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March 27th, 2019

D.C. Update: As USDA Prepares to Implement the Farm Bill, the Administration’s Budget Proposes Major Cuts in FY20

Throughout the month of March, USDA continued hosting listening sessions on various titles of the Farm Bill and working to create and publicize guidelines for managing programs in FY19. The Administration also released its FY20 budget proposal, with severe cuts suggested for USDA and EPA.

ACEP Implementation Update

Under the 2018 Farm Bill, NRCS may continue using authorities from the previous Farm Bill for an additional year as it works on rulemaking for conservation programs. However, some changes based on the 2018 Farm Bill will be implemented in FY19 programs.

For the Agricultural Conservation Easement Program, guidelines for implementing the program in FY19 were released on March 8. For the full suite of documents and information shared with state conservationists and regional directors, see the NRCS eDirectives site.

The first phase of FY19 guidance included several important clarifications for the coming year, including:

  • For new easements, ALE plans and forest management plans are not required, though grasslands of special environmental significance are required to have a grassland management plan developed by the eligible entity. This does not apply retroactively to unclosed 2014 Farm Bill easements.
  • The 25 percent cash match requirement will continue under the 2014 Farm Bill regulations, although agreements may be amended if the project doesn’t close in FY19 (i.e., the entity would need to show that they have the 25 percent cash match upfront but might not be required to expend it all after FY19).
  • Exception: Several states with historically low participation in ACEP-ALE (AR, AL, LA, MN, MO, ND, Pacific Islands, Puerto Rico) may waive the cash match even for projects that are not of special environmental significance.
  • Certified entities will keep their certified status, but the two new routes for becoming certified will not be implemented in FY19.
  • Because of the condensed timeline, eligible entities must agree to use the required ALE minimum deed terms for projects that close in FY19. If the project does not close in FY19, the entity will have the option to make use of the most current version of the terms available at the time of closing.
  • States may submit new template deeds for review beginning in FY20 after the publication of the interim rule. Preexisting template deeds can only be used on unclosed projects begun under the 2014 Farm Bill.
President’s FY20 Budget Released

Because of a delay caused by the recent government shutdown, the President’s Budget was released on March 11 rather than in February. As noted in previous DC Updates, this document is nearly always viewed by Congress as a political statement, and because of the severe cuts proposed for FY20 this budget is unlikely to be any different.

The USDA budget request is $20.8 billion, a $3.6 billion or 15 percent decrease from 2019 estimated spending. The budget includes a $40 million per year cut to the Agricultural Conservation Easement Program; this is the first time that this administration has targeted ACEP for cuts. The budget also proposed to eliminate the Conservation Stewardship Program and to decrease Conservation Operations (which includes conservation planning and technical assistance) to $755 million, over $100 million less than in FY19 and significantly below historic norms.

Other changes proposed in the USDA budget include a decrease in crop insurance subsidy payments, work requirements for able-bodied adults without dependents in the Supplemental Nutrition Assistance Program, cutting funding for the Sustainable Agriculture Research and Education program in half, and the elimination of the Rural Energy for America Program.

The EPA budget request is over 30 percent less than FY19. It eliminates the Nonpoint Source Program (Section 319) Grants that help pay for decreasing agricultural pollution. It also reduces funding for the Great Lakes Restoration Initiative to $30 million from $300 million in FY19 and reduces funding for the Chesapeake Bay Program to $7.3 million from $73 million in FY19.

“Middle List” of ERS and NIFA Locations Announced

On March 12, the USDA announced its shortened list of possible locations to house the Economic Research Service and National Institute of Food and Agriculture outside of the national capital region. A document was also released showing the 76 ERS positions that would remain in the capital region.

Report language in the final FY19 appropriations bill directed the Department to include cost estimates for the proposed move of the two agencies and “a detailed analysis of any research benefits of their relocation.” The report language also stated that “[i]nsufficient information and justification relating to the reorganization and relocation make moving forward on these proposals premature at this time.” This report language is not legally binding.

Although a detailed cost-benefit analysis was not included in the USDA budget, the ERS allocation did include $15 million to pay for moving agency staff outside of the national capital region, and the NIFA allocation included $9.5 million for relocation.

On March 27, the House Appropriations Committee held a hearing on the proposed move, where it was announced that a short list of potential relocation sites would be announced by USDA in the coming days. House Agriculture Committee Ranking Member Mike Conaway and House Agriculture Committee member Vicky Hartzler led a letter released on the same day in support of the relocation.

Green New Deal Resolution Vote in Senate

As he had promised earlier, Senate Majority Leader Mitch McConnell brought the Green New Deal resolution up for a vote in the Senate on March 26. In protest of what they called a “sham vote” given the lack of prior hearings on the resolution, 43 Democratic senators voted “present.” The final vote for the resolution was 0-57.

Looking Ahead

In the month ahead, Congress will take up the task of putting together appropriations bills for determining agency funding levels. USDA will continue to work through the process of preparing FY19 funding announcements, while also reviewing listening session feedback and moving ahead with the rulemaking process for FY20.