Department of Agriculture

Perennially a favorite target for Congressional earmarks, the U.S. Department of Agriculture (USDA) budget, at $92.8 billion, is nearly $3 billion below the FY 2006 level of anticipated expenditures. More than three-fourths of the USDA budget outlays for FY 2007 are dedicated to mandatory spending programs such as nutrition assistance, conservation, export promotion and farm commodity programs. The remaining balance of $21.5 billion, $1.7 billion or 7.3 percent less than the FY06 outlay level, is for discretionary programs. All USDA research and TBED-related programs fall within the discretionary section of the budget.



The FY07 budget request includes $322 million for the USDA portion of the multi-agency Food and Agricultural Defense Initiative (FADI), an increase of $69 million or 27 percent above FY06 levels. Since the research and diagnostic facility in Ames, Iowa, was fully funded in 2006, the FY07 request represents a programmatic increase of $127 million or 65 percent. The largest line-item FADI increases within the USDA are for Enhanced Surveillance for Pest Detection/Animal Health Monitoring ($43 million; 49 percent increase);  research within the Agricultural Research Service ($72 million; 112 percent increase); and the Food Emergency Response Network ($19 million; 533 percent increase).



USDA support for the much-in-the-news international Avian Influenza concern would decrease 29.3 percent in FY07 to $82 million.



Tech-based and Traditional Economic Development

Economic development activities, targeting rural America are supported by two USDA service agencies: the Rural Business-Cooperative Service and the Rural Utilities Service. Comparison of FY07 budget levels with FY06 actual levels is challenged by a $1.6 billion one-time infusion of funds for hurricane relief. The budget request also calls for elimination of a $1.5 billion program that underwrites notes issued by private sector electric and telecommunication lenders.



In addition, the budget request eliminates funding ($198 million) for the Broadband and Internet Services program, which helps finance the installation of various modes of broadband transmission capacity in rural America. However, other broadband loan programs remain in place, albeit at lower funding levels. The 2007 budget still includes discretionary funding to support about $357 million in loans.



As was the case in the president's FY06 budget proposal, no new funds are included in the FY07 budget for the Rural Business Enterprise (Congress appropriated $40 million in FY06) and Rural Business Opportunity Grant ($3 million) programs, Economic Impact Initiative Grants ($18 million), Appropriate Technology Transfer for Rural Areas ($2 million), Rural Community Development Initiative ($6 million), or the Empowerment Zones & Enterprise Community (EZ/EC) Program ($13 million).



Retained in the FY07 budget request are:

• Distance Learning and Telemedicine (DLT) Grant Program - $24.75 million (18.5 percent decrease) to support the educational and health care needs of rural America through advanced telecommunications technologies. Regarding DLT loans, the budget request states, "Since there is little demand for the DLT loans and the loans now cost the Government [due to heavy default rates in 2003], the Budget proposes to not provide any DLT loans in 2007."
• Business and Industry Guaranteed Loans - $990 million (8.3 percent increase) to provide protection against loan losses so that private lenders are willing to extend credit to establish, expand or modernize rural businesses. Special efforts are being made to help rural communities diversify their economies, particularly into value-added processing, by focusing on cooperative ventures.
• Rural Economic Development Grants - $10 million (no change) for grants to electric and telephone utilities. Program promotes sustainable rural economic development and job creation projects through the operation of a revolving loan fund program.
• Value-Added Producer Grants Program (formerly known as Value-Added Development Grants) ­ $19 million for discretionary grants (level funding).
• Renewable Energy and Energy Efficiency Program ­ $8 million for discretionary grants ($3 million decrease) and $35 million in loans ($143 million decrease). Funds are used to pay up to 25 percent of eligible project costs to purchase renewable energy systems or make energy improvements, including those that derive energy from wind, solar, biomass or geothermal sources, or hydrogen derived from biomass or water using wind, solar or geothermal energy sources.

Research

USDA research activities are coordinated by the four Research, Education and Economics agencies, which oversee the discovery, application and dissemination of information and technologies spanning the biological, physical and social sciences.



Agriculture Research Service (ARS), with a FY07 $1.001 billion (11.9 percent decrease), is the principal in-house research agency for the USDA, conducting research toward a safer, more economical food supply of agricultural products and to provide producers with technologies to competitively supply these products. Most ARS program activities would experience cuts except homeland security ($81 million; 125 percent increase) and the National Agricultural Library ($25 million; 13.6 percent increase). Total ARS funding available for R&D contracts is slated to drop 42.3 percent from $168 million to $97 million. Most of this reduction, however, results from the elimination of congressionally earmarked funds for 2006.



Cooperative State Research, Education, and Extension Service (CSREES), at $1.046 billion (13.3 percent decrease), is the federal partner with land grant and non-land grant colleges and universities in carrying out extramural research, higher education, and extension activities. After the removal of $196 million in congressionally earmarked funds, the Administration has requested $87 million of new funding for CSREES.

• Formula grant programs - $544 million (0.8 percent decrease). The budget request promotes the continued shift toward competitive grant mechanisms and away from formula funding within the traditional formula grant programs (such as the Smith-Level 3,890 Research and Extension, McIntire-Stennis and Hatch Act grant programs).
• National Research Initiative - $247.5 million (36.6 percent increase). This initiative accounts for the nation's largest competitive, peer-reviewed research program for fundamental and applied sciences in agriculture. The increase will fund initiatives in agricultural genomics, emerging issues in food and agricultural security, the ecology and economics of biological invasions, plant biotechnology and water security.
• Food and Agricultural Defense Initiative - $17 million (70 percent increase). Funding includes $5 million for a Higher Education Agrosecurity Program to provide capacity building grants to universities for interdisciplinary degree programs targeted toward supplying educational and professional development for food defense personnel.

Economic Research Service (ERS), at $82.5 million (8.7 percent increase), provides economic and other social science research and analysis for public and private decisions on agriculture, food, natural resources and rural America. The ERS request includes an increase of $5 million to implement a new research program to monitor the changing economic health and well-being of farm and non-farm households in rural areas; and an increase of $1.6 million to continue research into changing in food supply and consumption patterns. Principally an intramural research office, total ERS funding for R&D contracts remains level at $5 million.



National Agricultural Statistics Service, at $153 million (10 percent increase), conducts the Census of Agriculture and provides the official current statistics on agricultural production and indicators of the economic and environmental welfare of the farm sector. The majority of the $14 million increase is to conduct the 2007 Census.