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# Staff Contact: Russ Vought (x68581) May 18, 2006 

**Appropriations Policy Brief**

**H.R. 5384---Agriculture Appropriations Act for FY 2007**

**[Comparison to the RSC Budget]{.underline}:**

**Overview:** The RSC budget provided \$829 billion in discretionary
spending for FY 2007, compared to the \$873 billion allotted in the
House-reported resolution (H.Con.Res. 376). While the RSC budget did not
apportion this discretionary spending level by subcommittee---the 302(b)
allocation process---it did call for many program reductions within the
jurisdiction of the Agriculture and Rural Development Subcommittee.

[]{.mark}

**The Foreign Agricultural Service**: The FAS maintains attachés at 97
foreign posts to assist overseas development of markets for U.S. farm
commodities---largely through collecting information regarding a foreign
government's policies, market conditions, etc. This function could be
performed by the private sector that benefits from such services. The
RSC budget calls for a 30-percent reduction in such attaches and a
10-percent reduction in all other activities, except the general sales
manager. Instead, H.R. 5384 provides \$156.5 million for the FAS, an
*increase* of \$10.1 million over FY 2006.

**Federal Support for Agricultural Research and Extension Activities**:
The Department of Agriculture conducts and supports agricultural
research and education. Such research and grants provided by the
Agricultural Research Service (ARS), the Cooperative State Research,
Education, and Extension Service (CSREES), and the Economic Research
Service (ERS) replace funding from the private sector. Requiring the
government to scale down this research would permit the private sector
to finance more of its own research. The RSC budget would reduce funding
by the ARS by 10 percent; it would eliminate all special research grants
within the CSREES, thereby requiring all grants to be awarded
competitively. H.R. 5384 provides \$1.2 billion for ARS (-\$56 million
from FY 2006), \$1.2 billion for CSREES (-\$12 million from FY 2006),
and \$81 million for ERS (+6 million from FY 2006).

**Public Law 480, Title I Program:***.* The Public Law 480 program
provides below-market loans to purchasers of U.S. agriculture
commodities in developing countries as a form of export promotion.
According to GAO, this subsidy's "importance in helping develop
long-term U.S. agricultural markets had not been demonstrated,"
especially troubling since the program dates back to 1954. H.R. 5384
*eliminates* P.L. 480, Title I funding.

**Payments to Socially Disadvantaged Farmers and Ranchers***.* The
Socially Disadvantaged Farmers and Ranchers Competitive Grant Program
provides funds to land-grant, Hispanic-serving, and Native
American-serving institutions, to assist "socially disadvantaged
farmers" who own and operate farms. This program is duplicative since
these same farmers are eligible for all other farm programs. H.R. 5384
provides \$6.9 million for the program in FY 2007.

**Funding for the National Agricultural Statistics Service**: The
Service provides estimates of acreage, yield, and production of crops,
stocks, and value of farm commodities, and numbers of inventory values
of livestock items. Data on crops and livestock products are covered in
over 500 reports issued each year. The RSC budget would reduce funding
for the Service by 20 percent. H.R. 5384 provides \$148.7 million for FY
2007 (+\$9 million from FY 2006).

**Bureaucracy in the Department of Agriculture**: The RSC budget reduces
funding to administer the Department of Agriculture. Specifically,
funding is reduced for the Office of the Secretary by 10%. H.R. 5384
provides \$5.5 million for the Office, an *increase* of \$423 million
over FY 2006.

**Watershed Surveys and Planning Program (NRCS)***.* Enacted in 1954,
the purpose of this program is to assist federal, state, and local
agencies and tribal governments in protecting watersheds from damage
caused by erosion, floodwater, and sediment and to conserve and develop
water and land resources. Conservation programs are conducted through a
number of accounts within the Natural Resources Conservation Service,
and current conservation operations within the Department of Agriculture
could be combined and reprioritized. Both the RSC budget and the
President proposed eliminating this program. H.R. 5384 would provide \$6
million for it, the same level as in FY 2006.

**Watershed and Flood Prevention Operations (NRCS)**. This program
provides technical and financial assistance to local communities to
plan, design, and construct flood prevention, water supply, and water
quality improvement projects. By agreement with the Army Corps of
Engineers, this program funds only operations in small, rural watersheds
and in communities with small populations. In the 2004 Budget, OMB
compared the cost effectiveness of the Corps of Engineers, Natural
Resources Conservation Service (NRCS), and Federal Emergency Management
Agency flood damage reduction programs. Evaluation of projects completed
over a five-year period demonstrated that NRCS's program provided the
fewest benefits per dollar. The Administration also supports
cancellation of the program to help fund higher priority and more cost
effective programs. The RSC budget would eliminate the Watershed and
Flood Prevention Operations program. H.R. 5384 would provide \$40
million, \$34 million less than FY 2006.

**Resource Conservation and Development Program**. The purpose of the
Resource Conservation and Development (RC&D) program is to accelerate
the conservation, development and utilization of natural resources,
improve the general level of economic activity, and to enhance the
environment and standard of living in designated RC&D areas.
Conservation programs are conducted through a number of accounts within
the Natural Resources Conservation Service, and current conservation
operations within the Department of Agriculture could be better combined
and reprioritized. The RSC budget would eliminate this program. However,
H.R. 5384 would provide \$50.8 million for it, the same level as in FY
2006.

**[Items of Note]{.underline}:**

[]{.mark}

**Peanut Storage Extension:** Extends the peanut storage and handling
fee program through 2007. The program, which was set to expire in 2006,
provides federal funding to store and handle peanuts placed in the
marketing loan program. The extension has no cost in FY 2007 (because
the payments would be made after the harvest in FY08), but CBO assumes
it will cost \$77 million in FY 2008. The effect of this provision is to
ensure that the cost of the program is assumed in CBO's baseline (and
therefore disguised as an extension of current law) during consideration
of the next farm bill.

**MILC Extension**: Extends the Milk Income Loss Contract Program (MILC)
for one month---from August 31, 2007 to September 30, 2007. The
extension would cost \$40 million in FY07 (offset by other savers in the
bill), and \$3.8 billion over ten years. The cost for the remaining nine
fiscal years is **not** offset by the bill. The effect of this provision
is to ensure that the cost of the program is assumed in CBO's baseline
(and therefore disguised as an extension of current law) during
consideration of the next farm bill.

**Drug Reimportation**: Prohibits the FDA from using funds to prevent an
individual, wholesaler, or pharmacist from importing prescription drugs
from other countries.

**Program Terminations:** According to the Committee, H.R. 5384
terminates seven discretionary programs, saving \$113.7 million.

**Mandatory Reductions Providing Discretionary Offsets:** Includes
numerous changes to existing mandatory spending programs, newly
authorized in the 2002 farm program, that generate savings for
discretionary spending contained in the bill. The Committee adopted
\$576 million in such savings (slightly less than the President
proposed).

[]{.mark}

**Outsourcing/A-76 Activities:** Prohibits funds for Circular A-76
activities (governing the federal government's outsourcing policies)
until the Secretary has submitted to the Committees on Appropriations of
both Houses of Congress, a report on the Department's contracting out
policies, including agency budgets for contracting out.

[]{.mark}

**Colorado Land Lease**: Allows the Secretary to lease 40 acres of land
to Colorado State University for its Shortgrass Steppe Biological Field
Station.

**MS Land Conveyance**: Allows the Secretary to convey 19 acres to
Mississippi State University when vacated by Agriculture Research
Service (ARS).

[]{.mark}

**Tobacco Research**: Prohibits ARS funding from being used for research
related to the production, processing, or marketing of tobacco or
tobacco products.

**Animal ID Program**: Provides \$33.1 million for ARS to implement the
National Animal ID Program. However, none of the funds could be spent
until the Secretary submits a detailed plan for the program, including
proposed legislative changes, cost estimates, and means for evaluating
the program.

[]{.mark}

**Future User Fee Proposals**: Prohibits funds to pay the salary of any
employee who works on the President's FY07 budget submission if it
assumes new revenues stemming from user fee proposals that have not been
enacted prior to the submission (unless the submission also identifies
which spending proposals should not be enacted in the absence of the new
revenues).

[]{.mark}

**Hunger Fellowship Program**: Provides \$2.5 million for Bill Emerson
and Mickey Leland Hunger Fellowships.

**National Sheep Industry Improvement Center**: Provides \$250,000 for
the Center. According to its website, "The National Sheep Industry
Improvement Center (NSIIC) was established by Congress to provide
financial assistance for the enhancement and marketing of sheep or goat
products in the United States with an emphasis on infrastructure
development."

[]{.mark}

**Designation of Communities as Rural:** Designates the following
cities, townships, and municipalities as "rural areas" or otherwise
eligible for various federal grant and loan programs: Atascadero (CA),
Paso Robles (CA), Freeport (IL), and Kitsap (WA).

**Chinese Poultry Exports**: Prohibits funding to implement the final
rule published on April 24, 2006, to add the People's Republic of China
to the list of countries eligible to export poultry products to the
United States.

**[Earmarks:]{.underline}**

**Note:** According to the House Appropriations Committee, H.R. 5384
includes \$435 million in Member project funding which is \$35 million
below last year's House bill level of \$460 million and \$277 million
below last year's conference agreement of \$812 million.

Included in the bill **TEXT**:

> \$1 million for the Ohio Livestock Expo Center in Springfield, OH

-   \$410,000 to acquire "fourband digital color infrared imagery of the
    entire state of Mexico"

Included in the Committee Report (not an exhaustive list):

-   \$244,077 for bee research in Weslaco, TX

-   \$24.2 million for eradication and control for Glassy-winged
    Sharpshooters/Pierce\'s Disease

-   \$20 million for eradication and control of Emerald Ash Borer

-   \$6.5 million for eradication and control of Sudden Oak Death

-   \$19.9 million for eradication and control of Asian Long-horned
    Beetle

-   \$150,000 for blackbird control in LA

-   \$940,000 for brown tree snake management in Guam

-   \$1.7 million for cereal crops in Fargo, ND

-   \$790,744 for coffee and cocoa research in Beltsville, MD

-   \$490,354 for corn rootworm research in Ames, IA

-   \$373,824 for grapefruit juice/drug interaction research in Temple,
    TX

-   \$668,570 for diet nutrition and obesity research in New Orleans, LA

-   \$387,976 for manure management research (National Swine Research
    Center) in Ames, IA

-   \$365,156 for potato breeding research in Aberdeen, ID

-   \$1.9 million for red imported fire ants, in Stoneville, MS

-   \$450,000 for oyster post-harvest treatment in Florida

-   \$447,009 for Barley Food Health Benefits in Beltsville, MD

-   \$1.5 million for construction of an entrance off Bladensburg Road
    for the National Arboretum in DC

-   \$365,156 for potato breeding research in Aberdeen, ID

-   \$878,046 for Catfish Genome research in Auburn, Alabama

-   \$3.6 million for climate forecasting in Florida

-   \$2.5 million for cotton research in Texas

-   \$1.1 million for the Center for Innovative Food Technology in Ohio

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-   \$162,000 on top of last years earmark, for the Children's Nutrition
    Research Center in Houston, TX for obesity research

-   \$584,089 for aerial application research in College Station, TX

-   \$784,244 for Appalachian horticulture research in Poplarville, MS

-   \$72, 552 Aquaculture Fisheries Center in Pine Bluff, AR

-   \$628,843 aquaculture research in Aberdeen, ID

-   \$242,486 for cotton genetics research in Florence, SC

-   \$392,832 for citrus waste utilization in Winter Haven, FL

-   \$628,843 for grape genetics in Geneva, NY

-   \$573,689 for grape rootstock in Geneva, NY

-   \$3.7 million for formosan termite research in New Orleans, LA

-   \$1.2 million for mosquito trapping research/west nile virus
    research in Gainesville, FL

-   \$2.5 million for the National Soil Dynamics Lab in Auburn, AL

-   \$1.6 million for the Plant Stress and Water Conservation Lab in
    Lubbock, TX

-   \$1.7 million for rangeland resources research in Las Cruces, NM

-   \$408,589 for soybean and nitrogen fixation research in Raleigh, NC

-   \$413,654 for wheat quality research in Wooster, OH

-   \$1.5 million for the Rice Research Unit in Beaumont, TX

-   \$584,911 for the Arkansas Children's Nutrition Center

-   \$4.2 million for the Delta Nutrition Intervention Initiative

-   \$2.2 million for Pierce's disease research in CA

-   \$682,000 for the regional barley gene mapping project in Oregon

-   \$750,000 for human nutrition research in Iowa

-   \$1.5 million for pasteurization of shell eggs in MI

-   \$311,986 for late blight fungus research in Orono, ME

-   \$2 million for catfish health research in Stoneville, MS

-   \$420,028 for wheat quality research in Manhattan, KS

-   \$1.2 million for wolf predation management, of which \$1 million is
    for WI, MN, and MI, and \$175,000 is for NM and AZ

-   \$300,000 for beaver management in NC

-   \$325,000 for crop and aquaculture losses in southeast MO

-   \$1.3 million for predator control programs in MT, ID, and WY

-   \$300,000 for beaver management in WI

-   \$244,077 for bee research in Weslaco, TX

-   \$1.0 million for bovine genetics in Beltsville, MD

**[Funding Summaries]{.underline}:**

In thousands

  -------------------------------------------------------------------------------------------------------------- ------------- ------------- ----------- ---------- -------------
                                                                                                                 **FY 2006**   **FY 2007**   **FY 2007** **Cmte     **Cmte Vs.**
                                                                                                                                                         Vs.**      

                                                                                                                 **Enacted**   **Request**   **Cmte**    **FY       **Request**
                                                                                                                                                         2006**     

  **Agriculture Programs**                                                                                                                                           

  Office of the Secretary\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...                        5,076         11,540        5,499       423        -6,041

  Executive Operations\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...                       165,036       181,381       127,352     -37,684    -54,029

  Hazardous Materials Management\...\...\...\...\...\...\...\...\...\....                                        11,880        12,020        12,020      140        0

  Economic Research Service\...\...\...\...\...\...\...\...\...\...\...\...\....                                 75,172        82,544        80,963      5,791      -1,581

  Agriculture Statistics Service\...\...\...\...\...\...\...\...\...\...\...\.....                               139,293       152,584       148,719     9,426      -3,865

  Agriculture Research Service S&E\...\...\...\...\...\...\...\...\...\...\...\....                              1,123,654     1,001,385     1,057,000   -66,654    55,615

  Cooperative State Research, Education & Extension..                                                            1,182,650     1,023,077     1,170,812   -11,838    147,735

  Outreach to Socially Disadvantaged Farmers\...\...\...\....                                                    5,940         6,930         6,930       990        0

  Animal & Plant Health Inspection Service S&E\...\...\...\...\...\...\...                                       807,306       945,153       898,116     90,810     -47,037

  Agriculture Marketing Service\...\...\...\...\...\...\...\...\...\...\...\.....                                114,486       86,938        104,928     -9,558     17,990

  Grain Inspection, Packer & Stockyards Admin\...\...\...\...                                                    38,059        21,844        39,737      1,678      17,893

  Food Safety & Inspection Service\...\...\...\...\...\...\...\...\...\....                                      829,378       757,470       853,249     23,871     95,779

  Farm Service Agency S&E\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....                      1,019,700     1,091,359     1,053,760   34,060     -37,599

  Loan Subsidies\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...                 149,788       113,912       149,306     -482       35,394

  Agriculture Credit Insurance Expenses\...\...\...\...\...\...\.....                                            309,465       319,657       315,258     5,793      -4,399

  Risk Management Agency\...\...\...\...\...\...\...\...\...\...\...\...\...\....                                76,278        80,797        77,197      919        -3,600

  **Conservation Programs**                                                                                                                                         

  Office of the Under Secretary\...\...\...\...\...\...\...\...\...\...\...\....                                 737           957           810         73         -147

  Conservation Operations\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...                            831,124       744,877       791,498     -39,626    46,621

  Watershed Surveys & Planning\...\...\...\...\...\...\...\...\...\...\.....                                     6,022         0             6,022       0          6,022

  Watershed & Flood Prevention\...\...\...\...\...\...\...\...\...\...\...\...                                   74,250        0             40,000      -34,250    40,000

  Watershed Rehabilitation\...\...\...\...............\...\...\...\...\...\...\....                              31,245        15,300        31,245      0          15,945

  Resource Conservation\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....                            50,787        25,933        50,787      0          24,854

  **Rural Development**                                                                                                                                             

  Office of the Under Secretary\...\...\...\...\...\...\...\...\...\...\...\....                                 629           823           692         63         -131

  Rural Community Advancement Program\...\...\...\...\...\...\...                                                694,922       600,762       699,893     4,971      99,131

  Salaries & Expenses (Including Transfers)\...\...\...\...\.....                                                495,877       500,326       474,951     -20,926    -25,375

  Rural Housing Loan Authorization\...\...\...\...\...\...\...\...\...\....                                      5,027,750     5,057,622     5,059,625   31,875     2,003

  Rental Assistance Program\...\...\...\...\...\...\...\...\...\...\...\...\.....                                646,571       486,320       335,400     -311,171   -150,920

  Mutual & Self-Help Housing Grants\...\...\...\...\...\...\...\...\...\...                                      33,660        37,620        37,260      3,600      -360

  Rural Housing Assistance Grants\...\...\...\...\...\...\...\...\...\....                                       43,536        40,590        40,590      -2,946     0

  Farm Labor Program Account\...\...\...\...\...\...\...\...\...\...\...\.....                                   30,856        33,798        47,525      16,669     13,727

  Rural Business-Cooperative Loan Authorization\...\...\...                                                      58,622        68,577        68,577      9,955      0

  Rural Development Loan Fund\...\...\...\...\...\...\...\...\...\...\...\....                                   19,316        19,901        19,371      55         -530

  Rural Cooperative Development Grants\...\...\...\...\...\...\.....                                             29,193        27,225        9,913       -19,280    -17,312

  Rural Empowerment Zone Grants\...\...\...\...\...\...\...\...\...\....                                         11,088        0             11,088      0          11,088

  Renewable Energy Programs\...\...\...\...\...\...\...\...\...\...\...\.....                                    22,770        10,163        20,000      -2,770     9,837

  Rural Utility Loan Authorization\...\...\...\...\...\...\...\...\...\...\...\...                               6,076,760     4,527,799     5,377,197   -699,563   849,398

  Rural Utility Loan Subsidy\...\...\...\...\...\...\...\...\...\...\...\...\...\.....                           6,309         3,322         4,219       *-2,090*   897

  Dist. Learning, Telemedicine, Broadband Loan Auth\...                                                          519,750       356,419       503,535     -16,215    147,116

  Dist. Learning & Telemedicine Loans Subsidies\...\...\....                                                     49,624        35,576        44,486      -5,138     8,910

  **Domestic Food Programs**                                                                                                                                        

  Office of the Under Secretary\...\...\...\...\...\...\...\...\...\...\...\....                                 593           732           652         59         -80

  WIC\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....   5,204,430     5,200,000     5,244,000   39,570     44,000

  Commodity Assistance Program\...\...\...\...\...\...\...\...\...\...\....                                      177,572       70,370        189,370     11,798     119,000

  **Foreign Assistance**                                                                                                                                             

  Foreign Agriculture Service\...\...\...\...\...\...\...\...\...\...\...\...\.....                              146,222       157,486       156,486     10,264     -1,000

  McGovern-Dole Int\'l School Lunch Program\...\...\...\...\.....                                                99,000        99,000        100,000     1,000      1,000

  PL 480 Program Appropriation\...\...\...\...\...\...\...\...\...\...\...\....                                  1,218,062     1,221,151     1,225,751   7,689      4,600

  **FDA**                                                                                                                                                            

  Salaries & Expenses Including Fees\...\...\...\...\...\...\...\...\....                                        1,823,751     1,916,329     1,914,382   90,631     -1,947

  Buildings & Facilities\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....                   7,920         4,950         4,950       -2,970     0

  **Other & General Provisions**                                                                                                                                     

  Commodity Futures Trading Commission\...\...\...\...\...\...\...                                               97,402        127,000       109,402     12,000     -17,598

  Hunger Fellowships\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....                       2,500         0             2,500       0          2,500

  National Sheep Industry Improvement Center\...\...\...\.....                                                   1,238         0             250         -988       250

  Denali Commission\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....                     743           0             0           -743       0

  Specialty Crop Grants\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....                        6,930         0             15,600      8,670      15,600

  Fruit & Vegetable Pilot Program\...\...\...\...\...\...\...\...\...\...\...\...                                6,000         0             25,000      19,000     25,000
  -------------------------------------------------------------------------------------------------------------- ------------- ------------- ----------- ---------- -------------