After three continuing resolutions (CR), which cumulatively delayed the fiscal year (FY) 2017 appropriations package by over seven months, Congress has finally reached an agreement on funding levels for the remainder of FY 2017. Despite a particularly contentious political environment, one area on which Congress was largely able to agree in the omnibus spending bill was support for sustainable agriculture programs. Overall, we at the National Sustainable Agriculture Coalition (NSAC) are pleased with the bill, which includes increased funding for: the Sustainable Agriculture Research and Education (SARE) program; Farm Service Agency (FSA) loan programs; Value Added Producer Grants (VAPG) program; Conservation Technical Assistance; the National Sustainable Agriculture Information Service (ATTRA); and the Agriculture and Food Research Initiative (AFRI), among other programs. We are also thrilled to report that the bill does not cut mandatory farm bill funding from the Conservation Stewardship Program (CSP), our nation’s largest working lands conservation program.

Overview

After months of negotiations and delays, on Sunday April 30^th Congress finally reached an agreement on FY 2017 funding, which will keep the government running until September 30, 2017.

Now that an agreement has been reached, the bill needs to be passed by the House and Senate, and then sent to President Trump for his signature. The current CR expires this Friday, so the bill will need to be acted upon before the end of the week to avoid a government shut down.

So far, there has been little to no signaling from the White House as to what the Administration thinks of the bill, which contains both wins and losses for the President. For instance, Congress’ budget agreement bucks the President’s request for border wall funding, but does include $15 billion in additional funding to “fight terrorism,” a top priority for the President.

The bill—known as an “omnibus”—is actually a package of 12 individual spending bills bundled together, including spending for the Department of Agriculture.

For the USDA and the Food and Drug Administration (FDA), the two departments that deal most regularly with food and agriculture issues, the bill provides $20.87 billion in discretionary funding – $623 million below the FY 2016 enacted level of $21.75 billion. While FY 2017 includes a few major funding increases over FY 2016, the bill manages to come out with a lower overall price tag due to a rescission of $850 million in un-obligated balances to the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) program. This means that WIC is costing less than expected, and that the savings can be used for other priorities without harming the program.

In a surprise to most observers, the bill does not contain any new assistance for cotton or dairy producers, a significant point of discussion over the last several weeks. More on that below.

This post breaks down the omnibus as it pertains to NSAC’s farm and food priorities for FY 2017, including:

• Conservation
• Energy
• Research and Food Safety Outreach
• Outreach to Socially Disadvantaged Farmers
• Rural Development and Farm Loans
• Legislative Riders

For detailed funding levels please see our annual appropriations chart.

Conservation and Energy Programs

NSAC applauds Congress for rejecting cuts to CSP in the omnibus package, one of our top priorities for FY 2017. By maintaining farm bill funding levels, CSP will be able to help farmers increase efficiency and improve and protect natural resources by enrolling 10 million acres of working lands this fiscal year. This victory is especially significant given that the House Appropriations Committee’s bill, approved last spring, would have cut the program by 20 percent (a reduction of 8 million acres).

We thank Senators John Hoeven (R-ND) and Jeff Merkley (D-OR), the leaders of the Senate Agriculture Appropriations Subcommittee, as well as Senator Jerry Moran (R-KS), the former chair of the Subcommittee, for defending CSP against cuts.

Unfortunately, as in previous years, the omnibus does include a $181 million (11 percent) cut to the popular Environmental Quality Incentives Program (EQIP). This cut will have a direct impact on producers seeking financial and technical assistance to help them conserve water, soil, and other natural resources on and around their farms. Even without cuts, EQIP can typically fund only half of those who apply for the program. The cut included in the FY 2017 package will further increase waiting lists and mean that thousands of farmers and ranchers will be unable to secure the assistance they seek.

Moreover, the $181 million cut to EQIP has ramifications for the popular Regional Conservation Partnership Program (RCPP); because RCPP draws its funding from CSP and EQIP, among other USDA conservation programs, the cut to EQIP means a $28 million cut to RCPP.

Recognizing the critical role that technical assistance plays in helping farmers, ranchers, and foresters plan and implement conservation activities, the omnibus increases USDA’s Conservation Operations budget from $850.9 million to $864.5 million. This is in line with the Senate Appropriations Committee approved level, which was nearly $10 million higher than what the House was seeking.

Conservation Operations is the primary means by which USDA offers conservation technical assistance (CTA) to farmers, ranchers, and foresters. USDA’s ability to deliver conservation programs to producers depends heavily on on-the-ground CTA, which makes up the bulk of the Conservation Operations account. NSAC thanks the leaders of the Senate Agriculture Appropriations Subcommittee for their efforts in securing this important funding.

Energy

We are pleased to report that the omnibus refrains from cutting farm bill mandatory funding for the Rural Energy for America Program (REAP), which provides grants and loans to producers and businesses for energy conservation and renewable energy generation. In addition to protecting REAP’s mandatory funding, the bill also provides an additional appropriation for REAP loan guarantees (although slightly less than in FY 2016).

While the omnibus protects farm bill funding for REAP, it did not restore funding levels for the Biomass Crop Assistance Program (BCAP), which was cut by 88 percent last year and retains only $3 million of its mandatory farm bill funding.

On-Farm Research and Food Safety Outreach

We are thrilled to report that the budget agreement includes a $2.3 million (nine percent) increase in funding for the Sustainable Agriculture Research and Education (SARE) program, USDA’s only competitive grant research program with a clear and consistent focus on sustainability and farmer-driven research. This increase brings total SARE funding to $27 million, the highest level in the program’s nearly 30-year history.

This funding helps puts SARE on a solid footing as we head toward the next farm bill, when the program will need to be reauthorized for the first time.

In recent years, USDA has only been able to fund 7 percent of qualified pre-proposals for SARE Research and Education grants. As a result, agricultural advances have been stymied and family farmers have missed out on new innovations that could help them adopt and enhance sustainable farming systems. The increased funding in FY 2017 will help address this bottleneck and get additional worthy projects off the ground in the coming year. We applaud appropriators for investing in farmer-driven research, and particularly commend Subcommittee Ranking Member Sen. Jeff Merkley (D-OR), who has championed this issue and doggedly pursued higher funding for SARE.

We are also pleased to report that the National Sustainable Agriculture Information Service (also known as “ATTRA”) received a 10 percent increase in funding, bringing total funding to $2.75 million, in line with NSAC’s request. This increase will help expand ATTRA’s Armed to Farm Program, which helps to train veterans who are interested in pursuing agriculture as a career. Both the House and Senate bill included this funding level, despite a request of only $2.5 million from the previous Administration. We commend Congress for recognizing the vital importance of ATTRA, which serves millions of producers and conservation professionals each year, and hope the new Administration will avoid any future attempts to cut the program.

The omnibus increases funding for the Agriculture and Food Research Initiative (AFRI), USDA’s largest competitive grants research program, from $350 million to $375 million. AFRI also received an increase of the same size in the FY 2016 budget. This sizable increase gives USDA the ability to fund more public plant breeding and cultivar development research. Investment in this work is further supported with report language that underscores that AFRI funding should be available to “all priority areas including conventional plant and animal breeding.”

The bill maintains level funding of $4 million for the Organic Transitions research program and contains no cuts to the Organic Research and Education Initiative (OREI) which remains $20 million (minus a sequester cut of 1.4 million).

Finally, unlike its investment in agricultural research, the omnibus falls far short on funding for food safety training efforts. The Food Safety Outreach Program (FSOP) provides a crucial service to small and mid-sized farmers, processors and wholesalers by helping them to comply with the new and complex Food Safety Modernization Act (FSMA) rules. While NSAC requested increased funding for the program, the omnibus maintains level funding at $5 million. The major FSMA rules are now final; and farms will soon be required to comply. As smaller operations prepare to comply, now is the time to scale up critical training and technical assistance. Over a hundred thousand producers will be impacted by FSMA, and without adequate training and technical assistance, small and mid-sized farmers will be impacted disproportionately. As such, NSAC will continue to press appropriators to increase funding for this critical program in the next appropriations cycle.

Outreach to Socially Disadvantaged Farmers

Another major shortcoming of the omnibus is the lack of discretionary funding for the Outreach and Assistance for Socially Disadvantaged and Veteran Farmers and Ranchers program, also known as the 2501 program. While the bill does not cut the program’s $10 million in mandatory funding provided by the 2014 Farm Bill, it does not provide any of the $10 million in additional discretionary funding that NSAC sought, and it even rejects the $3 million that Senate Appropriators had included in their version of the bill. The 2014 Farm Bill cut the program’s mandatory funding in half and added veterans as beneficiaries. Ever since, NSAC has been seeking to restore the program to its former level through the appropriations process. We will continue to fight this fight as the FY 2018 funding cycle picks up.

Rural Development and Farm Loan Programs

The omnibus contains significantly higher funding levels for the Farm Service Agency’s (FSA) Guaranteed and Direct Operating loans as well as for Guaranteed Farm Ownership loans – increases NSAC led the fight for in 2016 when FSA was in danger of leaving thousands of approved farmers in limbo. Without operating loans and access to reliable and timely credit, many farmers would be unable to sustain their businesses, and those new to the industry would likely be unable to even get their operations off the ground. Given the ongoing struggles of the American farm economy, including a prolonged period of low commodity prices, this increase is particularly critical and much appreciated.

All FSA loan programs, with the exception of the Direct Farm Ownership Loan program, receive increases in the omnibus package. The biggest winner for FSA is the Guaranteed Operating Loans program, which receives an increase of $567 million (41 percent) in loan authority over FY 2016 levels. The increase for Direct Operating Loans is $278 million (a 22 percent increase), and Guaranteed Farm Ownership loan funding is increased by $750 million (38 percent). NSAC is hopeful that this large increase in funding for FSA loan programs will help FSA and their private bank partners meet new demand and prevent backlogs for loans in the coming months. NSAC thanks House and Senate agriculture appropriators for recognizing the dire need for this type of support, especially for beginning farmers and ranchers who are unable to secure capital in the private market.

As with loans, the omnibus provides robust funding for a number of critical rural development programs. We commend House Agriculture Appropriations Subcommittee Chairman Robert Aderholt (R-AL) and Ranking Member Sanford Bishop (D-GA) for their leadership in securing $15 million in discretionary funding for the Value-Added Producer Grants Program, bumping the program up to a funding level not seen since 2014. This 40 percent increase, which is in line with NSAC’s request, is especially important in FY 2017 because the program has very little funding left from the 2014 Farm Bill. VAPG, one of NSAC’s top appropriations priorities for FY 2017, helps farmers and ranchers develop new farm and food-related businesses that boost farm income, create jobs that can’t be out-sourced, empower local communities and increase rural economic opportunity.

Also within the Rural Development section of the bill, the Health Food Financing Initiative (HFFI) received first-time USDA funding of $1 million. This program, which provides funding to address food deserts and other healthy food access issues has never before received funding through USDA. HFFI efforts are currently being funded through complimentary initiatives at the Treasury Department and the Department of Health and Human Services.

Unfortunately, the final bill provides no discretionary funding for the Rural Microenterprise Assistance Program (RMAP). The 2014 Farm Bill does provide $3 million in mandatory farm bill spending for RMAP in FY 2017, but that is insufficient to maintain the program at current levels. Without additional funding, RMAP is limited in its ability to provide much needed support to rural entrepreneurs during this time of low commodity prices.

As in previous years, appropriators provided no funding for the Beginning Farmer and Rancher Individual Development Accounts (BFRIDA) program. BFRIDA is designed to help beginning farmers and ranchers finance their new and growing agricultural businesses through business and financial education and matched savings accounts. This program could prove a critical component to helping farmers diversify their income during the current downturn in the farm economy if it were funded.

Legislative Riders 

Heading into final negotiations, House and Senate leaders were negotiating a long list of policy riders, including provisions to: further obstruct implementation of the Farmer Fair Practices Rules (aka the “GIPSA rider”); add cotton back into Title I of the farm bill; help struggling dairy farmers; and block the implementation of rules regarding school meal nutrition standards, among other issues.

GIPSA Rider

We are pleased to report that the final bill does not include what has been referred to as the “GIPSA rider,” a policy provision used to blocked USDA from moving forward with a trio of rules to help protect contract farmers in their negotiations with multi-national livestock and poultry companies. USDA recently delayed one critical rule until October, but farmers are calling on President Trump to move forward quickly. The lack of a GIPSA rider in the omnibus removes one hurdle to finalizing the rules.

Cotton and Dairy

Though they were aggressively lobbied for, provisions to assist the cotton industry by restoring it to a Title I commodity program and adjusting the Margin Protection Program (MPP) to assist dairy producers were not included in the omnibus.

The omnibus does, however, include report language to benefit both commodities. It directs USDA to write a report within 60 days on the needs of cotton growers. It also asks USDA to consider immediate assistance for dairy producers and clarifies that USDA’S Risk Management Agency has the authority to develop dairy policies that are not constrained by the existing limits on livestock policies.

School Foods Nutrition Standards

The omnibus contains several riders related to delaying or eliminating school food nutrition standards set by the Healthy, Hunger Free Kids Act of 2010.

Language is included to allow a waiver from the current whole grain requirements if the school district can demonstrate any hardship, including a financial one. The current requirements state that all grains served must be whole grain rich, but the waiver will allow districts to reduce that requirement to 50 percent of grains. It also prevents any funds from being spent to strengthen sodium limits in school meals, and eases limitations on the types of milk that participating schools can serve..

National Organic Program Animal Welfare Rider

The omnibus does not contain a rider to prevent USDA from finalizing animal welfare rules for organic production systems. These rules would implement a comprehensive set of animal welfare standards for certified organic production of animals and animal products. The rule was originally published on President Obama’s last day in office with an effective date of March 20. The effective date has since been delayed until May 19. The lack of a rider clears the way for the rule to take effect on May 19, barring any further delays by USDA.

Looking Forward to FY 2018

While the wins for sustainable agriculture in FY 2017 are significant, we must now turn our attention to FY 2018 and a presidential budget request that proposes historic cuts to critical USDA programs.

Appropriators have already begun the process of debating funding levels for FY 2018, even while finishing the FY 2017 cycle. The country is also still waiting to see the full FY 2018 budget request from the White House; the “skinny budget” released last month was just the Administration’s first foray into the budget battlefield. The full budget request is rumored to appear later this month, and is expected to include deep cuts to many important programs.

After they have received the President’s budget, congressional appropriators will take that, and the hundreds of other budget proposals they receive from Members of Congress and stakeholders, and will draft funding bills for FY 2018. We expect this process to continue through the late spring and into the summer.

In the coming weeks and months, we will redouble our efforts to build upon successes and defend the programs that small and mid-sized family farmers, rural communities, and our shared natural resources depend upon. Stay tuned for more information as the FY 2018 process unfolds.