NSAC's Blog
The President’s FY 2021 Budget Proposal and Sustainable Agriculture Priorities
February 21, 2020
Once again President Trump has offered a budget request to Congress that contradicts many of his public statements regarding his Administration’s support for farmers, ranchers, and rural communities. Like each of the previous budget request proposed by President Trump, the fiscal year (FY) 2021 budget includes substantial cuts to federal food and farm programs.
President Trump’s FY 2021 budget proposes to slash the U.S. Department of Agriculture’s (USDA) budget by nearly $62 billion total. The President has proposed $2 billion in cuts to discretionary programs, roughly 8% of FY 2020 spending (estimated) that is set by Congressional appropriators. The President also proposes $60 billion in cuts to mandatory agriculture spending including important safety net programs like crop insurance and SNAP as well as rural development and conservation programs. Very little of USDA was spared the budget axe.
While the indiscriminate cuts to critical food and farm programs proposed in the budget would have devastating effects on farmers and ranchers, rural communities, land stewardship, and anti-hunger efforts they are only projections of the President’s priorities and do not have the force of law. Congress makes the real decisions about how and where to spend federal funding and hopefully they will reject the President’s proposed cuts for the FY 2021 just as they chosen to do since the beginning of his term. The National Sustainable Agriculture Coalition will be working with Congress over the next few months to ensure that the President’s shortsighted proposals are not enacted and instead robust investments in sustainable agriculture research, conservation, and food systems that support farmers and consumers in every community are included in the FY 2021 agriculture spending bill.
Budget Overview
The release of the President’s budget proposal marks the beginning of the hectic annual budget and appropriations 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.
When it comes to food and agriculture programs and NSAC’s priorities the president’s budget includes concerning cuts to both discretionary and mandatory funding (Changes in Mandatory Program Spending or “CHIMPS”). The most concerning of which is the dramatic CHIMPS to the Conservation Stewardship Program (CSP) a program NSAC worked with Congress to create in the 2008 farm bill and reauthorize in all subsequent farm bills. The President’s budget proposes to eliminate all funding for the program. In addition, the President’s budget proposes to eliminate nearly all discretionary funding for rural business development programs, including the Value-Added Producers Grants (VAPG) Program (an NSAC priority program), and funding for the Farmers Market and Local Food Promotion Program, the other core subprogram of the Local Agriculture Market Program. The President’s budget would also see discretionary funding eliminated for the WIC Farmers Market Nutrition program (WIC FMNP), another NSAC priority program that helps support farmers markets and low income women and children.
While the President’s budget is filled with untenable cuts to food and farm spending, NSAC was pleased to see that the Sustainable Agriculture Research and Education (SARE) program and the Food Safety Outreach Program (FSOP) were spared cuts as had been proposed in previous budgets. NSAC believes both programs deserve increases to help farmers produce safe and wholesome food while meeting the challenges of climate and environmental degradation but we are pleased to see proposed flat funding for SARE and FSOP nonetheless.
Unpacking the President’s FY21 Budget
In this post, NSAC outlines the Administration’s proposed FY 2021 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:
- Conservation
- Nutrition Assistance
- Research and Food Safety
- Beginning and Socially Disadvantaged Producers
- Rural Development
- Local and Regional Food Systems
- Farm Loans
- Farm Stress
- Commodities and Crop Insurance
Conservation
The President’s budget proposal includes sweeping cuts to federal conservation programs, undermining the work of Congress to uphold and strengthen these programs in the 2018 Farm Bill. The most concerning is the aforementioned proposal to completely eliminate CSP. For the last three fiscal years, Congress has held fast and rejected any cuts to mandatory conservation funding through the appropriations process. It is disappointing that the Administration would continue to propose cuts to these vital conservation programs that help tens of thousands of farmers each year to enhance their soil, reduce water pollution, and protect wildlife habitat and other natural resources.
As in past years, the President’s budget also includes a proposed CHIMPS to the Agricultural Conservation Easement Program (ACEP) of $40 million. Finally, the President’s budget includes a proposal to cut approximately $6 million to the Conservation Technical Assistance (CTA). CTA funding supports NRCS field staff as they work one-on-one with farmers to develop and implement resource conservation plans on their farms. While the proposed $6 million cut is far less than proposed in previous President’s budgets, it is are still concerning as staff capacity at NRCS is already extremely limited and further cuts would undermine NRCS ability to provide on-the-ground conservation support to farmers.
The President’s budget also proposes several changes to the Conservation Reserve Program (CRP). One change would target CRP funding towards environmentally sensitive areas and limit the enrollment of whole farm fields, which is something NSAC generally supports. However, the budget also proposes to eliminate all funding for incentive payments, which are critical to support the continuous CRP (CCRP) enrollment option and reduces all rental payments to 80 percent of the average county rental rate or 10 percent lower than the rate authorized by the farm bill. These changes would limit CRP program participation and negate any positive impacts of addition focus on environmentally sensitive areas.
Nutrition Assistance
In this year’s budget, the President continues his attacks on anti-hunger and anti-poverty programs, which are critical to help low income families afford adequate nutrition and support children, seniors citizens, and families in every part of the country. Despite Congress’ repeated rejection of sweeping cuts to the Supplemental Nutrition Assistance Program (SNAP) in the 2018 Farm Bill and appropriations, the President has requested the program’s budget be slashed by $180 billion over 10 years. This is on top of significant cuts to SNAP the Administration is seeking through the federal rulemaking process. As noted above, the President’s budget also proposes to eliminate the WIC Farmers Market Nutrition.
In addition to SNAP cuts the President has once again offered a “Harvest Box” program, an attempt to weaken SNAP by replacing some of its benefits with a box of agricultural commodities. This unproven program model has been widely ridiculed as it would deprive low income families of the opportunity to purchase foods that are appropriate for members of the household, harms struggling food retailers, ignores food safety, and shifts an important anti-poverty program towards another commodity support program. Nutrition experts and SNAP stakeholders were so critical of the program that Congress refused to authorize a pilot for the Harvest Box program in the farm bill.
The dramatic and drastic changes to nutrition and hunger assistance programs extends to the school meal program. The Administration’s budget proposal would also cut school meals by $1.7 billion over the next 10 years through changes to the popular Community Eligibility Provision.
Research and Food Safety
Agricultural research investments are one area where there are a few positive signs for sustainable agriculture priorities although there remain many areas of concern. The President’s budget proposal includes aa 41 percent increase to the main competitive grants funding program, the Agriculture and Food Research Initiative (AFRI). The proposed budget would increase funding from $425 million to $600 million, but $100 million of the increase is dedicated to artificial intelligence and machine learning, research areas that are unlikely to support small, sustainable farm operations.
The President also relents on some cuts to programs that he had proposed in previous budgets. The Sustainable Agriculture Research and Education Program (SARE) would receive $37 million (flat funding) rather than be cut to $19 million as had been previously proposed. The President’s budget proposes $6 million for the Organic Transition Research (ORG) Program rather than be eliminated completely. The Food Safety Outreach Program is slated to receive $8 million (flat funding) rather than a proposed cut of 50 percent as in the FY 2020 budget proposal.
While AFRI, SARE, ORG, and FSOP funding proposal represents a bright spot for agriculture research in the President’s budget the overall status of funding for the agencies that lead the country’s agriculture research efforts looks bleak. The FY 2021 budget includes a roughly $190 million ($1.631 billion down to $1.440 billion or 12%) cut to the USDA’s Agricultural Research Service. Despite the repeated claims that relocating the Economic Research Service (ERS) from the Capital City region to the Kansas City Metro Region was not about cutting spending, the administration FY 2021 budget proposes to cut ERS’s budget $23 million ($85 million down to $62 million or 27%) now that the relocation is complete.
Beginning and Socially Disadvantaged Producers
The 2018 Farm Bill included the creation of a new umbrella program the Farming Opportunity Training and Outreach (FOTO) program, which combines and permanently funds the Beginning Farmer and Rancher Development Program (BFRDP) and the Outreach and Assistance to Socially Disadvantaged and Veteran Farmers and Ranchers Program (aka “Section 2501”). In combining the funding and authorizations for BFRDP and 2501, Congress was able to provide both programs with permanent baseline funding while maintaining each program’s historic integrity. Funding for FOTO is divided equally between 2501 and BFRDP, and funding ramps up to achieve permanent baseline by 2023. For FY 2021, $35 million in mandatory funding is provided for FOTO, split evenly between BFRDP and 2501 ($17.5 million each). This represents a $2.5 million cut to both BFRDP and 2501 compared to historic funding levels. Unfortunately, just like the President’s FY 2020 budget, the FY 2021 budget does not include any proposed discretionary funding for FOTO, however it does not propose to cut any of the programs mandatory funding.
Rural Development
For the third consecutive budget, the President’s proposes significant cuts to many rural development programs – especially rural economic development programs. Despite Congress repeatedly rejecting proposed cuts to rural development programs and evidence that these cuts are unwise, the President’s continue to propose draconian cuts while arguing rural development programs are duplicative or ineffective.
The Administration’s FY 2020 budget proposes to eliminate nearly every single discretionary investment in rural business development programs, including funding for the highly popular the Value-Added Producer Grants (now a subprogram of the new Local Agriculture Market Program and an NSAC priority program), the Rural Microentrepreneur Assistance Program (RMAP), Rural Business Development Grants (RBDG) program, the Appropriate Technology Transfer for Rural Areas (ATTRA) program, and the Rural Energy For America Program (REAP).
At a time in which the development of cooperative grocery stores is an increasingly successful tool for rural communities struggling with food access, the President’s budget proposes to slash the Rural Cooperative Development Grant program by nearly 66%. The President’s budget also proposed CHIMPS to REAP which would result in the elimination of the program. RMAP, RBDG and ATTRA do not receive mandatory funding from the farm bill so the elimination of discretionary funding for those programs effectively eliminates the programs entirely.
However, there is one bright spot in the President’s budget when it comes to rural business development programs: a proposed increase of $500 million (from $1 bill to $1.5 billion) for the Business and Industry Loan Guarantee Program. This program is a critical source of investment capital for rural business development and includes a five percent set-aside for local and regional food projects. An increase to $1.5 billion for the program would result in $75 million for loan guarantees to support local and regional food system business investments in rural communities.
Local and Regional Food Systems
Unsurprisingly, given the President’s repeated vilification of SNAP, his budget proposal also moves to eliminate all funding, $18.5 million in FY 2021 for the Farmers Market Nutrition Program for Women, Infants, and Children (WIC FMNP). WIC FMNP is a critically important program that helps vulnerable populations across the country access healthy food. In FY 2018 WIC FMNP provided just under 1.7 million low-income pregnant and postpartum women with coupons or electronic benefits to buy fresh produce from over 17,000 local farmers in 39 states, the District of Columbia, 6 Tribal Nations, Puerto Rico, the Virgins Islands and Guam.
Eliminating WIC-FMNP would increase hunger and take away an important source of income for farmers across the country.
The budget does not, however, propose to eliminate any of the mandatory farm bill funding for the Food Insecurity Nutrition Incentives Program or the new Local Agriculture Market Program (LAMP) which includes VAPG and the Farmers Market and Local Food Promotion Program (FMLFPP). However, the budget does not request any discretionary funding for LAMP generally or FMLFPP specifically. As part of its packaging under LAMP, FMLFPP received a nearly 20 percent cut to its annual funding. NSAC plans to continue working with our champions in Congress to restore this cut through the FY 2021 appropriations process as we successfully accomplished in the FY 2020 spending package.
Farm Loans
The President’s budget includes an increase in funding for some FSA farm ownership loans proposing to increase direct loans from $1.875 bill in FY 2020 to $2.119 billion for FY21, however the budget does not include a corresponding increase of guaranteed farm ownership loans and instead proposes to flat fund those at $2.75 billion for FY 2021. FSA direct loans and loan guarantees assist farmers who are unable to secure credit from private lenders necessary to purchase farmland.
The President’s budget also proposes to increase financing for farmers to cover annual operating costs. The budget includes increases for both guaranteed and direct operating loans, proposing to increase direct operating loan assistance from $1.55 billion to $1.633 billion and guarantee operating loans from $1.960 bill to $2.118 billion. The President’s budget also proposes to provide $18 million for the new Heir’s Relending Program, authorized in the 2018 Farm Bill.
Farm Stress
Farmers and ranchers across the country are in distress. Plummeting farm incomes, market instability, extreme weather patterns, and a fraying disaster safety net has pushed many to bankruptcy, foreclosure, and even suicide.
The 2018 Farm Bill authorized Farm and Ranch Stress Assistance Network (FRSAN) to establish a network of organizations to connect farmers, ranchers, and farmworkers to stress assistance programs and resources across the country. The president’s budget proposes to cut FRSAN by $2 million ($10 million down to $8 million or 20%).
Reflecting the growing need for alternative dispute resolution services in the face of farm and rancher distress, the President’s budget includes a proposal to increase funding from $5.5 million to just under $7 million for State mediation grants. State mediation grants are made to States to support certified programs to provide alternative dispute resolution, such as lease issues, family farm transition, and farmer-neighbor disputes.
Commodities and Crop Insurance
The President’s budget also includes several changes to crop insurance and commodity programs. The core of those changes proposed by the President are:
- Reducing the average premium subsidy for crop insurance from 62 to 48 percent.
- Limiting commodity, conservation, and crop insurance subsidies to those users that have an Adjusted Gross Income (AGI) of $500,000 or less.
- Capping underwriting gains at 12 percent.
- Tightening commodity payment limits, including eliminating the separate payment limit for peanut producers.
- Limiting eligibility for commodity subsidies to one manager per farm.
While NSAC supports efforts to reign in egregious subsidy loopholes, we support a more targeted approach to reforming crop insurance than the indiscriminate approach proposed in the president’s budget. If Congress were to move forward with the President’s proposals, crop insurance subsidies would be cut for all farmers no matter the size of their operation. Throughout the farm bill debate, NSAC has advocated for a more precise approach to reform that would increase access to risk management options available to farmers while also ending the era of unlimited crop insurance subsidies for the wealthiest mega-farms.
Appropriators have been increasingly reluctant to make any changes to farm bill programs through appropriations making it very unlikely such reforms will be even considered as part of the FY 2021 appropriations process. Cutting crop insurance and commodity programs during a prolonged down-turn in the agriculture economy immediately prior to a general election makes it less likely that appropriators would accept cuts proposed by the President.
The Process Moving Forward
The release of the President’s budget proposal marks the beginning of the hectic annual budget and appropriations process. The President’s budget lays out the executive branch’s vision for how to spend federal taxpayer resources. Under “regular order” the release of the president’s budget proposal is usually followed by the House and Senate Budget committees adopting a budget resolution that sets the framework for the House and Senate Appropriations Committees to make decisions regarding how to allocate funding.
As part of setting a framework for spending decisions, the Budget Resolution would typically include what is known as the 302(a) allocation which sets the topline amount of discretionary funding available to the appropriations committees to divide among their subcommittees to construct the appropriations bills. However, because of the two-year budget deal that was truck last summer included a compromise regarding the FY2021 defense and nondefense 302(a) allocations there is no requirement that the Budget Committees develop and pass such a budget resolution.
The two-year budget deal sets the FY 2021 defense spending topline level at $740.5 billion and the non-defense discretionary spending topline level at $634 billion. Food and agriculture spending is part of the non-defense discretionary spending pool of funding. The FY 2021 topline amount is about $2 billion more than the FY 2020 topline amount. However, this additional funding will not be sufficient to meet the expanding cost of the Veterans Administration Health Choice program which has grown more quickly than anticipated. Unless Congress is able to supplement funding or decrease the costs associated with the VA Choice program, they will be forced to make further cuts to other non-defense discretionary programs which includes food and agriculture programs.
As the FY 2021 appropriations cycle continues to move forward, NSAC will work with Congress to ensure that we build upon, rather than undermine, investments in food and agriculture programs – including the progress made by food and farm advocates in the 2018 Farm Bill.
Categories: Budget and Appropriations
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