Omnibus Spending Bill Impacts on Ag-Related Topics

January 13, 2014 08:57 PM

via a special arrangement with Informa Economics, Inc.

Renews horse slaughter ban | COOL language | NASS to compile four eliminated Current Industrial Reports

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

The Fiscal Year 2014 omnibus spending agreement made public Monday evening would renew a ban on horse slaughter and "strongly" recommends USDA delay implantation of new regulations for country-of-origin labeling while the World Trade Organization (WTO) considers a challenge to the law.

Resumption of four Current Industrial Reports. Since 2012, the US government has suspended or eliminated a number of reports due to budget constraints and has been unable to carry out four Current Industrial Reports formerly compiled by the US Census Bureau. The funding level provided will allow USDA's NASS to resume or begin compilation of these reports at the frequency levels assumed in Fiscal year 2012. NASS is directed to resume all of these reports immediately upon enactment of the omnibus measure. That means there is a high probability that NASS will now resume several key reports that had been suspended, including the mid-year Cattle inventory report. The Census reports that NASS would start working on include fats and oilseed data which includes soybean crush and corn oil extraction, wheat grind and cotton stocks and use data.

WIC program. The explanatory statement that accompanies the bill (details below) appears to direct USDA to allow white potatoes to be purchased again through the WIC nutrition program, but others say that USDA has flexibility in this area.

Regarding country of origin labeling (COOL), the explanatory statement that accompanies the spending bill complains about the high cost of implementing the rule released by USDA and warns that the new regulations won't satisfy Canada's and Mexico's concerns about the COOL program. "If the complainants do prevail, industry may be forced to change their labels and practices once again, and the Nation will suffer the conic impact" of $2 billion in retaliatory trade actions, the statement said.

The bill includes language to prevent the Grain Inspection, Stockyards and Packers Administration from issuing new rules for farmers who raise poultry and livestock under contract that was intended to give them additional legal protections in their dealings with processors. The language is different from a provision in the House farm bill (HR 2642) that would repeal contract rules that major livestock groups and packing houses say go too far. House and Senate farm bill negotiators are continuing to work on a final farm bill.


The appropriators note concern that the preventive controls rule issued under the Food Safety Modernization Act (FSMA) "significantly underestimates" the potential cost to the food sector. "The agency has indicated that significant changes will be needed in key provisions and is encouraged to re-propose a rule that provides the necessity, location and frequency of testing based upon risk-cost benefit and other established verification activities," the explanatory statement said.

The bill would provide $20.9 billion in discretionary spending for USDA and FDA for the fiscal year that ends Sept. 30, up from $20.7 billion in fiscal 2013. The bill would provide $6.7 billion for WIC. The bill would increase the CFTC's funding by $10 million from 2013, to $215 million.

EQIP funding cut. Appropriators have again cut funding for the Environmental Quality Incentives Program (EQIP) for money - the bill would cut $400 million from the program for FY 2014.

USDA's authority to inspect catfish. The explanatory statement said the appropriators expect "USDA to meet its statutory obligation" and implement the program using a broad definition of catfish. The Obama administration has called for eliminating the program, which has been the subject of retaliatory threats from Vietnam and other Asian countries.

Other policy-related riders include:

  • Encourage OSHA to consult with USDA before enforcing worker-safety regulations for on-farm grain storage. OSHA contends grain bins are not covered by a small-farm exemption that the bill would continue.

  • Direct the General Accountability Office (GAO) to analyze EPA's policies for responding to requests for personal information of private businesses and steps EPA is taking to better manage private information. The provision follows negative reaction from farm groups over the release of information about livestock operations.

  • Provide $1 million to study the extent of domestic hunger and food insecurity and establish a 10-member National Commission on Hunger to make policy recommendations to Congress. The panel is to "develop innovative recommendations to encourage public-private partnerships, faith-based sector engagement, and community initiatives to reduce the need for government nutrition assistance programs, while protecting the safety net for the most vulnerable members of society."

  • Maintain a prohibition on mandatory reporting of greenhouse gas emissions from manure management systems.

  • Provide USDA $20 million in funding to fight citrus greening disease.

The $1.012 trillion, 1,582-page spending package includes all 12 appropriations bills for funding the entire federal government for the remainder of Fiscal 2014. Release of the measure's details sets it up for a vote in the House on Wednesday and another later in the week in the Senate. The measure marks a 2.6 percent increase in discretionary spending from the $986.3 billion, sequester-set level of fiscal 2013. Spending had been set to fall again to again to $967 billion but the plan adheres to the new caps on defense and domestic discretionary spending set under last month’s House-Senate budget deal (PL 113-67) of $520.5 billion and $491.8 billion, respectively.

In the Energy-Water spending section, Army Corps of Engineers funding would jump by $487 million — or 10 percent — to $5.5 billion, according to the summary by House appropriators. That would include an appropriation of more than $1 billion from the Harbor Maintenance Trust Fund, an increase from the annual appropriation from the fund of about $700 million. The allocation is in line with provisions in the House and Senate water authorization bills (HR 3080, S 601) now in conference, which would phase in increased appropriations from the fund, which collects roughly $1.6 billion each year in user fees. The bill also would provide taxpayer funding for 75 percent of the cost of the over budget Olmsted lock and dam project on the Ohio River, up from the current 50 percent level and mirroring the level that would be set by the House-passed water bill. That would leave just 25 percent to be matched by the Inland Waterways Trust Fund which is supported by towboat fuel taxes that barge lines pay, freeing up tens of millions of dollars this year for other lock projects.


Policy provisions would deny funding for implementing light bulb efficiency standards and would fund continued review of the proposed nuclear waste facility at Yucca Mountain in Nevada, according to the House Appropriations Committee.


EPA funding would be cut by $143 million to $8.2 billion, according to the House Appropriations Committee summary. The bill would also impose a handful of new policy provisions, including one requiring the administration to report to Congress on all federal agency expenditures for climate change programs in fiscal 2013 and 2014. The measure rejects an administration request for $72 million to cover EPA regulatory programs, including $31 million for climate regulatory programs and $23 million for water regulatory programs, according to the House summary. The Great Lakes Restoration Initiative would be funded at the fully requested level of $300 million.

President Barack Obama’s TIGER grant program would get $600 million to provide transportation grants to the states while his high-speed rail initiative would be zeroed out under a $50.8 billion Transportation-HUD spending package appropriators unveiled Monday. The $600 million appropriation exceeded even the Obama administration’s request of $500 million. Mandatory funding levels for the federal highway program would total almost $41 billion, the level set by the 2012 surface transportation authorization (PL 112-141) and $557 million more than Fiscal 2013 spending. The bill would add a new condition to the Essential Air Service program that subsidizes flights to low-use rural airports, barring Transportation Secretary Anthony Foxx from renewing contracts for communities that are less than 40 miles from a hub airport unless the locality negotiates an agreement to share costs. The program would be funded at $249 million, an increase of $6 million over last year.

Cellular phones during flights language. In the Financial Services spending title, appropriators are requiring the Federal Communications Commission to consult with the secretaries of Transportation and Homeland Security, as well as the FBI, before a final rule is promulgated that would allow passengers to use cellular phones for voice calls during flight. The FCC chairman would be required to keep the House and Senate Appropriations committees apprised of any developments in the rulemaking.

In the State-Foreign Operations portions of the budget, the legislation sets aside $1.3 billion in military aid for Egypt, under a new set of restrictions. Cairo also receives $250 million in economic assistance. One chunk of the military assistance can only be made available after the Egyptian government holds a constitutional referendum. A second chunk could be cleared after Egypt holds parliamentary and presidential elections. Overall, the secretary of State must certify that Egypt remains a security partner to the United States and is upholding its obligations under the 1979 Egypt-Israel Peace Treaty before any aid can be provided, although the bill also provides some exemptions to the assistance requirements for security purposes.

The following ag-related information comes from the explanatory statement that accompanies the omnibus spending bill:


The agreement provides $161,206,000 for the National Agricultural Statistics Service, including $44,545,000 for the Census of Agriculture.

Included within funding for the Census of Agriculture is an increase of $2,250,000 for the Organic Production Survey.

Since 2012, NASS has suspended or eliminated a number of reports due to budget constraints and has been unable to carry out four Current Industrial Reports formerly compiled by the US Census Bureau. The funding level provided will allow NASS to resume or begin compilation of these reports at the frequency levels assumed in fiscal year 2012. NASS is directed to resume all of these reports immediately upon enactment of this Act. Further, this funding level will allow NASS to carry out its full plan for fiscal year 2014 reports as presented in the budget.


The agreement provides $772,559,000 for the National Institute of Food and Agriculture's research and education activities.


The agreement acknowledges the growing economic and ecological damage caused by feral swine across the United States. Conservative estimates indicate feral swine are present in 44 States, and agricultural losses and control efforts cost $1,500,000,000 annually. The agreement understands that computer models have shown that lethal methods combined with contraception could significantly reduce feral swine populations over several years. In addition to the agreement's support for the Department's proposed increased funding for feral swine management, the agreement encourages Wildlife Services to explore development and field testing of non-hormonal, species-specific oral contraceptives, such as phaged-peptide constructs.

The agreement provides funding for the animal disease traceability system within the Animal Health Technical Services line item. APHIS is directed to submit quarterly reports to the Committees with system updates on the traceability framework, State and Tribal coordination, specific cost information, assessments of progress, and any deviations from the scheduled completion dates.

The agreement provides (Sec. 748) one-time funding of $20,000,000 for the efforts of the multi-agency coordination involving the citrus industry, Federal and State regulatory personnel, and researchers to combat the spread and eventual eradication of citrus greening. APHIS is encouraged to use reimbursable and cooperative agreements with Federal and State entities as necessary to respond to this growing threat. The Department is directed to provide the Committees with a spending plan for these one-time funds within 90 days of enactment. Funds are available until September 30, 2015.


The agreement provides $79,914,000 for the Agricultural Marketing Service.

The agreement does not approve of USDA's continued implementation, enforcement, and the associated spending related to the mandatory country of origin labeling regulation for certain meat products during the pending World Trade Organization (WTO) dispute with Canada and Mexico. When USDA responded to a WTO arbitration ruling with a final rule entitled "Mandatory Country of Origin Labeling of Beef, Pork ... ," 78 Federal Register 31367, on May 24,2013, the final rule estimated implementation costs of $123,300,000 at the midpoint and ranging from $53,100,000 at the low end to $192,100,000 at the high end. In addition to the high cost of implementing the rule, the complainants have responded by formally stating that the revised final regulation does not address the international trade compliance concerns raised by the two countries in their WTO case. On June 7, 2013, Canada issued a list of US products (agricultural and non-agricultural exports to Canada) that would face higher tariffs totaling up to $1,100,000,000. Mexico is expected to issue a similar list of US exports totaling several hundred million dollars. If the complainants do prevail, industry may be forced to change their labels and practices once again and the Nation will suffer the economic impact of approximately $2,000,000,000 in retaliation actions affecting agriculture and non-agriculture jobs and industries across the US It is strongly recommended that USDA not force increased costs on industry and consumers and that the Department delay implementation and enforcement of the final rule (78 Federal Register 31367) until the WTO has completed all decisions related to cases WTIDS384 and WT/DS386.

The agreement includes a $1,000,000 increase above the fiscal year 2012 level for the National Organic Program.


The agreement provides $40,261,000 for the Grain Inspection, Packers and Stockyards Administration.


The agreement provides $1,177,926,000 for the Farm Service Agency.

The agreement directs USDA to pursue options for obtaining additional reimbursements from public and private entities for the cost of providing imagery and/or imagery services acquired through the National Agriculture Imagery Program (NAIP). The supplemental funding would allow the NAIP program to collect high-quality digital aerial photography of the entire continental US each year. In addition to base funds, these supplemental contributions should provide the maximum benefit for USDA programs and other users of these images. Within days of enactment of this Act, USDA shall submit a report to the Committees that includes a detailed description of options for obtaining such reimbursements, including a discussion on the option to request new legislative authority.


The agreement provides $71,496,000 for the Risk Management Agency.

There is concern about the pace of progress in implementing an organic price election for all organic crops as required in the Food, Conservation, and Energy Act of 2008. USDA is urged to make every effort to implement this requirement as quickly as possible. The Department is requested to provide a report to the Committees with its strategic plan and timetable to implement organic price elections for all organic crops produced in compliance with the National Organic Program regulations under the Organic Foods Production Act of 1990 (7 USC. 6501 et seq.).


The agreement provides $19,287,957,000 for Child Nutrition Programs. Included in the total is an appropriated amount of$II,276,388,000 and a transfer from Section 32 of $8,011,569,000.

In lieu of the language in the House and Senate reports on School Meals, the Secretary is directed to establish a waiver approval process within 90 days of enactment for States to grant waivers for the 2014-15 school year to any local educational agency that certifies it cannot operate a food service program without incurring increased costs in order to comply with the interim final rule entitled "National School Lunch Program and School Breakfast Program: Nutrition Standards for All Foods Sold in School" and/or Part 220 of title 7, Code of Federal Regulations as such part relates to establishing new nutrition standards for the school breakfast program. The Secretary is further directed to provide schools that are granted a waiver technical assistance to help with implementation in future years.

USDA is directed to provide sufficient guidance and training so that States can ensure that all approved CACFP sites providing at -risk, after-school snacks and suppers, are in full compliance with the eligibility requirements for participating in the program.

There continues to be concern about high error and improper payment rates in the National School Lunch Program (NSLP) and the School Breakfast Program (SBP). For fiscal year 2013, the NSLP had an error rate of 15.69 percent totaling $1,800,000,000 in improper payments, and the SBP had an error rate of 25.26 percent totaling $831,000,000 in improper payments. The agreement provides the requested funding to support USDA's efforts to reduce erroneous payments. USDA is directed to work with States and local educational agencies and submit a plan to the Committees within 60 days of enactment detailing the steps it will take to reduce high error and improper payment rates.


The agreement provides $6,715,841,000 for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).

WIC regulations require the State agency conduct an on-site visit prior to or at the time of a vendor's initial authorization. The visit is part of the application review process that could take up to 90 days. USDA has taken strong actions to impose vendor moratoriums in States where questionable vendor practices have been identified. The agreement includes language to address a backlog of vendor applications that exists in States that have a federally imposed vendor moratorium. It is understood the Secretary will establish terms and conditions focusing on existing retailers that are in good standing, are at a low risk for fraud, and have existing master agreements in place.

The agreement expects the Secretary to amend 7 CFR 246.10 in order for state agencies to include all varieties of fresh, whole, or cut vegetables, except for vegetables with added sugars, fats, oils; provided that inclusion of such vegetables contribute towards meeting the special nutritional needs of program participants and increases the availability of low-cost, high nutrient alternatives for participants throughout the year. Within 15 days of any decision not to comply, the Secretary shall submit a report to the Committees explaining such decision.


The agreement provides $82,169,945,000 for the Supplemental Nutrition Assistance Program. The agreement includes $3,000,000,000 to be made available for a contingency reserve. The agreement provides a funding level for SNAP benefits as reflected in OMB's midsession review of the budget.

There is concern about the use of valuable tax dollars to promote enrollment of SNAP through radio, television, and other advertisements as well as outreach activities with foreign governments to encourage the use of SNAP. USDA is strongly encouraged to cease these types of government-sponsored recruitment activities.

USDA is directed to maintain restrictions for hot prepared foods and other foods intended for immediate on-premise consumption, including hot beverages and fountain drinks.



The agreement provides $1,466,000,000 for Food for Peace Title II Grants.

The agreement directs USDA and USAID not to conduct the study in H.Rpt. 113-116 on the proposed food aid reforms in the President's fiscal year 2014 Budget.


The agreement provides $185,126,000 for the McGovern-Dole International Food for Education and Child Nutrition Program.




FDA is to be commended for its recent decision to revise language in proposed rules affecting farmers including changes to proposed regulations regarding water quality standards and testing, the use of raw manure and compost, mixed use facilities, and qualified exemptions.

There is concern that FDA's analysis of the implementation costs for the Preventive Controls for Human Food rule [FDA-2011-N-0920) significantly underestimates the cost to those entities as demonstrated in comments filed with the agency on November 22, 2013. The agency did not include regulations or a cost benefit analysis for environmental, ingredient, and finished product testing. The agency has indicated that significant changes will be needed in key provisions and is encouraged to re-propose a rule that provides the necessity, location, and frequency of testing based upon risk/cost benefit and other established verification activities. FDA is urged to stay within the framework specified in law, ensure food safety rules are risk-based, and make certain that food safety improvements are economically feasible to both the agency and the industry.

It has been determined that FDA user fee programs are subject to sequester, although they are not normal tax revenue. It is important to maintain industry support for user fee programs and for FDA to continue to meet negotiated performance standards. The Administration is thereby encouraged to reconsider the inclusion of FDA user fees when calculating sequester.

The Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2010 (P.L. 111-80) included a new provision appropriating prescription drug user fees collected in excess of the fiscal year 2010 limitations stated in such Act. These fees were to be credited to the Food and Drug Administration Salaries and Expenses account and remain available until expended. It is understood that excess prescription drug fees collected prior to fiscal year 20 I 0 remain unobligated. The intent of P.L. 111-80 was to make available such prior year excess collections. FDA is directed to make these funds, which are in excess of the fiscal year 2010 limitations, available for obligation to support the prescription drug review and approval process.

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.






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