Archives for the 'Farm Credit' Category
Legislative Roundup: Farm Credit Funding Passes, Other Food and Farm Legislation Could Move
Wednesday, July 28th, 2010
[Friday July 30 update to story below -- A measure to fund the Pigford II class action settlement between USDA and black farmers is now expected to come to the Senate floor early next week as a stand alone measure. The Food Safety Modernization Act (S 510) is now not expected to be taken up before the Senate leaves for summer recess at the end of next week, though it may come to the floor in September. Whether the Senate takes up the child nutrition reauthorization bill next week is still an open question.]
As is often the case as the summer congressional recess approaches, there is lots of activity on Capitol Hill. With so many moving pieces of interest to the National Sustainable Agriculture Coalition (NSAC) and NSAC member organizations, we are issuing this brief update.
Supplemental Appropriation – Farm Credit Funding, BCAP Cut
On Tuesday, July 27, the House approved a $59 billion war supplemental spending bill by a vote of 308-114 and sent it to the President for his signature. The bill includes $950 million in Farm Service Agency (FSA) farm loan program funding to help meet emergency farm lending needs. The loan funding and several other USDA-related provisions are offset by a $50 million funding cut to the Biomass Crop Assistance Program (BCAP). NSAC was a strong proponent of the farm loan funding and the offset.
The war supplemental has been pending for months. The bill has bounced back and forth between the House and the Senate, with major disputes centering around how many emergency domestic spending initiatives to tie to the war and foreign aid spending, the centerpiece of the bill. In the end, the Senate’s smaller domestic package prevailed.
The bill includes $33 billion for war operations, $6 billion in foreign aid, $5 billion for domestic disaster relief, and $13 billion in mandatory funding to help Vietnam veterans exposed to Agent Orange.
The NSAC-supported credit package includes $350 million for direct farm operating loans, $300 million for guaranteed farm ownership loans, $250 million for guaranteed farm operating loans, and $50 million for subsidized guaranteed farm operating loans.
The limitation placed on BCAP, an important farm bill renewable energy program, is warranted in our view based on runaway spending and misplaced priorities, as this program was being implemented by the FSA. With a cap on program spending, the agency will need to continue to give thought to focusing the program to support the most important biomass crop projects possible.
Pigford Settlement Funding
Included in the most recent House-passed version of the supplemental appropriations bill, but deleted from the final product, was $1.15 billion for the Pigford II settlement between USDA and black farmers. That measure was originally attached to a tax extender bill that has not made it through the legislative gauntlet yet, and then it was stuck onto the supplemental in the House.
Now, Senate Majority Leader Harry Reid (D-NV) says he will try to add the Pigford settlement funding, and another class action settlement between American Indians and the Department of the Interior over the government’s mishandling of trust accounts, onto a small business bill the Senate is considering on the floor this week. It is not yet clear whether this third attempt to find a vehicle for the two settlement accounts will be successful. NSAC supports the funding and the quickest possible resolution of the matter.
Ag Disaster Aid
Speaking of the small business bill, Senate Agriculture Chair, Blanche Lincoln (D-AR), has secured the agreement of the Majority Leader to attach her emergency agricultural disaster funding measure to the small business legislation. That measure was also attached to the tax extender bill earlier in the year, but now is seeking a potentially faster moving vehicle. A vote is expected later this week.
The measure includes $1 billion for bonus direct commodity payments for farmers who suffered a greater than 5 percent loss in production, a provision that has proved controversial, yet remains in play. The measure also includes specific disaster funding for cottonseed, aquaculture, Hawaiian sugar, livestock, and specialty crop producers.
Food Safety and Child Nutrition Bills
As regular readers will know, food safety and child nutrition reauthorization legislation has been chugging along slowly for the past two years. With time running out on this session of Congress, it is not yet clear if a way will be found to pass these bills and get them signed into law this year. The measures are both among the most bipartisan bills pending in Congress, which, all other things being equal, should improve their chances of passage. Nonetheless, netiher has proceeded smoothly, and both are looking for Senate floor time before the August recess begins.
The Senate food safety bill (S. 510) was voted out of Committee late last year, but has been stalled since then due to behind the scenes negotiations over amendments ranging from family farms and local food systems, to banning the use of the chemical additive BPA in food containers, to the re-importation of drugs from Canada.
The House passed it’s companion bill a year ago and has been waiting for final Senate action before they can proceed to a conference committee to settle on the final form of the legislation. Even if the Senate passes a bill soon, it is unclear whether enough time remains in this session for what could be a long conference negotiation.
The pending Managers Amendment to the Senate bill contains a number of provisions strongly supported by NSAC. NSAC also supports two amendments still being negotiated by Senator Brown (D-OH) and Senator Tester (D-MT), though we will withhold final judgment until negotiated text is closer to being agreed upon.
A child nutrition bill was approved by the Senate Agriculture Committee in March and a companion bill by the House Education and Labor Committee in July. Both bills include mandatory funding for the Farm to School program. The Senate bill costs $4.5 billion over 10 years and is paid for through offsets, including the controversial proposed cut to the Environmental Quality Incentives Program. The House bill costs $8 billion over 10 years, but House Democratic leadership is still in the process of looking for funding offsets and have thankfully indicated to us they will not scale back farm bill conservation programs to pay for the child nutrition increase.
While further House action on the bill is not likely until September, Senate Majority Reid said this week that he would explore whether floor time might be made available for the Senate nutrition bill. Senator Lincoln intends to take to the floor each day to explain to her colleagues the importance of taking up the bill. Her floor statement from Tuesday, July 27 is posted here.
We will continue to provide readers with new information on the food safety and child nutrition bills as it becomes available.
Revised Chart on FY 2011 Ag Appropriations
Tuesday, July 20th, 2010
With both the House Agricultural Appropriations Subcommittee and the full Senate Appropriations Committee now having taken action on their Fiscal Year 2011 agricultural spending bills, NSAC is posting a revised version of its annual agriculture appropriations chart to our website. The chart provides detailed funding level decisions on a program-by-program basis for about 40 USDA programs that we follow closely each year.
Appropriations bills generally only become public once the full appropriations committees have voted on them. Since that has not yet happened for the House bill yet, the numbers represented in our chart for the House bill are based on the best available information we have been able to obtain. In a few instances there are blanks where information has either been lacking or inconsistent and therefore possibly unreliable. The Senate numbers are all confirmed. The Senate bill and committee report can be found here.
Looking ahead to later this year when a final bill is put together, we will be emphasizing:
- attaining the historic House Subcommittee-approved $30 million funding level for the Sustainable Agriculture Research and Education (SARE) program;
- removing the cuts to mandatory farm bill conservation funding contained in the Senate bill for the Wetlands Reserve, Grasslands Reserve, Farm and Ranch Land Protection, and Agricultural Management Assistance program;
- achieving the higher Senate total funding level ($8.35 million) for the Rural Micro-entrepreneurship Assistance Program and farm operating and ownership loans;
- obtaining the higher House funding level ($7 million) for the USDA Office of Advocacy and Outreach that coordinates policy and programs for beginning and minority farmers and farmworkers; and
- inserting into the final bill funding for the groundbreaking Beginning Farmer and Rancher Individual Development Account program.
As the process continues, we will update our appropriations chart as information changes.
USDA Boosts Assistance to Socially Disadvantaged Farmers
Monday, July 19th, 2010
The USDA Office of Advocacy and Outreach (OAO) is requesting a second round of applications for the Outreach and Assistance for Socially Disadvantaged Farmers and Ranchers Competitive Grants Program (OASDFR), a program that seeks to ensure equitable participation in USDA programs for minority producers.
The OAO will fund up to $4.7 million in grants to eligible entities.
Applications can be found here and must be submitted on or before August 9, 2010.
A conference call is taking place on Tuesday, July 20 from 1 PM to 2 PM EST to answer questions about the program and the request. The call-in number is (800) 867-6144 and the conference code is 4635#. To RSVP for the call send a message to oasdfr@usda.gov.
In June, USDA announced some $26 million in FY 10 awards under an earlier round of the program.
Through the new OASDFR request for proposals, the OAO hopes to identify the causes of inequitable participation by certain socially disadvantaged groups through the provision of grants to Native American Tribal Governments and organizations, Latino-Serving Institutions, State Controlled Institutions of Higher Education, Land Grant Institutions, and community-based organizations and non-profits that focus on minority farmers.
Groups eligible for the newly-announced grants must be able to implement a project that addresses the following:
1. Collect and analyze data on the number of actual and potential socially disadvantaged farmers within a defined geographic region
2. Engage in outreach to identify causes of failure to achieve equitable participation in USDA agricultural programs and to develop recommended solutions
3. Develop and deploy improved approaches to technical assistance and outreach
4. Collect and analyze information to evaluate the success of those approaches
More information regarding the program is available on our website: OASDFR.
Senate Committee Adopts Ag Spending Bill
Thursday, July 15th, 2010
On Thursday, July 15, the Senate Appropriations Committee approved the Fiscal Year 2011 Agricultural Appropriations bill by voice vote. The action on the agriculture bill came after a lengthy partisan debate over the overall discretionary spending levels for the entire government for FY 2011, which concluded with the adoption of Chairman Inouye’s proposed spending allocations.
The agriculture bill proposes to spend $22.838 billion for all discretionary spending (net of a variety of cuts to mandatory programs) for the Department of Agriculture, the Food and Drug Administration, and several smaller government agencies. This is nearly $300 million less than the FY 2010 level and $27 million less than what President Obama requested.
After winning support from USDA, the White House and then the House Agriculture Appropriations Subcommittee asked for a $30 million funding level for the Sustainable Agriculture Research and Education (SARE) program. We regret to say that today the Senate Committee adopted a far lower,, $23 million, SARE funding level. Both bills include $15 million for research and education grants and $5 million for extension and outreach grants, but they differ on funding for the SARE state matching grant program, with the House at $10 million and the Senate at only $3 million. NSAC strongly supports the $30 million funding level and will continue to urge the Senate to come up to that level before finishing work on its bill this year.
As with the House Subcommittee-passed bill, the Senate bill moves forward on two Administration initiatives. The USDA portion of the Healthy Food Financing Initiative would receive $30 million under the Senate bill compared to $40 million in the House bill and $50 million requested by USDA. The Senate bill, like the House bill, also approves a somewhat scaled-back version of the new Regional Rural Innovation Initiative, which includes funding for local and regional food system projects. Both bills also provide $2 million for USDA’s Farm to School “tactical teams” to help school districts source more local food.
Whereas the House Subcommittee-passed bill refrains from cutting any farm bill mandatory conservation programs other than the traditional $270 million cut from the Environmental Quality Incentives Program (EQIP) and $165 million cut from the Small Watersheds program, the Senate bill includes some but not all of the additional conservation cuts proposed by President Obama. The Senate Committee-passed bill adopts a $75 million cut to the Wetlands Reserve Program, a $14 million cut to the Grasslands Reserve Program, a $15 million cut to the Farm and Ranch Land Protection Program, and a $5 million cut to the conservation portion of the Agricultural Management Assistance Program. The Administration had also requested cuts to the Conservation Stewardship Program and the Wildlife Habitat Incentives Program, but those cuts were rejected by the Senate Committee. NSAC appreciates the sparing of those two programs, but continues to oppose the additional raids on farm bill conservation spending, and will continue to urge the Senate to find alternative offsets before bringing their bill to conclusion later this year.
A few other bill highlights follow:
Research — In addition to the SARE news above, the Senate Committee bill includes $5 million for Organic Transitions research, the same level as the House bill and $5 million more than the zero budget requested by the President. For the Agriculture and Food Research Initiative (AFRI), the Senate bill provides $310 million, compared to $312 million in the House bill, $262 million in the current year, and the $429 million Obama requested level.
Rural Development — Like the House bill, the Senate bill would level funding for the Value-Added Producer Grants (VAPG) program at $20.4 million. The total Senate funding level for Rural Business and Industry Guaranteed Loans would provide $49.7 million in loan guarantees for local and regional food enterprises versus $47.1 million in the House bill (the same as the FY 2010 level). The Rural Microentrepreneur Assistance Program (RMAP) fares much better in the Senate bill than the House bill. The House bill would allow the $4 million in mandatory farm bill money to move forward, but provides no additional discretionary funds above that level, whereas the Senate bill provides an additional $4.35 million, for a total of $8.35 million. The President had requested an additional $7.7 million. Rural Coop Development Grants would get a modest increase to $12.4 million in the Senate bill. The ATTRA National Sustainable Agriculture Information Service program would receive $2.8 million in both bills, same as the current funding level.
Credit — With additional emergency funding for farm loans still pending in the supplemental appropriations bill slowly making its way through Congress, the Senate regular appropriations bill passed out of Committee today includes higher farm loan amounts than the House bill. Whereas the House bill provides $475 million for Direct Farm Ownership Loans, the Senate bill provides $650 million. For Direct Farm Operating loans, the Senate provides $1.1 billion versus $900 million in the House bill. The Senate bill also includes more for guaranteed operating loans.
Beginning and Minority Farmers — The majority of direct farm ownership and farm operating loans go to beginning and to socially disadvantaged farmers and ranchers, so the credit numbers above are relevant here as well. Sadly, neither bill has provided funding for the Beginning Farmer and Rancher Individual Development Account (IDA) program. NSAC will continue to push both houses of Congress to find a way to provide $5 million for this important farm bill program. The two bills have a big difference of opinion over the new Office of Advocacy and Outreach, the central USDA coordinating and policy arm for minority farmer, beginning farmer, and small farm issues. The House bill would match the President’s request for $7 million, but the Senate proposes only level funding at $1.7 million. NSAC will continue to press for the full requested amount.
Organic – Both the House and Senate bills adopt the requested level of $10.1 million for the National Organic Program, and as noted above, both adopt $5 million for the Organic Transitions integrated research program. It also appears that the Senate bill has included $1 million for the Organic Data Initiative, though we are still waiting on confirmation.
NSAC will be posting a chart on its website with more complete details on sustainable food and farming programs in the two pending bills in the near future.
Farmers Agree, Mr. Vilsack: Farm Bill Should Emphasize Beginning Farmers
Thursday, July 8th, 2010
By Anna Jones-Crabtree from Vilicus Farm
On July 1st, NSAC posted a blog to applaud Secretary Vilsack’s plea to Congress to support beginning farmers and to encourage USDA to walk the talk.
Farmers agree. Here is how Anna Jones-Crabtree from Vilicus Farm in Montana responded to our blog:
We would not be farming if it were not for some of the Farm Service Agency’s (FSA) beginning farmer programs. However, all of the points made below are right on….. USDA and the farm bill continues to talk the talk about beginning farmers but we aren’t seeing the walk.
Access to land, financing/credit, and time are the three biggee’s for beginning farmers. There are minimally supportive programs for financing and access to land. The time issue isn’t even dealt with since most of us are working two jobs to support the dream of farming.
It’s clear to us; we need systematic reform.
We need to rework the risk structure system so we can get crop insurance on ’specialty crops’ like flax and spelt in our first year of production since we choose to not follow the recipe of a simple wheat/fallow/spray rotation. Society needs to provide farmers with health insurance so we don’t have to work second jobs. We need a formal farmer mentorship program to ask questions like how deep do you set your blade plow? Or, at what stage does mowing your cover crops work?
We need a much more robust, creative and integrated research program at our universities. We need research that targets real life systems approaches to sustainable agriculture. We need researchers to inform and cooperate with the Natural Resource Conservation Service (NRCS) on their conservation programs. We need to value and compensate our farmers just as we do our doctors. We don’t ask our physicians to jerry-rig and duct tape the heart lung support machine– we ask them to be doctors. We need to ask our farmers to be farmers.
In my vision of the future, I see well-informed farmers captivated by the wonders of soil microbial action. I see farmers working with their communities to create biodiesel from their oilseed crops that they grew as part of their complex rotational — improving the sustainability of not only their operation but also their community’s. I see farmers growing vegetables for their local community. I see farmers, such as myself, growing grains and legumes, that change vast tracts of land into functioning robust ecosystems, that are not just based on ‘nature’ but also weave humans into natural systems. I see rigorous academic opportunities to study farming systems that produce farmers held in as high esteem as engineers.
My husband Doug and I are committed to this longer term vision. It has taken us 15+ years in other careers, saving money, and building good credit to even be able to entertain a return to farming. Even with all of our ducks in a row, it was not, by a long shot, an easy path.
We have to make the entry to farming easier. We have a whole generation who would relish the opportunity to farm but don’t know where to start. Their hands have spent more time text-messaging than shaking off hydraulic oil from an implement that just didn’t want to plug or from playing with the tractor. They need exposure to climate change science, business planning, skills to navigate USDA programs, agronomy, wildlife, moisture management along with the basics of growing carrots, or safflower, or buckwheat, or eggplant or, or, or…..
I was one of 100+ folks that applied for about 10 positions on that Beginning Farmer and Rancher Advisory Committee. The Committee was supposed to be in place by the end of last calendar year. I spent a lot of time on that application and had some wonderful letters of recommendation. Try as I might to call, ask, probe, USDA is moving slower then molasses in December on our farm in north central Montana.
I would welcome a spirited conversation about what we can do in Montana and elsewhere to grow our next generation of farmers in a way that creates the systemic change I think we all hope for. We need a dialog with all the parties in the food system – the farmers, the buyers, the consumers and the retailers- about the challenges inherent in the current system and how we change it for the better – for all of us.
We need to start somewhere. At some level, I believe we as a society have written our farmers off… it’s not something our best and brightest strive to become. It’s not a career you go into if you are smart. All that has to change if we have any hope of creating a sustainable way of living on this planet.
And heck, if the Beginning Farmer Rancher Committee ever gets appointed and I get the chance to be on it, I would welcome a way to take the grounded, real life ideas from a bunch of Montanan’s to DC.
Farm Credit, Pigford Settlement Funding in House Supplemental War Spending Bill
Friday, July 2nd, 2010
Late on Thursday, July 1st, the House adopted by key amendments to the 2010 supplemental war spending bill (HR 4899). The House amended a Senate-passed version of the bill from May. Click here to view NSAC’s initial blog on this bill.
The Senate bill included $950 million worth of Farm Service Agency direct and guaranteed farm operating loans and guaranteed farm ownership loans, which the House did not alter. Thus, if the Senate can approve the House amendments when it returns from the July 4 recess week, then the badly needed emergency farm loan money will finally become a reality.
The House amendments do, however, alter the offset for the farm loan funding. Rather than reducing runaway spending on the Biomass Crop Assistance Program, the House amendments uses funds from earlier fiscal year appropriations bills that were provided to various program accounts at USDA but have not been used.
Both House and Senate versions of a different bill – the so-called tax extenders or second stimulus bill – contains funding for USDA ($1.15 billion) and the Interior Department ($3.4 billion) to settle discrimination cases pending against them from black farmers (Pigford case) and Native Americans (Cobell case) respectively. With future prospects for that important piece of legislation now in doubt, the House, prodded by the Congressional Black Caucus and others, added both settlement accounts to the supplemental spending bill yesterday, hopefully bringing those one step closer to reality. To offset the cost of those items among others, the House acted to close gift tax and cellulosic fuel tax credit loopholes. As with the farm credit situation, the outcome on Pigford funding now requires positive Senate action after the week-long recess.
The Senate version of the supplemental includes $45.5 billion in discretionary funding for FY 2010 ($37.1 billion for the wars in Iraq and Afghanistan plus additional amounts for US disaster aid, Haiti, the Gulf Coast oil spill, farm loans, and other domestic needs) plus $13 billion in mandatory funding for Vietnam veterans exposed to Agent Orange.
The House has now voted to add, in addition to the discrimination settlement funds, $10 billion to help save teaching jobs around the country, $4.95 billion for Pell Grants, $701 million for border security, $142 million in additional Gulf Coast oil spill funding, and $50 million in emergency food assistance, among other items. The House amendment offsets the additional funding via $11.7 billion in rescissions from discretionary programs and $4.7 billion in savings from changes to mandatory programs.
Among the discretionary offsets are roughly $300 million from broadband funding to USDA under the recovery/stimulus act, $487 million in reserve fund money for the WIC program, and another $220 million from other USDA accounts. Full details on those recessions are not yet publicly available.
One of the offsets – an $800 million recission from President Obama’s “Race to the Top” educational initiative – drew a rebuke and veto threat from the White House. The White House also weighed in against an amendment that ultimately was defeated that called for the White House to produce a plan and a timeline for the safe, orderly and expeditious redeployment of troops from Afghanistan.
NSAC will continue to urge Congress to find the most expeditious way possible to enact the farm credit and Pigford funding, with attention now turning back once again to the Senate once they return from the one-week July 4 recess.
Congress Yet to Finish on Pigford, Farm Credit, Child Nutrition Funding
Friday, May 28th, 2010
Last week we reported on several major pending pieces of legislation. At that time, two bills — the so-called tax extenders bill and the emergency supplemental appropriations bill — seemed like they might be resolved by today, the beginning of the congressional recess week for Memorial Day. Alas, while progress was made on both this week, final resolution will now not occur until after the Memorial Day recess is over.
Today the House passed a $115 billion version of the extenders bill, pared down from the earlier nearly $200 billion version. Action came too late for the Senate to take up the bill, however.
The Senate meanwhile last night passed its $59 billion version of the emergency supplemental appropriations bill, but House Appropriations Committee markup of their $84 billion version of the bill was postponed in light of all the action on the House floor on the extenders bill.
With final action on both bills extending into June and the likelihood of significant differences between House and Senate bills, it could easily take several more weeks to reach resolution.
Tax Extender Bill
The tax extender bill as passed by the House retains the three big items related to agriculture — $1.15 billion for the Pigford II USDA settlement with black farmers who faced USDA discrimination, the $1.5 billion agricultural disaster package, and the $868 million one-year extension of the biodiesel tax credits. Unless removed or modified during Senate floor action the week of June 7, these will become law when the final bill is passed.
In the meantime, the $80 billion cut to the bill to pare it down to a $115 billion measure — a cut primarily made to accommodate ‘Blue Dog’ Democrats — will be the cause of a good deal of advocacy during the coming recess week. The cuts included scaling back the number of years for fixing doctor payments under Medicare and eliminating emergency assistance to state governments and COBRA health insurance benefits for laid off workers. Chances are the Senate will consider amendments to add back some or all of those Blue Dog-instigated changes.
The House passed the measure in an unusual two-step fashion. By a vote of 215-204, it passed everything except for the Medicare physician payment fix, which was then voted separately on a 245-171 vote. The Senate will likely re-unite the measures.
Supplemental Appropriation
With respect to the emergency supplemental appropriation, the details of the House bill that will now be marked up after recess were released on Wednesday. Like the Senate version, the bulk of the bill is for the wars in Iraq and Afghanistan plus funding for veterans and aid to Haiti.
For agriculture, like the Senate bill, funding is provided for desperately needed supplemental farm operating loans. The House bill provides enough appropriated dollars for USDA to provide $850 million in loans and loan guarantees. The Senate version, approved yesterday, would provide $950 million. The offsetting cuts to provide funds for these additional loans also differ – the House bill would rescind previously appropriated but unused funds within Farm Service Agency accounts, while the Senate bill would scale back the Biomass Crop Assistance Program.
NSAC supports the emergency farm credit money and we remain hopeful that Congress can finish action on the supplemental after the recess without significant further delay.
In a related note, USDA’s Farm Service Agency today posted a new webpage that specifies how much money is left in each of its rapidly dwindling farm credit accounts and includes frequently asked questions section to help farmers understand the funding situation and what happens as funds expire.
Discrimination Cases
In news related to congressional consideration of funding for the Pigford II settlement, on Thursday government lawyers and lawyers for Native American farmers jointly asked for and received from U.S. District Court for D.C. a continuation until July 29 of the discussion period to work out a settlement in the Keepseagle v. Vilsack case. Also this week, USDA and the Justice Department announced the establishment of a $1.13 billion fund at Justice that would be used to make payments to women and Hispanic farmers who can prove they were discriminated against by USDA. All four discrimination cases pending against USDA thus moved somewhat closer to resolution this week.
Child Nutrition
Switching to the Child Nutrition Act reauthorization measure, three important things happened this week. First, a bipartisan letter from 53 Senators was sent to the Senate Democratic and Republican leaders urging them to take up the $4.5 billion bill approved unanimously by the Senate Agriculture Committee earlier this year.
Second, as part of a defense bill, the House approved, 341-85, a non-binding “sense of Congress” resolution that the child nutrition bill should be funded at the $10 billion level requested by the Obama Administration, noting that hunger and obesity are impairing military recruitment. An earlier letter signed by 221 House Members also endorsed the $10 billion number.
Third, the House Education and Labor Committee announced that after recess a child nutrition bill will be released that will serve as the vehicle for a Committee mark-up later in June. We expect that bill, like the Senate counterpart, to include mandatory funding for the Farm to School program, an NSAC priority.
Whatever the level of total funding in the emerging House child nutrition bill, the big issue will be how to pay for it. The Senate measure uses a controversial cut to farm bill conservation funding for about half of its offset. That cut is facing stiff opposition in the House. However, if the House bill emerges out of Committee with a bigger price tag than the Senate bill, as seems likely, that will make the job of finding offsets even harder. Attention will focus on the Ways and Means Committee and closing egregious tax loopholes as way to fund better school meals for more children.
Final passage of the child nutrition bill will be a race against time in an election-year shortened congressional calendar. Hopefully this week’s letters, resolutions, and mark-upl announcements bode well for a summer in which the pace picks up considerably.
Moving Legislation – What’s in it for Food and Agriculture
Friday, May 21st, 2010
With the financial regulation bill approved in the Senate and moving to conference with the House-passed bill, and with the one week Memorial Day recess just a week away, several key legislative items are starting to move quickly. A brief review follows, highlighting what is in the bills for food and agriculture.
Budget Resolution – A full-fledged congressional budget resolution outlining spending and deficits for next year and beyond now seems totally dead in the water. When Congress fails to pass a budget resolution, the alternative is a so-called “deeming resolution” specifying spending levels for the following fiscal year. Unlike the budget resolution, the deeming resolution does not include funding and deficit projections for the 5 and 10 years following, making it a somewhat easier vote in an election year at a time of high deficits.
The latest read on the deeming resolution is that it would likely freeze domestic discretionary spending in 2011. There will very likely be an attempt to attach it to the supplemental appropriations bill (see below). If the deeming resolution cannot hitch a ride on must-pass legislation in the very near future, it is also possible there may be an informal agreement to simply accept its spending outlines as a given. One way or the other, an agreement must be reached so that the appropriations committees can start in on their annual funding bills.
Once the overall spending outline has been agreed to, the appropriations subcommittees will battle over how big a slice of the overall budget pie they will receive to work with. Agriculture did fairly well in that respect last year, but with the likelihood of a freeze, the bidding could prove tougher this year. The subcommittee allocation, which should be set in early June, will be the first key determinant in the ability of the food and ag spending bill to respond to sustainable agriculture priorities. NSAC is encouraging agricultural leadership to fight for a fair allocation.
Supplemental Appropriations Bill – Both houses of Congress will be taking up the $60 billion supplemental appropriations bill (H.R. 4899) next week. In addition to emergency funding for the war in Iraq and Afghanistan and for a variety of US natural disasters, the Senate version of the bill includes an important funding increase for direct and guaranteed farm operating loans and guaranteed farm ownership loans. Without the supplemental funding, USDA’s Farm Service Agency will run out of loan funds next month for the rest of the year.
Also included in the Senate bill is an $18 million appropriation for emergency forest restoration for lands damaged by natural disasters. The bill pays for the $31.6 million cost of increasing lending authority by $950 million and the $18 million forestry item by cutting spending for the Biomass Crop Assistance Program (BCAP) by $50 million, capping BCAP at $552 million for the year. BCAP was originally intended to be a fairly small program, but spending for it has skyrocketed under a very broad interpretation of the law by USDA. NSAC strongly supports the credit provision.
The major debates on the supplemental bill will center on fights over costs and how much of the bill or new additions to the bill — including an upcoming move to add $23 billion for emergency support to keep teachers from being laid off due to local budget cuts — should be offset with spending reductions in other programs.
Tax Extenders Bill — The $200 billion “American Jobs and Closing Tax Loopholes Act” (H.R. 4213) is also moving rapidly toward floor consideration in both houses. It extends a wide variety of targeted tax expenditures as well as unemployment benefits. The bill also carries emergency aid to local government, emergency disaster relief, a summer jobs program, a multi-year postponement of the scheduled cut in Medicare physician payments, and a major reform in the size of fees recovered from oil companies in the wake of oil spills.
For agriculture, the bill includes $4.6 billion to pay for settlements in the Pigford (black farmer) and Cobell (American Indian) lawsuits. NSAC supports the inclusion of the long overdue funding for the settlements.
The bill also includes a $1.5 billion agricultural disaster relief package, including the controversial $1 billion in supplemental direct payments to producers with a 5 percent or greater lass in production.
In the tax extenders portion, the biodiesel production tax credit, small agri-biodiesel producer credit, and biomass diesel tax credit are all extended for one year, at a cost of $868 million. The charitable deduction for contributions of food inventories is extended for a year ($78 million cost).
Portions of the bill, including many big ticket items, have exemptions from “pay-go” rules and hence do not have to be offset under current congressional rules. Other parts of the bill do, however, need offsets, and that is where the “tax loophole” closing part of the bill’s title comes from.
The bill would force investment fund managers to pay regular rather than capital gains rates on a portion of income receive as “carried interest,” stop employment tax avoidance by professional service businesses, and close a wide variety of abuses of the foreign tax credit system for multinational corporations. Together, the loophole closers yield close to $60 billion in offsets.
With many politically important provisions expiring in coming weeks, there will be huge pressure to get this bill finished before the Memorial Day recess, so there should be lots of action next week.
Child Nutrition and Food Safety Waiting in the Wings – While the supplemental and tax extender bills, along with House-Senate conference on financial regulation, are front and center right now, waiting in the wings for Senate floor time after the recess are the Child Nutrition Act re-authorization bill and the Food Safety Modernization Act. There are no promises at this point for floor time for either measure, though both regularly appear on lists of bills needing floor consideration this year. Either or both of them could possibly be on the Senate floor between the Memorial Day and July 4 recess weeks, though nothing at this point is certain.
In the meantime, a draft of the House version of the Child Nutrition bill is expected next week, with markup in the House Education and Labor Committee expected sometime during the month of June.
Senate Funding Bill Includes Needed Boost in Farm Credit
Thursday, May 13th, 2010
In approving a $59 billion emergency supplemental funding bill to fund the ongoing wars in Afghanistan and Iraq, Haiti relief efforts, U.S. natural disaster aid, and disability compensation for Vietnam veterans, the Senate Appropriations Committee endorsed an amendment proposed by Senator Herb Kohl (D-WI), Chairman of the Agricultural Appropriations Subcommittee, to boost direct and guaranteed farm operating and ownership loan funding amounts by $950 million during the rest of FY 2010.
USDA’s Farm Service Agency has been indicating for months that farmer demand for loans is exceeding the funding levels made available by Congress in the regular FY 2010 Agricultural Appropriations bill last year. Despite this crisis situation brought on by constrained lending in the commercial markets and low dairy and livestock prices, the Obama Administration did not request the additional funding. Kohl thus took the lead to secure the needed resources.
Under congressional budgeting rules, the additional funding for farm lending had to be offset. The amendment approved today in Committee decreased funding for the Biomass Crop Assistance Program (BCAP) by $31.5 million, enough to fully pay for the subsidy and administrative costs of the additional nearly $1 billion farm loan volume.
Of the total, $350 million is appropriated for direct farm operating loans, which would bring direct operating loans to $1.35 billion for the year. An additional $300 million in the amendment is for guaranteed operating loans, and $300 million for guaranteed farm ownership loans. The latter can be used to refinance debt to help maintain the farm.
The supplemental bill next heads to the Senate floor, with a vote likely before Memorial Day, and then to the House. NSAC will be urging support for the Kohl measure throughout this process.