NSAC's Blog

2016 Funding Bill Opens Payment Loophole, Cuts Conservation and Renewable Energy

June 19, 2015

On Thursday, June 18, the House Agriculture Appropriations Subcommittee passed its funding bill for fiscal year (FY) 2016. Overall, the bill provides $20.65 billion in discretionary funding, $175 million less than last year’s enacted level and a whopping $1.1 billion less than the USDA request.

The full House Appropriations Committee will now take up the House Subcommittee bill, likely on Thursday, June 25.

The Senate Agriculture Appropriations Subcommittee is expected to debate and pass its version of the bill at some point over the next several weeks, likely soon after the July 4 recess.

While Congress continues to work through the appropriations bills for the coming fiscal year, final action on those bills awaits a House, Senate, and White House negotiation over total final spending levels for domestic programs. Congress has approved defense spending levels substantially over current spending caps, but to date is keeping all other spending at current total levels, even though there is little likelihood of bills at those levels becoming law. When spending cap negotiations begin, however, is anyone’s guess at this point.

This post breaks down the House Subcommittee bill as it pertains to key sustainable farm and food priorities. You can download our annual appropriations chart here.

Research, Education, Extension, and Food Safety Outreach

We are thrilled to report that the House Subcommittee bill meets the President’s FY 2016 request for $5 million for the Food Safety Outreach Program, also known as the National Food Safety Training, Education, Extension, Outreach and Technical Assistance program. The Food and Drug Administration (FDA) is in the process of proposing new, expansive food safety regulations for farmers and food processors under the Food Safety Modernization Act (FSMA) and this training and education program will help ensure that producers, wholesalers, and processors are prepared to comply with the new rule.

The 100 percent increase over last year’s level of $2.5 million will allow USDA to expand the training program significantly. However, to ensure that producers, wholesalers, and processors get the food safety training that they need, USDA’s National Institute of Food and Agriculture (NIFA) will need to make some significant changes to the way that it has administered the program thus far.

In FY 2015, FDA and USDA solicited proposals for the establishment of one national and four regional food safety training centers. For FY 2016 and beyond, NIFA must ensure that nonprofit community-based or non-governmental organizations, including organizations representing owners and operators of small and mid-sized farms, small food processors, or small fruit and vegetable merchant wholesalers can compete for grant funding for on-the-ground food safety training projects that directly reach the targeted, intended beneficiaries. Farmer- and community-based organizations are best suited to provide the outreach, education, and training for our small farms and food businesses to help them understand and come into compliance with the new food safety rules.

The bill provides level funding of $22.7 million for the Sustainable Agriculture Research and Education (SARE) program. This is the same level of funding that was provided in FY 2014 and in FY 2015. SARE is the only USDA competitive grant research program with a clear and consistent focus on sustainability and farmer-driven research. We will continue to urge the House and Senate to increase funding for SARE in FY 2016 to $30 million.

We are pleased to report that the National Sustainable Agriculture Information Service (also known as “ATTRA”) receives level funding of $2.5 million in the House Subcommittee’s bill, despite a requested cut of 18 percent from the Administration. We commend the Subcommittee for recognizing the vital importance of ATTRA, which serves millions of producers and conservation professionals each year.

The Subcommittee increased funding for the Agriculture and Food Research Initiative – USDA’s largest competitive grants research program – from $325 million to $335 million, which is substantially less than the President’s request of $450 million. Overall research and extension funding in the bill remained static.

The bill maintains level funding of $4 million for the Organic Transitions research program.

Rural Development and Farm Loan Programs

The House bill renews last year’s historic increase to direct farm loans made through USDA’s Farm Service Agency (FSA), including program levels of $1.5 billion for farm ownership loans and $1.252 billion for farm operating loans.

For FY 2015, this was an increase of more than 260 percent for direct farm ownership loans and five percent for direct operating loans.

Year after year, FSA has had to turn farmers away – many of them aspiring or beginning farmers – for lack of sufficient funding to meet the high demand for farm loans. The increased loan funding this fiscal year and hopefully next will allow FSA to address the substantial backlog of approved but unfunded loan applications, and to increase access to credit for young and beginning farmers.

Unfortunately, the bill takes a step backward on funding for key rural development programs. Funding for the Value-Added Producer Grants (VAPG) program is reduced by 7 percent from $10.75 million in FY 2015 to $10 million in the FY 2016 bill. In FY 2015, discretionary funding for VAPG was reduced from $15 million to $10.75 million. If the House level becomes law, discretionary funding for VAPG will have been cut by 33 percent over the last two years. Fortunately, the appropriations bill does not cut the mandatory funding provided for VAPG by the 2014 Farm Bill. Nonetheless, we will continue to urge Congress to restore discretionary VAPG funding to $15 million.

The Subcommittee bill provides no discretionary funding for the Rural Microenterprise Assistance Program (RMAP) despite an increased request from the President for FY 2016. The 2014 Farm Bill does provide $3 million in mandatory farm bill spending for RMAP in FY 2016, but that is an insufficient amount to maintain the program at current levels moving forward.

As in previous years, the Subcommittee bill provides no funding for the Beginning Farmer and Rancher Individual Development Accounts program. The BFRIDA program is designed to help beginning farmers and ranchers finance their new and growing agricultural businesses through business and financial education and matched savings accounts. The President requested $2.5 million for BFRIDA grants in FY 2016.

Conservation and Energy Programs

Unfortunately, the House subcommittee bill once again launches an assault on the Conservation and Energy Titles of the 2014 Farm Bill.

The subcommittee bill reduces the FY 2016 enrollment for the Conservation Stewardship Program (CSP) by nearly 23 percent, from 10 million acres to 7.74 million acres. This equates to a five-year cut of roughly $200 million. The bill also cuts the Environmental Quality Incentives Program (EQIP) by $300 million, or 18 percent.

The cuts to CSP and EQIP would also result in a $35 million cut to the Regional Conservation Partnership Program (RCPP) because RCPP draws its funding from CSP and EQIP, among other programs. RCPP supports local projects aimed at solving priority resource issues identified by state and local partners.

We are deeply troubled by these cuts, which will have a direct impact on farmers, ranchers and foresters who are trying to conserve soil, water, and other resources on and around their land. We are also highly critical of this re-opening of the farm bill to change the terms Congress agreed to after three long years of work on the Agricultural Act of 2014.

On top of cuts to conservation, the House bill slashes farm bill mandatory funding for the Rural Energy for America Program (REAP) by 30 percent, from $50 million to $35 million. While it dramatically limits mandatory farm bill funding for REAP, the bill provides a very small amount of discretionary funding – less than $1 million – for REAP loan guarantees.

The bill also cuts mandatory farm bill funding for the Biomass Crop Assistance Program (BCAP) in half, from $25 million to $12 million.

The bill funds the Conservation Operations budget at $832.9 million, which is a reduction of $13.5 million from last year’s level. USDA’s ability to deliver conservation programs to farmers and ranchers depends heavily on on-the-ground conservation technical assistance, which makes up the bulk of the Conservation Operations account.

Surprisingly, this cut was requested by the Obama Administration, even as USDA made the following statement in its FY 2016 budget request:

In terms of environmental outcomes, the funding reduction will result in lost conservation opportunities and reduced natural resource benefits. NRCS estimates that the reduction in CTA will result in the following lost benefits: almost 694,000 tons of sediment loss prevention; almost 9.8 million pounds of nitrogen loss prevention; over 1.7 million pounds of phosphorus loss prevention; over 18,200 tons of carbon sequestration in soils.

We will work with the Senate to reverse this cut as the appropriations process moves forward.

Legislative Riders

In recent years, the annual appropriations bills have become the target for a multitude of policy riders that would normally be the purview of policy authorizing committees, not the spending committees. Legislating on spending bills in normal times has been frowned upon, but lately has become more the rule than the exception.

Protecting the Rights of Livestock and Poultry Farmers — We are thrilled to report that the House Subcommittee bill does not include what is known as the “GIPSA rider” which for the last four years has denied poultry and livestock farmers basic protections under the Packers and Stockyards Act.

The Packers and Stockyards Act of 1921 is the nation’s primary statute providing basic protections for livestock and poultry growers against fraudulent, deceptive, and retaliatory practices by meatpackers and poultry integrators. In previous years, the GIPSA rider prevented USDA from advancing its fair competition and contract reform rule, which it began to finalize in December 2011.

It is certainly possible that, in the coming weeks and months, certain members of Congress will attempt to reinsert the anti-farmer rider into the agriculture appropriations bill on behalf of a few powerful corporations. However, NSAC will work to keep the rider out and ensure that USDA can begin to prevent retaliation by meatpackers and integrators against contract livestock and poultry farmers who speak out about contract abuses.

Payment Limits —  NSAC strongly opposes an end run around farm bill payment limitations inserted into the bill. The measure, with a price tag of over $50 million, would bring back marketing loan commodity certificates, a feature of farm programs that ended in 2009. The kicker is it would also direct USDA to apply farm law as it existed in 2008, when marketing loan gains were not subject to payment limits, rather than the law as it exists post-2014 Farm Bill that makes all forms of payments and gains subject to the payment limit. Hence, mega farms would be able to collect unlimited subsidies through this mechanism. This rider is a blatant end-run around the policy set by the 2014 Farm Bill and should be rejected by the full House Appropriations Committee.

Conservation Compliance — The Subcommittee bill includes a rider that would delay the implementation of wetland and soil conservation requirements for an additional year under certain circumstances. The 2014 Farm Bill requires that producers meet basic conservation requirements to qualify for federal premium subsidies for crop insurance.

Producers had until June 1 of this year to file a self-certification form to be eligible for premium subsidies. The compliance rider would delay the deadline by one year, until September 30, 2016, or two and a half years from when the law was enacted tying basic conservation requirements to the receipt of crop insurance subsidies.

NSAC opposes this unnecessary delay and is encouraging USDA to take care of any remaining certification or enrollment problems administratively, thereby negating the need for this rider.

Dietary Guidelines, School Meals, and Nutrition — The House Subcommittee bill attacks nutrition efforts from several angles. First, the bill cuts funding for the Women, Infants, and Children feeding program by $139 million relative to last year’s funding level. Second, the bill includes several policy riders to limit new nutrition requirements for school meals, delay a new menu calorie labeling requirement for certain retail food establishments, and prohibit the upcoming new dietary guidelines from including any sustainability considerations.

Next Steps

The full House Appropriations Committee will take up the Subcommittee bill on Thursday, June 25. However, the Senate Agriculture Appropriations Subcommittee is not expected to debate and vote on its version of the bill until after July 4. Stay tuned for next week’s post as the House Appropriations Committee debates the bill and considers amendments.

Categories: Beginning and Minority Farmers, Budget and Appropriations, Conservation, Energy & Environment, Farm Bill, Local & Regional Food Systems, Organic, Research, Education & Extension, Rural Development

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