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

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

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

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

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

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

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

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

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

The Good

The major win in the Research Title was a new initiative aimed at improving the data collection efforts regarding local and regional food systems, and also evaluating programs that seek to benefit local food systems.  Unfortunately, the program receives no money, which NSAC will be advocating for into the Senate mark up.  For more details about other local food provisions, see our blog post on local food.

The draft bill also provides level funding at $5 million in mandatory funding (and $5 million in appropriated funds) for the Organic Production and Market Data Initiatives (ODI), and includes a new reporting requirement for USDA to detail how data collection agencies are coordinating with data user agencies on issues like the development of organic price elections.  For more details on the organic provisions in the draft bill, see our organic drilldown blog post.

Another minor win was a new streamlining requirement which requires USDA’s National Institute of Food and Agriculture to assess barriers that institutions with limited capacity face in successfully applying and competing for federal research grants.  Hopefully, this new requirement will force the agency to streamline its application process and take steps to better serve all eligible research institutions, not just large land-grant colleges and universities with a dedicated grants support staff.

The Half-baked

There were several mandatory research programs that were reauthorized and provided manadatory dollars, although at decreased funding levels.  They includethe Organic Agriculture Research and Extension Initiative (OREI), which received $16 million per year (down from $20 million currently) and the Beginning Farmer and Rancher Development Program, which received $10 million per year (down from $19 million currently).  Both of these receive 5-year as opposed to permanent funding.

The Specialty Crop Research Initiative, on the other hand, does receive permanent funding, starting at a lower annual funding level for a few years but then fully restored to its current level after that phase in period.  Although some positive policy improvements were made for OREI, there were no changes made to SCRI to place an additional emphasis on sustainable, ecologically based systems or public breeding research.

The Ugly

Perhaps the most disappointing outcome of the Research Title was the refusal to make any modifications to the Agriculture and Food Research Initiative (AFRI).  This program is the largest federal competitive grants program that funds agricultural research, education, and extension projects across the country.  There have been some serious challenges during the program’s implementation since it was first authorized in the last farm bill.

Two of the major changes that NSAC has been advocating for since the program’s inception is to increase the amount of research devoted to public plant and animal breeding that leads to the release of public cultivars, and to clarify the program’s eligibility requirement so that all programs within AFRI are open to land-grant colleges and universities, as well as federal agencies, non-profit organizations, private academic institutions, and other eligible applicants that are listed in the statute.

Additionally, the proposal for a new Local and Regional Food Systems Enterprise Facilitation initiative within the Extension service, which was included in the Local Farms, Food, and Jobs Act, was not included in the Research Title provisions contained in the draft farm bill.  Public health also took a back seat in this piece of legislative: the research program on antibiotic resistance was allowed to expire, and there was no other provision regarding the impact of federal agricultural policies and programs on the nation’s public health.  Hopefully these issues will be addressed in markup of the bill later this week and as the farm bill process moves forward.

Finally, the draft bill does not include mandatory funding for the National Food Safety Training, Education, Extension, Outreach, and Technical Assistance competitive grants program that Sen. Stabenow (D-MI) successfully championed in the Food Safety Modernization Act, but the bill does create a new food safety training program with an authorization for appropriations of $20 million per year.  The new program is created for the purposes of “establishing a Comprehensive Food Safety Training Network.”  While food safety training goals are critical to improving the safety of our food supply, neither program can really go anywhere in this tight fiscal environment without mandatory funding.  It is also unclear why a duplicative program is really needed.  We are interested in finding out what the reasoning is for the new proposal.

(Editor’s note:  We thank Gary Peterson, Development and Communications Director with the Agriculture and Land-Based Training Association (ALBA), an NSAC member organizations, for reporting on recent developments concerning agriculture and water quality in California’s Salinas Valley and Monterey Bay region.  ALBA brings a unique perspective to this issue with its mission to advance economic viability, social equity and ecological land management among limited-resource and aspiring farmers.  Many of these farmers and their families live in communities that are directly affected when local water sources are contaminated, especially groundwater used for drinking water, farmers who can also adopt ecological land management techniques to help protect the quality of water in the region.)

For many years, the agricultural communities of the Salinas Valley and Monterey Bay regions of California have responded to evolving regulatory mandates for water quality protection.  For more than six years, the Agriculture and Land-Based Training Association (ALBA) has conducted bilingual outreach and education to engage Spanish-speaking farm operators in discussion and understanding of the regulatory issues.  A key role for ALBA as a beginning farmer training and farm business incubator is to help growers understand and adapt to regulations.  ALBA has also worked with strong and diverse partnerships looking for solutions, including USDA’s Natural Resources Conservation Service (NRCS), which is a vital partner with growers facing unprecedented measures for regulatory compliance.

Farmers, regulatory agencies, and environmental advocates have taken strongly held positions on the issues of nitrate levels in groundwater and pesticides and other contaminants from agriculture in surface waters.  The issue of environmental contaminates also became a food safety issue in the region in 2008, when the discovery of leafy greens contaminated with virulent bacteria led to a call for more stringent food safety practices.

Nitrates in Groundwater

The economic benefits of agriculture to the region are significant, with Monterey County alone exceeding $4 billion in annual agricultural production.  But it is also clear that the sandy loam soils that make this economy possible also allow nitrates used in agricultural production to reach the water table.

Under California’s water quality regulations, growers until recently could file for a conditional waiver from regulation for pollutant discharge from irrigated lands.  There were two choices for compliance under the waiver: (1) the grower could conduct individual on-farm water quality monitoring and reporting; or  (2) the grower could enroll and pay for cooperative monitoring of regional surface waters.  Nearly every agricultural operation in the region choose the cooperative monitoring regime because the individual monitoring approach included gathering information about individual operations.

But in March, the Central Coast Regional Water Quality Control Board (RWQCB), the regulatory body overseeing water quality in the region, concluded that the conditional waiver option for irrigated lands was not sufficient to improve water quality.  The day before the meeting, the Center for Watershed Sciences at the University of California, Davis released a report entitled Addressing Nitrate in California’s Drinking Water: With a Focus on Tulare Lake Basin and Salinas Valley Groundwater.  The report paints a stark picture for the public, finding that more than one quarter million people in the study areas are at risk of significant adverse health effects from nitrate contamination in drinking water.  Fully 96% of the nitrate contamination originates on cropland and has been accumulating for decades.  Even immediate action would only begin to alleviate groundwater contamination years from now.

Synthetic fertilizer represents the largest single input, and leaching to groundwater is a greater nitrate output than the nitrate uptake by crops.  In the study areas, it was found that 57% of the population is, or has been, exposed to nitrates in excess of the maximum contaminant level of 45 milligrams per liter, as nitrate.  In the Salinas Valley, it is estimated that providing safe drinking water from groundwater would cost $36 million per year for the next 20 years, nearly three-quarters of a billion dollars. Recommended methods for dealing with the nitrate contamination include mixing deeper, cleaner water with contaminated groundwater sources, creating a fertilizer mill tax to fund mitigation programs and discourage overuse, and conducting grower outreach and education on minimizing fertilizer inputs.  None of the methods is widely accepted as providing a full solution and all are expensive.

The Central Coast Regional Water Quality Board determined that the nitrate contamination is the largest public health threat the Board has ever had to address and the Board also found that pesticides and other contaminants needed to be controlled.  The Board took action by proposing that the cooperative monitoring approach be scrapped and replaced by a three-tiered conditional waiver that would require verification of individual compliance with discharge requirements.  This hit growers hard.

In response, the region’s agricultural industry launched efforts to build bridges with various stakeholders, private philanthropy invested in facilitated dialogue among growers and environmentalists, and local academics were engaged to offer an alternative approach that looked much like cooperative monitoring.  But, after listening to hours of public input about how to deal with water quality and agriculture, the Board voted unanimously at its March 22, 2012 meeting to approve a new agricultural discharge waiver program, with a few amendments.

The process for establishing compliance with the agricultural waiver is becoming clearer and it is challenging.  ALBA has learned that its compliance costs, for our 150 certified organic acres under cultivation, will likely exceed $7,000 per year.  The Central Coast Regional Water Quality Board has created a three-tier system to alleviate pressure on the smallest operators, but with its overall size ALBA appears to be in Tier 2.  Water quality testing will be required in domestic and irrigation wells, as well as receiving water, or surface flows.  Photo monitoring may be required for documenting riparian habitat and persistent erosion.  All these factors and more are to be analyzed in an annual compliance document that defines the risks of nitrate loading along with plans to mitigate those risks.  While costly and time-consuming, ALBA is proceeding with its own compliance while leveraging its experience to help small and beginning farmers to also comply.

Food Safety and Conservation

The relation between food safety and water quality is also an issue of concern for growers of all types and sizes.  In 2010, Congress enacted the Food Safety Modernization Act that provides for food safety measures including on-farm measures.  The federal Food and Drug Administration is in the process of implementing regulations for the Act.  USDA’s Natural Resources Conservation Service reported to area growers that it had communicated its concerns to the federal Food and Drug Administration about the potential impacts on conservation practices of food safety measures intended to reduce the risk of contamination of growing crops.  Commonsense conservation practices for protecting water quality, like grassed waterways and riparian buffers, are viewed by some as habitat for wildlife that could carry human pathogens.  Vegetation in or near waterways is increasingly seen as an intolerable risk for contamination of growing crops. This viewpoint prevails despite the fact that almost all animal species, with the exception of wild pigs, have very low risk of transferring human pathogens such as E. coli 0157:H7 to fresh produce in the field. And, the removal of buffers and vegetation could well lead to a decrease in surface water quality.

Salinas Valley growers and residents face unsettling questions as the regulatory ground shifts beneath California agriculture.  Will national grocers and other players in the food supply chain pass along a price premium for regulatory compliance that can help growers meet the costs of regulation?  Will rural residents be provided with public resources to mitigate nitrate contamination of drinking water from community sources and individual wells?  Can research help inform policies needed to achieve the appropriate balance between conservation and food safety – both of which are critical to sustainable food production?  The ground is shifting beneath California agriculture and farmers will need sound conservation assistance to stay on their feet.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

AFRI was established in the 2008 Farm Bill, and is authorized to receive $700 million in appropriated funds per year.  In 2011, AFRI received $265 million in appropriations, and awarded $244 million in grants through seven separate program areas.

The Foundational program funds basic and applied research projects that address any of the six legislatively mandated priority areas, including:

1. Plant health and production and plant products;
2. Animal health and production and animal products;
3. Food safety, nutrition, and health;
4. Renewable energy, natural resources, and environment;
5. Agriculture systems and technology; and
6. Agriculture economics and rural communities.

In addition to the foundational program, more than half of AFRI’s funding is awarded to projects that cover five administratively identified “challenge areas,” which are guided by USDA’s long-term strategic plan.  These include:

1. Climate Change and Variability
2. Food Security
3. Sustainable Bioenergy
4. Childhood Obesity Prevention
5. Food Safety

Finally, AFRI also offers a fellowship program, which awards grants to pre- and post-doctoral graduate student research, that addresses one of the program areas listed above.

Several of the comments presented in last week’s listening session included recommendations to increase the balance between funding for the foundational program and the challenge areas, to increase the number of smaller grants awarded, and to increase the funding available for individual, investigator-led research projects.  The priority areas within the foundational program are the ones authorized by Congress in the 2008 Farm Bill, and yet only 30 percent of total AFRI funding is allocated to this program.

Many also suggested revising the program’s Requests for Applications (RFA) to make it less prescriptive, in order to increase the flexibility in the types of research projects that can be funded within AFRI.  Another common recommendation was to increase resources for projects that have an extension component, including minority led extension projects that address food insecurity within rural communities.  Finally, several stakeholders addressed concerns of inadequate research projects funded on food safety, immigration and farm labor, political and economic impacts of agriculture research, integrated pest management, and antibiotic resistant bacteria.

The specific recommendations included in NSAC’s comments were to:

• increase resources on, and give priority to research projects that lead to the release of farmer-ready public crop varieties;
• expand the emphasis on organic and sustainable farming systems;
• restore a balance between the authorized foundational programs and challenge area grants;
• include an emphasis on beginning farmers and ranchers, and local/regional food systems;
• open up additional foundational programs to include integrated projects;
• require each program to be fully competitive and open to all applicants authorized in the 2008 Farm Bill, including research agencies and non-profit organizations;
• include smaller grants for innovative projects, including farmer-driven research;
• streamline the application process and reduce administrative requirements for applicants with more limited institutional capacity.

The program is up for reauthorization at the end of this fiscal year, and Congress is currently debating the details of what should be including in the next farm bill.   NSAC and its allies in the agricultural research community will continue to support this important source of federal funding for research on sustainable agriculture systems, and will be advocating for important policy changes in the farm bill reauthorization.

NIFA will continue to hold upcoming listening sessions to address each of the seven AFRI programs separately.  These listening sessions will be conducted virtually, and organized in a webinar format.  To see more information on upcoming listening sessions, see the AFRI website.

NIFA will be accepting written comments on the FY13 AFRI program through March 22.  All those who wish to submit comments can do so by visiting www.regulations.gov (identify comments as NIFA-2012-0004), by emailing to AFRI@nifa.usda.gov, or by mailing to AFRI; IFPS, NIFA, USDA, STOP 2220, 1400 Independence Ave SW, Washington, DC 20250-2220. All written comments must be received by 5:00 pm EST on March 22^nd.

To read more about AFRI, see NSAC’s grassroot’s guide, or visit NIFA’s website.

As far as the upcoming 2012 Farm Bill is concerned,the President’s request consists in large part of the same $32 billion in 10-year farm bill cuts he issued last September while the Super Committee process was still in play.  The proposal would end direct payments, and substitute a continuation and broadening of the Average Crop Revenue Election (ACRE) program and a renewal of the Supplemental Revenue Assistance Payments (SURE) program, commonly referred to as the permanent disaster program.  It would also reduce crop insurance premium subsidies by two percent.  Unlike prior Obama budgets, there is no proposal to tighten payment or income limits for the receipt of farm subsidies.

The President’s budget proposal also steers clear of the 37 mandatory farm bill programs that lack funding after the end of the current farm bill cycle this year (FY 2012).  Rather than request new farm bill funding for these programs, which include the Wetlands Reserve Program, Grassland Reserve Program, Beginning Farmer and Rancher Development Program, Organic Research and Extension Initiative, Farmers Market Promotion Program, Rural Energy for America Program, Organic Certification Cost Share, Outreach and Assistance to Socially Disadvantaged Farmers and Ranchers, and many more, the President’s budget is  silent, suggesting these are simply not Administration priorities.

Mandatory Conservation Spending

President Obama’s proposed budget calls for deep, permanent cuts of over $595 million to mandatory spending for farm bill conservation programs.  As in the President’s FY 2012 budget request from a year ago, the targeted programs include the Environmental Quality Incentives Program and the Conservation Stewardship Program, which would be cut by $347 million and $68 million, respectively.

Unlike last year’s request, the President’s FY 2013 request does not target the Wetlands Reserve Program or the Grassland Reserve Program because those programs expire at the end of FY 2012, though both would receive modest carryover funding in 2013 from left over funds from the current farm bill cycle.  Cuts were also proposed to the farm bill mandatory spending for the Wildlife Habitat Incentives Program (WHIP), Agricultural Management Assistance (AMA) Program, and Watershed Rehabilitation Program.

For the Conservation Reserve Program (CRP), the President proposes to lower the maximum allowable acreage cap to 30 million acres, down from 32 million acres in FY 2012.  Even with the recently announced new general sign up for the CRP, however, the program will enter FY 2013 with far fewer than 30 million acres.  Hence, on this point, the Obama budget proposal lacks a measure of truth in advertising.  In fact, the cuts he has proposed for working lands conservation programs could be eliminated from his proposal with a more honest accounting for CRP trends.

We have seen this attack on mandatory conservation before.  In fact, since the enactment of the 2002 Farm Bill, presidential administrations have requested and appropriators have legislated roughly $4.4 billion in cuts from Farm Bill mandatory conservation spending.  Despite these severe cuts, the President once again proposes to substantially rewrite the Farm Bill budget agreed to in the 2008 Farm Bill .

Now is not the time to do further damage to the conservation baseline.  Farmer and rancher demand for conservation dollars exceeds supply by multiple factors for most programs.  If anything, in the face of renewed severe erosion, climate change pressures, water depletion, and mounting energy prices, we need a bigger, not smaller investment in farm conservation to protect the land that is our long-term food security.

Commodity Payments and Crop Insurance

The President’s request follows the emerging consensus to do away with direct payments but offers no new alternative safety net proposal and instead simply proposes extensions of the ACRE and SURE programs that most other farm bill actors believe need major reworking.  The one novel element in the plan would cut 2 percent across the board from the 60 percent of farmer crop insurance premiums that are paid by the taxpayer.

Both the commodity payment and crop insurance proposals fail completely to target the cuts or place effective limits on the amount any given farm can receive, and thus their impact would be felt most heavily by small and medium-size farms.  Neither proposal addresses the critical issue of whether the public should be given assurances that natural resources are protected in return for their large investment in farm production subsidies.

Discretionary Spending

As a result of the $1 trillion in 10-year cuts to discretionary spending approved in the Budget Control Act last year, pressure on all discretionary spending, including USDA, remains high.  The budget request from the President is lower than the enacted 2012 levels, which in turn are considerably lower than the preceding two years.  A portion of the difference, however, is made up by the changes to mandatory program spending, primarily farm bill conservation programs as described above.

Conservation

On the discretionary side of the conservation ledger, the budget proposes level funding for the conservation operations budget (which includes conservation technical assistance) for the Natural Resources Conservation Service at $827 million, equal to 2012 levels but a very large decrease from 2011 levels.

Research, Education, Extension

In agricultural research, the budget request for the third year in a row calls for an increase in funding for the Sustainable Agriculture Research and Education Program, including launching of the long-delayed Federal-State Matching Grant program to increase sustainable agriculture research, education and extension capacity at the state level.  The request is for $22.7 million.  An even larger increase for the SARE program, from $19 million to $30 million, was adopted in FY 2011 by the House Appropriations Committee and in part by their Senate counterparts, only to have the increase dissolve when no final bill was enacted and government spending was continued at previous levels by means of a “continuing resolution.”  The lower level of $19 million was then adopted again in FY 2012.

The President’s budget for USDA also proposes to fund the Organic Transitions research program and the ATTRA or National Sustainable Agriculture Information Service at their current levels of $4 million and $2.25 million, respectively.  On a negative note, the request would eliminate all funding for the Regional Integrated Pest Management (IPM) Centers.

For the Agriculture and Food Research Initiative, the largest of the research competitive grants programs, the budget request of $325 million is a 23 percent increase over the current level.

Farm Credit

President Obama proposes level funding for most Farm Service Agency credit programs, including direct operating farm loans and direct farm ownership loans.  However, he also requests $2.5 million in first-time funding for the Beginning Farmer and Rancher Individual Development Account (IDA) pilot program, or half the level authorized in the 2008 Farm Bill.

Healthy Foods

While the proposal does not include a specific funding request for the Healthy Food Financing Initiative (HFFI), it does request funding to combat food deserts through existing programs.  In the past, the President has explicitly requested $35 million for the initiative.  Funding for the Farmers Market Nutrition Program would continue at the FY 2012 level of $16.5 million under the President’s proposal.

Rural Development

In rural business development, the President requests $15 million for the Value-Added Producer Grants program.  While this is a slight increase over the $14 million provided in FY 2012, it is a 21 percent reduction from FY 2011 and a 26 percent reduction from FY 2010.  Funding for the Business & Industry Loan Program, and therefore the loan set-aside to finance local and regional food enterprises, would be stable at FY 2012 levels.  The funding request for the Rural Coop Development Grants program is roughly 9 percent higher than the program’s FY 2012 funding level.

The budget request calls for a 23 percent increase in funding for Rural Business Enterprise Grants (RBEG) from $24.3 million to $30 million, but does not request any funding for Rural Business Opportunity Grants (RBOG).

The President proposes that Congress provide $3.4 million in discretionary funds for the Rural Microentrepreneur Assistance Program, on top of the mandatory funding that the program may receive in the upcoming farm bill.  In a similar manner, the budget request also proposes $4.6 million in discretionary funding for the Rural Energy for America Program (REAP) over and above any mandatory farm bill funding provided in the upcoming farm bill.

FDA Spending

The budget proposes a large $654 million increase to the Food and Drug Administration’s budget, including increased spending for food safety under the new Food Safety Modernization Act.  The majority of the increase, however, is from proposed user fees that may or may not be approved by Congress.

Chart with the Details

The NSAC Appropriations Chart with all the details on appropriations history and the new funding requests for a wide variety of programs that impact sustainable agriculture and food systems can be found at our Annual Appropriations webpage.

Our press release on the budget request is also available online.

Big Picture Context

The President’s budget reflects a $4 trillion cut in spending over the next decade, including $1 trillion in cuts to discretionary spending enacted as part of the Budget Control Act of 2011, plus $1.5 trillion in revenue increases (largely from expiration of a portion of the Bush tax cuts), $360 billion from health mandatory programs, and $278 billion from other mandatory programs, including farm bill programs.

Strangely, though, the Obama budget does not include any accounting for the $1.2 trillion in automatic cuts (sequestration) scheduled under current law to go into effect on January 1, 2103, four months into FY 2013.   To date, the Administration has refused to share any information about the size and the shape of the scheduled automatic cuts that by law it must determine and administer.  The White House prefers for strategic reasons to keep that information secret.

The likelihood of automatic cuts during the next fiscal year may impact whether or not Congress will pass a new farm bill on time and on schedule this year.  The lack of information from the Administration is, for the time being at least, shielding decision makers from the hard realities of what those cuts will mean for key farm bill programs in specific terms.

Next Steps – FY 2013 Appropriations

Like Farm Bill authorizations and budget resolution caps on discretionary spending, the President’s budget request provides a benchmark for appropriators as they begin the FY 2013 appropriations process.

The next step in the budgeting and appropriations process will be for the House to pass a budget resolution setting a top line spending cap for FY 2013 appropriations.  While last Year’s Budget Control Act already set overall spending limits, the Chairman of the House Budget Committee, Paul Ryan, has indicated that he intends to pass a resolution this Spring.  The Senate will forgo that step and simply use the FY 2013 spending level already provided by the Budget Control Act, arguing that the Budget Control Act already established the discretionary spending caps for FY 2013 and therefore there is no need to pass a new resolution.

The House and Senate Appropriations Committees will then use the top line spending caps in the Budget Control Act to determine agriculture spending limits, called “sub-allocations.”  Appropriators will use this sub-allocation along with the President’s budget request as a guideline as they determine program funding for FY  2013.

We will alert NSAC members and readers throughout the budget and appropriations process as opportunities emerge to make citizen comment heard.

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.

If this rule becomes final, it is expected to benefit customers by allowing products to reach store shelves more quickly.  Additionally, it is anticipated that the rule should benefit smaller producers by making the label process easier and less costly.

The public comment period on the proposed rule runs through February 3.  Comments may be submitted electronically at www.regulations.gov or by mail to FSIS, Room 8-164, 355 E Street SW, Washington, DC 20024-3221.

A provision in the Local Farms, Food, and Jobs Act (S. 1773, H.R. 3286) would take the intention of the proposed rule a step further.  Under the provision of this bill, FSIS would be required to provide an electronic submission option for the meat label approval process and to create a searchable database of existing meat labels.  Together, this system would allow meat processors to view, and if they wish, model their own meat labels after those that have previous approval from FSIS, thus saving time and money.

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

Several of the funded projects include:

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

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

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

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

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

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

The petitions, filed in 1999 and 2005, urge the FDA to withdraw the approvals for antibiotics given to animals in feed or water for purposes other than disease treatment if the antibiotics are also used in human medicine.  The petitions were filed by Environmental Defense, Center for Science in the Public Interest, Food Animal Concerns Trust, Union of Concerned Scientists and other groups because evidence shows that use of antibiotics for non-therapeutic purposes in livestock production can lead antibiotic resistance within human populations.  The groups argue that these antimicrobial drugs shouldn’t be used for growth promotion and disease prevention, but rather for treating diagnosed illnesses.

The response to these long-standing citizen petitions came after several of the petitioners filed suit in May against the FDA for not responding.  In its response to the petitions, the agency expressed shared concern with the public and the need to address this issue, yet proceeded to deny the petitions on the basis of statutory hurdles such as a notice to the drug maker and an evidentiary hearing on the matter.  It argues that taking these drugs off the market would simply be too expensive, resource intensive, and cumbersome: “The agency’s experience with contested, formal withdrawal proceedings is that the process can consume extensive periods of time and agency resources.”

Instead, FDA is “currently pursuing other alternatives to address the issue of antimicrobial resistance related to the production use of antimicrobials in animal agriculture.”  The proposed alternative is collaborating with the pharmaceutical companies that produce these antibiotics to voluntarily take them off the market for animal feed.

As expected, consumer and public health interests are not pleased by this alternative proposal.

“Instead of adhering to its mission to protect consumers, the FDA is waiting for the drug companies to voluntarily do what the Agency is legally mandated to do.  There is absolutely no reason to believe that drug companies will voluntarily reduce sales of antibiotics and act against their own financial self-interest.  Without reductions in antibiotics used it is impossible for there to be any public health benefit.” said Steven Roach, Public Health Program Director of Food Animal Concerns Trust (FACT).  “For this reason we do not see the FDA’s plan as an answer to the petitions or the problem of antibiotic resistance.”

FACT’s Executive Director Richard Wood declared that, “reducing antibiotic overuse is essential for making sure antibiotics will keep working for years to come – to treat our sick children, families and animals.  It is outrageous that the FDA considers voluntary self-regulation by drug companies to be enough.  It is clearly not.”