March 14, 2012
Earlier this month, the House Agriculture Appropriations Subcommittee held a series of four hearings on the Obama Administration’s fiscal year (FY) 2013 budget request for the U.S. Department of Agriculture (USDA). The hearings precede and are meant to inform the markup of a FY 2013 agriculture appropriations bill.
The four hearings covered the President’s budget requests for four USDA mission areas: Rural Development, Marketing and Regulatory Affairs, Natural Resources and Environment, and Food Safety. Hearings for the Farm and Foreign Agricultural Services mission area and Research, Education, and Economics mission area have been scheduled for later this month.
The first hearing, which occurred on March 1, focused on rural development. Judith Canales, Administrator of the Rural Business-Cooperative Service spoke about the importance of the rural development programs, including the Value-Added Producer Grants (VAPG) program, Rural Business Enterprise Grants (RBEG) program, Rural Microentrepreneur Assistance Program (RMAP), and Rural Energy for America Program (REAP). In her written remarks, Canales states “USDA is revitalizing rural communities by expanding economic opportunities and creating jobs for rural residents to promote investment[…] and build a link between local production and local consumption.”
In response to a question from Rep. Sanford Bishop (D-GA) regarding improving and expanding upon the Rural Microentrepreneur Assistance Program in FY 2013, Administrator Canales explained that the Administration’s FY 2013 request of $3.4 million in discretionary funding for the program would support $22.5 million in loans and create or save more than 3,000 jobs. Rep. Bishop noted that RMAP is able to leverage a small amount of money to create a major impact in rural America. During the same exchange, Administrator Canales also spoke to the importance and effectiveness of VAPG, noting that the program is targeted at small business development and consistently contributes to farmer-led job creation in rural areas.
VAPG provides competitive grants to producers, groups of producers, or producer-owned businesses or cooperatives to develop value-added producer-owned enterprises. VAPG grants can be used for business planning and feasibility studies as well as for working capital. Since 2001, the program has provided 1,541 grants totaling more than $210 million to all 50 states. Despite being a key part of a proven job-creation strategy, VAPG has been cut by more than 30 percent in the last two years. We hope that Congress does not continue this trend in FY 2013.
Following the rural development hearing, the Subcommittee held a hearing on March 6 to consider the President’s FY 2013 budget request for USDA’s Marketing and Regulatory Affairs mission area. One of the issues that arose at the March 6 hearing was USDA’s implementation of the Grain Inspection, Packers & Stockyards Act (GIPSA) rule. USDA implemented pieces of this rule last year, but was cut of at the knees on the rest of it by last year’s agriculture appropriations bill. Unfortunately, two members of the Agriculture Appropriations Subcommittee spoke out against the rule on behalf of the anti-competitive meatpacking industry. USDA will have an opportunity to implement the remaining portions of this fair competition rule in FY 2013 so long as it is not once again limited by the agriculture appropriations bill.
Subcommittee Ranking Member Sam Farr (D-CA) spoke up in support of a number of NSAC appropriations priorities related to organic production. In particular, Rep. Farr noted the importance of maintaining funding for the National Organic Certification Cost-Share Program and for organic price data collection and reporting by the Agricultural Marketing Service, National Agricultural Statistics Service, and Economic Research Service.
The Subcommittee held two more hearings last week, one on March 7 and another on March 8. Both Under Secretary Harris Sherman and Natural Resources Conservation Service (NRCS) Chief Dave White testified at the March 7 hearing on the President’s budget requests for the Natural Resources and Environment mission area. Chief White began by discussing the agency’s Streamlining Initiative. He noted that while the Initiative will result in increased efficiencies, NRCS must ensure that those efficiencies do not limit the agency’s ability to provide technical assistance to producers.
Within the agriculture appropriations bill, the Conservation Operations account is the primary discretionary funding mechanism used to support technical assistance for farmers and ranchers. This is discretionary funding is paired with technical assistance support from mandatory conservation program spending, which does not come from the Appropriations Committees, but rather from the Farm Bill itself. While appropriators do not provide mandatory funding, they do have the ability to limit it and have done so repeatedly in recent years.
In order to provide adequate technical assistance to producers across the country, NRCS needs more boots on the ground; and while the Streamlining Initiative will work toward this goal, it will do little so long as the Conservation Operations account is underfunded and mandatory conservation spending is undercut.
The Administration’s FY 2013 budget request includes a $347 million (roughly 20 percent) permanent cut to the Environmental Quality Incentives Program (EQIP). Subcommittee Chairman Jack Kingston (R-GA) asked Undersecretary Sherman to explain how this Change in Mandatory Program Spending (CHIMPS) would play out on the ground. Undersecretary Sherman noted that the CHIMPS would lower the level of activity in the program and “would delay the work that needs to be done.”
Representative Farr then asked Chief White to touch on the issue of reattaching highly erodible land and wetland conservation requirements to subsidized crop insurance. This has become an increasingly important issue in recent years, with support from a broad array of groups, including NSAC, the National Farmers’ Union, American Farmland Trust, National Wildlife Federation, and many others.
Basic conservation requirements to protect against soil erosion and wetland drainage have been a condition of receiving farm subsidies since 1985. This conservation requirement has dramatically reduced soil erosion on farmland and protected wetlands, keeping land productive and important natural resources intact. Today, the biggest farm subsidy paid by U.S. taxpayers is for crop insurance. With this shift in the prominence of crop insurance and with proposed changes to the farm safety net that will accelerate this shift, many groups and farmers around the country believe that compliance should be reattached to crop insurance subsidies, as it was up until 1996. Chief White noted that he recognizes the importance and understands the rationale, but noted that in the end it is up to the House and Senate Agriculture Committees to decide.
Following this exchange, Rep. Farr asked Chief White to discuss the FY 2012 Conservation Stewardship Program (CSP) sign up, which ended in January, and to comment on the improvements that NRCS made to the program for FY 2012. Chief White noted that demand for the program this year was incredible high and that the agency significantly increased the transparency and functionality of the Conservation Measurement Tool, which NRCS uses to enroll, score, and rank producers who apply for the program. See this earlier post about the recent Senate Agriculture Committee hearing on conservation for more detailed remarks by Chief White.
The House Agriculture Appropriations Subcommittee will hold two more hearings next week. A hearing on the Administration’s requests for the Farm and Foreign Agricultural Services mission area and Research, Education, and Economics mission area will be held on March 20 and March 21, respectively. We will report on the results of those hearings shortly thereafter.
Categories: Budget and Appropriations, Competition & Anti-trust, Conservation, Energy & Environment, Food Safety, Local & Regional Food Systems, Organic, Rural Development