Appropriations for FY2001: U.S. Department of Agriculture and Related Agencies

Appropriations for FY2001: U.S. Department of Agriculture and Related Agencies

Order Code RL30501
CRS Report for Congress
Received through the CRS Web
Appropriations for FY2001:
U.S. Department of Agriculture
and Related Agencies
Updated November 9, 2000
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 Appropriations. 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.loc.gov/crs/products/apppage.html]

Appropriations for FY2001: U.S. Department of Agriculture
and Related Agencies
Summary
On October 28, 2000, the President signed into law the FY2001 appropriations
act (P.L. 106-387/H.R. 4461) for the U.S. Department of Agriculture (USDA) and
related agencies. The full House and Senate had approved the conference agreement
on H.R. 4461 on October 11th and 18th, respectively. The act contains $74.8 billion
in regular appropriations for programs funded by the annual appropriations bill and
$3.65 billion in FY2001 emergency supplemental spending, primarily to compensate
farmers for the financial effects of low farm commodity price and natural disasters.
Of the $74.8 billion in regular appropriations contained in P.L. 106-387, $15.0
billion is for discretionary programs, which is above both the House and Senate-
passed levels of $14.5 billion and $14.85 billion, respectively, but below the
Administration request for $15.5 billion. Regular FY2001 funding for USDA
mandatory programs (such as food stamps and certain farm commodity support
programs) is $59.8 billion in the FY2001 act, about $1 billion below the House- and
Senate-passed levels, mainly because of a recent re-estimation of food stamp
spending. Much of the CBO-estimated $3.65 billion in emergency supplemental
assistance provided in P.L. 106-387 is for direct payments to farmers. This includes
an estimated $1.6 billion in disaster payments for year 2000 crop losses; $490 million
in emergency livestock assistance; and direct payments to dairy farmers in
compensation for low farm milk prices, among many other provisions. Actual
emergency spending under the act could be higher than $3.65 billion since the crop
disaster payments and the market loss payments for dairy farmers authorized by the
act are based on a payment formula rather than a fixed appropriation.

Conference committee action on H.R. 4461 was delayed for several weeks
because of controversy over three provisions – the exemption of food and medicine
exports from current U.S. sanctions against Cuba; the relaxation of restrictions on the
reimportation of prescription drugs from Canada and Mexico; and the amount of
emergency assistance to be provided to farmers and rural areas. Conferees adopted
language to allow food and medical sales to Cuba, but prohibit any private or public
financing of such exports by U.S. banks or federal, state or local governments.
Conferees also adopted a provision to allow the importation of prescription drugs, but
with several restrictions. The Administration had expressed its displeasure with the
sanctions and drug reimportation provisions saying that they are both too restrictive,
but did not issue a veto threat.
Among the many other provisions in P.L. 106-387 are an increase in the payment
limit for recipients of loan deficiency payments; continued prohibitions or limitations
on mandatory spending on certain agricultural research, conservation and rural
programs; an earmark of duties collected on certain unfair trade practices to assist
those industries affected by the trade practice; increased funding for food safety
activities; an easing of restrictions on food stamp recipients with respect to housing
and automobile allowances; and emergency funding of $200 million for rural
economic assistance and improvements to infrastructures in rural areas.

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
Trade Sanctions
Remy Jurenas
RSI
7-7281
Rural Development
Eugene P. Boyd
G&F
7-8689
Domestic Food Assistance
Jean Yavis Jones
RSI
7-7331
Agricultural Research and Food Safety
Jean M. Rawson
RSI
7-7283
USDA Marketing and Regulatory Programs
Alejandro Segarra
RSI
7-9664
Food and Drug Administration
Donna U. Vogt
DSP
7-7285
Division abbreviations: RSI = Resources, Science and Industry; G&F = Government and Finance;
DSP= Domestic Social Policy.

Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
USDA Spending at a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Mandatory vs. Discretionary Spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The FY2001 Appropriations Act for USDA and Related Agencies (P.L. 106-
387/H.R. 4461) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Trade Sanctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Emergency Supplemental Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Commodity Credit Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Crop Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Farm Service Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
FSA Salaries and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
FSA Farm Loan Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Agricultural Trade and Food Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Discretionary (Appropriated) Programs . . . . . . . . . . . . . . . . . . . . . . 11
Mandatory Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Earmark of Countervailing and Anti-Dumping Duties . . . . . . . . . . . . 13
Conservation and Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
NRCS Discretionary Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Mandatory Conservation Programs . . . . . . . . . . . . . . . . . . . . . . . . . 14
Emergency Conservation Spending . . . . . . . . . . . . . . . . . . . . . . . . . 14
Additional Conservation Provisions . . . . . . . . . . . . . . . . . . . . . . . . . 14
Kyoto Protocol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Administration Safety Net Initiative . . . . . . . . . . . . . . . . . . . . . . . . . 15
Agricultural Research, Education, and Economics . . . . . . . . . . . . . . . . . . 15
Agricultural Research Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Cooperative State Research, Education, and Extension Service . . . . 16
Economic Research Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
National Agricultural Statistics Service . . . . . . . . . . . . . . . . . . . . . . . 17
Research Programs with Authorized Mandatory Funding . . . . . . . . . 17
Food Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Marketing and Regulatory Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Rural Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Rural Community Advancement Program . . . . . . . . . . . . . . . . . . . . . 20
Fund for Rural America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Rural Housing Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Rural Business and Cooperative Programs . . . . . . . . . . . . . . . . . . . . 21
Rural Utilities Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Food and Nutrition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Child Nutrition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Food and Drug Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Food Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Drug and Medical Device Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Buildings and Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

List of Tables
Table 1. U.S. Department of Agriculture and Related Agencies Appropriations,
FY1994 to FY2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Table 2. Congressional Action on FY2001 Appropriations for the U.S. Department
of Agriculture and Related Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Table 3. Emergency Provisions in the FY2001 Agriculture Appropriations Act (P.L.
106-387/H.R. 4461)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Table 4. U.S. Department of Agriculture and Related Agencies Appropriations,
FY2000 vs. FY2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Appropriations for FY2001:
U.S. Department of Agriculture
and Related Agencies
Most Recent Developments
On October 228, 2000, the President signed into law the FY2001 appropriations
act (P.L. 106-387/H.R. 4461) for the U.S. Department of Agriculture and related
agencies. The House approved the conference report (H. Rept. 106-948) on H.R.
4461 by a 340-75 vote on October 11, 2000; the Senate approved the measure, 86-8,
on October 18th. The conference agreement contains $74.8 billion in regular FY2001
appropriations and a CBO-estimated $3.65 billion in emergency supplemental
spending, primarily to help farmers and rural areas recover from continued low farm
commodity prices and natural disasters. Conference action had been delayed for
several weeks because of controversy over proposed reforms of Cuban trade
sanctions, the reimportation of prescription drugs from Canada and Mexico, and the
level of spending provided for emergency farm assistance.

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, nor with the agriculture appropriations bill, which includes
funds for non-USDA programs, notably the Food and Drug Administration (FDA).
USDA gross outlays for FY1999 (the most recently completed fiscal year for
which data are currently available) were $67.5 billion. By far the largest outlay within
the Department, $33.0 billion, or just under one-half of total FY1999 outlays, was for
its 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. FY1999 gross outlays also include $23.6 billion, or just
over one-third of total outlays, for farm and foreign agricultural services. Within this
mission area of USDA are the programs funded through the Commodity Credit
Corporation (e.g., commodity support programs, the conservation reserve program,
and certain trade programs), crop insurance, farm loans, and foreign food aid
programs.

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Another $4.7 billion (7%) was spent in FY1999 on an array of natural resource
and environment programs, nearly three-fourths of which funded the Forest Service
(which is funded through the Interior appropriations bill, and the only USDA agency
not funded through the agriculture appropriations bill), and the balance for a number
of conservation programs for farm producers. USDA programs for rural development
($2.5 billion in gross outlays for FY1999); research and education ($1.9 billion);
marketing and regulatory activities ($818 million); meat and poultry inspection ($604
million); and departmental administrative offices and other activities ($362 million)
account for most of the balance of USDA spending.
Mandatory vs. Discretionary Spending
Approximately three-fourths of total USDA spending is classified as mandatory,
which by definition occurs outside the control of annual appropriations. 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. Currently accounting for the vast majority of USDA mandatory spending are
the food stamp program (which accounts for nearly one-half of total USDA
mandatory spending); child nutrition programs; the farm commodity price and income
support programs; the federal crop insurance program; and the conservation reserve
program (CRP).
Although they have mandatory status, the food and 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 is also made to reimburse the Commodity Credit

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Corporation for losses it incurs in financing the commodity support programs and the
various other programs it finances. Historically, spending levels among these
programs has been erratic and unpredictable, making total USDA spending highly
variable. Some of this unpredictability was lessened by the enactment of the 1996
farm bill, which fixes the level of spending on direct payments to program crop
producers, and no longer ties these payments to market conditions. However,
emergency provisions in the FY1999 omnibus appropriations act (P.L. 105-277), the
FY2000 agriculture appropriations act (P.L. 106-78) and various supplemental
spending acts have made available a total of nearly $16 billion in additional funding
to farmers to help them recover from low commodity prices and natural disasters.
Most of this emergency funding was provided through the Commodity Credit
Corporation’s ongoing borrowing authority from the U.S. Treasury.
Table 1. U.S. Department of Agriculture and Related Agencies
Appropriations, FY1994 to FY2001
(budget authority in billions of dollars)
FY94
FY95
FY96
FY97
FY98
FY99
FY00
FY01
Discretionary
$14.59 $13.29 $13.31
$13.05
$13.75
$13.69
$13.95
$15.04
Mandatory
$56.25 $54.61 $49.78
$40.08
$35.80
$42.25
$61.95
$59.77
Total Budget
$70.84 $67.90 $63.09
$53.12
$49.55
$55.94
$75.90
$74.81
Authority
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.
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 that are funded by the annual agriculture appropriations act
are its rural development programs, research and education programs, agricultural
credit, 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. FY2000 funding levels for
all USDA discretionary programs (except for the Forest Service) is provided by the
FY2000 agriculture appropriations act (P.L. 106-78).
The FY2001 Appropriations Act for USDA and Related
Agencies (P.L. 106-387/H.R. 4461)
On October 28, 2000, the President signed into law the FY2001 appropriations
act for USDA, FDA, and related agencies (P.L. 106-387, H.R. 4461). The full House
and Senate approved the conference agreement (H. Rept. 106-948) on the measure
on Oct. 11th and 18th, respectively. P.L. 106-387 contains a total of $78.5 billion in
budget authority for FY2001, including $74.8 billion in regular appropriations for all

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programs normally funded by the annual appropriations bill, and $3.65 billion in
emergency supplemental spending for various USDA programs. The $74.5 billion in
regular appropriations is approximately $800 million below the $75.3 billion provided
in both the House and Senate versions of the bill passed in July by their respective
chambers. Much of the difference in regular spending between the final law and the
House- and Senate-passed levels is explained by a downward re-estimation of the
funding requirements of the food stamp program. The $3.65 billion in emergency
funding for FY2001 is higher than the approximately $2 billion provided in the
original Senate-passed bill. The original House-passed bill contained no emergency
spending provisions for FY2001.
Conference action on the measure had been delayed for several weeks because
of controversy over three issues – the exemption of food and medicine from unilateral
sanctions against Cuba and other countries; a relaxation of restrictions on the
importation of FDA-approved drugs from Canada and Mexico; and the amount of
supplemental funding required to respond to natural disasters and low farm
commodity prices. (See discussions of these issues below.)

Table 2. Congressional Action on FY2001 Appropriations for the U.S.
Department of Agriculture and Related Agencies
Subcommittee
Markup
Conference Report
Completed
Approval
House
House
Senate
Senate
Conference
Public
House
Senate
Report
Passage
Report
Passage
Report
House
Senate
Law
Vote of
Vote of
H. Rept.
Vote of
Vote of
P.L.
H.R. 2536
S. 2536
339-82
79-13
106-948
340-75
86-8
106-387
H. Rept.
S. Rept.
106-619
106-288
5/04/00 5/04/00
7/11/00
7/20/00
10/6/00
10/11/00 10/18/00 10/28/00
5/16/00
5/10/00
** = Pending
The following sections review the major components of the FY2001 agriculture
appropriations act (P.L. 106-387, H.R. 4461) as approved by the House and the
Senate, and compares it with the original House-passed and Senate-passed versions
of the bill, the Administration request and FY2000 funding levels. Also included is
a discussion of the estimated $3.6 billion in supplemental USDA spending adopted
in the conference agreement.
Trade Sanctions
P.L. 106-387 includes House Republican leadership language to exempt
agricultural and medical products from current and future U.S. unilateral economic
sanctions. Its immediate effect would be to allow commercial sales of such products
to Cuba, and to codify Administration decisions to allow such sales to four other
sanctioned countries (Iran, Libya, North Korea, and Sudan). Sales of exempted

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products could not be made to these five countries using any U.S. government
assistance program (such as foreign aid, credit or guarantees, and export assistance).
The President, though, is granted authority to waive this prohibition if he determines
it is in the national interest with respect to Iran, Libya, North Korea, and Sudan, or
for humanitarian reasons. This waiver authority does not extend to Cuba.
Various provisions affect the terms of the food/medical exemption that would
apply to Cuba. In addition to the prohibition on federal financing of sales, financing
of agricultural exports to Cuba by U.S. banks or by state and local governments also
would be permanently prohibited. Sales to Cuba could only occur on a
cash-in-advance basis, or if financed by a third country bank. These payment and
financing conditions are nearly similar to those that apply under current Treasury
regulations on sales now permitted to Iran, Libya, and Sudan. Also, U.S. exporters
of agricultural and medical products would be required to meet specified export
licensing requirements. Other language would codify current Cuban embargo
regulations by prohibiting (1) merchandise imports from Cuba, and (2) travel-related
transactions that Treasury regulations in effect on June 1, 2000 did not expressly
allow, such as for tourism (other than travel related to selling agricultural
commodities under the new policy).
Other provisions in P.L. 106-387 would require congressional approval before
the President imposes future restrictions or prohibitions on sales of these products on
a target country for foreign policy or national security reasons. These also would
limit the duration of such approved sanctions to not more than 2 years, unless
Congress approves a requested extension.
Some members argue that the adopted provisions are too restrictive in
prohibiting the financing of U.S. agricultural sales to Cuba, and oppose the
codification of current travel rules. Supporters of legislating an opening for
prospective food sales to Cuba acknowledge that the final language was the best that
could be attained under current circumstances. Though the Administration signaled
last summer that it might support legislative initiatives to permit food and medical
product sales to Cuba as long as such efforts did not support Castro's government,
President Clinton on October 6 criticized the conference-adopted provisions as “a big
mistake” that would do little to facilitate sales to Cuba, and called the related tourist
travel ban “unwarranted” and unwise. The Cuban government has criticized the final
agreement due to the export financing prohibition and travel provisions. Analysts
project that an exemption under the stated conditions might result in $25 to $50
million in U.S. food exports to Cuba within a year. For more information, see
Economic Sanctions and Agricultural Exports in the CRS electronic briefing book on
trade, and CRS Issue Brief IB10061, Exempting Food and Agriculture Products from
U.S. Economic Sanctions: Current Issues and Proposals.
Emergency Supplemental Assistance
Title VIII of P.L. 106-387 provides an estimated $3.6 billion in FY2001
emergency spending for farmers and rural areas, primarily in response to natural
disasters and continued low farm commodity prices. This follows $15 billion in
supplemental spending provided to USDA programs in FY2000 and $1.64 billion
already provided in FY2001, most in the form of direct payments to qualified farmers.

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Title VIII provides “such sums as are necessary” to fund the disaster payment formula
used by USDA in recent years to compensate farmers for major crop losses caused
by natural disasters. The estimated cost of making quantity and quality loss payments
to a grower of a 2000-year crop is $1.6 billion. However, the borrowing authority
of USDA’s Commodity Credit Corporation can be used to fully fund the disaster
payment formula, should more funding be required. P.L. 106-387 also includes $490
million in payments to livestock producers to compensate for forage losses caused by
a disaster. The act also provides a third consecutive year of “market loss payments”
to compensate dairy farmers for low milk prices. It requires USDA to use a payment
formula based on a portion of the difference between 2000 farm milk prices and
previous years’ prices, which CBO estimates will cost $473 million. (A more recent
estimate by USDA shows that dairy payments will be approximately $667 million,
based on the payment formula in the law.) Separate assistance is provided to apple
growers to help them recover from low commodity prices and to aid both apple and
potato growers who experienced poor-quality crops caused by natural disasters.
Title VIII of P.L. 106-387 also includes several provisions that modify farm
policy, but are considered to be budget neutral in FY2001. This includes an increase
in the annual limit for loan deficiency payments from $75,000 to $150,000 per person.
The law also makes modifications to the sugar price support program by requiring
USDA to offer nonrecourse loans to sugar processors instead of the current recourse
loans. This change, in effect, gives sugar processors a minimum price guarantee for
their commodity.
Table 3 summarizes all of the provisions in the emergency title of P.L. 106-387
which have an effect on FY2001 spending. Some of the provisions are expected to
affect federal spending in years beyond FY2001, but current estimates for out-year
spending are not yet available. For more background on emergency farm spending,
see CRS Issue Brief IB10043, Farm Economic Relief: Issues and Options for
Congress; CRS Report RS20269, Emergency Funding for Agriculture: A Brief
History of Congressional Action; and CRS Report RS20696, Emergency Farm
Assistance in FY2000: Description and State Distribution.
Table 3. Emergency Provisions in the FY2001 Agriculture
Appropriations Act (P.L. 106-387/H.R. 4461)(a)
USDA Programs
Cost Estimate --
FY2001
-million $-
Farm Disaster Payments: 2000 Crop Quantity and Quality Losses
$1,627 (b)
Livestock Assistance Payments:
Replace forage lost to or damaged by a natural disaster
$490
Direct indemnity payments to replace livestock killed by a natural disaster
$10
Direct Payments to Dairy Farmers: Low commodity price assistance
$473 (b)
Continued next page

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- Continued from previous page -
Rural Community Advancement Program: Loans and Grants for rural
$200
areas with high energy costs, high unemployment and natural disasters
Apple and Potato Payments:
Direct payments to compensate for low 1998 and 1999 apple prices
$100
Direct payments for 1999 and 2000 apple and potato quality losses
$38
Wetlands Reserve Program: Increase enrollment by 100,000 acres
$117
Emergency Watershed Program: Repair flood damage to waterways
$110
Emergency Conservation Program: Rehabilitate farmland after a disaster
$80
Crop Disease and Insect Assistance:
$26 for each tree removed to combat citrus canker
$58
Mexican fruit fly, plum pox, Pierce’s disease, watermelon wilt, and crickets
$19
Tobacco Assistance:
Burley crop loan forfeitures
$50
Market loss payments for quota holders not producing a 2000 year crop
$3
Farm Service Agency: Salaries & expenses for administering emergencies
$50
Food Stamps: Modification of recipient qualifications
$40
Conservation Technical Assistance: CRP and WRP
$35
Honey Assistance: Nonrecourse loans and loan deficiency payments
$20
Wool & Mohair Assistance: $0.40/lb payment for 2000 marketing year
$20
Cranberry Producer Assistance: Direct payment for low commodity prices
$20
California Fruit Growers: Direct payments for insolvency of a cooperative
$20
Business and Industry Guaranteed Loans and Grants
$20
Common Computing Environment: USDA field offices
$19.5
Crop Insurance: Additional premium subsidies
$13
Hawaiian Sugar Transportation Loss Assistance
$7.2
Commodity Eligibility Assistance
$5
Financial Assistance to South Carolina: SC Grain Dealers Guaranty Fund
$2.5
Indemnity Payments for Vermont Sheep Disease Losses
$2.4
Shared Appreciation Agreements: Low-interest loans for indebted farmers
$2
Small Business Admin. study of effects of disasters on rural areas
$0.2
Total USDA Supplemental Funding in P.L. 106-387
$3,646,800
(a) Emergency provisions listed in this table include those that have an effect on federal spending in FY2001.
Not included are numerous emergency provisions that affect policy but are budget neutral in FY2001.

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(b) The agreement provides “such sums as our necessary” to fund the disaster payment formula and the dairy
payments. The amounts shown above for these two programs are CBO estimates prior to enactment. A more
recent USDA estimate for the amount of dairy payments is for spending of $667 million in FY2001.
Commodity Credit Corporation
Outlays for farm support programs (including ongoing commodity support
programs and recent emergency assistance to compensate farmers for low commodity
prices and natural disasters) and various farm export and conservation programs are
funded through USDA’s Commodity Credit Corporation (CCC).
The CCC has a $30 billion line of credit with the U.S. Treasury. Therefore, the
CCC does not require an annual appropriation to fund its spending activities.
However, because CCC outstanding borrowing cannot exceed $30 billion, the annual
agriculture appropriations bill contains funding for a “reimbursement of CCC net
realized losses” so the Corporation can repay its debt to the Treasury and not exhaust
its borrowing authority. This reimbursement is categorized as an indefinite
appropriation, meaning that the CCC is provided “such sums as are necessary.” It is
a mandatory expenditure that is not included in the discretionary spending allocation
given to the appropriations subcommittees.
Historically, the appropriation received by the CCC in any fiscal year would
be to reimburse the Corporation for actual losses in the previous fiscal year. Over the
last couple of years, CCC annual spending has been at or near historically high levels
($19.2 billion in FY1999 and an estimated $28 billion in FY2000), mainly because of
the large amounts of CCC-funded financial assistance provided in recent emergency
supplemental appropriations acts (but initially funded through CCC’s borrowing
authority with the Treasury) coupled with rising cost of ongoing farm income
assistance programs. Consequently, in FY2000 and FY2001, USDA requested an
appropriation to cover the CCC’s expected current year losses, as well as
unreimbursed past losses. Without such an appropriation, USDA feared that the CCC
would exhaust its $30 billion credit limit with the Treasury.
When the FY2000 agriculture appropriations act (P.L. 106-78) was being
debated last year, USDA had estimated that the CCC would require an appropriation
of $14.368 billion for its FY2000 and prior years’ unreimbursed losses. However,
because of the $9 billion in emergency assistance authorized in FY2000 (most of
which is funded through the CCC) and increased spending for the ongoing commodity
support programs, the estimated FY2000 appropriation has been revised to $30.037
billion, a $15.7 billion increase over the initial estimate. USDA’s FY2001 estimate
for CCC appropriations is $27.771 billion, which is provided in the FY2001
agriculture appropriations act (P.L. 106-387).
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

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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
and also provides “such sums as are necessary” for the Federal Crop Insurance Fund,
through which all other expenses of the program are funded including premium
subsidies, indemnity payments, and reimbursements to the private insurance
companies.
The Administration requested $67.7 million for the FY2001 salaries and
expenses of the RMA, up $3.7 million from the FY2000 level. P.L. 106-387 concurs
with the Senate-passed level of $65.6 million, a smaller increase than what was
requested and in the House-passed bill. The Senate Appropriations Committee report
says the amount provided is adequate to meet mandatory pay cost increases. Funding
provided to the Federal Crop Insurance Fund is classified as an “indefinite”
appropriation that can only be estimated until final participation rates and actual crop
losses are known. Therefore, P.L. 106-387 provides “such sums as are necessary”
for FY2001, which the Administration estimates will be $1.728 billion.
A separate provision in the emergency title of P.L. 106-387 provides $13 million
to the federal crop insurance program to cover a shortfall in the additional premium
subsidy given to participating farmers in the 1999 crop year. An earlier supplemental
act (P.L. 105-277) provided USDA with $400 million to offer additional premium
discounts to attract more farmers to the program. USDA estimated that the funding
would allow for a 30% discount on farmer-paid premiums. After sign-up, they
estimated a $13 million shortfall in funds necessary to provide the full 30% discount.
Earlier in 2000, separate legislation was enacted making permanent changes to
the federal crop insurance program. The recently enacted measure (P.L. 106-224)
significantly increases the portion of the premium paid by the government on behalf
of the farmer; provides improved coverage for farmers affected by multiple years of
natural disasters; authorizes pilot insurance programs for livestock producers, and
gives the private sector greater representation in policymaking. New funding
provided by this law did not have to be offset, because the final FY2001 budget
resolution (H.Con.Res. 290) made room in the budget for $8.17 billion in new
spending for the crop insurance program over a 5-year period (FY2001-05). For more
information on the crop insurance legislation, see CRS Issue Brief IB10033, Federal
Crop Insurance: Issues In the 106th Congress.
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
and guaranteed farm loan programs, certain conservation programs and domestic and
international food assistance and international export credit programs.

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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 FY2001,
P.L. 106-387 provides $828.4 million for this account, which is $34 million more than
the FY2000 level (excluding supplementals), and equal to the Administration’s
request. Not included in this total is an emergency supplemental appropriation of $50
million within P.L. 106-387 for FSA salaries and expenses, to fund the agency’s
implementation of the disaster payments and other emergency farm assistance
programs in the bill.
A recent Administration proposal to collocate more than two dozen FSA,
Natural Resources and Conservation Service (NRCS), and rural development state
offices came under criticism in House report language. Concern is expressed in this
report that the process used by USDA to select collocation of statewide headquarters
should be supported by rigorous analysis, show no reductions in services available to
the public, and demonstrate cost-effectiveness.

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.
P.L. 106-387 provides a loan subsidy of $117 million to support an FY2001
direct and guaranteed FSA farm loan level of $1.218 billion. The amount provided
in P.L. 106-387 is closer to the level in the original Senate-passed version of the bill
($107 million in loan subsidies to support $3.083 billion) than the House-passed
version, which concurred with the Administration request for $455 million in subsidy
to support $4.558 billion in loan volume. The final FY2001 act provides funding that
will support $1 billion less in unsubsidized guaranteed loans and $125 million less in
emergency disaster loans than the amount requested by the Administration for these
programs. The amount provided supports a total FY2001 loan volume that is close
to the loan authority provided in the regular FY2000 appropriations act. However,
supplemental funding was enacted in FY2000 to increase the total loan volume by
$2.5 billion. Contributing to the need for supplemental funding were widespread
natural disasters and the continued weak state of the farm economy which caused
more farmers to qualify for federal credit programs.
Several emergency provisions in P.L. 106-387 affect federal farm credit
programs. One provision allows farmers who owe money to USDA as part of a
shared appreciation agreement to finance their payment through FSA over a 25- year
period at a below-market interest rate. Since the late 1980s, many farmers have

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entered into shared appreciation agreements with USDA, whereby delinquent
borrowers are forgiven a portion of their indebtedness as long as they share a portion
of any appreciation in their collateral real estate values with USDA ten years after the
agreement is signed. Many of these 10-year agreements are now maturing, and at a
time when the farm economy is weak and many producers lack the financial resources
to make a payment to USDA. Another emergency provision allows disaster-stricken
poultry farmers who could not obtain hazard insurance to qualify for FSA emergency
disaster loans to rebuild their chicken houses. P.L. 106-387 also gives USDA the
authority to transfer funds among the direct and guaranteed farm loan programs as
needed, with the advance consent of the House and Senate Appropriations
Committees.
Agricultural Trade and Food Aid
Discretionary (Appropriated) Programs. For the international activities of
USDA subject to annual appropriations in FY2001, the FY2001 agriculture
appropriations act (P.L. 106-387) contains budget authority of $1.092 billion. This
level of spending is $37 million above the FY2000 enacted spending level, and
virtually identical to the levels requested by the Administration in its budget request
and the Senate-passed bill. (The only difference is that the conferees included $2
million for FAS to administer emergency international and other food aid programs.)
P.L. 480 food aid, the salaries and expenses of the Foreign Agricultural Service, and
administrative expenses of the CCC export credit guarantee programs are the USDA
international activities that require an annual appropriation.
P.L. 480 is the main channel for U.S. foreign food aid and the largest
appropriated international USDA program. P.L. 106-387 contains budget authority
for P.L. 480 of $973.4 million, about $31 million more than enacted in FY2000.1 For
the Foreign Agricultural Service (FAS), which implements USDA’s international
programs, P.L. 106-387 provides an appropriation of $113.4 million, $4.2 million
more than in FY2000. Final FY2001 budget authority for administrative expenses of
the CCC export credit guarantee program are identical to the FY2000 appropriated
level of $3.8 million.
The only differences between the original House- and Senate-passed versions of
the FY2001 appropriations bill were in funding levels for P.L. 480 (Title II) and for
the Foreign Agricultural Service. The House provided $109.2 million for FAS and the
Senate bill contained $113.4 million. For Title II funding within P.L. 480, the Senate
provided $837 million, compared with $770 million in the House bill. In both cases,
conferees agreed to the higher levels provided by the Senate.
Mandatory Programs. Many of USDA’s international programs do not receive
an annual appropriation, since they are funded through the borrowing authority of
USDA’s Commodity Credit Corporation (CCC). For example, the $3.8 million
1 In addition to the regular appropriation, FY2000 spending for P.L. 480 of $942.7 million was
augmented by a $648 million transfer from the Commodity Credit Corporation for Title I
concessional loans to Russia for purchases of food commodities. According to the Administration,
additional CCC transfers to P.L. 480 are not anticipated in FY2001.

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budget authority for administrative expenses of the CCC export credit guarantee
program would support export credit guarantees for an estimated $3.8 billion worth
of U.S. agricultural exports. The FY2001 estimated program level for CCC export
credit guarantees is unchanged from the FY2000 estimated level. Two other USDA
programs funded through the CCC help to develop markets for agricultural exports.
For the Market Access Program (MAP) which aims to develop overseas markets for
U.S. agricultural commodities, the Administration estimates spending of $90 million,
the maximum allowed under the 1996 farm law. MAP has been a frequent but
unsuccessful target of budget cutters who label it “corporate welfare,” and of some
Members in search of funds to offset increased spending for other programs. An
amendment reflecting that point of view which would have effectively prohibited
spending on MAP was defeated on the House floor. A provision in the committee-
reported version of the bill that would have restored MAP funding for mink pelts was
struck from the House-passed bill on a point of order. The Foreign Market
Development Program (FMDP), or Cooperator Program, another export market
development activity, previously funded as a discretionary program but now financed
by the CCC, would entail spending of $27.5 million in FY2001.
The Export Enhancement Program (EEP) and the Dairy Export Incentive
Program (DEIP), also funded by the CCC, are USDA’s current direct export subsidy
programs. The budget proposes EEP spending at $478 million, the maximum level
authorized in the 1996 farm law and under the 1994 World Trade Organization
(WTO) Agreement on Agriculture. EEP subsidies have been little used in recent
years (only $1 million in FY1999) because, according to USDA, global supply and
demand conditions do not favor its use.
For DEIP, the Administration proposes a program level of $66 million, a
reduction from the FY2000 estimate of $119 million. The proposed reduction reflects
limits imposed by commitments in the WTO Agricultural Agreement, and an end in
June 2000 of “roll-over authority” in the Agricultural Agreement, which had allowed
countries to exceed their annual export subsidy limits by drawing on unused subsidy
authority from previous years.

Section 416(b) commodity donations and food aid under the Food for Progress
program also are funded by CCC. (Food for Progress also can use Title I
appropriated funds or commodities in CCC inventories to carry out its programs.)
For Section 416(b) commodity donations, which were valued at more than $1.2
billion in FY1999 ($794 million in commodity value and $428 million in ocean
transportation and overseas distribution costs), outlays for ocean freight and overseas
distribution are estimated to fall to $75 million in FY2000. (No estimate for Section
416(b) has yet been provided for FY2001.) Food for Progress, which provides U.S.
farm commodities to developing countries and emerging democracies, would require
an estimated $118 million in FY2001 ($88 million for commodities and $30 million
for transportation and other costs).
Adding the appropriations for P.L. 480, FAS, and the administrative expenses
associated with CCC export credit guarantees to the estimated levels of activity for
the CCC funded programs (credit guarantees, EEP, DEIP, MAP, FMDP, Section
416(b) and FFP) results in a program level (the value of goods and services provided)
for USDA’s international activities of around $5.8 billion.

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For more information, see CRS Issue Brief IB98006, Agricultural Export and
Food Aid Programs; CRS Issue Brief IB10040, Agricultural Trade Issues in the
106th Congress; CRS Report RS20520, Foreign Food Aid Programs: Background
and Selected Issues; CRS Report RS20399, Agricultural Export Programs: The
Export Enhancement Program (EEP); CRS Report RS20402, Agricultural Export
Programs: The Dairy Export Incentive Program (DEIP); and CRS Report RS20415,
Agricultural Export Programs: The Market Access Program and the Foreign Market
Development Cooperator Program.
Earmark of Countervailing and Anti-Dumping Duties. P.L. 106-387 includes
a separate title (Title X) that requires revenues generated from antidumping and
countervailing duties be transferred to the domestic industries originally affected by
the dumping or subsidy actions. Title X stipulates that the transfer of revenues
(estimated by CBO at as much as $40 million in FY2001) is intended to offset the
costs incurred by domestic industries to adjust to the unfair trade practices. S.61,
H.R. 842, S.528, and H.R. 1201, introduced earlier in the 106th Congress but not
acted on, contain a similar provision. (For further information on trade remedy law
reform in the 106th Congress, see CRS Report RL30461.)
Conservation and Environment
The FY2001 agriculture appropriations act (P.L. 106-387) provides $872.7
million for discretionary conservation programs, which is more than the House and
Senate each provided, and slightly less than what the Administration requested. A
majority of conservation funding is mandatory spending which would be affected by
some general provisions, discussed below. For the discretionary programs, the House
bill provided $812.8 million, an increase of $8.7 million over FY2000, but just over
$65 million less than the $877.3 million proposed by the Administration. The Senate
bill provided almost $866.9 million, a larger increase of more than $63 million over
FY2000. Neither bill provided any funding to implement the conservation elements
in the Administration’s Safety Net Initiative.
The agreement provides full funding for the Office of the Under Secretary for
Natural Resources and the Environment, but includes report language that prohibits
this office from supervising, managing, or directing the Forest Service or NRCS until
January 20, 2001, and requires that the chiefs of both agencies report directly to the
Secretary of Agriculture until that date. The House had eliminated all funding for this
office, while the Senate had provided full funding with no limitation.
NRCS Discretionary Programs. All discretionary conservation programs are
funded through USDA’s Natural Resources Conservation Service (NRCS). For
Conservation Operations, the largest appropriated NRCS program that provides basic
technical assistance to farm operators through field staff, P.L. 106-387 provides the
same amount that the Senate approved, $714.1 million, which is $33.1 million less
than the Administration had requested. The House bill provided $676.8 million, $70
million less than the Administration request. P.L. 106-387 provides numerous
earmarks, many of which had been included in the House and Senate Appropriations
Committees reports. Among the earmarks and directions in the final agreement are
$2 million for the Urban Resources Partnership Program, of which $1million will be
available only after the rule making process has been completed; and providing the

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funding for the American Heritage Rivers initiative that the Administration had
requested. Among the largest earmarks are $18 million for the Grazing Lands
conservation Initiative and an increase of $14.1 million for Animal Feeding
Operations/Confined Animal Feeding Operations Programs.
For other conservation programs, P.L. 106-387 agrees with the House bill to
provide $10.9 million for Watershed Surveys and Planning, and concurs with the
Senate bill to provide $99.4 million for Watershed and Flood Prevention Operations.
The House had agreed with the Administration proposal to reduce from $91.6 million
in FY2000 to $83.4 million Watershed and Flood Prevention Operations, which is
used to build and operate small dam and related projects for purposes that range from
flood control to recreation. The conference report earmarks funds for several projects
(but fewer projects than either the House or Senate bills) and adopts a provision in the
House bill that limits the amount of the appropriation that could be spent on technical
assistance. It also earmarks $8 million for pilot rehabilitation projects for aging
projects that are approaching the end of their design life in 4 specified states. (Free-
standing legislation to address this topic is being considered but has not been
enacted.) The conference committee agreed to increase funding for the Resource
Conservation and Development Program to $42.0 million, which is higher than the
House-approved level of $41.7 million or the Senate-approved level of $36.3 million.
The final act also provides $6.3 million for the Forest Legacy Program, which is the
same as the Senate level. The House had agreed with the Administration proposal to
provide no funding.
Mandatory Conservation Programs. P.L. 106-387 agrees with general
provisions in both the House- and Senate-passed bills that affect two mandatory
conservation programs. Final provisions limit funding for the Environmental Quality
Incentives Program (EQIP), a cost sharing program, to $174 million, the same
amount as FY2000 and $26 million less than the authorized level, and prohibit any
money from being spent on the Conservation Farm Option (CFO). The
Administration requested $325 million for EQIP, and strongly opposed the limitations
on EQIP spending. The CFO originally was authorized to spend $46 million, the
same level as estimated by the Administration, none of which can be spent because of
the prohibition in P.L. 106-387. For a third mandatory program, the Wetland
Reserve Program (WRP), P.L. 106-387 provides such funds as may be necessary to
enroll a total to 1,075,000 acres in the emergency title (Title VIII), exceeding the
authorized ceiling by 100,000 acres. In this title, P.L. 106-387 also provides an
additional $35 million to provide technical assistance associated with the CRP and
WRP, and allows the Secretary to use funds authorized for conservation under the
emergency title of the Agricultural Risk Protection Act of 2000 (P.L. 106-224) to
fund the Wildlife Habitat Incentives Program.
Emergency Conservation Spending. P.L. 106-387 provides emergency
funding for several conservation programs within Title VIII; many of these provisions
were in the Senate-passed version. Funding for the mandatory programs was
described above. For discretionary programs, the bill provides $80 million to the
Emergency Conservation Program and $110 million to the Watershed and Flood
Prevention Operations Program. Of the watershed total, $14 million is earmarked to
specified projects.

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Additional Conservation Provisions. P.L. 106-387 also includes a new
conservation title, Title XI, that contains provisions that were not in either the House
or the Senate bill. This title authorizes a pilot program to enroll up to 500,000 acres
of farmable wetlands in 6 states in the upper Midwest into CRP in FY2001 and
FY2002. Eligible lands are specified, and this program does not raise the overall cap
on total CRP enrollment above 36.4 million acres. The Secretary is required to report
to Congress on the impact of this pilot program, and provisions that would enable the
Secretary to expedite issuing regulations are included. Another provision amends the
Food Security Act of 1985 to allow incidental grazing each year between May 1 and
August 1 in return for reduced rental payments.
Kyoto Protocol. Also adopted in P.L. 106-387 was a provision that prohibits
the use of any funds in the FY2001 appropriations act for the Kyoto Protocol. The
provision reflects concerns of those opposing the 1997 Kyoto Protocol to control
"greenhouse gas" emissions that have been connected to possible global climate
change. The final act does not include a House-passed provision that would have
limited the funding prohibition to activities that have not otherwise been authorized
in law. Likewise, conferees did not address House report language that directed the
Administration to submit the Kyoto Protocol to the United Nations Framework
Convention on Climate Change (UNFCCC) to the Senate for advice and consent
within 3 years of the date of adoption. (For additional information about the Kyoto
Protocol, see CRS Report 98-2, Global Climate Change Treaty: the Kyoto Protocol.)
Administration Safety Net Initiative. P.L. 106-387 is silent on the
Administration’s Safety Net Initiative. The Administration’s budget had estimated
a total of $3.9 billion for conservation in FY2001 for all mandatory and discretionary
programs, an increase of $1.1 billion over FY2000 estimates. The Administration had
placed most of these proposals in the conservation component of its Safety Net
Initiative. These proposals had included expanded activity in several current
mandatory conservation programs and creating one new program. The conservation
component would have required new spending of $1.3 billion in FY2001, all of which
requires authorizing legislation. Nearly one-half ($600 million) of the $1.3 billion
requested would have supported a proposed new Conservation Security Program,
modeled after legislation introduced by Senator Harkin (S. 1426). The stated purpose
of this new program was to promote sound land management by providing
conservation payments to landowners who voluntarily implement specified
conservation practices. The balance of the requested $1.3 billion would have
provided additional funding to five current USDA conservation programs.
For more information on USDA conservation issues, see CRS Issue Brief
IB96030, Soil and Water Conservation Issues.
Agricultural Research, Education, and Economics
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

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USDA’s liaison with state-level research, education and extension programs at the
land grant Colleges of Agriculture. 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 Under Secretary for Research, Education, and Economics.
The FY2001 agriculture appropriations act (P.L.106-387) contains
appropriations of $2.12 billion for USDA’s four research, education and economics
agencies in FY2001. This represents just under a 1% increase above FY2000 ($2
billion).
Agricultural Research Service. P.L. 106-387 provides $973 million for ARS
(+$90 million from FY2000). Of this, $899 million would go to ARS’s research
programs (+ $68.4 million from FY2000) and $74.2 million would pay for
modernizing and building ARS facilities (+$21.7 million from FY2000). The original
House-passed version of H.R. 4461 provided level funding for ARS ($883 million in
FY2000), while the Senate version contained $928 million. The Administration’s
budget requested a total of $933.6 million -- $894 million for ARS research and $39
million for facilities. Report language accompanying both the House and Senate
measures would restore nearly all of the individual ARS research projects that the
Administration had proposed for termination and would redirect savings from a few
project terminations to new and ongoing projects.
Cooperative State Research, Education, and Extension Service. P.L. 106-
387 provides $981.6 million for CSREES (+$36 million from FY2000), the agency
through which USDA funds land grant colleges for state-level research, education,
and extension programs. Of that amount, $506.2 million supports research (+$24
million), $433.4 million supports Extension (+$9.3 million), and $42 million (+$2.4
million) funds the integrated research and extension competitive grant program that
was authorized in the Agricultural Research, Extension, and Education Reform Act
of 1998 (7 U.S.C. 7626). The House- and Senate-passed measures would have
provided $952.6 million and $964.8 million, respectively, for CSREES. P.L. 106-387
also increases the amount of the Native American Institutions Endowment Fund,
which supports the 1994 Native American land grant colleges, from its current level
of $4.6 million to $7.1 million.
P.L. 106-387 concurs with the Senate- and House-passed bills and provides level
funding for the block payments to the states under the Hatch Act of 1887 (for
research at the state agricultural experiment stations) and under the Smith-Lever Act
(for state extension programs). This concurs with the Administration’s request of
$180.5 million and $276.5 million for Hatch and Smith-Lever, respectively. Both bills
were in agreement with the Administration’s request for level funding for cooperative
forestry research ($21.9 million). P.L. 106-387 provides $32.7 million for research
and extension programs at the 1890 (historically black) land grant colleges, a $3.4
million increase over FY2000. The House-passed version had provided an additional
$6.8 million for the 1890 schools through a decrease in ARS funding; the Senate-
passed measure provided level funding.
P.L. 106-387 funds Special Research Grants at $85.7 million (+$25.7 million
from the FY2000 level, +$21.5 million from the Senate bill, and +$11.3 million from

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the House bill). The Administration requested a dramatic reduction in Special Grants
– down to $6.4 million – and concurrently requested a $30.7 million increase in the
National Research Initiative (NRI) competitive grants program – to $150 million
($119 million in FY2000). The FY2001 appropriations act provides $106 million for
the NRI, an amount $9 million above the House bill, $12.7 million below the Senate
bill, and $13 million below current year funding. Report language also stipulates that
$20.8 million of the NRI appropriation support food safety research, as the
Administration requested as part of the Food Safety Initiative.
Economic Research Service. The FY2001 act provides $67 million for ERS
(+$1.7 million from FY2000). The act retains Senate report language that: (1)
transfers $1 million in funding from ERS to USDA’s Food and Nutrition Service, part
of which is for studies on food stamp program participation and on infant formula
pricing; and (2) designates $12.2 million of the total appropriation to support studies
and evaluations of the USDA food assistance programs,
National Agricultural Statistics Service. P.L. 106-387 contains $100.7 million
for NASS (+$1.4 million), and includes amended House report language to provide
an additional $157,000 to NASS for developing and implementing a more frequent
dairy price survey.
Research Programs with Authorized Mandatory Funding. General
provisions in both the House- and Senate-passed bills prevent the expenditure of
FY2001 mandatory funds of $120 million for the Initiative for Future Agriculture and
Food Systems (which Congress authorized in a research reauthorization act in 1998,
P.L. 105-185) and $60 million for the Fund for Rural America (authorized in P.L.
104-127, and reauthorized and amended in P.L. 105-185; $20 million of the total is
allocated for research and extension grants.) P.L. 105-185 gives the Secretary
authority to obligate the annual allocations for these two programs over a 2-year
period.
The FY2001 agriculture appropriations act adopts and amends Senate report
language concerning the obligation of FY2000 funds in FY2001, and of FY2001
funds in FY2002. The conferees approved language that would: (1) permit the
obligation of FY2000 funds in FY2001 for both the Initiative and the Fund; (2)
restrict eligibility for the FY2001 Initiative (supported by FY2000 funds) to 1862,
1890 (historically black), 1994 (Native American), and Hispanic-serving institutions;
and (3) split the FY2000 allocation for the Fund for Rural America, allowing $30
million to be spent in FY2001 and $30 million in FY2002.
In September 2000, USDA awarded the first grants under the Initiative for
Future Agriculture and Food Systems, using FY1999 funds that were still eligible for
obligation in FY2000. The Department awarded 86 grants, mostly to 1862 and 1890
land grant institutions, but also to non-land grant institutions, ERS, ARS, and the U.S.
Geological Survey.
Food Safety
USDA’s Food Safety and Inspection Service (FSIS) is responsible for the
mandatory inspection of meat, poultry, and processed egg products to ensure their

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safety, wholesomeness, and proper labeling. FSIS’s FY2000 appropriation was $641
million. In addition, $83 million was available from user fees collected for overtime
and holiday inspection, bringing the total program level to $724 million.
The FY2001 agriculture appropriations act (P.L. 106-387) provides $696.7
million in appropriated funds for FSIS, more than either the House- or Senate-passed
bill ($673.8 million and $678 million, respectively). Congress expects that about $83
million in user fees collected for overtime and holiday inspection also will be available.
P.L. 106-387 includes $6 million to liquidate unpaid obligations from previous years,
and the full amount the Administration requested for FSIS Food Safety Initiative
activities ($28.8 million). P.L. 106-387 also makes inspection of meat from squab and
ratites (ostrich, emu, and rhea) mandatory under the Poultry Products Inspection Act.
The House and Senate committee reports contain identical language directing
FSIS: to (1) report by March 1, 2001, on its progress in reviewing all regulations to
determine if they should be revised or removed in the wake of the 1996
implementation of the HACCP system; (2) to require senior managers to make annual
visits to a variety of meat and poultry operations; and (3) to require senior managers
to become HACCP-certified in the same way that inspectors are.
For more information, see CRS Issue Brief IB10037, Meat and Poultry
Inspection Issues. For a discussion of the FDA component of the Food Safety
Initiative, see the “Food and Drug Administration, Food Issues” section below.)
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 FY2001, the conference report recommends the fully funding the aggregate
Administration’s request for MRP of $635 million, or $17 million over the FY2000
appropriation level.
APHIS, the agency responsible for protecting U.S. agriculture from foreign pests
and diseases, accounts for most of the proposed spending within MRP missions. For
FY2001, the FY2001 agriculture appropriations act (P.L. 106-387) provides $540.4
million, a $97.5 million increase over FY2000 and $22.8 million above the
Administration’s request. The House-passed bill provided $470 million for APHIS,
while the Senate bill provided $458 million. Conferees added a significant increase
for boll weevil eradication (a total of $79.2 million, up from $15.1 million in FY2000),
which is above what was in either the House or Senate bills. P.L. 106-387 includes
$85 million for Agricultural Quarantine Inspection (AQI) fees, down from $87
million approved by both the House and Senate reports. It also includes substantial
funding increases for imported fire ant control, and Wildlife Services operations

CRS-19
(including a provision to develop pilot projects addressing non-lethal methods to
reduce livestock predation) over the Administration’s request.
The President’s proposed Invasive Species Initiative ($8.8 million request) for
APHIS failed to be recommended for funding. Similarly, the Administration’s request
to fund through appropriations some programs traditionally financed through the
Commodity Credit Corporation (CCC) (i.e., emerging plant pests, and fruit fly
exclusion & detection) was rejected in the conference report. In addition, P.L. 106-
387 increases fruit fly exclusion programs funding by $7 million from FY2000 (to $33
million), but falls short of the $55 million requested by the Administration. Reports
from both committees instructed the Secretary to continue using the CCC mechanism
to obtain the additional financing needed (approximately $50 million) to supplement
the Administration’s request level programs dealing with emerging pests such as the
Asian longhorn beetle, citrus canker, plum pox and Pierce’s disease. Funding for
emerging plant pest programs was frozen at FY2000 levels ($3.5 million). In this
regard the conferees have directed the Department to notify the Committees on
Appropriations when funds are released from the CCC for APHIS programs.

The Agricultural Marketing Service (AMS) is responsible for facilitating the
marketing and distribution of agricultural products and ensuring fair-trading practices.
For FY2001, P.L. 106-387 recommends an appropriation of $65 million, which is
below the Administration request of $67 million. The request reflected a shift in the
funding of the livestock price reporting program from the CCC to annual
appropriations. The request also included new funding for the operation of a data
collection program on food-borne pathogens, as part of the President’s Food Safety
Initiative, and for the implementation of the Pesticide Data Program (PDP). P.L. 106-
387 provides $1.1 million for PDP implementation (compared with the $14.3 million
requested), $6.2 million for the microbiological data program, and provides the full
Administration request of $5.9 million for implementing the Livestock Mandatory
Price Reporting Act of 1999.
USDA’s Grain Inspection, Packers, and Stockyards Administration (GIPSA)
establishes the official U.S. standards, inspection and grading for grain and other
commodities. GIPSA has also been working to improve monitoring of livestock
markets, where concentration has raised concerns about decreasing competition. For
FY2001, P.L. 106-387 provides $31.4 million for salaries and expenses, which is
more than both the House bill ($27.8 million) or the Senate bill ($27.3 million), but
below the Administration’s FY2001 request for $33.5 million. P.L. 106-387 also
provides $600,000 for anti-competitive behavior investigations in livestock, and
$400,000 to examine the competitive structure of the poultry industry.
Rural Development
The Department’s rural development mission area is charged with addressing the
housing, infrastructure, and community and economic development needs of rural
areas. The FY2001 agriculture appropriations act (P.L. 106-387) provides an
appropriation of $2.486 billion in grants and subsidies in support of $8.808 billion in
direct and guaranteed loan authority for rural development activities. The
Administration’s budget proposal for FY2001 requested an appropriation of $2.588
billion to support $8.084 billion in direct and guaranteed loans and a variety of grant

CRS-20
programs. P.L. 106-387 is $102 million below the request and between the $2.407
billion in the House-passed bill and $2.512 billion in the Senate-passed bill.
Separately, P.L. 106-387 includes $200 million in emergency rural development
assistance under the Rural Community Advancement Program (RCAP), mainly in
response to the hurricanes that struck rural areas in late 1999 and to provide relief to
rural areas with high unemployment levels. The Senate bill also contained an
emergency spending provisions of $180 million for rural development programs.
Rural Community Advancement Program. P.L. 106-387 includes a regular
annual appropriation of $762.5 million for the Rural Community Advancement
Program (RCAP). An additional $200 million in emergency RCAP funds is provided
to assist rural communities, including those experiencing extreme unemployment and
economic depression ($50 million), areas with high energy costs ($30 million),
communities in the Southeast affected by natural disasters ($50 million), and for rural
utilities ($70 million). An earlier House-version of the bill would have provided
$775.8 million to RCAP, approximately $14 million more than agreed to by the
conference committee or the $762.5 million requested by the Administration. The
Senate-approved version of the bill recommended a funding level of $749.3 million,
which is $13 million below the final law and the Administration’s request. The
Senate-version of the bill also included an additional $180 million in emergency RCAP
funding.
Fund for Rural America. The Administration’s budget assumes full funding
($60 million) for the Fund for Rural America, a mandatory program which Congress
has prohibited from receiving funds in recent agriculture appropriations acts. P.L.
106-387 prohibits the spending of FY2001 funds in the current fiscal year but allows
the FY2000 funding ($60 million) to be spent one-half in FY2001 and the other half
in FY2002. The FY2000 agriculture appropriations act had prohibited the spending
of the FY2000 funds in FY2000.
Rural Housing Programs. P.L. 106-387 includes $1.452 billion in loan and
grant assistance for programs funded within the Rural Housing Service. This is $69
million more the $1.383 billion than approved by the House. The final act concurs
with the House-passed version of the bill by including $254 million in housing
subsidies. This funding level supports $5.069 billion in loan authority, and is $31
million less than approved by the Senate. The Senate-passed bill also included $1.481
billion in total Rural Housing Service assistance, which is $55 million less than
requested by the Administration, but $29 million more than in the final law and $98
million more than recommended by the House. The conference committee estimates
that the $1.452 billion in loan and grant assistance will support $5.069 billion in loan
authority. The House had proposed a loan authority level of $5.073 billion, while the
Senate set a level of $4.564 billion.
In addition, P.L. 106-387 includes: 1) $1.1 billion in direct loans, or $200
million less than requested by the Administration in support of its National
Homeownership Initiative; 2) $100 million less in loan guarantee authority for the
multifamily housing program (Sec. 538) loans than requested by the Administration;
3) $674 million for the Section 521, Rental Assistance Program, as requested by the
Administration; and 4) $13.8 million for empowerment zones and enterprise
communities designated as Rural Economic Area Partnership Zones.

CRS-21
Rural Business and Cooperative Programs. P.L. 106-387 provides $33.5
million for the Rural Business-Cooperative Service for FY2001, which is close to the
Senate-passed level of $33.0 million, $23 million below the Administration request,
but $3 million higher than FY2000. Most of the difference between the agreement
and the Administration’s request was in the Rural Development Loan Fund. The final
level of $23.1 million is $13 million below the request.
The Administration was also seeking $15 million annually in mandatory funding
for Round II empowerment zones and enterprise communities. Five Round II
empowerment zones were authorized under the Taxpayer Relief Act of 1997, and 20
enterprise communities by the FY1999 appropriations act. P.L. 106-387 includes
$3.2 million to cover the cost of direct loans under the rural development loan fund
to rural empowerment zones and enterprise communities designated as Rural
Economic Partnership Zones. It also includes: 1) $6.5 million for Rural Cooperative
Development Grants; 2) $1.5 million to cooperatives and associations whose primary
focus is to provide assistance to small minority producers and farmers; 3) $4 million
for counties in the Mississippi Delta region, and 5) $2 million in rural development
loan funds for federally recognized Native American tribes. P.L. 106-387 also
includes $10 million in emergency business and industry grants.
Rural Utilities Service. For rural utility programs, P.L. 106-387 concurs with
the Senate-passed level of $107.7 million, which is close to the FY2000 level and
higher than the House-passed level ($89.4 million) and the Administration request
($100.9 million). P.L. 106-387 includes $27 million for Distance Learning and
Telemedicine, as recommended by the Senate and requested by the Administration.
The Administration also requested $33.6 million in loan subsidies to support $2.045
billion in loan authority for the rural electrification and telecommunications loans. P.L.
106-387 concurs with the Senate bill and provides $40.4 million to support $2.616
billion in loans, while the House bill recommended $33.3 million for $2.04 billion in
loans. P.L. 106-387 supports the Administration’s $175 million request for the rural
telephone banks program account. The Administration’s proposed Rural Utility
Service initiative included $102 million for a pilot loan and grant program to finance
broadband transmission and local dial-up internet service. Conferees adopted the
Senate position and provide $2 million for a broadband internet demonstration
project.
Food and Nutrition
USDA’s Food and Nutrition Service (FNS) administers the nation’s domestic
food assistance programs. These include the food stamp program, school lunch,
breakfast, child and adult care food, summer food and special milk programs, the
special supplemental nutrition program for women, infants, and children (WIC) and
various commodity donation programs for the elderly, poor, and homeless. The
FY2001 agriculture appropriations act (P.L. 106-387) provides a total of $34.1 billion
to fund all of these programs. This is $2.1 billion less than the Administration’s
original FY2001 request and $927.5 million less than FY2000 budget authority for
these programs, with most of the difference in spending for the food stamp program.
It does not reflect additional funding expected to be needed because of provisions
added to the conference agreement that will increase food stamp eligibility.

CRS-22
Food Stamps. For the food stamp and related programs (i.e. nutrition assistance
for Puerto Rico and Emergency food assistance program or EFAP), P.L. 106-387
provides a total of $20.1 billion for FY2001– $18.7 billion for food stamps (including
a $100 million reserve); $1.3 billion for nutrition assistance for Puerto Rico (+$33
million above FY2000); and $100 million (the same as FY2000) to buy commodities
for the EFAP. As in past years, the major difference between the Congress and the
Administration was the latter’s request for a substantially higher food stamp
contingency reserve fund ($1 billion) than that normally provided by the Congress
($100 million).
P.L. 106-387 reflects a downward adjustment in the amounts contained in the
House and Senate-passed FY2001 appropriation bills because of a more optimistic
projection of program spending needs in the mid-session review by the Office of
Management and Budget (OMB).2 This level is expected to provide sufficient funding
to fully cover food stamp eligibility and benefits for FY2001. Not included in the final
amount is additional spending that most likely will be needed because of provisions
added to the final law that expand food stamp program eligibility (i.e., higher housing
allowance and more flexible auto value limits). P.L. 106-387 requires that the
Administration submit a request for the entire amount needed to pay for this
expansion, and to request this as emergency funding, and thus does not require
offsetting reductions. Meanwhile, the Administration did not follow up on its plans,
described in its original budget submission, that would have restored food stamp
eligibility to some 210,000 legal aliens made ineligible by the 1996 welfare reform
law.
Child Nutrition. P.L. 106-387 funds FY2001 child nutrition programs at
$9.541 billion, $4.5million less than the amount proposed by the Administration and
$2.5 million less than estimated FY2000 spending. The final amount does not include
some $400 million in commodities bought for child nutrition programs using
agricultural surplus removal funds (and not charged to the child nutrition account).
It does include the transfer of some $5.1 billion from Section 32, agricultural surplus
removal funds.3
The level provided in P.L. 106-387 is expected to be sufficient to maintain full
service for the school lunch, school breakfast, child and adult care food, summer food,
and special milk programs. Most of the funding under this account (some $5.75
billion) is expected to go for meal subsidies and commodities provided under the
school lunch program. The second largest funded program, the child and adult care
food program, will receive $1.8 billion under the FY2001 appropriation. Just over
$1.5 billion is expected to be used for the school breakfast program, including $6.5
2 The mid-session review predicted greater economic growth and lower unemployment than
originally predicted, and therefore lower likely participation in the food stamp program and
less federal spending needs.
3 Section 32 of the Act of August 24, 1935 provides that 30 percent of gross customs receipts
be placed into an account each year to, among other things, promote domestic food
consumption, remove agricultural surpluses, and assist the food needs of the poor. Each year
80-90% of the funds in this account are transferred to the child nutrition account to help pay
for the cost of child feeding programs.

CRS-23
million for start up grants, $500,000 of which is targeted for the state of Wisconsin.
The summer food service and special milk programs will receive $323.5 million and
$16.8 million, respectively. In FY2001, 27.8 million children are expected to
participate in the school lunch program on an average day, and 8 million in the school
breakfast program.
WIC The special supplemental nutrition program for women, infants and
children (WIC) provides monthly food supplements to low-income women, infants
and children (under age 5) with nutritionally related health problems. P.L. 106-387
provides $4.052 billion for WIC for FY2001, $10 million of which is to be used for
the farmers’ market nutrition program (FMNP). The final level is the same as the
amount proposed under the House-passed appropriation; $15 million less than the
Senate-passed bill, and $20 million more than FY2000 funding for this program. The
$4.148 billion originally requested by the Administration was expected to be needed
to bring WIC participation up to 7.5 million participants by the end of FY2001,
according to Administration estimates. Subsequent reports that the program was
serving considerably fewer participants (7.16 million versus 7.33 million) in FY2000
than previously had been reported, indicated that greater than expected carryover
funds would be available. This is expected to lessen the amount of funding needed to
maintain or increase FY2000 program caseload in FY2001.
An administration proposal to separate FMNP funding from the WIC account
and fund this activity separately under the category of Commodity Assistance
Programs (CAPs) was rejected by Congress. The FMNP operates in certain areas
where WIC recipients have access to farmers markets. It provides funding for the
issuance of food instruments to WIC recipients to be used to buy fresh foods at
farmers’ markets. Congress also did not approve an Administration request for WIC
funds to be used for program studies and evaluations, although it does allow WIC
funds to be made available to determine whether a child eligible for the program has
had a blood lead screening test, which was recommended by the Senate
appropriators.4 Report language was added by the conferees protecting against
violations of religious rights and beliefs with respect to lead blood screening tests. The
conferees also agreed to report language that directs the USDA to make no changes
to the sugar cap on WIC cereals, nor use any funds to study proposals that would
exempt natural sugar contained in fruits from being counted toward the sugar cap.
Commodity Assistance Programs Programs included under the CAP category
are the commodity supplemental food program (CSFP) for low-income mothers,
young children and the elderly, and administrative grants for the costs of storing,
handling and distributing commodities under the emergency food assistance program
(EFAP). The Administration proposed to add the farmers’ market nutrition program
(FMNP) to this category, funding it at $20 million. This brought total budget
authority for Commodity Assistance Programs (or CAPs) to $158.3 million under the
Administration proposal, an increase of $25 million above FY2000 spending. House
and Senate legislators rejected the Administration proposal to add the FMNP to the
4 For several years appropriators have forbidden the FNS from using program funds to do
program studies and analysis, instead providing the responsibility for these activities and the
funds for this purpose to the Economic Research Service of the USDA

CRS-24
CAP category, and conferees agreed to provide a total of $140.3 million for the
CSFP and state EFAP grants. This is $7 million more than FY2000 budget authority
for these programs. Traditionally, EFAP state grants are funded at $45 million.
Food Donation Programs. These programs include the elderly nutrition
program, the needy family program for Pacific Islanders and disaster aid. The elderly
nutrition program, which receives the bulk of the funding under this category ($140
million out of $141.1. million in FY2000) provides commodities or cash-in-lieu of
commodities for meal programs for the elderly operated under the Older Americans
Act. Commodity assistance also is provided for Pacific Islanders and for disaster aid
under this category. P.L. 106-387 provides a total of $151.1 million for these
programs for FY2001, the same amount requested by the Administration and $10
million more than FY2000 funding.
Food and Drug Administration
Overview
The Food and Drug Administration (FDA) is the agency of the Department of
Health and Human Services responsible for regulating the safety of foods, drugs,
cosmetics, and medical devices. It is funded through both congressional
appropriations and user fees. The total collections of user fees are established each
year in the annual agriculture appropriation’s act.
The FY2001 appropriations act for USDA and related agencies (P.L. 106-387)
includes a total FY2001 appropriation of $1.249 billion for FDA, $34 million over the
FY2000 appropriation of $1.214 billion and $142 million below the President’s
request of $1.391 billion. The total FY 2001 appropriation includes $1.069 billion for
salaries and expenses, $31 million for buildings and facilities (subtotal $2 billion), and
$149 million to be collected under the Prescription Drug User Fee Act (PDUFA). In
addition, $23 million is made available to carry out the Medicine Equity and Drug
Safety Act (establishing prescription drug import regulations) after FDA submits a
request and justification to Congress.
Food Issues
P.L. 106-387 concurs with the Administration’s request for an FY2001 increase
of $30 million for the FDA portion of the President’s Food Safety Initiative (FSI).
In general, the act supports the Administration’s expansion of FDA activities under
the FSI. Part of the approved $30 million increase is to be used for specific purposes.
For example, the agreement supports food safety research at the National Center for
Food Safety and Technology (NCFST) in Illinois. The agreement requires that FDA
provide $1.5 million to New Mexico State University to establish an agricultural
product testing laboratory that will conduct rapid screening for microbial
contamination of fresh fruits and vegetables. Also, the final law directs, within sums
provided for the FSI, that FDA provide $100,000 to the Waste Management and
Education Research Consortium. FDA is also charged with developing a number of
policy actions when developing regulations for on-farm standards for the prevention

CRS-25
of Salmonella Enteritidis (SE) illnesses due to shell egg consumption. FDA,
according to the final act, is to coordinate federal and state programs to implement
standards, and consider existing national and state quality assurance programs and
cost-effective programs in accordance with the risk posed to U.S. consumers.
With FSI funding, seafood regulation and enforcement are to be encouraged.
The conferees note that FDA has a Memorandum of Understanding with the
Interstate Shellfish Sanitation Commission, and they want FDA to continue funding
this effort with $200,000 for FY 2001 so the Commission can develop shellfish safety
regulations. The conference agreement asks that FDA expedite consideration of a
health claim for salmon, and report back to Congress on the issue by December 1,
2000. The agreement provides that FDA use $121,000 of FSI funds to contract with
the State of Alaska to fund 200 inspections (140 seafood establishments and 60 other
food plants) to be carried out by state inspectors.
Separate from FSI funding, P.L. 106-387 addresses issues related to food
biotechnology. The conferees expect FDA to work with USDA to provide a unified
strategy and sufficient information on the production and consumption of
bioengineered foods. They also expect FDA to provide adequate funding to educate
overseas foreign regulators on the evaluation of the safety of biotechnology products
and food if requested by foreign governments. The conference agreement states that
FDA should spend $1 million, of premarket application review funds, to develop
safety evaluation criteria for genetically engineered ingredients in animal feeds.
The conference report noted that FDA has not finalized labeling regulations on
food irradiation that were required in the report accompanying the FDA
Modernization Act of 1997. The conferees expect a status report by November 15,
2000, with regulations finalized by March 1, 2002.
Conferees recommend that FDA establish performance benchmarks to measure
the rate of review of direct food and color additive petitions, including those with
food safety benefits. FDA is also to seek public comments and report to the
Appropriations Committees, by December 31, 2000, on its use of FY2000 funds to
reduce the food and color additive petition backlog.
With respect to the regulation of dietary supplements, the conference report
requires that the FDA report on how it is complying with a court decision that
overturned FDA regulations requiring marketers of dietary supplements to submit
health claims to the agency for approval. Within 6 months of enactment, FDA must
report on how the agency has implemented the Dietary Supplement Health and
Education Act during FY2000 and the cost of implementing the Dietary Supplement
Strategy 10-year Plan. The act recommends an increase of $1 million of FDA’s food
program funds be used for research on dietary supplements by both the National
Center for Natural Products Research in Mississippi and FDA’s food program.
Drug and Medical Device Issues
Recently, consumers have noticed the sizable differences between the prices
charged in the United States and in foreign countries for the same drug. In
conference, two new sections were added to the Federal Food Drug and Cosmetic

CRS-26
Act to address this issue. The first section, called the Medicine Equity and Drug
Safety Act of 2000, based on a Jeffords amendment, requires FDA to establish new
regulations governing the importation of FDA-approved prescription drugs by
pharmacists and wholesalers. Among other things, these new regulations would
require that the imported drugs be manufactured in an FDA-approved facility, have
a documented chain of custody, be tested by qualified laboratories, and have a brand
name attached that is identical to the drugs produced in the United States. This
section also includes a five-year sunset provision, and restrictions on the countries
from which the drugs can be imported. It also restricts reimporting certain classes
of drugs, including controlled substances. The conferees made available $23 million
to implement this first section. A second new section, called the Prescription Drug
Import Fairness Act of 2000, will allow individuals to import prescription drugs for
their own use without FDA sending a warning letter to the drug recipient, unless FDA
can specify what is wrong with the imported drug. (See CRS Report RL30678,
Prescription Drug Imports: Issues Raised by Amendments to the FY2001 Agriculture
Appropriations Bill.)
The conference committee report expressed concern about improving the
timeliness of product reviews. The agreement gives FDA more than $23 million for
premarket application review activities, and specifies how some of this funding is to
be used. For example, $1 million of the increase is to be added to orphan drug grants,
making the total $12.5 million for the grant program for FY2001. (Orphan drugs are
a class of drugs used to treat rare diseases but are not considered commercially
viable.) It also recommends that, with this increase, $2.2 million be used to improve
the quality and safety of the blood supply, and that FDA dedicate $2.8 million to
ensure the safety and efficacy of reprocessed medical devices.
P.L. 106-387 recommends a $1.2 million increase over FY2000 for the Office
of Generic Drugs to improve the science base of reviewers, and recommends $1.5
million to upgrade its information technology systems to allow for the electronic
submission of generic drug applications, and to accelerate the review of generic drug
applications. It provides $500,000 for clinical pharmacology grants, an increase of
$40,000 over FY 2000. The conferees support FDA’s decision to delay until October
1, 2001, the implementation of its December 1999 final rule governing the
Prescription Drug Marketing Act of 1987 which expands record keeping requirements
for wholesale drug distributors, and allows blood centers that meet the definition of
a “health care center” to distribute whole blood but not blood derivatives. Report
language requests a report from FDA by January 15, 2001, on how the agency plans
to address the issues. The conferees want FDA to conduct additional inspections and
provided a $9 million increase for inspections of human drugs and medical devices.
The conferees also provided a $5 million increase for enforcement of rules on internet
drug sales, and $5 million for counter-bioterrorism activities. They also want FDA to
clarify its existing enforcement authority and position on the compounding of
radiopharmaceuticals, and the conferees urge the agency to issue guidance promptly
on this topic. The agreement provides $3 million to the Center for Veterinary
Medicine (CVM) for work on antibiotic resistance.
The conferees believe that FDA should establish a gene therapy patient tracking
system to measure short and long-term effects of gene therapy treatment. The
conferees note that although FDA has developed a pilot system, they request, within

CRS-27
3 months of enactment, a report from FDA that includes a plan and budget for
implementing a patient tracking system and how the agency will integrate the new
system within the next 12 months with the current adverse events tracking system.
The conference agreement report contains language concerning the international
harmonization of regulations for pharmaceuticals, medical devices, and food. The
conference agreement requires FDA to report by January 1, 2001, on how the agency
will promote mutual recognition and international harmonization of approval systems
and product surveillance. The conference report recommends FDA use $1.8 million
of the FSI funding to support activities of the Codex Alimentarius, an international
organization designed to protect the health of consumers globally, and to facilitate
international trade in foods.
Because common allergenic contact dermatitis costs the U.S. economy more
than $1 billion annually, and because FDA has approved only 24 patch test kits for
allergenic chemicals, the conference report recommends FDA expedite the approval
of over 400 allergen tests used already in Europe and Canada. The conference report
also directs FDA to return to the Center for Devices and Radiological Health (CDRH)
the regulatory authority to approve patch test kits for allergens and to reinstate
approved treatments for allergens that were available to physicians prior to 1986.
With the March 21, 2000, Supreme Court affirmation of a lower court’s
decision, FDA no longer has the authority to regulate in states the sales of tobacco
products to youth. Consequently, the agreement states that the sums remaining from
FY 2000 appropriation for the agency’s youth tobacco prevention activities are to be
used to fund other FDA activities subject to approval by both Appropriations
Committees. One use of these funds ($21.8 million) should be for one-time contracts
and equipment purchases.
Buildings and Facilities
P.L. 106-387 provides $31.350 million for FDA buildings and facilities. This
funding is to be used to complete construction of FDA’s Arkansas Regional
Laboratory, and to replace the regional laboratory facility in Los Angeles, among
other things. Report language requires that FDA may not close or relocate its Division
of Pharmaceutical Analysis except within the city limits of St Louis, Missouri. The
conference report notes that Congress provided $5 million in FY2000, for FDA to
occupy and equip a new facility in College Park, MD.

For more information on FDA issues, see CRS Report 95-422, Food and Drug
Administration: Selected Funding and Policy Issues for FY2000, CRS Issue Brief
IB98009, Food Safety Issues in the 106th Congress, and CRS Report RS20507,
Labeling of Genetically Modified Foods.

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Table 4. U.S. Department of Agriculture and Related Agencies
Appropriations, FY2000 vs. FY2001
($ in millions)
FY2001 FY2001 FY2001
FY2000
FY2001
Adminis House-
Senate-
Agency or Major Program
Enacted
Enacted
tration
Passed
Passed
(1)
Request
Bill
Bill
Title I — Agricultural Programs-
Agric. Research Service (ARS)
882.9
933.6
882.9
927.9
973.0
Coop. State Research Education
945.6
965.3
952.6
964.8
981.6
and Extension Service (CSREES)
Economic Research Service (ERS)
65.4
55.4
66.4
67.0
67.0
National Agricultural Statistics
99.3
100.6
100.9
100.6
100.8
Service (NASS)
Animal Plant Health and Inspection
443.0
517.2
475.2
468.0
540.4
Service (APHIS)
Agric. Marketing Service (AMS)
65.1
81.5
71.3
79.3
80.1
Grain Inspection , Packers and
26.4
33.5
27.8
27.3
31.4
Stockyards Admin. (GIPSA)
Food Safety and Insp. Serv (FSIS)
649.1
688.2
673.8
678.0
696.7
Farm Service Agency (FSA)
794.4
828.4
828.4
828.4
828.4
FSA Farm Loans - Subsidy Level
82.0
185.6
185.6
107.0
117.0
*Farm Loan Authorization
3,083.3
4,557.9
4,557.9
3,083.2
3,097.7
FSA Farm Loans- Salaries and
214.2
269.5
269.5
269.5
269.5
Administrative Expenses
Risk Management Agency (RMA)
64.0
67.7
67.7
65.6
65.6
Salaries and Expenses
Federal Crop Insur. Corp. Fund (2)
710.9
1,727.7
1,727.7
1,727.7
1,727.7
Commodity Credit Corp. (CCC) (2)
30,037.0 27,771.0 27,771.0 27,771.0 27,771.0
Other
357.0
515.1
383.0
424.8
440.7
Total, Agricultural Programs
35,436.3 34,740.3 34,484.0 34,506.9 34,690.9
Title II -Conservation Programs
Conservation Operations
660.8
747.2
676.8
714.1
714.1
Total, Conservation Programs
803.5
877.3
812.8
866.9
873.5
Title III - Rural Development
Rural Community Advancement
693.6
762.5
775.8
759.3
762.5
Program (RCAP)
Rural Housing Service (RHS)
1,332.0
1,536.3
1,383.4
1,481.3
1,451.9
* RHS Loan Authority
4,589.4
5,385.0
5,073.5
4,564.4
5,068.6
Rural Business Cooperative Serv.
54.0
56.9
38.2
33.0
33.5
* RBCS Loan Authority
53.3
79.5
53.3
53.3
53.3

CRS-29
FY2001 FY2001 FY2001
FY2000
FY2001
Adminis House-
Senate-
Agency or Major Program
Enacted
Enacted
tration
Passed
Passed
(1)
Request
Bill
Bill
Rural Utilities Service (RUS)
107.3
100.9
89.4
107.7
107.7
* RUS Loan Authority
2,986.5
2,620.0
2,615.0
3,686.5
3,686.5
Total, Rural Development (1)
2,187.5
2,587.6
2,407.7
2,512.2
2,486.6
* Rural Development, Total Loan
7,629.1
8,084.5
7,741.8
8,304.1
8,808.4
Authority
Title IV - Domestic Food Programs
Child Nutrition Programs
9,554.0
9,546.1
9,535.0
9,541.5
9,541.5
WIC Program
4,032.0
4,089.1
4,067.0
4,052.0
4,052.0
Food Stamp Program
21,071.8 22,132.0 21,232.0 21,221.3 20,114.3
Commodity Donation Programs
274.4
309.4
299.4
281.4
291.4
Other
112.0
129.1
117.0
117.4
117.4
Total, Food Programs
35,044.1 36,205.7 35,250.4 35,213.6 34,116.6
Title V - Foreign Assistance
Foreign Agric. Service (FAS)
109.2
113.6
109.2
113.4
115.4
Public Law (P.L.) 480
942.7
973.4
906.4
973.4
973.4
CCC Export Loan Salaries
3.8
3.8
3.8
3.8
3.8
Total, Foreign Assistance
1,055.7
1,090.8
1,019.4
1,090.6
1,092.6
Title VI - FDA & Related Agencies
Food and Drug Administration (3)
1,049.0
1,211.3
1,102.3
1,098.9
1,099.9
Commodity Futures Trading
63.0
72.0
69.0
67.1
68.0
Commission (CFTC)
Total, FDA & Related Agencies
1,112.0
1,283.3
1,171.3
1,166.0
1,167.9
Other Provisions
2.3
--
119
--
70
Emergency USDA Spending
8,6705.
--
--
3,050.0
3,646.8
Bill Totals Including
84,312.5 76,785.6 75,264.5 78,406.8 78,144.8
Emergency Spending
Subtotal - Before CBO
Scorekeeping Adjustments,
75,642.0 76,762.6 75,176.5 75,356.8 74,498.0
Excluding Emergency Spend. (4)
CBO Scorekeeping Adjustments (4)
256.7
425.1
157.1
346.1
316.1
Grand Total, After Scorekeeping
75,898.7 77,269.7 75,421.6 75,702.9 74,814.1
Adjustments, Excludes Supplem.
Note: An item with an 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.

CRS-30
(1) P.L. 106-113 required a government-wide 0.38% cut from total discretionary and emergency
budget authority. USDA was required to cut $87.1 million from programs funded by the FY2000
agriculture appropriations act which is reflected in this table.
.
(2) Under current law, the Commodity Credit Corporation and the Federal Crop Insurance Fund each
receive every year an indefinite appropriation (“such sums, as may be necessary”). The amounts
shown for both FY2000 and FY2001are USDA estimates of the necessary appropriations.
(3) The Administration’s request for FDA does not include a requested FY2002 advance
appropriation of $23 million for FDA’s buildings and facilities.
(4) Scorekeeping adjustments reflect the savings or costs of provisions that affect mandatory
programs, plus the permanent annual appropriation made to USDA's Section 32 program.
.
Source: Based on spreadsheets provided by the House Appropriations Committee