Lugar (R-IN) and is intended to help alleviate paperwork and redundancy for farmers and USDA.

Finally, the Senate bill creates a program to provide grants to states to purchase “terminal lakes” that are located on agricultural land and that are ineligible for enrollment in the Wetlands Reserve Program.  The new language includes eligibility restrictions relating to flooding depth, access for agricultural use, and cropping and grazing history.  The program includes a 50 percent state cost share.  The language authorizes Congress to appropriate $25 million to remain available until expended for land purchase grants.  It also provides $150 million in mandatory funding for the Department of the Interior’s Bureau of Reclamation to transfer water into some terminal lakes under certain conditions.

Last week, the U.S. Supreme Court issued an opinion in the case National Meat Association v. Harris that strikes down a California law with requirements for how slaughterhouses handle pigs that cannot walk, referred to in the law as “nonambulatory.”  The California law requires slaughterhouses to take immediate action to humanely euthanize any nonambulatory animal that they are holding.  In addition, under the law, slaughterhouses cannot process, butcher, or sell meat or products of nonambulatory animals for human consumption.

The Court found that the California law was more stringent than the regulations issued by USDA’s Food Safety and Inspection Service (FSIS) under the authority of the Federal Meat Inspection Act.  Under the federal regulations, a nonambulatory pig is given an initial inspection to determine if it has a severe disease or condition.  If the inspection finds a severe disease or condition, the animal is designated “condemned” and killed apart from the slaughtering facility where food is produced.  Pigs that are not immediately condemned are designated as “suspect.”  They are set aside, monitored, and slaughtered separately from other livestock.  Then a food safety inspector examines the parts of the suspect animal to determine if any parts can processed for human food.

The Court determined that the Federal Meat Inspection Act includes a specific preemption clause that prevents states from imposing requirements within the scope of the Act that are in addition to, or different than, the requirements under the federal Act.  The Court also concluded that the Act’s preemption clause has a wide scope and prohibits states from imposing additional or different requirements even if they do not conflict with the federal Act.  Only states that have established state inspection programs for regulating facilities and operations that produce meat products limited to a market within the state can have more stringent requirements than those of the federal Act.

The Court left for another day the issue of whether the federal Act preempts a provision in the California law that makes it a crime for a slaughterhouse to buy nonambulatory animals at a site off the premises of the slaughterhouse.

Note that the federal law already has more stringent requirements for how nonambulatory cattle, known as “downer” cattle, are handled.  In 2009, USDA issued the regulations requiring that downer cattle be euthanized and banning the processing of the downer cattle for products that enter the food supply.  This regulation was issued in response to a Humane Society video, released in 2008, that showed workers at a California meatpacking plant abusing sick and injured downed cattle in an attempt to get them to walk to the slaughterhouse.  The video also led to the largest meat recall in the U.S., as well as the impetus for California to enact its law for the handling of all nonambulatory animals.

Pending federal legislation on concerning downed animals

Pending federal legislation, the Downed Animal and Food Safety Protection Act (H.R. 3704), would revise the Federal Meat Inspection Act to require that any cattle (including calves), sheep, swine, goats, or horses, mules, or other equines, that will not stand and walk unassisted be immediately and humanely euthanized.  The Act would also require inspectors to condemn the animals, so that they cannot be used for food consumption.  Under the Act, states would be allowed to adopt more stringent measures than allowed under the federal Meat Inspection Act.

Agreement between Humane Society of the U.S. and United Egg Producers

Another animal welfare measure, addressing the housing of egg-producing hens, was introduced in Congress last week.  The bill (H.R. 3798) would amend the Egg Products Inspection Act by significantly increasing the space required per hen and establishing new air-quality standards for hen houses.  Farmers would be given a phase-in period to make required changes.  The bill would also establish standards and requirements for labels on egg packages such as eggs from “free-range” hens and eggs from “cage-free” hens.

The measures in H.R. 3798 would codify many measures included in an agreement between the Humane Society of the United States and United Egg Producers.  In return for changes by egg producers, the Society would curtail work on state ballot initiatives intended to achieve the standards state-by-state.  The agreement is supported by the American Society for the Prevention of Cruelty to Animals and some other animal welfare groups, the National Consumers League, and state agricultural and egg producer groups, including the Association of California Egg Farmers, Colorado Egg Producers Association, Florida Poultry Association, Michigan Agri-Business Association, Michigan Allied Poultry Industries, North Carolina Egg Association and Ohio Egg Processors Association.

Some animal welfare organizations are opposed to H.R. 3798.  In addition, the American Farm Bureau Federation opposes the federal bill, along with the National Cattlemen’s Beef Association, the National Pork Producers Council, the National Chicken Council, the National Turkey Federation and the National Milk Producers Federation.

The tool calculates pollutant loadings from NPDES permits and Discharge Monitoring Report (DMR) data from EPA’s Permit Compliance System and Integrated Compliance Information System for the National Pollutant Discharge Elimination System.  Currently, the Tool’s database includes information available for the years 2007 through 2010.  Pollutant loadings are presented as pounds per year and as toxic-weighted pounds per year to account for variations in toxicity among pollutants.  The tool ranks dischargers, industries, and watersheds based on pollutant mass and toxicity, and presents top ten lists to help you determine which discharges are important, which facilities and industries are producing these discharges, and which watersheds are impacted.

The tool also includes wastewater pollutant discharge data from EPA’s Toxics Release Inventory (TRI) for the years 2007 through 2010.  Users can search TRI data to find the facilities with the largest pollutant discharges to surface waters or sewage treatment plants.  Users can also compare the DMR data search results against TRI data search results and vice versa. The tool clearly labels the source of data when displaying search results but does not mix TRI or DMR data when calculating pollutant discharges

Users of the database can sort data by geographic location, industry, year, and pollutant.  Information is displayed in graphs and maps.  The DMR tool also ranks pollutant mass and toxicity in “top ten” lists, highlighting the most important pollutants, the facilities or sectors with the worst exceedance records, and the watersheds most affected.  The public can then link to enforcement information for those facilities that have violated EPA limits.

The tool is an efficient and accessible means for individuals to track the health their local watersheds.  It should be noted, however, that the tool is not particularly useful with respect to Confined Animal Feeding Operations (CAFOs).  While CAFOs are point sources, because so many large CAFOs claim not to discharge they are not included in the tool.

According to yesterday’s press release, the new state program is “designed to increase the voluntary adoption of conservation practices that protect local rivers, streams and other waters by reducing fertilizer run-off and soil erosion.  Through this partnership, producers who undertake a substantial level of conservation activities to reduce nutrient run-off and erosion, will receive assurance from the state that their farms will meet Minnesota’s water quality standards and goals during the life of the agreement.”

Through a Memorandum of Understanding (MOU), USDA and EPA will work with the State to develop a certainty framework, which will be applied in priority watersheds.  It is not yet clear how those watersheds will be determined.  The MOU is the first step in developing what has been dubbed the Minnesota Agricultural Water Quality Certification Program (AWQCP), which includes USDA, EPA, Minnesota Department of Agriculture, Minnesota Pollution Control Agency, Minnesota Board of Water and Soil Resources, and Minnesota Department of Natural Resources.

According to the press release, “Minnesota and its partners will establish a Technical Advisory Committee to develop the certification program that will support the state’s water quality standards and goals.  The committee will solicit input from stakeholders in designing criteria to provide certainty for producers who have voluntarily attained or maintained a certain level of water quality improvements on their agricultural land.  Minnesota will test the program in several pilot watersheds.”

Beyond the information contained in the release, very little is known about the new certainty program.  It remains unclear, for example, which “conservation activities” will be offered to producers and through what program or programs they will be offered.  There is little information about what type of monitoring, verification, and reporting mechanisms will be built into the program.  There has also been no indication as to whether or not concentrated animal feeding operations (CAFOs) that are regulated as point sources of pollution under the Clean Water Act will be eligible to sign certainty agreements. Rumor has it that the “certainty” period would run ten years, though that is unconfirmed.

The most detailed information available at this point is a two page conceptual document issued by EPA and USDA last summer.  It outlines the general concept, with the details to be worked out with particular states.

The Minnesota proposal appears to bear some resemblance, though significant differences, from the Michigan Agriculture Environmental Assurance Program and the Louisiana Master Farmer Program.

Coverage of the announcement included articles in the Pioneer Press and in the Star Tribune.

The Minnesota Environmental Partnership also issued this statement as an initial response to the announcement.

We look forward to learning more about the new Minnesota partnership in the coming months.  Clearly, the devil will be in the details, which will determine whether this is a step forward or not.

Clean Water Act Section 308 gives the EPA broad authority to seek information from point sources, including CAFOs, about the disposition of waste that can result in water pollution and water quality degradation.  This information can aid EPA in many of its functions, including the development of effective Clean Water Act permit regulations.  The information can also help states in preparing state water quality reports.  Regrettably, the proposed rule exempts critical information from CAFO reporting requirements and leaves huge gaps in the ability of EPA and the states to regulate CAFO waste effectively.

The CAFO reporting rule is required by a settlement between EPA and environmental groups that challenged a 2008 CAFO Clean Water Act permit regulation.  These groups fought for the proposed rule for CAFO information reporting because the weak 2008 regulation did not require all CAFOs to obtain a Clean Water Act permit.  In addition, the CAFO permit regulation has large gaps that leave tons of CAFO manure and other waste unregulated.  The biggest flaw is that waste applied on land that is not under the control of the CAFO operator is not subject to the permit’s nutrient management plan.  In addition, EPA omitted from the permit controls over land application of heavy metals, antibiotics, pathogens, growth hormones, and other substances commonly found in CAFO waste.

EPA’s proposal for CAFO reporting does little to address these flaws in the CAFO permit rule.  First of all, EPA proposes two alternatives for the scope of the rule.  One option would require all CAFOs to report certain information to EPA, unless states with authorized NPDES programs choose to provide this information on behalf of the CAFOs in their state.

Under the second option, only CAFOs in “focus watersheds” that have water quality concerns already known to be associated with CAFOs would be required to report information to EPA.  This second option is nonsensical – without sufficient information about CAFO activities in watersheds, how is EPA to know whether a watershed is already impaired or likely to become impaired by CAFO waste?

In addition, EPA is proposing to require CAFOs to submit information on only five out of fourteen items addressed in the settlement, including

• Type of facility;
• Number and type(s) of animals;
• Whether the CAFO land applies CAFO waste;
• Available acreage for land application; and
• Whether the CAFO has a NPDES permit.

EPA proposed not to obtain information on the following:

• Name and address of the owner and operator;
• If a contract operation, the name of the vertical integrator;
• Location (longitude and latitude) of the operation;
• Type and capacity of manure storage;
• Quantity of manure, process wastewater and litter generated by the CAFO;
• If the CAFO land applies, whether it implements a nutrient management plan for land application;
• If the CAFO land applies, whether it employs nutrient management practices and keeps records on site consistent with the CAFO permit regulations;
• If the CAFO does not land apply, alternative uses of manure, litter, and/or wastewater; and
• Whether the CAFO transfers manure off-site, and if so, quantity transferred to recipients of transferred manure.

The information omitted by EPA from the proposed reporting rule is the very information needed by communities around the nation to assess the extent to which CAFO waste is contributing to water pollution.

In the preamble to the proposed rule, EPA pays inordinate attention to allowing CAFOs to evoke “confidential business information” to hide the quantity of waste they are generating and to hide how they are disposing of that waste.  But precious little attention is paid to the primary mission of the EPA – the protection of the environment and public health.  With this proposed rule, EPA appears to be deliberately putting blinders on itself and on rural communities to avoid even the possibility of effectively dealing with the water quality problems caused by CAFO waste.

According to the NRCS press release, “Proper management of nitrogen and phosphorus, including the use of organic sources of nitrogen such as animal manure, legumes and cover crops, can save producers money.  The nutrient management standard provides a roadmap for NRCS’s staff and others to help producers apply available nutrient sources in the right amount, from the right source, in the right place, at the right time for maximum agricultural and environmental benefits.”

NRCS state offices have until January 1, 2013 to implement the new standard; however, NRCS national headquarters will begin to apply the changes immediately.  The new standard will be applied to this fiscal year’s Environmental Quality Incentives Program (EQIP) and Conservation Stewardship Program (CSP) signups, including the current CSP signup period that ends on January 13, 2011.

NRCS put a significant amount of work into reducing a number of rather arbitrary criteria in earlier versions of the standard.  Many of the major changes made in the updated version add nutrient risk assessment procedures to the standard.  The nutrient management requirements for participants differ depending on the results of the risk assessment for nutrient pollution from their operations.

The standard has a number of important improvements over the previous version, which was issued in August 2006, as well as the version issued for public comment in January 2011.  We were pleased to see organic farming systems recognized in the standard, a first for conservation practice standards.  While still oriented to conventional application, the newly revised standard also does a better job of addressing alternative sources of nutrients and the incorporation of biological soil activity, green manures, legumes, cover crops, compost, and other similar options.  We are also pleased to see additional factors required to establish realistic yield goals in the revised standard.

The new standard generally prohibits the application of nutrients, including manure, on frozen and saturated ground but also creates exceptions, with undefined criteria and conditions that can vary from state to state.  This new “exception to the rule” provision is cause for concern.  Without firmer requirements, states where large-scale CAFOs are abundant will be the most likely to weaken the standard.  This is of particular concern in states which use CPS 590 as the nutrient management plan standard for CAFO Clean Water Act permits.  In addition, the standard continues to ignore assessment and control of of heavy metals which may be found in manure and other organic waste from CAFOs.

The updated standard will tailor nutrient management requirements based on NRCS-approved nitrogen and phosphorous risk assessments, so the full impact of the changes to CPS 590 will depend in part on the nutrient risk assessment policy and procedures outlined in NRCS’ General Manual and National Instruction.  We will review those documents and issue an additional report at a later date.

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.

The proposed rule is required by a settlement between EPA and environmental plaintiffs in the case National Pork Producers Council v. EPA.  In that case, both environmental group plaintiffs and agriculture groups promoting CAFOs challenged EPA’s 2008 regulations for CAFO Clean Water Act National Pollutant Elimination System Permits.  The environmental plaintiffs include the Waterkeeper Alliance, Natural Resources Defense Council, and the Sierra Club.

This proposed CAFO reporting rule is open for public comment through December 20, 2011.  EPA has issued a factsheet with information on submitting comments.

Next Wednesday, November 9, from 1-2:30 pm (ET), EPA will hold a webcast to provide an overview of the proposed rule requirements and answer questions about the proposed rule.  A second webcast is scheduled for Thursday, November 17 from 1-2:30 pm.  You can register for the webcasts at an EPA website.

The environmental groups fought for the proposed rule for CAFO information reporting because the weak 2008 CAFO permit rule did not require all CAFOs to obtain a Clean Water Act permit.  In addition, the CAFO permit rule has large gaps that leave tons of CAFO manure and other waste unregulated.  The biggest flaw is that waste applied on land that is not under the control of the CAFO operator is not subject to the permit’s nutrient management plan.   In addition, EPA omitted from the permit controls over land application of heavy metals, antibiotics, pathogens, growth hormones, and other substances commonly found in CAFO waste.

EPA’s proposal for CAFO reporting does little to address these flaws in the CAFO permit rule.  First of all, EPA proposes two alternatives for the scope of the rule.  One option would require all CAFOs to report certain information to EPA, unless states with authorized NPDES programs choose to provide this information on behalf of the CAFOs in their state.

Under the second option, only CAFOs in “focus watersheds” that have water quality concerns already known to be associated with CAFOs would be required to report information to EPA.  This second option is nonsensical – without sufficient information about CAFO activities in watersheds, how is EPA to know whether a watershed is already impaired or likely to become impaired by CAFO waste?

In addition, EPA is proposing to require CAFOs to submit information on only five out of fourteen items addressed in the settlement, including

• Type of facility;
• Number and type(s) of animals;
• Whether the CAFO land applies CAFO waste;
• Available acreage for land application; and
• Whether the CAFO has a NPDES permit.

EPA proposed not to obtain information on the following:

• Name and address of the owner and operator;
• If a contract operation, the name of the vertical integrator;
• Location (longitude and latitude) of the operation;
• Type and capacity of manure storage;
• Quantity of manure, process wastewater and litter generated by the CAFO;
• If the CAFO land applies, whether it implements a nutrient management plan for land application;
• If the CAFO land applies, whether it employs nutrient management practices and keeps records on site consistent with the CAFO permit regulations;
• If the CAFO does not land apply, alternative uses of manure, litter, and/or wastewater; and
• Whether the CAFO transfers manure off-site, and if so, quantity transferred to recipients of transferred manure.

Clean Water Act Section 308 gives the EPA broad authority to seek information from point sources, including CAFOs, about the disposition of waste that can result in water pollution and water quality degradation.  The information omitted by EPA from the proposed reporting rule is the very information needed by communities around the nation to assess the extent to which CAFO waste is contributing to water pollution.

In the preamble to the proposed rule, EPA pays inordinate attention to allowing CAFOs to evoke “confidential business information” to hide the quantity of waste they are generating and to hide how they are disposing of that waste.   But precious little attention is paid to the primary mission of the EPA – the protection of the environment and public health.   With this proposed rule, EPA appears to be deliberately putting blinders on itself and on rural communities to avoid even the possibility of effectively dealing with the water quality problems caused by CAFO waste.

Many of the antibiotics used by CAFOs are also important antibiotics for treating infections and diseases in humans caused by pathogens. On September 13, the U.S. Government Accountability Office (GAO) released a report that found that the FDA and USDA have failed to gather crucial data and research information needed to combat the development of antibiotic resistance in pathogens.  The report, entitled Agencies Have Made Limited Progress In Addressing Antibiotic Use in Animals, found that the FDA only collects data on drugs sold for animal use. But the agency does not collect data on which animal species are given the antibiotics or the purpose for their use. In addition, the data collected does not provide a representative sample of animals and retail meat across the nation. Without this data, FDA cannot examine trends and have an understanding of the relationship between antibiotic use and resistance sufficient to protect the public health.

A GAO Report issued in June 2011, entitled Data Gaps Will Remain Despite HHS Taking Steps to Improve Monitoring, concludes that that monitoring of human antibiotic use is also inadequate.  The Report also noted that EPA and the U.S. Geological Survey have detected antibiotics used in humans and in animal production in the environment at concentrations that can increase populations of resistant bacteria but that neither agency is monitoring the fate and transport of antibiotics, including their disposal.

The September GAO Report was requested by Representative Louis Slaughter (D-NY), House sponsor of the Preservation of Antibiotics for Medical Treatment Act (PAMTA)(H.R. 965/ S. 1211).  This Act would require FDA to “re-review” the approvals it previously issued for animal feed uses of the seven classes of antibiotics that are important to human medicine.  The approvals would be canceled for any antibiotics that are found to be unsafe from a resistance point of view.   For more information on PAMTA and the antibiotic resistance issue, see the Union of Concerned Scientist’s Wise Antibiotic webpage.

There are more than 280 million egg-laying hens in the US, with over 90 percent of these confined to wire battery cages.  Current UEP welfare standards require 67 square inches per bird.  It is estimated that at least 50 million hens are confined in more crowded conditions that do not meet current UEP standards.

The proposed legislation would require egg producers to provide at least 124 inches per bird.  It would also:

• require cage enrichments such as perches and nesting areas;
• end the practice of withholding food or water to force molting;
• set euthanasia standards;
• prohibit excessive levels of amounts of ammonia in henhouses;
• mandate method-of-production labeling on egg cartons (“eggs from caged hens,” “eggs from hens in enriched cages,” “eggs from cage-free hens,” and “eggs from free-range hens”); and
• ban the sale of eggs that don’t meet these conditions.

In its memorandum of understanding with the UEP, HSUS agreed to stop ballot measures, state legislation, litigation, and undercover investigations pertaining to the welfare of egg-laying hens.  HSUS had planned to submit tomorrow signatures to place the issue on the November 2011 ballot in Washington state, but has agreed not to pursue this measure.  Wayne Pacelle, President and CEO of HSUS, in explaining these concessions, acknowledged, “It is a major, major investment by industry to improve welfare.”  A number of other national animal welfare organizations joined HSUS in supporting the agreement.

HSUS and UEP concur that having a national standard is preferable to a patchwork of conflicting state laws.  Bob Krouse, Chairman of the UEP Board and a fifth generation family farmer from North Manchester, Indiana announced, “We are really excited as an industry about doing this.  This is a thrilling moment for us in egg production.”

He said that producers would pay the capital costs to implement improvements to the henhouses.  He explained that consumer demand dictates the number of hens raised for egg production and predicted that the number of birds raised will remain the same, but that there will be a modest increase in the price of eggs.  Speaking about enriched cages, he concluded, “That really is a better way of taking care of our birds than what we are doing right now.”

Pacelle said that UEP and HSUS will introduce the proposed legislation to members of Congress beginning today, with a goal of passing the bill within a year.   It would be the first national law to establish on-farm animal welfare standards.