NSAC's Blog

Congress Prepares to Pass Funding Extension, Includes Provision to Fill Farm Loan Shortfall

December 9, 2016

United States Capitol building in Washington, DC. Photo credit: USDA.

In order to keep the country’s lights on, Congress will need to pass – and the President will need to sign – new appropriations legislation before midnight tonight. Yesterday, the House passed a “continuing resolution” (CR) 326-96, to extend last year’s funding levels for a second time until April 28 (the first CR was passed and signed by the President on September 29 of this year). This second CR now heads to the Senate, where it must pass and then be signed by the President before the end of the day if a government shutdown is to be avoided.

Each year, Congress is charged with writing and passing appropriations legislation to fund the government, including the U.S. Department of Agriculture (USDA) and its programs, for the upcoming fiscal year. Congress failed to do this for fiscal year (FY) 2017 before FY 2016 closed on September 30, and instead passed a short-term extension (aka a continuing resolution) of last year’s funding package.

Some Democratic senators have vowed to delay the CR in response to what they see as an insufficient extension of expiring benefits for retiring coal miners. While they are not likely to try to defeat the bill, they may be able to briefly postpone a vote.

Assuming the Senate passes and the President signs the second CR, the incoming 115th Congress will need to get to work on additional legislation to keep the government running past the extension date of April 28. Such legislation would provide funding for the rest of FY 2017, which ends on September 30, 2017.

NSAC Secures Farm Loan Fix

Following several months of advocacy by the National Sustainable Agriculture Coalition (NSAC), working in close partnership with banking and other farm advocacy groups, congressional appropriators agreed to include a provision in the CR to allow USDA to make loans to farmers and ranchers in proportion to demand. This provision will make it possible for USDA to offer credit to beginning and other family farmers during the winter and spring months, when loan demand peaks, without running out of loan funds.

Making this type of change in a CR is particularly difficult and fairly rare; therefore, when it is done it is known in budget terms as an “anomaly.” NSAC would like to extend thanks to Senators Jerry Moran (R-KS) and Jeff Merkley (D-OR) and Representatives Robert Aderholt (R-AL) and Sam Farr (D-CA) – who serve as the chairs and ranking members of the House and Senate Agriculture Appropriations Subcommittees – for working tirelessly to secure support for this important provision.

Though the anomaly is very helpful in the short term, it does not secure additional funds that would prevent another shortfall in farm credit funding for the rest of FY 2017. Next spring, when Congress approves the final government funding bill, it will need to include a significant funding increase for direct and guaranteed farm operating loans. Additional funds are needed in order to make up for a large backlog of approved loans from FY 2016 that were carried over into FY 2017. Expanded support is also needed if USDA is to be able to meet the demand for new government-assisted credit, which has been steadily rising during the widespread economic downturn in the farm economy. NSAC will continue to work with farm lenders and other farm groups to try to secure sufficient funding in next year’s final bill.

Looking Forward

The spring of 2017 is shaping up to be a very busy and complicated time for the new Congress, which begins its work early next month. Appropriators typically begin working on appropriations legislation for the following fiscal year shortly after the Administration releases its budget request, which most often happens in February. Though that process might reasonably be delayed due to the administrative transition, we expect Congress to nonetheless do its job and complete work on FY 2018 budget resolutions and appropriations legislation in a timely manner. Given the time crunch, appropriators will be considering two fiscal years (FY 2017 and FY 2018) simultaneously.

As a reminder, both the House and Senate Appropriations Committees passed their respective agriculture appropriations bills for FY 2017 earlier this year. However, neither bill was considered on the floor of either chamber. Instead, the process stalled out and we were left with two consecutive extensions of FY 2016. Come spring 2017, appropriators will use the previously passed agriculture appropriations bills to negotiate final funding levels and policy riders for the remainder of FY 2017.

Several substantial differences exist between the House bill and the Senate bill. For example, the House bill cuts USDA’s largest working lands conservation program, the Conservation Stewardship Program (CSP), while the Senate bill does not. The House bill increases funding for USDA’s flagship, farmer-led rural development program, the Value Added Producer Grants (VAPG) program, while the Senate bill does not. The Senate bill increases funding for the Sustainable Agriculture Research and Education (SARE) program and the Outreach and Assistance for Socially Disadvantaged and Veteran Farmers and Ranchers program, while the House bill does not.

For our previous coverage of the House and Senate bills please refer to the linked blog posts. You can also download our full appropriations chart here.

Looking forward, NSAC will continue to advocate for sustainable agriculture priorities and will keep readers apprised as the FY 2017 appropriations cycle winds down and the FY 2018 cycle ramps up.

Categories: Budget and Appropriations, Commodity, Crop Insurance & Credit Programs

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