House Subcommittee Approves 2012 Ag Spending

On May 24, the House Agriculture Appropriations Subcommittee passed their fiscal year 2012 spending bill that would make significant cuts in both discretionary and mandatory agricultural program spending.

The bill would reduce total discretionary agriculture funding by $2.6 billion (13.4% below FY11) and includes significant "chimps" (changes in mandatory program spending) in order to keep total year-to-year agriculture outlays at essentially the same level, while accommodating a $6 billion increase in food stamp funding over FY11.

On the discretionary side, some of the significant spending cuts include: ag research by $354 million; Agriculture & Food Research Initiative by $39.47 million; Animal and Plant Health Inspection Service by $73 million; conservation operations by $99 million; and rural development by $338 million.

On the mandatory spending side, the bill reduced farm bill authorized funding levels for several conservation and energy title programs. The Environmental Quality Incentive Program was funded at $1.4 billion, an increase over FY11, but $350 million below the farm bill level. The Conservation Stewardship Program received $634 million, $15 million below FY11 and $171 million below the Farm Bill level.

The bill limits funding for the Bioenergy Program for Advanced Biofuels in FY12 to $55 million, which is $50 million below the Farm Bill authorized level. Funding for the Biomass Crop Assistance Program (BCAP) was completely eliminated from the FY 2012 House bill. Another program to be eliminated is the Rural Energy for America Program (REAP) which is used to support anaerobic digesters and blender pumps.

The appropriations bill contains a rider that would prevent implementation of the proposed Grain Inspection, Packers and Stockyards Administration (GIPSA) Rule.

Disproportionate cuts

Many agricultural groups expressed concern that agriculture is being asked to bear a disproportionate amount of spending cuts.  

 National Farmers Union President Roger Johnson said the proposed appropriations bill for Fiscal Year 2012 agriculture’s budget will have been cut 26% in the last two years.

“Fiscal responsibility should not entail cutting costs to realize short-term savings that result in increased long-term expenses,” said Johnson. “NFU members know the importance of balancing a budget and prioritizing expenditures but we believe the proposed agriculture spending cuts will be a serious mistake as we try to emerge from the economic downturn.”

The American Soybean Association is urging Congress and the Administration to reach a comprehensive agreement on a 10-year budget plan that includes reductions in all federal spending and entitlement programs. “This is necessary to ensure that any reductions to ag spending programs are made in the context of a long-term plan that truly achieves the necessary reductions in our national debt,” ASA said.

Future actions

The legislation is scheduled to be taken up by the full committee on May 31 before making its way to the House floor. The bill is consistent with an earlier House-passed Budget Resolution.

Like many appropriations bill in the past several years, this is unlikely to see final action in this form.

MF Global Washington Research Group WRG political analyst Chris Krueger, said a continuing resolution containing an across-the-board reduction in non-defense/security-related discretionary spending is more likely path for the upcoming 2012 fiscal year. “An outcome along these lines would be more straight-forward, fund existing programs across the board, though perhaps at an incrementally lower level,” wrote Mark McMinimy, MF Global research analysts in an Agribusiness Bulletin.