Appropriations for FY1999: U.S. Department of Agriculture and Related Agencies III

CONTENTS FOR THIS SECTION

Conservation

Natural Resources Conservation Service
Farm Service Agency Conservation Programs

Agricultural Research, Education, and Economics

Agricultural Research Service (ARS)
Cooperative State Research, Education, and Extension Service (CSREES)
Economic Research Service (ERS) and National Agricultural Statistics Service (NASS)

Food Safety and Inspection

Food Safety and Inspection Service

Marketing and Regulatory Programs

Agricultural Marketing Service
Animal and Plant Health Inspection Service
Grain Inspection, Packers, and Stockyards Administration

Conservation

P.L. 105-277 provides $793.1 million for conservation programs in FY1999, slightly more than the FY1998 appropriation of $786.5 million. Conservation programs are administered by both USDA's Natural Resources Conservation Service (NRCS) and its Farm Service Agency (FSA). However, all of the appropriated funds go to the NRCS. The Administration had requested $826.3 million, an increase of $40 million from the preceding year. The Senate-passed appropriation bill (S. 2159) would have provided $792 million, while the House-passed bill (H.R. 4101) would have provided $784.4 million.

The balance of funding for conservation programs was made mandatory in the 1996 farm act and is funded through the Commodity Credit Corporation (CCC). P.L. 105-277 allows just under $2 billion in funding for those programs in FY1999, a savings of more than $100 million from the Administration proposal and more than $300 million from FY1998.

Natural Resources Conservation Service. Within NRCS, the core conservation program and the primary source of technical assistance to producers and landowners is Conservation Operations (CO). P.L. 105-277 provides $641 million for CO, $99 million less than the Administration request of $742 million. This request included a transfer of $50 million from the Watershed and Flood Prevention Operations Program (the portion that pays for the technical assistance under this program) into the CO account. Other major requested increases included $23 million for activities associated with the Clean Water and Watershed Restoration Initiative, and $20 million to be used as incentive payments to encourage state and local conservation efforts. These increases would have been partially offset by $10 million from user fees (to be charged for the first time in conservation), and elimination of $6.9 million in prior congressional earmarks that do not have a federal or national impact. Both chambers rejected these requests. The House-passed bill had recommended funding at $641 million for CO, while the Senate-passed bill provided $638.6 million.

In the reports accompanying the legislation, both chambers included numerous recommendations for specific activities or projects (mostly of $1 million or less), and some involve policy changes. The House report expressed concern about accountability for how these funds are spent and identified several Administration initiatives on which they cannot be spent without prior approval by the House Appropriations Committee. It also called on NRCS to submit a report justifying the creation of regional offices with its FY2000 budget submission. The Act is silent on most items in the report language that either chamber had adopted. Where one chamber had earmarked funds, the earmark was accepted, but some of the funding levels were changed.

Beyond CO, P.L. 105-277 rejects most of the Administration proposals and makes changes in other programs. It adopts language on the Watershed and Flood Prevention Program inserted by the House that limits Technical Assistance under that program to a maximum of $47 million, and provides $6.3 million for the Forestry Incentives Program, as passed by the Senate. (The House and Administration had both recommended no funding.) The House and Senate had small disagreements on two other programs; the Senate provided level funding for two NRCS programs that are line items, Watershed Surveys and Planning and Resource Conservation and Development, while the House provided a decrease of $1.6 million for Watershed Surveys and Planning, and an increase of less than $1 million for the Resource Conservation and Development Program.

Five conservation programs administered by NRCS are funded as mandatory spending (not subject to annual appropriations) through the CCC as a result of provisions in the 1996 farm act. P.L. 105-277 makes changes to three of these mandatory programs and claimed nearly $100 million in budget savings, which was then applied towards meeting the allocation for all discretionary programs. It limits the Environmental Quality Incentives Program (EQIP), which supports structural and land management practices under multi-year agreements, to $174 million for savings of $26 million; concurs with the Senate in limiting Wetland Reserve Program (WRP) enrollment to 120,000 acres for savings of $47 million, and includes language passed by the Senate supporting greater flexibility for enrolling land into the WRP. It concurs with both Chambers in prohibiting any funding for the Conservation Farm Option (CFO), which provides payments to producers receiving market transition payments, for savings of $25 million. But, P.L. 105-277 rejected the House-passed prohibition on funding the Wildlife Habitat Incentives Program (WHIP), which provides payments to farmers who implement approved plans.

The Administration had proposed adding $100 million to the EQIP and increasing the CFO by $10 million. A proposed reduction in the WRP by $95 million, to $124 million, would have allowed USDA to enroll an additional 164,000 acres under permanent easements, temporary easements and long-term agreements. Also in the Administration request, the WHIP would have declined from $30 to $20 million and the Farmland Protection Program (FPP) would not have been funded. These changes reflect the approaching of the enrollment cap for the WRP, and the allocation of all authorized funds for the FPP in FY1998 and for the CFO and WHIP in FY1999.

The Senate bill had limited WRP enrollment to 120,000 acres (for $47 million in savings), changed how land can be enrolled and when payment limits would not apply for the WRP, and prohibited any funding for the CFO ($25 million in savings). The House bill had prohibited funding for the WHIP ($20 million in savings), limited WRP enrollment to 130,000 acres ($37 million savings), and limited funding for the EQIP to $174 million ($26 million savings). It also had prohibited funding for the CFO ($25 million savings).

Farm Service Agency Conservation Programs. FSA operates the largest conservation program, the Conservation Reserve Program (CRP). Under the CRP, landowners can enter into contracts, usually 10 years in duration, to retire environmentally sensitive lands from production in return for annual payments and technical assistance. CRP is a mandatory program funded through the CCC as a result of provisions enacted in the 1996 farm act. Estimated funds needed for the CRP decline from $1.798 billion in FY1998 to $1.694 billion in FY1999, according to the Administration. No funds were requested for two other programs, both responding to natural disasters, the Emergency Conservation Program (ECP) and the Flood Risk Reduction Program. Conferees rejected a Senate provision to add a pilot program for haying and grazing on CRP acreage in 7 states in no more than 1 in 4 years in return for reduced payments. The House-passed bill provides some directions for administering the Conservation Reserve Enhancement Program, a subset of the CRP.

The Forest Service, with requested outlays of $3.378 billion in FY1999, is another agency in USDA with natural resource protection responsibilities. Appropriations for the Forest Service are within the jurisdiction of the interior subcommittees of the House and Senate Appropriations Committees. Forest Service funding issues are addressed with the other major federal land management agencies in the CRS report on the Interior appropriations bill (see CRS Report 98-206.)

For more information on USDA conservation issues, see CRS Issue Brief IB96030, Soil and Water Conservation: Implementing the 1996 Farm Bill.

Agricultural Research, Education, and Economics

The FY1999 omnibus appropriations act (P.L. 105-277) contains $1.930 billion in spending to support the programs of USDA's research, education, and economics (REE) agencies in FY1999. The House-passed version of H.R. 4101 contained $1.838 billion, and the Senate bill, S. 2159, contained $1.843 billion for the REE agencies. The vetoed conference agreement on H.R. 4101 would have provided $1.923 billion. Its research provisions are virtually identical to those in P.L. 105-277, except that P.L. 105-277 provides $7 million more to the research agencies for the President's Food Safety Initiative. The level in P.L. 105-277 is almost 7% higher than the Administration's request of $1.808 billion and 3% above the FY1998 funding level of $1.870 billion. The conference agreement's allocation of funds among the various research and education programs differs significantly from the Administration's, as did the earlier House and Senate measures.

Four agencies carry out USDA's REE function. The Department's in-house research agency is the Agricultural Research Service (ARS), which provides scientific support to USDA's action and regulatory agencies and conducts long term, high risk, basic and applied research on subjects of national and regional importance. The National Agricultural Library merged with ARS in the 1994 USDA reorganization. The Cooperative State Research, Education, and Extension Service (CSREES) is USDA's liaison with state-level research, education and extension programs at the land grant Colleges of Agriculture. The Economic Research Service (ERS) provides economic analysis of agriculture issues using its databases as well as data collected by the National Agricultural Statistics Service (NASS). ARS, CSREES, ERS, and NASS are under the Under Secretary for Research, Education, and Economics.

Agricultural Research Service (ARS). P.L. 105-277 provides $842 million for ARS in FY1999. Of that amount, $786 million would be allocated to ARS research programs (a $42 million increase from the FY1998 level of $744 million), and $56.4 million would be allocated to the construction and repair of ARS buildings and facilities (compared to $80.6 million in FY1998). P.L. 105-277 provides more for ARS than either the Senate measure (S. 2159 -- $809 million), the House-passed version (H.R. 4101-- $817.2 million), or the conference agreement on H.R. 4101 ($838.4 million) .

The Senate-passed version of S. 2159 contained a $13.5 million reduction in the ARS buildings and facilities funds that the Senate used to partly offset a $66 million increase in support for the President's Food Safety Initiative over the amount contained in the bill as originally reported by the Senate Appropriations Committee. Of the $66 million, the Senate designated $9 million for ARS food safety research (the Administration requested $14 million). P.L. 105-277 provides a total of $59.3 million for the Initiative for research and increases the ARS allocation by $3.6 million to $12.6 million, but the offset is no longer coming from ARS's construction funds. The final appropriation of $56.4 million for ARS buildings and facilities exceeds the Senate-passed level by $24.5 million and is only $5 million less than the House-passed level of $61.4 million.

Two other titles of P.L. 105-277, not related to agriculture, also provide funds to ARS for specific research. Under Title III, the Office of National Drug Control Policy is to transfer $4.5 million to ARS for anti-drug research. Under Title VIII, the Western Hemisphere Drug Elimination Act of 1998, $23 million is appropriated for ARS to do research on drug crop eradication technologies, narcotics plant biochemistry, alternative crops, and development of herbicides for aerial spraying programs to eradicate narcotic plants.

Cooperative State Research, Education, and Extension Service (CSREES).

P.L. 105-277 provides $919.2 million for cooperative research, education, and extension programs in the states, an amount that is $71.3 million higher than the House-passed version of H.R. 4101, $44 million higher than S. 2159, $88 million above the Administration request, and $3.9 million more than the vetoed conference agreement on H.R. 4101.

The Administration requested a $23.5 million decrease in CSREES funding for FY1999, which included controversial reductions in Hatch Act funds for research at the state agricultural experiment stations, Smith-Lever Act formula funds for Extension programs, and McIntire-Stennis funds for cooperative forestry research. P.L. 105-277 reverses all of these proposals and actually provides more than contained in either S. 2159 or the House-passed version of H.R. 4101 (with the exception of formula funds for extension programs, where the conferees agreed with what the Senate had provided in S. 2159). P.L. 105-277 contains $180.5 million for Hatch Act formula funds (a 7% increase over FY1998); $276.5 million for Smith-Lever formula funds (a 3% increase); and $21.9 million for forestry research (a 7% increase). P.L. 105-277 also increases funding for research at the 1890 historically black land grant colleges by 7%, to $29.7 million, and for 1890's extension programs by 3%, to $25.8 million.

P.L. 105-277 provides $119.3 million for the National Research Initiative (NRI) competitive grants program. This amount is higher than either the House or Senate bills and higher than the FY1998 level of $112.5 million, but less than the Administration's $130 million request. Of the six research categories under the NRI, food safety receives an $8 million increase over the FY1998 level for a total of $16 million, as part of the Food Safety Initiative. Conference report language directs USDA to consult with the Food and Drug Administration (FDA) regarding its research needs and to use $5 million of the $8 million increase to meet those needs. P.L. 105-277 also provides an additional $4.1 million to CSREES for other research programs addressing food safety, for a total increase of $12.1 million in cooperative food safety research.

P.L. 105-277 provides a 23% increase (to $63.1 million) over the FY1998 level of $51.5 million. S. 2159 would have reduced funding for special grants to $51.4 million and the House-passed version of H.R. 4101 to $49.3 million. P.L. 105-277 also provides an additional $633,000 in funding for Extension special projects over the FY1998 level of $11.1 million. Extension's Expanded Food and Nutrition Education Program will receive level funding of $58.7 million.

Congress directed in the FY1996 agricultural appropriations report that no new funds should be appropriated for constructing research facilities at land grant Colleges of Agriculture after FY1997. No such funds were appropriated for FY1998. The Administration did not request any funds for facilities construction in FY1999, and P.L. 105-277 likewise contains none. It is expected that such funding may resume once Congress and Department officials have examined a congressionally mandated 10-year strategic plan for agricultural research facilities that is due to be completed shortly.

CSREES administers a competitive grants program under the Fund for Rural America, a program focused on research and development projects of benefit to farm and rural communities that was authorized and given mandatory funding in the 1996 farm act (P.L. 104-127). In FY1998, CSREES had $36.1 million available in funds to award to research projects related to rural needs. The recently enacted Agricultural Research, Extension, and Education Reform Act (P.L. 105-185, S. 1150) extended the authority for the Fund for Rural America through FY2003 and allocated an additional $100 million in mandatory funds to it over 5 years. This would make a total of $60 million available annually to USDA for all the activities of the Fund, with somewhat less than half of that amount being available for research grants. P.L. 105-277 reflects provisions in both the House- and Senate-passed FY1999 funding measures that prohibit the use of any funds to pay the salaries and expenses of personnel to carry out Fund for Rural America activities. This effectively puts the program on hold until FY2000.

Similarly, P.L. 105-277 adopts a provision in the House-passed version of H.R. 4101 that prohibits outlays of the first year's allocation of $120 million for the Initiative for Future Agriculture and Food Systems. The Initiative was authorized by the new research reauthorization act (P.L. 105-185) and would provide $600 million in mandatory funds over 5 years to support research on the genetics of food crops and livestock, food safety, human nutrition, alternative uses for agricultural commodities, biotechnology, and site-specific farming using satellite technology (precision agriculture). The withholding of the first year's funds puts the program on hold until FY2000.

Economic Research Service (ERS) and National Agricultural Statistics Service (NASS). P.L. 105-277 provides $65.8 million in funding for ERS. This is slightly below the House-passed level of $67.3 million and significantly higher than the Senate level of $54.0 million. The FY1998 appropriation of $71.6 million reflected a decision to give ERS the responsibility for all USDA research and analysis of food programs and food policy issues. P.L. 105-277 adopts the House provision to keep those responsibilities in ERS rather than to transfer them to the Food and Nutrition Service as the Administration requested and the Senate proposed. P.L. 105-277 stipulates that $12.2 million will be used for studies and evaluations of the food stamp, child nutrition, and Women, Infants, and Children (WIC) programs, and also includes language that directs that $2 million of the $12.2 million be transferred to the Food Program Administration account of the Food and Nutrition Service for conducting program evaluations. Also as part of ERS's total funding, the conferees directed $453,000 to be spent on studies to estimate the benefits of food safety. S. 2159 had provided $900,000 for that purpose and the House-passed bill contained $704,000. The conferees also reiterated Senate report language directing ERS not to reduce the frequency of its commodity situation and outlook reports.

P.L. 105-277 adopts the Senate provision to provide $104 million for NASS, reflecting the Administration's position that the agency will not require as much funding in FY1999 to continue its work on the 1997 Census of Agriculture. The FY1998 appropriation was $118 million, and the Administration's budget request for FY1999 was $107.2 million. The House measure would have provided $105.1 million. P.L. 105-277 provides that $23.6 million be spent for NASS's continuing work on the census, and reiterates Senate report language requiring USDA to streamline the census application by reducing redundant questions.

For more information on agricultural research issues, see CRS Issue Brief 97032, Agricultural Research, Education, and Extension Issues in the 105^th Congress.

Food Safety and Inspection

Improved food safety is among the three goals that Secretary Glickman has set forth for USDA under the Government Performance and Results Act. In order to elevate the Department's role in this mission area, the Administration in 1995 established an Office of the Under Secretary for Food Safety. The Food Safety and Inspection Service (FSIS) is the only agency in USDA's food safety mission area. FSIS is responsible for the mandatory inspection of meat, poultry and processed egg products to ensure their safety, wholesomeness, and proper labeling.

FSIS and the industry are now implementing a comprehensive new system to reduce pathogens in meat and poultry products through a preventive approach known as hazard analysis critical control point, or HACCP. This system is to supplement, not replace, existing inspection procedures. One budget issue related to HACCP implementation is FSIS's ability to properly implement and enforce the new procedures while still meeting its traditional inspection obligations. Some observers maintain that the agency could be hard pressed to keep both systems operating optimally with the annual appropriation it receives from Congress.

Food Safety and Inspection Service. For several years the Administration has proposed requiring the meat packing industry cover a greater portion of the full cost of federal meat, poultry, and egg inspection by paying increasing amounts of user fees. Congress rejected the Administration's user fee proposal last year, as it has rejected previous (and more modest) ones, and both the Senate and House appropriations measures reject the Administration's user fee proposal for FY1999.

For FY1999, P.L. 105-277 provides a $617.0 million appropriation for FSIS. This level is $8 million higher than the vetoed conference agreement on H.R. 4101. It is estimated that the amount of user fees collected for overtime inspection services will remain at about the FY1998 level ($86 million), bringing the total program level to $704 million, about a 4% increase from the 1998 fiscal year. The FY1998 appropriation for FSIS was $589 million, with a total program level of $675 million. The $8 million increase is designated entirely to FSIS activities related to the Food Safety Initiative, bringing the agency's total allocation for the Initiative to $16 million in FY1999. Conferees adopted a Senate provision to provide separate funding of $446,000 for the Office of the Under Secretary for Food Safety rather than a House proposal to fund the Office from the FSIS appropriation. Congress provided separate funding for the Office in FY1998.

Conferees adopted language directing the Secretary to report to the Committees on Appropriations by March 1, 1999, with recommendations on lifting the ban on interstate shipment of state inspected meat. The committee also rejected a Senate provision to require country-of-origin labeling on imports of beef and lamb, but requires a comprehensive study on its potential effects and several other related issues. The explanatory statement attached to P.L. 105-277 also directs FSIS to redo a report on the potential merits and effectiveness of a mandatory inspection program for meat from ratites (e.g., ostrich, emu, rhea), and to include in the revision the cost-benefit analysis and health risk assessment that Congress had originally asked for. (For more information, see CRS Issue Brief 95062, Meat and Poultry Inspection Issues.)

Marketing and Regulatory Programs

The mission of USDA's marketing and regulatory programs -- administered by three agencies, the Agricultural Marketing Service (AMS), the Animal and Plant Health Inspection Service (APHIS), and the Grain Inspection, Packers, and Stockyards Administration (GIPSA) -- is to "facilitate the domestic and international marketing of U.S. agricultural products and to ensure the health and care of animals and plants while improving market competitiveness and the economy for the overall benefit of both consumers and American agriculture," according to USDA. APHIS spending accounts for most of the marketing and regulatory program budget.

P.L. 105-277 contains $521.3 million for these agencies' programs, with an additional $195.3 million authorized to be collected through user fees, for a total program level of $716.6 million (27% user fee supported). The total program level in FY1998 was $708.6 million, of which approximately $195 million (or about 27%) came from user fees. The Administration's FY1999 budget proposal would have set a program level of $712.7 million for these agencies' programs, of which $207 million (about 29%) would have come from user fees.

Agricultural Marketing Service. P.L. 105-277 provides $61.0 million in appropriations to AMS ($3.0 million more than FY1998) and authorizes the collection of $64.7 million in user fees ($1.2 million more than the current year) for a total FY1999 program level of $124.7 million. The Senate measure, S. 2159, would have provided $57.8 million in budget authority to AMS and authorized the collection of $63.5 million in user fees. The House-passed bill allocated virtually level funding for FY1999 and adopted the Administration's request to allow $64.7 million to be collected in user fees. The Administration had requested $70.7 million for AMS and would have allocated most of the increase to broadening the scope of the Pesticide Data Program (PDP), which collects and analyzes data on pesticide residues in fruits, vegetables, and other foods.

P.L. 105-277 adopts a Senate provision that amends the Agricultural Marketing Act of 1946 to make it illegal to grade and repack eggs in USDA-stamped cartons if they have already been in commerce without having gone through the USDA voluntary egg grading program. Conference language also requires USDA and FDA to submit a status report to Congress on the agencies' efforts to improve the safety of shell eggs.

Animal and Plant Health Inspection Service. P.L. 105-277 provides $425.8 million in budget authority for APHIS programs ($0.5 million less than FY1998) and authorizes the expenditure of $88 million (same as FY1998) in collected user fees, for a total program level of $513.8 million for FY1999. S. 2159 would have provided a program level of $514.5 million, and the House version of H.R. 4101 would have provided $512.5 million. P.L. 105-277 also provides $7.7 million for APHIS building projects, an amount that is $2.5 million higher than the budget request and the House-passed bill, and $3.5 million higher than S. 2159. Conferees also adopted language directing USDA to publish rules regarding the compensation of Arizona wheat producers and others for their economic losses on the 1997-1998 crop due to karnal bunt disease.

The budget request, which called for an $8.1 million decrease for APHIS programs in FY1999, assumed less demand for some APHIS programs and increased cost-sharing for predator control and boll weevil eradication programs. In addition, the Administration's FY1999 budget proposed new user fees to recover some of the costs for administering animal welfare, biotechnology, veterinary biologic, pink bollworm, and Swine Health Protection Act programs. P.L. 105-277 reflects the fact that neither the Senate nor the House bill adopted this proposal.

A floor amendment (Bass) to the House version of H.R. 4101 that would have reduced funding by $10 million for APHIS's livestock predator control operations through its Wildlife Services program was adopted on June 23, and then voted down on June 24. After the amendment was adopted, many members were concerned that the wording of the amendment would actually reduce Wildlife Services spending by $21 million instead of the intended $10 million, and require reductions in Wildlife Services research spending as well as operations. When the amendment was revised the next day, it was defeated, thus maintaining the funding level at $28.7 million for operations and $10.3 million for research, as originally reported by the House Appropriations Committee.

P.L. 105-277 provides $28.8 million for predator control operations and $10.4 million for research. Conferees also adopted provisions that would provide: $400,000 to be used to prevent the inadvertent introduction of brown tree snakes in Hawaii; $300,000 to establish a Wildlife Services office in Hawaii; $450,000 for trap testing to meet U.S. obligations under international standards; and an additional $175,000 for coyote and wolf control in the Rocky Mountain region.

Grain Inspection, Packers, and Stockyards Administration. P.L. 105-277 provides $26.8 million for GIPSA and authorizes the collection of $42.6 million in user fees for a total program level of $69.3 million. S. 2159 would have appropriated $26.4 million and the House-passed measure $27.5 million for GIPSA. The amount provided in P.L. 105-277 is slightly higher than the current appropriation ($25.4 million) and substantially higher than the Administration request of $11.8 million. The budget request assumed enactment of authority for $21.5 million in additional user fees (which the House and Senate did not adopt) for grain inspection activities and to administer the Packers and Stockyards Act. A provision added in conference on P.L. 105-277 requires the Secretary of Agriculture to conduct a 12-month pilot investigation to require certain large buyers, sellers or marketers of domestic or imported cattle for fresh beef, or sheep for frozen lamb, to report to the Secretary the prices they paid. A similar pilot investigation is also required for the collection of export data for fresh or frozen muscle cuts of beef

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