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Wednesday, April 25, 2012

Agricultural Research, Education, and Extension: Issues and Background


Dennis A. Shields
Specialist in Agricultural Policy

The U.S. Department of Agriculture (USDA) Research, Education, and Economics (REE) mission area has the primary federal responsibility of advancing scientific knowledge for agriculture through research, education, and extension. USDA REE responsibilities are carried out by four agencies: the Agricultural Research Service (ARS), the National Institute of Food and Agriculture (NIFA), the Economic Research Service (ERS), and the National Agricultural Statistics Service (NASS). The USDA administers extramural federal appropriations to states and local partners primarily through three funding mechanisms: formula funds, competitive grants, and non-competitive grant programs.

The FY2012 Agriculture Appropriations Act (P.L. 112-55, H.R. 2112) contained $2.53 billion in discretionary funds for USDA agricultural research, education, and extension programs. While inflation-adjusted public spending for agricultural research grew steadily from the 1950s to the 1970s, it has remained relatively flat since the 1970s (with a few exceptions), and growth in funding has lagged behind that of other national science agencies.

The enacted 2008 farm bill (P.L. 110-246) directed USDA to reorganize the REE mission area. The farm bill created a new entity called the National Institute for Food and Agriculture (NIFA), which assumed all programs and authorities from the Cooperative State Research, Education, and Extension Service (CSREES). A new competitive grants program for basic and applied research, called the Agriculture and Food Research Initiative (AFRI), was also established by the 2008 farm bill and is administered by NIFA. The farm bill also extends and expands mandatory and discretionary funding for specialty and organic crops research, bioenergy programs, and pollinator protection programs, among others. Several mandatory programs (research and otherwise) that were authorized in the 2008 farm bill do not have a budget baseline that extends beyond the end of the 2008 farm bill (September 30, 2012). If policymakers want to continue these programs in the next farm bill, they will need to pay for them with other offsets.

Debates over the direction of public agricultural research and the nature of its funding mechanism continue. Ongoing issues include the need, if any, for new federal funding to support agricultural research, education, and extension activities, and the implications of allocating federal funds via formula funds versus competitive grants. In addition, factors including the growing importance of specialty crops, international trade negotiations, and a renewed interest in international agricultural development have many groups believing that Congress needs to increase support of U.S. agriculture through expanded research, education, and extension programs, whereas others believe that the private sector, not taxpayer dollars, should be used to support these activities.

While the 2008 farm bill provided a significant funding boost for agricultural research, relatively speaking, it is unclear whether budgetary resources and political will can sustain funding for agricultural research and related activities.



Date of Report: March 23, 2012
Number of Pages: 24
Order Number: R40819
Price: $29.95

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Tuesday, April 17, 2012

Lean Finely Textured Beef: The “Pink Slime” Controversy


Joel L. Greene
Analyst in Agricultural Policy

Since early March 2012, the use of lean finely textured beef (LFTB) in the U.S. ground beef supply has come under a barrage of media criticism and consumer backlash. The depiction of LFTB in the media as “pink slime” raised the product’s “yuck” factor and implied that there were food safety issues with LFTB, mainly because ammonium gas is used as an antimicrobial intervention in the production of LFTB. Also, the fact that ground beef purchased for the school lunch program could contain LFTB triggered consumer calls for the U.S. Department of Agriculture (USDA) to immediately end the practice.

The meat industry saw media sensationalism as a campaign of misinformation to undermine a product used for more than ten years to supplement lean beef supplies used in ground beef. Ground beef is the most popularly consumed beef item among American consumers, and consumers have increasingly demanded lean ground beef. USDA approved the process that Beef Products, Inc. (BPI), the primary producer of LFTB, uses to produce LFTB, and USDA continues to affirm that LFTB is a safe, nutritious beef product.

Although LFTB received negative press in previous years, the uproar starting in March 2012 has had greater impacts. USDA changed its policy on school lunches to allow schools to have a choice of whether to buy ground beef with LFTB or not. Major grocery chains announced that they were discontinuing the use of LFTB in retail ground beef. The result has been an immediate, sharp decline in 50% beef trimming prices, and expectations of higher ground beef prices. Some companies decided to voluntarily use LFTB labels on ground beef containing the product. Some food safety advocates who believe BPI was a food safety innovator have expressed concern that the barrage of negative publicity could stifle further innovation by meat companies.

The LFTB controversy demonstrates that consumers’ perceptions and understanding of modern food production can quickly affect markets and/or a company’s business. It raises policy issues about how consumers should be informed by either industry or government. Some Members of Congress have expressed strong interest in the LFTB controversy through statements and letters to USDA. Some Members have called for the immediate end of LFTB in the school lunch program, and others have asked that ground beef include labels informing consumers that LFTB is used in a beef product. Legislation also has been introduced that would require LFTB labels.



Date of Report: April 6, 2012
Number of Pages: 15
Order Number: R42473
Price: $29.95

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Expiring Farm Bill Programs Without a Budget Baseline


Jim Monke
Specialist in Agricultural Policy

The Food, Conservation, and Energy Act of 2008 (P.L. 110-246, the 2008 farm bill) authorizes most federal farm and food policies. Its authorizations generally expire at the end of FY2012, or with the 2012 crop year for the farm commodity programs. People are discussing the future of agricultural policy, and the House and Senate Agriculture Committees are preparing legislation for a possible 2012 farm bill.

The farm bill provides the mandatory funding for many farm bill programs, including the farm commodity programs and some nutrition, conservation, research, bioenergy, and rural development programs. Funding to write the next farm bill will be based on the baseline projection of the cost of these farm bill programs by the Congressional Budget Office (CBO), and on varying budgetary assumptions about whether programs will continue.

Some farm bill programs have baseline beyond the end of the 2008 farm bill, while others do not. Those with continuing baseline essentially have built-in future funding if policymakers decide the programs should continue in their current form. However, 37 programs that received mandatory funds during the 2008 farm bill are not assumed to continue from a budgetary perspective because they do not have a budgetary baseline beyond FY2012. If policymakers want to continue these programs in the next farm bill, they will need to pay for the programs with offsets.

Depending on the approach used to estimate a cost to extend the 37 programs for five years, an estimated $9 billion to $14 billion of offsets from other sources may be needed. This is nearly 3% of the $507 billion five-year CBO baseline for farm bill programs (FY2013-FY2017), or 13% of the $108 billion five-year baseline if the nutrition title is excluded. Finding this level of offsets may be a difficult task in a tight budget environment, especially when many observers believe that some of the farm bill baseline may be lost to deficit reduction.

The 37 provisions without baseline beyond FY2012 are spread among 12 of the 2008 farm bill’s 15 titles. The title with the most such provisions is the energy title (8), followed by conservation (5), nutrition (5), and horticulture and organic agriculture (5). Just two of the provisions—the agricultural disaster assistance program and the Wetlands Reserve Program, each with uncertainty about future costs—account for about 80% of the value of programs without future baseline.



Date of Report:
March 30, 2012
Number of Pages:
13
Order Number: R
41433
Price: $29.95

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Tuesday, April 10, 2012

Conservation Compliance and U.S. Farm Policy


Megan Stubbs
Analyst in Agricultural Conservation and Natural Resources Policy

The Food Security Act of 1985 (P.L. 99-198, 1985 farm bill) included a number of significant conservation provisions designed to reduce production and conserve soil and water resources. Many of the provisions remain in effect today, including the two compliance provisions—highly erodible land conservation (sodbuster) and wetland conservation (swampbuster). The two provisions, collectively referred to as conservation compliance, require that in exchange for certain U.S. Department of Agriculture (USDA) program benefits, a producer agrees to maintain a minimum level of conservation on highly erodible land and not to convert wetlands to crop production.

Conservation compliance affects most USDA benefits administered by the Farm Service Agency (FSA) and the Natural Resources Conservation Service (NRCS). These benefits can include commodity support payments, disaster payments, farm loans, and conservation program payments, to name a few. If a producer is found to be in violation of conservation compliance, then a number of penalties could be enforced. These penalties range from temporary exemptions that allow the producer time to correct the violation, to a determination that the producer is ineligible for any USDA farm payment and must pay back current and prior years’ benefits.

As Congress considers the reauthorization of farm policy through the next farm bill, issues related to conservation compliance have emerged. One of the most controversial issues has been the idea that crop insurance subsidies should be added to the list of benefits that could be lost if a producer is found to be out of compliance. Federal crop insurance subsidies were originally included as a benefit that could be denied under the compliance provisions, however, they were removed in the Federal Agricultural Improvement and Reform Act of 1996 (1996 farm bill) to increase producer flexibility, and direct payments were added. Presently, high commodity prices have resulted in few or no counter-cyclical payments, leaving conservation program participation and direct payments as the remaining major benefits that could motivate producer compliance with conservation requirements. Many environmental and conservation groups are asking Congress to consider re-tying crop insurance subsidies to compliance requirements, especially if direct payments are reduced or eliminated. Farm organizations and the crop insurance industry are generally opposed to tying crop insurance to compliance requirements, suggesting there may be a potential for reduced farmer participation in the federal crop insurance program.

The reduction in soil erosion from highly erodible land conservation continues, but at a slower pace than following enactment of the 1985 farm bill. The leveling off of erosion reductions leaves broad policy questions related to conservation compliance, including whether an acceptable level of soil erosion on cropland has been achieved; whether additional reductions could be achieved, and if so, at what cost; and how federal farm policy should encourage additional reductions in erosion. These broad policy questions, in addition to general concerns of program oversight and implementation, may influence the farm bill policy debate. Some environmental and conservation groups have asked Congress to tighten compliance requirements as one way of reducing soil erosion and preventing the conversion of wetlands. Many agricultural groups, however, prefer additional financial incentives through voluntary farm bill conservation programs as an alternative to conservation compliance.



Date of Report:
April 2, 2012
Number of Pages:
21
Order Number: R424
59
Price: $29.95

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Monday, April 2, 2012

Possible Extension or Expiration of the 2008 Farm Bill


Jim Monke
Specialist in Agricultural Policy

Megan Stubbs
Analyst in Agricultural Conservation and Natural Resources Policy

Randy Alison Aussenberg
Analyst in Social Policy


Farm bills, like many other pieces of legislation, are becoming more complicated and are taking longer to enact than in previous decades. Enactment of the 2008 farm bill was complicated by revenue provisions that involved other committees of jurisdiction, temporary extensions, and presidential vetoes.

The 2008 farm bill generally expires on September 30, 2012, or with the 2012 crop year. A potential timeline discussed by agriculture committee leadership was for the Senate Agriculture Committee to mark up a farm bill in the spring of 2012, and the House Agriculture Committee to follow suit thereafter. The House budget resolution (H.Con.Res. 112) might complicate that schedule and cause the House to act first by identifying budget cuts, although a separate farm bill might still be needed later. Some think these dynamics and election year politics may delay the farm bill.

Without a new farm bill or an extension, many discretionary programs would not appear to have statutory authority to receive appropriations in future years. However, the Government Accountability Office has said that there is no constitutional or statutory requirement that an appropriation must be preceded by an act that authorizes the appropriation.

Programs relying on mandatory funding are perhaps more at risk for discontinuation, since both their authorization and their funding depend on farm bill action. The last year of support under the 2008 farm bill’s commodity programs is the 2012 crop year. Therefore, the effective deadline for enacting a new farm bill is when the first commodity is harvested in 2013, not the fiscal year. Exceptions include dairy programs that expire with the fiscal year or on December 31, 2012.

Passage of the next farm bill also is pressured by a set of essentially mothballed provisions that date from the 1930s and 1940s. Known as “permanent law,” they would be reinstated if the current farm bill expires. The commodity support provisions of permanent law are so radically different from current policy—and inconsistent with today’s farming practices, marketing system, and international trade agreements—as well as potentially costly to the federal government that Congress is unlikely to let permanent law take effect. Some see the existence of permanent law as an assurance that the farm commodity programs will be revisited every time a farm bill expires.

For many conservation programs, program authority is often permanent but the authority to receive mandatory funding expires at the end of FY2012. Without an extension of mandatory funding, new contracts or agreements likely could not be approved. But all existing contracts and agreements (including long-term easements) would stay in force. Passing a new farm bill became less imperative for several conservation programs that were extended by the FY2012 Agriculture Appropriations Act (P.L. 112-55). It scored savings by limiting five conservation programs but protected their long-term budget baseline by extending the expiration date to 2014.

Many of the farm bill’s nutrition programs rely on annual appropriations regardless of whether they use mandatory or discretionary funds. Thus, a regular appropriation could be sufficient to continue most of the major programs’ operations if the 2008 farm bill expires. Exceptions include a farmers’ market nutrition program for seniors, and a few pilot or other small nutrition programs.

Several agricultural trade, international food aid, and rural development programs also are subject to expiration unless a new farm bill is enacted.



Date of Report: March 29, 2012
Number of Pages: 21
Order Number: R42442
Price: $29.95

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