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16. Department of Agriculture


Highlights of 2002 Funding

  • Fully funds the current participation rate for the key nutrition program for women, infants, and children.
  • Supports Department of Agriculture (USDA) food safety activities, including providing 7,600 meat and poultry inspectors.
  • Finances the acquisition of decent, safe, and affordable housing by 57,000 low- to moderate-income residents in rural America; creates 40,000 jobs in rural areas; and gives access to 1.4 million poor, rural residents to clean, safe drinking water.
  • Maintains funding for priority activities in the Forest Service's wildland fire management plan, including hazardous fuels reduction. In addition, the budget proposes an unallocated National Emergency Reserve for unforeseen disaster needs.
  • Redirects USDA research to provide new emphasis in key areas such as biotechnology, the development of new agricultural products, and improved protection against emerging exotic plant and animal diseases as well as crop and animal pests. The budget also redirects funds for the continued implementation of other major initiatives, including crop insurance reform.
  • Carries out the President's commitment to expand overseas markets for American agricultural products by strengthening USDA's market intelligence capabilities and the Department's expertise for resolving technical trade issues with foreign trading partners.
  • In general, funds USDA bureaus at or above the 2001 enacted level, not including one-time emergency funding and unrequested projects provided in 2001.



The President's Budget fully funds participation in the Special Supplemental Nutrition Program for Women, Infants, and Children at 7.25 million individuals monthly, the participation level projected for 2001.

Crop insurance reforms in the 2000 Agricultural Risk Protection Act (ARPA) fulfill the Administration's agenda to improve crop insurance by increasing premium subsidies and educational outreach, encouraging new product development and improving program integrity. ARPA will add $640 million in outlays to the crop insurance program in 2001 and more than $7 billion over the five-year period from 2001 to 2005.

The Administration will also propose a targeted tax incentive that would allow farmers and ranchers to reserve a substantial percentage of their net farm income in a tax deferred account that could be drawn on during economic downturns (Federal Farm and Ranch Risk Management, or FFARRM, accounts).

Redirected Resources

One-Time Funding: The 2002 Budget proposes to eliminate approximately $1.1 billion of one-time, mostly emergency, funding. This funding was provided to meet short-term 2000 and/or 2001 needs. Specific programs eliminated include $109 million for emergency pest suppression, $235 million for rural development assistance, $190 million for watershed and flood prevention and emergency conservation protection activities needed for 2000 and 2001 disasters, and about $600 million in wildland firefighting expenses.

Department of Agriculture (USDA) Research Earmarks: In 2001, USDA funded approximately 300 congressionally earmarked projects for research, education, and extension grants to land grant universities. Earmarked research is not subject to merit-based selection processes, therefore these projects do not represent the most effective use of limited Federal funding and often fail to address national priorities. The budget proposes to eliminate funding for these earmarks, saving taxpayers about $150 million.

Research Facilities Construction: USDA needs to renovate existing research facilities. At the same time, the Department is contemplating expansions to these existing facilities and the construction of new laboratories. The budget supports critically needed renovation and construction while reducing funding from the 2001 level by $44 million as the Department conducts a comprehensive review of overall facility needs.

Rural Telephone Bank (RTB): USDA's RTB was established in 1972 to provide a supplemental source of credit to help establish private rural telephone companies. The RTB has accomplished its mission. Consequently, no funding is provided to make new RTB loans in 2002, reducing budget authority by $3 million from 2001 enacted levels and the loan level by $175 million. Not funding new loans should generate increased member and borrower support for statutorily authorized privatization.

Completed and Reformed Programs: Many temporary and existing USDA programs have completed their term or mission. The 2002 Budget proposes not to renew these programs or address their goals through other existing or reformed programs. For instance, pilot programs such as the modular housing demonstration loans program are not renewed. Programs that have goals that are addressed in other areas, such as the Forestry Incentives Program, are discontinued. Programs that have successfully completed their mission, such as the brucellosis eradication programs, are not renewed.

Potential Reforms

Reforming USDA Food Aid Programs: Title I of Public Law 480 (P.L. 480 Title I) is administered by USDA and is one of several programs that provides food assistance to developing countries. P.L. 480 Title I has been criticized as being ineffective. The Administration proposes to undertake a review of the Title I program to evaluate its continued effectiveness in meeting its market development objectives. Most Title I programs are carried out through bilateral agreements with recipient country governments, even though the nature of international agricultural trade has been changing in recent years with a much reduced involvement by public sector entities and greater emphasis on private sector transactions. Although agreements with private trade entities are authorized under the Title I program, that authority has been used only sparingly. In addition, the Title I program will likely need to be evaluated in view of ongoing negotiations on international agricultural credit, which have been underway under the auspices of the Organization for Economic Cooperation and Development. The Administration's review will consider these, plus other, factors with the intention of developing options for program modifications and reforms.

The Administration will also review the donation of surplus U.S. commodities under the authority of section 416(b) of the Agricultural Act of 1949. The level of those donations has increased markedly since 1999, and some claim the program may be depressing U.S. commercial sales. It is now appropriate to evaluate the effects of the donations both domestically and overseas and the decisionmaking procedures used in carrying them out. Among other things, the review will consider what programmatic objectives are appropriate for section 416(b) donation activities and the future availabilities of surplus U.S. commodity inventories.

Reforming Service Delivery in USDA's County Offices: In the early 1990s, under the previous Bush Administration, an effort was begun to streamline USDA's county office structure to improve service and reduce costs. Nearly one-third of USDA's field offices have been closed since that time. However, there are still about 5,600 USDA county-level offices serving one million farmers (not counting 1,300 USDA rural development offices that serve farmers and other rural residents). The Department will review the efficiency of USDA's remaining field office structure, recognizing that many farmers and other rural customers want to use computers and fax machines to transact business with USDA. To meet those needs, the budget includes funds to continue efforts to streamline and modernize USDA's county office structure through completion of a common computing environment and reengineering the way USDA conducts business. In 2002, customers will be able to conduct business with the county-based agencies electronically. The Administration expects long-term savings and improved service from merging the information technology services of the three county-based agencies (the Farm Service Agency, the Natural Resources Conservation Service, and Rural Development).

Streamlining the Forest Service's Field Structure: Consistent with recommendations of the National Academy of Public Administrators and the General Accounting Office, the Administration will review and start to implement streamlining and efficiency-enhancing measures for the Forest Service's field structure, work force, and administrative operation to get more resources for "on-the-ground" activities. Centralized servicing and enterprise teams will be evaluated as possible ways to provide additional efficiency savings. Streamlined decision-making and an emphasis on the forest-level activities would establish increased accountability and improved decision making for the Agency.

Improving Management and Financial Accountability: The Inspector General has identified financial management as a top management challenge. USDA is also committed to improving the financial management of the Department. USDA will develop centralized and integrated management information systems to provide timely and reliable information on USDA's finances, people, and purchases. This should allow the Department to obtain a clean opinion on its financial statements and improve its computer security.

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