Home Farm Policy Menu Inside The Beltway -- July '99

Three Little Funding Bills go to Market:

Two Down, One to Go? Regular Appropriations

CAFO Doings:

Nutrient Management Policy Conservation Practice Standards Nutrient Management Planning

Since our last Washington Report, the emergency supplemental appropriations bill has become law. The final bill, approved in mid- May, included the $28 million for NRCS technical assistance on CRP and WRP that SAC played a major role in securing through an amendment by Senators Harkin and Kohl, but also an additional $35 million for the same purpose for the next year. The USDA request for $109 million to make an additional $1 billion in 1999 farm loans and loan guarantees was retained. The original Senate provision for $150 million for additional emergency payments to pork producers was trimmed to $145 million in the final bill (see story below on implementation).

Now attention turns to the likelihood of a third (counting the big $6 billion one last October and the more modest $600 million just passed) emergency supplemental appropriation later this year in response to the continuing weakness in the farm economy. Senators Harkin and Dorgan have already tried to attach a $5+ billion package to the second emergency supplemental, but failed. They then tried again during subcommittee markup of the regular FY 2000 appropriations, this time with an expanded $6.5 billion package ($4 billion in AMTA payments, plus payments for dairy, hogs, peanuts, cotton), but failed again on a party- line vote. The GOP ag leadership does not want to move on additional funding until the Administration makes a formal request, so as not to get sucker-punched as they did last year. Farm and commodity groups met with White House staff last week and requested a White House request of $8 billion, which reports say was warmly received. Look for an Administration request later this summer, with congressional consideration most likely in September.

The third supplemental will most definitely include lots of extra commodity program payments, plus some disaster assistance and probably some additional farm credit money. Despite our efforts, there is so far little interest on the Hill or at USDA in adding to the mix conservation incentive money or funding for alternative marketing strategies or sustainable agriculture producer grants. While the spigot is turned on, we need to redouble our efforts and make this the focus of a major campaign on our part. Look for an alert on this in the near future -- and plan to take action!

Meanwhile, the regular, annual appropriations bill (with funding for 2000) has been perking along. As you may recall, the 1997 balanced budget bill kicks in big time on this year's spending bills, with agriculture scheduled for about a billion dollar in cuts from what is only about a $13 billion bill to begin with.

To cut right to the chase, congressional appropriators have (magically, creatively, cynically) found a way to erase the effect of those balanced budget "caps" while still pretending to be working within them. The manure will hit the fan later this summer when they get to the big bills (health and human services, etc.), but agriculture, by virtue of being one of the first bills disposed of, should be safely out of the firing range by then. The ag bill has already been approved on the House floor with total spending $150 million higher than 1999 and well over $1 billion higher than the caps allow. Senate floor action will occur this week on a bill set at the 1999 level.

The net result of all the wheeling and dealing over budget caps are bills that are boringly status quo. "Level funded" has by and large been the watchword, with substantial increases mostly -- as has been true in the past couple of years -- in the food safety and nutrition areas. There is nonetheless a bit of good news on a few of the programs that we follow closely:

• ATTRA is up $200K in both bills, to $1.5 million.
  
  
• Rural coop development grants are up from $2 million to $2.5 million in the House and almost $4 million in the Senate.
  
  
• State mediation program grants are up to $4 million in the House, though level at $2 million in the Senate.
  
  
• As a result of a House floor amendment by Rep. Marcy Kaptur the outreach program for minority farmers is up to $10 million, though level funded in the Senate at $3 million.
  
  
• The Senate bill raises rural business enterprise grants to $40.2 million, compared to $34 million in the House bill.
  
  
• And last but not least, the Senate bill would allow the Wetlands Reserve Program to enroll 180,000 acres this year, compared to level enrollment of 120,000 acres in the House bill.

We will work for the higher numbers on each of the last five items in the House-Senate conference to resolve differences.

The SARE program and nearly all other research and extension programs other than special grants (aka pork projects) were level funded. The farm bill conservation programs (other than WRP) and mandatory research programs were left in the same sad state as last year's bill: nothing for Conservation Farm Option, Fund for Rural America, Initiative for Future Agriculture and Food Systems; $26 million cut in EQIP to $174 million; and no new funding for the Farmland Protection or Wildlife Habitat Incentives programs.

So, for these kinds of programs, our attention now turns to the probably forthcoming mega-billion supplemental appropriations bill (see above story). Unlike the regular appropriations bill, the supplemental will likely be considered "emergency" spending and therefore not subject to budget caps.

Since our last report, a major new crop insurance bill has landed in the hopper, with another waiting in the wings. Senators Cochran (R-MS) and Lincoln (D-AR) introduced S. 1108 with 7 other southern Senators as the southern entry into the crop insurance reform sweepstakes. The bill shares many things in common with the Kerrey-Roberts bill (see the last issue of the Washington Report), but also addresses regional concerns about double cropping, rating methods, and the like. Several new features include:

• A pilot project program for "low-risk" producers that would refund part of the premium if a loss was incurred.
  
  
• Authority for insuring based on cost of production rather than expected market price.
  
  
• Premium discounts for producers with 5 or more years with no claims or producers who implement "innovative farming management practices" that reduce risk.
  
  
• Authority to improve assigned yields for new farmers with only one or two years of production history, for farmers who buy or rent new land, and for farmers trying a crop not previously grown.

In an announcement just as we go to press, Senator Lugar (Senate Ag Committee chair) has released the outlines of a bill he intends to introduce next week. It takes a very different approach than any of the other proposals to date.

The Lugar bill would provide AMTA (Freedom to Farm) bonus payments (roughly an additional 1/3 payment) in 2000-2002 if producers either purchase catastrophic coverage, use futures, options, or forward contracts, or attend a risk management seminar. This main feature of the Lugar bill would spend most of the $6 billion set-aside for crop insurance reform without actually reforming the crop insurance program.

The bill would also provide premium discounts to farmers not enrolled in AMTA and would make higher levels of insurance coverage available in areas - - such as Indiana with a history of low losses. We will need to await further details, but it appears this may be an effort to put most of the new money for set-aside for crop insurance into a temporary program that phases out in 2002. This places Lugar at odds with the conventional approach of revving up the insurance programs as the commodity programs decline.

The timeline and direction of the crop insurance legislation was blurry to begin with, and now further complicated by the surprise Lugar move. The House Ag Committee originally planned to mark up in mid-June, but staff is still working on a bill to proceed from. Rumor has it they are bogged down on many of the details. At best, it looks like mark up would start sometime after the July 4th recess week. The Senate Committee is unlikely to proceed much further unless and until the House starts moving a bill through the process, though they still say they plan to pass out a bill before the August recess. The Administration for its part is sticking with its broad proposal outline and is not putting forth a detailed legislative proposal.

With leadership from SAC, a letter to both Ag Committees on key points of concern for sustainable and organic agriculture community is being sent up to the Hill the week of June 21. The letter, signed onto by 20+ groups (including 10 from MSAWG), addresses whole farm coverage, conservation compliance, targeting, cost, and related issues. Copies available on request.

MSAWG/SAC, in conjunction with the National Campaign for Sustainable Agriculture, the Time to Act Campaign, and the Consortium for Sustainable Agriculture Research and Education, organized a successful one day fly-in to press the case for better funding requests in the President's budget to be released next February for our priority programs.

Meetings were held with the Under Secretaries for Rural Development, Marketing, and Research. The delegation included farmers from NM, WI, VA, and MD, 2 Time to Act commissioners, 2 SARE regional coordinators, plus Ferd and Margaret.

Follow-up activities are underway. One possibility would be a joint marketing-rural development initiative for sustainable agriculture. A key concern on the research side is whether proposals for new programs for small farms and for organic farming are included as separate "new starts" or are incorporated into SARE. Currently, USDA leans toward proposing new programs, which in this era of tight budget caps are extremely difficult to launch.

Action has been hot and heavy on mandatory price reporting in reaction to the outcry around the country and newly adopted state laws. Negotiations among Senate Ag Committee, USDA, livestock association, and industry staff are reportedly fairly far along.

As we go to press, staff, farmers, and state legislators are here in town to press their case for a stronger deal. Representatives are in town from CRA, LSP, and key state legislators who've pushed the issue back home are meeting right now with Senators, USDA, and other key players to push for strong, meaningful reporting in livestock markets. We will provide a fuller report of the emerging legislation in the next issue.

Near death experiences (but not nearly near enough…) for the National Cattlemen's Beef Association (NCBA) and National Pork Producers (NPPC) earlier this month led both groups to flip-flop on the issue of mandatory price reporting. Though they're now "for" it, their proposals on the issue leave quite a lot to be desired.

The NCBA rolled out what they describe as a packer and producer plan for reporting of prices meat packers pay for beef cattle. The proposed legislation would require packers to report to the USDA twice a day on the sales volumes and cash prices paid for cattle, boxed beef, and beef for export. Packers would report once every week on prices paid under contract and for packer-owned livestock. Price reports would break down by weight and grade and include information on discounts. Reporting would cover both domestic and imported beef.

USDA would then issue compilation reports three times a day, and summarize the data weekly. They would also have to collect and disseminate information on retail sales and prices.

The text of the proposal is available on the web at hill.beef.org/catmak/llopr.htm

Secretary Glickman also backed the idea of mandatory reporting in testimony before the Senate Ag Committee, touting an Administration proposal that would grant USDA authority to set reporting requirements through the rulemaking process. A witness list from that hearing is available at the Senate Ag Committee website www.senate.gov/~agriculture/wit99526.htm, and links to witness testimony should become available there soon.

The NPPC also announced a preliminary agreement with 12 packers on price reporting for hogs and pork, which would require daily price data on hog purchases and prices, including contract and packer-owned/sold animals, and slaughter volume. The Ag Marketing Service would then publish these data, in aggregate form. According to the NPPC, the packers still have not agreed to report premiums paid, some record keeping requirements, and producer disqualification from purchase contract requirements.

Both NPPC and NCBA were violently opposed to mandatory reporting until very recently, so their deathbed conversions bear extremely close scrutiny. Both also seem to have over-sold the degree of packer support their respective proposals command.

As part of the recently-passed emergency supplemental bill, USDA was given $145 million to provide relief to pork producers. The Department is about to release the terms under which this aid will be made available. A small portion will be used to purchase pork for nutrition programs. The rest will go out as payments under the Small Hog Operations Payment (SHOP) program, the first installment of which was released earlier this year using existing funds.

The terms of this second installment will be the same but for one exception. Like SHOP 1, contract producers are not eligible, nor are those operations with more than $2.5 million in sales. Also like SHOP 1, payments will be made on up to 500 hogs marketed between July and December of 1998. The new twist is that producers are eligible if they marketed no more than 2500 hogs in the last 6 months of 1998, rather than just 1,000. Combining SHOP 1 and 2, all producers who fit within the eligibility criteria will receive $10/hog, or $5,000 if they sold as many as the maximum 500 hogs.

Approximately 85 individuals and organizations submitted comments in response to the CSREES Proposed Rule requiring land grant institutions to establish procedures for stakeholder input. A large number of family farmers from the Midwest and sustainable agriculture organizations from across the country wrote in to lambaste the Proposed Rule as inadequate due to the absence of specific performance indicators. CSREES' original proposal simply required institutions receiving formula funding to prepare an annual report on their efforts to facilitate broad stakeholder participation.

Comments opposing the Proposed Rule consistently cited the need for specific criteria to ensure fair, unbiased, and equal access to all stakeholders. Thanks to all of you who responded to the action alert. The USDA's Office of Inspector General echoed our concerns in a comment which directed CSREES to incorporate specific performance indicators as required by the statute.

For their part, the Land Grants were relatively quiet; only three schools (University of Illinois, Oregon State, and Iowa State) responded, and each expressed concern that the Proposed Rule was excessively demanding. In its comments, Iowa State stated "We endorse principles, but believe that following these principles should be encouraged, not specifically spelled out in the rules." Illinois felt that the definition of stakeholder was too broad, and would enable interest groups to intervene in program planning by demanding their "right" to participate. The Oregon State Extension Service felt that the extensive review and justification it conducts for state and local government should be sufficient to satisfy CSREES.

From what we have gathered so far from USDA/REE, they intend to promulgate the final rule with no changes. We are therefore sending a letter of protest to the USDA leadership, and will keep you posted on developments.

On June 16, 1999, NRCS Chief Pearlie Reed met with numerous representatives of environmental and sustainable agricultural organizations for a roundtable discussion dominated by the decision of South Dakota State Conservationist Dean Fisher to adopt the mapping conventions and wetland delineation standards used by the NRCS in Minnesota. These standards govern the application of the Swampbuster program and, under a memorandum of understanding with the EPA and the Army Corps of Engineers, are also used by those agencies in administering the Clean Water Act Section 404 wetland program. The decision, if it stands, will substantially weaken wetlands protection and could be extended to all Northern Plains states.

Participants roundly criticized NRCS, both for the process used by the S.D. State Conservationist in making the decision and for the substance of the decision. The State Conservationist apparently made the move without consulting the S.D. State Technical Committee, U.S. Fish and Wildlife Service, or environmental advocates, but did consult parties that would benefit from a weakening of the wetland delineation standards and the opportunity to drain additional land.

Dean Fisher responded that the changes were made to conform with the Swampbuster statute and regulations and that the delineations would not result in additional wetland losses in South Dakota. He defended the decision not to consult with environmental advocates based on his pre-determination that they would not agree to the change.

Public Employees for Environmental Responsibility, a whistleblower organization, has issued detailed memoranda which address this South Dakota issue and other deficiencies of the NRCS and EPA program for wetland delineations. Contact Martha Noble at the SAC offices, if you would like copies of these memoranda or a more detailed briefing on this issue.

The last few months have been active ones for the issue of Animal Feeding Operations (AFOs) in D.C., as the USDA and the EPA start implementing the Unified National Strategy for Animal Feeding Operations (UNSAFO) released March 9, 1999. The SAC office has been involved with a coordinated effort of the Clean Water Network Feedlot Work Group, which includes many SAC/MSAWG members, in trying to ensure that the AFO Strategy is implemented in a manner to adequately address the environmental and public health problems arising from CAFO operations. This report briefly addresses a few of the major activities of the last month.

In the AFO Strategy, the NRCS indicated that it would finalize a nutrient management policy, particularly with regard to developing a phosphorus standard for the application of animal waste, prepare a guidance for the preparation of Comprehensive Nutrient Management Plans (CMNPs) for AFOs operations, and revise its Conservation Practice Standards relevant to AFOs.

In early May, the NRCS finalized its nutrient management policy and prepared a guidance for the State Conservationists in implementing the policy. A draft version of this guidance was released for review to a few organizations within the D.C. beltway, including the SAC office which was given less than 24 hours to read the draft and try to solicit comment from SAC members.

The draft policy guidance indicated that each NRCS State Conservationist would be responsible for establishing a phosphorus standard for animal waste application for the state. We have criticized both the lack of public review of the guidance and the lack of concrete guidelines provided to State Conservationists for establishing the phosphorus application standard.

We are also concerned that the guidance pays too little attention to substances, such as heavy metals and pathogenic microorganisms, that may be present in animal wastes. MSAWG members at the state level should monitor actions by the State Conservationists in implementing the nutrient management policy. The State Technical Committees should be taking up these issues this summer.

We are also concerned that NRCS is going forward with revision of its Conservation Practice Standards relevant to AFOs without sufficient review of the growing body of evidence of the problems arising from the use of open-air waste lagoons, large-scale sprayfields and other components currently in use by large-scale concentrated animal feeding operations.

On June 8, 1999, the SAC office submitted comments prepared primarily by Loni Kemp of the Minnesota Project on three NRCS proposed Conservation Practice Standards related to AFOs, including standards for waste treatment lagoons, waste storage facilities, and pond liners. Our comments objected to the lax provisions in the standards, and to the failure of the standards to explicitly consider the size and amount of waste generate by an AFO-CAFO. Copies are available on request.

Our concern about implementation of the AFO Strategy has been heightened by briefings provided to Sierra Club and Clean Water Network activists, including many SAC- MSAWG members, who gathered in D.C. for a national meeting from June 11-15.

In his presentation, Obie Ashford, one of the NRCS team leaders for the preparation of an NRCS Guidance on Comprehensive Nutrient Management Plans, indicated that the guidance would cover waste treatment lagoons and other waste handling and storage facilities, as well as land application of animal waste, but would not include any mandatory measures for dealing with odors and air emissions.

Moreover, the guidance would leave setback requirements and other siting issues to the states. The USDA CNMP development process becomes even more critically important, given EPA's intention to incorporate the NRCS CNMPs into Clean Water Act NPDES permits for CAFOs with little or no revisions.

The SAC office has arranged to meet with NRCS headquarters staff. We will urge the NRCS to release the draft Guidance for the CNMP for general public review, before the agency becomes wedded to inadequate measures for dealing with CAFO pollution. We will also join in efforts to remind the EPA that it has an independent duty under the Clean Water Act, and other environmental protection statutes, to provide for adequate regulation of CAFOs.

The National Organic Standards Board met in Washington between June 8 through 10. Keith Jones of the National Organic Program indicated that the next draft of the Proposed Rule is running behind schedule, but he hoped to see it published by October. Keith has prioritized getting informal pre-clearance within USDA and at OMB to keep the review time to a minimum.

The NOSB discussed many of the difficult issues related to standards which the have proven difficult to resolve: the use of synthetic parasiticides in certified livestock, whether to require certification of retailers, and how to handle and pay for accreditation of certifiers. Officials from Alaska attended the meeting and presented their case for the certification of wild harvested seafood, but there appear to be few votes among the Board or the organic community to go in this direction. The Board also began a review of potential standards for organic aquaculture operations.

The Board made no final recommendations on standards, but did discuss several important procedural issues. Representatives of the Organic Trade Association presented their recently completed draft of the American Organic Standards which are meant to reflect industry consensus and provide a comprehensive benchmark when the next proposed rule is released. The OTA welcomes public comment on its proposed standards, which can be downloaded at www.ota.com.

The NOSB has also begun looking at candidates to fill four seats soon to be vacant. Kathleen Merrigan resigned her seat at the end of the meeting (she is taking over as Administrator of the Agricultural Marketing Service), and Fred Kirschenmann, Margaret Wittenberg, and Rod Crossley will leave at the end of 1999. The Board sees replacing these individuals as extremely important for building upon the momentum achieved following the crash and burn of the first Proposed Rule. The seats opening up on the Board are designated for farmer, retailer, processor, and environmental representatives. The Department should soon be announcing the vacancies in the Federal Register, and will solicit nominations for successors.

Two notable bookmarks for you Cyberians:

• The Sustainable America website has moved to a new address at www.sustainable-usa.org and includes information from the recent "National Town Meeting on Sustainable Development."
  
  
• Also, the President's Commission on Sustainable Development has set up shop at www.whitehouse.gov/PCSD

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Home Farm Policy Menu Inside The Beltway -- July '99