Mini-bus Agricultural Spending Bill Slightly Cuts Funding

This week the House and Senate approved a mini-bus spending bill including 2012 funding for the U.S. Department of Agriculture. It approves a total of $136.6 billion in both discretionary and mandatory funding for the Agriculture agencies and programs.

The bill represents a compromise between the House and Senate, where the House earlier approved a budget of $125.5 billion in both discretionary and mandatory funding, but the Senate approved a budget of $182 billion. The final version’s discretionary funding in the legislation totals $19.8 billion – a reduction of $350 million below last year’s level and a cut of $2.5 billion from the President’s request.

Major programs predominantly saw across the board cuts from 2011 levels, although the Food Safety and Inspection Service and the Food and Drug Administration saw stable or higher budgets.

Specifically, agricultural research saw a cut from 2011, but still secured $2.5 billion which is said to help support research on “critical agricultural issues including emerging crop and livestock diseases, food safety and water quality, and maintains the nation’s investment in land-grant and other agricultural colleges and universities,” the bill summary noted.

Conservation programs have seen significant funding hits in recent years. The bill does secure $828 million for conservation operations that goes directly to farmers.

The bill includes $1 billion for food safety and inspection programs – approximately the same as last year’s level. This funding level will continue critical meat, poultry, and egg product inspection and testing activities, expand a poultry inspection pilot project that will lead to food safety improvements, and help address new concerns with the pathogen E. coli.

The FDA received a total of nearly $2.5 billion in discretionary funding in the bill – $50 million above last year’s level and $234 million below the President’s request. Total funding for the FDA, including user fees, is $3.8 billion.

Mandatory food and nutrition programs within the Department of Agriculture – including SNAP (formerly Food Stamps) and child nutrition – are funded at $98.6 billion. School lunch and school breakfast programs will receive $18.2 billion in mandatory funding in the agreement. Specifically the bill includes provisions to prevent “overly burdensome and costly regulations” and providing school districts greater flexibility in providing nutritional meals and will prevent costs for lunch and breakfast programs from ballooning by an additional $7 billion over the next five years.

The bill also strikes funding levels for the Commodity Futures Trading Commission, providing only $205 million. The National Farmers Union criticized the move. “Reducing funding will make CFTC’s job nearly impossible,” said NFU president Roger Johnson. “We cannot expect to avoid another economic crisis if we do not provide regulators with the resources to do their jobs.”

The conference committee included a policy rider that would prevent USDA from making any further progress on the Grain Inspection, Packers and Stockyards Administration (GIPSA) rule. The rider effectively prohibits USDA from issuing any other rules related to GIPSA beyond what was sent to the Office of Management and Budget (OMB) on Nov. 3. As a result, only some of the poultry provisions included in the original GIPSA rule will be published as a Final or Interim Final rule, and none of the pork or beef aspects of the rule will be finalized.

The rule drew more than 60,000 public comments in opposition to or support of the proposal. It also drew opposition from a bipartisan group of House members and Senate agriculture committee leaders who told Agriculture Secretary Tom Vilsack and GIPSA Administrator J. Dudley Butler that the rule, which had been ordered in the 2008 farm bill, went far beyond what Congress wanted.

The farm bill had primarily sought clarification in the relationships between contract growers and integrators. However, GIPSA wrapped into the rule a number of additional issues, including provisions that would disallow marketing arrangements between producers and packers, packer-to-packer sales and auction buyers purchasing livestock for more than one packer.

GIPSA also proposed that "competitive injury" under the Packers & Stockyards Act be defined as injuring one party rather than industry-wide competition as nine U.S. district courts have held. Vilsack and Butler maintained that the rule would provide the courts with "direction."

RJ Karney, director of Congressional relations for the American Farm Bureau Federation, said the Farm Bureau is concerned about the GIPSA language as it eliminates funding to finalize the rule. “While the Farm Bureau is in the unique position of representing producers of every species impacted by this rule, we have no affiliation with, nor do we represent, packers, integrators or processors – unlike some of the groups supporting this provision. Our evaluation of the proposed regulation is based solely on its impact on farmers and ranchers, and to be clear, there are provisions in the proposed rule that we strongly oppose. However, we believe it is important for USDA to finish reviewing the 60,000 comments it has received on the rule, as well as completing the thorough economic analysis already underway."