UPDATED: June 18, 2012

On Wednesday, June 6, the House Agriculture Appropriations Subcommittee approved its FY 2013 agriculture appropriations bill.  The spending bill covers the majority of the functions of USDA as well as the Food and Drug Administration.

In late April, we happily reported that the Senate Appropriations Committee’s FY 2013 agriculture appropriations bill included small increases in funding for the Sustainable Agriculture Research and Education (SARE) program and the Value Added Producer Grants (VAPG) program.  That bill also maintained full funding for many farm bill conservation programs and abstained from including limitations on USDA’s ability to implement the Grain Inspection, Packers and Stockyards Act (GIPSA) rule.

Unfortunately, the House Subcommittee bill passed yesterday takes multiple steps in the wrong direction.  If it were to become law, the bill would reverse many of the important advances made in the Senate bill.

Whereas the Senate bill endorsed the Obama Administration’s proposal to fund for the first time the Sustainable Agriculture Federal-State Matching Grant Program as a new component of SARE, the House Subcommittee bill reduces overall SARE spending to $18.8 million from $19.2 million in FY 2012 and does not provide any money for the federal-state match component.

Congress authorized the match component along with the rest of SARE back in 1990, but to date it has never received an appropriation.  Grants through the program have greater and longer-lasting impacts when they are a part of a larger, sustained effort coordinated and leveraged by a center, institute, program, or other longer-term investment by a university or other organization.  We therefore urge House and Senate appropriators to resolve their differences and provide long-overdue support for the federal-state matching component of the SARE program.

While the Senate Appropriations Committee endorsed the Administration’s proposal to increase spending for the Value-Added Producer Grants (VAPG) program by $1 million to $15 million, the House Subcommittee slashed VAPG funding by nearly 30 percent.  VAPG funding has already been cut by 31 percent since 2010.  This latest cut would mean that, in just four years, appropriators cut more than 50 percent of the funding for one of USDA’s most effective rural development tools.  VAPG grants encourage the kind of entrepreneurship in agriculture that enables farms and communities to survive economically.  At its core, the cut contained in the House Agriculture Appropriations Subcommittee’s bill represents a lack of concern for rural community revitalization and a disdain for farmer-led economic development.

Farm Bill “CHIMPS”

While the Senate agriculture appropriations bill steered clear of making “Changes in Mandatory Program Spending” (CHIMPS) to the Conservation Stewardship Program (CSP), Farm and Ranch Land Protection Program (FRPP), Wetlands Reserve Program (WRP), and the Grassland Reserve Program (GRP), the House Subcommittee bill cuts CSP by $75 million, FRPP by $50 million, WRP by about $300 million, and GRP by about $12 million.  (Note — It is not clear whether savings from cuts to WRP and GRP should actually be counted as a reduction in spending in reality, as USDA has not yet determined whether it will sign up new acres within these two programs in FY 2013, but the appropriations bill nonetheless will claim credit for savings regardless.)

Like the Senate bill, the House bill cuts funding for the Environmental Quality Incentives Program (EQIP) by $350 million (20 percent relative to the farm bill) and funding for the NRCS portion of the Agricultural Management Assistance (AMA) program by $2.5 million (50 percent relative to the farm bill).  Where the Senate bill cut $12 million, or 14 percent, from the Wildlife Habitat Incentives Program (WHIP), the House bill would cut $40 million, or 47 percent.

The Senate Agriculture Committee has reported its version of the new 2012 Farm Bill to the floor of the Senate, with floor action slated for next week.  That bill already is planning to reduce conservation spending by over $6 billion in the coming decade.  The House Agriculture Committee is likely to mark up the new 2012 Farm Bill later this month and rumor has it that the House farm bill cut to conservation will be somewhat larger than the Senate proposal.  In light of these huge farm bill cuts, we strongly oppose additional cuts through” changes to mandatory program spending” (i.e., rewriting the farm bill in the appropriations bill).

Legislative Riders to Boost Corporate Power

Perhaps most concerning is the House Subcommittee’s treatment of USDA’s Grain Inspection, Packers and Stockyards Act (GIPSA) rule.  USDA did implement certain elements of this livestock and poultry fair competition and contract reform rule lat year; however, a combination of pressure from the meatpacking industry and restrictions included in the FY 2012 appropriations bill led the agency to back off from implementing the remaining portions of the rule.  The restrictions included in the FY 2012 bill were bad enough.  However, the FY 2013 House Subcommittee bill takes it even further.

Like the FY 2012 appropriations bill, the FY 2013 House bill would continue restriction on funding for USDA to develop or issue the regulatory measures that did not make it into the GIPSA Final Regulation issued in December 2011.  These include restrictions on tournament systems as the basis for determining compensation for poultry growers; clarification by regulation that a the finding of competitive injury is not necessary for farmers and ranchers to prevail in cases where a violation of the Act has been found; definitions for unfair, unjustly discriminatory and deceptive practices or devices; criteria to determine if undue or unreasonable preferences or advantages given to a selected producers; and a requirement that sample copies of poultry and swine production contracts be submitted to GIPSA companies that enter into contracts with farmers.  Also like the FY 2012 bill, the House Subcommittee bill would bar regulations that combined exceeds $100 million annual cost to the economy.

Unlike the FY 2012 appropriations bill, the FY 2013 House bill would take the unprecedented step of forcing USDA to rescind most components of the Final Regulation that it issued in December 2011.  These include protections for hog and poultry contract growers who expect the terms of a contract to be met, protections for growers who raise breeding and laying hens for the broiler sector, and criteria under which USDA Secretary may determine that a poultry integrator violated the Packers & Stockyards Act by failing to give a poultry grower at least 90 days notice that the poultry integrator was going to suspend delivery of birds to the grower.

These limitations would leave only two elements of the Final Rule intact for USDA to implement in FY 2013.  If a grower is responsible for a breach of contract, the integrator will be required to provide the grower with written notice that specifies an adequate amount of time to correct the breach.  Companies will also still be required to give growers the option to opt of arbitration clauses in production contracts.

NSAC vehemently opposes these limitations to full implementation of the GIPSA rule.  The anti-competition language included in the House appropriations bill is a perversion of the contract between appropriators and those who they represent.  We depend on appropriators to provide annual funding for discretionary programs, not to legislate in an appropriations bill and not to undue farm bill legislation passed by Congress and signed into law by the President.  If our legislators want to see even lower approval ratings for Congress and want to see more poultry and livestock producers forced out of business by abuse of corporate power, then they are on the right track.  But everyone who cares about fairness for American farmers and ranchers should fight these legislative riders and preserve the GIPSA market fairness rule as the appropriations process progresses.

In addition to the GIPSA language, the House bill also includes a legislative rider intended to force USDA to deregulate GMO crops even in the case of a court ruling invalidating or vacating such a deregulation.  The rider requires that, if a deregulation is voided by the courts, USDA must grant a waiver — what the language calls “temporary deregulation” — to any producer who requests such deregulation.

According to the Center for Food Safety, “The provision appears to be a gross violation of the separation of powers and would therefore be unconstitutional.  The judicial review process is an essential element of U.S law and serves as a vital check on any Federal Agency decision that may negatively impact human health, the environment or livelihoods.”

NSAC urges the Senate to reject these blatant abuses of the legislative process and affronts to fair play, law enforcement, and the principle of judicial review.

Other Spending Levels

Beyond NSAC’s top appropriations priorities, the House Agriculture Appropriations Subcommittee also:

• includes a bump up for the Agriculture and Food Research Initiative, a quasi-competitive research, education and extension grants program, from $264 million currently to $276.5 million.  The Senate bill provides $298 million, a 13 percent increase.
• like the Senate bill, keeps direct and guaranteed farm ownership and operating loan funds constant at FY 12 levels; NSAC has requested an increase for direct farm ownership loans targeted to beginning farmers and ranchers;
• allows $3 million in remaining 2008 Farm Bill funding for the Rural Microentrepreneur Assistance Program to be spent in 2013; we had advocated for additional discretionary funding but none was granted;
• includes decreases for a variety of other programs we follow closely including ATTRA ($2.205 million from $2.25 million), NRCS Conservation Operations including Technical Assistance ($812 million from $828.2 million), State Mediation Grants ($3.7 million from $3.8 million), Rural Business Enterprise Grants Program ($20 million from $24.3 million) and others.
• level-funds the Organic Transitions Research program, National Organic Program, and the Office of Advocacy and Outreach.

For more details, see the NSAC Appropriations Chart on our website, which is now up-to-date with House Subcommittee action.

For general details on the bill refer to the Subcommittee’s summary.

The House Appropriations Committee has not yet set a timeline for when it will consider the FY 2013 agriculture appropriations bill, but we will monitor the process and keep readers informed as we learn more.