On July 11, the House Committee on Agriculture approved a bipartisan 2012 Farm Bill on a vote of 35 to 11 following a marathon mark up in which approximately 100 amendments were filed to the bill. The House version of the Farm Bill, H.R. 6083, the Federal Agriculture Reform and Risk Management Act of 2012 (FARRM), reflects a serious effort to reduce overall spending associated with agriculture-related and nutrition programs and sets up some major issues, including crop insurance and benefits under the Supplemental Nutrition Assistance Program (SNAP/formerly food stamps), to be addressed with the Senate during eventual conference negotiations toward a final bill.

In introducing the House version of the Farm Bill, Agriculture Committee Chairman Frank Lucas (R-OK) noted that the bill is bipartisan and that his work with his Ranking Member, Rep. Collin Peterson (D-MN) has "resulted in a reform-minded, fiscally responsible policy that is equitable for farmers and ranchers in all regions and will lead to improved program delivery.” Rep. Peterson characterized the bill as putting Congress a step closer to "complet[ing] work on the 2012 Farm Bill before the current bill expires” on September 30. Rep. Peterson called on the House leadership to take up the bill for debate by the full House of Representatives before the August recess so the House and Senate can conference a final bill in September.

The Chairman and Ranking Member highlighted that the House bill:

• Saves more than $35 billion in mandatory funding, with nearly half of the savings associated with changes/reforms in the SNAP program;
• Repeals or consolidates more than 100 programs across USDA;
• Eliminates direct payments and countercyclical payments to farmers for commodity losses, as does the Senate bill, and makes changes to commodity policy that would save more than $14 billion;
• Consolidates conservation programs, going from 23 programs to 13 for savings of about $6 billion; and
• Makes changes to reduce the federal regulatory burdens on farmers, ranchers, and rural communities.

According to preliminary estimates by the Congressional Budget Office (CBO), the House version of the Farm Bill would reduce federal direct spending by an estimated $35.1 billion over ten years from current law projections. This bill governs spending on entitlement and mandatory programs that are not subject to annual appropriations action by Congress. It also authorizes appropriations for programs, such as the research and extension programs of the U.S. Department of Agriculture (USDA), which Congress must fund each year in the appropriations bills.

The Committee adopts reforms to nutrition entitlement programs, including significant changes to the SNAP program, for net savings of nearly $16.1 billion over ten years. During Committee consideration of the bill, amendments to reverse the SNAP program cuts and to scale them back to $4.5 billion, the amount approved in the Senate version of the bill, were defeated.

As does the Senate bill, the House bill achieves additional deficit reduction by eliminating direct and countercyclical payments and related payments for major commodity programs, such as wheat, corn, soybeans, etc. These provisions save $14 billion over ten years. The Committee bill also includes provisions to streamline and reform commodity policy. CBO estimates net savings from the commodity programs at $23.6 billion over ten years. The Senate bill saved $19.8 billion over ten years. The House bill continues crop insurance with a goal of improving coverage for producers of all crops in all regions.

As does the Senate bill, the House bill proposes to eliminate duplication and consolidate federal programs, such as conservation programs. The House bill would save nearly $6.1 billion over ten years from proposed changes in conservation programs.

For the USDA research and extension programs, the House bill would largely extend current programs; however given current budget constraints, the Committee reduces existing authorization levels (not actual spending) by an estimated $500 million, and includes specific authorized funding levels for programs with open-ended ("such sums as may be necessary”) authorizations. The House Committee also removes USDA’s authority to fund non-competitive grants.

The most controversial provision in the research title of the bill is a requirement for USDA to institute a 1:1 match for applied research grants that are commodity-specific or State-specific. While there is waiver authority for the Secretary of Agriculture should such research be determined "a national priority,” there is significant concern over the requirement to match federal funding on a dollar-for-dollar basis. An amendment was offered by Rep. Terri Sewell (D-AL) to strike this provision (Section 7127) from the bill. After discussion and assurances by the Chairman and Ranking Member that they will work with Committee Members, affected stakeholders, and USDA to craft a consensus that could be included in the final bill, the amendment was withdrawn.

The House bill would extend the authorization for intramural research through the Agricultural Research Service (ARS) through FY 2017. It would also reauthorize the National Institute of Food and Agriculture (NIFA) through FY 2017 and extend the authorization for NIFA’s extramural competitive grants program, the Agriculture and Food Research Initiative (AFRI), at the current $700 million annual level (AFRI is funded at $264.5 million in FY 2012). The bill would also reauthorize funding for the Extension Service and extends authority for the Hispanic-Serving Institutions (HSI) program.

The House Committee continues mandatory funding, as well as authorizes additional appropriations if Congress so chooses, for Specialty Crop Research, Organic Agriculture Research and Extension, and Beginning Farmer and Rancher Development. CBO estimates mandatory spending for research, extension, and related matters in the House bill at $546 million over ten years. The House broadens eligibility for the Beginning Farmer and Rancher Development grants to military veterans, providing a set-aside of not more than five percent for this purpose.

Also within the research title, as did the Senate, the House bill would establish a new program to recruit, train, support, and retain veterinarians. The bill authorizes $10 million for each fiscal year beginning in FY 2013.

The House version of the Farm Bill has no provisions affecting the current formula grant programs for land-grant institutions. Formula programs authorized under the Hatch Act and Smith-Lever Act have open-ended authorizations for appropriations at "such sums as may be necessary.”

The House bill does not address the indirect cost rate as the 2008 Farm Bill did. Thus, under the proposed House bill, the indirect cost rate remains at the current level of 30 percent established in the FY 2012 Agriculture Appropriations bill. The House and Senate versions of the FY 2013 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations bill currently pending before Congress would extend the 30 percent indirect cost rate for another year. The 2008 Farm Bill increased the indirect cost rate from 19 percent to 22 percent.

The House bill does not include provisions that would establish a non-profit Foundation for Food and Agriculture Research (FFAR) to promote a public-private partnership to leverage additional funding for agriculture research. The Senate bill includes language to create FFAR with mandatory funding of $100 million toward this effort, which must be matched by non-federal funding through the Foundation.

The House Farm Bill would extend existing energy programs affecting rural areas for five years through FY 2017, including the Biomass Research and Development Initiative (BRDI), which would be authorized at $20 million annually. In a significant departure from the Senate bill, the House provides that these energy programs are subject to funding by Congress through the annual appropriations bills. The Senate bill provides nearly $800 million in mandatory spending to continue existing energy programs, which would require no further action by the Congress.

Following the completion of the House committee markup, Agriculture Secretary Vilsack issued a statement that took issue with the recommended deep cuts in the SNAP program and with "misguided” reductions to energy and conservation programs. The Secretary indicated that the Administration would work with Congress during the legislative process to achieve a Farm Bill that is consistent with the President’s budget and policies.

Sources:

To view the text of the House Committee-approved bill, a summary of its provisions, and a section-by-section description of the bill, please see http://agriculture.house.gov/singlepages.aspx?NewsID=1227&LSBID=1271.