FARM BILL 1.05

H.R. 2112 Defines the 2012 Farm Bill Playing Field
Mark Dunlea with Ed Yowell
July 2011

The 2012 Farm Bill Starts with the 2011 Ag Budget


The beginning point of a new Farm Bill is the end point of the old Farm Bill. The beginning “baseline” budget of the 2012 Farm Bill will be the result of projecting the budgeted costs of the Titles, programs, and initiatives of the 2008 Farm Bill through the succeeding five years. Thus, food and farm budget reductions to the 2008 Farm Bill that are adopted by Congress in 2011will determine, to a significant degree, what funding is available to the Titles, programs, and initiatives of the 2012 Farm Bill.

Federal farm and food policy from 1933 to 2008 evolved continuously, generally becoming more extensive in scope and effect, reflecting changes in agriculture and changing perceptions of social need and strategic and political focus. What started in the 1930s with farm production, rural poverty, soil conservation, and food assistance, evolved during the ensuing years to include nutrition programs, agricultural research and education, rural development, farm credit and crop insurance, foreign trade, and energy. The 2008 Farm Bill was notable for the local and healthy food initiatives it contained in response to Americans’ increased awareness of the provenance of their food as well as the inequities, health impacts, and environmental costs of our food system.

Title I, Commodity Programs, including farm commodity price and income supports, and Title IV, Nutrition, including SNAP, the Supplemental Nutrition Assistance Program, formerly the Food Stamp Program, account respectively for about $41 billion and $188 billion of the five year $288 billion 2008 Farm Bill. Both SNAP and commodity subsidies are non-discretionary spending items, with distributions based on program eligibility. Other spending items contained in the Farm Bill are discretionary.

Presently, House and Senate Republicans are using the need to raise the federal debt limit by August 2011 as leverage to achieve deeper cuts in the federal budget, including the discretionary agricultural budget, which includes Farm Bill expenditures. While Congress is supposed to take up the new Farm Bill in 2012, many observers are concerned that funding for certain discretionary food and farm programs will be cut so deeply in the current philosophically-charged deficit reduction deliberations that there will remain an inadequate budgetary base for the 2012 Farm Bill, especially for continuing and building upon some of the new initiatives of the 2008 Farm Bill.

Representative Frank Lucas (R-OK), a veteran of the House Committee on Agriculture and its present Chair, has opined that, rather than slicing up food and farm funding piecemeal in the present budget process, Congress should take up the 2012 Farm Bill in the context of a comprehensive review of food and farm policy, and make budget decisions based on that review. Thus far, it has not happened.

Where We Are

The budget cuts contained in the Continuing Resolution (CR) passed by Congress on April 14, 2011 to fund the government through September 2011, the conclusion of the federal fiscal year, avoided a federal government shut-down and constituted the single largest cut made to the federal budget in one year.

According to an analysis by the National Sustainable Agriculture Coalition, “Overall, the CR cuts discretionary agriculture spending by $3 billion or 14 percent relative to FY 2010 levels. While steep, the cut is lower than the 22 percent cut proposed in the earlier House-passed CR.

The final bill reduces Farm Service Agency credit program funding by $433 million (including a 27 percent cut in direct farm ownership loans targeted to beginning farmers), Natural Resources Conservation Service funding by $118 million, rural low income housing funds by $175 million, Agricultural Research Service funding by $64 million, and National Institute for Food and Agriculture funding by $126 million relative to FY 2010. It also cuts the Women, Infants and Children (WIC) feeding program by $504 million, eliminating WIC reserves that guard against swings in the economy and food prices.

A number of discretionary programs, including the Conservation Loan Program and the National Sustainable Agriculture Information Service… were eliminated completely. NSAC will work to try to resurrect these programs in the FY 2012 bill. The at least temporary demise of the Information Service is particularly disheartening as the budget axe fell on it due to a misinterpretation of the program being a local congressional “earmark” rather than a national, farm bill-authorized and USDA-requested program.

Other programs, such as the Organic Transitions research program, Regional Integrated Pest Management Centers, and Regional Rural Development Centers were trimmed back a bit, but left standing.”

These cuts, to some extent, were presaged by the December 1, 2010 report of President Obama’s bi-partisan National Commission on Fiscal Responsibility and Reform (a.k.a. the Deficit Commission) report, “The Moment of Truth.” In it, the Deficit Commission recommended reducing agricultural programs by $15 billion. The recommended cuts included reductions to mandatory agricultural programs, such as direct payments to farmers, when prices exceed the cost of production,and other subsidies, and reductions to non-mandatory programs, including conservation programs, such as the Conservation Stewardship Program (CSP) and the Environmental Quality Incentive Program (EQIP), and to the Market Access Program (MAP). SNAP reductions were not recommended.

Despite the concerns of Representative Lucas, and in addition to the April 2011 agriculture budget cuts on June 16, 2011, the House passed H.R. 2112, the FY 2012 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act (a.k.a. the House Ag Appropriations Bill), by a vote of 217 to 203. This bill, if enacted, would set the federal agriculture budget through September 2012.

It should be noted here that the jurisdictions of the House and Senate “Ag Appropriations Sub-Committees” extend over the budgets of the USDA and the FDA, thereby encompassing the Farm Bill, the Child Nutrition Act, including the National School Lunch Program and WIC (the Special Supplemental Nutrition Program for Women, Infants, and Children), and the Food Safety Modernization Act.

The overall agricultural budget contained in the House Ag Appropriations Bill for FY2012, $17.25 billion, is $5.041 billion (22.6%) below President Obama’s request and $2.672 billion (13.4%) below the FY 2011 budget.

Representative Hal Rogers (R-KY), Chair of the House Committee on Appropriations, stated, “This bill (H.R. 2112) answers the call from Americans to reduce government spending while still providing for critical programs that keep American agriculture competitive in a global economy…This legislation will also help to put the Department of Agriculture (and)… the FDA…back on a sustainable budget path that is accountable to the taxpayers of this country.”

Representative Jack Kingston (R-GA), Chair of the House Ag Sub-committee, also praised the passage of the bill, stating, “As the Congress continues the battle to lower spending…this bill represents a reduction of 13.4 percent in discretionary funding and makes the tough choices…keeping our bill’s basic missions of food production, food and drug safety, rural development and nutrition programs intact…where possible, the (House Appropriations) Committee has worked with the (House)Agriculture Committee to identify and initiate major reforms for the upcoming Farm Bill.”

What Happened…Cuts and Not

All sides in the debate on agricultural spending cuts have been active, meeting with respective successes and failures. In sum, June 16, 2011, the date on which the House passed H.R. 2112, looks like a dark day for the cause of local, healthy, sustainable, and accessible food systems, although, there are a few bright spots.  

What has been cut?

WIC - Perhaps most significantly, WIC, the federal nutrition program benefitting pregnant and breast-feeding women, infants, and children less than five years of age, which is not a Farm Bill program, would receive an additional FY 2012 cut of $685.8 million, or 10.2%, below last year, and $1.342 billion, or 18.2%, below President Obama’s request.

TEFAP - The Commodity Assistance Program, that provides food to The Emergency Food Assistance Program (TEFAP), would receive a FY 2012 cut of $53.6 million, or 21.8% below last year, and $57.1 million, or 22.9% below the President’s request.

Conservation – The Conservation and Stewardship Program (CSP), the Environmental Quality Incentive Program (EQIP), and the Wetlands Reserve Program would receive a FY 2012 cut of $1 billion in addition to $500 million in FY 2011 cuts. The 2008 Farm Bill included provisions to include certified organic and transitional farmers in CSP and EQIP.

Cotton Subsidies - The House voted to suspend the $147 million payments to the Brazil Cotton Institute next year (In 2009, the World Trade Organization allowed Brazil to impose sanctions against the United States after ruling that U.S. cotton subsidies were illegal.) These annual payments were intended to keep Brazil from retaliating over the United States’ domestic cotton subsidies. Representative Ron Kind (D-WI), who is a frequent critic of domestic farm commodity subsidies, while opposing the House Ag Appropriations Bill in general, offered the amendment, saying the U.S. should alter domestic cotton subsidies to comply with WTO rules instead of paying the settlement to Brazil. Kind was joined by fiscal conservatives who agreed the Brazil payment is wasteful.

Ethanol - Representative Jeff Flake (R-AZ) proposed an amendment, passed by a vote of 283-128, which would prohibit funds appropriated in H.R. 2112 from being used to construct ethanol blender pumps and storage facilities. Supporters cited that subsidized corn used to make ethanol drives up the cost of feed corn to farmers.
What’s not?

Commodity Subsidies - By a vote of 186 to 228, the House rejected an amendment proposed by Representative Jeff Flake (R-AZ) that would tighten the eligibility limit for farmers to $250,000 in adjusted gross income. The current limit is $1.25 million per individual with separate maximums for farm and off-farm income. While fiscal conservatives and other critics argued that subsides need to be cut as lawmakers look for ways to save, the can has been kicked down the road to wait for Congress to consider the 2012 Farm Bill.

The House, while voting to suspend annual payments the Brazil Cotton Institute, rejected an amendment proposed by Jeff Flake (R-AZ) to prohibit the use of funds for upland cotton counter-cyclical payments, repayment rates for marketing assistance loans at the prevailing world market price, or loan deficiency payments.

What is symbolic?

Child Nutrition Act/National School Lunch Program - The House Appropriations Committee called upon the USDA to alter the regulatory process for the new, healthy, nutritional requirements being developed for the National School Lunch Program, pursuant to the 2010 Child Nutrition Act, to avoid increasing local school districts’ food costs.

Representative John Kline (R-MN), Chair of the House Committee on Education and the Workforce, holding jurisdiction over the Child Nutrition Act, on April 13, 2011, wrote to USDA Secretary Tom Vilsack of his concerns about the cost of implementation, “…complying with the proposed rule…equates to an increase of 14 cents per lunch and 50 cents per breakfast (which) will be absorbed by local school districts already facing severe budgetary challenges…the federal government should not create unduly restrictive and burdensome regulations adversely affecting school districts…To do so would be irresponsible.”

Know Your Farmer/Know Your Food - The House, in H.R. 2112, voted to stop the USDA from spending money on the Obama Administration’s Know Your Farmer, Know Your Food initiative intended to support local farmers, strengthen rural communities, and promote healthy eating. Since Know Your Farmer has no distinct budget allocation, being rather an executive initiative to focus existing USDA programs and resources on the re-invigoration of local food systems, it is not clear how this will be affected.

Agriculture and Antitrust Enforcement - The House also voted to prevent the USDA from moving forward with new rules that would make it easier for smaller farmers and ranchers to sue large livestock companies on antitrust grounds. The proposed USDA rules were meant to address the growing concentration of corporate power in the livestock industry, which was a topic of the joint USDA/DoJ 2010 series of workshops entitled, “Agriculture and Antitrust Enforcement Issues in our 21st Century Economy.”

What’s Next?

The FY 2012 agriculture budget, with its implications for the 2012 Farm Bill, won’t be done until the House and the Senate agree on a version and President Obama signs it.

The Senate, with a Democratic majority, is less far along than is the House in crafting its food and farm budget, likely awaiting the outcome of the deficit reduction negotiations between the White House and Congressional Republicans.

Looking towards the 2012 Farm Bill, with prices for farm commodities at record highs and with agricultural exports being one of the bright spots in our post-recession economy, Commodity Program subsidies, targeted by the Deficit Commission, indeed, are an inviting target for cuts, and there appears to be some philosophical agreement on making them, with reticence crossing party lines based on legislators’ geographical, agricultural/non-agricultural, constituencies.

SNAP, the single largest funding stream in the Farm Bill, while not targeted in the Deficit Commission report, nor addressed in H.R.2112, is a target of many Congressional Republicans, citing that SNAP spending has soared during the recession, both because of increased eligibility and participation and the Obama Administration’s stimulus package-based benefits increase. Some Congressional Republicans want to transform SNAP from an entitlement program into a program of block grants to states. On SNAP, in April 2011, Representative Paul Ryan (R-WI), Chair of the House Committee on Budget, proposed the implementation of a block grant program beginning in 2015.

The Senate Ag Committee has not yet taken up the 2012 Farm Bill. However, Senator Kirsten Gillibrand (D-NY), the first New Yorker to serve on the Senate Agriculture Committee in nearly 40 years, sitting on three Ag sub-committees, held agricultural listening sessions around the state between April and June to discuss how the 2012 Farm Bill, and federal agriculture policy, might help New York farmers and farming communities. She focused on issues including access to financing, new market opportunities, assistance for specialty crops, farm labor, and investments in renewable energy. Her stops included visits to Western New York, the Finger Lakes Region, Central New York, the Southern Tier, the Albany Region, the North Country, the Hudson Valley, and Long Island.

Notably absent from her itinerary is a visit to New York City, despite her seat on the Nutrition, Specialty Crop, Food and Agricultural Sub-committee. The New York City coalition on the 2012 Farm Bill, an informal group of local food active organizations, is inviting Senator Gillibrand to hold a listening session in New York City.

Meanwhile, the House Ag Committee is commencing its Farm Bill hearings, called Agricultural Program Audits, with Conservation Programs and Nutrition and Horticulture Programs first up on Thursday, July 7, 2011. Committee Chairman Frank Lucas (R- OK), upon assuming the position of Committee chair, stated his priorities, "Oversight is a primary responsibility of Congress…We will hold oversight hearings of the Environmental Protection Agency (EPA), which has demonstrated a fondness for overreaching regulations that defy Congressional intent and threaten production agriculture and rural economies.”

He continued, "I will work with my colleagues to enact legislation that eliminates the obstacles for job growth and entrepreneurship throughout rural America…to make sure we write a market-oriented, fiscally responsible farm bill that will provide America's farmers and ranchers with the necessary tools and certainty they need to produce the safest, most affordable, most abundant food, fiber, feed and fuel supply in the history of the world."

In the March 2011 installment of this series, “Farm Bill 1.03 Cities and Eaters do Matter: What New York got from the Last Farm Bill,”  Thomas Forster laid out a road map for the 2012 Farm Bill. As the House commences 2012 Farm Bill hearings, it is instructive to look down the road with his points to guide; advance planning and commitment, resources to do the work, working from precedent and parallel efforts, agreeing where to agree/disagree, and maintaining a common message throughout the process.


Mark Dunlea is Executive Director of the Hunger Action Network of New York State. He works on community food security and food policy issues at the local, state and national level.

Ed Yowell is a Co-chair of the Food Systems Network NYC, a member of the Greenmarket Farmer and Community Advisory Committee, a Slow Food NYC Board Member, and a Slow Food USA Regional Governor.

 

Sources

“Congress Passes FY 2011 Budget, Cuts Billions from Agriculture.” National Sustainable Agriculture Coalition. April 15, 2011. http://sustainableagriculture.net/blog/congress-passes-final-fy11-cr/
“House Approves Agriculture Funding Bill for Fiscal Year 2012.” House Committee on Appropriations press release. June 16, 2011. http://appropriations.house.gov/News/DocumentSingle.aspx?DocumentID=247105
“House Approves Agriculture Funding Bill for Fiscal Year 2012.” House Committee on Appropriations press release. June 16, 2011. http://appropriations.house.gov/News/DocumentSingle.aspx?DocumentID=247105
Letter to USDA Secretary Tom Vilsack. Committee on Education and the Workforce, U.S. House of Representatives. April 13, 2011. http://edworkforce.house.gov/UploadedFiles/Kline_Vilsak_CNR__4-11.PDF
“Lucas to Chair Agriculture Committee in Next Congress.” Press Release. December 8, 2010. http://www.house.gov/apps/list/press/ok03_lucas/101208_PR_LucasAgChair.shtml
Forster, Thomas. “Farm Bill 1.03 Cities and Eaters do Matter: What New York got from the Last Farm Bill.” Food Systems Network NYC. March 2011. http://www.foodsystemsnyc.org/articles/farm-bill-march-2011


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