Appropriations for FY2003: U.S. Department of Agriculture and Related Agencies

CRS Report for Congress
Appropriations for FY2003:
U.S. Department of Agriculture
and Related Agencies
Updated March 4, 2003
Ralph M. Chite, Coordinator
Specialist in Agricultural Policy
Resources, Science, and Industry Division


Congressional Research Service ˜ The Library of Congress

Appropriations are one part of a complex federal budget process that includes budget
resolutions, appropriations (regular, supplemental, and continuing) bills, rescissions, and
budget reconciliation bills. The process begins with the President’s budget request and is
bounded by the rules of the House and Senate, the Congressional Budget and Impoundment
Control Act of 1974 (as amended), the Budget Enforcement Act of 1990, and current
program authorizations.
This report is a guide to one of the 13 regular appropriations bills that Congress passes each
year. It is designed to supplement the information provided by the House and Senate
Appropriations Subcommittees on Agriculture. It summarizes the current legislative status
of the bill, its scope, major issues, funding levels, and related legislative activity. The report
lists the key CRS staff relevant to the issues covered and related CRS products.
NOTE: A Web version of this document with active links is
available to congressional staff at:
[http://www.crs .gov/products/appropriations/apppage.sht
ml].



Appropriations for FY2003:
U.S. Department of Agriculture and Related Agencies
Summary
On February 20, 2003, the President signed into law the FY2003 omnibus
appropriations act (P.L. 108-7, H.J.Res. 2), containing funding for agencies and
programs within the eleven regular FY2003 appropriations bills that were unresolved
in the 107th Congress. For the U.S. Department of Agriculture (USDA) and related
agencies, P.L. 108-7 contains a total regular annual appropriation of $74.25 billion,
of which $56.7 billion is for mandatory programs and $17.55 billion is for
discretionary programs. The $17.55 billion in discretionary funds is $805 million
below the Senate-passed version of H.J.Res. 2 and $56 million below the House-
reported version of H.R. 5263, but $124 million above the Administration’s FY2003
request and $1.27 billion above the enacted FY2002 level including FY2002
supplementals. Not included in the totals is the effect of a 0.65% across-the-board
rescission to almost all discretionary programs funded by P.L. 108-7, which could
reduce USDA and related agencies appropriations by approximately $85 million in
FY2003. Also separate from the regular appropriations is a provision in P.L. 108-7
for $3.1 billion in FY2003 agricultural disaster assistance, primarily for farmers and
ranchers affected by a natural disaster in 2001 or 2002. The cost of the disaster
assistance is offset by a comparable reduction in a mandatory conservation program
over a 10-year period.
Among its other major provisions affecting USDA agencies and programs, P.L.
108-7: 1) provides $1.45 billion in foreign food aid under P.L. 480 Title II, including
$250 million in supplemental funding that is available through FY2004, and requires
USDA to supply a minimum of 400,000 tons of commodities under a separate
mandatory food aid program; 2) prohibits the use of discretionary funds to administer
any mandatory conservation programs; 3) limits spending on certain mandatory trade,
conservation and research programs and applies the savings from these reductions
to spending on discretionary programs; 4) rejects an Administration proposal to
require private crop insurance companies to absorb more of the cost of the federal
crop insurance program; 5) provides supplemental funding to help the Farm Service
Agency administer disaster and farm bill programs; 6) funds special research grants
proposed to be terminated by the Administration; 7) increases funding over FY2002
for food safety and animal and plant health inspection activities, reflecting increased
government responsibility to protect the food supply from terrorist attacks; and 8)
increases USDA food and nutrition program spending by $4 billion over FY2002, in
line with the Administration request, including $3.2 billion more for the food stamp
program.
Included in the bill totals is $1.4 billion in appropriations for the largest related
agency, the Department of Health and Human Services’ Food and Drug
Administration. This appropriation includes $159 million as requested by the
Administration for FDA’s counter-terrorism activities. FDA also is authorized to
collect $270.5 million in various user fees to supplement its appropriation, including
a new medical device user fee.



Key Policy Staff
CRS
Area of ExpertiseNameDivisionTelephone
USDA Budget/Farm Spending and CoordinatorRalph M. ChiteRSI7-7296
ConservationJeffrey A. ZinnRSI7-7257
Agricultural Trade and Food AidCharles E. HanrahanRSI7-7235
Rural DevelopmentTadlock CowanRSI7-7600
Domestic Food AssistanceJean Yavis JonesRSI7-7331
Joe RichardsonDSP7-7325
Agricultural Research and Food SafetyJean M. RawsonRSI7-7283
USDA Marketing and Regulatory ProgramsGeoffrey S. BeckerRSI7-7287
Food and Drug AdministrationDonna U. VogtDSP7-7285
B. RandallDSP7-7046
Division abbreviations: RSI = Resources, Science and Industry; DSP= Domestic Social Policy.



Contents
Most Recent Developments..........................................1
USDA Spending at a Glance.........................................1
Mandatory vs. Discretionary Spending.............................2
FY2003 Agriculture Appropriations Action.............................4
Administration’s Request...................................4
House Action.............................................5
Senate Action.............................................5
Conference Action.........................................6
FY2003 Agriculture Appropriations: Proposed Spending Levels and Current
Issues .......................................................7
Farm Commodity Support ......................................7
Farm Disaster Assistance........................................8
Crop Disaster Assistance....................................8
Livestock Assistance.......................................9
Other Assistance..........................................9
Crop Insurance................................................9
Farm Service Agency..........................................10
FSA Salaries and Expenses.................................10
FSA Farm Loan Programs..................................11
Agricultural Trade and Food Aid.................................12
FAS Salaries and Expenses.................................12
Foreign Food Aid: Funding and Issues........................13
Mandatory Trade Programs.................................14
Natural Resources and Environment..............................15
Discretionary Programs....................................16
Technical Assistance Funding...............................18
Mandatory Programs......................................18
Agricultural Research, Education, and Economics...................19
Agricultural Research Service (ARS).........................20
Cooperative State Research, Education, and Extension Service
(CSREES) ..........................................20
Economic Research Service (ERS) and National Agricultural
Statistics Service (NASS)..............................22
Food Safety and Inspection.....................................22
Marketing and Regulatory Programs..............................22
Animal and Plant Health Inspection Service....................23
Agricultural Marketing Service..............................24
Grain Inspection, Packers, and Stockyards Administration.........25
Rural Development...........................................25
Rural Community Advancement Program (RCAP)...............26
Rural Housing Service.....................................27
Rural Utilities Service.....................................28
Rural Business-Cooperative Service..........................28
Other Spending Provisions.................................28
Food and Nutrition............................................29



Child Nutrition...........................................29
WIC ...................................................30
Commodity Assistance Program.............................30
Food Donation Programs...................................30
Other Provisions.........................................31
Food and Drug Administration......................................31
Food Issues..................................................32
Drug Issues .................................................32
Medical Device Issues.........................................33
Biologics Issues..............................................33
For Additional Reading............................................38
List of Tables
Table 1. USDA and Related Agencies Appropriations, FY1995 to FY2003....3
Table 2. Congressional Action on FY2003 Appropriations for the U.S.
Department of Agriculture and Related Agencies.....................5
Table 3. USDA and Related Agencies Appropriations for FY2003..........34



Appropriations for FY2003:
U.S. Department of Agriculture
and Related Agencies
Most Recent Developments
On February 20, 2003, the President signed into law the FY2003 omnibus
appropriations act (P.L. 108-7, H.J.Res. 2), which includes $74.25 billion in regular
FY2003 funding for USDA and related agencies. Of this amount, $17.545 billion is
for discretionary programs. Not included in the total is $3.1 billion in supplemental
disaster assistance provided by the measure, primarily for farmers and ranchers
affected by a natural disaster in 2001 or 2002.
USDA Spending at a Glance
The U.S. Department of Agriculture (USDA) carries out its widely varied
responsibilities through approximately 30 separate internal agencies and offices
staffed by some 100,000 employees. USDA is responsible for many activities
outside of the agriculture budget function. Hence, spending for USDA is not
synonymous with spending for farmers.
USDA gross outlays for FY2002 (the most recently completed fiscal year) were
$79.95 billion, including regular spending and supplemental spending for homeland
security following the September 11, 2001 terrorist attacks. The mission area with
the largest gross outlays ($37.5 billion or 50% of spending) was for food and
nutrition programs – primarily the food stamp program (the costliest of all USDA
programs), various child nutrition programs, and the Women, Infants and Children
(WIC) program. The second largest mission area in terms of total spending is for
farm and foreign agricultural services, which totaled $22.9 billion, or 31% of all
USDA spending. Within this area are the programs funded through the Commodity
Credit Corporation (e.g., the farm commodity price and income support programs
and certain mandatory conservation and trade programs), crop insurance, farm loans,
and foreign food aid programs.


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

USDA spending in FY2002 also included $7.0 billion (9%) for an array of
natural resource and environment programs, approximately three-fourths of which
was for the activities of the Forest Service, and the balance for a number of
discretionary conservation programs for farm producers. (USDA’s Forest Service is
funded through the Interior appropriations bill, and is the only USDA agency not
funded through the annual agriculture appropriations bill.) USDA programs for rural
development ($2.72 billion in gross outlays for FY2002); research and education
($2.2 billion); marketing and regulatory activities ($1.5 billion); meat and poultry
inspection ($717 million); and departmental administrative offices and other
activities ($454 million) account for the balance of USDA spending.
Mandatory vs. Discretionary Spending
Approximately three-fourths of total spending within the U.S. Department of
Agriculture is classified as mandatory, which by definition occurs outside the control
of annual appropriations. Currently accounting for the vast majority of USDA
mandatory spending are: the farm commodity price and income support programs
(including ongoing programs authorized by the 2002 farm bill and emergency


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

programs authorized by various appropriations acts); the food stamp program and
child nutrition programs; the federal crop insurance program; and various agricultural
conservation and trade programs.
Although these programs have mandatory status, many of these accounts
ultimately receive funds in the annual agriculture appropriations act. For example,
the food stamp and child nutrition programs are funded by an annual appropriation
based on projected spending needs. Supplemental appropriations generally are made
if and when these estimates fall short of required spending. An annual appropriation
also is made to reimburse the Commodity Credit Corporation for losses it incurs in
financing the commodity support programs and the various other programs it
finances.
The other 25% of the USDA budget is for discretionary programs, which are
determined by funding in annual appropriations acts. Among the major discretionary
programs within USDA are Forest Service programs; certain conservation programs;
most of its rural development programs and research and education programs;
agricultural credit programs; the supplemental nutrition program for women, infants,
and children (WIC); the Public Law (P.L.) 480 international food aid program; meat
and poultry inspection, and food marketing and regulatory programs. Funding for all
USDA discretionary programs (except for the Forest Service) is provided by the
annual agriculture appropriations act. Funding for Forest Service programs is
included in the annual Interior appropriations act.
Table 1. USDA and Related Agencies Appropriations, FY1995 to FY2003
(budget authority in billions of dollars)
FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03
Discretionary $13.29 $13.31 $13.05 $13.75 $13.69 $13.95 $15.07 $16.02 $17.55
Mandatory $54.61 $49.78 $40.08 $35.80 $42.25 $61.95 $58.34 $56.91 $56.70
Total Budget$67.90$63.09$53.12$49.55$55.94$75.90$73.41$72.93$74.25
Authority
Note: Includes regular annual appropriations for all of USDA (except the Forest Service), the Food and Drug Administration, and the CommodityFutures Trading Commission. Excludes all mandatory emergency supplemental appropriations.
Source: House Appropriations Committee.


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

A key distinction between mandatory and discretionary spending involves how
these two categories of spending are treated in the budget process. Congress
generally controls spending on mandatory programs by setting rules for eligibility,
benefit formulas, and other parameters rather than approving specific dollar amounts
for these programs each year. Eligibility for mandatory programs is usually written
into authorizing law, and any individual or entity that meets the eligibility
requirements is entitled to the benefits authorized by the law. Spending for
discretionary programs is controlled by annual appropriations acts. The thirteen
subcommittees of the House and Senate Appropriations Committees originate bills
each year which decide how much funding to devote to continuing current activities
as well as any new discretionary programs.
FY2003 Agriculture Appropriations Action
Administration’s Request. As the first step in the FY2003
appropriations process, the Bush Administration released its budget request on
February 4, 2002. Within the budget, the Administration requested FY2003 budget
authority of $74.062 billion for the U.S. Department of Agriculture and related
agencies (which includes all of USDA except the Forest Service, and also includes
the Food and Drug Administration and the Commodity Futures Trading
Commission.) The $74.062 billion requested for FY2003 is $814 million above the
FY2002 enacted appropriation of $73.187 billion. (The FY2002 enacted level
includes two supplemental appropriations acts (P.L. 107-117 and P.L. 107-206),
making nearly $500 million in net supplemental appropriations to various USDA
programs, and FDA and CFTC ,in response to the September 11, 2001 terrorist
attacks.)
The requested $17.421 billion for discretionary accounts was $1.145 billion
above the total FY2002 discretionary appropriation of $16.276 billion. Accounting
for $368 million of the requested increase in discretionary spending for USDA and
related agencies is the Administration’s assumption of a legislative proposal that
would require all federal agencies to assume the full cost of accruing employee
pensions and retiree health benefits beginning in FY2003, which ultimately was not
adopted by appropriators.1


1 Although the Administration request for FY2003 includes the estimated $368 million to
fund this proposal, this report (in conformance with the presentation of data by the
Appropriations Committees) does not allocate these funds across individual agencies.
Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

Table 2. Congressional Action on FY2003 Appropriations for the U.S.
Department of Agriculture and Related Agencies
SubcommitteeConference Report
Markup CompletedHouseHouseSenateSenateConferenceApproval
ReportPassageReportPassageReportPublic LawHouseSenateHouseSenate
H.R. 5263S. 2801H.Rept. 108-10338-8376-20P.L. 108-7
(H.Rept.(1)(S.Rept.(1)to H.J.Res. 2
107-623) 107-223)
6/26/02 7/23/02 7/26/02 7/25/02 2/13/03 2/13/03 2/13/03 2/20/03
(1) The 107th Congress adjourned without passage of H.R. 5263 or S. 2801 by its respective chambers. The 108th
Congress considered the FY2003 appropriations for USDA and related agencies in the context of an omnibus
appropriations bill (H.J.Res. 2) which the Senate amended and passed on January 23, 2003.
House Action. The agriculture subcommittee of the House Appropriations
Committee and the full House Appropriations Committee completed their respective
markups of the FY2003 agriculture bill for USDA and related agencies on June 26
and July 11, 2002, respectively. The bill (H.R. 5263) and report (H.Rept. 107-623)
were filed by the full committee on July 26, 2002. No floor action was held on the
bill.
Total appropriations in H.R. 5263, as reported, were $74.306 billion, of which
$17.601 billion were for discretionary programs, and $56.705 billion for mandatory
USDA programs. The $17.601 billion for discretionary programs was exactly equal
to the 302b allocation given to the subcommittee by the full committee, and $180
million above the President’s request for FY2003. The discretionary level in the
House bill was $1.325 billion higher than the regular FY2002 appropriations,
including supplementals.
When the 108th Congress convened in early January 2003, the full House
adopted a continuing resolution (H.J.Res. 2), which also was intended to serve as a
vehicle for completing final funding decisions on the 11 remaining regular
appropriations bills, including agriculture. Although the House-adopted version of
H.J.Res. 2 was a temporary resolution extending funding through January 31, 2003,
the Senate-amended version was an omnibus appropriations measure that included
the full-text of each of the outstanding regular bills, as amended. Until H.J.Res. 2
was enacted, FY2003 spending for USDA and related agencies was governed
temporarily by eight continuing resolutions enacted periodically over the first five
months of FY2003,
Senate Action. The Senate Appropriations Committee completed
subcommittee and full committee markup during the week of July 22, 2002, and
reported its version of the FY2003 agriculture appropriations bill (S. 2801, S.Rept

107-223) on July 25. S. 2801, as reported, provided total funding of $74.66 billion,


which was $354 million above the House bill, $598 million above the Administration


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

request, and $1 billion above the FY2002 enacted level including supplementals. Of
the total amount provided in S. 2801, $17.98 billion was for discretionary programs,
compared with $17.6 billion in the House bill, $17.4 billion in the Administration’s
request and $16.55 billion provided in FY2002.
The 107th Congress adjourned without completing action on S. 2801 or any
other FY2003 agriculture spending bill. In early January 2003, Senate appropriators
combined the FY2003 agriculture appropriations bill with ten other unresolved
appropriations bills, as amended, into an omnibus package which was adopted as a
substitute amendment (S.Amdt. 1) to H.J.Res. 2. H.J.Res. 2 was further amended
on the Senate floor, and adopted by the Senate on January 23, 2003. Funding levels
for USDA and related agencies in H.J.Res. 2 were relatively close to the funding
levels in S. 2801 for ongoing USDA programs. However, separate adopted
amendments in H.J.Res. 2 provided $3.1 billion in farm economic and disaster
assistance, and $500 million in additional P.L. 480 funds for emergency famine
relief in Africa. The $3.1 billion in farm assistance was offset by an across-the-board
reduction in all discretionary programs in the measure. No offsets were provided for
the supplemental P.L. 480 food aid.
Conference Action. Conference action on the FY2003 omnibus
appropriations bill (H.J.Res. 2) was completed on February 13, 2003, when the
conference report (H.Rept. 108-10) was adopted by the House by a vote of 338-83,
and later the same day by the Senate by a vote of 76-20. The President signed the
measure into law (P.L. 108-7) on February 20, 2003. The final omnibus lawth
combines the 11 appropriations bills that were not completed by the 107 Congress,
with various other spending provisions, including a supplemental $3.1 billion disaster
assistance package for farmers and ranchers. For the regular annual appropriations
for USDA and related agencies, P.L. 108-7 contains budget authority of $74.25
billion, of which $17.55 billion is for discretionary programs and $56.70 billion is
for mandatory programs. The discretionary appropriation in the final measure is $56
million below the House-reported (H.R. 5263) level and $805 million below the
Senate-passed level (H.J.Res. 2), but $124 million above the Administration request
and $1.27 billion above the enacted FY2002 level including supplementals. The
FY2003 totals do not include the $3.1 billion in disaster assistance that was adopted
in a separate title of the bill. Spending for disaster assistance was offset by a
comparable reduction in estimated spending for a mandatory conservation program
over a 10-year period. The appropriated totals do not reflect the effect of a 0.65%
across-the-board in almost all discretionary programs in the omnibus measure, which
if applied equally to all USDA and related agency programs, would reduce
appropriations by approximately $85 million. (The WIC program is the only USDA
discretionary account that is specifically exempted from the rescission.)


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

FY2003 Agriculture Appropriations: Proposed
Spending Levels and Current Issues
The following sections compare the enacted conference agreement on the
FY2003 omnibus appropriations bill (P.L. 108-7), with the Senate-passed version of
the bill (H.J.Res. 2), the House-reported agriculture appropriations bill in the 107th
Congress (H.R. 5263), the Administration’s FY2003 request, and the FY2002
enacted level for various mission areas and agencies within USDA, and for the Food
and Drug Administration. Also see the table at the end of the report for a tabular
summary of P.L. 108-8, the House and Senate measures, the FY2003 request, and
the FY2002 enacted appropriation levels, including supplementals. This report will
continue to track congressional action on FY2003 agriculture appropriations as the
process continues.
Farm Commodity Support
Most spending for USDA’s mandatory agriculture and conservation programs,
as authorized by the 2002 farm bill (P.L. 107-171), is funded through USDA’s
Commodity Credit Corporation (CCC). The CCC is a wholly owned Government
corporation. It has the legal authority to borrow up to $30 billion at any one time
from the U.S. Treasury. These borrowed funds are used to finance the spending of
ongoing programs such as farm commodity price and income support activities
(including annual Direct and Counter-cyclical Payments and Milk Income Loss
Contract Payments); and various agricultural conservation and trade programs. The
CCC has also been the funding source for a large portion of emergency supplemental
spending over the years, particularly for ad-hoc farm disaster payments, and direct
market loss payments to growers of various commodities which have been provided
in response to low farm commodity prices.
The CCC must eventually repay the funds it borrows from the Treasury. But,
because the CCC never earns more than it spends, its losses must be replenished
periodically through a congressional appropriation so that its $30 billion borrowing
authority (debt limit) is not depleted, which would render the corporation unable to
function. Congress generally provides this infusion through the regular annual
USDA appropriation law. Because of the degree of difficulty in estimating its
funding needs, which is complicated by crop and weather conditions and other
uncontrollable variables, the CCC in recent years has received a “current indefinite
appropriation,” which in effect allows the CCC to receive “such sums as are
necessary” during the fiscal year for previous years’ losses and current year’s losses.
Indefinite appropriations have become more common for the CCC in recent years,
particularly in FY2000 when CCC net outlays in that year totaled $32 billion.
Without an indefinite appropriation, the CCC would have exhausted its $30 billion
borrowing limit.


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

For FY2003, the Administration requested an indefinite appropriation for the
CCC estimated at $16.285 billion, compared with an estimated $20.279 billion for
FY2002. The FY2003 omnibus appropriations act (P.L. 108-7) concurs with this
request and estimate. Not included in this amount is a separate supplemental
appropriation of $3.1 billion in P.L. 108-7 for farm disaster assistance, which is to
be funded through the borrowing authority of the CCC. (See below.)
Farm Disaster Assistance
With a large portion of the nation in extreme and severe drought for the past two
years, many farm groups were seeking supplemental federal disaster assistance for

2001 and 2002 crop and livestock losses. The omnibus appropriations act (P.L. 108-


7) contains an estimated $3.1 billion in economic and disaster assistance for
agricultural producers in a separate title of the act (Division N, Title II). A similar
amount was provided in the Senate-passed version of the measure (H.J.Res. 2). No
comparable provisions were considered in the House. The cost of the package is
offset by a spending limitation placed on a farm bill-authorized conservation
program, the Conservation Security Program, over the next 10 years. The
Administration did not request any assistance, and insisted during the congressional
debate that any assistance Congress provided must be offset with comparable
reductions in other farm spending.
The following is a breakdown of the major provisions in the disaster assistance
provisions in P.L. 108-7.
Crop Disaster Assistance. P.L. 108-7 contains "such sums as are
necessary" from the Commodity Credit Corporation to fully fund a disaster payment
formula that is similar to the payment formula last used for ad-hoc 2000 crop disaster
payments. Regardless of whether a farmer is in a declared disaster area, a producer
can be eligible for assistance if individual crop losses were in excess of 35% in either
2001 or 2002. For losses in excess of the 35% threshold, an eligible producer can
receive a payment equal to 50% of the relevant price for the commodity. Producers
who had the opportunity to insure the crop and waived insurance for that year will
be slightly penalized and receive a payment equal to 45% of the relevant price. All
commercially grown crops are eligible for a payment under this formula except for
sugar and tobacco, which have separate disaster payment programs in the program.
All producers must choose between a 2001 payment or a 2002 payment, and may not
receive a payment for both years' losses. The act limits the amount of the disaster
payment so that the payment, in combination with crop insurance payments and the
value of the crop that was not lost, cannot exceed 95% of the value of the crop had
there been no losses. A participating producer also must agree to purchase crop
insurance for the next two crop years, or, when insurance is not available, purchase
coverage under the noninsured assistance program for two years. Congressional


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

Budget Office cost estimate: $2.115 billion (subject to change, since "such sums
as are necessary" are available for this provision.)
Livestock Assistance. P.L. 108-7 provides $250 million to compensate for
2001 or 2002 livestock forage or feed losses caused by a natural disaster. The
program will be administered in the same fashion as the ad-hoc 1999 Livestock
Assistance Program (LAP). To receive LAP assistance, a producer must be in a
disaster-declared county (declared by the President or the Secretary of Agriculture)
and must choose between 2001 or 2002 losses. The measure also removes date
restrictions for eligibility for the Livestock Compensation Program (LCP), which
USDA administratively implemented in 2002. The CBO-estimated cost of the LCP
provision is $100 million. USDA funded the LCP through the use of Section 32
funds, which are traditionally used to make surplus commodity purchases. The
omnibus act requires any new spending to come from the Commodity Credit
Corporation, instead of Section 32, and reimburses Section 32 with $250 million in
CCC funds to compensate for a portion of the past payments of the program.
Other Assistance. P.L. 108-7 also provides various forms of assistance to
certain commodities, including: 1) $60 million in disaster payments to sugar beet
producers; 2) a CBO-estimated $60 million in payments to sugarcane producers and
processors for hurricane losses; 3) a CBO-estimated $54 million to compensate
tobacco producers for losses associated with quota reductions, pests and diseases; and
4) $18.2 million to compensate Florida citrus growers whose trees were quarantined
for citrus canker.
Crop Insurance
The federal crop insurance program is administered by USDA’s Risk
Management Agency (RMA). It offers basically free catastrophic insurance to
producers who grow an insurable crop. Producers who opt for this coverage have the
opportunity to purchase additional insurance coverage at a subsidized rate. Most
policies are sold and completely serviced through approved private insurance
companies that have their program losses reinsured by USDA. The annual
agriculture appropriations bill makes two separate appropriations for the federal crop
insurance program. It provides discretionary funding for the salaries and expenses
of the RMA. It also provides “such sums as are necessary” for the Federal Crop
Insurance Fund, which funds all other expenses of the program, including premium
subsidies, indemnity payments, and reimbursements to the private insurance
companies.
The omnibus appropriations act (P.L. 108-7) provides an FY2003 appropriation
of $70.708 million for RMA salaries and expenses, the only discretionary component
of the federal crop insurance program. This appropriation is the same as in the
Senate-passed version of the omnibus measure (H.J.Res. 2), slightly below the


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

House-reported (H.R. 5263) level of $72.771 million. The House and Senate and
final levels for FY2003 are slightly below the Administration request only because
neither bill concurs with the Administration request to shift GSA rent expenses from
a central account to individual agency accounts. The Administration request was $4
million below the FY2002 appropriation of $74.75 million. Most of the reduction
in the FY2003 funding request is attributable to one-time costs in FY2002 for
implementing the Agricultural Risk Protection Act (P.L. 106-224), which provided
increased subsidies and made other enhancements to the crop insurance program.
For mandatory expenses of the crop insurance program (premium subsidy,
program losses and reimbursements to private insurance companies), the
Administration requests “such sums as are necessary” and estimated an FY2003
appropriation of $2.89 billion, which was virtually equal to the FY2002 estimate of
$2.90 billion. P.L. 108-7 concurs with the FY2003 request.
Annual spending on the crop insurance program is difficult to predict in advance
and is dependent on weather and crop growing conditions. The crop insurance
program received legislative enhancements in 2000 (P.L. 106-224) which have
contributed to significantly higher farmer participation in the program. The
Administration maintains that the increased participation has resulted in windfall
profits for the private insurance companies. Hence, the FY2003 budget request
contained a legislative proposal to require private insurance companies to absorb
more of the risk of the program by limiting their underwriting gains to 11.5% of
retained premiums. P.L. 108-7 does not address this proposal, and to date, no
legislative action has occurred. Senate report language accompanying S. 2801
directed USDA to follow current procedures in the Standard Reinsurance Agreement
between private companies and USDA before any risk-sharing changes are made.
For more background on crop insurance, see CRS Report RL30739, Federal
Crop Insurance and the Agriculture Risk Protection Act of 2000 (P.L. 106-224).
Farm Service Agency
While the Commodity Credit Corporation serves as the funding mechanism for
the farm income support and disaster assistance programs, the administration of these
and other farmer programs is charged to USDA’s Farm Service Agency (FSA). In
addition to the commodity support programs and most of the emergency assistance
provided in recent supplemental spending bills, FSA also administers USDA’s direct
and guaranteed farm loan programs, certain conservation programs and domestic and
international food assistance and international export credit programs.
FSA Salaries and Expenses. This account funds the 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,


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

and from the various direct and guaranteed farm loan programs. All administrative
funds used by FSA are consolidated into one account. For FY2003, the FY2003
omnibus appropriations act (P.L. 108-7) provides an annual appropriation of $976.7
million for FSA salaries and expenses. Separately in the act, FSA is authorized to
tap the Commodity Credit Corporation for up to an additional $70 million to cover
the administrative costs associated with implementing the $3 billion farm disaster
assistance package in the act, as well as the ongoing farm commodity support
programs. The regular appropriation of $976.7 million is equal to the amount
provided in the House-reported appropriations bill (H.R. 5263) and $10.2 million
below the Senate-passed (H.J.Res. 2) level of $986.9 million. The Senate measure
also contained the $70 million supplemental authority.
The Administration had requested an FY2003 appropriation of $993.6 million
for FSA salaries and expenses, compared with $939 million appropriated in FY2002.
Most of the requested increase was attributable to increased pay costs and a lack of
carryover funds from FY2002. (FY2002 funding was bolstered by a $29 million
carryover from FY2001. No carryover was expected into FY2003.) The requested
level for FY2003 did not reflect any new activities associated with the recently
enacted 2002 farm bill (P.L. 107-171). The farm bill provides $50 million in new
mandatory no-year funding for FSA salaries and expenses to administer new farm bill
programs. Neither P.L. 108-7 nor the House-reported or Senate-passed measure
concurs with the President’s request to increase the FSA appropriation by $17 million
over FY2002 to cover FSA rental payments to GSA, which are currently paid out of
a central USDA account.
FSA Farm Loan Programs. Through FSA farm loan programs, USDA
serves as a lender of last resort for family farmers unable to obtain credit from a
commercial lender. USDA provides direct farm loans and also guarantees the timely
repayment of principal and interest on qualified loans to farmers from commercial
lenders. FSA farm loans are used to finance the purchase of farm real estate, help
producers meet their operating expenses, and financially recover from natural
disasters. Some of the loans are made at a subsidized interest rate. An appropriation
is made to FSA each year to cover the federal cost of making direct and guaranteed
loans, referred to as a loan subsidy. Loan subsidy is directly related to any interest
rate subsidy provided by the government, as well as a projection of anticipated loan
losses caused by farmer non-repayment of the loans.
The omnibus appropriations act (P.L. 108-7) provides an appropriation of
$228.3 million to subsidize the cost of total direct and guaranteed farm loans of
$3.937 billion for FY2003. The appropriation is midway between the $212.1 million
(supporting $3.8 billion in total loans) in the House-reported bill (H.R. 5263) and the
Administration request and the $243 million ($4.01 billion in loans) in the Senate-
passed measure (H.J.Res. 2). The enacted FY2003 level will allow FSA to make


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

available nearly twice the level of direct operating loans than in FY2002 ($104.4
million in FY2003 vs. $54.6 million authorized in FY2002.)
FSA farm loan levels have been higher in recent years because an FY2000
supplemental act (P.L. 106-113) provided significant emergency funding for various
USDA farm loan programs, from which balances were carried over into subsequent
years. Supplemental funding has been provided in recent years for federal farm loans
in response to low farm commodity prices, which have limited the ability of farmers
to secure commercial farm loans.
Agricultural Trade and Food Aid
USDA’s agricultural trade and food aid activities include some programs that
are funded by appropriations and others that are funded through the borrowing
authority of the CCC. The FY2003 omnibus appropriations act (P.L. 108-7) deals
mainly with programs for which appropriations are required. CCC-funded activities
are dealt with primarily in budget proposals submitted by the President, although
general provisions in the annual appropriations act occasionally address funding
levels and other aspects of the CCC-funded programs.
Adding together appropriations and estimated spending for CCC-funded
activities (some additional food aid programs, market development, export subsidies,
export credit guarantees) results in a program level of about $6.1 billion for all
USDA international activities for FY2003.2 The program level for USDA’s
international activities was estimated at about $5.5 billion in FY2002. The program
level reflects not only increased spending for food aid, but also Congress’s rejection
in the 2002 farm bill of many of the food aid reforms proposed by the Administration
in its FY2003 budget proposals.
FAS Salaries and Expenses. The Foreign Agricultural Service (FAS)
administers USDA’s international programs (both appropriated and CCC-funded).
The administration of P.L. 480 Food for Peace, however, is shared between USDA
and the U.S. Agency for International Development (USAID). USDA is responsible
for Title I of P.L. 480, which provides low-interest, long-term loans to developing


2 Program level is an estimate of the value of all goods and services provided through
USDA’s international activities. Program level exceeds budget authority because certain
significant federal credit programs, such as export credit guarantees funded through the
borrowing authority of the Commodity Credit Corporation (CCC), do not require annual
appropriations. Only administrative expenses and loan subsidies, not the value of the loan
or guarantee, require an appropriation. In addition, CCC funded activities, such as EEP,
MAP, and FMDP, which are included in program level, do not require annual
appropriations.
Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

countries to finance the purchase of U.S. food products, while USAID is responsible
for Title II (commodity donations) and Title III (a bilateral food grant program).
(FAS also administers several food aid programs financed with CCC-funds) For
salaries and expenses of FAS, P.L. 108-7 provides $129.9 million, which is $8.1
million above the FY2002 enacted amount and about $1.5 million less than requested
by the President.
Foreign Food Aid: Funding and Issues. P.L. 480 food aid accounts for
$1.343 billion (more than 90%) out of an appropriation of $1.477 billion for
discretionary agricultural trade programs. P.L. 108-7 contains an appropriation of
$1.477 billion for USDA’s international activities that are subject to annual
appropriations (P.L. 480 food aid, salaries and expenses of the Foreign Agricultural
Service, and administrative expenses for managing export credit guarantee
programs). Of that amount, $1.2 billion is authorized for humanitarian commodity
donations under P.L. 480 Title II. In addition, P.L. 108-7 includes a supplemental
appropriation of $250 million for emergency relief activities under P.L. 480, which
will remain available through FY2004. Not counting the additional $250 million, the
total for appropriated international programs is $344 million greater than enacted for
FY2002 with most of the increase going to humanitarian food donations. Additional
spending for humanitarian relief is a response to the Administration’s decision to
phase out food aid based on commodity surpluses and to estimates by U.S. and
international food aid agencies of large, urgent food needs in Sub-Saharan Africa,
North Korea, Afghanistan and elsewhere. In light of estimated food needs around the
world, the issue of food aid spending for emergency relief could be revisited duringth
the 108 Congress.
The increase in food aid appropriations in the FY2003 omnibus appropriations
act is in response both to large estimated global food needs and to the
Administration’s decision to phase out food aid based on commodity surpluses or
CCC funding. Proposed reductions in Section 416(b) (which uses surplus
commodities and CCC funds) are based on the Administration’s review of food aid
that also recommended (in the FY2003 budget proposal) that all programs now run
through private voluntary organizations (PVOs), cooperatives, and the World Food
Program be placed in USAID, with USDA food aid activities confined to
government-to-government programs. Consistent with this approach, the
Administration recommended in the FY2003 budget proposal an increase in P.L. 480
Title II commodity donations to compensate partially for the phase-out of Section

416(b) commodity donations.


Initial Administration budget proposals also excluded any CCC funding in
FY2003 for Food for Progress (FFP) which provides U.S. commodities to developing
countries and emerging democracies. CCC funding of this program has averaged
around $100 million annually in recent years. Under the President’s proposals, any
FFP activity would have been be limited to government-to-government programs


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

financed with money appropriated for P.L. 480 Title I. However, reauthorization of
the FFP program in the 2002 farm bill (P.L. 107-171), with continued reliance on
CCC funding, complicated the efforts of the Administration to phase out CCC-
funded food aid programs. P.L. 108-7 goes further and amends the FFP statue by
requiring a minimum volume of 400,000 metric tons of commodities (which
effectively entails CCC funding) and by requiring the President to enter into FFP
agreements not only with foreign governments, but also with PVOs, coops, and
intergovernmental organizations. Consequently, the President’s FY2003 estimates
for international programs now include $158 million of CCC funding for FFP.
On the international level, the use of commodity surpluses to augment U.S. food
aid has been criticized by the European Union, Australia, and other agricultural
exporting countries as an effort by the United State to circumvent U.S. World Trade
Organization (WTO) export subsidy reduction commitments. These trading partners
argue that much of U.S. food aid is being used to manage supplies rather than to meet
emergency needs and that large food aid shipments impede sales of agricultural
products by and between developing countries. The issue of food aid and
international agricultural trading rules is being pursued by U.S. trading partners in the
new round of multilateral trade negotiations launched at the end of 2001.
Consistent with its phase-out of Section 416(b), the President’s budget assumes
that $118 million will be available for programming under Section 416(b) in
FY2003. That would consist almost entirely of surplus nonfat dry milk held in CCC
inventories. In contrast, $175 million of commodity assistance and
transport/distribution costs under Section 416(b) were funded in FY2002 and $948
million in FY2001.
Mandatory Trade Programs. In addition to Section 416(b) and Food for
Progress (discussed above), many other USDA international programs are funded
through CCC borrowing authority. By far the largest component of program level
is accounted for by an estimated $4.225 billion of CCC export credit guarantees,
which guarantee payment for commercial financing of U.S. agricultural exports. The
actual export value of credit guarantees made available in FY2003 will depend
ultimately on market conditions and demands for credit. Historically, the value of
such guarantees has rarely reached (or exceeded) the levels anticipated in budget
requests.
U.S. export credit programs have also been raised as an issue in WTO
agricultural trade negotiations. The EU and other trading partners charge that the
program has a subsidy element (although it is much less than the subsidy represented
by the EU’s export restitution program) and gives the U.S. an unfair competitive
advantage in exporting certain agricultural commodities. The United States took part
in negotiations on export credit programs in the Organization for Economic
Cooperation and Development (OECD), but these negotiations did not succeed and


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

were suspended. Any changes in the U.S. program that might result from trade
negotiations would have to overcome strong congressional support of these programs
as they are presently constituted.
Two other CCC-funded programs assist trade organizations in their efforts to
develop markets overseas for U.S. agricultural products. For the Market Access
Program (MAP), the Administration assumes spending of $110 million and for the
Foreign Market Development (or “Cooperator”) Program (FMDP), $34 million.
These amounts are authorized in the 2002 farm bill (P.L. 107-171).
For one CCC-funded direct export subsidy program, the Export Enhancement
Program (EEP), the conference report limits CCC spending to $28 million. For its
reduction from the level authorized in the farm bill ($478 million), P.L. 108-7 scores
savings of $450 million. In the past, the Congressional Budget Office (CBO) has
scored no savings for proposed cuts to EEP funding since actual spending in the
program has been negligible (e.g., $1 million in FY2001, $0 in FY2002). However,
the conference report estimate of savings is based on Office of Management and
Budget’s (OMB) scoring method (rather than CBO’s) which allows dollar-for-dollar
savings for cuts from the authorized EEP level. For the other export subsidy
program, the Dairy Export Incentive Program (DEIP), the President’s budget
anticipates that $57 million would be provided, an estimate that reflects the
maximum permitted under international trade agreements.
The 2002 farm bill established a new food aid program, the McGovern-Dole
International Food for Education and Child Nutrition Program (IFED), and mandated
that $100 million of CCC-funding be made available for FY2002. In subsequent
fiscal years (FY2004-FY2007), “such sums as necessary” would be appropriated.
IFED began as a pilot project during the Clinton Administration and was financed by
$300 million in CCC-funds and commodities. Consistent with farm bill
requirements, the Administration indicates that $100 million of CCC funds would be
expended on IFED in FY2003.
For more information on agricultural trade and food aid, see CRS Issue Brief
IB98006, Agricultural Export and Food Aid Programs and CRS Issue Brief IB10077,
Agricultural Trade Issues in the 107th Congress.
Natural Resources and Environment
The natural resources and environment mission area within USDA is
implemented through the programs of the Natural Resources Conservation Service
(NRCS), the Farm Service Agency (FSA), and the Forest Service. (Funding for the
Forest Service is provided in the annual Interior appropriations bill, and is discussed
in CRS Report RL31306, Appropriations for FY2003; Interior and Related


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

Agencies.) Conservation spending combines discretionary spending, which is just
over $1 billion in the FY2003 omnibus appropriations act (P.L. 108-7), and
mandatory funding, which is funded through the Commodity Credit Corporation,
and is estimated at almost $3.0 billion, according to the January 2003 Congressional
Budget Office (CBO) estimate.
Mandatory conservation spending includes $1 billion in new spending
authorized by the recently enacted 2002 farm bill (P.L. 107-171). The new farm bill
provides legislative authority, including funding levels, for many of the mandatory
conservation programs through FY2007. When Congress was considering this law,
the CBO estimated that overall mandatory conservation funding would grow by
about 80%, increasing by a total of $9.2 billion through FY2007 (and $17.1 billion
through FY2011, assuming an extension of current policies, without modification,
through that year.)
Discretionary Programs. The FY2003 omnibus appropriations act (P.L.
108-7) provides $1.028 billion for all discretionary conservation programs within
USDA, which is $7 million higher than the House committee-reported bill (H.R.
5263), $9 million less than the Senate-passed measure (H.J.Res. 2), and $22 million
below the Administration request of $1.049 billion. Much of the difference between
the congressional levels and the Administration request was a $48.7 million request
for the Emergency Conservation Program (funded under the Farm Service Agency)
that was not included in P.L. 108-7 or either chamber’s measure. The FY2003
enacted level is a decrease of $29 million from the FY2002 appropriation of $1.056
billion, which included $94 million of supplemental spending provided for
watershed and flood prevention in P.L.107-206.
The largest discretionary conservation program is Conservation Operations
(CO), most of which supports technical assistance. P.L. 108-7 provides $825 million
for CO in FY2003, which is less than the Administration request of $841 million, but
a significant increase from the $779 million provided in the FY2002 appropriation.
A large portion of the requested increase, $48 million, would have paid for technical
assistance in helping animal feeding operations comply with clean water regulations.
P.L. 108-7 provides less than either the House-reported bill ($844 million) or the
Senate-passed measure ($840 million). The conference report accompanying the law
identifies 114 earmarks for CO with a total cost of more than $110 million. Some
of these are new this year, while others had been specified in appropriations bills in
previous years. Reports accompanying bills emerging from both chambers each
identified numerous earmarks; S. 2801, for example, includes 83 earmarks allocating
about $90 million. Some earmarks are for specific projects or sites and others are for
activities. The largest earmark in the law, $21.5 million, is for the grazing lands
conservation initiative. The conference report also identifies partners to be involved
in many of these projects and activities. P.L. 108-7, drawing from the House bill,
requires NRCS to treat earmarks as additions to each state’s allocation.


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

For watershed activities, P.L. 108-7 provides $110 million for Watershed and
Flood Prevention Operations ($200 million appropriated in FY2002, including a $94
million supplemental appropriation provided in P.L. 107-206), $11.2 million for
Watershed Surveys and Planning ($11 million in FY2002) and $30 million for
Watershed Rehabilitation Program ($10 million in FY2002). It identifies several
earmarks in the general provisions and in the conference report. The Administration
requested no appropriation in FY2003 for these three watershed programs. Instead,
it proposed a new approach, requesting $110 million for Emergency Watershed
Protection, which is the average of annual spending over the past 10 years, so that
USDA would have funds on hand to provide immediate assistance after a natural
disaster. (Currently, emergency programs typically are funded in supplemental acts
after a disaster strikes, so assistance may not be available for several months or
longer after the damage occurs.)
Neither chamber concurred with this Administration request to consolidate three
accounts into the Emergency Watershed Protection account. Instead, the House
recommended $110 million for Watershed and Flood Prevention Operations (with
numerous earmarks), $11.2 million for Watershed Surveys and Planning, and no
funding for Emergency Watershed Protection or Watershed Rehabilitation, while the
Senate recommended $105 million for Watershed and Flood Prevention Operations
(with numerous earmarks), $11.0 million for Watershed Surveys and Planning, and
no funding for Emergency Watershed Protection, and also $30 million for Watershed
Rehabilitation. P.L. 108-7 includes provisions from both bills that limit spending for
technical assistance to $45.5 million of the total for Watershed and Flood Prevention
Operations, and limit expenditures related to protecting threatened and endangered
species to $1 million.
P.L. 108-7 provides no funds for the Emergency Conservation Program, an
FSA-administered program which helps producers repair damaged farmland
following a disaster. Traditionally, this program has been funded through
emergency supplemental appropriations. Congress rejected an Administration
proposal to move to a new funding approach. This proposal assumed that FY2003
spending would be the average of the past 10 years, $48.7 million, and requests this
level of funding in the regular FY2003 appropriations, so that it can more rapidly
respond to emergencies.
P.L.108-7 provides $51 million for the Resource Conservation and
Development (RC&D) Program to support activities in designated RC&D districts.
This amount is almost $2 million more than the Administration request of $49.1
million and $1 million more than the Senate provided, but $4.1 million less than the
House-reported level. The act does not provide any funding for the Forestry
Incentive Program administered by NRCS, which was eliminated by the 2002 farm
bill.


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

Technical Assistance Funding. In late 2002, the Office of Management
and Budget, supported subsequently by the Department of Justice, issued an opinion
that technical assistance funding for mandatory programs remains limited under a cap
that has been placed in section 11 of the Commodity Credit Corporation charter
under prior law. Members had thought that the issue had been resolved through
language included in the 2002 farm bill and were supported in this conclusion by an
opinion issued by the General Accounting Office. The Administration proposed to
address this limit in FY2003 through a January 2003 proposal to create a new farm
bill technical assistance line item, and to fund it at $333 million in FY2003. It stated
that this line item combined with other funding would be adequate to fully fund all
technical assistance necessary to implement all mandatory and discretionary
conservation programs. Congress strongly rejected this proposal. Section 213 of the
disaster assistance package (Division N, Title II) in P.L. 108-7 amends the farm bill
by specifically prohibiting the use of discretionary funds to implement any mandatory
conservation programs.
Mandatory Programs. The Administration’s FY2003 request was submitted
prior to enactment of the 2002 farm bill, which reauthorized and greatly increased
funding for many conservation programs slated to expire at the end of FY2002.
Although the Administration had stated its support for authorizing higher annual
mandatory conservation funding levels in the 2002 farm bill, its request for FY2003
did not include any of the anticipated reauthorizations or increases, except that it
requested then-level funding at $200 million for the Environmental Quality
Incentives Program (EQIP), a cost sharing program to pay for installing conservation
practices. Most of the other mandatory conservation programs had either reached
their authorized ceilings (set in dollars or acres), or had been unfunded because of
limitations enacted in previous appropriations legislation.
The $3.1 billion in agricultural disaster assistance provided in P.L. 108-7 is
offset by limiting spending on the new Conservation Security Program (CSP). The
CSP has not yet been implemented, but was designed to pay farmers to institute and
maintain conservation practices on land that is producing food and fiber. The
limitation in P.L. 108-7 prohibits any funding in FY2003 and limits total ten-year
funding (FY2004-2013) to $3.773 billion, providing an offset of $3.105 billion over
the time period. The farm bill had called for this program to be implemented in
FY2003. The House-reported bill would have limited this program to a single state,
Iowa, making it a pilot program with savings of $3 million, while the Senate-passed
bill would have made it available in all states.
P.L. 108-7 includes three other provisions that either limit or prohibit funding
for certain mandatory conservation programs. The act: 1) limits FY2003 enrollment
in the Wetlands Reserve Program to 245,833 acres instead of the 250,000 acres
authorized in the farm bill (savings of $5 million); 2) limits FY2003 funds for the
EQIP to $695 million instead of the $700 million authorized in the farm bill; and 3)


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

prohibits the use of any of the $45 million in mandatory funds authorized in FY2003
for the Small Watershed Rehabilitation Program. (However, the act does provide
$30 million in discretionary funding for the Small Watershed Rehabilitation
Program.)
The FY2003 omnibus appropriations act does not comment on the most costly
mandatory conservation program, the Conservation Reserve Program (CRP). It is
administered by FSA and pays farmers to retire from production highly erodible and
environmentally sensitive land. Late last year, USDA reported that there were about
35.1 million acres enrolled in the CRP, almost 10% of the country’s cropland. It has
been approaching its ceiling of 36.4 million acres, which was raised to 39.2 million
acres by the 2002 farm bill. The budget assumes FY2003 outlays of $1.856 billion
to fund existing and new contracts. Most other mandatory funding programs will
grow rapidly, as they were reauthorized by the 2002 farm bill. Examples include the
Wetlands Reserve Program, which will grow from 1.075 million acres (by 250,000
acres per year) to 2.275 million acres and the EQIP, which will grow from $200
million in FY2001 to $1.3 billion in FY2007.
For more information on USDA conservation issues, see CRS Issue Brief
IB96030, Soil and Water Conservation Issues, and for more information on the farm
bill conservation provisions, see CRS Report RL31486, Resource Conservation Title
of the 2002 Farm Bill: A Comparison of New Law with Bills Passed by the House
and Senate, and Prior Law.
Agricultural Research, Education, and Economics
The FY2003 omnibus appropriations act (P.L. 108-7) provides $2.506 billion
for USDA’s four research, education, and economics (REE) agencies in FY2003,
compared with $2.517 billion in the Senate-passed bill (H.J.Res. 2) and $2.379
billion in the House-reported bill (H.R. 5263). The Administration had requested
$2.232 billion. The final law is $61 million above the FY2002 enacted level
(including supplementals for counter-terrorism activities).
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 Cooperative State Research, Education, and Extension Service (CSREES) is the
agency through which USDA sends federal funds to land grant Colleges of
Agriculture for state-level research, education and extension programs. 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).


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

Agricultural Research Service (ARS). The FY2003 omnibus
appropriations act provides $1.172 billion in total for ARS. Of that amount, $1.053
billion supports ARS’s research programs (a $73 million increase from the regular
FY2002 appropriation), and $119.5 million supports modernizing and building ARS
facilities (a $0.5 million increase from the regular FY2002 appropriation). Overall,
however, ARS will receive $64 million less in FY2003, if the additional $138 million3
ARS received in supplemental funding is included in the FY2002 agency total. P.L.
108-7 provides virtually level funding with the Senate-passed omnibus measure for
ARS research, and an increase over both the Senate-passed and House-reported
measures in funds available for facilities construction ($95 million and $101 million,
respectively). The Administration requested $971.4 million for ARS research and
$16.6 million for ARS construction projects for FY2003.
The conference report contains language calling for the continuation of all ARS
research projects and locations that the Administration had recommended for
termination or consolidation and closure. Conferees also adopted a provision from
the House-reported spending bill that blocks the expenditure of any funds to conduct
a review of the quality and relevance of ARS research. Congress first authorized the
USDA secretary to request the National Academy of Sciences to conduct this review
in the Agricultural Research, Extension, and Education Reform Act of 1998 (P.L.
105-185). However, the NAS study, which was released in December 2002, is
instead a review of the effect of publicly funded research on the structure of U.S.
agriculture. The 2002 farm bill (P.L. 107-171) reauthorized the ARS study as
originally conceived, but the language in the final FY2003 appropriations law states
that USDA should have time to review the existing NAS study before asking NAS
to undertake another.
The Public Health Security and Bioterrorism Response Act of 2002 (P.L. 107-
188) authorized additional appropriations for ARS in FY2003-06 to upgrade
bioterrorism-related research facilities in Plum Island, NY and Ames, IA. The Act
also authorized $190 million in FY2003 to be shared among ARS, APHIS, the Forest
Service, and cooperators in the states for research on bioterrorism prevention,
preparedness, and response, among other things. The FY2003 omnibus
appropriations act does not contain any appropriations under that authority.
Cooperative State Research, Education, and Extension Service
(CSREES). P.L. 108-7 provides $1.125 billion for CSREES support of research


3 P.L. 107-117 provided $50 million to ARS for constructing a high security bio-
containment facility at its National Animal Disease Center in Ames, Iowa, $23 million for
upgrading its foreign animal disease research lab on Plum Island, New York, and $40
million for bioterrorism research. P.L. 107-206 provided an additional $25 million to Ames,
Iowa.
Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

and extension programs at the land grant colleges of agriculture. The Senate-passed
omnibus measure would have provided $1.156 billion, and the House-reported
measure would have appropriated $1.07 billion. The Administration had requested
$1.021 million. The $1.125 billion enacted total is a $97 million increase (almost
10%) over the FY2002 appropriation, most of which is allocated to research and
education programs ($79 million) and extension programs ($14 million), with a $4
million decrease in funding for integrated research and extension programs.
P.L. 108-7 adopted the Administration’s request for: (1) $180.1 million
(FY2002 level) in formula funds for core research and extension programs at 1862
land grant institutions; and (2) $21.8 million (FY2002 level) in formula funds for
forestry research. The final law provided $35.6 million (+$1 million from FY2002)
for research at 1890 (historically black) land grant colleges; $32.1 million for
extension at 1890 colleges (+$1 million from FY2002), and $453.5 million (higher
than FY2002 and both the House-reported and Senate-passed measures) for extension
at 1862 institutions.
The final FY2003 spending act increases funding for Special Research
(earmarked) grants to $112.3 million, an amount higher than both the House-reported
and the Senate-passed measures ($102.8 million and $103.8 million, respectively).
The Administration had proposed termination of most Special Research grants, with
a funding recommendation of $3.3 million. FY2002 funding was $97 million. P.L.
108-7 also provides $30 million for an additional group of earmarked grants under
the “Federal Administration” portion of the CSREES budget, which is more than
included in either chamber’s initial bill, and more than in FY2002 ($21.7 million).
The FY2003 budget request was $9.7 million. Finally, the conferees agreed to
provide $167.1 million for the National Research Initiative Competitive Research
Grants (NRI) program, compared with $124.3 million in the Senate-passed omnibus
measure, $130 million in the House-reported bill, and $120 million in FY2002. The
Administration had proposed doubling that amount – to $240 million – for FY2003.
The conference report retains the earlier concurrence between the House and
Senate bills, and with the FY2003 budget request, to block the expenditure of $120
million in mandatory funds for the Initiative for Future Agriculture and Food Systems
that was created in separate legislation in 1998. The 2002 farm bill (P.L. 107-171),
reauthorizes the Initiative and gradually increases its authorized funding from $120
million to $200 million annually in FY2006-07.
The Public Health Security and Bioterrorism Preparedness and Response Act
of 2002 (P.L. 107-188) provides authority for security improvements at land grant
college facilities and development of on-farm biosecurity education programs. The
FY2003 omnibus appropriations act contains no appropriations under this authority.


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

Economic Research Service (ERS) and National Agricultural
Statistics Service (NASS). P.L. 108-7 provides $69.1 million for ERS,
representing an increase from the Senate-passed measure ($65.1 million) and a
decrease from the House-reported bill ($73.3 million) and the budget request ($79.2
million). FY2002 ERS funding was $67.2 million. The conferees did not include the
Administration’s request (which was included in the House-reported bill) to transfer
funds from a central account to each individual agency to cover rent paid by each
agency to GSA. For NASS, the conference report contains $139.4 million, which is
only slightly below the Senate-passed measure ($140.9 million), but above the
House-reported level of $137.8 million. The FY2002 appropriation was$113.8
million, and the budget request was $143.7 million. P.L. 108-7 reflects earlier House
and Senate concurrence on allocating $41.3 million of the NASS appropriation for
the agency’s work on the 2002 Census of Agriculture, as the Administration
requested.
Food Safety and Inspection
USDA’s Food Safety and Inspection Service (FSIS) is responsible for the
mandatory inspection of meat, poultry, and processed egg products to insure their
safety, wholesomeness, and proper labeling. The FY2003 omnibus appropriations
act (P.L. 108-7) contains the Senate-proposed $759.8 million for FSIS, which is
higher than the $755.8 million in H.R. 5263 and fully funds the President’s budget
request. The FY2002 funding level (including a $15 million supplemental) was
$730.6 million. FSIS also will have access in FY2003 to an additional $101 million
in user fee income to support its inspection activities. P.L. 108-7 includes $5 million
specifically for FSIS to hire at least 50 additional personnel to enforce the Humane
Methods of Slaughter Act. A provision in the Senate-passed measure calling for
more stringent monitoring of foreign establishments exporting meat and poultry to
the United States, is not included.
Marketing and Regulatory Programs
USDA’s marketing and regulatory programs (MRP) are administered by three
agencies: the Agricultural Marketing Service (AMS), the Animal and Plant Health
Inspection Service (APHIS), and the Grain Inspection, Packers, and Stockyards
Administration (GIPSA). The stated mission of these programs is to “expand
domestic and international marketing of U.S. agricultural products and to protect the
health and care of animals and plants, by improving market competitiveness and the
farm economy for the overall benefit of both consumers and American agriculture.”
The FY2003 omnibus appropriations act (P.L. 108-7) provides $868.1 million for
USDA’s three marketing and regulatory agencies, which is about $18 million below
the amounts contained in the House-reported (H.R. 5263) and Senate-passed measure


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

(H.J.Res. 2). The amount provided in P.L. 108-7 is also $11 million below the
Administration request of $879.2 million, but close to the total FY2002 appropriation
of $867.3 million (including FY2002 emergency supplemental appropriations of
$119.1 million, intended to protect the food supply against agricultural terrorist
threats).
Animal and Plant Health Inspection Service. The largest appropriation
for marketing and regulatory programs goes to USDA’s Animal and Plant Health
Inspection Service (APHIS), the agency responsible for protecting U.S. agriculture
from foreign pests and diseases. P.L. 108-7 contains $735.5 million for APHIS.
This amount is $11.3 million lower that the FY2002 total ($746.8 million), which
included supplemental appropriations of $119.1 million under P.L. 107-117.
Disregarding the supplementals, the FY2003 appropriation represents a $105 million
increase in funds for APHIS salaries and expenses over FY2002, and a $2.8 million
increase for facilities renovation. The Administration had requested an FY2003
appropriation of $775.3 million for APHIS (which included a one-time shift of $26.7
million to cover GSA rental costs, which was not adopted in the conference report).
Both the House-reported appropriations bill (H.R. 5263) and the Senate-passed
omnibus measure would have provided $749 million. The conferees did not include
a Senate proposal to increase APHIS salaries and expenses by $17 million for
stepped-up border inspections. That appropriation has been used in the past primarily
for purchasing new equipment and training inspectors (including new additions to the
Beagle Brigade), whereas the inspection service itself is paid entirely for by user fees
collected from passengers, importers, and shippers at U.S. ports of entry. The
inspection function, equipment, Beagle Brigade, and up to 3,200 employees have
been transferred to the new Department of Homeland Security under P.L. 107-296.
USDA is retaining control of the user fees collected and is to repay DHS for the costs
that the new department incurs for providing border inspection services from that
account. USDA expects to collect approximately $275 million in user fees in
FY2003. Beginning in FY2004, appropriations for equipment, dogs, and training
will be made under the new Department’s budget authority. (See CRS Report
RL31466, Homeland Security Department: U.S. Department of Agriculture Issues).
P.L. 108-7 contains a $62.1 million increase for APHIS Animal Health
Monitoring and Surveillance activities ($133.2 million total), in order to increase the
agency’s surveillance against and readiness for a biological attack against U.S.
agriculture. In addition, the report includes a $37.8 million increase for managing
emerging plant pests($75.3 million total), an $18.2 million increase for managing
Johne’s disease ($21 million total), and an $20.2 million increase for Wildlife
Services (predator control) programs($69 million total).
P.L. 108-7 also provides $15 million for management of chronic wasting disease
(CWD) in domestic and wild deer and elk in different regions of the United States,
and contains language requiring APHIS to expand laboratory testing capacity for the


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

disease by establishing protocols with and providing funding for commercial labs that
have rapid testing capabilities. Conferees did not adopt a House-reported proposal
to require USDA and the U.S. Department of Interior (Fish and Wildlife Service and
Park Service) to submit a detailed joint budget request for an FY2004 CWD
program. Likewise, proposals to appropriate additional funds for CWD research
were not included in the final measure.
Agricultural Marketing Service. AMS is responsible for promoting U.S.
agricultural products in domestic and international markets, and for facilitating the
marketing and distribution of agricultural products. P.L. 108-7 provides $92.0
million for AMS as proposed by the House, a level which is just above the $91.7
million proposed by the Senate and requested by the Administration. The FY2002
level was about $86.8 million. Conference agreement report language calls for $15.8
million to be used for the pesticide data program, of which not less than $1 million
is to be added to existing funds for the drinking water initiative.
AMS is responsible for the so-called Section 32 program, a permanent
appropriation (but separate from the annual USDA appropriations bill) that since
1935 has earmarked the equivalent of 30% of annual customs receipts to support the
farm sector through a variety of activities. As is customary, most of the money for
FY2003 (approximately $4.7 billion of the $5.8 billion total) has been transferred
to the Food and Nutrition Service to help pay for child nutrition programs, and
another $75 million was transferred to the Commerce Department to pay for fisheries
activities. Much the remainder is available to AMS to cover a variety of obligations,
including: planned and “emergency” farm commodity purchases, which in turn are
used to supplement the resources of domestic feeding programs; AMS administrative
expenses for marketing order oversight; and other activities.
There was widespread concern that there might not be adequate funds for these
various activities – particularly the “emergency” commodity purchases that arise
during the course of the fiscal year – after the Department said in the fall of 2002 that
it would use Section 32 funds to pay up to $937 million for a special livestock
disaster assistance program. Department officials subsequently reported that they had
made a number of adjustments in other USDA spending accounts for FY2003 that,
they said, would enable them to cover both the disaster program and the other, more
“traditional” Section 32 activities. Furthermore, a provision (Section 204) of the
agricultural disaster assistance title (Title II) of the FY2003 omnibus appropriations
act requires the Secretary of Agriculture to transfer $250 million from the CCC to
Section 32 “to carry out emergency surplus removal of agricultural commodities.”
Separately, a general provision (section 720) in the regular agriculture appropriations
section of P.L. 108-7 prohibits the “reprogramming” of any funds provided in the act
from one program to another, unless the House and Senate Appropriations
Committees are notified 15 days in advance of such reprogramming. (For more


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

background on Section 32, see CRS Report RS20235, Farm and Food Support
Under USDA’s Section 32 Program.)
Grain Inspection, Packers, and Stockyards Administration. GIPSA
establishes the official U.S. standards, inspection and grading for grain and other
commodities, and ensures fair-trading practices. GIPSA also has been seeking to
improve its understanding and oversight of livestock markets, where increasing
concentration and other changes in business relationships have raised concerns
among some producers about the impacts on competition and on the prices they
receive. P.L. 108-7 provides $39.95 million for GIPSA in FY2003 instead of $44.7
million as proposed by the House and $44.5 million as proposed by the Senate. The
Administration had requested $12.2 million for GIPSA in FY2003, down $20.9
million from the $33 million provided in FY2002. To cover the shortfall, the
Administration had included a proposed increase of $29 million in new user fees,
which if enacted would have been used to fund Packers and Stockyards Act
inspections, and grain standard testing activities. P.L. 108-7 does not assume
adoption of such user fees. The final law does include language, as proposed by the
House, directing the Secretary to conduct a 2-year study on packer ownership of
livestock ($4.5 million). For more information, see CRS Issue Brief IB10063,
Animal Agriculture Issues in the 107th Congress.
Rural Development
USDA’s rural development mission is to enhance rural communities by
targeting financial and technical resources in areas of greatest need. Three agencies,
established by the Agricultural Reorganization Act of 1994 (P.L.103-354), are
responsible for this mission area: the Rural Housing Service (RHS), the Rural
Business-Cooperative Service (RBS), and the Rural Utilities Service (RUS). An
Office of Community Development provides community development support
through Rural Development’s field offices. The mission area also administers the
rural portion of the Empowerment Zones and Enterprise Communities Initiative and
the National Rural Development Partnership.
The FY2003 omnibus appropriations act (P.L. 108-7) provides $2.795 billion
in budget authority for rural economic and community development programs, which
is between the $2.739 billion recommended in the Senate-passed measure (H.J.Res.
2) and $2.823 billion in the House-reported measure. The Administration’s budget
request was $2.587 billion. The FY2003 enacted level is $225.3 million more than
was enacted for FY2002 (including a rescission). It supports a loan authorization
level of $12 billion in direct and guaranteed rural development loans, considerably
higher than the budget request of $7.251 billion. Accounting for most of the
difference between P.L. 108-7 and the request is the additional loan authority in P.L.

108-7 for unsubsidized guaranteed housing loans and electric utility loans. The


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

House proposed a loan authorization level of $9.677 billion, and the Senate proposed
a level of $9.857 billion.
Rural Community Advancement Program (RCAP). The RCAP,
authorized by the 1996 farm bill (P.L.104-127), consists of consolidated funding for
12 rural development loan and grant programs in three accounts: Community
Facilities, Rural Utilities, and Business and Cooperative Development. RCAP was
designed to provide greater flexibility in targeting financial assistance to local needs
and permits a portion of the various accounts’ funds to be shifted from one funding
stream to another. P.L. 108-7 provides $907.7 million in budget authority for the
three RCAP accounts, $42.6 million less than proposed by the House, $40.5 million
more than proposed by the Senate, and $116.2 million more than the Administration
request.
P.L. 108-7 provides funding of $96.8 million for the Community Facilities
account, over twice the level recommended by the House and just slightly less than
the amount proposed by the Senate. For the Rural Utilities account, it provides
$723.2 million, $40.4 less than the Senate and about $92 million less than the House
measure. P.L. 108-7 provides $87.7 million for the Rural Business Development
account, $5.7 million less than the House proposal and approximately $1 million less
than the Senate measure. The majority of the RCAP authorization supports water
and waste disposal grants in the Rural Utilities account. Within that account, P.L.
108-7 also earmarks $18.3 million for technical assistance grants for rural water and
waste systems and adopts House and Senate recommendations for $12.1 million for
the circuit rider program. The House measure contained a provision for $17.5
million in technical assistance for water and waste water, but the Senate measure had
no similar provision.
As with both the House-reported bill and Senate-passed measure, P.L. 108-7
also earmarks $30 million of RCAP funding for water and waste disposal programs
in Alaskan native villages, $24 million for Federally Recognized Native American
Tribes, $2 million for the Delta Regional Authority, and $25 million for colonias
along the U.S.-Mexican border. Funding for the colonias is $5 million more than
proposed by the Senate and the same as that proposed by the House. P.L. 108-7 also
includes Senate language providing $30 million for grants to rural communities with
high-energy costs and $25 million for facilities in rural communities suffering
extreme unemployment and severe economic depression. The House measure did
not contain these latter two provisions.
P.L. 108-7 also designates $7 million for the Rural Community Development
Initiative, $1 million of which is provided to a demonstration program for
Replicating and Creating Rural Cooperative Home Based Health Care. The House
and Senate measures proposed $6 and $10 million respectively for the Initiative. P.L.

108-7 adopts language from the House measure designating $37.6 million for the


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

Empowerment Zones/Enterprise Communities (EZ/ECs) and areas designated as
Rural Economic Area Partnerships (REAP) Zones. The Administration’s budget did
not request direct EZ/EC funding, and the Senate measure did not designate funding
to the program.
Rural Housing Service. P.L. 108-7 provides a total appropriations of $305.5
million for the Rural Housing Insurance Fund Program account instead of $303.6
million proposed by the House and $282.5 million proposed by the Senate. The
appropriation supports a total rural housing loan authorization level of $5.8 billion,
which is greater than the $3.9 billion proposed by the Senate and requested by the
Administration, and the $4.5 billion proposed by the House. P.L. 108-7 permits $5.5
billion for Section 502 direct and guaranteed loans, $35 million for Section 504
housing repair loans, $5 million for Section 524 site loans, $12 million for credit
sales of acquired land, and $5 million for Section 523 self-help housing and land
development loans. Other than the increase for Section 502 loan level, P.L.108-7
concurs with the Senate’s proposed funding levels. It also provides $100 million in
Section 538 multi-family loan guarantees and $4.5 in loan subsidies, as proposed by
the House measure and budget request. The Senate measure did not recommend any
loan authority for Section 538 multi-family housing guarantees. The budget request
for Section 538 housing guarantees was $100 million, approximately the same as the
House proposal.
P.L.108-7 provides $202 million in direct loan subsidies for Section 502 single
family housing, about $17 more than the budget request and $8 million more than the
Senate measure proposed. The House measure proposed $210 million for Section
502 loans. P.L. 108-7 provides $115 million in loan authorization for Section 515
housing, nearly double the budget request and $4.2 million less than the House
proposal. The Senate proposed $120 million for Section 515 rental housing.
P.L.108-7 further provides $54 million in direct loan subsidies for Section 515 rental
housing, the same as proposed by the House, but nearly double the budget request.
P.L. 108-7 also adopted Senate language that permits loans for new construction
of Section 515 housing. The Administration had requested that there be no new
construction of Section 515 rental housing. P.L. 108-7 also adopts Senate language
stating that a priority should be placed on long-term rehabilitation needs in the multi-
family housing portfolio and encourages the Department to study Section 515 costs
in comparison to other federal programs serving the same eligible rural population.
For Section 504 housing repairs, P.L. 108-7 provides $10.8 million, the same as the
House and Senate measures and the budget request.
For Section 521 rental assistance, P.L. 108-7 provides $726 million, $4 million
more than the House bill and $4 million less than proposed by the Senate measure.
P.L. 108-7 provides $36.3 million for the Farm Labor Program grants and direct
loans, instead of $38 million proposed by the House and $34.6 million provided by


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

the Senate measure and requested by the Administration. For rural housing
assistance grants, the Conference Agreement concurs with the House bill and the
Administration request by providing $42.5 million. P.L. 108-7 adopts the House and
Senate proposals for $35 million for the mutual and self-help housing grants, $1
million more than requested. It also earmarks $11.6 million in rural housing loans
until June 2003 for empowerment zones, enterprise communities, and REAP Zones.
Rural Utilities Service. P.L. 108-7 provides a total subsidy of $12.5 million
for programs under the Rural Electrification and Telecommunications Loan Program,
the same as proposed in House and Senate measures and the budget request. The
Agreement provides for an estimated loan authorization level of $5.6 billion as
proposed by the Senate instead of $4.5 billion proposed by the House. The loan
authorization is nearly $2.4 billion more than requested. Part of the loan
authorization also includes $1 billion for guaranteed underwriting of credit payments
under Section 313A of the Rural Electrification Act of 1936. (7 U.S.C. 940(c)), as
proposed by the Senate measure.
For the Rural Telephone Bank (RTB), P.L. 108-7 adopts the Senate measure’s
proposed loan level of $174.6 million, $23 million less than the House proposal.
There was no Administration request.
In other RUS programs, P.L. 108-7 provides loan subsidies and grants of $56.9
million for the Distance Learning and Telemedicine program, instead of $44.1
million as proposed by the House and $51.9 as proposed by the Senate. P.L. 108-7
adopts the House proposed loan authorization level of $380 million. The Senate
proposal was for $129.5 million and the budget request was for $156.5 million. As
proposed by both House and Senate measures, P.L. 108-7 provides no funding for the
Local Television Loan Guarantee program. Direct authorization of $80 million for
local television broadcast loan guarantees is included in the 2002 farm bill (P.L.107-

171).


Rural Business-Cooperative Service. P.L. 108-7 provides $19.3 million
in loan subsidies to support $40 million in loan authorization for the Rural
Development Loan Fund. These amounts are the same as the House and Senate
measure and the same as requested. Earmarks make portions of this account
available to Federally Recognized Native American Tribes, EZ/ECs, and Mississippi
Delta counties. Rural Cooperative Development Grants are funded at $9 million, the
same as proposed by House and Senate measures and as requested by the
Administration. P.L. 108-7 also adopts both House and Senate proposals for $15
million to EZ/EC areas. The Administration requested no direct funding for the
EZ/EC program.
Other Spending Provisions. As in both the House and Senate measures,
P.L. 108-7 provides no funding for the National Rural Development Partnership,


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

which was authorized in the 2002 farm bill. It also concurs with the Senate -passed
measure in prohibiting the expenditure of funds to carry out the following two
mandatory programs authorized by the 2002 farm bill (P.L.107-171): (1) the Rural
Strategic Investment Program (authorized at $100 million), and (2) the Rural
Firefighters and Emergency Personnel Training Program (authorized at $10 million).
The House-reported bill did not contain any provisions to limit or prohibit funding
for any mandatory rural development program.
Food and Nutrition
The FY2003 omnibus appropriations act (P.L. 108-7) provides a total
appropriation of $41.89 billion for all USDA food and nutrition programs. These
programs provide federal funding and commodities to states for food assistance to
children in schools and other children’s facilities, and for low-income individuals and
families. The FY2003 appropriation is $21 million above the original Administration
request, but $79 million below the House-reported level in H.R. 5263, and $34
million below the Senate-passed level in H.J.Res. 2.
Food Stamps. P.L. 108-7 provides $26.313 billion for food stamps and
related programs. This includes food stamp program expenses, a reserve fund,
nutrition assistance for Puerto Rico and Samoa and funding to buy commodities for
the emergency food assistance program (TEFAP). The enacted FY2003 level is the
same as the House-reported level, and is $24 million more than the Senate-passed
level, $64 million more than the Administration request, and $3.25 billion more than
FY2002. The House and Senate measures and the Administration request were in
agreement on the amounts for food stamp expenses and the food distribution program
on Indian Reservations (FDPIR) ($22.773 billion) and the food stamp reserve ($2.0
billion). For other related programs, P.L. 108-7 provides $1.401 billion for Puerto
Rico and American Samoa as proposed by the House, instead of $1.377 billion as
requested by the Administration and proposed by the Senate. According to the House
committee report, this is because of additional mandatory spending required for these
programs under the 2002 farm bill (P.L. 107-171). P.L. 108-7 also provides $140
million for the emergency food assistance program, as proposed by both the House
and Senate, rather than the FY2003 request and FY2002 enacted level of $100
million.
The Administration budget anticipated food stamp participation growth of about
800,000 in FY2003, or about 4% above FY2002 for a total of 20.6 million persons
in FY2003. Conference report language allows up to $10 million of the TEFAP funds
to be used for administrative costs.
Child Nutrition. For all child nutrition programs, P.L. 108-7 provides $10.580
billion, the same as the Senate-passed level and $4 million above the House-reported
level and the Administration request. The difference is an additional $4 million in


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

discretionary spending for – school breakfast program start-up grants ($3 million),
the Food Works of Vermont Common Roots program ($200,000), and an archive
resource center at the National Food Service Management Institute ($500,000). The
funding levels projected by the Administration for meal service programs are
expected to maintain full program participation. Independent verification of school
food service claims, proposed by both the House and Senate measures, is funded in
the finally enacted measure at $5.08 million.
WIC. P.L. 108-7 provides for a total FY2003 appropriation of $4.696 billion
for the special nutrition program for women, infants and children (WIC), which is
$289 million more than the FY2002 level of $4.462 billion (including
supplementals), $55 million less than was recommended by the Senate bill, and
$180 million less than recommended by the House bill. The final amount includes
a reserve fund of $125 million, as recommended by the Administration. (WIC is the
only discretionary account that is exempted from the provision in P.L. 108-7 that
requires a .65% across-the-board-cut in other discretionary program spending to
keep the omnibus measure within budget targets.) The Administration request was
projected to be able to serve a monthly average of 7.8 million low-income pregnant
and postpartum mothers and young children. The Administration revised its original
WIC proposal, recommending that $25 million be taken its previous proposed $150
million reserve fund in order to help offset proposed increases in spending for
conservation technical assistance and EEOC salaries and expenses. Administration
officials report that this reserve will not be needed and therefore no loss occurs to the
program for this change. WIC reserve funds are provided in case costs to maintain
caseload are higher than projected.
Commodity Assistance Program. P.L. 108-7 provides FY2003 funding
of $164.5 million for the Commodity Assistance Program (the term used by
appropriators to refer to the Commodity Supplemental Food Program (CSFP) and for
administrative funds for the TEFAP). This appropriation is $19.5 million more than
requested and $15 million above FY2002, but $5.5 million less than the House bill
and $2.5 below the Senate measure. The House Appropriations Committee
recommended that all of its proposed increase go for the CSFP; EFAP
administrative costs would have remained at the FY2002 level of $50 million. The
Senate measure proposed $167 million, less than the House level, and required that
$5 million of the amount provided be used for senior farmers’ market activities.
Food Donation Programs. No FY2003 funding is provided in USDA
appropriations for the elderly nutrition program (or nutrition services incentive
program), a food donation program that provides mostly cash-in-lieu of commodities
to support meal programs for senior citizens. P.L. 108-7 concurs with an
Administration proposal to merge this program with the larger meal programs
operated for senior citizens under the Older Americans Act by the Department of
Health and Human Services. FY2002 funding for the elderly nutrition program was


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

$149.7 million. Pacific Island and Disaster Assistance (the Needy Family Program)
will continue to be funded at $1.081 million under P.L. 108-7, in concurrence with
the Administration request and both the House and Senate proposals.
Other Provisions. P.L. 108-7 adopted a House provision that prohibits the
use of any child nutrition, WIC, or food stamp funds from being used by the Food
and Nutrition Service (FNS) to conduct studies or evaluations, with some exceptions.
In its general provisions, P.L. 108-7 funds the Bill Emerson and Mickey Leland
Hunger Fellowships at $3 million, compared with $4 million in the House bill and
$2.5 million in the Senate measure. Senate provisions earmarking $1 million of the
$3.3 million school breakfast start-up grant program for Wisconsin and setting aside
$200,000 for a Common Roots program also were adopted in the final measure.
Food and Drug Administration
The Food and Drug Administration (FDA), an agency in the Department of
Health and Human Services (DHHS), is responsible for the regulation and safety of
foods, drugs, biologics (mainly vaccines), and medical devices. The agency is
funded by a combination of congressional appropriations and user fee revenues,
assessed primarily for the pre-market review of pharmaceuticals and medical device
products. The amount of drug user fees to be collected each year is set in FDA’s
annual appropriations act. The FY2003 omnibus appropriations act (P.L. 108-7)
provides $1.661 billion to fund FDA for FY2003. This amount includes a total
appropriation of $1.391 billion (including $1.383 billion for salaries and expenses
and $8 million for the maintenance of buildings and facilities. The balance of $270.5
million is for various user fee collections. By comparison, the House-reported bill
(H.R. 5263), including salaries and expenses, drug user fees, and facilities came to
$1.608 billion. The Senate omnibus measure (H.J.Res. 2) , which also added
revenues from a new medical device user fees, provided $1.665 billion.
The Prescription Drug User Fee Act (PDUFA), reauthorized in 2002 as part of
the Public Health Security and Bioterrorism Preparedness and Response Act of 2002
(P.L. 107-188), allows FDA to collect user fees for the review of drug and biologic
applications. P.L. 108-7 set these fees at $222.9 million for FY2003. Also, the new
Medical Device User Fee and Modernization Act (MDUFA) of 2002 (P.L. 107-250),
signed by the President in October 2002, authorized FDA to charge user fees for
medical device applications as well. P.L. 108-7 set the FY2003 user fee assessments
for medical devices at $25.1 million. The agency also collects user fees from
mammography clinics and export certificates, and P.L. 108-7 set their FY2003 total
at $22.5 million.


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

For FDA counter-terrorism activities, the conference report mirrors the
President’s FY2003 budget request, and provides $159 million to continue activities
initiated by the agency during the previous year relating to the safety of food,
pharmaceutical products, and physical security.
Conferees also provided FY2003 funding for a number of specific budget
categories. For instance, conferees provided $3 million to continue support for the
Office of Women’s Health and directed the agency to provide concise information
to women and health professionals about hormone replacement therapy. Moreover,
the conferees urged the FDA to work with physicians, women’s health groups, and
federal agencies to conduct a public awareness campaign about the use of hormone
therapy, including the treatment of menopausal symptoms. The conference
agreement provided $5 million to support the agency’s adverse event monitoring
system (AERS), along with $8.3 million to upgrade its financial management system.
Also, the conferees prohibited FDA from relocating its Offices of Public Affairs and
Legislative Affairs to the Department of Health and Human Services.
Food Issues
P.L. 108-7 funded a number of initiatives related to food safety. It provided a
$1 million increase for the FDA’s Center for Food Safety & Applied Nutrition’s
Adverse Event Reporting System (CAERS), to ensure prompt identification of and
response to adverse health events related to foods, including dietary supplements.
It also provided $250,000 for the development of advanced testing methods for foods
at New Mexico State University. Acknowledging FDA’s role in international trade
issues, the conferees stipulated that the agency spend at least $2.1 million of
appropriated funds to support activities of the Codex Alimentarious Commission, the
international food standard setting organization.
Drug Issues
The House and Senate have, for years, recognized that the timely approval of
generic drugs is an important factor in addressing the rising cost of prescription
drugs. To this end, the adopted conference agreement provided $44.5 million, an
increase of $5.3 million over the FY2002 baseline level of $39.2 million, and
$750,000 more than the Administration’s budget request. Further, the conferees
recommended that FDA spend no less than $400,000 to continue its generic drug
education activities, particularly for increased consumer education. Conferees also
provided $5 million for the agency’s Office of Drug Safety to continue post-
marketing surveillance for pharmaceuticals. Moreover, the conferees said that print
advertisements for pharmaceuticals should provide information relating to the side
effects, contraindications, and effectiveness in a format that is useful to consumers
consistent with existing law, and encouraged the agency to work with consumers and


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

industry as it moves towards finalizing its April 2001 draft guidance on print
advertising for pharmaceuticals. Additionally, the conference agreement stipulated
that FDA is to spend no less than $13.4 million for grants and contracts under the
Orphan Drug Act.
Medical Device Issues
The conferees were concerned about delays in review of new medical devices
and the impact this was having on the health of Americans. Last year, in the FY2002
appropriations conference report, Congress directed FDA to upgrade its medical
device review performance, compared to the 180-day statutory requirements for
application decisions. Today, applications for medical devices are often for
combination products that involve consultation with FDA’s Center for Biologics
Evaluation and Research (CBER). The conference agreement makes $25.1 million
in new medical device user fees available for the agency, as proposed by the Senate.
This provision was not in the House bill, since it preceded passage of the authorizing
legislation. As such, the device program including user fees is $208.7 million, a
$29.2 million increase over the FY2002 regular appropriations. The conferees
expected that this investment will significantly reduce review times for medical
devices.
The conferees noted that DHHS is currently working to ensure that health care
providers and first responders are vaccinated in the event of a public health
emergency. Recognizing that a small percentage of health care workers are allergic
to natural rubber, the conferees urged the Secretary to ensure that alternatives are
readily accessible to individuals who are allergic to the gloves normally provided.
Also, the conferees urged the FDA to finalize its 1999 proposed regulations to
classify all surgeons’ and patient examining gloves as Class II medical devices.
Biologics Issues
The conference report noted that FDA had not finalized its proposed rule to
require manufacturer tracking of blood-derived products and prompt patient
notification of adverse events. As such, they directed the FDA to submit a report on
the status of the rule by March 1, 2003.


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

Table 3. USDA and Related Agencies Appropriations for FY2003
(Budget Authority, in Millions of $)
FY2003
FY2003FY2003 HouseSenate-
F Y 2002 Adm i ni - Comm. P assed F Y 2003
Agency or Major ProgramEnactedstrationBillOmnibus Enacted
(1) Request (H.R. (H.J.Res. (4)
(2)5263)2)
(3)
Title I — Agricultural Programs
Agric. Research Service (ARS)
Regular Appropriation 1,098.5988.01,097.51,154.61,172.3
Supplemental Appropriations138.00000
Coop. State Research Education and1,027.61,020.61,070.51,155.91,124.5
Extension Service (CSREES)
Economic Research Service (ERS)67.279.273.365.169.1
National Agricultural Statistics Service113.8143.7137.9140.9139.4
(NASS)
Animal Plant Health and Inspection
Service (APHIS)
Regular Appropriation627.7775.3749.1748.9735.5
Supplemental Appropriation119.10000
Agric. Marketing Service (AMS)86.891.792.091.792.0
Grain Inspection , Packers and33.112.244.744.540.0
Stockyards Admin. (GIPSA)(5)
Food Safety and Insp. Serv (FSIS)
Regular Appropriation715.6763.0755.8759.8759.8
Supplemental Appropriation 15.0000
Farm Service Agency (FSA) Salaries and939.0993.6976.7986.9976.7
Expenses
FSA Farm Loans - Subsidy Level 187.6212.1212.1243.8228.3
*Farm Loan Authorization3,890.73,802.03,802.04,065.73,937.0
FSA Farm Loans- Salaries and280.6287.2287.2287.2287.2
Administrative Expenses
Emergency Conservation Program048.7000
Risk Management Agency (RMA)74.7572.870.770.770.7
Salaries and Expenses
Federal Crop Insur. Corp. Fund (6)2,900.02,886.02,886.02,886.02,886.0


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

FY2003
FY2003FY2003 HouseSenate-
F Y 2002 Adm i ni - Comm. P assed F Y 2003
Agency or Major ProgramEnactedstrationBillOmnibus Enacted
(1) Request (H.R. (H.J.Res. (4)
(2)5263)2)
(3)
Commodity Credit Corp. (CCC) (6)20,279.016,285.016,285.016,285.016,285.0
Other :
Regular Appropriation478.5541.0642.7600.5579.2
Supplemental Appropriation 80.9 0000
Total, Agricultural Programs
Regular Appropriation 28,899.725,197.025,373.425,521.525,445.7
Supplemental Appropriations353.00000
Title II — Conservation Programs
Conservation Operations779.0841.0843.6840.0825.0
Watershed Surveys and Planning11.0011.211.011.2
Watershed & Flood Prevention
Regular Appropriation106.60110.0105.0110.0
Supplemental Appropriation94.00000
Watershed Rehabilitation Program10.00030.030.0
Emergency Watershed Protection0110.0000.0
Resource Conservation & Developm.48.049.155.150.051.0
Forestry Incentives Program6.80000
Total, Conservation
Regular Appropriation962.11,000.91,020.61,036.91,028.0
Supplemental Appropriation94.00000
Title III — Rural Development
Rural Community Advancement806.6791.5950.3867.2907.7
Program (RCAP)
Salaries and Expenses133.7145.7145.7127.5145.7
Rural Housing Service (RHS)1,474.51,528.51,576.01,585.31,577.7
* RHS Loan Authority4,485.83,924.34,551.53,932.25,844.9
Rural Business Cooperative Serv.46.635.850.750.850.7
* RBCS Loan Authority53.155.055.055.055.0


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

FY2003
FY2003FY2003 HouseSenate-
F Y 2002 Adm i ni - Comm. P assed F Y 2003
Agency or Major ProgramEnactedstrationBillOmnibus Enacted
(1) Request (H.R. (H.J.Res. (4)
(2)5263)2)
(3)
Rural Utilities Service (RUS)
Regular Appropriation120.084.699.9107.9112.7
Rescission (12.0) 0 0 0 0
* RUS Loan Authority5,378.63,272.65,070.75,870.36,120.7
Total, Rural Development
Regular Appropriation2,581.92,587.12,823.32,739.52,795.2
Rescission -12.0 0 0 0 0
* Rural Development, Total Loan9,917.67,251.99,677.29,857.412,020.6
Authority
Title IV — Domestic Food Programs
Child Nutrition Programs10,087.210,576.210,576.210,580.210,580.2
WIC Program
Regular Appropriation (7)4,348.04,751.04,776.04,751.04,696.0
Supplemental Appropriations 114.00000
Food Stamp Program
Regular Appropriation22,992.026,249.726,313.726,289.726,313.7
Re scission -24.0 0
Commodity Assistance Program (8)149.5145.0170.0167.0164.5
Food Donation Programs150.71.11.11.11.1
Food Program Administration127.5148.0134.4136.9136.6
Total, Food Programs
Regular Appropriation37,855.641,871.741,971.941,926.641,892.6
Supplemental Appropriations114.00000
Rescission -24.00000
Title V — Foreign Assistance
Foreign Agric. Service (FAS)121.8131.6130.0131.2129.9
Public Law (P.L.) 480998.71,314.01,357.11,328.41,343.4
CCC Export Loan Salaries4.04.14.14.14.1
Total, Foreign Assistance1,124.51,449.71,491.11,964.41,477.4
Title VI — FDA & Related Agencies


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

FY2003
FY2003FY2003 HouseSenate-
F Y 2002 Adm i ni - Comm. P assed F Y 2003
Agency or Major ProgramEnactedstrationBillOmnibus Enacted
(1) Request (H.R. (H.J.Res. (4)
(2)5263)2)
(3)
Food and Drug Administration
Regular Appropriation1,218.01,377.41,384.71,394.51,390.7
Supplemental Appropriation151.10000
Commodity Futures Trading
Commission (CFTC)
Regular Appropriation70.746.980.094.086.0
Supplemental Appropriation16.90000
Total, FDA & CFTC
Regular Appropriations1,288.71,424.31,464.61,488.51,476.7
Supplemental Appropriations168.00000
Title VII – General Provisions (9)-327.10118.2524.5275.5
Total, before adjustments: 73,530.5
Regular Appropriations72,590.7074,268.174,701.174,391.1
Supplemental Appropriations535.00000
Rescissions -47.3 73,530.5 -5 0 0
Grand Total73,078.474,263.174,701.174,391.1
CBO Scorekeeping Adjustments (10)108.4531.842.8-329.8-141.2
Grand Total, Including CBO
Scorekeeping Adjustments and73,186.874,062.474,305.975,030.974,249.9
Emergency Spending
Addendum:
Division N, Title II (P.L. 108-7)
Disaster Assistance Provisions (11)0003,100.03,084.0
Source: Based on spreadsheets provided by the House Appropriations Committee
An item with a single asterisk (*) represents the total amount of direct and guaranteed loans that can be made given the
requested or appropriated loan subsidy level. Only the subsidy level is included in the totals.
*** = Action Pending
(1) FY2002 enacted levels include amounts appropriated in the regular FY2002 agriculture appropriations act for USDA
and related agencies (P.L. 107-76), the $535 million in emergency supplemental funding in P.L. 107-117, and the $158
million in net non-contingent appropriations (after $44 million in rescissions) made in P.L. 107-206.
(2) Agency totals do not include the cost of the Administrations legislative proposal to require all federal agencies to
pay the full share of accruing employee pensions and annuitant health benefits beginning in FY2003. However, the


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

CBO-estimated cost of this proposal ($368 million in FY2003 for USDA, FDA, and CFTC) is included at the end of the
table in the scorekeeping adjustments of the FY2003 request.
(3) H.J.Res. 2, as passed by the Senate, includes an estimated across-the-board 2.9% rescission in all discretionary
accounts in the resolution. To date, it is not certain how the rescission would affect individual accounts. Therefore, this
table does not reflect the rescission on USDA and related agency programs and accounts. Recorded in this column are
the two adopted floor amendments that affect USDA spending : $3.1billion in disaster assistance and $500 million in
P.L. 480 international food aid.
(4) P.L. 108-7 includes a 0.65% across-the-board cut of all discretionary accounts funded by the omnibus FY2003
appropriations act, with the exception of the WIC program, which is specifically exempted. This table does not reflect
the effect of the 0.65% rescission on individual accounts, nor does the total reflect the rescission. If the rescission were
applied equally to all accounts, total reductions in spending to USDA and related agencies would be approximately $85
million.
(4) The Administrations request assumes enactment of new inspection and licensing user fees totaling
$29 million.
(5) Under current law, the Commodity Credit Corporation and the Federal Crop Insurance Fund each receive annually
an indefinite appropriation (“such sums, as may be necessary”). The amounts shown for both FY2002 and FY2003 are
USDA estimates of the necessary appropriations.
(6)The Administration request does not include a January 2003 budget amendment to reduce the WIC reserve request
by $25 million in FY2003, from the original requested amount.
(7) Includes an adopted $3.3 million rescission in the FY2002 enacted level.
(8) Among the enacted FY2002 “general provisions” are $75 million in apple market loss assistance, and an extension
of the authority for the dairy price support program for 5 months (scored by CBO at $15 million). The enacted other
provisions for FY2003 include $250 million in emergency foreign food assistance through P.L. 480 Title II (compared
with $500 million in the Senate-passed version.)
(9) Scorekeeping adjustments reflect the savings or cost of provisions that affect mandatory programs, plus the
permanent annual appropriation made to USDAs Section 32 program. The cost of the Administration proposal to
require all federal agencies to pay the full share of current employee pensions and annuitant health costs is also included
in the scorekeeping adjustments of the FY2003 Administration request. Appropriators included in FY2003 House and
enacted scorekeeping adjustments the savings attributed to limiting expenditures on the Export Enhancement Program.
Similar savings in FY2002 were included ingeneral provisions” by appropriators.
(10) P.L. 108-7 includes $3.1 billion in farm disaster assistance for 2000 and 2001 crop livestock losses. The cost of
this assistance in the final law was offset by a limitation placed on mandatory spending for the Conservation Security
Program over a ten-year period (FY2004-2013). This supplemental spending does not appear in the grand total listed
above.
For Additional Reading
CRS Issue Brief IB98006. Agricultural Export and Food Aid Programs.
CRS Report 98-325. Agricultural Research, Education, Extension and Economics
Programs: A Primer.


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.

CRS Issue Brief IB10077. Agricultural Trade Issues in the 107th Congress.
CRS Issue Brief IB10063, Animal Agriculture Issues in the 107th Congress
CRS Report 98-25. Child Nutrition Programs: Background and Funding.
CRS Report RL31095. Emergency Spending for Agriculture: A Brief History of
Congressional Action, FY1989-2001.
CRS Report RS20235, Farm and Food Support Under USDA’s Section 32 Program
CRS Report RS21212. Farm Disaster Assistance.
CRS Report RL30739. Federal Crop Insurance and the Agriculture Risk Protection
Act of 2000 (P.L. 106-224).
CRS Report 98-59. Food Stamps: Background and Funding.
CRS Report RL31466, Homeland Security Department: U.S. Department of
Agriculture Issues.
CRS Report RL31486, Resource Conservation Title of the 2002 Farm Bill: A
Comparison of New Law with Bills Passed by the House and Senate, and Prior
Law
CRS Issue Brief IB96030. Soil and Water Conservation Issues.


Note: Both the conference agreement on the FY2003 omnibus appropriations act (P.L. 108-7,
H.J.Res. 2) and the Senate-passed version of H.J.Res. 2 contained an across-the-board rescission
of discretionary accounts in the measure, to offset the cost of various provisions. Figures in this
report do not include the effect of the 0.65% rescission in the final law (which exempted the WIC
program from the rescission), nor the CBO-estimated 2.85% rescission in the Senate-passed version
of H.J.Res. 2. The effect of the rescissions on individual accounts currently is unavailable.