Thursday June 21 Ag News - Farm Bill Passes Senate...

Johanns Applauds Senate Passage of Farm Bill

Sen. Mike Johanns (R-Neb.) today applauded the Senate’s passage of the Agriculture Reform, Food and Jobs Act of 2012 - known as the farm bill. The bill reduces government spending by approximately $23 billion, while providing risk management tools to agricultural producers, and significantly reforms agriculture policy by taking a more market-oriented approach.

“This is a reform-minded, market-oriented farm bill that represents a positive step in our nation’s ag policy,” Johanns said. “Given our daunting budget situation, it is appropriate this bill saves more than $23 billion - a step in the right direction in dealing with our debt – while helping to mitigate the risks producers face.

“I will continue to be involved as the farm bill advances through Congress and hopefully to the President’s desk for his signature very soon.”

The farm bill passed with a bipartisan vote of 64-35.

This bipartisan bill will reduce the deficit by more than $23 billion because of changes to every title and the elimination of nearly 100 federal programs overall. It shifts farm policy further away from dependence on income support and instead focuses on risk management.

The bill saves $15 billion from commodity crop support by eliminating four programs, including direct payments; countercyclical payments; the Average Crop Revenue Election Program, called ACRE; and the Supplemental Revenue Assistance Program, called SURE.

The bill tightens payment limits and ensures those who receive government assistance are actively engaged in farming.

Johanns also championed – both as Secretary of Agriculture and during the committee process – streamlining and simplifying conservation programs, which the bill does by consolidating 23 conservation programs into 13. The improvements reduce costs while making the programs more farmer friendly.



Statement From Agriculture Secretary Tom Vilsack on U.S. Senate Approval of the Agriculture Reform, Food and Jobs Act

Agriculture Secretary Tom Vilsack made the following statement on the U.S. Senate's approval of the Agriculture Reform, Food and Jobs Act:

"I’m very pleased that the Senate acted in bipartisan spirit today to approve the Agriculture Reform, Food and Jobs Act. I am grateful for the Senate’s progress toward providing a reformed safety net for producers in times of need, supporting agricultural research and trade promotion, honoring World Trade Organization commitments, furthering the bio-based economy, conserving our natural resources, strengthening local and regional food systems, and promoting job growth in rural America.  As the legislative process moves forward, the Administration will continue to seek policy solutions and savings consistent with the President’s Budget, and we are hopeful that the House of Representatives will produce a bill with those same goals in mind.   Swift action is needed so that American farmers and ranchers and our rural communities have the certainty they need to continue strengthening the rural and national economy."



ASA Applauds Senate Passage of 2012 Farm Bill

The American Soybean Association (ASA) today applauded Senate passage of its 2012 Farm Bill.

"ASA is extremely pleased with the Senate's legislation, which would establish an effective risk management program for soybean producers that complements crop insurance, consolidate conservation programs, and have agriculture do its fair share to help address our nation's fiscal situation by reducing government spending on agriculture by $23 billion," said ASA President Steve Wellman, a soybean farmer from Syracuse, Neb. "We look forward to working with the House Agriculture Committee as it finalizes its version of this legislation, so the 2012 Farm Bill can be completed this year."

Wellman's comments followed final passage of the Senate bill on a 64-35 vote. Major provisions supported by ASA include the Agriculture Risk Coverage (ARC) program under which revenue losses exceeding 11 percent will be partially offset at either the farm or county level. ASA also supported the consolidation of conservation programs for environmentally sensitive and working lands, reduction of Conservation Reserve Program acres from 32 to 25 million acres, and reauthorization and funding of the Market Access Program (MAP) and Foreign Market Development (FMD) program.   

In its review of the farm bill, the Senate considered a total of 73 amendments, including several that ASA strongly opposed and that were defeated:
-    An amendment by Sen. Jim DeMint (R-S.C.) that would have made national check-off programs voluntary lost on a vote of 20-79.
-    An amendment by Sen. Tom Coburn (R-Okla.) that would have reduced annual funding for MAP from $200 to $160 million lost on a vote of 30-69.
-    An amendment by Sen. Bernard Sanders (I-Vt.) to authorize states to require mandatory labeling of biotech food products lost on a vote of 26-73.

"While ASA disagrees with some of the amendments that were approved on the floor of the Senate, on the whole ASA believes the Senate's farm bill will help farmers manage risk, conserve natural resources and develop foreign markets," Wellman stated. "Additionally, maintaining the viability of the crop insurance program as an effective risk management tool is a top priority for ASA and soybean farmers. ASA will continue to work with the Senate and House Agriculture Committees to ensure that the viability of the crop insurance program as a risk management tool is not weakened." 

Wellman concluded, "ASA thanks Senate Agriculture Committee Chair Debbie Stabenow and Ranking Member Pat Roberts for their leadership in guiding the farm bill through the Senate. We urge the House to move forward so the 2012 Farm Bill process can be completed before current program authorities expire at the end of September."



NCGA Congratulates Senate on Farm Bill Passage, Urges House Action

The National Corn Growers Association today congratulates the Senate on passage of Agriculture Reform, Food and Jobs Act (2012 farm bill).  The legislation was agreed to by a vote of 64-35. NCGA also urges the House of Representatives to take action quickly.

“America’s farmers greatly appreciate the leadership and cooperative work by the Senate to pass the 2012 farm bill in a timely manner,” NCGA President Garry Niemeyer said.  “We would also like to thank Senators Stabenow and Roberts for their bipartisan efforts throughout the process. We have been calling on Congress to pass the new legislation before the current law expires on September 30. NCGA is pleased to see this significant hurdle has been overcome.”

NCGA has advocated for an affordable crop insurance program as well as a farm program that would provide risk management tools to growers when they are facing a loss beyond their control.  NCGA has also encouraged farm policy reforms that will be responsive to taxpayers and effective in helping farms remain viable and productive.

“Our focus now turns to the House Agriculture Committee with hopes that they will schedule a markup of their version of the farm bill for immediately following the July 4th recess,” Niemeyer said.  “We look forward to continuing our work with agriculture advocates to pass a new common sense, reformed 2012 farm bill before Congress recesses in August.”



NCGA Disappointed in Conservation Compliance for Crop Insurance Amendment Passage

National Corn Growers Association President Garry Niemeyer released the following statement in response to the Senate passing Chambliss amendment #2438:

“The National Corn Growers Association is very disappointed to see passage of Senator Saxby Chambliss’ conservation compliance for crop insurance amendment in the 2012 farm bill.  Our members have spent a significant amount of time discussing this issue and feel this addition to the farm bill would have a negative impact toward America’s farmers.  NCGA’s official policy states we oppose the coupling of conservation compliance to eligibility for federal crop insurance.”



Statement from NCBA Vice President of Government Affairs Colin Woodall Regarding Senate Passage of 2012 Farm Bill

The U.S. Senate in a 64 to 35 vote passed the 2012 Farm Bill (S. 3240) today, June 21, 2012. The National Cattlemen’s Beef Association (NCBA) commended the passage of the legislation. NCBA Vice President of Government Affairs Colin Woodall issued the following statement.

“Like many of us who have a vested interest in this legislation (S. 3240), I was pleasantly surprised by the bipartisan efforts made to move this bill through the Senate very efficiently and without much partisan rhetoric. Both Chairwoman Debbie Stabenow (D-Mich.) and Minority Leader Pat Roberts (R-Kan.) should be commended for their leadership on this very important piece of legislation. Their transparency and willingness to listen to all vested interests was very refreshing for the National Cattlemen’s Beef Association and other like-minded organizations. NCBA stands firm in our commitment to support this legislation.

“Although the amendment process was certainly concerning in its early stages, all is well for cattlemen and women thanks to their outspoken grassroots advocacy. This legislation, as written, incorporates all NCBA priorities. Bottom-line, there is no livestock title, conversation programs – specifically EQIP (Environmental Quality Incentives Program) –  are maintained and the research title is sustained. All this is done with more than $20 billion in savings to the American taxpayer.

“We support this legislation and will continue working with the House to ensure amendments that would interject the federal government into production agriculture are left out of the legislation or soundly defeated. As we focus our efforts on working with the House Committee on Agriculture to ensure another version of this legislation that is positive for cattlemen, I must stress the importance of family farmers and ranchers being engaged in this process.”



U.S. Senate Debates Farm Bill MAP Funding Survives Challenge

The U.S. Grains Council today expressed thanks to the National Corn Growers Association, the National Sorghum Producers, the National Barley Growers Association, and other allied organizations for their successful support of the Market Access Program (MAP) during Senate debate on the pending Farm Bill.

The 2012 Farm Bill (S. 3240) is currently under consideration in the Senate and is drawing heated debate.  Among the many amendments was one that called for slashing MAP funding by 20 percent ($40 million annually). The amendment would also have imposed arbitrary limitations on which international marketing activities could utilize the remaining funds. Thanks to effective advocacy by a wide range of groups supportive of U.S. export promotion efforts, the amendment was defeated today by a vote of 30 ayes to 69 nays.

“MAP funding in conjunction with other smaller funding programs has been an important contributor to the success of U.S. coarse grain and DDGS exports worldwide. U.S. agriculture trade is one of the few U.S. trade areas that maintains a surplus. Without MAP funding, U.S. grains exports will face a much tougher uphill battle,” said Dr. Wendell Shauman, USGC chairman.

Trade enhances global prosperity, expands U.S. exports, and promotes jobs and economic growth at home.  Many U.S. companies, trade associations, and federal, state, and local governments work to increase opportunities for U.S. exporters.  Some of these efforts promote the sale of particular products or brands. Others are broader in scope and promote entire industry sectors or a “made in the USA” brand.

MAP is a longstanding program through which the Foreign Agricultural Service has partnered with “co-operator” organizations to work jointly on projects of mutual interest.  The U.S. Grains Council has utilized MAP funding for a variety of programs that expand and defend export markets for U.S. corn, sorghum, barley, distillers dried grains with solubles (DDGS), and other value added products.  The Council’s current programs encompass more than 50 countries.

-    Capacity building programs assist foreign dairy, cattle, swine, and poultry producers in modernizing their operations, expanding local demand for their products, and thus increasing demand for U.S. sourced feed grains and DDGS.
-    Trade servicing programs assist foreign importers in navigating the complexities of international financial, regulatory, and trading systems.
-    The Council also works aggressively on trade policy questions including international acceptance of new production technologies, implementation of trade agreements to reduce tariff and other barriers to U.S. exports, and fair enforcement of existing trade agreements to discourage unfair foreign subsidies and create a more level playing field. 

Global corn production continues to rise as technology drives yield increases and new competitors such as Brazil, Argentina, and the Ukraine ramp up production for export.  Global grains markets are intensely competitive.  MAP is an important tool in assisting U.S. producers and agribusinesses in developing and defending export markets.  

Agriculture is an often-underappreciated hero of the U.S. international trade balance, one of the few sectors in which the U.S. consistently earns a major trade surplus.  As the global middle class continues to grow, as world food demand increases rapidly, and as international export competition intensifies, the importance of agricultural export promotion will continue to grow.  The U.S. Grains Council is committed to defending and increasing U.S. market share, and the Council is appreciative of the help of allied organizations in preserving essential market development tools like MAP.



Senate Farm Passes Farm Bill with Crucial Dairy Policy Reforms

The dairy policy reforms that have been under development for three years were included in the 2012 Farm Bill approved by the Senate Thursday by a vote of 64-35.

The National Milk Producers Federation hailed the bill’s passage as a “huge and historic step toward making a once-in-a-generation improvement in the safety net for America’s dairy farmers,” according to Jerry Kozak, President and CEO of NMPF.

“Despite a variety of political, economic and institutional challenges, the leaders of the Senate, and in particular, the leaders of the Senate Agriculture Committee, Sens. Stabenow and Roberts, have delivered on their promise to produce better farm and food policy.  We appreciate their hard work in the past months, and will work in turn to ensure the House produces a similar bill in the coming months,” Kozak said.

Kozak said the dairy title contains a better safety net for farmers in the form of the Dairy Production Margin Protection Program, which offers them a basic level of coverage against low margins, as well as a supplemental insurance plan offering higher levels of protection jointly funded by the government and participating farmers. Those farmers choosing to enroll in the margin program will also be subject to a Market Stabilization Program that addresses the imbalance between supply and demand when farm-level margins are poor.

During the consideration of more than 70 amendments to the bill, there was no effort to significantly alter the dairy title, NMPF said.  “Although it was necessary to work to defeat several unacceptable amendments, the fundamental package of dairy policy reforms supported by NMPF remained unchanged throughout the Senate debate,” said Kozak.  “We are very pleased at the progress made during this vital step in the Farm Bill process, but we also know that much work lies ahead,” he added. 

With Senate passage of a 2012 Farm Bill, the focus now shifts to the House of Representatives, where the House Agriculture Committee is expected to begin marking up its own version July 11th.

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Johanns to Keep Pushing EPA for Transparency on Surveillance

U.S. Sen. Mike Johanns (R-Neb.) today vowed to continue pressing for information on the Environmental Protection Agency's (EPA) use of aerial surveillance of agricultural operations after his amendment to the farm bill stopping this program received the support of a bipartisan majority of Senators. Although the amendment didn't receive the 60 votes needed to pass, it earned the support of 56 Senators, including 10 Democrats.

"EPA has been deliberately ambiguous when it comes to the size and scope of this program," Johanns said. "The Senate today sent the message that Americans deserve accountability and transparency from their government, and with regard to its aerial surveillance program, the agency has provided neither. EPA must be honest about this program or cease it entirely, and I will continue pressing for this information on behalf of all concerned farmers and ranchers."

The entire Nebraska delegation sent two letters to EPA Administrator Lisa Jackson requesting a full explanation of the agency's surveillance program. Administrator Jackson has refused to respond, instead delegating the response to a regional administrator who has been unable or unwilling to offer insight into the full scope of the program.

Neither delegation letter, nor Johanns, has suggested EPA uses drones for its surveillance program, as some news outlets have reported.



FSA Offers Low Interest Farm Storage Facility Loans

Nebraska Farm Service Agency (FSA) announced that producers considering expanding their farm storage should look into the FSA Farm Storage Facility Loan (FSFL) Program.   FSA administers the program on behalf of the USDA Commodity Credit Corporation (CCC).

“Now that the 2012 crop is planted and growing, farmers may want to consider using USDA’s Farm Service Agency facility loan program to build or improve their farm storage and handling facilities,” noted FSA State Director Dan Steinkruger.  “The facility loan program offers excellent terms and interest rates for those farmers wanting to make improvements to their farm operations.”

The FSFL program provides low-interest financing for producers of eligible commodities to build or upgrade farm storage and handling facilities.  The maximum loan amount is $500,000.  Participants are required to provide a down payment of 15 percent, with CCC providing a loan for the remaining 85 percent of the net cost of the eligible storage facility and permanent drying and handling equipment.  Loan terms of seven, 10 or 12 years are available depending on the amount of the loan.  Interest rates for each loan term may be different and are based on the rate which CCC borrows from the Treasury Department.  Seven year loans approved in June 2012 will have an interest rate of 1.25 percent.

The following commodities are eligible for farm storage facility loans:
·    Corn, grain sorghum, rice, soybeans, oats, peanuts, wheat, barley or minor oilseeds harvested as whole grain
·    Corn, grain sorghum, wheat, oats or barley harvested as other-than-whole grain
·    Pulse crops – lentils, dry beans, small chickpeas and dry peas
·    Hay
·    Renewable biomass
·    Fruits (including nuts) and vegetables – cold storage facilities
·    Honey

Applications can be obtained from the local FSA office.  A facility loan must be approved before any site preparation or construction can begin.  There is a $100 nonrefundable application fee per borrower.

Steinkruger added, “With the strong agriculture economy, building farm facilities compliments our ethanol industries, aids our international export policies and strengthens our overall economy.  Farmers with questions on facility loans should contact their local FSA office.



FSA-CCC Switching to Over the Counter Channel

FSA/CCC is moving toward OTCnet, an electronic method for processing customer check payments.  When a check is submitted for payment either in person or through the mail, the check will be converted into an Electronic Funds Transfer (EFT).  The funds will be debited from the producer’s account, usually within 24 hours of receipt.  Please see the U.S. Department of Treasury legal notices posted in the Service Center or visit the U.S. Department of Treasury Internet site at http://fms.treas.gov/otcnet/legal.html for detailed information.

What is OTCnet?
OTCnet is a web-based online application process for converting paper checks presented to FSA into electronic debits to the producer’s bank account.  It presents many benefits, such as reducing lost/misplaced checks and paper handling.  This improves customer relations, speeds the check clearing process, and reduces the potential for human error.

How will my check be handled?
The check will be scanned into the system and voided.  The customer will not receive the check back from FSA.  FSA will hold checks for up to 14 calendar days to ensure that the item was successfully processed, and then FSA will shred the check.

How quickly will funds be transferred from my account?
The transfer of funds from your account could occur within 24 hours.  Therefore, you should be sure that you have sufficient funds in your account to process the transaction.  If you do not have sufficient funds, we may initiate the transaction again.

How will this transaction appear on my account statement?
The transfer of funds will be reflected on your account statement.  The transaction may be recorded in a different place on your statement than where your checks normally appear, such as under “other withdrawals” or “other transactions”.

What are my rights if there is a problem with the transaction?
You have protections under Federal law for an unauthorized electronic fund transfer from your account.  You should contact your financial institution immediately if you believe that the transaction reported on your account statement was not properly authorized or is otherwise incorrect. 



Gas, Diesel Prices Still Going Down

The U.S. average retail price of regular gasoline decreased 4 cents this week to $3.53 per gallon, 12 cents per gallon lower than last year at this time. The national average price has now fallen nearly 41 cents since April 2.

Prices fell in all regions except the Midwest for the second consecutive week. The Midwest regional average price was up two cents to $3.56 per gallon, and is more expensive than the National average for the first time since September 2011. The West Coast average price dropped below the $4 mark for the first time since February 20, 2012, seeing the largest decline in the Nation, at 13 cents, to $3.96 per gallon. The East Coast price dropped almost five cents to $3.40 per gallon, while gasoline on the Gulf Coast fell about four cents to $3.27 per gallon. Rounding out the regions, the Rocky Mountain price declined about two cents to $3.69 per gallon.

The national average diesel fuel price decreased five cents to $3.73 per gallon, 22 cents per gallon lower than last year at this time. This marks the tenth consecutive week that the national average has fallen, and the ninth week that prices have declined in all regions.

The West Coast saw the largest decrease for the fourth consecutive week, falling nine cents to $3.90 per gallon. The East Coast price dropped five cents to $3.77 per gallon. On the Gulf Coast, the average diesel price decreased over 4 cents to $3.65 per gallon. The Midwest and Rocky Mountain region prices both declined 4 cents to $3.66 and $3.83 per gallon, respectively.



U.S. Chilled Pork Gets Celebrity Treatment in South Korea

The popularity of celebrity chefs and TV cooking programs isn’t unique to the United States. South Korean consumers are glued to their televisions to watch their favorite cooking gurus and learn the latest in trendy cooking techniques and recipes.

To capitalize on the growing craze, USMEF is partnering with celebrity chef Shin Hyo Seob, a judge on the popular Chef King television program, to promote U.S. chilled pork and encourage year-round consumption.

Frozen pork in Korea is typically considered a lower-quality product, so USMEF is working with chef Shin as part of a multiphase campaign to raise the awareness of chilled high-quality U.S. pork, using Shin and other Korean meat industry professionals as spokespersons. Funding for components of the campaign is provided by the USDA Market Access Program, the Pork Checkoff and the Illinois Soybean Association.

Chef Shin is the model in an ad campaign running through the balance of 2012 that shows four different U.S. chilled pork cuts – belly, collar butt, skirt meat and jowls – with comments from chef Shin saying he enjoys using U.S. pork for his dishes because it is chilled and it makes every dish he prepares better.

The ads, which highlight the delicious flavor of U.S. pork, are displayed in five subway stations in Seoul. The Seoul subway serves more than seven million commuters daily.

“Currently, among major Korean retailers, only Top Mart and Costco are selling U.S. pork all year round while Lotte Mart, Homeplus and E-Mart sell it on a spot basis,” said Jihae Yang, USMEF-Korea director. “Our goal is both to raise awareness of American pork and to associate it with leading chefs who choose only the best products for their dishes.”

In a trade magazine ad running this summer and fall targeted toward restaurant developers, USMEF is spotlighting restaurants that are successfully featuring U.S. pork on their menus. Owners or managers of those establishments are quoted in the ads explaining why they choose U.S. pork.

Chef Shin also loaned his voice to a series of radio ads running throughout the summer – the peak pork consumption period in Korea – on why consumers should choose U.S. pork for their dishes.

Yet another element of the campaign is a service that USMEF is offering to meat distribution companies. USMEF is providing a free professional and highly decorative truck wrapping for participating companies with images that depict chilled U.S. pork and highlight the fact that U.S. pork is the No. 1 imported pork in Korea.

“So far we have 24 trucks wrapped with the USMEF pork messaging and another seven with pork on one side and beef on the other,” said Yang. “By the end of the year our goal is to have 50 trucks driving every day through the streets of Seoul, delivering a constant reminder of the quality of American pork.”

The Korean pork industry was severely damaged last year by foot-and-mouth disease as it was forced to cull more than 3 million hogs – more than a third of the domestic herd. However, the industry is rapidly rebounding, posing challenges for all imported pork. At the same time, U.S. pork continues to be the leading imported pork, holding a 32 percent share when measured by volume and 30.6 percent by value.

Through the first four months of 2012, U.S. pork exports to Korea are down in both volume and value, but the country remains the No. 5 market for American pork exports, buying 67,061 metric tons (147.8 million pounds) of product valued at $192.7 million.

Since market conditions in Korea have changed significantly since last year, it is difficult to compare 2011 to 2012. It is worth noting that U.S. pork export volume to Korea for January through April of this year remains 38 percent above 2008 levels, which was the next-highest year on record, and export value has more than doubled. In addition, the Korea-U.S. Free Trade Agreement just took effect in mid-March, so the U.S. pork industry should begin to see benefits of that agreement in the months and years ahead.



Farm Bureau says Increased Trade with Russia Will Benefit U.S. Farmers

Timely congressional approval of permanent normal trade relations status for Russia will benefit U.S. farmers and ranchers, the American Farm Bureau Federation told a House Committee.

Wayne Wood, president of Michigan Farm Bureau, testified on behalf of AFBF before the House Committee on Ways and Means.

"PNTR makes permanent the trade status the U.S. has extended to Russia on an annual basis since 1992," Wood said. "It recognizes Russia's joining the World Trade Organization, which will provide our farmers and ranchers with more certain and predictable market access."

Russia's commitment to adhering to WTO provisions on sanitary and phytosanitary measures in particular will benefit U.S. farmers and ranchers because this will limit the country's ability to impose arbitrary measures that have impeded trade in the past.

In his testimony, Wood explained that exports of U.S. farm goods to Russia are likely to increase substantially following congressional approval of PNTR and the country's accession to the WTO. U.S. sales of beef, poultry, pork, apples, cheeses, soybeans and soybean products are all expected to grow due to improved market access.



STATEMENT OF ADMINISTRATION POLICY
H.R. 5973 – Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2013

The Administration strongly opposes House passage of H.R. 5973, making appropriations for Agriculture, Rural Development, Food and Drug Administration, and Related Agencies programs for the fiscal year ending September 30, 2013.

Last summer, the Congress and the President came to a bipartisan agreement to put the Nation on a sustainable fiscal course in enacting the Budget Control Act of 2011 (BCA).  The BCA created a framework for more than $2 trillion in deficit reduction and provided tight spending caps that would bring discretionary spending to a minimum level needed to preserve critical national priorities.  Departing from the bipartisan agreement reached in the BCA and departing from these caps, the House of Representatives put forward a topline discretionary funding level for FY 2013 that, for example, would cost jobs and hurt average Americans, especially seniors, veterans, and children – as well as degrade many of the basic Government services on which the American people rely such as air traffic control and law enforcement.  In addition, these cuts were made in the context of a budget that fails the test of balance, fairness, and shared responsibility by giving millionaires and billionaires a tax cut and paying for it through deep cuts, including to discretionary programs.

In addition to the concern outlined above, the Administration strongly opposes the bill as reported by the Committee.  The bill severely undermines key investments in financial oversight in a manner that would cripple Wall Street reform.  It also imposes harmful cuts in rural economic development, renewable energy development, nutrition programs, food safety, and international food aid.  Investing in these areas is critical to the Nation's economic growth, security, and global competitiveness. The Administration also strongly objects to the inclusion of any ideological and political provisions that are beyond the scope of funding legislation.

If the President were presented with H.R. 5973, his senior advisors would recommend that he veto the bill.

The Administration would like to take this opportunity to share additional views regarding the Committee's version of the bill.

U.S. Department of Agriculture (USDA)
Rural Development.  The Administration appreciates that several Rural Development programs are funded at the FY 2013 Budget requested levels.  However, funding for the Rental Assistance Grants falls $18 million short of the amount needed for expiring rental assistance contract renewals expected in FY 2013, eliminating nearly 4,600 units of rental assistance for rural America.  The Administration urges the House to provide the requested $907 million, which would continue the support of rents for USDA financed properties on behalf of the tenants who receive subsidized rent.  In addition, the funding for Distance Learning, Telemedicine and Broadband programs is $20 million below the FY 2013 Budget request, and the bill also proposes to rescind balances that would otherwise support broadband deployment in rural America.  The Administration urges the House to provide the requested $47 million in the FY 2013 Budget for the programs to advance economic recovery, foster job growth, and improve health care and education in rural America.

Grants Funding.  The Administration is concerned that the $277 million provided for the Agriculture and Food Research Initiative competitive grant program, a significant reduction from the $325 million requested in the FY 2013 Budget, would prevent USDA from fully responding to the serious challenges of climate change, world food hunger, food safety, human nutrition, and sustainable bioenergy.

Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).  The Administration is concerned with the funding level for WIC in the bill and encourages the House to provide the $7 billion level requested in the FY 2013 Budget.  WIC program costs are highly variable.  The Committee's low funding level creates a risk that the contingency reserve, which is normally used to cover unexpected changes in food prices or participation, would be needed to cover anticipated costs, thus threatening the program's ability to manage shortfalls.

Commodity Supplemental Food Program (CSFP).  The Administration urges the House to fund CSFP at the FY 2013 Budget request.  The Committee bill level could result in as many as 55,000 participants – the majority of whom are vulnerable seniors – losing eligibility.  CSFP provides a supplementary food package with the nutrients typically lacking in the diets of its target population.

International Food Aid.  The Administration strongly opposes the $250 million reduction in funding from the FY 2013 Budget request for Food for Peace Title II international food aid.  The funding level would severely reduce the United States' ability to respond to food crises abroad and to make investments that both save lives and help prevent future crises.  Title II programs help to stabilize conditions for vulnerable groups in the face of drought, conflict, and other shocks.

Clean and Renewable Energy.  The Administration urges the House to include the proposal in the FY 2013 Budget that moves the Rural Electric Loan Program away from fossil fuels and encourages the construction, acquisition, or improvement of renewable energy plants in rural America.

Service Center Salaries and Expenses.  The Administration urges the House to restore funding for USDA's Service Center Agencies (Farm Service Agency, Natural Resources Conservation Service, and Rural Development) to the level requested in the President's Budget.  Each of these agencies has seen significant decreases in its administrative budget since 2010, which they have met through permanent staffing reductions using voluntary early retirement and separation authorities, delaying or eliminating the acquisition of important information technologies upgrades, office closures, and reductions for most other administrative expenses.  An additional three percent reduction could harm program delivery, delay rural economic development, and lead to longer waits for farm and home loans as well as assistance for farmers and ranchers.

Building Operations and Maintenance (O&M).  The Administration opposes the elimination of funding for the building O&M portion of the Agriculture Buildings and Facilities account, and the 35 percent reduction for the departmental administration staff offices, a $55 million and $9 million reduction, respectively, from the FY 2013 Budget request.  Consistent with the Administration's efforts to reduce administrative costs, the Department is streamlining services and cutting expenses by closing unnecessary offices, reducing travel and printing, and consolidating information technology contracts.  The Committee proposal to eliminate O&M funding entirely and the deep cut in the USDA-wide staff offices would put an unrealistic burden on agencies.

Program Cuts, Consolidations, and Savings.  The Administration urges the House to accept additional cuts, consolidations, and savings proposed in the FY 2013 Budget for USDA, including an estimated $75 million in savings from blocking spending of the Good Performance Rebate and $15 million in savings from termination of the Watershed Rehabilitation Program.

Department of Health and Human Services
Food and Drug Administration (FDA).  The Administration strongly supports robust funding for FDA to continue implementation of the Food Safety Modernization Act, improve oversight of imports, and invest in the development of medical products, including medical countermeasures.  The Administration requested $4.5 billion in total resources for FDA and the bill provides $3.8 billion, does not include new proposed user fees, and rescinds previous appropriations.  The Administration urges the House to adopt the new user fees proposed in the FY 2013 Budget and restore FDA's budget authority.  These new user fees, targeted in areas where the industry derives a direct benefit from FDA's regulatory oversight, provide additional resources that are essential to support FDA's critical mission to make food and medical products safer, and increase access to safe and effective generic drugs and biologics.  The reductions in budget authority also jeopardize FDA's ability to complete its Life Sciences/Biodefense laboratory, an integral part of FDA's regulatory science capacity that will support national and global preparedness for annual and pandemic influenza and other emerging threats.

Other Independent Agencies
Commodity Futures Trading Commission (CFTC).  The Administration strongly opposes the $128 million reduction in funding from the FY 2013 Budget request for CFTC.  Moreover, the $25 million cut from the FY 2012 enacted level would result in furloughs across the Agency, and would also severely undermine CFTC's ability to carry out its market oversight and enforcement functions.  The funding level would significantly curtail the Administration's priority of timely, effective implementation of Wall Street Reform, which includes CFTC's new responsibilities to regulate the $300 trillion swaps market.  Reducing CFTC's capacity to effectively police the futures and swaps marketplaces would imperil investors' funds and pose a threat to U.S. financial stability.  In addition, the Administration urges the Congress to consider the Budget proposal to implement a CFTC user fee, which would fully offset the FY 2013 Budget request for CFTC.  CFTC is the only Federal financial regulator not funded in whole or in part through fees paid by its regulated community.

Riders
The Administration strongly opposes problematic policy and language riders that have no place in funding legislation, including, but not limited to, the following provisions in this bill:

GIPSA Marketing Rule.  Section 719 of the bill effectively prevents USDA's Grain Inspection, Packers and Stockyards Administration from further implementing the remaining portions of a rule on conduct violations of the Packers and Stockyards Act of 1921.  The provision's proposal to rescind many components of the rule that was finalized in December 2011, would prevent full implementation of this rule, which is needed to clarify conditions for industry compliance with the Packers and Stockyards Act and provide for a fairer marketplace.

Changes to the WIC Food Benefit.  Section 743 would prohibit the exclusion of certain foods from the WIC food package, which undermines the science-based approach used in the program.  WIC provides supplemental foods that nutrition research has found to be critical for healthy child development that are otherwise lacking in the diets of pregnant women, infants, and children.

The Administration looks forward to working with the Congress as the FY 2013 appropriations process moves forward.