Conservation Reserve Program

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

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

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

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

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

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

Environmental Quality Incentives Program and Wildlife Habitat Incentives Program

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

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

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

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

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

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

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

Regional Conservation Partnership Initiative

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

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

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

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

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

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

Combined Easement Program

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

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

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

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

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

Other Changes to the Conservation Title

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

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

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

Step Forward, Two Steps Backward for Conservation Stewardship Program

First the good news: the Conservation Stewardship Program (CSP) remains part of the revised conservation title for the 2012 Farm Bill approved by the Senate Agriculture Committee on April 26.  The program emerges from Senate Committee markup continuing as an ongoing, permanent program with substantial funding on a par with the other large working lands program, the Environmental Quality Incentives Program.

The CSP provides comprehensive conservation assistance to farmers and ranchers to resolve particular priority resource concerns in a given location and address the full range of conservation issues, including soil quality, soil erosion, water quality and quantity, wildlife and biodiversity, air quality, and energy conservation.  It offers farmers the opportunity to augment the foundation of their good current conservation efforts by earning payments for actively managing and maintaining them, expanding and improving them, and adding new conservation activities—even while they work their lands for production.  CSP is for working farms and ranches, built on the belief that we must enhance natural resource and environmental protection at the same time we produce profitable food, fiber and energy.

Unlike EQIP, which provides “once and done” cost share assistance for implementing new conservation activities, primarily for structures and equipment, CSP provides support for ongoing advanced conservation management of farming operations on a long-term, continual improvement basis.

NSAC has a very extensive platform for improvements in the conservation title of the 2012 Farm Bill, but none more important than retaining and improving CSP.

In light of that priority status, we are unhappy to report that the good news from last week comes with two major setbacks, one expected, one less so.

Funding

As has been clear since a draft farm bill was put together by the chairs and ranking members of the House and Senate Agriculture Committee last year for the ill-fated congressional super committee, the conservation title has been slated to be cut by 10 percent, or about $6.4 billion over the next decade, in the 2012 Farm Bill.  As part of that overall slashing of the conservation budget, the Conservation Stewardship Program has also been on deck for a 10 percent or $2 billion cut, wiping out the $1 billion increase it received in the 2008 Farm Bill with another $1 billion cut added on top of that.

Rather than enrolling 12.769 million acres a year, as was the case under the 2008 Farm Bill, if the new conservation title becomes law, the annual amount will decrease to 10.34 million acres a year.  The national average payment rate per acre, including both financial and technical assistance and administrative costs will remain at $18 an acre.  (That is an average rate; the rate for individual farms can vary widely, depending on land use and conservation benefits).

The NSAC farm bill platform called for a decrease in the number of acres enrolled each year but an increase in the average per acre payment rate, with no change in net funding for the program.  That recommendation was based on a program analysis that suggested farmers would tend to choose conservation activities with higher conservation and environmental impact if payments were not such a small percentage of their costs as is currently the case.

Policy

While the large 10 percent cut had long been anticipated, the second big step backward for the CSP was more unexpected.  When the draft farm bill presented to the Senate Agriculture Committee by Chair Debbie Stabenow (D-MI) and Ranking Member Pat Roberts (R-KS) on April 20, it became clear there were serious policy setbacks for the program as well.

In the place of a comprehensive conservation program that both targeted conservation priorities by watershed and encouraged farmers to meet or exceed environmental thresholds for these priorities while also taking steps to improve other resource concerns such as soil quality and energy conservation, the proposal laid before the Committee scaled back the program to one that would focus only on a small handful of priority concerns and limit supported conservation activities to a narrow subset.  Thankfully, this was corrected in the revised bill presented to the Committee on April 25 based on amendments pursued by Sen. Harkin (D-IA) and accepted by Chairwoman Stabenow and Ranking Member Roberts.  This is an incredibly important revision and is now part of the bill reported out of Committee.

Another critical improvement made in the bill last week is on the issue of contract renewals.  Under the draft bill presented on April 20, CSP contract renewals were based in part on the farmer agreeing to address two additional priority resource concerns.  This would not be possible for farmers who already are addressing all priority resource concerns at levels exceeding the good stewardship threshold levels.  Additional language pursued by Sen. Harkin and accepted by the Chair and Ranking Member clarifies that the test is whether a farmer has met or exceeded or will meet or exceed those levels.

On other issues, though, there are still major setbacks in the bill as reported:

• Rather than ranking CSP applications solely by their projected environmental benefits based on the totality of the conservation activity on the farm, the new Senate farm bill proposal maintains a more complicated ranking system that has had the effect of NRCS providing greater points to those who enter the program with less conservation on the ground and fewer points to those with the highest level of conservation, keeping the best stewards out of the program.

• Rather than clarifying how the 2008 Farm Bill encouraged farmers to undertake comprehensive conservation planning, the new bill moved in the opposite direction, narrowing the scope of conservation planning.

• Rather than clarifying the law to provide for CSP payments for farmers with the strongest commitment to highly diversified resource-conserving crop rotations, the new proposal continues to single out those who will adopt diversification strategies in the future.

• Rather than add language to allow landowners to make a smooth transition from a Conservation Reserve Program contract to a CSP contract, the new bill would keep the current one year lag, but then give former CRP contract holders additional ranking points, providing them with an unfair advantage over all other producers.

• Rather than making the program work more fairly for New England, Appalachia and other areas with a predominance of small acreage farms, the new bill continues to base payments on size of farm, with no allowance for a minimum contract rate.

• Rather than clarifying the 2008 Farm Bill provision encouraging farmers to voluntarily undertake on-farm conservation research, the new proposal eliminated it as an option altogether.

• Rather than improve the Conservation Measurement Tool – the engine that drives CSP enrollment – and increase its transparency, the new bill eliminates all references to environmental benefit measurement tools, leaving the future direction of the program and its basic operating system a bit of an in-limbo mystery.

• Rather than adding organic farmers to a USDA coordination provision, the new bill continues to direct special interagency coordination with respect to transitioning farmers only.

• Rather than increasing the successful beginning farmer set-aside from five percent to ten percent (which would still be less than half the beginning farmer fair share, the bill maintains the status quo.

Other changes to CSP include a switch from each watershed selecting between three and five priority resource concerns to each watershed choosing at least five.  It is unclear from the bill language whether this is intended to apply to the eight major resource concerns or to a much longer list of more specific resource concerns.  We believe this provision must be clarified as the farm bill proceeds.

The new bill eliminates the existing 10 percent set-aside for forested land.  The bill also eliminates the current prohibition against enrolling the same land in CSP and what is today the Grassland Reserve Program and will become the Agricultural Land Easement program in the new bill.

NSAC will continue to work for CSP improvements as the farm bill process moves forward.

According to the Union of Concerned Scientists (UCS), nearly 70 percent of all antibiotics used in this country are given to animals to promote growth and prevent disease caused by overly crowded conditions.  The use of penicillin and tetracyclines in animal feed can promote the growth of antibiotic resistant bacteria, ultimately threatening human health.

The Natural Resources Defense Council, Center for Science in the Public Interest (CSPI), Food Animal Concerns Trust (FACT), Public Citizen, and UCS filed a law suit last year to force FDA to follow through on a 35 year old proposal to ban the use of these antibiotics for non-medical use in animals.  In 1977, FDA concluded that penicillin and tetracyclines given to animals can in fact promote antibiotic resistance bacteria growth.  This conclusion obligated FDA to rescind approval of such drugs for non-therapeutic use following a public hearing, yet FDA never took any further action.  Last week’s court order mean the onus is on the drug companies to prove the safety of their products.

“If, at the hearing, the drug sponsors fail to show that use of the drugs is safe, the ‘FDA’ commissioner must issue a withdrawal order,” stated Katz.

Environmental and consumer groups applauded Katz’s ruling.

“For over 35 years ago, FDA has sat idly on the sidelines largely letting the livestock industry police itself,” said Avinash Kar, NRDC health attorney.  “In that time, the overuse of antibiotics in healthy animals has skyrocketed – contributing to the rise of antibiotic-resistant bacteria that endanger human health.  Today, we take a long overdue step towards ensuring that we preserve these life-saving medicines for those who need them most – people.  These drugs are intended to cure disease, not fatten pigs and chickens.”

Read the NRDC press release, Court Orders FDA to Address Antibiotic Overuse in Livestock and Protect Effectiveness of Medicine for Humans.

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.

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.

The Beginning Farmer and Rancher Opportunity Act (BFROA) of 2011 has been introduced in Congress, and it’s our chance to break down the barriers to entry that impede new agriculture entrepreneurs from starting a farming business.  Your representative’s support is absolutely crucial to helping us build momentum for this important bill.

BFROA would improve existing credit programs so young and beginning farmers can access the financing necessary to run their businesses.  It would reauthorize important conservation programs that foster new life-long stewards of the land and encourage innovative strategies for land transfer and farm entry.  The bill also invests farm bill dollars in training veterans who want to launch a ranching or farming business.

New farmers can produce our nation’s food and fiber, protect and enhance our natural resources, and contribute to the revitalization of our rural and urban communities.  Will you ask your representatives’ to support this comprehensive and forward-thinking initiative today?

Thank you for taking action to ensure a healthy, safe, and prosperous future!

We previously reported to you that a 2011 Food and Farm Bill appeared imminent.  Days before Thanksgiving the Congressional “Super Committee” failed to reach agreement on $1.2 trillion in budget cuts.  With that, the 2011 Farm Bill proposal intended for inclusion in the Super Committee’s deficit reduction bill is thus no more.

The now dead 2011 proposal was a mixed bag to be sure.  However, because you made your voice heard, the short-lived 2011 Farm Bill contained some of sustainable agriculture’s conservation, local food, beginning farmer, and organic priorities.

There are many scenarios for what might happen next with the farm bill.  What’s clear is that a more traditional farm bill process will begin early next year.  We now have a prime opportunity to amplify our voices and push for a greener, healthier, and fairer food and farm system for consumers and family farmers!

We need your continued engagement to keep up the momentum and mobilize an even stronger front for the 2012 Food and Farm Bill Campaign.  Thriving family farms and sustainable and organic agriculture are critical to America’s economy, health, and environment.  Pass this link on to your friends and networks, build the sustainable and organic agriculture movement, and stay tuned!

Thank you for all you do!

The National Sustainable Agriculture Coalition Staff

To take action on two of our farm bill priorities, see the Beginning Farmer and Rancher Opportunity Act and Local Farms, Food, and Jobs Act.

To support our 2012 Food and Farm Bill Campaign, please make a tax-deductible donation today.  Thank you!

The U.S. Secretary of Agriculture called attention to a real worry when he asked: “Why not place the nation’s attention on the need for young farmers on the same plane as police officers and teachers? They are equally important to the future of this country.”

Indeed! Our nation’s farmers are aging and retiring rapidly, and beginning farmers and ranchers face tremendous obstacles entering this field. As a career choice, farming and ranching may be one of the most difficult occupations to enter. To ensure a healthy, safe, and prosperous future America urgently needs new farmers.

Today you have an extraordinary opportunity to launch a new generation of farmers and ranchers in this country!

Ask your Two Senators and your Representative to Co-sponsor the
Beginning Farmer and Rancher Opportunity Act of 2011!

The Beginning Farmer and Rancher Opportunity Act of 2011 is a jobs creator that helps new farmers and ranchers get a start. This is a remarkable opportunity to break down barriers to entry and give real support to aspiring farmers across this nation.

Next week the National Sustainable Agriculture Coalition (NSAC) will be joining members of Congress and other farm groups in introducing the bill. We need support from as many legislators as possible. Can we count on you to make a call?

In last week’s blog Update on the Conservation Stewardship Program – Part I we highlighted data on each of the first two sign-up periods of the Conservation Stewardship Program (CSP).  In this post we continue in that vein and also provide some basic information on the program’s influence on how farmers, ranchers and forestland manage their land across the United States.

Allocation of CSP funding

Roughly $320 million (plus an additional $60 million for technical assistance) has been distributed to 20,567 farmers and ranchers across the US by the program after the first two sign-up years in 2009 and 2010.  The $320 million represents the first year cost of the five-year contracts.  Nearly half of total CSP financial assistance dollars went to farms that are entirely comprised of cropland.  Another 35 percent went to farms that had a combination of cropland and either range or pasture or both.  Payments to farms and ranches and woodlot operations that have no cropland accounted for 16 percent of total CSP financial assistance dollars in 2009 and 2010.

The figure below provides a breakdown of funding allocations by land-use type.

The average annual payment per acre (exclusive of technical assistance costs) for 2009 and 2010 combined was $12.73.  Cropland had the highest average annual payment per acre of $22.76 and rangeland had the smallest annual payment per acre of $3.97.

The average annual payment per contract was $15,642.  Farmers who received payments for both cropland and rangeland had the highest average annual contract payment of roughly $29,000.  Forestland owners received the smallest average annual contract payment of $4,716.

Five states – Minnesota, Iowa, Nebraska, North Dakota and Kansas – received nearly one-third of total CSP funds (or ~ $100 million) over the first two years of the first two sign-up periods.  Minnesota has received the largest proportion of CSP funding overall of any state.  Farmers in that state have received $21 million in payments since 2009.

Nearly half of the contracts issued by the program since 2009 went to payments on cropland.  Despite the relatively small average payments per acre and per contract for forestland, contracts to forestland owners represent 18 percent of total contracts awarded.

The table below outlines the number of contracts issued for each land-use type.

Allocation of CSP acreage

Over 25 million acres of land was enrolled in CSP in 2009 and 2010 combined.  This pie chart shows the breakdown of treated acres by land-use type.  The majority of acres treated by the program so far have been cropland and rangeland, though with a healthy amount of pasture and forested land as well.  The 12.8 million acres available for CSP enrollment each year is allocated to the states in proportion to each state’s total agricultural land area compared to the US total.

Texas, Nebraska and Montana enroll the greatest number of acres in the program, each of them with significant cropland and substantial rangeland.  Counting the 2009 and 2010 enrollments, farmers and ranchers in these three states together have implemented conservation activities on over 5 million acres of land through CSP.  The table below highlights the top ten states for acreage enrollment in CSP for both the 2009 and 2010 sign-up periods.

In Texas the majority of CSP acres were enrolled as rangeland, while Montana enrolled farmers who predominately implemented conservation practices on a combination of pastureland, rangeland and cropland.  The majority of contracts issued in Nebraska were for farms with both cropland and rangeland.

Farms with commodity crops dominate contract numbers

Farmers that grow corn, forage/hay, wheat, and soybeans on their farms received the lion’s share of CSP contracts.  The table below summarizes the number of contracts issued for various commodity types.  Note that  data on dollars allocated or acres treated for particular commodities was not available at the time that this blog was published; hence we are only showing contract numbers, by predominate activity per farm.

Among farms with livestock, beef and dairy represent that vast majority of total contracts.

Practices and enhancements most popular with farmers and ranchers

In the 2009 and 2010 enrollment years, the conservation enhancements chosen most frequently by farmers on cropland were:

• reducing pesticide drift;
• GPS and electronic control technology for chemical application;
• plant tissue testing for nitrogen management;
• wildlife-sensitive haying;
• split nitrogen applications;
• advanced integrated pest management;
• precision nutrient application;
• continuous no-till with residue management;
• resource-conserving crop rotations;
• cover crop mixtures; and
• pollinator habitat.

For pasture and rangeland, leading enhancements chosen by grazers and ranchers included:

• rotation of feeding and supplementation areas;
• retrofitting water facilities for wildlife escape;
• grazing management to improve wildlife habitat;
• monitoring to improve grazing management;
• incorporating native grasses and legumes into forage base;
• management intensive rotational grazing; and
• solar powered electric fencing.

For forestland, the leading enhancements chosen by family foresters were:

• forest stand improvement for wildlife habitat and soil quality;
• forest wildlife structures;
• riparian forest buffers;
• prescribed burning;
• hardwood crop tree release; and
• pollinator habitat.

Wildlife habitat enhancements come up big

Over 15,0000 conservation enhancements and practices specifically designed for wildlife habitat benefits were included in 2009 and 2010 contracts.  This is about 20 percent of the total conservation enhancements and practices selected in the two initial sign-ups and does not include the many additional enhancements designed for other primary purposes (such as reducing pesticide use and nutrient runoff, conserving water, or increasing biodiversity) with positive indirect wildlife benefits.

Other intriguing enhancement choices

In the first two years, 350 farmers chose to convert cropland to grass-based agriculture and nearly 450 chose to implement continuous cover crop systems.  Over 500 chose to adopt non-chemical control of weeds and invasives on grasslands.  Enhancements that are specific to organic farming systems were chosen in 210 contracts; this does not count all of the other conservation practices highly relevant to, but not specific to, organic systems, such as crop rotation, cover cropping, composting, and habitat for beneficials and pollinators.  Nearly 200 farmers and ranchers chose to participate in on-farm research and demonstration or on-farm innovative practice pilot testing projects.

Top ranking enhancements

CSP conservation enhancements are ranked according to expected environmental benefits.  The higher the environmental benefit score, the higher the CSP payment.  The top dozen highest-scoring enhancements are:

• conversion of cropped land to grass-based agriculture for biomass or forage production;
• continuous no-till for organic farming systems;
• continuous cover crops;
• continuous no-till with residue management;
• riparian forest buffer extension;
• resource-conserving crop rotations;
• 100 percent on-farm nitrogen sources;
• herbaceous riparian buffer extension;
• legume cover crops for on-farm nitrogen;
• rotation of livestock feeding and supplementation areas;
• prairie restoration; and
• filter strip extension.

CSP program update – part three

Part three of this blog series will highlight participation of specialty crop producers and beginning, social disadvantaged, and limited resource farmers and ranchers in the program and how their participation differs from the general farmer population.  It will also include information on CSP participation via special area wide project-based approaches.

NSAC welcomes back Kate Fitzgerald, a farm and food policy consultant, to our pages as a guest blogger.  Thanks Kate!

USDA’s Know Your Farmer, Know Your Food blog published the first of two articles on Rural Development’s grant and loan programs that can be used to develop or improve small meat and poultry processing plants.  The blog focuses on the Business and Industry Guaranteed Loan Program (B&I).

One of NSAC’s 2008 Farm Bill priorities was successfully winning a five percent (5%) set-side in the B&I program for local and regional food enterprises.  Expanding or updating a meat processing facility to increase its capacity to sell competitively into the regional retail or institutional market is exactly the kind of loan that NSAC members hope the B&I guarantee will make happen.

Matthew Michael, Director of Program Evaluation and Improvement Staff at the USDA’s Food Safety Inspection Service (FSIS) and FSIS representative to the Know Your Farmer, Know Your Food work group said that he hopes small meat and poultry processors, in particular, take advantage of the B&I loan guarantees.  Small meat and poultry processors have significant initial capital expenses, as well as one-time operating costs that could be mitigated with B&I loan guarantees.

It is heartening to see this new outreach about the program.  With program tweaks that will make the guarantee easier for small-scale businesses to use and continued aggressive outreach on USDA’s part, the B&I loan guarantee can help increase the flow of credit to rural food businesses that will stimulate local economies and meet growing demand for local food.

“The Farm Credit Council promotes the idea of financing local food system aggregation, processing and distribution infrastructure such as producer-owned small meat plants, according to Gary Matteson of the Farm Credit Council.  “Small meat processors can add tremendous value to local producers, particularly since direct to retail is the predominant marketing channel for livestock producers.”

Redeveloping small scale meat processing is a crucial component of vibrant regional food economies.  Another successful NSAC 2008 Farm Bill priority permitted the interstate shipment of state inspected meat which removed a significant barrier to the industry’s growth.  USDA finalized rules for the program in April.

Two recently released guides should make business planning and accessing credit easier for entrepreneurs.  As we previously reported, the Niche Meat Processors Assistance Network (NMPAN) recently released a small business planning guide for small scale meat processors.  In addition, a new Field Guide to the New American Foodshed is available to help food system entrepreneurs find and use relevant business development information about local and regional food markets.

Gradually the necessary pieces are falling into place to create the business environment that will support local, small and mid-sized farm and food entrepreneurs!