The House passed a $125.5 billion fiscal year 2012 USDA, FDA and related agencies funding bill that makes sharp cuts in some programs but turned out not to be nearly as draconian as it could have been, according to observers.

The bill, H.R. 2112, would reduce spending on nutrition, food aid and conservation programs by nearly $2 billion, moves that drew scathing criticism from hunger, environmental and some farm organizations.

But the House turned back several attempts to make significant cuts in farm program spending and farm program eligibility, areas that House Agriculture Committee members, including Chairman Frank Lucas, R-Okla., said would more appropriately be dealt with in the next farm bill.

At one point in the nearly two days of debate, Lucas had appropriations-committee language removed from the bill on a point of order. The latter would have reduced the 2008 farm bill’s average adjusted gross income eligibility level from $1.25 million ($750,000 on-farm and $500,000 off-farm income) to $250,000.

New payment cap

He and Rep. Collin Peterson, D-Minn., the Agriculture Committee ranking member, also helped defeat an amendment offered by Rep. Earl Blumenauer, D-Ore., that would have capped farm program payments at $125,000 a year, arguing it would have a devastating effect on farmers facing disasters now.

“This amendment asks us to tell the farmers affected by these catastrophes that while they were trying to save their equipment, livestock, and personal property from devastation, we were changing the rules in Washington,” said Lucas. “So they may have lost everything, but we in Washington have decided it was only worth $125,000.”

The House also defeated a second attempt to lower the adjusted gross income eligibility limit for farm AGI to $250,000, which failed 186-228; a proposal to eliminate Market Access Program funding, which failed 101-314; and to eliminate or reduce P.L. 480 Title II international food-aid funding.

Farm organizations such as the National Cotton Council and the USA Rice Federation applauded those efforts. The NCC said many of the amendments would have “severely compromised” the cotton program by amending the 2008 farm bill two years before it is scheduled to expire.

“Once again agriculture was asked to contribute to deficit reduction,” NCC Chairman Charles Parker said, “and while the cuts in this bill are difficult to accept, the leaders are to be complimented for their efforts to preserve funding for key programs and agencies as best they could.”

Eliminate CC payments

One of those, an amendment offered by Rep. Jeff Flake, R-Ariz., would have terminated counter-cyclical payments for upland cotton, prohibited repayment of cotton marketing assistance loans at the adjusted world price or issuance of loan deficiency payments for upland cotton and would have ended cotton storage payments.

“Fortunately, a blatant and inappropriate circumvention of the farm program development process was avoided with this amendment’s defeat,” said Parker, a cotton producer from Kennett, Mo. “It would have targeted cotton specifically and undermined a critical safety net for cotton farmers who face uncertain economic and weather climates and seriously jeopardized an industry that makes significant contributions to our nation’s economic well-being.”

Parker said the U.S. cotton industry and other ag sectors understand the gravity of the current budget situation but noted Congress went through a lengthy debate during 2008 farm bill development before imposing tighter eligibility requirements and establishing limitations on benefits.

NCC leaders said they were deeply disappointed that the House approved an amendment by Rep. Ron Kind, D-Wis., and Flake that would prohibit the transfer of funds to the Brazilian Cotton Institute.

The Kind-Flake amendment would result in the United States violating the Framework Agreement negotiated by the U.S. and Brazilian governments. The agreement allowed Brazil to withhold implementation of prohibitively high tariffs on U.S. exports and provided for a series of consultations that could lead to a resolution of the dispute.

Retaliatory tariffs

Such a development could bring on up $800 million in retaliatory tariffs on U.S. goods, many of them in categories other than agriculture. “They will go after everybody outside of production agriculture to get that $800 million in retaliatory tariffs,” Lucas said.

Peterson issued a statement calling the plethora of amendments to the funding bill for Agricultural, rural Development, Food and Drug Administration and Related agencies an “assault on U.S. agriculture.”

“We first saw it with the Ryan budget, which cut $178 billion from agriculture programs. And today, Congress approved a bill that makes disproportionate cuts to agriculture, including vital conservation and nutrition programs,” he said, referring to the work of House Budget Committee Chairman Paul Ryan.

Additionally, the bill includes an unprecedented nearly $2 billion in changes to mandatory spending, taking funds from carefully negotiated farm bill programs. Furthermore, the funds that would allow the CFTC to move ahead with financial reforms and bring about a more open and transparent derivatives market were slashed.

“I fear that if Congress continues to chip away at farm programs we will be left without an adequate safety net and the end result could potentially cost the government more money, not less.”

'Playing with food security'

Groups like the National Wildlife Federation accused House Republicans of “playing with America’s food and energy security” by cutting more than $1 billion in conservation and renewable energy funding in H.R. 2112.

“We are deeply disappointed with the outcome of this vote,” said Aviva Glaser, agriculture policy coordinator for the Federation. “Congress is trying to balance the budget on the backs of farmers by gutting conservation and renewable energy programs.”

The Environmental Defense Fund also weighed into the debate, asking the Senate to fix the many problems created by the House in the passage of the $1 billion in cuts for conservation programs.

“We realize that Congress faces tough budget choices, but making draconian cuts to voluntary conservation programs that help farmers and ranchers provide all Americans with cleaner air and water, more productive soils and habitat for wildlife is penny-wise and dollar-foolish,” said Sara Hopper, agricultural policy director for the EDF.

“The Senate needs to restore reasonable funding levels for conservation programs for the benefit of our environment and taxpayers.”