Agriculture and Related Agencies: FY2013 Appropriations
Released: 2013-01-17T00:00:00

Scope of the Agriculture Appropriations Bill

The Agriculture appropriations bill—formally known as the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act—provides funding for the following agencies and departments:

all of the U.S. Department of Agriculture (USDA) except the Forest Service, which is funded in the Interior appropriations bill, the Food and Drug Administration (FDA) in the Department of Health and Human Services, and in the House, the Commodity Futures Trading Commission (CFTC). In the Senate, the Financial Services bill contains CFTC appropriations.

Jurisdiction is with the House and Senate Committees on Appropriations, and their respective Subcommittees on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies. The bill includes both mandatory and discretionary spending, although most decision making concerns discretionary spending. See Appendix A for more on scope and terminology.

Action on FY2013 Appropriations

Both the House and the Senate reported bills for FY2013 Agriculture appropriations ( Table 1 ). The Senate full committee moved first, reporting S. 2375 ( S.Rept. 112-163 ) on April 26, 2012. The House subcommittee marked up its bill on June 6, 2012, followed by full committee action on H.R. 5973 ( H.Rept. 112-542 ) on June 19, 2012. No further action occurred on the bills in the 112 th Congress. FY2013 began under a continuing resolution (CR; P.L. 112-175 ) that lasts until March 27, 2013. The CR funds discretionary operations at FY2012 levels plus 0.612%, continues mandatory programs as needed, and continues other terms and conditions that were applicable in FY2012. Table 2 summarizes the bill totals, as proposed in the 112 th Congress, by title.

In the past 14 years, stand-alone Agriculture appropriations bills were enacted five times, in FY2000-FY2002, FY2006, and FY2010 ( Table B -1 in Appendix B ). Omnibus appropriations were used seven times, in FY1999, FY2003-FY2005, FY2008, FY2009, and FY2012. Year-long continuing resolutions were used twice, in FY2007 and FY2011. Figure B -1 shows the timeline.

Amounts in this report are based on H.R. 5973 and S. 2375 in the 112 th Congress and not the continuing resolution. For enacted post-sequestration amounts, see CRS Report R43110, Agriculture and Related Agencies: FY2014 and FY2013 (Post-Sequestration) Appropriations .

Senate Action

The Senate Appropriations committee approved its FY2013 Agriculture appropriations bill ( S. 2375 , S.Rept. 112-163 ) by a vote of 28-1 on April 26, 2012. The full committee bypassed subcommittee action by "polling" the bill out of subcommittee—a procedure that permits a bill to advance if subcommittee members independently agree to move it along. This expedited procedure, formerly uncommon for Agriculture appropriations, has been used since FY2009.

The Senate-reported bill would have increased discretionary Agriculture appropriations to $20.8 billion, an increase of $1.2 billion (+6.2%) above FY2012 levels, after adjusting for the inclusion of disaster provisions and CFTC appropriations in FY2012 ( Table 2 ). Without these adjustments, the Senate-reported discretionary amount was about $700 million (+3.5%) above FY2012.

The Senate bill would have differed from the enacted FY2012 appropriation primarily by increasing discretionary domestic nutrition programs (+$438 million), agricultural research (+$64 million), rural development (+$50 million), the FDA (+$24 million), and the Farm Service Agency (+$14 million), and by reducing the use of rescissions and limits on mandatory programs (-$672 million; see Table 3 ).

House Action

The House Agriculture appropriations subcommittee marked up its FY2013 bill by voice vote on June 6, 2012. The full House Appropriations committee reported the bill ( H.R. 5973 , H.Rept. 112-542 ) by voice vote on June 19, 2012. On June 21, the Rules Committee met to report an open rule for floor consideration ( H.Res. 697 ). The rule was adopted on June 26 to allow consideration of the Transportation-Housing and Urban Development appropriations bill, also part of H.Res. 697 , but action on the Agriculture bill was postponed because of expected action on the farm bill.

The House-reported bill would have reduced discretionary Agriculture appropriations to $19.4 billion, a cut of $365 million from FY2012 levels, after adjusting for the inclusion of disaster provisions in FY2012 ( Table 2 ). Without this adjustment, the House-reported discretionary amount was about $675 million (-3.3%) below FY2012.

The House bill would have differed from FY2012 and the Senate bill primarily by decreasing rural development (-$153 million from FY2012, -$204 million from the Senate), international food aid (-$324 million from FY2012 and the Senate bill), agricultural research (-$35 million from FY2012, -$99 million from the Senate bill), the Farm Service Agency (-$35 million from FY2012, -$50 million from the Senate bill), animal and plant health programs (-$30 million from FY2012 and the Senate bill), the CFTC (-$25 million from FY2012, -$128 million from the Senate bill), the FDA (-$25 million from FY2012, -$50 million from the Senate bill), and discretionary conservation programs (-$16 million from FY2012, -$2 million from the Senate bill); and by increasing discretionary domestic nutrition programs (+$295 million from FY2012, -$143 million from the Senate bill) and reducing the use of limits on mandatory programs (-$154 million from FY2012, +$403 million over the Senate bill; see Table 3 ).

The House bill also has policy-related provisions that would have removed a 2011 livestock and poultry marketing rule, tightened farm commodity program payment limits, and required USDA to allow white potatoes for the Women, Infants, and Children (WIC) feeding program.

The Administration opposed the cuts in the House bill, particularly to CFTC, rural development, renewable energy, domestic nutrition, food safety, and international food aid, and opposes the programmatic restrictions on the livestock and poultry marketing rule, as well as the WIC program.

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Historical Trends

After years of growth, discretionary Agriculture appropriations peaked in absolute terms in FY2010, although mandatory nutrition spending continues to rise. This section offers perspective on type of funding (mandatory or discretionary), purpose (nutrition vs. other), and relationships to inflation, GDP, and the federal budget. The proposed amounts for FY2013 in H.R. 5973 and S. 2375 are the bases for comparison throughout most of this section.

Figure 1 shows the Agriculture appropriations bill divided between mandatory and discretionary spending. Mandatory appropriations, accounting for about 85% of the total, have a 10-year average annual growth of +7.9%, while discretionary appropriations show a +0.8% average annual growth rate over 10 years to the amount in the House bill (+1.6% average annual growth rate to the amount in the Senate bill). The total (mandatory plus discretionary) reflects a +6.5% average annual increase over 10 years.

Figure 2 shows the same bill total as in Figure 1 , but divided between domestic nutrition and other program spending. The share going to nutrition has risen from 46% in FY2000 to about 75% in the FY2013 proposals. Over the past 10 years, total nutrition spending has increased at an average rate of about +9.8% per year, compared to a +0.3% average annual change for the "rest of the bill" in the House bill (+0.8% for the Senate bill; including the rest of USDA but excluding the Forest Service, plus FDA and CFTC). Nutrition spending has increased even faster in the more recent five-year period.

Figure 3 shows just the discretionary appropriations levels in the Agriculture appropriations bill, divided between domestic nutrition programs and the rest of the bill. Figure 4 shows just the mandatory appropriations amounts.

Table 4 presents the data in these graphs and Table 5 shows the average annual growth rates from various years in the past to FY2013 (in both actual and inflation-adjusted terms).

The totals can also be viewed in inflation-adjusted terms ( Table 6 ) and against other economic variables ( Table 7 ). If the general level of inflation is subtracted, total Agriculture appropriations show positive "real" growth—that is, growth above the rate of inflation ( Figure 5 ). The total has increased at an average annual real rate of about +4.2% over the past 10 years. Nutrition programs have increased at an average annual real rate of +7.4%, while the "rest of the bill" shows a -1.9% average annual real decline over 10 years. Similarly, mandatory spending shows positive real growth over 10 years, while discretionary spending is flat to a small real decline.

Relative to the entire federal budget, the Agriculture bill's share declined from 4.4% of the federal budget in FY1995 to 2.7% in FY2009, before rising again to nearly 3.9% in FY2013 ( Figure 6 ). The share for nutrition programs had declined from 2.6% in FY1995 to 1.8% in FY2008, but the recent recession has caused that share to rise to 2.9% for FY2013. The share for the rest of the bill has declined from 1.8% in FY1995 and 2.1% in FY2001 to about 1% for FY2013.

As a percentage of gross domestic product (GDP), Agriculture appropriations had been fairly steady at under 0.75% of GDP, but have risen since FY2008 to about 0.87% of GDP ( Figure 7 ). Nutrition programs have been rising as a percentage of GDP since FY2000 (about 0.66% for FY2013), while non-nutrition agricultural programs have been declining (to 0.22% for FY2013).

Finally, on a per capita basis, inflation-adjusted total Agriculture appropriations have risen slightly over the past two decades from about $350 per capita in 1995 and 2000 (FY2012 dollars) to about $435 per capita for FY2013 ( Figure 8 ). Nutrition programs have risen more steadily on a per capita basis from about $214 per capita in 1995 (and a low of $152 per capita in 2001) to $330 per capita for FY2013. Non-nutrition "other" agricultural programs have been more steady or declining, falling from a high of $188 per capita in 2000 to under $110 per capita for FY2013.

Savings Achieved by Limits and Rescissions

The FY2013 Agriculture appropriations bills reported in the 112 th Congress contained rescissions and limitations on mandatory farm bill programs totaling about $1.5 billion in the House bill and $1 billion in the Senate bill (Title VII in Table 3 ). These amounts were less than in FY2012 ($1.65 billion) and FY2011 ($1.87 billion), but still more than prior years (e.g., $619 million in FY2010). These actions would be counted (scored) as savings and would help to meet the discretionary budget allocations. They provided relatively more (or help avoid deeper cuts) to regular discretionary accounts than might otherwise be possible. These types of reductions grew in importance in the FY2011 appropriation, which required a large discretionary cut from the year before. Half of the $3.4 billion reduction in total discretionary appropriations between FY2010 and FY2011 was achieved by a $1.7 billion increase in the use of farm bill limitations and rescissions.

Changes in Mandatory Program Spending (CHIMPS)

In recent years, appropriators have placed limitations on mandatory spending authorized in the farm bill ( Table 8 ). These limitations are also known as CHIMPS, "changes in mandatory program spending." Mandatory programs usually are not part of the annual appropriations process since the authorizing committees set the eligibility rules and payment formulas in multi-year authorizing legislation (such as the 2008 farm bill). Funding for mandatory programs usually is assumed to be available based on the authorization without appropriations action.

When the appropriators limit mandatory spending, they do not change the authorizing law. Rather, appropriators have put limits on mandatory programs by using appropriations language such as: "None of the funds appropriated or otherwise made available by this or any other Act shall be used to pay the salaries and expenses of personnel to carry out section [ ... ] of Public Law [ ... ] in excess of $[ ... ]." These provisions usually have appeared in Title VII, General Provisions, of the Agriculture appropriations bill.

Passage of a new farm bill in 2008 made more mandatory funds available for programs, some of which appropriators or the Administration have chosen to reduce, either because of policy preferences or jurisdictional issues between authorizers and appropriators.

Historically, decisions over expenditures are assumed to rest with appropriations committees. The division over who should fund certain agriculture programs—appropriators or authorizers—has roots dating to the 1930s and the creation of the farm commodity programs. Outlays for the farm commodity programs were highly variable, difficult to budget, and based on multi-year programs that resembled entitlements. Thus, a mandatory funding system—the Commodity Credit Corporation (CCC)—was created to remove the unpredictable funding issue from the appropriations process. The dynamic changed near the turn of the century when farm bills began using mandatory funds for programs that usually were discretionary. Appropriators had not funded some programs as much as authorizers had desired, and authorizing committees wrote farm bills using the mandatory funding at their discretion. Tension arose over who should fund certain activities: authorizers with mandatory funding at their disposal, or appropriators with standard appropriating authority. Some question whether the CCC, which was created to fund the hard-to-predict farm commodity programs, should be used for programs that are not highly variable and are more often discretionary. The programs affected by CHIMPS include conservation, rural development, bioenergy, and some smaller nutrition assistance programs. CHIMPS have not affected the farm commodity programs or the primary nutrition assistance programs (such as SNAP), which are generally accepted as legitimate mandatory programs.

For FY2013, the House bill contained $1.052 billion of reductions from 10 mandatory programs, and the Senate a $649 million reduction from five mandatory programs. These are both less than the limitations placed in FY2012, but more than historical averages.

Rescissions

Rescissions are a method of permanently cancelling the availability of funds that were provided by a previous appropriations law, and in doing so achieving or scoring budgetary savings. Often rescissions relate to the unobligated balances of funds still available for a specific purpose that were appropriated a year or more ago (e.g., buildings and facilities funding that remains available until expended for specific projects, or disaster response funds for losses due to a specifically named hurricane). These are often one-time savings from cancelling unobligated budget authority.

For FY2013, proposed rescissions totaled $484 million in the House bill and $330 million in the Senate bill ( Table 9 ). The amount in the House bill was on par with the FY2012 amount, but the Senate bill had less than last year. Both amounts were less than the peak year for the use of rescissions in FY2011. The FY2011 appropriation made unusually large rescissions, compared with prior years, to unobligated balances in accounts such as building and facilities, and rural broadband. Rescissions in FY2011 totaled about $925 million, up from a more typical range of $100 million to $500 million. Because some of these were one-time savings from cancelling unobligated balances, the high level was difficult to repeat in FY2012 and FY2013.

Selected Agency-level Tables

The following tables provide additional detail for selected agencies in the Agriculture appropriations bill:

Table 10 shows proposed appropriations for domestic food assistance programs. Table 11 shows farm loan program amounts for the Farm Service Agency. Table 12 contains appropriations for agricultural research and related programs. Table 13 presents food safety appropriations within the Food and Drug Administration and for the Food Safety Inspection Service. Table 14 through Table 16 show various rural development appropriations, including rural housing, rural cooperative business development, and rural utilities programs.

Appendix A. Background on Scope and Terms

USDA Activities and Relationships to Appropriations Bills

The U.S. Department of Agriculture (USDA) carries out widely varied responsibilities through about 30 separate internal agencies and offices staffed by about 100,000 employees. USDA spending is not synonymous with farm program spending, nor are agriculture appropriations completely correlated with USDA spending.

USDA divides its activities into "mission areas." Food and nutrition programs are the largest mission area—with more than three-fourths of USDA's budget in FY2012—supporting the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps); the Women, Infants, and Children (WIC) program; and child nutrition programs. The second-largest USDA mission area—with about one-eighth of USDA's budget—is farm and foreign agricultural services. This broad mission area includes the farm commodity price and income support programs, crop insurance, certain mandatory conservation and trade programs, farm loans, and foreign food aid programs. Five other mission areas share one-eighth of USDA's budget, including natural resource and environment, rural development, research and education, marketing and regulatory programs, and food safety.

Comparing USDA's organization and budget data to the Agriculture appropriations bill in Congress is not always easy. USDA's "mission areas" do not always correspond to the titles or categories in the Agriculture appropriations bill.

Foreign agricultural assistance is a separate title in the appropriations bill (Title V, Figure A-1 ), but is joined with domestic farm support in USDA's "farm and foreign agriculture" mission area ( Figure A-2 ). Title I in the appropriations bill (Title I, Figure A-1 ) covers four of USDA's mission areas: agricultural research, marketing and regulatory programs, food safety, and the farm support portion of farm and foreign agriculture. The Forest Service is about half of the natural resources mission area ( Figure A-2 ) but is funded in the Interior appropriations bill. It also accounts for about one-third of USDA's personnel, with about 34,000 staff years in FY2011.

The type of funding (mandatory vs. discretionary) also is an important difference between how the appropriations bill and USDA's mission areas are organized.

Conservation in the appropriations bill (Title II, Figure A-1 ) includes only discretionary programs. The mandatory funding for conservation programs is included in Title I of the appropriation in the Commodity Credit Corporation. Conversely, the non-Forest Service part of USDA's natural resources mission area includes both discretionary programs and some mandatory conservation programs.

Related Agencies

In addition to the USDA agencies mentioned above, the Agriculture appropriations subcommittees have jurisdiction over appropriations for two related agencies:

The Food and Drug Administration (FDA) of the Department of Health and Human Services (HHS), and The Commodity Futures Trading Commission (CFTC, an independent financial markets regulatory agency) —in the House only.

The combined share of FDA and CFTC funding in the overall Agriculture and Related Agencies appropriations bill is about 2% (Title VI).

Jurisdiction over CFTC appropriations is assigned differently in the House and Senate. Before FY2008, the agriculture subcommittees in both the House and Senate had jurisdiction over CFTC funding. In FY2008, Senate jurisdiction moved to the Financial Services Appropriations Subcommittee. Placement in the enacted version now alternates each year. In even-numbered fiscal years, CFTC has resided in the Agriculture appropriation act. In odd-numbered fiscal years, CFTC has resided in the enacted Financial Services appropriations act.

These agencies are included in the Agriculture appropriations bill because of their historical connection to agricultural markets. However, the number and scope of non-agricultural issues has grown in recent decades. Some may argue that these agencies no longer belong in the Agriculture appropriations bill. But despite the growing importance of non-agricultural issues, agriculture and food issues are still an important component at each agency. At FDA, food safety responsibilities that are shared between USDA and FDA have been in the media during recent years and are the subject of legislation and hearings. At CFTC, volatility in agricultural commodity markets has been a subject of recent scrutiny at CFTC and in Congress.

Discretionary vs. Mandatory Spending

Discretionary and mandatory spending are treated differently in the budget process. Discretionary spending is controlled by annual appropriations acts and consumes most of the attention during the appropriations process. Eligibility for participation in mandatory programs (sometimes referred to as entitlement programs) is usually written into authorizing laws; any individual or entity that meets the eligibility requirements is entitled to the benefits authorized by the law.

In FY2012, about 15% of the Agriculture appropriations bill was for discretionary programs (about $20 billion), and the remaining balance of 85% was classified as mandatory (about $117 billion).

Most agency operations (salaries and expenses) are financed with discretionary funds. Major discretionary programs include certain conservation programs; most rural development programs; research and education programs; agricultural credit programs; the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC); the Food for Peace international food aid program; meat and poultry inspection; and food marketing and regulatory programs. The discretionary accounts also include FDA and CFTC appropriations.

The largest component of USDA's mandatory spending is for food and nutrition programs—primarily the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) and child nutrition (school lunch and related programs)—along with the farm commodity price and income support programs, the federal crop insurance program, and various agricultural conservation and trade programs. Some mandatory spending, such as the farm commodity programs, is highly variable and driven by program participation rates, economic and price conditions, and weather patterns. Formulas are set in the 2008 farm bill ( P.L. 110-246 ). In recent years, mandatory spending has tended to rise particularly as nutrition benefits have risen because of the recession (see " Historical Trends ").

Although mandatory programs generally are outside the scope of the appropriations debate, amounts for these programs are included in the annual Agriculture appropriations act. In terms of budget enforcement, though, mandatory spending decisions are governed in the authorizations process via the Congressional Budget Office baseline. For example, the SNAP and child nutrition programs are funded by an annual appropriation based on projected spending needs. In fact, SNAP is referred to as an "appropriated entitlement," and requires an annual appropriation. In contrast, the Commodity Credit Corporation operates on a line of credit with the Treasury, but receives an annual appropriation to reimburse the Treasury and to maintain its line of credit.

Budget Authority, Obligations, Outlays, and Program Levels

In addition to the difference between mandatory and discretionary spending, four other terms are important to understanding differences in discussions about federal spending: budget authority, obligations, outlays, and program levels.

1. Budget authority = How much money Congress allows a federal agency to commit to spend. It represents a limit on funding and is generally what Congress focuses on in making most budgetary decisions. It is the legal basis to incur obligations. Most of the amounts mentioned in this report are budget authority. 2. Obligations = How much money agencies commit to spend. Obligations represent activities such as employing personnel, entering into contracts, and submitting purchase orders. 3. Outlays = How much money actually flows out of an agency's account. Outlays may differ from appropriations (budget authority) because, for example, payments on a contract may not flow out until a later year. For construction or delivery of services, budget authority may be committed (contracted) in one fiscal year and outlays may be spread across several fiscal years. 4. Program level = Sum of the activities supported or undertaken by an agency. A program level may be much higher than its budget authority for several reasons. User fees support some activities (e.g., food or border inspection). The agency makes loans; for example, a large loan authority (program level) is possible with a small budget authority (loan subsidy) that accounts for defaults and interest rate assistance, assuming most loans are repaid. Transfers from other agencies, or funds are carried forward from prior years.

Appendix B. Agriculture Appropriations Timelines

Key Policy Staff