Food and Agriculture Provisions in the FY1997 Supplemental Appropriations Act

Food and Agriculture Provisions in the FY1997 Supplemental Appropriations Act

97-600 ENR
Updated June 16, 1997
CRS Report for Congress
Received through the CRS Web
Food and Agriculture Provisions in the
FY1997 Supplemental Appropriations Act
Ralph M. Chite
Specialist in Agricultural Policy
Environment and Natural Resources Policy Division
Summary
An FY1997 supplemental appropriations bill (P.L.105-18, H.R. 1871) was signed
into law on June 12, 1997. The conference agreement of an earlier version of the bill
(H.R. 1469) was vetoed on June 9, because of provisions unrelated to the supplemental
funding provided. Contained within the $8.6 billion measure is $354.3 million for food
and agriculture programs within the U.S. Department of Agriculture (USDA). The vast
majority of the USDA funding was designated as emergency supplemental funding to
help farmers recover from floods and other natural disasters. Most of the non-emergency
USDA funding in P.L. 105-18 provides supplemental funding to the Special
Supplemental Nutrition Program for Women, Infants and Children (WIC).
Background
The President signed into law an FY1997 supplemental appropriations bill (P.L. 105-
18, H.R. 1871), which provides $5.6 billion dollars in disaster relief for many regions of
the country and another $3 billion in other spending, primarily for U.S. peacekeeping in
Bosnia. An earlier version of the bill (H.R. 1469), which contained identical funding levels
as the enacted version, was passed by both chambers a week earlier. However, the
President vetoed H.R. 1469, primarily because the measure would have provided for an
automatic continuing resolution for any FY1998 appropriations bill not enacted by
September 30. This provision was not included in the enacted version.
P.L. 105-18 provides $354.3 million in supplemental funding for USDA programs,
compared with $229.35 million in the President’s request. Much
1
of the difference between
the total amount requested and the amount ultimately approved by Congress is because
1 Appropriations for all USDA programs except for the Forest Service are provided through
the agriculture subcommittee of the House and Senate Appropriations Committees. The totals in
this report do not reflect the $67.4 million provided by P.L. 105-18 for Forest Service emergency
expenses resulting from flooding and other natural disasters.
Congressional Research Service ˜ The Library of Congress

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the extent of damage caused by the Upper Midwest flooding this spring was not fully
known in the early stages of the bill process. Moreover, there were subsequent disasters
requiring additional funding.
The vast majority of the funding for food and agriculture provisions in the measure
has been designated as emergency supplemental funding to help farmers recover from
floods and other natural disasters. Most of the non-emergency USDA funding provides
supplemental funding to the Special Supplemental Nutrition Program for Women, Infants
and Children (WIC).
Emergency Provisions
The Watershed and Flood Prevention Operations Program, administered by the
Natural Resources Conservation Service, receives $166 million in P.L. 105-18. Earlier this
year, the President requested a supplemental of $84.1 million. These funds likely are
expected to be used to repair damage to waterways and watersheds resulting from floods
and other natural disasters. As much as $15 million of this amount can be used for
floodplain easements. This will allow a willing, flood-affected farmer to receive a payment,
in return for agreeing not to redevelop or use certain lands for agricultural purposes.
The Emergency Conservation Program administered by the Farm Service Agency,
which provides cost-sharing assistance to producers affected by the floods, receives $70
million in P.L. 105-18, compared with the earlier Administration request for $37 million.
Funds in this program are used to restore damaged farmland by reshaping it and removing
debris.
The supplemental appropriations act permits the Secretary of Agriculture to sell $50
million of reserve grain in government stocks to fund a currently unfunded livestock
indemnity program. This will pay livestock growers a certain amount for each head of
cattle lost in a disaster. An appropriation is not required for this authority, since it will be
funded through USDA’s Commodity Credit Corporation.
The Tree Assistance Program (TAP) receives $9 million in emergency funds to
primarily help small, California orchardists replant trees that were damaged or destroyed
by natural disasters. TAP is a cost-sharing program that pays orchardists 65 percent of
the cost of replanting or rehabilitating disaster-stricken trees on losses in excess of 35
percent.
P.L. 105-18 also provides $18 million to support an estimated $70 million in Farm
Service Agency (FSA) emergency disaster loans. These low-interest loans are designed
to help disaster-stricken, family-sized farmers, who are unable to obtain credit from a
commercial lender. Most of the $95 million in current lending authority in this program has
been used. Also provided is $5 million for FSA subsidized guaranteed operating loans.
These loans are made by a commercial lender, but the government provides an interest-rate
subsidy and guarantees up to 90 percent of principal and interest. The $5 million can
support approximately $45 million in new guarantees. Current funding allows for loan
guarantees of $200 million in this program for FY1997.

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P.L. 105-18 also provides assistance to rural areas affected by disasters by allowing
USDA to use any unobligated balances in the Rural Housing Insurance Fund from prior
year supplementals. This estimated balance of about $5.5 million, can be used to support
Section 502 low-income housing loans, Section 504 housing repairs loans and grants,
Section 515 rental housing loans, and domestic farm labor grants. The measure also
provides $4 million for loan subsidies or grants for the Rural Utilities Assistance
Program, for the repair of rural water and sewer systems following a flood or other
natural disaster, once FEMA assistance is exhausted.
Non-Emergency Provisions
The WIC program, which provides monthly food packages to low-income mothers
and their small children, receives supplemental funding of $76 million in P.L. 105-18 to
help meet a higher than anticipated caseload and food costs for the current fiscal year. The
President had requested $100 million to maintain the current 7.4 million person caseload
through FY1997.
P.L. 105-18 also provides $6.3 million in budget authority to support $50 million in
additional funding for the Farm Service Agency farm operating loan program. The
program has current funding for approximately $470 million in loans, which USDA says
is virtually exhausted.
Another provision requires the Secretary of Agriculture to survey cheese
manufacturers weekly on prices received for bulk cheese and to ensure manufacturers of
the confidentiality of this survey . Within 150 days of enactment of the supplemental,
(November 9, 1997), the Secretary is required to report to Congress on the rate of
compliance of manufacturers to the survey, and if necessary, propose legislative
recommendations for improving compliance. USDA recently began a weekly survey of
cheese manufacturers and uses this survey price as a component in determining the base
price for most farm milk sold in the nation.
Offsets
In order to partially offset the cost of the supplemental funding, P.L. 105-18 makes
reductions of $79 million in FY1997 mandatory spending for USDA programs.
P.L. 105-18 reduces by $16 million total FY1997 spending for the Export Credit
Guarantee Program, which guarantees the repayment of commercial loans to finance the
sale of U.S. agricultural exports to developing and middle-income countries. This reduces
the potential amount of loans guaranteed this year from $5.5 billion to $3.5 billion, which
is close to the annual program level in recent years.
A $10 million limit is placed on funding for the Export Enhancement Program
(EEP), which provides bonus payments to exporters of U.S. agricultural commodities to
make them price competitive in foreign markets. This is a $90 million reduction from the
current authority of $100 million, for estimated savings of $23 million. To date, USDA has
awarded no EEP bonuses in FY1997, based on its view that current market conditions do
not warrant the use of EEP.

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P.L. 105-18 cuts funding for mandatory commodity purchases from $100 million to
$80 million for The Emergency Food Assistance Program (TEFAP), which provides
USDA commodities to emergency feeding organizations and authorizes grants to states
to help administer the program. The $20 million reduction comes from the $100 million
in mandatory funding required to be provided to TEFAP from food stamp funds.
Discretionary funding of TEFAP provided through annual appropriations is not affected
by the reduction. The Administration request for a $6.25 million reduction in TEFAP to
fund a like increase in the Nutrition Education and Training Program, was not approved
in the measure.

A reduction of $20 million is made in the Fund for Rural America, a new program
which provides $100 million annually to augment existing resources for rural development
and agricultural research. Since most of the FY1997 funding for rural development under
this program has been obligated, it is expected that most of the $20 million reduction may
come from the research portion of the program.
P.L. 105-18 did not concur with the Administration request to rescind $50 million
from Title I (credit sales) of the P.L. 480 foreign food aid program. Report language of
earlier-passed versions of the bills state that any surplus of Title I funds may be needed to
be transferred to Title II for commodity donations for overseas emergencies. P.L. 105-18
also did not concur with a $19 million reduction in the Wetlands Reserve Program,
originally contained in the House version of H.R. 1469 only.