Order Code RL31301
Report for Congress
Received through the CRS Web
Appropriations for FY2003:
U.S. Department of Agriculture
and Related Agencies
Updated February 3, 2003
Ralph M. Chite, Coordinator
Specialist in Agricultural Policy
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress
Appropriations are one part of a complex federal budget process that includes budget
resolutions, appropriations (regular, supplemental, and continuing) bills, rescissions, and
budget reconciliation bills. The process begins with the President’s budget request and is
bounded by the rules of the House and Senate, the Congressional Budget and Impoundment
Control Act of 1974 (as amended), the Budget Enforcement Act of 1990, and current
program authorizations.
This report is a guide to one of the 13 regular appropriations bills that Congress passes each
year. It is designed to supplement the information provided by the House and Senate
Appropriations Subcommittees on Agriculture. It summarizes the current legislative status
of the bill, its scope, major issues, funding levels, and related legislative activity. The report
lists the key CRS staff relevant to the issues covered and related CRS products.
NOTE: A Web version of this document with active links is
available to congressional staff at:
[http://www.crs.gov/products/appropriations/apppage.sht
ml].
Appropriations for FY2003:
U.S. Department of Agriculture and Related Agencies
Summary
During 2002, the House and Senate Appropriations Committees completed
action on their respective versions of FY2003 appropriations bills (H.R. 5263 and S.
2801) for the U.S. Department of Agriculture (USDA) and Related Agencies
(including the Food and Drug Administration). However, neither chamber
conducted floor action on its respective measure before the 107th Congress
adjourned. Meanwhile, FY2003 funding for USDA and related agencies currently
is being governed by a continuing resolution that maintains FY2003 funding at the
FY2002 enacted level including supplemental appropriations.
On January 23, 2003, the Senate passed an omnibus appropriations measure
(H.J.Res. 2) containing FY2003 funding for agencies and programs within the 11
FY2003 appropriations bills that were unresolved in the 107th Congress, including
agriculture. Overall funding for ongoing USDA and related agency programs in
H.J.Res. 2 is close to the $74.3 billion provided in the Senate-reported version of S.
2801. Not included in that total is an adopted amendment providing $3.1 billion in
supplemental disaster assistance, to primarily assist producers in counties declared
disaster areas in 2001 and 2002. This funding was offset with a portion of an across-
the-board rescission of all discretionary spending in the omnibus measure. Another
adopted amendment in H.J.Res. 2, not included in the total, is $500 million in
additional food aid for African famine relief, with no budget offsets. No
supplemental provisions were included in either H.R. 5263 or S. 2801. Total funding
levels for H.J.Res. 2 currently are not available, since the potential effect of an
included 2.85% across-the-board rescission has not been determined. The measure
is in conference committee.
Among their common elements, both H.R. 5263, as reported by the House, and
H.J.Res. 2, as passed by the Senate: 1) reject an Administration proposal to eliminate
funding for three ongoing watershed programs and replace them with regular funding
for the Emergency Watershed Program; 2) fund special research grants proposed to
be terminated by the Administration, and eliminate funding for a mandatory research
program; 3) express concern over an Administration proposal to reduce mandatory
foreign food aid spending, and limit funding for the Export Enhancement Program;
4) increase funding over FY2002 for food safety and animal and plant health
inspection activities reflecting increased government responsibility to protect the
food supply from terrorist attacks; and 5) increase USDA food and nutrition program
spending by $4 billion over FY2002, in line with the Administration request,
including $3.2 billion more for the food stamp program.
*Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include the
rescission, since the effect of the rescission on individual accounts is currently unknown.

Key Policy Staff
CRS
Area of Expertise
Name
Division
Telephone
USDA Budget/Farm Spending and Coordinator Ralph M. Chite
RSI
7-7296
Conservation
Jeffrey A. Zinn
RSI
7-7257
Agricultural Trade and Food Aid
Charles E. Hanrahan
RSI
7-7235
Rural Development
Tadlock Cowan
RSI
7-7600
Domestic Food Assistance
Jean Yavis Jones
RSI
7-7331
Joe Richardson
DSP
7-7325
Agricultural Research and Food Safety
Jean M. Rawson
RSI
7-7283
USDA Marketing and Regulatory Programs
Geoffrey S. Becker
RSI
7-7287
Food and Drug Administration
Donna U. Vogt
DSP
7-7285
B. Randall
DSP
7-7046
Division abbreviations: RSI = Resources, Science and Industry; DSP= Domestic Social Policy.
Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
USDA Spending at a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Mandatory vs. Discretionary Spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Recent Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
FY2003 Continuing Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
FY2003 Budget Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
FY2003 Agriculture Appropriations Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Administration’s Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
House Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Senate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
FY2003 Agriculture Appropriations: Proposed Spending Levels and Current Issues
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Farm Commodity Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Farm Disaster Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Crop Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Farm Service Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
FSA Salaries and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
FSA Farm Loan Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Agricultural Trade and Food Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
FAS Salaries and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Foreign Food Aid: Funding and Issues . . . . . . . . . . . . . . . . . . . . . . . . 13
Mandatory Trade Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Natural Resources and Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Discretionary Conservation Programs . . . . . . . . . . . . . . . . . . . . . . . . . 16
Mandatory Conservation Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Technical Assistance Funding Proposal . . . . . . . . . . . . . . . . . . . . . . . 19
Agricultural Research, Education, and Economics . . . . . . . . . . . . . . . . . . . 19
Agricultural Research Service (ARS) . . . . . . . . . . . . . . . . . . . . . . . . . 20
Cooperative State Research, Education, and Extension Service (CSREES)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Economic Research Service (ERS) and National Agricultural Statistics
Service (NASS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Food Safety and Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Marketing and Regulatory Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Animal and Plant Health Inspection Service . . . . . . . . . . . . . . . . . . . . 23
Agricultural Marketing Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Grain Inspection, Packers, and Stockyards Administration . . . . . . . . 24
Rural Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Rural Community Advancement Program (RCAP) . . . . . . . . . . . . . . 25
Rural Housing Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Rural Utilities Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Rural Business-Cooperative Service . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Spending Restriction Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Food and Nutrition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Food and Drug Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Food Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Drug Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Medical Device Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Biologics Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
For Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
List of Tables
Table 1. USDA and Related Agencies Appropriations, FY1994 to FY2002 . . . . 3
Table 2. Congressional Action on FY2003 Appropriations for the U.S. Department
of Agriculture and Related Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Table 3. USDA and Related Agencies Appropriations for FY2003 . . . . . . . . 35
Appropriations for FY2003:
U.S. Department of Agriculture
and Related Agencies
Most Recent Developments
On January 23, 2003, the Senate completed action on an omnibus appropriations
measure (H.J.Res. 2), which includes FY2003 funding for USDA and Related
Agencies. The measure contains $3.1 billion in supplemental disaster assistance for
crops and livestock and $500 million in supplemental food aid for African famine
relief through USDA’s P.L. 480 program. H.J.Res. 2 is currently in conference
committee. During 2002, the House and Senate Appropriations Committees had
reported their respective versions (H.R. 5263 and S. 2801) of an FY2003 agriculture
appropriations bill. However, no floor action was taken before the 107th Congress
adjourned. Neither of these measures contained any supplemental spending.
USDA Spending at a Glance
The U.S. Department of Agriculture (USDA) carries out its widely varied
responsibilities through approximately 30 separate internal agencies and offices
staffed by some 100,000 employees. USDA is responsible for many activities
outside of the agriculture budget function. Hence, spending for USDA is not
synonymous with spending for farmers.
USDA gross outlays for FY2002 were $79.95 billion, including regular
spending and supplemental spending for homeland security following the September
11, 2001 terrorist attacks. The mission area with the largest gross outlays ($37.5
billion or 50% of spending) was for food and nutrition programs – primarily the
food stamp program (the costliest of all USDA programs), various child nutrition
programs, and the Women, Infants and Children (WIC) program. The second largest
mission area in terms of total spending is for farm and foreign agricultural services,
which totaled $22.9 billion, or 31% of all USDA spending. Within this area are the
programs funded through the Commodity Credit Corporation (e.g., the farm
commodity price and income support programs and certain mandatory conservation
and trade programs), crop insurance, farm loans, and foreign food aid programs.
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.




















































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































CRS-2

USDA spending in FY2002 also included $7.0 billion (9%) for an array of
natural resource and environment programs, approximately three-fourths of which
was for the activities of the Forest Service, and the balance for a number of
discretionary conservation programs for farm producers. (USDA’s Forest Service is
funded through the Interior appropriations bill, and is the only USDA agency not
Figure 1
U.S. Department of Agriculture Actual Gross Outlays, FY2002
funded through the annual agriculture appropriations bill.) USDA programs for
rural development ($2.72 billion in gross outlays for FY2002); research and
education ($2.2 billion); marketing and regulatory activities ($1.5 billion); meat and
poultry inspection ($717 million); and departmental administrative offices and other
activities ($454 million) account for the balance of USDA spending.
Mandatory vs. Discretionary Spending
Approximately three-fourths of total spending within the U.S. Department of
Agriculture is classified as mandatory, which by definition occurs outside the control
of annual appropriations. Currently accounting for the vast majority of USDA
mandatory spending are: the farm commodity price and income support programs
(including ongoing programs authorized by the 2002 farm bill and emergency
programs authorized by various appropriations acts); the food stamp program and
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-3
child nutrition programs; the federal crop insurance program; and various
agricultural conservation and trade programs.
Although these programs have mandatory status, many of these accounts
ultimately receive funds in the annual agriculture appropriations act. For example,
the food stamp and child nutrition programs are funded by an annual appropriation
based on projected spending needs. Supplemental appropriations generally are made
if and when these estimates fall short of required spending. An annual appropriation
also is made to reimburse the Commodity Credit Corporation for losses it incurs in
financing the commodity support programs and the various other programs it
finances.
The other 25% of the USDA budget is for discretionary programs, which are
determined by funding in annual appropriations acts. Among the major discretionary
programs within USDA are Forest Service programs; certain conservation programs;
most of its rural development programs and research and education programs;
agricultural credit programs; the supplemental nutrition program for women, infants,
and children (WIC); the Public Law (P.L.) 480 international food aid program; meat
and poultry inspection, and food marketing and regulatory programs. Funding for
all USDA discretionary programs (except for the Forest Service) is provided by the
annual agriculture appropriations act. Funding for Forest Service programs is
included in the annual Interior appropriations act.
Table 1. USDA and Related Agencies Appropriations, FY1994 to FY2002
(budget authority in billions of dollars)
FY94
FY95
FY96
FY97
FY98
FY99
FY00
FY01
FY02
Discretionary
$14.59
$13.29 $13.31 $13.05 $13.75
$13.69
$13.95
$15.07
$16.02
Mandatory
$56.25
$54.61 $49.78 $40.08 $35.80
$42.25
$61.95
$58.34
$56.91
Total Budget
Authority
$70.84
$67.90 $63.09 $53.12 $49.55
$55.94
$75.90
$73.41
$72.93
Note: Includes regular annual appropriations for all of USDA (except the Forest Service), the Food and Drug Administration, and the Commodity
Futures Trading Commission. Excludes all emergency supplemental appropriations.
Source: House Appropriations Committee.
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-4
A key distinction between mandatory and discretionary spending involves how
these two categories of spending are treated in the budget process. Congress
generally controls spending on mandatory programs by setting rules for eligibility,
benefit formulas, and other parameters rather than approving specific dollar amounts
for these programs each year. Eligibility for mandatory programs is usually written
into authorizing law, and any individual or entity that meets the eligibility
requirements is entitled to the benefits authorized by the law. Spending for
discretionary programs is controlled by annual appropriations acts. The thirteen
subcommittees of the House and Senate Appropriations Committees originate bills
each year which decide how much funding to devote to continuing current activities
as well as any new discretionary programs.

Recent Congressional Action
FY2003 Continuing Resolution
The 107th Congress adjourned without approving a regular full-year FY2003
appropriations measure for all non-defense agencies and programs, including USDA
and related agencies. FY2003 spending for these agencies and programs currently
is being governed by a seventh continuing resolution (P.L. 108-4, H.J.Res. 13) which
expires on February 7, 2003. The resolution maintains FY2003 spending at the
FY2002 level (including supplementals) for the effective period of the resolution.
For discretionary programs, the resolution requires funds to be allocated at the
same rate as in FY2002, that is, the equivalent of one-twelfth of the FY2002
appropriation is available in each month in FY2003. One exception to this is the rate
of funding for USDA’s Special Supplemental Nutrition Program for Women, Infants,
and Children (WIC). Total FY2003 spending for WIC is limited to its FY2002 level
of $4.4 billion. However, its authorizing statute requires that program funding be
“front loaded,” so that one-third of the funds are allocated to the states in the first
quarter of the fiscal year, instead of the one-fourth funding that would accrue to the
program in the first quarter under the continuing resolution.
The continuing resolution contains specific requirements for the rate of
spending for mandatory programs. The resolution allows the funds to be made
available at whatever rate of spending is required by a mandatory program’s
authorizing statute. Hence, full funding for food stamps and child nutrition programs
will be provided under the current resolution regardless of what proportion it is of
total spending, as long as it does not exceed the total FY2002 appropriation. The
mandatory farm price and income support programs also are unaffected, but this is
because they do not require an annual appropriation, and instead rely on the
borrowing authority of USDA’s Commodity Credit Corporation (CCC) for their
funding. The CCC does receive an annual appropriation to reimburse it for its annual
operating losses. Since the requested funding level for the CCC is below the FY2002
appropriation, available CCC borrowing authority is expected to be adequate
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-5
If a final appropriations measure is not enacted in FY2003 and USDA operates
under a continuing resolution for the entire fiscal year that limits funding to the
FY2002 level without exception, USDA spending could be adversely affected,
according to USDA budget officials. Maintaining funding levels at the FY2002 level
could lead to problems for some of the nutrition programs that are regarded as
“entitlements.” Also, all government agencies and programs must absorb a
mandated federal pay increase for FY2003, currently scheduled at 3.1%.
FY2003 Budget Resolution
The full House approved its version of an FY2003 budget resolution (H. Con.
Res. 353) on March 20, 2002. The Senate Budget Committee completed markup of
its version of the resolution (S. Con. Res. 100) during the week of March 18, 2002.
The Senate did not complete formal action on the FY2003 resolution. The budget
resolution establishes a framework for all federal spending and revenue for FY2003
and does not require presidential approval. Although the FY2003 budget resolution
has not been resolved, the House and Senate Appropriations Committees still made
FY2003 discretionary spending allocations to each of their thirteen subcommittees
to fund their respective annual appropriations bills. These so-called 302b allocations
are based on the amount of total discretionary spending contained within the House
and Senate versions of the FY2003 budget resolution. In 2002, the agriculture
subcommittee of the House Appropriations Committee received an FY2003
allocation of $17.601 billion for the funding of all discretionary USDA and related
agency programs under the subcommittee’s jurisdiction. The Senate Appropriations
Committee initially allocated $17.980 billion to its agriculture subcommittee.
However, in early January 2003, House and Senate Appropriations Committee
leadership reached an informal agreement on revised allocations for all
subcommittees with pending FY2003 action, in order to conform with
Administration budget targets. The agreed-to allocation for the agriculture
subcommittees for FY2003 was $17.4 billion, which is equivalent to the President’s
request.
FY2003 Agriculture Appropriations Action
Administration’s Request. As the first step
in
the
FY2003
appropriations process, the Bush Administration released its budget request on
February 4, 2002. Within the budget, the Administration requested FY2003 budget
authority of $74.0 billion for the U.S. Department of Agriculture and related agencies
(which includes all of USDA except the Forest Service, and also includes the Food
and Drug Administration and the Commodity Futures Trading Commission.) The
$74.0 billion requested for FY2003 is $928 million above the regular appropriations
of $73.0 billion made in FY2002 (P.L. 107-76). It is $432 million above the total
FY2002 appropriations of $73.6 billion, which includes two supplemental
appropriations acts (P.L. 107-117 and P.L. 107-206), making nearly $500 million in
net supplemental appropriations to various USDA programs, and FDA and CFTC ,in
response to the September 11, 2001 terrorist attacks.
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-6
The requested $17.4 billion for discretionary accounts is $1.4 billion above
regular discretionary appropriations of $16.0 billion made in FY2002, and $870
million above the total appropriation of $16.55 billion that includes the $535 million
supplemental. Accounting for $368 million of the requested increase in discretionary
spending for USDA and related agencies is the Administration’s assumption of a
legislative proposal that would require all federal agencies to assume the full cost
of accruing employee pensions and retiree health benefits beginning in FY2003.1
Table 2. Congressional Action on FY2003 Appropriations for the U.S.
Department of Agriculture and Related Agencies
Subcommittee
Conference Report
Markup Completed
Approval
House
House
Senate
Senate
Conference
House
Senate
Report
Passage
Report
Passage
Report
House
Senate
Public Law
H.R. 5263
S. 2801
(H.Rept.
(1)
(S.Rept.
(1)
107-623)
107-223)
6/26/02 7/23/02
7/26/02
7/25/02
**
**
**
**
** = Pending
(1) The 107th Congress adjourned without passage of H.R. 5263 or S. 2801 by their respective chambers. The 108th
Congress is considering the FY2003 appropriations for USDA and related agencies in the context of an omnibus
appropriations bill (H.J.Res. 2) which the Senate amended and passed on January 23, 2003.
House Action. The agriculture subcommittee of the House Appropriations
Committee and the full House Appropriations Committee completed their respective
markups of the FY2003 agriculture bill for USDA and related agencies on June 26
and July 11, 2002, respectively. The bill (H.R. 5263) and report (H.Rept. 107-623)
were filed by the full committee on July 26, 2002. No floor action was held on the
bill.
Total appropriations in H.R. 5263, as reported, are $74.306 billion, of which
$17.601 billion are for discretionary programs, and $56.705 billion for mandatory
USDA programs. The $17.601 billion for discretionary programs is exactly equal
to the 302b allocation given to the subcommittee by the full committee, (see
“FY2003 Budget Resolution” above), and $180 million above the President’s request
for FY2003. The discretionary level in the House bill is $908 million higher than
what was provided in FY2002 including supplementals, or $1.4 billion higher than
the regular FY2002 appropriations, excluding emergency supplementals.
1 Although the total Administration request for FY2003 includes the estimated $368 million
to fund this proposal, this report (in conformance with the presentation of data by the House
Appropriations Committee) does not allocate these requested funds across individual
agencies.
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-7
When the 108th Congress convened in early January 2003, the full House
adopted a continuing resolution (H.J.Res. 2), which also was intended to serve as a
vehicle for completing final funding decisions on the 11 remaining regular
appropriations bills, including agriculture. Although the House-adopted version of
H.J.Res. 2 was a temporary resolution extending funding through January 31, 2003,
the Senate-amended version is an omnibus appropriations measure that includes the
full-text of each of the outstanding regular bills, as amended. H.J.Res. 2 currently
is in conference. In the meantime, FY2003 spending is being governed by a seventh
continuing resolution (P.L. 108-4, H.J.Res. 13), until it expires on February 7, 2003.
(See the “FY2003 Budget Resolution” section earlier in this report.)
Senate Action. The Senate Appropriations Committee completed
subcommittee and full committee markup during the week of July 22, 2002, and
reported its version of the FY2003 agriculture appropriations bill (S. 2801, S.Rept
107-223) on July 25. S. 2801, as reported, provides total funding of $74.66 billion,
which is $354 million above the House bill, $598 million above the Administration
request, and $1 billion above the FY2002 enacted level including supplementals. Of
the total amount provided in S. 2801, $17.98 billion is for discretionary programs,
compared with $17.6 billion in the House bill, $17.4 billion in the Administration’s
request and $16.55 billion provided in FY2002.
The 107th Congress adjourned without completing action on S. 2801 or any
other permanent FY2003 agriculture spending bill. In early January 2003, Senate
appropriators combined the FY2003 agriculture appropriations bill with ten other
unresolved appropriations bills, as amended, into an omnibus package which was
adopted as a substitute amendment (S.Amdt.1) to H.J.Res. 2. H.J.Res. 2 was further
amended on the Senate floor, and adopted by the Senate on January 23, 2003.
Funding levels for USDA and related agencies in H.J.Res. 2 are relatively close to
the funding levels in S. 2801 for ongoing USDA programs. However, separate
adopted amendments in H.J.Res. 2 provide $3.1 billion in farm economic and
disaster assistance, and $500 million in additional P.L. 480 funds for emergency
famine relief in Africa. The $3.1 billion in farm assistance was offset by an across-
the-board reduction in all discretionary programs in the measure. No offsets were
provided for the supplemental P.L. 480 food aid. H.J.Res. 2 is currently in
conference committee.
FY2003 Agriculture Appropriations: Proposed
Spending Levels and Current Issues
The following sections compare the Senate-passed omnibus appropriations bill
(H.J.Res. 2) to the House-reported agriculture appropriations bill (H.R. 5263), the
Administration’s FY2003 request, and the FY2002 enacted level for various mission
areas and agencies within USDA, and for FDA. Also see the table at the end of the
report for a tabular summary of the House and Senate measures, the FY2003
request, and the FY2002 enacted appropriation levels, including supplementals. This
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-8
report will continue to track congressional action on FY2003 agriculture
appropriations as the process continues.
Farm Commodity Support
Most spending for USDA’s mandatory agriculture and conservation programs,
as authorized by the 2002 farm bill (P.L. 107-171), is funded through USDA’s
Commodity Credit Corporation (CCC). The CCC is a wholly owned Government
corporation. It has the legal authority to borrow up to $30 billion at any one time
from the U.S. Treasury. These borrowed funds are used to finance the spending of
ongoing programs such as farm commodity price and income support activities
(including annual Direct and Counter-cyclical Payments); and various agricultural
conservation and trade programs. The CCC has also been the funding source for a
large portion of emergency supplemental spending over the years, particularly for ad-
hoc farm disaster payments, and direct market loss payments to growers of various
commodities which have been provided in response to low farm commodity prices.

The CCC must eventually repay the funds it borrows from the Treasury. But,
because the CCC never earns more than it spends, its losses must be replenished
periodically through a congressional appropriation so that its $30 billion borrowing
authority (debt limit) is not depleted, which would render the corporation unable to
function. Congress generally provides this infusion through the regular annual
USDA appropriation law. Because of the degree of difficulty in estimating its
funding needs, which is complicated by crop and weather conditions and other
uncontrollable variables, the CCC in recent years has received a “current indefinite
appropriation,” which in effect allows the CCC to receive “such sums as are
necessary” during the fiscal year for previous years’ losses and current year’s losses.
Indefinite appropriations have become more common for the CCC in recent years,
particularly in FY2000 when CCC net outlays in that year totaled $32 billion.
Without an indefinite appropriation, the CCC would have exhausted its $30 billion
borrowing limit.
For FY2003, the Administration requested an indefinite appropriation for the
CCC estimated at $16.285 billion, compared with an estimated $20.279 billion for
FY2002. Both the House-reported appropriations bill (H.R. 5263) and the Senate-
passed omnibus measure (H.J.Res. 2) concur with this request and estimate.
Farm Disaster Assistance. With a large portion of the nation in extreme
and severe drought for the past two years, many farm groups have been seeking
supplemental federal disaster assistance for 2001 and 2002 crop and livestock losses.
The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res. 2)
contains an adopted Cochran amendment (S.Amdt. 204) providing $3.1 billion in
economic and disaster assistance for agricultural producers. No comparable
provisions have been considered in the House.
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-9
An estimated $2.04 billion of the assistance in the Senate-passed measure is in
the form of supplemental direct payments to producers of various crops. If a county
received a disaster declaration in either 2001 or 2002, eligible growers in that county
could receive a supplemental payment, with no distinction of whether the producer
has been affected by a natural disaster. The eligible producer would receive a
payment equal to 42% of the direct payment the producer received for the 2002 crop
under the federal price and income support program. The adopted amendment also
contains $375 million for other specified crops and $350 million in livestock
assistance.
Throughout the more than one-year debate on 2001 and 2002 farm disaster
assistance, the Administration has insisted that any new emergency aid for farmers
needs to be offset with comparable spending reductions elsewhere in the budget. The
total $3.1 billion cost of the amendment was offset as part of a 1.6% across-the-board
reduction in all non-defense discretionary spending in the resolution. However, the
effect of this rescission on USDA discretionary programs has not been determined.
Conferees are expected to address the issue of whether an across-the-board
rescission is the appropriate way to fund the assistance, considering that the
assistance is classified as mandatory spending and the rescissions are to discretionary
programs. They are also expected to address concerns that the assistance in the bill
is not necessarily targeted to those most in need of disaster aid.
Last year, a Daschle amendment to provide an estimated $6 billion in farm
disaster assistance was included in the Senate’s FY2003 Interior appropriations bill,
with no offsets. However, Senate floor action was not completed when the 107th
Congress adjourned. A similar Daschle amendment (S.Amdt. 79) was offered to
H.J.Res. 2, but was defeated on the Senate floor. For a comparison of the disaster
provisions in S.Amdt. 2, as passed by the Senate, with the Daschle amendment and
other pending bills, see CRS Report RL31700, Farm Disaster Bills in the 108th
Congress: A Comparison.
Crop Insurance
The federal crop insurance program is administered by USDA’s Risk
Management Agency (RMA). It offers basically free catastrophic insurance to
producers who grow an insurable crop. Producers who opt for this coverage have the
opportunity to purchase additional insurance coverage at a subsidized rate. Most
policies are sold and completely serviced through approved private insurance
companies that have their program losses reinsured by USDA. The annual
agriculture appropriations bill makes two separate appropriations for the federal crop
insurance program. It provides discretionary funding for the salaries and expenses
of the RMA. It also provides “such sums as are necessary” for the Federal Crop
Insurance Fund, which funds all other expenses of the program, including premium
subsidies, indemnity payments, and reimbursements to the private insurance
companies.
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-10
The Senate-passed omnibus measure (H.J.Res. 2) and the House-reported bill
(H.R. 5263) provide nearly identical FY2003 funding of $70.7 million for RMA
salaries and expenses, the only discretionary component of the federal crop
insurance program. The House and Senate levels are slightly below the
Administration request only because neither bill concurs with the Administration
request to shift GSA rent expenses from a central account to individual agency
accounts. The Administration request is $4 million below the FY2002 appropriation
of $74.75 million. Most of the reduction in the FY2003 funding request is
attributable to one-time costs in FY2002 for implementing the Agricultural Risk
Protection Act (P.L. 106-224), which provided increased subsidies and made other
enhancements to the crop insurance program.
For mandatory expenses of the crop insurance program (premium subsidy,
program losses and reimbursements to private insurance companies), the
Administration requests “such sums as are necessary” and estimates an FY2003
appropriation of $2.89 billion, which is virtually equal to the FY2002 estimate of
$2.90 billion. H.J.Res. 2, as passed by the Senate, and H.R. 5263, as reported by the
House, concur with the FY2003 request.
Annual spending on the crop insurance program is difficult to predict in
advance and is dependent on weather and crop growing conditions. The crop
insurance program received legislative enhancements in 2000 (P.L. 106-224) which
have contributed to significantly higher farmer participation in the program. The
Administration maintains that the increased participation has resulted in windfall
profits for the private insurance companies. Hence, the budget request contains a
legislative proposal to require private insurance companies to absorb more of the risk
of the program by limiting their underwriting gains to 11.5% of retained premiums.
Neither bill concurs with this proposal. Senate report language directs USDA to
follow current procedures in the Standard Reinsurance Agreement between private
companies and USDA before any risk-sharing changes are made.
For more background on crop insurance, see CRS Report RL30739, Federal
Crop Insurance and the Agriculture Risk Protection Act of 2000 (P.L. 106-224).
Farm Service Agency
While the Commodity Credit Corporation serves as the funding mechanism for
the farm income support and disaster assistance programs, the administration of
these and other farmer programs is charged to USDA’s Farm Service Agency (FSA).
In addition to the commodity support programs and most of the emergency assistance
provided in recent supplemental spending bills, FSA also administers USDA’s direct
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-11
and guaranteed farm loan programs, certain conservation programs and domestic
and international food assistance and international export credit programs.
FSA Salaries and Expenses. This account funds the administrative
expenses for program administration and other functions assigned to the FSA. These
funds consist of appropriations and transfers from CCC export credit guarantees,
from P.L. 480 loans, and from the various direct and guaranteed farm loan programs.
All administrative funds used by FSA are consolidated into one account. For
FY2003, the Administration requests an appropriation of $993.6 million for FSA
salaries and expenses, compared with $939 million appropriated in FY2002. Most
of the requested increase is attributable to increased pay costs and a lack of carryover
funds from FY2002. (FY2002 funding was bolstered by a $29 million carryover
from FY2001. No carryover is expected into FY2003.) The requested level for
FY2003 does not reflect any new activities associated with the recently enacted 2002
farm bill (P.L. 107-171). The farm bill provides $50 million in new mandatory no-
year funding for FSA salaries and expenses to administer new farm bill programs.
The House-reported bill (H.R. 5263) provides $977 million, $17 million less
than the Administration request of $993.6 million. The Senate-passed omnibus
measure (H.J.Res. 2) provides $986.9 million, which is $6.7 million less than the
Administration request, but nearly $10 million more than the House-reported bill.
However, the farm disaster assistance provisions in H.J.Res. 2 contain an additional
$70 million in FSA salary and expense funding (through a transfer from the
Commodity Credit Corporation) to help FSA administer the disaster provisions of
H.J.Res. 2 and the commodity support titles of the 2002 farm bill. Neither bill
concurs with the President’s request to increase the FSA appropriation by $17
million over FY2002 to cover FSA rental payments to GSA, which are currently paid
out of a central USDA account.
FSA Farm Loan Programs.
Through FSA farm loan programs, USDA
serves as a lender of last resort for family farmers unable to obtain credit from a
commercial lender. USDA provides direct farm loans and also guarantees the timely
repayment of principal and interest on qualified loans to farmers from commercial
lenders. FSA farm loans are used to finance the purchase of farm real estate, help
producers meet their operating expenses, and financially recover from natural
disasters. Some of the loans are made at a subsidized interest rate. An appropriation
is made to FSA each year to cover the federal cost of making direct and guaranteed
loans, referred to as a loan subsidy. Loan subsidy is directly related to any interest
rate subsidy provided by the government, as well as a projection of anticipated loan
losses caused by farmer non-repayment of the loans.
For FY2003, the House-reported bill (H.R. 5263) concurs with the
Administration request for an appropriation of $212.2 million to subsidize the cost
of total direct and guaranteed farm loans of $3.8 billion. The Senate-passed omnibus
measure (H.J.Res. 2) provides $243.8 million, $31.6 million above FY2002 and the
FY2003 request, to support $4.065 billion in farm loans, or $263 million more in
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-12
loans than the House-reported bill and the Administration request. Most of the
difference between the House and Senate funding levels is that the Senate measure
provides $24 million more in loan subsidy than the House to support an additional
$205 million in guaranteed subsidized farm operating loans.
FSA farm loan levels have been higher in recent years because an FY2000
supplemental act (P.L. 106-113) provided significant emergency funding for various
USDA farm loan programs, from which balances were carried over into subsequent
years. Supplemental funding has been provided in recent years for federal farm
loans in response to low farm commodity prices, which have diminished the ability
of farmers to secure commercial farm loans.
Agricultural Trade and Food Aid
The Senate-passed omnibus appropriations bill (H.J.Res. 2) contains an
appropriation of $1.964 billion in FY2003 for USDA’s international activities that
are subject to annual appropriations (P.L. 480 food aid, salaries and expenses of the
Foreign Agricultural Service, and administrative expenses for managing export credit
guarantee programs). The total includes an adopted Nelson (FL) amendment,
containing an additional $500 million for humanitarian food aid for Sub-Saharan
African countries under the P.L. 480 Title II account. The House-reported bill
recommends budget authority of $1.491 billion for USDA’s international programs.
This level is $367 million greater than enacted in FY2002 and $41.5 million greater
than requested by the President for FY2003. With the Nelson amendment, the
Senate bill recommendation for appropriated international programs is $473 million
greater than that in the House-reported bill. The issue of additional appropriations
to meet food needs in Sub-Saharan Africa is expected to be addressed in conference.
Among its general provisions, both the Senate omnibus bill and H.R. 5263 as
reported limit funding for one of USDA’s export subsidy programs, the Export
Enhancement Program (EEP), to not more than $28 million in FY2003, compared
with the Administration estimate of $478 million.
The Administration’s budget estimate of a program level of $6.45 billion for all
USDA international activities for FY2003 was based on estimated spending of $478
million for EEP.2 The program levels for USDA’s international activities were
2 Program level is an estimate of the value of all goods and services provided through
USDA’s international activities. Program level exceeds budget authority because certain
significant federal credit programs, such as export credit guarantees funded through the
borrowing authority of the Commodity Credit Corporation (CCC), do not require annual
appropriations. Only administrative expenses and loan subsidies, not the value of the loan
or guarantee, require an appropriation. In addition, CCC funded activities, such as EEP,
MAP, and FMDP, which are included in program level, do not require annual appropriations.
(continued...)
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-13
estimated at $6.4 billion in FY2002, and were $5.22 billion in FY2001. Increased
budget authority requested for FY2003 reflects a decision by the Administration to
phase out food aid that is dependent on surpluses and to pay for much of U.S. foreign
food aid with discretionary rather than mandatory spending. The net effect of curbing
EEP spending while augmenting discretionary funding for food aid would mean a
program level near the Administration estimate. Although both bills recommend
increases in budget authority for discretionary food aid programs, report language
also stresses the continuing importance of commodity assistance and the use of
surplus commodities in U.S. food aid programs. The Senate committee report
(S.Rept. 107-223), for example, expresses strong disagreement with Administration
decisions to phase out food aid based on commodity surpluses.
FAS Salaries and Expenses. The Foreign Agricultural Service (FAS)
administers USDA’s international programs. The administration of P.L. 480 Food
for Peace, however, is shared between USDA and the U.S. Agency for International
Development (USAID). USDA is responsible for Title I of P.L. 480, which provides
low-interest, long-term loans to developing countries to finance the purchase of U.S.
food products, while USAID is responsible for Title II (commodity donations) and
Title III (a bilateral food grant program). FAS (with the Farm Service Agency–FSA)
administers the export credit guarantee programs as well. For salaries and expenses
of FAS, the Senate- passed omnibus bill provides budget authority of $131.2 million,
while H.R. 5263 provides budget authority of almost $130 million. The President’s
budget requested $131.6 million and the FY2002 enacted amount was $121.8
million. Both bills also recommend $4.1 million for administrative expenses of FAS
and FSA in connection with the export credit programs.
Foreign Food Aid: Funding and Issues. Within the $1.491 billion of
recommended budget authority requested for discretionary programs, H.R. 5263, as
reported, provides $1.357 billion for P.L. 480 (Food for Peace) programs, which
have been the main channel for U.S. foreign food aid and are the largest appropriated
international USDA program. The House level is $358 million greater than the
FY2002 enacted amount and $43 million greater than the President’s FY2003
request. Compared to the budget request, H.R. 5263 increases Title II commodity
donations by $15 million and Title I loans by $28 million. Within the $1.964 billion
of budget authority provided by the Senate bill for discretionary programs, $1.828
billion would go to P.L. 480 food aid.
With the adopted Nelson amendment to the Senate bill, food aid appropriations
would increase to about $1.8 billion compared with spending of an estimated $1.61
billion in FY2002 and $1.66 billion in FY2001. Despite the recommended increases
in budget authority, the program level for U.S. food aid under the Administration
request would decline to $1.2 billion.
2 (...continued)
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-14
The increase in food aid donations recommended by the Senate bill is in
response both to unanticipated food needs in a number of Sub-Saharan African
countries and to the Administration’s decision to phase out food aid based on
commodity surpluses or CCC funding. Proposed reductions in Section 416 (which
uses surplus commodities) are based on a recent Administration review of food aid
that also recommended (and is in the budget) that all programs now run through
private voluntary organizations (PVOs), cooperatives, and the World Food Program
be placed in USAID, with USDA food aid activities confined to government-to-
government programs. Consistent with this approach, the Administration shows no
CCC funding in FY2003 for Food for Progress (FFP) which provides U.S.
commodities to developing countries and emerging democracies. CCC funding of
this program has averaged around $100 million annually in recent years. Any FFP
activity would be limited to government-to-government programs under P.L. 480
Title I. Reauthorization of the FFP program in the 2002 farm bill (P.L. 107-171),
with continued reliance on CCC funding, complicates the efforts of the
Administration to phase out CCC-funded food aid programs.
The Administration’s decisions to phase out Section 416(b) commodity
donations and to limit the proportion of commodities that are monetized (i.e., sold)
to finance projects have provoked controversy. Food aid providers, such as private
voluntary organizations (PVOs) and cooperatives, agribusiness suppliers of
commodities to the food aid programs, and Members of Congress have criticized the
Administration’s decisions on food aid. These groups welcome the increase in Title
II commodity donations, but maintain that the net effect of the Administration’s
decision will be to reduce U.S. foreign food aid. Reflecting these views, the House
Committee report endorses the use of commodities (and monetization) in U.S. food
aid programs and points out that it “expects” the Administration to take its views into
consideration in administering food aid programs. While some food aid groups agree
that food aid should not be based on the availability of surpluses (as is the case with
Section 416(b), they maintain that substantially more funds for food aid than
requested by the President or provided in the House or Senate reported bills are
needed. The Nelson amendment was adopted in response to these concerns.
The use of commodity surpluses to augment U.S. food aid has been criticized
by the European Union, Australia, and other agricultural exporting countries as an
effort to circumvent U.S. World Trade Organization (WTO) export subsidy reduction
commitments. These trading partners argue that much of U.S. food aid is being used
to manage supplies rather than to meet emergency needs and that large food aid
shipments impede sales of agricultural products by and between developing
countries. The issue of food aid and international agricultural trading rules is being
pursued by U.S. trading partners in the new round of multilateral trade negotiations
launched at the end of 2001.

Mandatory Trade Programs. In addition to Section 416(b) and Food for
Progress, many other USDA international programs are not subject to direct annual
appropriations, and instead are funded through CCC borrowing authority. About
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-15
two-thirds of the proposed FY2003 program level, $4.058 billion, would be for CCC
export credit programs, which guarantee payment for commercial financing of U.S.
agricultural exports. The export value of credit guarantees historically has not
reached the levels anticipated in budget requests due to actual market conditions and
credit needs.
U.S. export credit programs have also been raised as an issue in WTO
agricultural trade negotiations. The EU and other trading partners charge that the
program has a subsidy element (although it is much less than the subsidy represented
by the EU’s export restitution program) and gives the U.S. an unfair competitive
advantage in exporting certain agricultural commodities. The U.S. has been engaged
in negotiations on export credit programs in the Organization for Economic
Cooperation and Development (OECD), but these negotiations did not succeed and
have been suspended. Any changes in the U.S. program that might result from trade
negotiations would have to withstand scrutiny by the House and Senate Agriculture
Committees which strongly support the programs as they are presently constituted.
For other CCC-funded programs, the Administration proposes $90 million for
the market access program (MAP) and $28 million for the foreign market
development cooperator program (FMDP), the same as current year funding. Both
programs – which have been expanded significantly by the 2002 farm bill (P.L. 107-
171) – assist trade associations and others to develop overseas markets for U.S.
farm products. For one CCC-funded direct export subsidy program, the Export
Enhancement Program (EEP), both bills limits spending to $28 million. In contrast,
the Administration had proposed $478 million for EEP, the maximum permitted by
the 1996 farm law and world trade obligations. For its proposed reductions from the
authorized level, the House bill scored savings of $450 million, although only about
$1 million annually has been used in recent years. In the past, the Congressional
Budget Office has scored no savings for proposed cuts to EEP funding, since actual
spending in the program has been negligible. However, the House Budget Committee
chose to use the Office of Management and Budget (OMB) score which allows
dollar-for-dollar savings for cuts from the authorized EEP level.

For the other export subsidy program, the Dairy Export Incentive Program
(DEIP), the President’s budget anticipates that $63 million would be provided also
reflecting maximum permitted levels under trade obligations.
No additional funding is in the FY2003 budget request for the Global Food for
Education Initiative (GFEI), a pilot school and child nutrition program begun by the
Clinton Administration and expected to cost an estimated $230 million. USDA said
a decision on continuation will hinge on the results of an evaluation. However, the
new farm bill (P.L. 107-171) mandates $100 million of CCC funding to continue this
program in FY2003 and “such sums as necessary” in fiscal years 2004-2007.
Finally, the Administration proposes that all costs of the “cargo preference” law,
which requires that 75% of all food aid be shipped on U.S. flag vessels when
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-16
feasible, would be borne by USDA; currently, the U.S. Maritime Administration
reimburses USDA for one-third of those costs.
For more information on agricultural trade and food aid, see CRS Issue Brief
IB98006, Agricultural Export and Food Aid Programs and CRS Issue Brief
IB10077, Agricultural Trade Issues in the 107th Congress.
Natural Resources and Environment
The natural resources and environment mission area within USDA is
implemented through the programs of the Natural Resources Conservation Service
(NRCS), the Farm Service Agency (FSA), and the Forest Service. (Funding for the
Forest Service is provided in the annual Interior appropriations bill, and is not
discussed further.) Conservation spending combines discretionary spending,
requested by the Administration at $1.05 billion for NRCS and FSA in FY2003, and
mandatory funding, currently estimated at just over $3.0 billion for FY2003,
according to Congressional Budget Office (CBO) estimates which includes $1 billion
in new spending authorized by the recently enacted 2002 farm bill (P.L. 107-171).
The 2002 farm bill provides legislative authority, including funding levels, for many
of the mandatory conservation programs through FY2007. Under this law, overall
mandatory conservation funding is forecast by CBO to grow by about 80%,
increasing by a total of $9.2 billion through FY2007 (and $17.1 billion through
FY2011, assuming no changes in policy).
Discretionary Conservation Programs. The House Appropriations
Committee-reported bill (H.R. 5263) provides $1.02 billion for all discretionary
conservation programs within USDA, $29 million below the Administration request
of $1.05 billion and $36 million below the FY2002 appropriation of $1.056 billion,
which includes $94 million of supplemental spending provided for watershed and
flood prevention in P.L.107-206. The Senate-passed omnibus appropriations bill
(H.J.Res. 2) provides $1.037 billion for FY2003, which is $35 million above the
House level. Much of the difference between the congressional levels and the
request is a $48.7 million request for the Emergency Conservation Program that is
not included in either bill.
The largest discretionary conservation program is Conservation Operations
(CO), most of which supports technical assistance. The Administration recommends
an appropriation of $841 million for CO, up $62 million or 8%, compared with the
FY2002 appropriation of $779 million. Of this increase, $48 million would pay for
technical assistance in helping animal feeding operations comply with clean water
regulations. H.R. 2563, as reported, provides a CO funding level of $843.6 million
for FY2003, which is $64.6 million above FY2002, and $2.6 million above the
Administration’s request. The Senate-passed omnibus bill recommends $840
million, which is $60 million above FY2002 and $1 million less than the request.
The House bill requires NRCS to report on funding allocations to states within 45
days in response to a concern that the agency is reducing state allocations in
proportion to congressional earmarks rather than treating earmarks as additions to
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-17
each state’s allocation. The Senate bill states that the 2002 farm bill already
addressed the funding of technical assistance to support mandatory programs through
the CCC by providing that funding for each program include funding for necessary
technical assistance. The bill states that none of the appropriated funds to the CO
account are to be used to implement the mandatory programs.
Reports accompanying both bills identify more than 50 earmarks, many of
which had received similar treatment in earlier years. The Senate bill, for example
includes 83 earmarks allocating about $90 million. The Senate bill specifies that all
FY2002 earmarks are not funded in FY2003, unless specified. Some earmarks are
for specific projects or sites and others are for activities. The largest earmark is for
the grazing lands conservation initiative — H.R. 5263 provides $21.5 million and
H. J. Res 2 provides $23.5 million, even though the recently enacted 2002 farm bill
(P.L. 107-171) authorized appropriations of $60 million annually. H.R. 5263
provides $3 million for animal waste management pilot projects, while H.J.Res. 2
specifies several animal waste management projects for funding. Both bills identify
partners to be involved in specific projects and activities.

The Administration requests no appropriation in FY2003 for its three ongoing
watershed programs: Watershed and Flood Prevention Operations ($200 million
appropriated in FY2002, including a $94 million supplemental appropriation
provided in P.L. 107-206), Watershed Surveys and Planning ($11 million in
FY2002) and Watershed Rehabilitation Program ($10 million in FY2002). Instead,
it requests $110 million for Emergency Watershed Protection, which is the average
of annual spending over the past 10 years, so that USDA would have funds on hand
to provide immediate assistance after a natural disaster. (Currently, the emergency
programs typically are funded in supplemental acts after a disaster strikes, so
assistance may not be available for several months or longer after the damage
occurs.)
Neither bill concurs with the Administration request to consolidate accounts
into the Emergency Watershed Protection account. Instead, H.R. 5263 recommends
$110 million for Watershed and Flood Prevention Operations (with numerous
earmarks), $11.2 million for Watershed Surveys and Planning, and no funding for
Emergency Watershed Protection, while H.J.Res. 2 recommends $105 million for
Watershed and Flood Prevention Operations (with numerous earmarks), $11.0
million for Watershed Surveys and Planning, $30 million for Watershed
Rehabilitation, and no funding for Emergency Watershed Protection, and also $30
million for Watershed Rehabilitation. Both bills limit spending for technical
assistance to $45.5 million of the total and spending for activities related to
protecting threatened and endangered species to $1 million.
The Administration also requests no funding in FY2003 for the Forestry
Incentives Program, which is terminated by the 2002 farm bill. (It was funded at $7
million in FY2002). The Emergency Conservation Program, an FSA-funded
program which helps producers repair damaged farmland following a disaster, is
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-18
usually funded through emergency supplemental appropriations. However, the
Administration assumes that FY2003 spending will be the average of the past 10
years, $48.7 million, and requests the availability of this level of funding in the
regular FY2003 appropriations, which it says would enable it to more rapidly
respond to emergencies. The Administration requests almost level funding for the
Resource Conservation and Development (RC&D) Program, to support activities in
designated RC&D districts, at $49.1 million. Both bills concur with the
Administration request not to provide any funding for the Forestry Incentive
Program. H.J.Res. 2 recognizes the creation of the new similar Forest Land
Enhancement Program in the 2002 farm bill, and notes that it will receive a total of
$100 million in mandatory funding through FY2007. But the two measures differ
from the request by not funding the Emergency Conservation Program and by
providing an increase for the RC&D Program; the House bill increase is more than
$7 million, to $55.1 million, while the Senate bill increase is almost $2 million, to
$50.0 million.
Mandatory Conservation Programs. The Administration’s FY2003
request was submitted prior to enactment of the 2002 farm bill, which reauthorized
many conservation programs slated to expire at the end of FY2002. Although the
Administration stated its support for increased mandatory conservation funding in
its comments about the 2002 farm bill, its budget request for FY2003 did not include
any of the anticipated increases, except that it requested funding of $200 million for
the Environmental Quality Incentives Program (EQIP) in FY2003. Most of the other
mandatory conservation programs had either reached their authorized ceilings (set
in dollars or acres), or had been unfunded because of limitations enacted each year
in appropriations legislation.
The largest mandatory conservation program is the Conservation Reserve
Program (CRP), which pays farmers to retire from production highly erodible and
environmentally sensitive land. Late last year, USDA reported that there were about
35.1 million acres enrolled in the CRP, almost 10% of the country’s cropland. It was
approaching its ceiling of 36.4 million acres, which was raised to 39.2 million acres
by the 2002 farm bill. The budget assumes FY2003 outlays of $1.856 billion to fund
existing and new contracts. Most other mandatory funding programs will grow
rapidly, as they were reauthorized by the 2002 farm bill. Examples include the
Wetlands Reserve Program, which will grow from 1.075 million acres (by 250,000
acres per year) to 2.275 million acres and the Environmental Quality Incentives
Program, which will grow from $200 million annually to $1.3 billion annually, by
the end of FY2007.
General provisions in H.R. 5263, as reported, limit EQIP funding to $695
million (a savings of $5 million from the authorized level) and limit WRP enrollment
to 245,833 acres in Section 745 (a reduction of 4,177 acres from the authorized level,
or $5 million in savings). H.R. 5263 also limits expenditures for a new mandatory
program, the Conservation Security Program, to a single state, Iowa, making it a pilot
program (savings of $3 million in FY2003). This program will provide assistance
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-19
to farmers for the first time in FY2003 to install conservation practices on land in
production. The Senate-passed bill prohibits using any of the authorized $45 million
in mandatory FY2003 funding for the Small Watershed Rehabilitation Program.
Technical Assistance Funding Proposal. The Administration proposed
a new technical assistance line item for FY2003 in a January 2003 letter from the
Office of Management and Budget. This line item would provide an additional
$332.8 million to fully fund the technical assistance necessary to implement all
mandatory and discretionary conservation programs, including the new programs and
enlarged existing programs enacted in the 2002 farm bill. It would be offset by
decreases in funding in five other USDA accounts, with over 80% of the offsets
coming from other conservation programs. The Administration states that this
proposal responds to a Department of Justice opinion that technical assistance
funding for mandatory programs remains limited under a cap that had been placed
in section 11 of the Commodity Credit Corporation charter in prior law. The Senate
omnibus bill rejected this proposal, saying that Congress had already removed this
cap by provisions in the 2002 farm bill. The Senate also went further, stating that no
funds from the Conservation Operations account could be used to pay for technical
assistance supporting implementation of any of the mandatory programs in FY2003.
The House bill is silent on this topic as it was passed before this issue arose.
For more information on USDA conservation issues, see CRS Issue Brief
IB96030, Soil and Water Conservation Issues, and for more information on the farm
bill conservation provisions, see CRS Report RL31486, Resource Conservation Title
of the 2002 Farm Bill: A Comparison of New Law with Bills Passed by the House
and Senate, and Prior Law.
Agricultural Research, Education, and Economics
The Senate-passed omnibus bill (H.J.Res. 2) provides $2.516 billion for
USDA’s four research, education, and economics (REE) agencies in FY2003, which
is $171 million above the House committee-reported (H.R. 5263) level of $2.371
billion. Both the Senate omnibus and the House committee bill are above the
Administration request of $2.229 billion. The omnibus bill is $71 million above the
FY2002 enacted level (including supplementals), while the House level is $74
million below the aggregate FY2002 appropriations.
Four agencies carry out USDA’s REE function. The Department’s in-house
research agency is the Agricultural Research Service (ARS), which provides
scientific support to USDA’s action and regulatory agencies and conducts long-term,
high risk, basic and applied research on subjects of national and regional importance.
The National Agricultural Library merged with ARS in the 1994 USDA
reorganization. The Cooperative State Research, Education, and Extension Service
(CSREES) is the agency through which USDA sends federal funds to land grant
Colleges of Agriculture for state-level research, education and extension programs.
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-20
The Economic Research Service (ERS) provides economic analysis of agriculture
issues using its databases as well as data collected by the National Agricultural
Statistics Service (NASS). ARS, CSREES, ERS, and NASS are under the
Undersecretary for Research, Education, and Economics.
Agricultural Research Service (ARS). The Senate-passed omnibus
measure provides $1.15 billion for ARS. Of that amount, $1.05 billion would
support ARS’s research programs, and $101 million would support modernizing and
building ARS facilities. The omnibus measure represents a $74 million decrease
from FY2002's $1.2 billion regular appropriation for all of ARS, with a 7.6%
increase in the research area and a 15% decrease in the regular appropriation for
facilities funding. Taking into consideration the combined supplemental funding of
$138 million that ARS received in two FY2002 supplemental acts (P.L. 107-117 and
P.L. 107-206), the omnibus measure provides a 3.3% increase in funding for ARS
research, but a 53% decrease in construction funds.3 The House committee bill (H.R.
5263) provides $1.1 billion for ARS – $1 billion for research programs and $95.3
million for facilities. For all of ARS, H.R. 5263 is at roughly the same level provided
in the omnibus bill. The President’s budget requested $971.4 million for ARS
research and $16.6 million for construction projects for FY2003.
For FY2003, the Administration proposed reducing spending in certain core
research areas by $15 million and closing certain labs in order to increase funding
for ARS research in selected high priority areas. As in past years, neither the House
nor the Senate measure concurs with these proposals. H.R. 5263 contains language
in its report blocking the expenditure of any funds to conduct a review of the quality
and relevance of ARS research, stating that the National Academy of Science is due
to release a similar study sometime in 2002. The Senate-passed omnibus bill
contains no comparable language.
The Public Health Security and Bioterrorism Response Act of 2002 (P.L. 107-
188) authorized additional appropriations for ARS in FY2003-06 to upgrade
bioterrorism-related research facilities in Plum Island, NY and Ames, IA. The Act
also authorized $190 million in FY2003 to be shared among ARS, APHIS, the Forest
Service, and cooperators in the states for research on bioterrorism prevention,
preparedness, and response, among other things. The Senate-passed omnibus bill
does not contain any appropriations under that authority.
3 P.L. 107-117 provided $50 million to ARS for constructing a high security bio-
containment facility at its National Animal Disease Center in Ames, Iowa, $23 million for
upgrading its foreign animal disease research lab on Plum Island, New York, and $40 million
for bioterrorism research. P.L. 107-206 provided an additional $25 million to Ames, Iowa.
Also, included in P.L. 107-206 was $8 million for research on plant and animal diseases.
However, the $8 million was contingent upon a Presidential request and emergency
designation, which the President did not provide.
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-21
Cooperative State Research, Education, and Extension Service
(CSREES). The Senate-passed omnibus measure provides $1.156 billion for
CSREES support of research and extension programs at the land grant colleges of
agriculture. This amount is $94 million less than H.R. 5263. It represents a 12%
increase above the FY2002 appropriation of $1.024 million, and a 13% increase
above the Administration’s request of $1.021 million.
The Senate-passed omnibus measure increases formula funds for: (1) core
research and extension programs at 1862 land grant institutions: $185.5 million (+
$5.4 million from FY2002 and the President’s request; + $3.5 million from the
House bill); (2) forestry research: $22.5 million (+ $.07 million from FY2002 and
the budget request; - $.05 million from H.R. 5263); (3) research at 1890 (historically
black) land grant colleges: $35.6 million (+$1 million from FY2002 and the budget
request; ( -$0.4 million compared with H.R. 5263; (4) extension at 1890 colleges:
$32.1 million (+$1 million from FY2002 and the budget request; virtually even with
H.R. 5263); and (5) extension at 1862 institutions : $284.2 million (+$8.3 million
from FY2002 and the budget request; +$7.2 million from H.R. 5263).
The Senate-passed measure increases funding for Special Research (earmarked)
grants to $103.8 million. This is somewhat higher than the $102.8 million contained
in the House- reported measure. The Administration had proposed termination of
most Special Research grants, with a funding recommendation of $3.3 million.
FY2002 funding was $97 million. The omnibus measure also continues funding for
an additional group of earmarked grants under the “Federal Administration” portion
of the CSREES budget, providing $26.3 million for those research projects ($21.7
million in FY2002; $9.7 million in the budget request). Finally, the omnibus
measure would provide $24.3 million for the National Research Initiative
Competitive Research Grants (NRI) program, compared with $130 million in the
House bill. The NRI was funded at $120 million in FY2002, and the Administration
had proposed doubling that amount for FY2003.
The Senate omnibus measure retains the agreement between the earlier House
and Senate bills, and with the FY2003 budget request, to block the expenditure of
$120 million in mandatory funds for the Initiative for Future Agriculture and Food
Systems that was created in separate legislation in 1998. The 2002 farm bill (P.L.
107-171), the recently enacted law that will guide U.S. farm policy through 2007,
reauthorizes the Initiative and gradually increases its funding from $120 million to
$200 million annually in FY2006-07.
The Public Health Security and Bioterrorism Preparedness and Response Act
of 2002 (P.L. 107-188) provides authority for security improvements at land grant
college facilities and development of on-farm biosecurity education programs. The
omnibus bill contains no appropriations under this authority.
Economic Research Service (ERS) and National Agricultural
Statistics Service (NASS). The omnibus bill provides $65.1 million for ERS,
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-22
$8.2 million less than H.R. 5263, $2.1 million less than FY2002, and $14.1 million
less than the Administration request. Most of the difference between H.R. 5263 and
the omnibus bill is due to the House Committee’s inclusion of a request by the
Administration to transfer funds from a central account to each individual agency to
cover rent paid by each agency to GSA. For NASS, the Senate-passed omnibus
measure provides $140.9 million, which is $3 million more than provided by H.R.
5263, $27 million more than the FY2002 appropriation, but $2.8 million less than the
budget request. Both the House and Senate measures allocate roughly $41 million
for NASS to use to carry out the 2002 Census of Agriculture, as the Administration
requested.
Food Safety and Inspection
USDA’s Food Safety and Inspection Service (FSIS) is responsible for the
mandatory inspection of meat, poultry, and processed egg products to insure their
safety, wholesomeness, and proper labeling. The Senate-passed omnibus bill
(H.J.Res. 2) would provide $759.8 million for FSIS in FY2003, compared with
$755.8 million in H.R. 5263, and a total FY2002 appropriation of $730.6 million,
which includes a $15 million supplemental. FSIS also will have access to an
additional $101 million in user fee income to support its FY2003 inspection
activities. The Senate-passed omnibus measure includes $5 million specifically for
FSIS to hire at least 50 additional personnel to enforce the Humane Methods of
Slaughter Act. A provision is included calling for more stringent monitoring of
foreign establishments exporting meat and poultry to the United States, but an
Administration request for an additional $7.3 million in appropriations to
accommodate a one-time shift of funds to cover rental payments to GSA is not
included.
Marketing and Regulatory Programs
USDA’s marketing and regulatory programs (MRP) are administered by three
agencies: the Agricultural Marketing Service (AMS), the Animal and Plant Health
Inspection Service (APHIS), and the Grain Inspection, Packers, and Stockyards
Administration (GIPSA). The stated mission of these programs is to “expand
domestic and international marketing of U.S. agricultural products and to protect the
health and care of animals and plants, by improving market competitiveness and the
farm economy for the overall benefit of both consumers and American agriculture.”
For FY2003, the Administration requested $879.2 million for USDA’s three
marketing and regulatory agencies compared with a total FY2002 appropriation of
$867.3 million (included emergency supplemental appropriations of $119.1 million,
intended to protect the food supply against agricultural terrorist threats). The House
Appropriations Committee-reported bill (H.R. 5263) provides $886.6 million for
MRP, or $19.3 million over FY2002 regular and supplemental appropriations. The
Senate-passed omnibus appropriations bill provides $885.1 million.
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-23
Animal and Plant Health Inspection Service. The largest appropriation
for marketing and regulatory programs goes to USDA’s Animal and Plant Health
Inspection Service (APHIS), the agency responsible for protecting U.S. agriculture
from foreign pests and diseases. The Administration requested an FY2003
appropriation of $775.3 million for APHIS, compared with a total FY2002
appropriation of $746.8 million (including supplemental appropriations of $119.1
million.) The budget request contained a one-time shift of $26.7 million to cover
GSA rental costs, but this is not included in Senate-passed omnibus appropriation of
$749 million. The amount in the omnibus bill is only $200,000 higher than the
appropriation contained in H.R. 5263. The omnibus measure provides a $17 million
increase in APHIS salaries and expenses for stepped-up border inspections. This
function and up to 3,200 employees have been transferred to the new Department of
Homeland Security under P.L. 107-296. Border inspection activities will continue
to be paid for by user fees collected from passengers, importers, and shippers at U.S.
ports of entry. USDA is to retain control of the user fees collected and to repay DHS
for its border inspection costs from that source. The annual appropriation for border
inspection is used primarily to purchase new equipment and train inspectors
(including new additions to the Beagle Brigade). Beginning in FY2004,
appropriations for these purposes will be made under the new Department’s budget
authority. (See CRS Report RL31466, Homeland Security Department: U.S.
Department of Agriculture Issues).
The Senate-passed omnibus measure also contains a $50 million increase for
APHIS Animal Health Monitoring and Surveillance activities, in order to increase
the agency’s surveillance against and readiness for a biological attack against U.S.
agriculture. In addition, the measure includes a $30 million increase for managing
emerging plant pests, a $17 million increase for managing Johne’s disease, and an
$18 million increase Wildlife Services (predator control) programs.
The omnibus measure contains an almost $8 million increase for management
of chronic wasting disease (CWD) in domestic and wild deer and elk in different
regions of the United States. H.R. 5263, as reported, would require USDA and the
U.S. Department of Interior (Fish and Wildlife Service and Park Service) to submit
a detailed joint budget request for FY2004 in order to implement a nationwide CWD
control plan. Separately, the House-passed version of the FY2003 Interior
appropriations bill (H.R. 5093) made available $2.7 million for the Biological
Research arm of the U.S. Geological Survey to conduct CWD research. The Senate-
passed omnibus bill (H.J.Res. 2) contains a $1 million increase for ARS to expand
its CWD investigations, and H.R. 5263 as reported provides $1.5 million for the
same purpose.
Agricultural Marketing Service. AMS is responsible for promoting U.S.
agricultural products in domestic and international markets, and for facilitating the
marketing and distribution of agricultural products. The Administration requested
FY2003 appropriations of $91.7 million for AMS, compared with $86.8 million in
FY2002. These levels include Section 32 funds, and payments to states and
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-24
territories. Not included in the appropriated level are $190 various user fees that also
fund numerous AMS activities. The President’s request included funding for
expanding global marketing opportunities for agricultural commodities and for
improving the Federal Seed program which monitors and controls seed labeling for
domestic and foreign sales. The House committee-reported bill (H.R. 5263) provides
$91.96 million for AMS, which is $5.2 million over FY2002 levels, and $0.1 million
over the Administration’s request. The Senate-passed omnibus bill provides $91.7
million, the Administration-proposed level. Included in the committee reports are
provisions for increased funding of the pesticide and microbiological data programs.
Grain Inspection, Packers, and Stockyards Administration. GIPSA
establishes the official U.S. standards, inspection and grading for grain and other
commodities, and ensures fair-trading practices. GIPSA has also been working to
improve monitoring of livestock markets, where concentration has raised concerns
about decreasing competition. The Administration requested $12.2 million for
GIPSA in FY2003, down $20.9 million from the $33.1 million provided in FY2002.
To cover the shortfall, the Administration had included a proposed increase of $29
million in new user fees, which if enacted would be used to fund Packers and
Stockyards Act inspections, and grain standard testing activities. However, neither
the House nor Senate version assumes adoption of such user fees. H.R. 5263 and the
Senate-passed bill increase GIPSA funding to $44.7 million and $44.5 million,
respectively, an increase of more than $11 million over FY2002. The House bill
directs the Secretary to conduct a 2-year study on packer ownership of livestock
($4.5 million).
For more information, see CRS Issue Brief IB10063, Animal Agriculture Issues
in the 107th Congress.
Rural Development
USDA’s rural development mission is to enhance rural communities by
targeting financial and technical resources in areas of greatest need. Three agencies,
established by the Agricultural Reorganization Act of 1994 (P.L.103-354), are
responsible for the mission area: the Rural Housing Service (RHS), the Rural
Business-Cooperative Service (RBS), and the Rural Utilities Service (RUS). An
Office of Community Development provides community development support
through Rural Development’s field offices. The mission area also administers the
rural portion of the Empowerment Zones and Enterprise Communities Initiative and
the National Rural Development Partnership.
The Senate-passed omnibus appropriations bill (H.J.Res.2) recommends $2.739
billion in budget authority for rural economic and community development programs
in FY2003. This is $169.6 million more than was enacted for FY2002 (including a
rescission) and $83.8 million less than provided by the House Appropriations
Committee-reported bill (H.R. 5263) for FY2003. It is also $152.5 million more than
the Administration request for FY2003. Funding in the House-reported bill and the
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-25
Senate-passed measure supports a loan authorization level of $9.68 billion and $9.86
billion, respectively, in direct and guaranteed rural development loans, both of which
are well above the Administration request for $7.22 billion in loan authorization.
Rural Community Advancement Program (RCAP). The RCAP,
authorized by the 1996 farm bill (P.L. 104-127), consists of consolidated funding for
13 rural development loan and grant programs in three accounts: Community
Facilities, Rural Utilities, and Business and Cooperative Development. RCAP was
designed to provide greater flexibility in targeting financial assistance to local needs
and permits a portion of the various accounts’ funds to be shifted from one funding
stream to another. The Senate-passed measure provides $867.2 million in budget
authority for the three RCAP accounts, $83 million less than the $950 million
provided in H.R. 5263, and $60.6 million more than enacted for FY2002. Senate
recommended funding is also $75.7 million more than requested.
The Senate-passed measure provides funding of $97.6 million for the
Community Facilities account, over twice the level recommended by H.R. 5263;
$682.8 million for the Rural Utilities account; and $86.8 million for the Rural
Business Development account. House-recommended funding for the Rural Utilities
account and the Rural Business Development account is $815 million and $93.4
million respectively. As with the House bill, most of the RCAP authorization in the
Senate measure would support water and waste disposal grants in the Rural Utilities
account, although at $132 million less than in H.R. 5263.
Both the House and Senate measures earmark funding for water and waste
disposal programs in Alaskan native villages ($30 million), Federally Recognized
Native American Tribes ($24 million), and the Colonias ($20 million) along the
U.S.-Mexican border. Senate bill language also designates $10 million to the Rural
Community Development Initiative, $4 million of which is provided to a
demonstration program for Replicating and Creating Rural Cooperative Home Based
Health Care and $6 million for developing local capacity for private, non-profit
organizations to improve housing, community facilities, and economic development
projects for low-income rural communities. The Senate-passed measure designates
$30 million of RCAP funding to communities facing extremely high energy costs,
and $25 million for grants to facilities in rural communities with extreme
unemployment and severe economic distress. Both measures provide $37.6 million
to empowerment zones and enterprise communities designated by the Secretary as
Rural Economic Area Partnership (REAP) Zones. Most of the Senate’s budget
authority is for rural utility programs. The Senate measure recommends $19.2
million for technical assistance grants to water and waste water systems. The House
bill recommends $17.5 million for these grants.
Rural Housing Service. The Senate-passed measure provides $1.585 billion
for the RHS in FY2003, $110.8 million more than FY2002 and $56.8 million more
than the budget request. The Senate appropriation supports a total rural housing loan
authorization level of $3.932 billion. This loan authorization amount is $619.3
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-26
million less than in the House bill and $553.7 million less than enacted for FY2002.
Senate budget authority is $56.7 million more than requested. The loan
authorization level reserves $3.7 billion for Section 502 direct and guaranteed loans,
$35 million for Section 504 housing repair loans, $5 million for Section 524 site
loans, $12 million for credit sales of acquired land, and $5 million for Section 523
self-help housing and land development loans. The Senate did not recommend any
loan authority for Section 538 multi-family housing guarantees. The amount
requested for this housing program was $100 million, approximately the same as
recommended by the House bill. Of the total in loan authorization, the Senate also
recommends that $11.7 million be earmarked for empowerment zones, enterprise
communities, and REAP Zones.
The Senate measure provides $282.5 million in direct loan subsidies, most of
which is for Section 502 single-family housing. This is $21 million less than the
House-reported bill, and $33 million more than the Administration request. For
Section 521 rental assistance, the Senate provides $730 million, an increase of $29
million over FY2002 and $18 million more than in the House bill.
The Senate measure also contains $10.8 million in direct loan subsidies for
Section 515 rental housing, the same as requested. The House bill provides $43
million more for Section 515 loan subsidies. The Senate provides $120 million in
loan authorization for Section 515 new housing construction, rehabilitation, and
repair, negating the Administration’s request that there be no new construction of
Section 515 rental housing. This is a total of $60 million more than requested and
$4.2 million more than recommended by the House bill. The Administration had
requested no new construction until the Department completes a review of Section
515 multi-family housing. Senate language, however, states that a priority should
be placed on long-term rehabilitation needs in the multi-family housing portfolio and
encourages the Department to study Section 515 costs in comparison to other federal
programs serving the same eligible rural population.
The Senate-passed measure contains $34.6 million for farm labor housing grants
and direct loans, the same as requested and $3.4 million less than H.R. 5263. For
rural housing assistance grants, the Senate provides $47.5 million, $5 million more
than requested and than the House bill provides. Both the House and Senate
measures recommend $35 million for mutual and self-help housing grants, the same
amount as enacted in FY2002 and $1 million more than requested. The Senate also
earmarks approximately $1 million until June 2003 in both the mutual and self-help
grants and rural housing assistance grant for empowerment zones, enterprise
communities, and REAP Zones.
Rural Utilities Service. The Senate-passed measure provides $108 million
in budget authority and supports a loan authorization level of $5.87 billion for rural
utility programs. The Senate budget authority level for RUS programs is $8 million
more than the House level, $23.3 million more than the Administration’s request,
and about the same as the enacted level in FY2002. The loan authorization is nearly
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-27
$500 million more than enacted in FY2002 and $2.6 billion more than requested. It
is also nearly $800 million more loan authority than in the House bill. Almost all
RUS loan authorization ($5.56 billion) is designated for the rural electrification and
telecommunications account. Part of this loan authorization also includes $1 billion
for guaranteed underwriting of a cushion of credit payments under Section 313A of
the Rural Electrification Act of 1936. (7 U.S.C. 940(c)).
For the Rural Telephone Bank (RTB), both the House and Senate measures
recommend a loan level of $174.6 million. There was no Administration request.
The RTB is required by law to begin privatization (repurchase of federally owned
stock) in FY1996. House bill language includes the same provision from FY2002
to limit the retirement of Class A stock to 5%. The Senate measure does not include
similar language.
In other RUS programs, the Senate provides loan subsidies and grants of $51.9
million for the Distance Learning and Telemedicine program. This is $2.5 million
more than enacted in FY2002 and $7.8 million more than in H.R. 5263. The loan
authorization level for the program is authorized at $129.5 million, $26.9 more than
requested, but $250 million less than in the House bill and enacted in FY2002.
Authorization of $2 million in grants is also recommended for the Rural Teleworks
Program. Both bills provide no funding for the Local Television Loan Guarantee
program, whose loan level was authorized at $258 million in FY2002. Both bills
also provide no funding for direct loans. Through a $20 million rescission, the
FY2002 supplemental appropriations act (P.L. 107-206) provided $8 million in
additional funding for the Local Television Loan Guarantee Program account, to
remain available until expended. Direct authorization of $80 million for local
television broadcast loan guarantees is also included in the 2002 farm bill (P.L.107-
171).
Rural Business-Cooperative Service. The House and Senate measures
provide nearly identical amounts for the RBS accounts to support rural business
development and expansion – $50.658 million in H.R. 5263 and $50.758 million in
the H.J.Res. 2, which are both about $15 million more than the Administration
request. For rural development (intermediary relending) loans, the Senate provides
funding for a total loan authorization level of $40 million, the same as the budget
request and th House bill.
Within the totals, both bills provide $14.97 million for the Empowerment
Zone/Enterprise Community Initiative, the same as enacted in FY2002. No funding
for the program was requested. Funding for Rural Cooperative Development Grants
is $9 million in both bills, an increase of $1.25 million above FY2002 and the same
as requested by the Administration. The Senate also designates $2.5 million of this
grant funding to cooperative agreements for the Appropriate Technology Transfer
Program.
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-28
Spending Restriction Provisions. No funding is provided in either
appropriations measure for the National Rural Development Partnership, which was
authorized in the 2002 farm bill. The Senate-passed measure, however, encourages
the Department to continue support for the program through available funds. It also
makes two general provisions prohibiting the expenditure of funds to carry out the
following two mandatory programs authorized by the 2002 farm bill (P.L.107-171):
(1) the Rural Strategic Investment Program and (2) the Rural Firefighters and
Emergency Personnel Training Program. The Administration has recommended that
funding for the Rural Firefighter program be eliminated for FY2003 and funding for
the Value-Added Market Development Grants be limited to $10 million (down from
an authorized $40 million). The savings from these two proposed cuts would be used
to partially offset the cost of a new discretionary conservation technical assistance
account, also recommended by the Administration but not adopted in either the
House or Senate measures. The Senate report language also recommends budget
authority not to exceed $50 million for ethanol plant development. The House-
reported bill does not contain any provisions to limit or prohibit funding for any
mandatory rural development program.
For additional information on USDA rural development programs, see “Rural
Development”, CRS Electronic Briefing Book page.
Food and Nutrition
For FY2003, the Administration originally requested an appropriation of $41.87
billion for all USDA food and nutrition programs, an increase of about $4 billion
above the FY2002 appropriation. The House Appropriations Committee-reported
bill (H.R. 5263) provides $41.97 billion for these programs, which is about $100
million more than the original Administration request. The Senate-passed omnibus
appropriations measure (H.J.Res. 2) provides $41.93 billion; $44 million less than
the House level, but $56 million more than the Administration’s original request.
USDA food and nutrition programs provide federal funding and commodities to
states for food assistance to children in schools and other children’s facilities, and for
low-income individuals and families.
The Administration budget recommends a total of $26.25 billion for food
stamps and related programs for FY2003, $3.25 billion more than FY2002. This
includes food stamp program expenses, a reserve fund, nutrition assistance for Puerto
Rico and Samoa and funding to buy commodities for the emergency food assistance
program (EFAP). Both the House-reported and Senate-passed measures provide
the same amounts for food stamp expenses and the food distribution program on
Indian Reservations (FDPIR) – $22.77 billion – and for a food stamp reserve fund
($2 billion). However, the Administration request and the Senate measure contain
$1.377 billion for Puerto Rico and Samoa, while the House bill funds this at $1.401
billion. According to the House committee report, this is because of additional
mandatory spending required for these programs under the 2002 farm bill (P.L. 107-
171). Funding to buy commodities for EFAP would be $140 million under both S.
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-29
2801 and H.R. 5263; the Administration proposed only $100 million for this purpose,
the same as in FY2002. The Administration budget anticipates food stamp
participation growth of about 800,000 in FY2003, or about 4% above FY2002 for a
total of 20.6 million persons in FY2003. The 2002 farm bill (P.L.107-171) restored
food stamp eligibility for legal immigrants residing in the U.S. for at least 5 years
and changed the quality control system, employment rules, and deductions.
H.R. 5263 funds all child nutrition programs at $10.576 billion, in concurrence
with the Administration request. The Senate measure is slightly higher ($10.58
billion), providing $4 million in discretionary spending to continue school breakfast
program start-up grants of $3 million; $200,000 for the Food Works of Vermont
Common Roots program; and $500,000 for an archive resource center at the National
Food Service Management Institute. The funding levels projected under each of
these budgets for the mandatory meal service programs are expected to maintain full
program participation for the school lunch, breakfast, child and adult care food,
summer food service, and special milk programs, as well as other related support
activities.
The Senate-passed measure provides $4.751 billion in FY2003 for the special
nutrition program for women, infants and children (WIC), $289 million more than
the FY2002 level of $4.462 billion (including supplementals). The Senate level,
which is the same as the original Administration request for FY2003, is projected to
be able to serve a monthly average of 7.8 million low-income pregnant and
postpartum mothers and young children. The House proposes $4.776 billion for
WIC in FY2003, $25 million more than the Senate and $50 million more than the
most recent Administration request. The Administration revised its original WIC
proposal, recommending that $25 million be taken from the earlier proposed $150
million reserve fund in order to help offset proposed increases in spending for
conservation technical assistance and EEOC salaries and expenses. WIC reserve
funds are provided in case costs to maintain caseload are higher than projected. The
House and Senate measures maintain the $150 million reserve that was provided for
WIC in FY2002.
Funding for the Commodity Assistance Program (the term used by appropriators
to refer to the Commodity Supplemental Food Program (CSFP) and for
administrative funds for the EFAP) would decline under the Administration proposal
– from $149.5 million in FY2002 to just under $145 million in FY2003. The House
bill increases funding for these two programs to $170 million in FY2003; of this
amount, $120 million would go for the CSFP and $50 million for TEFAP
administrative expenses. The House Appropriations Committee recommends that all
of the increase go for the CSFP; TEFAP administrative costs would remain at the
FY2002 level of $50 million. The Senate measure is $167 million below the House
level and requires that $5 million of the amount provided must be used for senior
farmers’ market activities.
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-30
No FY2003 funding is requested in the USDA budget for the elderly nutrition
program (or nutrition services incentive program), a food donation program that
provides mostly cash-in-lieu of commodities to support meal programs for senior
citizens. The Administration proposes to merge this program with the larger meal
programs operated for senior citizens under the Older Americans Act by the
Department of Health and Human Services. Both the House and Senate measures
agree to the Administration proposal to zero out elderly program FY2003 funding
for USDA ($149.7 million in FY2002). Pacific Island and Disaster Assistance
would continue to be funded at $1.081 million under the Administration request and
both bills.
Other nutrition program provisions in H.R. 5263 would: (1) provide $4 million
for Bill Emerson and Mickey Leland Hunger Fellowships, (2) permit the USDA
Secretary to use up to $10 million of food stamp funds designated for buying EFAP
commodities for costs associated with the distribution of commodities, and (3)
prohibit the use of any child nutrition, WIC, or food stamp funds from being used by
the Food and Nutrition Service (FNS) to conduct studies or evaluations, with some
exceptions. S. 2801 differs in several respects from these House proposals. The
Senate-passed measure provides $2.5 million for Emerson and Leland Hunger
Fellowships, and permits the Secretary to use up to $5 million of food stamp funds
for costs associated with the distribution of commodities under EFAP. It also allows
up to $3.195 million for program evaluations and studies by the Food and Nutrition
Service and not more than $500,000 of this amount to be transferred to the Economic
Research Service (ERS) of USDA. ERS is the unit that would conduct studies and
evaluations under the House bill.
Food and Drug Administration
The Food and Drug Administration (FDA), an agency in the Department of
Health and Human Services (DHHS), is responsible for the regulation and safety of
foods, drugs, biologics (mainly vaccines), and medical devices. The agency is
funded by a combination of congressional appropriations and user fee revenues,
assessed primarily for the pre-market review of pharmaceutical products. The total
amount of drug user fees to be collected each year is set in FDA’s annual
appropriations act. The House- reported FY2003 appropriations bill provides $1.385
billion for FDA, an increase of $167 million over the $1.369 billion appropriated for
FY2002 (including an FY2002 supplemental of $151 million), and $8 million above
the Administration’s FY2003 request of $1.377 billion. The Senate-passed omnibus
appropriations measure (H.J.Res. 2) provides a total of $1.395 billion, an amount
$10 million above the House level, $25 million above the FY2002 appropriation
(including the supplemental) and $17 million over the request. As part of the
appropriation, the House provides $1.377 billion for salaries and expenses compared
with $1.384 billion in the Senate omnibus bill, and $8 million for the maintenance
of buildings and facilities compared with $11 million in the Senate omnibus bill.
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-31
The Prescription Drug User Fee Act (PDUFA), reauthorized in May 2002 as
part of the Public Health Security and Bioterrorism Preparedness and Response Act
of 2002 (P.L. 107-188), allows FDA to collect user fees for the review of drug and
biologic applications. Both the House-reported bill and Senate-passed omnibus
measure set the total amount of these fees for FY2003 at $222.9 million. The new
Medical Device User Fee and Modernization Act of 2002 (P.L. 107-250), signed by
the President on October 26, 2002, authorized FDA to collect user fees on medical
device applications as well. The Senate sets the user fees collected for medical
devices at $25.1 million for FY 2003; the House bill does not set any amount. The
FDA also collects user fees from mammography clinics and export certificates; the
Senate sets their FY 2003 total at $22.5 million. The House bill does not specify an
amount.
The House-reported total program level, including salaries and expenses,
PDUFA user fees, and facilities amounts to $1.608 billion. The Senate-passed
omnibus total includes not only salaries and expenses, PDUFA fees, and facilities,
but also the three fee programs, making the total $1.665 billion, $57 million more
than the House.
For FDA counter-terrorism activities, the House-reported bill mirrors the
President’s FY2003 budget request of $159.1 million while the Senate-passed
measure provides $152.3 million to continue activities initiated by the agency during
the previous year relating to food safety, safe and effective medical products, and
physical security.
The House and Senate provide different levels of funding in FY2003 for several
budget categories. Both committees, for example, encourage the FDA to continue
its support for the Office of Women’s Health, thus ensuring that the agency’s
regulatory functions remain gender sensitive and responsive. The House set aside
$1.5 million in FY2003 for the office, while the Senate doubled the amount to $3
million. The House fully funds the Administration’s $8.3 million request to upgrade
its financial management system, but the Senate states that these funds were already
provided in the FY 2002 budget through reprogramming, and as such, are no longer
necessary. Both committee reports prohibit FDA from spending any money on
several administrative actions involving agency personnel. One such restriction
would stop the agency from transferring and consolidating its Offices of Public
Affairs and Legislation to DHHS. These offices issue public information regarding
the safety of foods, drugs, vaccines, and medical devices. Officials in these offices
rely on the expertise found in other parts of the agency, and, as such, both
committees want the offices to remain with the agency.
Food Issues
The House committee bill did not specify a funding level for food safety;
however, the Senate omnibus bill, noting the expansion of FDA activities under the
category of “Food Safety Initiative,” recommends a total of $502.3 million for this
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-32
purpose. House report language requests a summary of the case-controlled studies
that link naturally-occurring bacterial pathogens to specific foods – i.e., E. coli,
Salmonella, Campylobacter, and Listeria found on meat, poultry, eggs, seafood,
fruits and vegetables. In addition, both bills support further progress in the detection
of the pathogens; the Senate provides $2 million for FDA to continue the evaluation
of new testing methods for pathogens at New Mexico State University.
The House committee, in its report, expresses displeasure with the agency’s
failure to produce a report detailing how the FDA allocates money to the National
Antimicrobial Resistance Monitoring System (NARMS) activities and overhead
costs. The House committee wants the report within 60 days of enactment of the
FY2003 appropriations bill. The Senate does not ask for a report, but still notes that
NARMS data should be unbiased, timely, and accurate.

Both the House and Senate are concerned about seafood safety. As such, they
direct FDA to spend $250,000 to continue its support for shellfish safety research,
including advancing new technologies and a study on Vibrio vulnificus, a pathogen
found in raw oysters. Both chambers want FDA to continue working with the
Interstate Shellfish Sanitation Conference to develop regulations, and information
on shellfish. The Senate wants FDA to be mindful of the history of Hawaii’s seafood
industries, and take special care when the agency inspects seafood plants in Hawaii
for compliance with the Hazard Analysis and Critical Control Point (HACCP)
regulations. The Senate also wants seafood HACCP inspections to continue in
Alaska.
The House directs FDA to enforce U.S. dietary supplement laws, and stop
makers of the so-called herbal product “Siberian ginseng” from labeling and
referring to the product as “ginseng.” The Senate is interested in the potential
positive health benefits of Omega 3, a fatty acid, quantities of which are found in
salmon. As such, the Senate wants the agency to report by April 15, 2003, on
whether canned and fresh salmon should be labeled to reflect the health benefits of
Omega 3. The Senate wants FDA to enforce milk protein standards of identity.
The House committee lauded FDA for its recent statement that adverse event
reports (AERs) concerning dietary supplements containing ephedrine alkaloids do
not alone provide a scientific basis for assessing the safety of the herbal and
supplement products. Ephedrine alkaloid, a central nervous system stimulant, is an
active ingredient in a variety of dietary supplements and over-the-counter
medications. The Senate, concerned about AERs as well, provides $7.6 million for
the food center’s adverse event system – called CAERS. Of this amount, the Senate
wants FDA to spend $2 million on reviewing botanicals in dietary supplements.
Noting FDA’s involvement with international trade issues, the Senate directs
FDA to spend $2.1 million in support its activities in the international food standard
setting organization, the Codex Alimentarius Commission. It also directs the agency
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-33
to fund adequately visits to foreign countries to educate regulators on the safety
evaluations of biotechnology.
Drug Issues
The House and Senate committees both recognized that the timely approval of
generic drugs is an important factor in addressing the rising cost of prescription
drugs. To this end, the Senate provides $45.3 million for FDA’s generic drug
program, an increase of $6.1 million over the FY2002 baseline level of $39.3
million, and $1.5 million more than the budget request. The House committee
recommends a $4.58 million increase for the program. Both committees expect FDA
to review 75% of the abbreviated new drug applications (ANDAs) for generic drugs
within 6 months of submission. The House committee, however, wants the agency
to come up with a plan describing how it will review 100% of ANDAs within 180
days of submission, including the resources the program would need to increase
inspections, and upgrade its infrastructure and technological requirements. The
House committee also recommended $400,000 to continue FDA’s education
program regarding the importance of generic drugs, particularly studies on consumer
education. Both the House and Senate committees encourage the agency to issue a
guidance clarifying when drug patents should be listed in the Orange Book, the
official FDA publication for information concerning pharmaceutical patents. Also,
the House committee wants to ensure that the Office of Drug Safety receives at least
a $5 million increase for FY2003, as authorized by the 2002 bioterrorism act, to
continue its post marketing surveillance for pharmaceuticals.
Medical Device Issues
Both committees were concerned about delays in review for new medical
devices and the impact this was having on the health of Americans. In last year’s
appropriations conference report, Congress directed FDA to provide an update of its
medical device review performance (compared to the 180-day statutory requirements
for application decisions), to the House committee in January and July 2002. To
date, the updated report has not been submitted. The House committee directs the
FDA to develop a plan to eliminate the medical device performance gap within 90
days of enactment. The plan must include an estimate of the resources needed, and
specify how the agency would meet statutory timeframes for application reviews and
inspections, and what infrastructure and technology upgrades would be required.
The House committee noted that many applications for medical devices are for
combination products that involve consultation with FDA’s Center for Biologics
Evaluation and Research (CBER). The House committee asks for a report by May
31, 2003, on the prevalence of combination products and how their review times
compared with standard medical devices.
The Senate, in contrast, provides an increase of $8 million from the FY2002
level for activities related to the pre-market review of medical devices, the money
to be used solely for pre-market reviews. Moreover, the Senate calls for a report,
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-34
within 90 days, describing how these funds will be spent, including the number of
employees that will be hired, a description of their duties, and the effects the funds
will have on pre-market review times. Also, the Senate expresses concern that FDA
may consider allowing a single pre-market submission for reprocessing of multiple
models of certain medical devices, and, as such, urges the agency to require a pre-
market submission for every model that is to be reprocessed, if an application was
required for the original device. The Senate also directs FDA to adequately fund
patient safety activities related to implanted medical devices. The committee
encourages DHHS to ensure that products used in vaccination efforts by health care
providers and first responders are latex free. Additionally, it encourages FDA to
finalize its 1999 proposal to reclassify all surgeon’s and patient examination gloves
as Class II devices.
Biologics Issues
The House committee encourages the Center for Biologics Evaluation and
Research to allocate adequate resources for the Office of Blood Research and
Review to promote the timely review of new intravenous immune globulin (IGIV)
products that have been submitted for licensure using the revised clinical trial
protocol. In addition, the House committee wants the FDA to develop a feasability
plan for a ‘Fast-Track’ program to hasten the awarding of Investigational New Drug
status to new vaccine candidates, particularly HIV vaccines, and submit a progress
report on implementing the program by March 1, 2003. The Senate is concerned
about the safety of human tissue processing. Since 1997, FDA has proposed several
new regulations dealing with the registration of tissue processors, the listing of tissue
products, and good manufacturing practices. FDA has finalized only the rule dealing
with registration and listing, so far. As such, the Senate directs the the agency to
finalize the tissue safety rules within 9 months of enactment.
The Senate committee is also concerned about blood safety and availability, in
particular the impact of recent policies to defer (i.e., disqualify) donors as a
precaution against the transmission of infectious diseases. As such, the committee
urges the agency to address these issues, and consider modifying its donor deferral
criteria if serious blood shortages continue.
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-35
Table 3. USDA and Related Agencies Appropriations for
FY2003
(Budget Authority, in Millions of $)
FY2003
FY2003
FY2003
House
Senate-
FY2002
Admini-
FY2003
Agency or Major Program
Comm.
Passed
Enacted
stration
Enacted
Bill
Omnibus
(1)
Request
(H.R.
(H.J.Res. 2)
(2)
5263)
(3)
Title I — Agricultural Programs
Agric. Research Service (ARS)
***
Regular Appropriation
1,098.5
988.0
1,097.5
1,154.6
Supplemental Appropriations
138.0
0
0
0
Coop. State Research Education and
1,027.6
1,020.6
1,062.3
1,155.9
***
Extension Service (CSREES)
Economic Research Service (ERS)
67.2
79.2
73.3
65.1
***
National Agricultural Statistics
113.8
143.7
137.9
140.9
***
Service (NASS)
Animal Plant Health and Inspection
***
Service (APHIS)
Regular Appropriation
627.7
775.3
749.1
748.9
Supplemental Appropriation
119.1
0
0
0
Agric. Marketing Service (AMS)
86.8
91.7
92.0
91.7
***
Grain Inspection , Packers and
33.1
12.2
44.7
44.5
***
Stockyards Admin. (GIPSA)
(4)
Food Safety and Insp. Serv (FSIS)
***
Regular Appropriation
715.6
763.0
755.8
759.8
Supplemental Appropriation
15.0
0
0
0
Farm Service Agency (FSA) Salaries
939.0
993.6
976.7
986.9
***
and Expenses
FSA Farm Loans - Subsidy Level
187.6
212.1
212.1
243.8
***
*Farm Loan Authorization
3,890.7
3,802.0
3,802.0
4,065.7
***
FSA Farm Loans- Salaries and
280.6
287.2
287.2
287.2
***
Administrative Expenses
Emergency Conservation Program
0
48.7
0
0
Risk Management Agency (RMA)
74.75
72.8
70.7
70.7
***
Salaries and Expenses
Federal Crop Insur. Corp. Fund (5)
2,900.0
2,886.0
2,886.0
2,886.0
***
Commodity Credit Corp. (CCC) (5)
20,279.0 16,285.0 16,285.0
16,285.0
***
Other :
***
Regular Appropriation
478.5
541.0
642.7
600.5
Supplemental Appropriation
80.9
0
0
0
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-36
FY2003
FY2003
FY2003
House
Senate-
FY2002
Admini-
FY2003
Agency or Major Program
Comm.
Passed
Enacted
stration
Enacted
Bill
Omnibus
(1)
Request
(H.R.
(H.J.Res. 2)
(2)
5263)
(3)
Total, Agricultural Programs
Regular Appropriation
28,899.7 25,197.0 25,373.4
25,521.5
***
Supplemental Appropriations
353.0
0
0
0
Title II — Conservation Programs
Conservation Operations
779.0
841.0
843.6
840.0
***
Watershed Surveys and Planning
11.0
0
11.2
11.0
***
Watershed & Flood Prevention
Regular Appropriation
106.6
0
110.0
105.0
***
Supplemental Appropriation
94.0
0
0
0
Watershed Rehabilitation Program
10.0
0
0
30.0
***
Emergency Watershed Protection
0
110.0
0
0
***
Resource Conservation & Developm.
48.0
49.1
55.1
50.0
***
Forestry Incentives Program
6.8
0
0
0
***
Total, Conservation
***
Regular Appropriation
962.1
1,000.9
1,020.6
1,036.9
Supplemental Appropriation
94.0
0
0
0
Title III — Rural Development
Rural Community Advancement
806.6
791.5
950.3
867.2
***
Program (RCAP)
Salaries and Expenses
133.7
145.7
145.7
127.5
***
Rural Housing Service (RHS)
1,474.5
1,528.5
1,576.0
1,585.3
***
* RHS Loan Authority
4,485.8
3,924.3
4,551.5
3,932.2
***
Rural Business Cooperative Serv.
46.6
35.8
50.7
50.8
***
* RBCS Loan Authority
53.1
55.0
55.0
55.0
***
Rural Utilities Service (RUS)
***
Regular Appropriation
120.0
84.6
99.9
107.9
Rescission
(12.0)
0
0
0
* RUS Loan Authority
5,378.6
3,272.6
5,070.7
5,870.3
***
Total, Rural Development
***
Regular Appropriation
2,581.9
2,587.1
2,823.3
2,739.5
Rescission
(12.0)
0
0
0
* Rural Development, Total Loan
9,917.6
7,224.9
9,677.2
9,857.4
***
Authority
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-37
FY2003
FY2003
FY2003
House
Senate-
FY2002
Admini-
FY2003
Agency or Major Program
Comm.
Passed
Enacted
stration
Enacted
Bill
Omnibus
(1)
Request
(H.R.
(H.J.Res. 2)
(2)
5263)
(3)
Title IV — Domestic Food Programs
Child Nutrition Programs
10,087.2 10,576.2 10,576.2
10,580.2
***
WIC Program
***
Regular Appropriation (6)
4,348.0
4,751.0
4,776.0
4,751.0
Supplemental Appropriations
114.0
0
0
0
Food Stamp Program
***
Regular Appropriation
22,992.0 26,249.7 26,313.7
26,289.7
Rescission
(24.0)
Commodity Assistance Program (7)
149.5
145.0
170.0
167.0
***
Food Donation Programs
150.7
1.1
1.1
1.1
***
Food Program Administration
127.5
148.0
134.2
136.9
***
Total, Food Programs
***
Regular Appropriation
37,855.6 41,871.7 41,971.9
41,926.6
Supplemental Appropriations
114.0
0
0
0
Rescission
(24.0)
Title V — Foreign Assistance
Foreign Agric. Service (FAS)
121.8
131.7
130.0
131.2
***
Public Law (P.L.) 480
998.7
1,314.0
1,357.1
1,328.4
***
Supplemental Appropriation
500.0
CCC Export Loan Salaries
4.0
4.1
4.1
4.1
***
Total, Foreign Assistance
1,124.5
1,449.7
1,491.1
1,964.4
***
Title VI — FDA & Related Agencies
Food and Drug Administration
**
Regular Appropriation
1,218.0
1,377.4
1,384.7
1,394.5
Supplemental Appropriation
151.1
0
0
0
Commodity Futures Trading
***
Commission (CFTC)
Regular Appropriation
70.7
46.9
80.0
94.0
Supplemental Appropriation
16.9
0
0
0
Total, FDA & CFTC
***
Regular Appropriations
1,288.7
1,424.3
1,464.6
1,498.2
Supplemental Appropriations
168.0
0
0
0
Other Provisions (8)
118.9
0
118.2
24.5
***
Senate Bill: Emergency Relief
3,100.0
***
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-38
FY2003
FY2003
FY2003
House
Senate-
FY2002
Admini-
FY2003
Agency or Major Program
Comm.
Passed
Enacted
stration
Enacted
Bill
Omnibus
(1)
Request
(H.R.
(H.J.Res. 2)
(2)
5263)
(3)
Total, before adjustments:
***
Regular Appropriations
73,035.7 73,505.6 74,263.1
74,201.1
Supplemental Appropriations
535.0
0
0
3,600.0
Rescissions (3)
(47.3)
0
0
Unavailable
Grand Total
73,523.4 73,530.6 74,263.1
Unavailable
CBO Scorekeeping Adjustments (9)
108.4
531.8
42.8
Unavailable
***
Grand Total, Including CBO
***
Scorekeeping Adjustments and
73,631.8 74,062.4 74,305.9
Unavailable
Emergency Spending
Source: Based on spreadsheets provided by the House Appropriations Committee
An item with a single asterisk (*) represents the total amount of direct and guaranteed loans that can be
made given the requested or appropriated loan subsidy level. Only the subsidy level is included in the totals.
*** = Action Pending
(1) FY2002 enacted levels include amounts appropriated in the regular FY2002 agriculture appropriations
act for USDA and related agencies (P.L. 107-76), the $535 million in emergency supplemental funding in
P.L. 107-117, and the $158 million in net non-contingent appropriations (after $44 million in rescissions)
made in P.L. 107-206.
(2) Agency totals do not include the cost of the Administration’s legislative proposal to require all federal
agencies to pay the full share of accruing employee pensions and annuitant health benefits beginning in
FY2003. However, the CBO-estimated cost of this proposal ($368 million in FY2003 for USDA, FDA, and
CFTC) is included at the end of the table in the scorekeeping adjustments of the FY2003 request.
(3) H.J.Res. 2, as passed by the Senate, includes an estimated across-the-board 2.9% rescission in all
discretionary accounts in the resolution. To date, it is not certain how the rescission would affect individual
accounts. Therefore, this table does not reflect the rescission on USDA and related agency programs and
accounts. Recorded in this column are the two adopted floor amendments that affect USDA spending :
$3.1billion in disaster assistance and $500 million in P.L. 480 international food aid.
(4) The Administration’s request assumes enactment of new inspection and licensing user fees totaling
$29 million.
(5) Under current law, the Commodity Credit Corporation and the Federal Crop Insurance Fund each receive
annually an indefinite appropriation (“such sums, as may be necessary”). The amounts shown for both
FY2002 and FY2003 are USDA estimates of the necessary appropriations.
(6)The Administration request does not include a January 2003 budget amendment to reduce the WIC
reserve request by $25 million in FY2003, from the original requested amount.
(7) Includes an adopted $3.3 million rescission in the FY2002 enacted level.
(8) Among other FY2002 provisions, includes $75 million in apple market loss assistance, and an extension
of the authority for the dairy price support program for 5 months (scored by CBO at $15 million).
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.
CRS-39
(9) Scorekeeping adjustments reflect the savings or cost of provisions that affect mandatory programs, plus
the permanent annual appropriation made to USDA’s Section 32 program. The cost of the Administration
proposal to require all federal agencies to pay the full share of current employee pensions and annuitant
health costs is also included in the scorekeeping adjustments of the FY2003 Administration request.
For Additional Reading
CRS Briefing Book. Agriculture Policy.
CRS Issue Brief IB98006. Agricultural Export and Food Aid Programs.
CRS Report 98-325. Agricultural Research, Education, Extension and Economics
Programs: A Primer.
CRS Issue Brief IB10077. Agricultural Trade Issues in the 107th Congress.
CRS Report 98-25. Child Nutrition Programs: Background and Funding.
CRS Report RL31095. Emergency Spending for Agriculture: A Brief History of
Congressional Action, FY1989-2001.
CRS Report RS21212. Farm Disaster Assistance.
CRS Report RL30739. Federal Crop Insurance and the Agriculture Risk Protection Act
of 2000 (P.L. 106-224).
CRS Report 98-59. Food Stamps: Background and Funding.
CRS Report RL31466, Homeland Security Department: U.S. Department of Agriculture
Issues.
CRS Issue Brief IB96030. Soil and Water Conservation Issues.
Note: The Senate-passed omnibus appropriations measure for FY2003 (H.J.Res.2) includes a
Congressional Budget Office-estimated 2.85% rescission of total discretionary spending in the
measure, to offset the cost of various adopted amendments. Figures in this report do not include
the rescission, since the effect of the rescission on individual accounts is currently unknown.