NSAC's Blog

Weekly Update – March 27, 2009

March 30, 2009



Act Now to Shut Down Multimillion Dollar Farm Subsidy Loophole!

The 2008 Farm Bill handed President Obama and USDA Secretary Vilsack a rare opportunity to close one of the biggest payment limit loopholes in current regulations. The nation’s largest farms collect unlimited annual production subsidies under rules that permit payments to those who provide only minimal farm management and no active labor. Their ill-gotten gains are used to bid away land from small and beginning farmers choking off economic opportunity and farm entry for the next generation of farmers.

President Obama and Secretary Vilsack need to hear a loud and clear message from farmers and other citizens who care about the future of farming: The time is now to close the loophole that allows widespread abuse of payment limitation law! Comments must be received by April 6, 2009. An NSAC Action Alert with talking points and information on submitting comments is posted here.



Budget Debate Begins: This week the House and the Senate Budget Committees approved their respective versions of the budget resolution for 2010, which serves as a blueprint for considering spending and tax bills later in the year and sets the cap on discretionary appropriations spending for the year. The bills will be on the floor of the House and Senate this coming week, with a House-Senate conference to reconcile differences to begin during the upcoming two-week congressional recess.

The bills track some of President Obama’s budget plan, but diverge at critical points. In order to show lower future deficits than forecast in the President’s plan, the House and Senate assume there is no extension of the so-called “making work pay” middle class tax cut beyond 2010 and assume the huge annual adjustment to prevent the alternative minimum tax from hitting more upper middle class taxpayers is going to be offset with unspecified spending cuts.

More immediately relevant, the House bill slices $7 billion and the Senate bill $16 billion from the President’s proposed domestic discretionary spending level for 2010, with even deeper cuts lined up for 2011-14. The final bill to be negotiated between the House and Senate versions will likely end up somewhere in between these two figures, ensuring that food, agriculture, and rural appropriations battles later this year will be a lot tougher than if the President’s proposal had been adopted.

By contrast, the President’s proposed 4 percent increase in defense spending is adopted by both the House and Senate bills.

While the Obama budget assigns specific funds over the next ten years to expand healthcare coverage and education and energy spending, both the House and Senate bills simply provide placeholders for deficit neutral bills later this year for health care, education, energy, transportation, and other new authorizations of mandatory spending.

For instance, instead of assuming the President’s $634 billion health care reform package paid for through tax increases on the wealthy and a variety of Medicare payment reductions, the congressional bills just stipulate that the authorizing committees may enact health care reform of any magnitude provided that it is entirely offset through spending reductions or tax cuts of equal size. Another example – instead of assuming the President’s proposal for a cap and trade auction for carbon emissions to raise $646 billion to be used in significant measure to cut taxes on lower and middle class families and fund green energy programs, the congressional budget resolutions contain another deficit neutral reserve fund of unspecified size for new energy legislation.

The biggest political showdown during the budget conference between the House and Senate bills will be over parliamentary procedures. The House, siding with the President, calls for the use of procedures for health care reform and student education aid spending that would allow bills to pass in the Senate with just a regular majority of 51 votes. The Senate bill, however, rejects that view and would continue to require a super majority of 60 votes to approve such measures. With 58 and possibly 59 Senate seats in Democratic control, the Republican minority views the super majority requirement as essential to preserving its ability to effect the legislation, and the Senate Democratic majority is to this point at least willing to preserve the minority’s ace in the hole.

Reserve Fund for Child Nutrition: While health care, education, and climate/energy get most of the media attention in the budget debate, both the House and Senate budget bills contain a similar deficit neutral “reserve” fund for the reauthorization of the Child Nutrition Act. The House Education and Labor Committee and Senate Agriculture Committee are not told how much new spending they can authorize for school feeding programs, only that if they do call for new spending they must find ways to offset the new spending with spending cuts elsewhere.

The President had called for $1 billion a year in new spending for child nutrition, to be paid for by reducing commodity subsidies to the largest participating farms. Child nutrition advocates are asking for a $4 billion a year increase. In essence, the budget resolution will just kick this can down the road, leaving the authorizing committees, in negotiations with congressional Democratic leadership, the task of trying to work out some kind of deal later this year, or else face the unenviable task of writing a status quo bill. The lack of any real framework for child nutrition in the budget resolution likely means a somewhat slower start, or perhaps slower finish, for the reauthorization.

Yet Another Timing Shift: Earlier this week, the White House announced that its detailed budget proposal to Congress would be delayed until early May. Previous target dates were late March, then early and then late April. In normal years when there is no change in Administrations, the budget request comes at the beginning of February.

This year’s delay will affect the annual appropriations cycle in ways that are still being sorted out. Member requests and testimony from outside interest groups, normally due by late March are currently re-scheduled for the very beginning of May. But that timeline may potentially slip again now that there will still be no detailed Administration proposal by that date.

Also uncertain is whether the White House will go back into its budget proposal and make changes to the budget framework it presented in late February now that it knows the changes Congress is making to it in the congressional budget resolution. Stay tuned as all parties to the annual budget and appropriations process continue to sort out the process for this unusual transition year.

Agriculture Programs on the Chopping Block?: In producing the Senate budget bill, Budget Committee Chair Kent Conrad (D-ND) assumed there will be no cuts at all to farm commodity production subsidies, rejecting all of the Obama proposals, but instead that agriculture would contribute to deficit reduction goals by cuts to the Environmental Quality Incentives program (EQIP), federal crop insurance spending, and the Market Access Program (export promotion). These proposed cuts went unchallenged during the Budget Committee markup, and hence are still assumed in the Senate version of the bill.

However, in the absence of instructions in the budget resolution to the Agriculture Committee to actually write legislation to make those cuts effective, it is unclear that they have any real meaning other than helping contribute to lower deficit projections in the Senate budget resolution. Nonetheless, given how congressional assumptions often have a long shelf life, NSAC will join with other organizations in opposing the Senate assumptions when the bill goes to conference with the House.

Payment Limit Amendment Fails: Senator Chuck Grassley (R-IA) introduced an amendment in this week’s budget debates that would have assumed for budgeting purposes that Congress would place a hard cap of $250,000 a year on recipients of farm commodity payments. While this amendment has passed in previous Senate budget debates, it did not pass this week due to a change of heart by three Senators – Robert Byrd (D-WV), Patty Murray (D-WA), and Ron Wyden (D-OR) – who voted for the amendment last year but who switched sides this year.

The amendment was vigorously opposed by Chairman Conrad (D-ND). In order to provide a degree of cover to the Democratic flip floppers, Conrad proposed an alternative amendment to cut crop insurance subsidies, and that amendment passed. These crop insurance cuts would be over and above the ones already assumed in the Senate proposal. But again, with no instructions in the budget resolution to the Agriculture Committee to actually make those crop insurance cuts, they are, for the time being at least, nothing more than assumptions.

For more information about the amendment and outcome, read NSAC Policy Director Ferd Hoefner’s post.

In statements to the press after the vote, both White House budget direct Peter Orzag and USDA Secretary Tom Vilsack said that they would continue to push for commodity reforms, noting that the budget resolution is just the first step in a long process and is not, in their view, the final word on the matter.




Dave White Named NRCS Chief: President Obama made longtime NRCS employee Dave White the new Chief of the Natural Resources Conservation Service. White has been serving as Acting Chief since January. He came up through the ranks of the agency, working in several states and eventually headquarters, before becoming the State Conservationist in Montana most recently. White served on Senator Lugar’s (R-IN) staff and on Senator Harkin’s (D-IA) staff during consideration of the 2002 and 2008 Farm Bills, respectively, making him one of the most farm bill savvy Chiefs in memory and providing him with a up-close view of the making of the Conservation Stewardship Program, the major new conservation initiative of those two farm bills.

CRP General Sign-Up in 2010: In testimony before the House Agriculture Committee this week (see story below), the Farm Service Agency indicated that it anticipates a general sign-up for the Conservation Reserve Program (CRP) in 2010. The new farm bill lowered the maximum acreage for the CRP to 32 million acres, but FSA anticipates enrollment to be more than a million acres lower than the cap next year, allowing it to enroll new acres. Existing CRP acres with contracts ending this year could apply to re-enroll during the new sign-up, but to succeed would likely need to improve their “environmental benefits index” score to get back into the program. Meanwhile, as always, partial field practices such as contour grass strips, riparian buffers, and windbreaks are eligible to enroll at any time through the continuous sign-up for those high environmental benefit practices.

Brouhaha over AGI Enforcement: A tempest in a teapot erupted this week when Republican Representatives from farm districts cried foul over an arrangement between USDA and the IRS for the IFS to use tax return data to help USDA determine whether a farm or conservation program participants exceeds the new “adjusted gross revenue” eligibility caps. The Representatives portray this action as a violation of privacy. The response from Ag Chairman Peterson (D-MN) and from the Administration is, in essence, how else did you think the AGI provision was going to be enforced? The only place to get tax figures is from tax returns. We suspect the protest will continue, since it pays rhetorical dividends, but will not change the plans to enforce the AGI caps.

House Conservation Subcommittee Hearing: On Wednesday, March 25, the House Agriculture Committee’s Subcommittee on Conservation, Credit, Energy, and Research held a hearing to review USDA administration of conservation program contracts.

Kathleen Tighe, Deputy Inspector General at USDA, and Lisa Shames, Director of the Natural Resources and Environment division of the U.S. Government Accountability Office, testified as co-auditors with the private firm KPMG in the 2008 audit of USDA’s conservation programs. They said that USDA’s Natural Resources Conservation Service (NRCS) lacked necessary accounting capabilities, that state offices were inadequately monitoring compliance, that occasionally duplicate payments were made for the same action on the same piece of land, that sometimes EQIP payments were made for actions with no link to environmental quality, and that from 2003 to 2006, $49 million had to be returned to NRCS because it had gone to individuals who turned out not to be eligible to receive the funds.

Tighe and Shames also made clear that the audit uncovered no corruption at NRCS, only “poor administration,” and that the NRCS action plan and corrective procedures in place look good, but felt it is too early to say yet whether they will be effective.

House Agriculture Committee Chairman Collin Peterson (D-MN) urged in his opening remarks that the Natural Resources Conservation Service do more to ensure that eligibility requirements for conservation programs are followed and that NRCS must monitor more closely how conservation funds are actually used on-site once they have been dispersed.

Dave White, Chief of NRCS, noted that federal spending on conservation has grown dramatically in recent years, especially since the 2002 Farm Bill, but funding for staff and program tools has not kept up and hence conservation programs are not yet fully effective.

White also discussed a recent audit of the Wetlands Reserve Program (WRP) by KPMG that found nine deficiencies in NRCS record-keeping and financial accounting. White acknowledged that NRCS has had problems in these areas, but vigorously argued that those problems are “fixable” and that NRCS management is “doing its darndest” to work toward a clean audit. NRCS has implemented a web-based tool to monitor compliance with federal regulations, and has initiated a program of quarterly appraisals to track progress.

White also stated that he anticipates that all 2008 Farm Bill programs administered by NRCS would be fully implemented by this fall.

Bob Stephenson, head of the conservation division of the Farm Service Agency (FSA), also testified. FSA was not audited separately as NRCS was. An audit of just the Commodity Credit Corporation found deficiencies similar to those uncovered for NRCS, but those did not receive attention at the hearing.

Food Safety Oversight Hearing at House Appropriations Agriculture Subcommittee: On Thursday, March 26, the House Appropriations Committee’s Subcommittee on Agriculture held a hearing on Food Safety Oversight. Daniel Levinson, Inspector General for the Department of Health and Human Services, testified that “recent outbreaks of foodborne illness involving peanut butter, peppers, and spinach have raised serious questions about FDA’s ability to protect the Nation’s Food Supply.” He emphasized traceability of all products at all stages of the food supply chain as an imperative goal.

Levinson’s recommendations to FDA are: to strengthen existing requirements for lot-specific records, develop guidance on traceability and require food facilities to further strengthen traceability, address difficulties for traceability posed by commingling of products, seek the authority to request facilities’ records at any time (not only when FDA believes an article of food poses a threat to public health), and to conduct education and outreach activities to inform all segments of the food industry about records requirements.

Craig Henry, Senior Vice President for Science and Regulatory Affairs for the Grocery Manufacturers Association, recommended increased FDA food-related spending; that food companies conduct evaluations of food safety risks, identify appropriate food safety controls, and document those controls in a food safety plan; giving FDA the power to regulate fruits and vegetables; improving traceability; and giving FDA the power to order mandatory recalls.

Chairwoman Rosa DeLauro (D-CT) bill used the hearing as another opportunity to promote her bill to create one Food Safety Agency within the Department of Health and Human Services. Representative Marcy Kaptur (D-OH) spoke about the importance of ensuring that stronger food safety measures do not unduly burden small producers.

Senate Foreign Relations Committee Holds Hearing on Global Hunger: On Tuesday, March 24, the Senate Foreign Relations Committee held a hearing on “Alleviating Global Hunger.” Committee Chairman John Kerry’s (D-MA) opening remarks focused on the physical and moral challenge that the persistence of global hunger represents and mentioned that those challenges are exacerbated by the current financial crisis and by climate change.

Richard Lugar (D-IN), the Committee’s ranking member, recently introduced a bill in the Senate called the Global Food Security Act of 2009 (S. 384) to fund efforts in foreign countries to promote food security. Lugar urged that global food security should be a greater priority in US foreign policy, and that global hunger be seen as an opportunity for the US to build diplomatic and commercial ties around the world. He chided European policy makers for rejecting expanded use of biotechnology, which he argues is essential for relieving global hunger.

Harvard’s Robert Paarlberg, author of Starved for Science: How Biotechnology Is Being Kept Out of Africa, testified in support of his view that hunger can only be addressed by providing farmers access to education, genetically engineered seeds, nitrogen fertilizers, irrigation, electricity, veterinary medicine, and the infrastructure necessary to transport goods to market. Paarlberg complained that the US has walked away from the global hunger issue since the 1980s, for reasons that include complacency after the Green Revolution, faith in private investment, and hostility to the use of nitrogen fertilizers and genetically engineered seeds on the part of “activist groups.”

John Kerry spoke eloquently of the depletion of soil fertility, the dead zone in the Gulf of Mexico, and the rising public interest in organics, and asked Paarlberg if perhaps organic agriculture should not be pushed aside completely. Paarlberg responded that use of nitrogen fertilizer needs to be approximately quintupled in Africa, but allowed that it is probably used excessively in the US. Paarlberg ended his cheerleading for biotechnology by accusing critics of being unaware that GMOs enable farmers to use less pesticide and fertilizers, that there is no evidence that GMOs pose a risk to human health or the environment, and that genetic modification makes crops more resistant to drought.

Catherine Bertini, a senior fellow in agricultural development at the Bill & Melinda Gates Foundation, testified that US leadership will be critical for alleviating global hunger, and that US policy should aim primarily to make small stakeholder farmers self-sufficient. She emphasized that effective policy will have to address the needs and concerns of the women who form a large majority of small stakeholder farmers globally.

Former Secretary of Agriculture Dan Glickman echoed Bertini’s testimony, urging that agriculture should play a pivotal role in US foreign policy. He sees food security as an issue where the US can, with a relatively modest investment, be a force for major positive change. What has been missing, he said, is leadership and sustained commitment to addressing the issue.

Reverend David Beckman, president of Bread for the World, argued that US food aid policy should promote more local self-reliance and that related offices of US government agencies that deal with global hunger and rural development should be pulled together into a new agency.

Edwin Price, Director of the Norman Borlaug Institute for International Agriculture and Dr. Gebisa Ejeta, an agronomist at Purdue University also testified.






Vilsack To Testify, Merrigan to be Confirmed: On Tuesday, Secretary Tom Vilsack will present USDA’s testimony before the House Agriculture Appropriations Subcommittee concerning FY 2010 appropriations. On Wednesday afternoon, the Senate Agriculture Committee has scheduled a confirmation hearing for Kathleen Merrigan to be Deputy Secretary, Jim Miller to be Under Secretary for Farm and Foreign Agriculture Services, and Dallas Tonsager to be Under Secretary for Rural Development. The Senate is expected is expected to confirm all three before week’s end.




CCPI Request Highlighted: On Friday, March 27, USDA issued a press release in which Secretary Vilsack encourages organizations to submit proposals for the Cooperative Conservation Partnership Initiative (CCPI) by the April 23 deadline. Of the $52.4 million in farmer financial assistance available, 90 percent will be allocated to projects at the state level, while just under $6 million will be for multistate or national projects. The release states that for national or multistate projects they are particularly looking for innovative approaches to working with socially disadvantaged and beginning farmers on improved conservation outcomes.

Public comments on the request for proposals and on the issue of how CCPI can contribute to renewable energy production and conservation and to reduced carbon and greenhouse gas emissions must be submitted by April 8.

Additional details about the CCPI Request for Proposals and public comment period are at www.nrcs.usda.gov/programs/farmbill/2008/index.html. For additional information about CCPI, go to www.nrcs.usda.gov/programs/ccpi/.


BFRDP Webinar: On April 6, USDA is hosting a webinar on the Beginning Farmer and Rancher Development Program. The webinar will review the Request for Applications and the peer review process, with time reserved at the end for questions and answers. The webinar is scheduled for 2:00 to 3:30 PM eastern time on April 6. To participate, your computer must have DSL or cable; dial-up modem will not work. You also need Flashware software on your computer, version 9 or better. Log on to http://connect.extension.iastate.edu/csrees/ a few minutes before 2 PM eastern to participate. BFRDP proposals are due by May 13.

RMA Commodity Partnership and Targeted State Funding Available: On Friday, March 27, the Risk Management Agency issued a Request for Applications for the Commodity Partnerships for Small Agricultural Risk Management Education Sessions. http://frwebgate6.access.gpo.gov/cgi-bin/TEXTgate.cgi?WAISdocID=37422118756+0+1+0&WAISaction=retrieve This year there is $900,000 available for small grants (maximum award is $10,000) to deliver training and information in the management of production, marketing, and financial risk for farmers, especially those producing livestock, fruits and vegetables, or crops not currently insurable under the federal crop insurance program. Proposals must be submitted by May 11.

Also on Friday, March 27, RMA issues this year’s Request for Applications for risk management education in targeted states (the northeastern states plus UT, WY, NV, and HI). http://frwebgate6.access.gpo.gov/cgi-bin/TEXTgate.cgi?WAISdocID=37494010700+1+1+0&WAISaction=retrieve There is $4.5 million available, with one grant to be awarded in each of the 16 states. An emphasis is placed on beginning and socially disadvantaged farmers and ranchers. Proposals are due by May 11.

USDA Action to Benefit Nutrition Programs and Dairy Farmers: USDA Secretary Tom Vilsack announced on Thursday, March 26, that approximately 200 million pounds of nonfat dry milk will be transferred from the Commodity Credit Corporation (CCC) to USDA’s Food and Nutrition Service for use in domestic feeding programs to help support both low-income families and dairy farmers who have been challenged by high feed costs and low dairy prices.

Collin Peterson (D-MN), chairman of the House Agriculture Committee, praised the USDA action, saying “This is a win-win situation that will offer relief to our nation’s dairy farmers who are suffering from high input costs and declining milk prices and to low income American families who are finding it harder to put healthy food on the table during these difficult economic times.”

Specialty Crop Block Grant Final Rule Announced: On Friday, March 27th, the Agricultural Marketing Service announced in the Federal Register the Final Rule for Specialty Crop Block Grants Program. http://edocket.access.gpo.gov/2009/E9-6816.htm





Obama’s Pick for EPA Deputy Withdraws: Jon Cannon, President Obama’s nominee for U.S. EPA’s second highest post, abruptly pulled out of the Senate confirmation process just prior to his confirmation hearing on Wednesday, March 25, because of an investigation into the nonprofit group where he once served on the board of directors.

Cannon is a former EPA lawyer and former board member of the now-defunct America’s Clean Water Foundation. In 2007, the EPA inspector general issued a report questioning more than $25 million in federal grants awarded between 1998 and 2003 to the Foundation for environmental studies of CAFOs. The Foundation had close ties with the National Pork Producers Council. The report found that the Foundation had given a contract to a member of its board of directors, in violation of conflict of interest provisions, and had not complied with federal grant regulations.



Categories: General Interest

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