June 23, 2021
On May 28th, 2021, after months of delays President Biden released his administration’s fiscal year (FY) 2022 budget, the first of his presidency. Notably this is the most delayed budget release in U.S. history, a fact that was largely precipitated by the Trump Administration’s refusal to accept the results of the 2020 General Election and subsequent efforts to delay the orderly transition from one Presidential administration to the next.
The detailed proposal for FY 2022 (October 1, 2021 – September 30, 2022) includes both the President’s discretionary spending plans as well as the previously announced infrastructure and jobs plans. With $6 trillion in proposed spending the President’s budget consists of $1.5 trillion in discretionary spending, $2.3 trillion for his infrastructure plans – the American Jobs Plan and $1.8 trillion for his American Families Plan.
As part of the $1.5 trillion in proposed discretionary spending, the President’s budget proposes $27.9 billion for the United States Department of Agriculture (USDA). The $27.9 billion for the USDA is a significant increase, nearly $4 billion in additional spending (+16.7%) when compared with the FY 2021 agriculture spending bill. For some context President Trump’s FY 2021 budget proposed to slash the USDA’s budget by nearly $62 billion total.
The release of the President’s budget proposal marks the official beginning of the hectic annual budget and appropriations legislative process. The President’s budget lays out the Executive branch’s vision for how funding should be allocated by Congress as it develops and passes appropriations bills. Congress works to develop and pass 12 appropriations bills each year, one of which includes food and agriculture spending.
The nearly $4 billion in additional spending proposed for the USDA includes considerable new investments in a number of important sustainable agriculture and food systems programs.
Research and extension programs would receive considerable new investments if the President’s budget were enacted, with both the Agriculture and Food Research Initiative (AFRI) and the Sustainable Agriculture Research and Extension (SARE) program receiving full funding of $700 million (+$265 million) and $60 million (+$20 million). Programs that support the development of local and regional food systems and healthy food access would also receive increased funding, with the Value Added Producer Grant program (VAPG) receiving $15 million in discretionary funding (+$3 million) and the WIC Farmers’ Market Nutrition Program receiving $24 million (+$3 million). The budget also proposes to maintain support for the Farmers Market and Local Food Promotion Program with $7.4 million in discretionary funding.
In this post, NSAC outlines the Administration’s proposed FY 2022 budget as it pertains to the sustainable agriculture community. For a summary of funding proposals for programs NSAC tracks included in the President’s budget visit our newly updated appropriations chart. Issue areas covered in this analysis include:
For the first time in many years, the President’s FY 2022 budget request does not include sweeping proposals to gut USDA conservation programs or any USDA agency for that matter. The President’s budget is not only notable because it does not propose sweeping cuts to USDA conservation programs. Rather it goes in the opposite direction and includes proposals to increase mandatory funding for several conservation programs as part of the American Jobs Plan infrastructure package and increased discretionary funding as part of an overall government wide focus on climate change.
However, while investing resources to address climate change is a core element of the President’s overall budget, the proposals relative to USDA conservation programs and climate change fall short of the levels of investment that many advocates believe are necessary for agriculture to reach net-zero by 2050.
The FY 2022 budget includes several proposed mandatory spending increases (something that is generally outside the scope of the appropriations committees and the domain of the authorizing committees) for working lands conservation programs that the President and USDA envision to be part of the American Jobs Plan Infrastructure package. The Budget proposes to increase funding for the Environmental Quality Incentives Program by $50 million per year (totaling $500 million over ten years), increase funding for the Regional Conservation Partnership Program by $100 million over four years (totaling $400 million), increase funding for Watershed and Flood Prevention Operations by $100 million per year for ten years, and increase funding by $200 million over four years for the Healthy Forest Reserve Program.
Conspicuously absent from the proposal is the Conservation Stewardship Program (CSP), the largest working lands program in the country and the only program that rewards both ongoing and new conservation activities. This absence stands in stark contrast to candidate Biden’s Rural Build Back Better plan in which investing in CSP was a central component of Biden’s plans to invest in climate-smart agriculture and enabling U.S. agriculture to be the first to reach net zero emissions.
While the glaring absence of CSP from the FY 2022 budget set of mandatory spending proposals on infrastructure is concerning, on the discretionary side of things the budget proposes to increase funding for Conservation Technical Assistance (CTA) by nearly $40 million, from $734 million in FY 2021 to $773 million in FY 2022. CTA, a subset of Conservation Operations, is the backbone of USDA’s conservation programs. Through CTA, USDA Natural Resource Conservation Service (NRCS) field staff work with farmers to develop and implement conservation plans to conserve resources on their farms and fulfill conservation compliance requirements. Unfortunately, a $40 million increase to CTA falls short of the level that many advocates were looking for, and is certainly not enough to support the widespread adoption of climate-friendly practices that needs to take place to reach the goal of net zero.
In addition to the increased funding for CTA, the President’s budget includes a number of cross cutting, multi-agency climate related proposals. The budget would provide $40 million in dedicated and increased funding for the USDA’s existing 10 regional climate hubs, providing $23 million in direct investments and $17 million in activities to support hub outcomes. The funding would be divided among the NRCS, the U.S. Forest Service, Agriculture Research Service (ARS) and the National Institute of Food and Agriculture, to help farmers and ranchers adapt to and mitigate climate change. The budget also proposes to provide approximately $46 million to multiple USDA mission areas to further the creation of a Civilian Climate Corps.
As mentioned above Research and extension programs would receive considerable new investments if the President’s budget were enacted. The President’s FY 22 Budget Request includes $4 billion for research, education and outreach programs, representing a 16% increase ($647 million) over the FY 2021 enacted level.
The President’s budget proposes to provide full funding to both the Agriculture and Food Research Initiative (AFRI) and the Sustainable Agriculture Research and Extension (SARE) program, $700 million (+$265 million) and $60 million (+$20 million), respectively. The Food Safety Outreach Program (FSOP), which funds food safety related outreach, education, training, and technical assistance projects that directly assist small and mid-sized farms, beginning and socially disadvantaged farmers, small processors, and small-scale wholesalers would be provided flat funding, $10 million, under the President’s budget. And the Organic Transitions (ORG) research program, which helps support organic farmers and livestock producers, would also be flat funded at $7 million.
Local food, rural development, and healthy food access is another bright spot in the President’s budget request.
The 2018 Farm Bill created the Local Agriculture Market Program (LAMP), a program championed by NSAC, which combined the Farmers Market and Local Food Promotion Program (FMLFPP) and the Value-Added Producers Grant Program (VAPG).
Under LAMP, both VAPG and FMLFPP are provided with permanent mandatory funding; however in combining those programs, FMLFPP ends up with $5.3 million less in annual mandatory funding compared to its level under the 2014 Farm Bill. VAPG was provided with a small increase in mandatory funding relative to 2014 Farm Bill levels, but that increase is far less than the program’s historic funding levels. Over the life of the 2014 Farm Bill, VAPG received on average $25.9 million in combined mandatory and discretionary funding per year; whereas under the 2018 Farm Bill, VAPG is provided with only $17.5 million in mandatory funding per year.
The President’s budget recognizes the importance of these keystone local food and entrepreneurship programs and builds on previous appropriations packages proposing $7.4 million in discretionary funds for FMLFPP (flat funding when compared to FY 2021) and $15 million for VAPG in the FY 2022, a $3 million increase when compared to FY 2021.
Several other important rural economic development programs are also slated to receive robust funding in FY 2022. The President’s budget proposes that the Rural Microentrepreneur Assistance Program (RMAP) be provided with $6 million for grants (flat funding compared to FY 2021) and an additional $400,000 which will allow the program to provide $150 million worth of loans to micro-enterprises in rural communities.
However, the good news does not stop there. The FY 2022 spending package also includes $9 million (an increase of $2 million relative to FY 2021) to continue and expand the work of the new Office of Urban Agriculture (authorized in the 2018 Farm Bill), $24 million for the WIC Farmers Market Nutrition Program (a $3 million increase relative to FY 2021) and $12 million for Farm to School Grant Program. The FY 2021 bill also provides $5 million for the USDA’s Healthy Food Financing Initiative (HFFI) and $2.8 million for the Appropriate Technology Transfer for Rural Areas program, also known as the National Sustainable Agriculture Information Service.
As part of an overall effort from the USDA to address historic and current racial discrimination with USDA programs and policies, the Presdeints’ budget proposes to increas the USDA Office of Civil Rights by $6 million from $23 to $29 million in FY 2022. In addition, the Budget provides $33.7 million for the Heir’s Relending Program, authorized in the 2018 Farm Bill, to resolve ownership and succession of farmland.
Access to credit is critical for farmers, particularly for those just beginning their careers and for producers not well served by the commercial lending sector. Farm Service Agency (FSA) loan programs fill the lending gap by providing financing for producers unable to secure credit from private lenders. For decades, these programs have increased access to credit for small and mid-size family farms and for operations run by beginning, socially disadvantaged, and veteran farmers.
The President’s FY 2022 Budget request largely maintains program levels for Guaranteed and Direct Operating loans, as well as for Guaranteed Farm Ownership loans with modest increases to Direct and Guaranteed Farmownership loans:
WIth the President’s Budget Request now in-hand, Congressional appropriations can begin the appropriations legislative process. Normally, the President’s budget would be followed by the House and Senate Budget Committee developing and passing a joint or concurrent budget resolution which sets the topline level of funding available to the Appropriations Committees to spend, often referred to as the 302(a) allocations. However, the budget resolution is also the vehicle in which Congress would need to include Budget Reconciliation instructions in order to trigger that special process (more on reconciliation below).
Budget reconciliation is a special budget maneuver that essentially allows a majority party in control of both chambers of Congress and the White House to fast track increases or decreases to mandatory spending levels (not discretionary spending) and the debt-ceiling in a manner that allows the Senate to side-step the filibuster and 60-vote threshold.
Democractic leaders have not moved forward with adopting a joint budget resolution to set the 302(a) allocation for the appropriators because they are waiting to see what transpires with bipartisan negotiations in the Senate around an infrastructure package. By not yet adopting a budget resolution, Democrats preserve the opportunity to include in the joint budget resolution reconciliation instructions that would allow Democrats to use the reconciliation process to pass major infrastructure spending increases without Republican support.
In lieu of a concurrent budget resolution the House recently adopted a deeming resolution that “deems” a topline 302(a) funding level but doesn’t carry the weight that a full concurrent budget resolution would have. Deeming a topline 302(a) level for discretionary spending allows the House to move forward with providing interim allocations to the House appropriations subcommittees and the writing and marking-up of respective appropriations bills. However, at some point the House and Senate will need to agree to a concurrent budget resolution that officially sets the top line 302(a) level, which could complicate the eventual process of conferencing House and Senate appropriations bills later in the process. No such deeming resolution has been adopted in the Senate.
Following the adoption of a deeming resolution, the House has begun in earnest the process of writing, marking up, and passing appropriations bills with an ambitious goal of completing all 12 bills before the August recess.
The House Appropriations Committee subcommittee on agriculture is expected to release their draft bill this week, proceed to mark-up the bill in the subcommittee on Friday and then move towards full committee passage in the following week. As the process moves forward, we will be watching closely to see how NSAC’s sustainable agriculture and food systems appropriations priorities are addressed and working with committee members to ensure robust support for NSAC priorities.