Appropriations for FY2004: U.S. Department of Agriculture and Related Agencies

CRS Report for Congress
Appropriations for FY2004:
U.S. Department of Agriculture
and Related Agencies
Updated February 5, 2004
Ralph M. Chite, Coordinator
Specialist in Agricultural Policy
Resources, Science, and Industry Division

Congressional Research Service ˜ The Library of Congress

The annual consideration of appropriations bills (regular, continuing, and
supplemental) by Congress is part of a complex set of budget processes that also
encompasses the consideration of budget resolutions, revenue and debt-limit
legislation, other spending measures, and reconciliation bills. In addition, the
operation of programs and the spending of appropriated funds are subject to
constraints established in authorizing statutes. Congressional action on the budget
for a fiscal year usually begins following the submission of the President's budget at
the beginning of the session. Congressional practices governing the consideration
of appropriations and other budgetary measures are rooted in the Constitution, the
standing rules of the House and Senate, and statutes, such as the Congressional
Budget and Impoundment Control Act of 1974.
This report is a guide to one of the 13 regular appropriations bills that Congress
considers each year. It is designed to supplement the information provided by the
House and Senate Appropriations Subcommittees on Agriculture. It summarizes the
status of the bill, its scope, major issues, funding levels, and related congressional
activity, and is updated as events warrant. 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/ appropri ati ons/apppage.shtml ].

Appropriations for FY2004: U.S. Department of
Agriculture and Related Agencies
Summary
On January 23, 2004, the President signed into law an FY2004 consolidated
appropriations measure (P.L. 108-199, H.R. 2673) that includes annual funding for
the U.S. Department of Agriculture and Related Agencies. The full House approved
the conference agreement of the measure on December 8, 2003. Senate floor action
on the conference agreement was delayed for several weeks until a cloture motion
was approved and the conference agreement was adopted on January 22, 2004. Part
of the reason for the delay in Senate consideration of the measure was opposition to
a conference-adopted provision that postpones implementation of country-of-origin
labeling (COOL) for fresh fruits and vegetables, and red meats, for two years, until
September 30, 2006. Until enactment of P.L. 108-199, FY2004 spending for USDA
and related agencies had been governed by several continuing resolutions (most
recently P.L. 108-135, H.J.Res. 79), which allowed FY2004 spending to continue at
the FY2003 level.
The FY2004 consolidated appropriations act contains $80.63 billion for USDA
and related agencies for FY2004 (excluding the effects of a 0.59% across-the-board
rescission in all discretionary, non-defense accounts, as required by the final law). As
originally reported by their respective committees, H.R. 2673 and S. 1427 contained
nearly identical appropriations of $77.49 billion. However, the Senate added $2.2
billion to the mandatory food stamp account to reflect more recent projections of
program participation, and conferees added $1 billion to the food stamp reserve
account. Just over three-fourths ($63.7 billion) of the spending in the agriculture
portion (Division A) of P.L. 108-199 is classified as mandatory spending, including
food stamps, child nutrition programs, crop insurance, and the various farm support
programs funded through USDA’s Commodity Credit Corporation.
The balance of spending ($16.9 billion) in Division A is for discretionary
programs, which is $198 million below the Administration’s request and $61 million
below both the House- and Senate-passed levels. Discretionary spending in Division
A of the measure is $963 million below the FY2003 enacted level including
supplementals. Agriculture appropriators were allocated nearly $1 billion less for
FY2004 discretionary accounts than the FY2003 level including supplementals. To
help achieve this goal, P.L. 108-199 includes an FY2004 appropriation for foreign
food aid that is $572 million below the FY2003 level (which was bolstered by
supplemental spending). Also, P.L. 108-199 contains provisions that limit or prohibit
spending on certain mandatory conservation, rural development, and research
programs, which in total reduced spending in these accounts by approximately $650
million from authorized levels.
The measure did not include a Senate provision that would have relaxed the
licensing requirement for travel to Cuba for the sale of agricultural and medical
products. Conferees also rejected a House provision that would have blocked FDA
from preventing individuals from importing cheaper FDA-approved prescription
drugs from foreign suppliers.

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
Agricultural Research and Food SafetyJean M. RawsonRSI7-7283
Agricultural Marketing,
Grain Inspection, Packers and Stockyards Geoffrey S. BeckerRSI7-7287
Animal and Plant Health InspectionJames MonkeRSI7-9664
Rural DevelopmentTadlock CowanRSI7-7600
Domestic Food AssistanceJean Yavis JonesRSI7-7331
Joe RichardsonDSP7-7325
Food and Drug AdministrationDonna U. VogtDSP7-7285
Commodity Futures Trading CommissionMark JicklingG&F7-7784
Division abbreviations: RSI = Resources, Science and Industry; DSP = Domestic Social Policy;
G&F = Government and Finance

Contents
Most Recent Developments..........................................1
USDA Spending at a Glance.........................................1
Mandatory vs. Discretionary Spending.............................2
Congressional Action ..............................................4
FY2004 Agriculture Appropriations: Spending Levels and Current Issues.....6
Commodity Credit Corporation...................................6
Dairy Price Support Provision................................7
Crop Insurance ...............................................7
Farm Service Agency...........................................8
FSA Salaries and Expenses..................................9
FSA Farm Loan Programs...................................9
Natural Resources and Environment..............................10
Discretionary Programs....................................10
Mandatory Programs......................................11
Technical Assistance Funding...............................13
Other Provisions.........................................14
Agricultural Trade and Food Aid.................................14
Foreign Agricultural Service................................15
Food Aid...............................................15
Export Programs.........................................16
Other International Provisions...............................18
Cuba Trade..............................................18
Agricultural Research, Extension, and Economics...................18
Agricultural Research Service...............................19
Cooperative State Research, Education, and Extension Service.....20
Economic Research Service (ERS) and National Agricultural Statistics
Service (NASS)......................................21
Food Safety.................................................22
Marketing and Regulatory Programs..............................22
Animal and Plant Health Inspection Service (APHIS)............22
Agricultural Marketing Service..............................24
Grain Inspection, Packers, and Stockyards Administration.........25
Rural Development...........................................27
Reductions in Mandatory Spending and General Provisions........27
Rural Community Advancement Program (RCAP)...............28
Rural Housing Service.....................................29
Rural Utilities Service.....................................30
Rural Business-Cooperative Service..........................31
Food and Nutrition Programs....................................31
Food and Drug Administration (FDA).................................34
User Fees...................................................34
Counterterrorism Activities.....................................35
Unified Financial Management System............................35
Food .......................................................35

Drug Issues..................................................36
Commodity Futures Trading Commission (CFTC).......................37
List of Figures
Figure 1. U.S. Department of Agriculture Gross Outlays, FY2003............2
List of Tables
Table 1. USDA and Related Agencies Appropriations, FY1995 to FY2003....3
Table 2. Congressional Action on FY2004 Appropriations for the U.S. Department
of Agriculture and Related Agencies...............................5
Table 3. USDA and Related Agencies Appropriations,
FY2004 Budget Request, House Bill, Senate Bill and Enacted, vs. FY2003
Enacted ...................................................38

Appropriations for FY2004: U.S. Department
of Agriculture and Related Agencies
Most Recent Developments
On January 22, 2004, the Senate adopted a cloture motion and approved the
conference agreement on the FY2004 consolidated appropriations bill (H. Rept. 108-
401, H.R. 2673). The measure combined six annual appropriations measures with
the spending bill for the U.S. Department of Agriculture (USDA) and Related
Agencies. The President signed the measure into law (P.L. 108-199) on January 23,
2004. Division A of P.L. 108-199 contains $80.6 billion in FY2004 funding for
USDA and related agencies, of which $16.9 billion is for discretionary programs and
$63.7 billion is for mandatory programs.
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 farm programs.
USDA gross outlays for FY2003 were $81.53 billion, including regular and
supplemental spending. The mission area with the largest gross outlays ($41.3
billion or 50% of spending) was for food and nutrition programs — primarily the
food stamp program (the costliest single USDA program), various child nutrition
programs, and the Supplemental Nutrition Program for Women, Infants and Children
(WIC). The second largest mission area in terms of total spending is for farm and
foreign agricultural services, which totaled $24.3 billion, or 30% of all USDA
spending in FY2003. 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: The FY2004 consolidated appropriations act (P.L. 108-199, H.R. 2673) contains a
0.59 percent across-the-board rescission in all discretionary accounts. Enacted FY2004
funding levels in this report do not reflect the effects of this rescission.

Figure 1. U.S. Department of Agriculture Gross Outlays, FY2003
--- Billion $ ---
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Total USDA spending in FY2003 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; it is the only USDA agency not
funded through the annual agriculture appropriations bill.) USDA programs for rural
development ($2.9 billion in gross outlays for FY2002); research and education ($2.4
billion); marketing and regulatory activities ($2.3 billion); meat and poultry
inspection ($735 million); and departmental administrative offices and other
activities ($576 million) accounted 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
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 $17.46
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$74.16
Authority
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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 13

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.
Congressional Action
The agriculture subcommittee of the House Appropriations Committee and the
full House Appropriations Committee completed markup of the FY2004
appropriations bill for USDA and related agencies on June 17, 2003 and June 25,
2003, respectively. The FY2004 House measure (H.R. 2673, H.Rept. 108-193) was
officially reported on July 9, 2003, and approved by the full House on July 14, 2003.
Following the House action, the agriculture subcommittee of the Senate
Appropriations Committee completed markup of its version of the FY2004
agricultural appropriations bill on July 15 and July 17, 2003, respectively, and
reported the measure (S. 1427, S.Rept. 108-107) on July 17. Senate floor action was
completed on November 6, 2003, following the adoption of approximately 49
amendments. The Senate substituted the text of H.R. 2673 with the text of S. 1427
as amended, and then passed H.R. 2673 as amended.
On November 25, 2003, H.R. 2673 became a consolidated appropriations
measure when the conference agreement (H. Rept. 108-401) on H.R. 2673 was filed,
incorporating six other FY2004 appropriations measures with USDA funding. The
full House approved the conference agreement on December 8, 2003. Senate action
was completed on January 22, 2004, when a cloture motion was adopted followed
by Senate passage. The President signed the measure into law (P.L. 108-199) on
January 23, 2004.
Because final action on the FY2004 USDA spending bill (as well as several
other annual appropriations measures) was not completed in time for the beginning
of the fiscal year (October 1, 2003), spending for USDA and related agencies was
governed by several continuing resolutions (most recently P.L. 108-135, which was
in effect until enactment of the consolidated appropriations measure on January 23,
2004.) P.L. 108-135 allowed all departments and agencies for which FY2004
spending bills had not been completed to be funded at the FY2003 level until the
earlier of: enactment of a final spending measure or January 31, 2004.
The enacted consolidated appropriations measure contains $80.63 billion for
USDA and related agencies for FY2004 (excluding the effects of a 0.59% across-
the-board rescission in all discretionary, non-defense accounts, as required in the
final law). As originally reported by their respective committees, H.R. 2673 and S.
1427 contained nearly identical appropriations of $77.49 billion. However, the
Senate added $2.2 billion to the mandatory food stamp account to reflect more recent
projections of program participation, and conferees added $1 billion to the food
stamp reserve account. Just over three-fourths ($63.7 billion) of the spending in the
agriculture portion (Division A) of P.L. 108-199 is classified as mandatory spending,

including food stamps, child nutrition programs, crop insurance, and the various farm
support programs funded through USDA’s Commodity Credit Corporation.
The balance of spending ($16.9 billion) in Division A is for discretionary
programs, which is $198 million below the Administration’s request and $61 million
below both the House- and Senate-passed levels. Discretionary spending in Division
A of the measure is $963 million below the FY2003 enacted level including
supplementals. Agriculture appropriators were allocated nearly $1 billion less for
FY2004 discretionary accounts than the FY2003 level including supplementals. To
help achieve this goal, the conference agreement includes an FY2004 appropriation
for foreign food aid that is $572 million below the FY2003 level (which was
bolstered by supplemental spending). Also, the conference agreement contains
provisions that limit or prohibit spending on certain mandatory conservation, rural
development, and research programs, which in total reduced spending in these
accounts by approximately $650 million from authorized levels.
The measure did not include a Senate provision that would have relaxed the
licensing requirement for travel to Cuba for the sale of agricultural and medical
products. Conferees also rejected a House provision that would have blocked FDA
from preventing individuals from importing cheaper FDA-approved prescription
drugs from foreign suppliers.
Table 2. Congressional Action on FY2004 Appropriations for
the U.S. Department of Agriculture and Related Agencies
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^f^o^{r the}^te^x^t^of^the^H^ous^e^-^pa^s^s^e^{d bill (H}^.R.^2673),^a^nd^theⁿ^a^f^te^r^c^ons^ide^r^ing^f^u^rthe^{r a}^m^e^ndm^eⁿ^ts^{, a}^dopte^d^H^.^R.
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FY2004 Agriculture Appropriations: Spending
Levels and Current Issues
The following sections compare the agriculture provisions of the FY2004
consolidated appropriations act (P.L. 108-199, H.Rept. 108-401) with the House-
passed version of the FY2004 agriculture appropriations bill (H.R. 2673), the Senate-
passed version of the measure (originally reported as S. 1427, but subsequently
amended and substituted as the text for H.R. 2673), the FY2004 Administration
request, and the enacted conference agreement on the FY2003 omnibus
appropriations bill (P.L. 108-7) for various mission areas and agencies within
USDA, and for the Food and Drug Administration and the Commodity Futures
Trading Commission. Also see the table at the end of the report for a tabular
summary.
Commodity Credit Corporation
Most spending for USDA’s mandatory agriculture and conservation programs
was authorized by the 2002 farm bill (P.L. 107-171), and 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 spending for
ongoing programs such as farm commodity price and income support activities and
various conservation, trade, and rural development 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.
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.
As in past years, the Administration requested an indefinite appropriation for the
CCC for FY2004, which the Administration estimated at $17.275 billion, compared
with an estimated indefinite appropriation of $16.285 billion provided in FY2003.
The final FY2004 consolidated appropriations act (P.L. 108-199) and the original
House- and Senate-passed FY2004 agriculture appropriations bills (H.R. 2673) all
concur with this request.

Dairy Price Support Provision. A general provision in the final
consolidated appropriations act requires the Secretary of Agriculture to more
diligently support the farm price of milk at the farm bill-mandated support price of
$9.90 per hundredweight (cwt.). Under the dairy price support program, USDA
indirectly supports the farm price of milk by standing ready to purchase surplus
cheese, butter, and nonfat dry milk from processors at a price that should allow the
processors to pay at least the support price to farmers for the milk used in the
manufacturing of those products. Supporters of this provision argued that the
government purchase prices for surplus dairy products are set too low by USDA to
support the farm price of milk at $9.90 per cwt. Late in 2002 and in early in 2003 the
market price of farm milk used for cheese fell below the $9.90 support price for eight
consecutive months. USDA officials say they are evaluating the situation and point
out that the authorizing statute for the dairy price support program (P.L. 107-171, the
2002 farm bill) requires USDA to set dairy purchase prices so that the annual farm
milk price on average is supported at $9.90, not the monthly price. For more
information on the dairy price support program, see CRS Issue Brief IB97011, Dairy
Policy Issues.
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. Annual spending on the crop insurance program is difficult to predict in
advance and is dependent on weather and crop growing conditions and farmer
participation rates.
The Administration had estimated that the mandatory-funded Federal Crop
Insurance Fund would require an FY2004 appropriation of $3.368 billion, compared
with an estimated FY2003 appropriation of $2.886 billion. As is customary, the final
consolidated appropriations act (P.L. 108-199) concurs with the Administration’s
estimate and provides “such sums as may be necessary” for the fund. Legislative
enhancements (P.L. 106-224) made to the crop insurance program in 2000 greatly
increased the federal subsidy of insurance premiums. The increased subsidy coupled
with large program losses associated with the extended drought in various parts of
the country have contributed to increased program costs in recent years.

For the discretionary component of the crop insurance program, P.L. 108-199
provides $71.42 million, as proposed by the Senate, for the salaries and expenses of
USDA’s Risk Management Agency (RMA). The final FY2004 level is just $87,000
below the original House-passed level, $6.98 million below the Administration’s
request, but up $1.26 million from the FY2003 enacted level of $70.25 million. The
Administration had requested a nearly 12% increase for FY2004, mainly to cover
proposed information technology initiatives within RMA.
The Administration request also had contained a legislative proposal to limit the
amount of subsidy that accrues to the private insurance companies participating in
the program. The House- and Senate-passed versions of the bill, as well as the final
act, do not concur with the Administration proposal. The Administration maintains
that the increased farmer participation in the program following the 2000 legislative
enhancements has resulted in windfall profits for the private insurance companies.
Hence, the FY2004 budget request contained a proposal to cap the reimbursement
that the private companies receive from the federal government for their delivery
expenses at 20% of premium for FY2004 and subsequent years, instead of the current
cap of 24.5%. According to Congressional Budget Office estimates, enactment of
this proposal would have saved $81 million in FY2004. In report language, the
Senate Appropriations Committee stated that the proposed reimbursement limitation
would force some private companies out of business, and that the reimbursement rate
should be negotiated in the standard reinsurance agreement between the private
companies and the federal government, rather than through a legislative mandate.
Separately, the Agricultural Risk Protection Act of 2000 (P.L. 106-224), as
amended by the 2002 farm bill, authorized $20 million in each year (FY2003-2007)
for an Agricultural Management Assistance program, which assists crop growers in
states that are viewed as underserved by the crop insurance program (13 Northeast
states, Utah, and Wyoming.) The final consolidated appropriations act (P.L. 108-199)
concurs with a Senate-passed provision that requires that $15 million of the funds be
used for sharing in the cost of producers’ conservation practices, as prescribed in the
law, and $2 million for certification of organic growers in the states. In FY2003, the
Secretary used virtually all of the $20 million to further subsidize crop insurance
premiums of farmers in these states. Current law allows the funding to be used for
either conservation or risk management practices, but leaves the mix of spending to
the discretion of the Secretary of Agriculture.
Separately, report language in the final conference agreement urges the
Secretary to expand the number of states eligible for a pilot livestock insurance
program from the current 10 states to the maximum number possible, including
Missouri, North Dakota, Ohio, South Dakota, West Virginia, and Wisconsin.
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,
and from the various direct and guaranteed farm loan programs. All administrative
funds used by FSA are consolidated into one account. For FY2004, the final
consolidated appropriations act (P.L. 108-199) provides a total appropriation of $988
million for FSA salaries and expenses, as in the Senate-passed bill and requested by
the Administration. The final FY2004 level is below the House-passed level of $1.02
billion, but above the regular annual appropriation of $970.4 million for FY2003.
The final FY2004 level also is below the total FY2003 level that included
supplemental authority for FSA to tap the CCC for $70 million to cover the
administrative costs associated with implementing ad hoc disaster assistance
authorized in the emergency provisions of P.L. 108-7.
Report language accompanying the House bill instructed USDA not to shut
down or consolidate any local FSA offices unless rigorous analysis proves such
action to be cost-effective. The Senate committee also expressed concern about FSA
downsizing and directed the Secretary to consider the impact further reductions will
have on farm services before considering closing additional offices.
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 help farmers 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 Administration requested an appropriation of $210.7 million for FY2004
to subsidize the cost of making $3.52 billion in direct and guaranteed FSA loans.
The enacted FY2003 loan subsidy was $226.8 million to support FSA loans totaling
$3.94 billion. Most of the proposed $420 million decline in requested loan authority
was accounted for in a proposed $300 million reduction in unsubsidized guaranteed
farm operating loans (from $1.7 billion authorized in FY2003 to an estimated $1.4
billion in FY2004). The Administration contends that the proposed reduction in

funding for this program, which finances farmers’ purchases of feed, seed, fertilizer,
livestock and machinery, is consistent with historical demand.
The FY2004 consolidated appropriations act (P.L. 108-199) provide cuts in FSA
farm loans beyond those requested by the Administration. Conferees provided an
appropriation of $196.7 million to subsidize the cost of making $3.26 billion in direct
and guaranteed FSA loans in FY2004. The appropriation level is above the $194.3
million provided in the Senate-passed version, but below the House-passed version
of $200.2 million. As in the Administration request, most of the reduction in loan
authority in the final appropriations act is within the unsubsidized guaranteed
operating loan program account.
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.) Conservation
spending combines discretionary spending, which has totaled more then $1 billion
annually in recent years, and mandatory funding, which is funded through the
Commodity Credit Corporation and is estimated to total just under $3 billion in
budget authority in FY2004, according to the March 2003 Congressional Budget
Office baseline. The NRCS administers all the discretionary conservation programs.
Discretionary Programs. The final FY2004 consolidated appropriations act
(P.L.108-199) provides a total of $1.033 billion for the five discretionary
conservation line items for FY2004, an increase of $12 million from the FY2003
enacted level of $1.021 billion. The earlier House-passed version of the agriculture
appropriations bill (H.R. 2673) provided $1.045 billion, while the Senate-passed
version of H.R. 2673 provided $973.2 million. The House version was an increase
of $23.5 million from the FY2003 enacted level, while the Senate bill was a decrease
of $48.1 million from that amount. The Administration had requested $1.241 billion.
The Administration total is difficult to compare directly with congressional amounts
because the request included the creation of a new discretionary line item of $432
million to pay for technical assistance in support of the mandatory conservation
programs, which would have been funded in part, by taking money from other
accounts. The conference committee and both chambers rejected this request. For
more information on this issue, see “Technical Assistance Funding,” below.
The enacted FY2004 level differs from the House and Senate bills, the
Administration request, and the FY2003 funding levels in almost all cases for the five
discretionary programs. P.L. 108-199 provides $853.0 million for Conservation
Operations, $3.0 million more than the House-passed bill and $23.4 million more
than the Senate-passed bill. (The FY2003 appropriation was $819.6 million, and the
Administration requested $703.6 million for FY2004). P.L. 108-199 provides $10.6
million for Watershed Surveys and Planning, $0.5 million less than the House bill

and $0.6 million more than the Senate bill. (The FY2003 appropriation was $11.1
million and the Administration requested $5.0 million for FY2004.) For Watershed
and Flood Prevention Operations, P.L. 108-199 provides $87.0 million, $3.0 million
less than the House and $32 million more than the Senate. (The FY2003
appropriation was $109.3 million and the Administration requested $40 million for
FY2004.) For Watershed Rehabilitation, P.L. 108-199 provides $29.8 million, $10.2
million less than the House bill and the same as the Senate bill. (The FY2003
appropriation was also $29.8 million and the Administration requested $10.0 million
for FY2004.) For the Resource Conservation and Development Program, the P.L.
108-199 provides $51.9 million, $1.0 million less than the House bill and $0.9
million more than the Senate bill. (The FY2003 appropriation was $50.7 million and
the Administration request was $49.9 million.)
The use of earmarks within two discretionary conservation program accounts,
Conservation Operations and Watershed and Flood Prevention Operations, continues
to be substantial. The conference committee report identifies 135 earmarks for
Conservation Operations, and retains all other earmarks that were in the reports that
accompanied both the House and Senate bills. The final consolidated appropriations
act includes very few earmarks for Watershed Programs, with some identified in
report language and others in the general provisions of the measure. For comparison,
the FY2003 appropriation included 214 congressional earmarks with a total value of
more than $200 million, according to a compilation prepared by the NRCS budget
office. Both the number and total value of earmarks have been growing in recent
years, and for both of these accounts, the growth in earmarks has exceeded the
growth in overall program funding some years. Some conservation supporters have
expressed concern that the increased use of earmarks means that less money is
available for those pressing conservation priorities that do not coincide with the
earmarked projects and activities. The conference report specifies that these
earmarks are to be in addition to state funding allocations, and requires NRCS to
report to both appropriations committees on how Conservation Operations funds are
being allocated among states within 45 days of enactment.
Mandatory Programs. Annual or total funding levels for each of the
mandatory conservation programs is contained in the omnibus 2002 farm bill (P.L.
107-171). (For two of the programs, the Conservation Reserve and the Wetlands
Reserve, limits are set in enrolled acres rather than dollars, so savings are made by
limiting the number of acres that can be enrolled.) The Conservation Reserve
Program (CRP) remains the largest conservation program in FY2004, according to
the Congressional Budget Office’s August 2003 estimates. Outlays for all mandatory
conservation programs are estimated to rise from a total of $2.86 billion in FY2003
to $2.99 billion in FY2004.
However, P.L. 108-199 limits (and in one case completely prohibits) funding
for seven of the mandatory programs, for total estimated savings of $240.6 million.
These mandatory program adjustments include:

^!limiting enrollment in the Wetland Reserve Program to 189,177
acres instead of 250,000 acres, for an estimated savings of $69.0
million;
^!limiting spending under the Environmental Quality Incentives
Program (EQIP) by $25.0 million, to $975 million;
^!limiting spending under the Conservation Security Program to $41.4
million, which is $11.6 million below the Congressional Budget
Office estimate;
^!eliminating mandatory spending on the Dam Rehabilitation
Program, with a savings of $95.0 million;
^!limiting the Ground and Surface Water Conservation Program by
$9.0 million, to $51.0 million;
^!limiting the Wildlife Habitat Incentives Program by $18 million, to
$42.0 million; and
^!limiting the Farmland Protection Program (FPP) (also called the
Farm and Ranch Lands Protection Program) by $13.0 million, to
$112 million.
The total reduction in mandatory programs under the final appropriations act
was greater than under the bills that passed either chamber. The House-passed bill
limited funding for four programs to a total of $229 million below authorized levels,
while the Senate-passed bill limited funding for five programs for an estimated
reduction of $204 million. P.L. 108-199 also amends another mandatory program,
the Agricultural Management Assistance Program, modifying an amendment that had
been adopted in the Senate bill. The final act provides $14 million to conservation
programs in 15 specified states, $1 million to organic certification assistance, and $5
million to financial management activities to reduce risk each year from FY2004
through FY2007. This provision responds to an action taken by USDA in FY2003
to channel almost all of the authorized total of $20 million to further subsidize crop
insurance premiums.
The Administration’s budget submission had proposed to limit total funding for
mandatory conservation programs to $285 million below the authorized levels by
reducing funding in five programs. In the Administration request, the reduction
would have offset part of the cost of establishing a proposed new line item to fund
technical assistance in support of mandatory programs, a proposal both chambers
rejected (see discussions above and below). P.L. 108-199 concurs with the
Administration proposals for the Dam Rehabilitation Program, the Ground and
Surface Water Conservation Program, the Wildlife Habitat Incentives Program, and
the Farmland Protection Program (now called the Farm and Ranch Lands Program
by USDA).

Technical Assistance Funding. The rapid expansion in funding for
conservation programs and activities has increased requests for technical assistance.
Technical assistance had been funded in part through the Commodity Credit
Corporation (CCC), in part by reprogramming carry-over funds, and in part by using
funds from Conservation Operations, a discretionary program, to pay for this
assistance. A statutory cap on the use of CCC funds to provide such assistance for
mandatory conservation programs, combined with limits from the other sources and
rapid growth in these programs, has created a funding shortfall. Congress attempted
to address these funding concerns in the 2002 farm bill (P.L. 107-171). However, in
late 2002, the Office of Management and Budget, supported by a Department of
Justice opinion, ruled that the farm bill did not remove the CCC cap and the
Administration would have to continue to limit mandatory technical assistance
funding through the CCC.
The Administration initially sought to address this problem by proposing to
create a new farm bill technical assistance line item in FY2003, funded at $333
million. This would have provided the technical assistance for all of the mandatory
conservation programs (authorized at a total of $1.2 billion), plus the Conservation
Reserve Program, a mandatory program authorized in acres rather than dollars.
Congress rejected this proposal, and specifically prohibited the use of discretionary
funds (funds from the Conservation Operations account) to implement any mandatory
conservation programs. This prohibition, combined with a retention of the cap on
CCC funds, meant that some of the mandatory programs were significant “donor
programs” by funding technical assistance for other programs, thereby leaving less
money available to implement their activities. USDA estimated that four programs
were donor programs, with the largest donations being made from the EQIP ($107.9
million) and the Farmland Protection Program ($27.6 million).
The Administration again proposed a new discretionary technical assistance line
item for FY2004 and Congress again rejected it. P.L. 108-199 includes a provision
within each of the five discretionary accounts that prohibits using these funds to pay
for technical assistance in support of the mandatory conservation programs. The
House bill, as reported, contained a provision prohibiting the spending of funds in the
Conservation Operations account for this purpose. This provision was removed in
a floor amendment. The Senate bill contained provisions prohibiting funding for
technical assistance for mandatory programs from all the discretionary programs
except the Resource Conservation and Development Program. The conference
committee does not otherwise address the issue. Earlier, during floor debate on the
agriculture appropriations bill, the Senate defeated an amendment that would have
prohibited technical assistance funding for the Conservation Reserve Program
coming from four programs (EQIP, Farmland Protection, Grassland Reserve, and
Wildlife Habitat Incentives), so there will again be donor programs among the
mandatory programs unless Congress enacts freestanding legislation, such as H.R.
1907, that would prohibit funds in three of the mandatory programs (EQIP, the
Grasslands Reserve Program, and Farmland Protection) from being used for technical
assistance for any of the other mandatory programs.

Other Provisions. Also in P.L. 108-199 are general provisions that (1)
waive cost sharing requirements for the Emergency Watershed Protection Program
to repair or prevent damage to non-federal lands in watersheds that have been
affected by fires initiated by the federal government; (2) prohibit making land
enrolled in the CRP and planted to hardwood trees ineligible for re-enrollment; and
(3) prohibit NRCS from reorganizing regional conservationists and regional offices
without approval by the appropriations committees. Additionally, report language
for the Office of the Secretary encourages implementation of a new program to
establish a conservation corridor along the Delmarva peninsula; encourages a study
of cropping techniques in the Upper Midwest; and requires consultation with the
agriculture committees before proceeding with possible mergers involving the NRCS
and FSA.
Division H of P.L.108-199 also includes conservation provisions that are not
part of the regular annual funding for conservation programs. One provision
authorizes the Conservation Security Program (CSP) through FY2007 rather than
FY2013, and removes a lifetime cap of $3.77 billion on total program spending that
was placed on the CSP by the FY2003 consolidated appropriations act (P.L. 108-7)
so that the remainder of the estimated spending could be used to offset the cost of
disaster assistance. Other separate provisions in the FY2004 consolidated
appropriations act make disaster assistance funds available to deal with the resource
problems stemming from the wildfires in California during the fall of 2003, including
$150 million to the Emergency Watershed Protection Program, $12.5 million to the
Tree Assistance Program, and $12 million to the Emergency Conservation Program.
The cost of these wildfire assistance provisions is offset by a mandated rescission of
$225 million from the Federal Emergency Management Agency (FEMA). The
California wildfires are also addressed in the general provisions of the agriculture
title, where a provision waives the cost-sharing requirements for funding and
assistance under the Emergency Watershed Protection Program.
Agricultural Trade and Food Aid
USDA’s international activities include both discretionary and mandatory
programs with the former funded by appropriations and the latter funded with
borrowing from USDA’s Commodity Credit Corporation. Both the discretionary and
the mandatory international programs are authorized in the 2002 farm bill (P.L. 107-
171). The FY2004 consolidated appropriations act (P.L. 108-199) provides $1.512
billion for discretionary USDA trade programs, namely P.L. 480 food aid, the new
McGovern-Dole international food for education program (IFEP), salaries and
expenses of USDA’s Foreign Agricultural Service, and administrative expenses for
CCC export programs. The original House-passed agriculture appropriations bill
(H.R. 2673) provided an appropriation of $1.523 billion for these activities, while the
Senate-passed version provided an appropriation of $1.487 billion. Most of the
difference between the two bills was accounted for by a Senate recommendation of
$25 million for IFEP, in contrast to a House-recommended appropriation of $56.9

million. The conference report resolved this difference by appropriating $50 million
for IFEP.
For the mandatory programs, which include both agricultural export and other
food aid programs, the Administration’s FY2004 budget proposal estimates a
program level of around $4.7 billion. The final FY2004 appropriations measure
places no new funding limits on the mandatory agricultural trade and food aid
programs; it does, however, make permanent a prohibition, first incorporated in
appropriations measures in FY1993, on the use of USDA funds to promote the sale
or export of tobacco or tobacco products.
Foreign Agricultural Service. For FAS, which administers USDA’s
international programs, P.L. 108-199 appropriates $132.1 million, considerably less
than the $140.8 million requested by the Administration. House and Senate measures
had recommended $133.9 million and $131.6 million respectively. Neither measure
included the Administration’s request for a $5 million USDA contribution to the
Montreal Protocol Fund. The Montreal Protocol is an international agreement on
limiting substances that deplete the ozone layer. Additionally, P.L. 108-199 allots
to FAS the sum of $500,000 for cross-cutting trade negotiations and biotechnology
activities. This allocation is part of an appropriation of $3.3 million for such
activities. Other USDA agencies that receive trade-biotechnology allotments in the
conference report include the Office of the Secretary ($1.165 million), APHIS ($1.0
million), and GIPSA ($150,000).
Food Aid. For P.L. 480 commodity sales and donations, P.L. 108-199
provides an appropriation of $1.326 billion, an amount identical with the Senate-
passed amount and only $2 million less than recommended in the House-passed
measure. Of that amount, $1.192 billion is for commodity donations for emergency
and non-emergency activities under P.L. 480 Title II. USDA administers P.L. 480
commodity sales and IFEP, while the U.S. Agency for International Development
(USAID) administers humanitarian donations under P.L. 480 Title II. The conferees
direct the Administration not to place arbitrary limits on monetization (i.e., sales of
donated commodities for local currencies) under Title II, but rather to base approvals
of food aid proposals on the merits of program plans to promote food security and
improve people’s lives, not on the level of monetization. The FY2004 bill authorizes
the transfer to Title II of any balances, recoverables, or reimbursements that remain
available to P.L. 480 Title III (a food-for-development program, first established in

1990, that has not received an appropriation in recent years).

The new food aid program, IFEP, authorized in the 2002 farm bill (P.L. 107-
171), receives an FY2004 appropriation of $50 million. IFEP will provide
commodity donations and associated finance and technical assistance to carry out
school and child feeding programs in foreign countries. The 2002 farm bill
authorized $100 million of CCC funding for IFEP in FY2003 but stipulated that,
beginning in FY2004, IFEP must be funded by appropriations. The bill suggests,

however, that the Secretary investigate the use of other resources, such as Section

416(b) food aid (see below), to carry out activities consistent with the goals of IFEP.

The appropriation for food aid in P.L. 108-199 is $377.6 million less than the
amount appropriated for FY2003. The regular FY2003 appropriation for food aid
was augmented by $369 million for P.L. 480 Title II programs in the Emergency
Supplemental Wartime Appropriations Act of 2003 (P.L. 108-11). P.L. 108-11
included $69 million toward partial replenishment of releases of commodities from
the Emerson Trust used to meet urgent food needs in Africa, Afghanistan, and Iraq;
$150 million to finance previously approved but unfunded FY2003 P.L. 480 Title II
projects, and $150 million in additional food aid for Africa, Iraq, and Afghanistan.
The President’s budget provides no estimate of the value or volume of
commodities that could be released from the Emerson Trust (primarily a commodity
reserve), which was used extensively in FY2003 to respond to food emergencies in
Africa and Iraq. In FY2003, the Secretary of Agriculture announced availability
from the Emerson Trust of 200,000 tons of wheat for emergency relief in the Horn
of Africa (Ethiopia and Eritrea) and 600,000 tons of wheat for emergency relief in
Iraq. Of the total amount made available, only about half was used (400,000 metric
tons). USDA estimates that about 1.6 million metric tons of wheat now remain in
the trust, which is authorized to hold up to 4 million metric tons of wheat, corn,
sorghum, and rice. The appropriations measure provides no additional funding for
replenishment of the Emerson Trust. Instead, it limits to $20 million the amount of
FY2004 P.L. 480 funds that could be used to reimburse the trust for the release of
commodities to meet emergency food aid needs.
Other food aid programs include Food for Progress (FFP) which provides
commodities to countries that are introducing and expanding free enterprise in their
agricultural economies and Section 416(b) commodity donations. The President’s
budget envisions $151 million of CCC funding for FFP; some funding for FFP also
will come from appropriations for P.L. 480 Title I, which P.L. 108-199 set at $132
million. USDA estimates that about $119 million of surplus nonfat dry milk will be
made available as commodity donations under Section 416(b) in FY2004. The
conference report accompanying P.L. 108-199 directs the Secretary of Agriculture,
to the extent practicable, to make available $25 million in Section 416(b)
commodities to mitigate the effects of HIV/AIDS.
Export Programs. Mandatory (CCC-funded) programs to promote exports
include the Export Enhancement Program (EEP), the Dairy Export Incentive Program
(DEIP), CCC Export Credit Guarantee Programs, the Market Access Program
(MAP), and the Foreign Market Development Program (FMDP). None of these
mandatory programs require an annual appropriation. In the EEP and DEIP
programs, USDA makes cash bonus payments to exporters of U.S. agricultural
commodities to enable them to be price competitive when U.S. prices are above
world market prices. EEP has been little used in recent years. No EEP bonuses were
provided in FY2002 or FY2003. Reflecting this program experience, the President’s

budget assumes a program level of $28 million in FY2004, compared with $478
million authorized for EEP in the 2002 farm bill. Consequently, USDA would retain
some flexibility to increase the level of EEP subsidies. For DEIP, the Administration
expects a program level of $57 million for FY2004.
The President’s budget projects an overall program level of $4.2 billion in
FY2004 for CCC export credit guarantee programs, which provide payment
guarantees for the commercial financing of U.S. agricultural exports. While this
projection is virtually the same as for FY2003, the actual level of guarantees will
depend on demand for credit, market conditions, and other factors. Of the amount
of guarantees expected to be issued in FY2004, $4 billion would be made available
for GSM (General Sales Manager)-102 short-term guarantees of up to 3 years, while
GSM-103 intermediate-term guarantees (3 to 10 years) would be allocated $18
million.
For export market development, the budget proposes $125 million for the
Market Access Program and $34.5 million for the Foreign Market Development
Program, as required by the 2002 farm bill. Both programs support the development
and maintenance of export markets for U.S. agricultural products. However, MAP
mainly promotes high value products, including brand-name products, while FMDP
promotes generic commodities.
Funding for U.S. agricultural export and food aid programs could be affected
by ongoing WTO agricultural trade negotiations. The United States has proposed
that agricultural export subsidies be eliminated, while the European Union, which
opposes complete elimination of such subsidies, has conditioned its willingness to
negotiate reductions in export subsidies on the inclusion of export credit programs
(such as CCC export credit guarantees) and food aid based on surpluses (such as
section 416(b)) on the WTO agriculture negotiating agenda. The EU and other
trading partners charge that the U.S. credit program has a subsidy element (although
it is much less than the subsidy represented by the EU’s own export subsidy program)
and gives the United States an unfair competitive advantage in exporting certain
agricultural commodities.
The EU and other U.S. trading partners, such as Australia, Brazil, and a number
of agricultural exporting developing countries, also have raised the issue of large
U.S. food aid shipments in ongoing WTO agriculture negotiations. They have
suggested that the United States is using food aid to get around its export subsidy
reduction commitments made in the 1994 Uruguay Round Agriculture Agreement.
The United States has countered that its food aid shipments, though large, are made
in conformity with WTO rules, and are being made available to countries with food
needs or used for development programs.
In ongoing WTO agriculture negotiations, the United States has agreed to the
principle of establishing new rules and disciplines for export credit guarantees and
for food aid. However, those negotiations have not yielded agreements on detailed

proposals for modifying either program. For more information on the status of
negotiations on export credits and food aid, see CRS Report RL32053, Agriculture
in WTO Negotiations.
Other International Provisions. P.L. 108-199 includes an FY2004
appropriation of $3 million to finance Bill Emerson and Mickey Leland Hunger
Fellowships as authorized in P.L. 108-58. These fellowships, administered by the
Congressional Hunger Center, honor Emerson and Leland, now deceased, who were,
respectively, ranking member and chairman of the House Select Committee on
Hunger, which was eliminated along with other House Select Committees in 1995.
Cuba Trade. P.L. 108-199 did not adopt language included in the Senate-
passed version of the FY2004 agriculture appropriations bill that would have relaxed
the licensing requirement for traveling to Cuba to pursue opportunities to sell
agricultural and medical products. The Senate language was reportedly in response
to a Treasury Department decision in June 2003 to deny the license application of a
firm seeking to organize a food and agribusiness exhibition in Havana in January
2004. The Bush Administration continues to oppose any efforts to relax existing
restrictions on eligible agricultural exports to Cuba.
Current U.S. policy is to exempt commercial sales of agricultural and medical
products from U.S. unilateral sanctions imposed on foreign countries, subject to
specified conditions and prohibitions. Debate continues, though, among policymakers
on the scope of the statutory restrictions that should apply on agricultural sales to
Cuba. Members of Congress opposed to the Cuba-specific prohibitions have
introduced bills in the 108th Congress proposing to effectively repeal them. For
more information on this issue, see the CRS Electronic Briefing Book, Trade, page
on Economic Sanctions and Agricultural Exports.
Agricultural Research, Extension, and Economics
Four agencies carry out USDA’s research, education, and economics (REE)
function. The Department’s intramural science agency is the Agricultural Research
Service (ARS), which performs research in support of 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).
With the exception of recent years in which USDA research agencies have
received supplemental funds for antiterrorism activities, the agricultural research
budget, when adjusted for inflation, has remained flat for almost 30 years.
Furthermore, current financial difficulties at the state level are causing some states

to reduce the amounts they appropriate to match the USDA formula funds (block
grants) for research, extension, and education (100% matching is required, but most
states have regularly appropriated two to three times that amount). A combination
of cuts at the state and federal levels can result in program cuts as far down as the
county level. In 1998 and 2002 legislation authorizing agricultural research
programs, the House and Senate Agriculture Committees tapped sources of available
funds from the mandatory side of USDA’s budget and elsewhere (e.g., the U.S.
Treasury) to find new money to boost the availability of competitive grants in the
REE mission area. From FY1999 through FY2003, the Appropriations Committees
prohibited the use of those mandatory funds for the purposes the Agriculture
Committees intended; however, from FY1999 through FY2002, and now again for
FY2004, the appropriations conference committees have allocated more funding for
ongoing REE programs than were contained in either the House or Senate
appropriations bills. Nonetheless, agricultural scientists, stakeholders, and others
currently are concerned that higher military spending and lower tax revenues may
return the REE mission area to a period of static or shrinking appropriations.
Agricultural Research Service. The FY2004 consolidated appropriations
Act (P.L. 108-199) provides $1.15 billion for ARS, an amount higher than both the
House- ($1.05 billion) and Senate-passed ($1.09 billion) appropriations bills. This
represents essentially level funding with the regular appropriation for ARS in
FY2003, excluding the $110 million one-time supplemental appropriation that ARS
received in P.L. 108-11 for construction at the National Animal Disease Laboratory
in Ames, Iowa.
P.L. 108-199 allocates $1.1 billion of the total FY2004 ARS appropriation to
support the agency’s research programs, and $63.8 million to support the
modernization and construction of ARS facilities. This will provide nearly $54
million in additional funds for research over FY2003, but represents nearly a $55
million decrease in spending for facilities ($118.7 million in FY2003, excluding the
supplemental). The research allocation in P.L. 108-199 is $75 million more than that
contained in the House bill and $43.4 million more than in the Senate bill.
Of the $63.8 million appropriated in FY2004 for facility construction and
modernization, $10.5 million is allocated for laboratory security upgrades (the
Administration had requested $22 million for ARS construction, nearly all for
security upgrades), and the balance is designated for construction projects at eighteen
different ARS locations. The House bill would have provided $36 million for
building projects, and the Senate measure $46 million. The Senate bill provision to
provide $2 million for renovations at the National Agricultural Library in Beltsville,
Maryland, was not adopted. FY2004 conferees included report language requiring
ARS to submit prospectuses on construction projects and to assist the committees in
setting priorities to guide future appropriations.
As in past years, the Administration’s budget request for ARS assumed the
discontinuation of several dozen congressionally earmarked research projects and

directed the savings to other research areas that the agency considers to have higher
priority. Again as in the past, the FY2004 act reflects the appropriators’ rejection of
that proposal, and provides continued funding for all the projects at FY2003 levels.
(The House appropriations committee report for FY2004 also contains language
stating that in future years the Administration will be expected to defend and explain
why each research program should be terminated.) However, the conferees did
include in the Act the Administration’s proposal to reprogram roughly $12 million
from lower-priority research areas into special initiatives on emerging diseases,
global climate change, biosecurity, and genomic sequencing. Every 5 years, ARS
evaluates its programs and revises its research plan. Reprogramming is the outcome
of this process.
Cooperative State Research, Education, and Extension Service.
P.L. 108-199 provides total FY2004 funding of $1.120 billion for CSREES, an
amount $2.4 million higher than the FY2003 appropriation. This amount is $11
million higher than the House bill and $1.8 million more than the Senate bill
provisions.
Within the agency’s budget, P.L. 108-199 allocates $621.4 million for research
and education funding for the states, which is $4.65 million above FY2003, $24
million above the House bill allocation, $3.9 million above the Senate provision, and
$107.2 million above the FY2004 budget request. Block grants to the states to
support agricultural experiment station research (under the Hatch Act of 1887) at the
1862 land grant universities are funded at $180 million, level with FY2003. Grants
for research at the 1890 (historically black) land grant institutions are funded at $36
million, essentially level with the FY2003 appropriation of $35.6 million. Conferees
appropriated $1.1 million to supplement money distributed from the endowment fund
to support research at the 1994 (tribally controlled) land grant institutions ($1.7 in
FY2003).
For state extension programs, P.L. 108-199 designates $441.7 million, which
represents an $8.8 million decrease from FY2003. The House bill contained $439.7
million for extension, and the Senate bill $442 million. Block grants to the states to
support extension programs (under the Smith-Lever Act of 1914) at the 1862 land
grant universities are funded at $279.4 million, a decrease from $281.2 million in
FY2003. Grants for extension programs at the 1890 institutions are funded at $31.9
million, essentially level with the $32.1 million appropriated in FY2003. P.L. 108-
199 provides $2.9 million to support extension programs at the 1994 institutions
($3.4 million in FY2003).
For the fairly new category of multi-state research projects that have both
research and extension components (authorized in1998), the FY2004 consolidated
appropriations act provides $50.5 million, which is a $4.1 million increase over
FY2003, and a $4 million increase over the Senate bill provision, but a $12.4 million
decrease from both the budget request and the House bill.

The act contains increased funding for an outreach program for socially
disadvantaged farmers, from $3.5 million in FY2003 to $6 million in FY2004, an
amount that is higher than both the budget request ($4 million) and the funding
contained in the Senate bill (which provided level funding), but lower than the House
bill provision ($8.5 million).
As in past years, the Administration proposed to eliminate all but about $3
million in earmarked research and extension grants to specified land grant schools
(special research grants). Congress traditionally has never adopted such proposals.
P.L. 108-199 contains $111.3 million, essentially level funding with FY2003 ($112
million); the House and Senate bills would have provided about $100 million for
special research grants. For USDA major competitive, peer-reviewed grant program,
the National Research Initiative (NRI), P.L. 108-199 appropriates $165 million,
essentially level funding with the FY2003 appropriation of $167 million, which was
the highest in the program’s 13-year history (authorized at $500 million annually
since 1994). The NRI would have received $149 million and $180 million,
respectively, in the House and Senate bills. The FY2004 budget request was for
$200 million.
P.L. 108-199 includes (as did the House and Senate bills) the Administration’s
request to continue to deny funding to carry out the Initiative for Future Agriculture
and Food Systems competitive grants program. This program (which is not subject
to annual appropriations) was established in 1998, was reauthorized in the 2002 farm
bill (P.L. 107-171), and is authorized to receive $120 million annually in government
mandatory funds. Grants were awarded under the initiative in FY2000 and FY2001,
but appropriators prohibited the funds to be used for that purpose in FY2002 and
FY2003. Language in P.L. 108-199 concurs with a Senate bill provision giving the
Secretary discretionary authority to make 20% of NRI funds available for competitive
grants under the terms and conditions of the initiative. This means that
approximately $30 million of the $165 million NRI appropriation could be awarded
as initiative grants in FY2004. Both grant programs support fundamental research
on subjects of national, regional, or multistate importance to agriculture, natural
resources, human nutrition, and food safety, among other things.
Economic Research Service (ERS) and National Agricultural
Statistics Service (NASS). P.L. 108-199 includes the House bill provision to
appropriate $71.4 million for ERS. This represents a $2.7 million increase over
FY2003, a $1.5 million increase over the Senate bill, but $5.3 million decrease from
the amount requested by the Administration. For NASS, the act contains FY2004
funding of $128.9 million, as proposed in the Senate bill, which is about $1 million
less than the House provision, $7.3 million less than the budget request, and $9.5
million less than the FY2003 level.

Food Safety
USDA’s Food Safety and Inspection Service (FSIS) conducts mandatory
inspection of meat, poultry, and processed egg products to insure their safety and
proper labeling. The FY2004 consolidated appropriations act (P.L. 108-199)
provides $784.5 million for FSIS, roughly the amount contained in both the House
and Senate bills. It represents a $29.7 million increase over FY2003, but it is $12.6
million below the Administration’s request.
The FY2004 conference report contains language from the House bill directing
the agency to use the increase to hire additional inspectors, provide more scientific
training, and conduct more sampling for pathogens that cause human illness, among
other things. P.L. 108-199 also includes the Administration’s request for $1.65
million to be used solely to pay for microbiological testing of meat and poultry
samples at commercial laboratories, in order to support the goal of establishing a
valid and reliable baseline against which to measure risks and performance. Report
language also expresses concern over the validity of FSIS determinations of the
“equivalency” of foreign meat and poultry inspection systems that are authorized to
export to the United States. FSIS is required to present a report to Congress by
March 1, 2004, documenting the process for determining equivalency, and explaining
recent changes in the agency’s system for reinspecting meat imports at U.S. ports of
entry. A provision in the Senate bill to prohibit USDA from spending any funds to
inspect downed (non-ambulatory) animals was not included in the conference
agreement (meaning that they could not receive federal inspection for use as human
food). However, because the first case of bovine spongiform encephalopathy (BSE,
or mad cow disease) was identified in a downer cow in the state of Washington in
December 2003, FSIS has since instituted new regulations banning downed animals
from entering slaughtering plants.
In addition to annual appropriations, FSIS traditionally has had access to user
fees collected from industry for laboratory accreditation and for overtime and holiday
inspection. Approximately $101 million is made available annually from this
account to support the inspection program. The President’s budget request contained
a proposal to change the definition of “overtime” to mean any hours that a firm might
be operating beyond one 8-hour daytime shift. This would significantly raise the
amount of fees collected from industry and diminish the proportion of inspection paid
for by tax dollars. Congress has never agreed to similar proposals in the past, saying
that assuring the safety of the food supply is an appropriate function of the federal
government. In keeping with the House and Senate bills, which disregarded the
Administration’s proposal, the FY2004 appropriations act does not address it.
Marketing and Regulatory Programs
Animal and Plant Health Inspection Service (APHIS). The largest
appropriation for USDA marketing and regulatory programs goes to the Animal and
Plant Health Inspection Service. APHIS is responsible for protecting U.S. agriculture

from foreign pests and diseases, responding to domestic animal and plant health
problems, and facilitating agricultural trade through science-based standards. Under
the FY2004 consolidated appropriations act (P.L. 108-199), APHIS receives $725.6
million. This is $32.9 million more than FY2003 (see next paragraph), $25.7 million
more than the Administration’s request, $13.5 million more than the Senate-passed
bill, and $4.9 million less than the House-passed bill. Of the $725.6 million in P.L.
108-199, $720.6 million is for salaries and expenses, and $5 million is for buildings
and facilities, the latter of which matches the Administration’s request and both the
House and Senate versions.
The FY2003 amount that is comparable to the FY2004 appropriation is $692.7
million. This equals the FY2003 appropriation of $730.7 million, after rescission,
minus $38 million transferred to the new Department of Homeland Security (DHS).
On March 1, 2003, approximately 2,680 APHIS border inspectors and the Plum
Island Animal Disease Center became part of DHS under P.L. 107-296. Separate
FY2004 appropriations for USDA and DHS reflect this new division of
responsibilities. DHS now conducts agricultural inspections at the border, but
APHIS continues to set agricultural inspection policies, conduct preclearance,
supervise training, and inspect passengers and cargo entering the mainland from
Hawaii and Puerto Rico. USDA continues to collect the user fees that fund much
of the agriculture border inspection program and will reimburse DHS for inspections
performed. In FY2004, USDA expects to collect $285 million in such fees and
transfer $178 million to DHS.
APHIS activities are divided into five program functions, plus a contingency
fund. P.L. 108-199 funds the pest and disease exclusion function at $152.5 million,
an increase of $6 million from FY2003, but $3.4 million less than the
Administration’s request ($5.9 million less than the House and $4.5 million more
than the Senate). Plant and animal health monitoring is funded at $139.3 million, an
increase of $6.3 million from FY2003, but $3 million less than the Administration’s
request ($430,000 less than the House, and $2.4 million more than the Senate). Pest
and disease management rises prominently to $333 million, an increase of $15.8
million over FY2003, and $35.5 million over the Administration’s request ($4.2
million above the House and $920,000 above the Senate). The increase for scientific
and technical services is $13.8 million over FY2003 and $6.1 million above the
Administration’s request ($2.3 million below the House and $10 million above the
Senate). The contingency fund and animal care function adopt the Senate-passed
levels, and are very similar to FY2003, the Administration’s request, and the House.
Within the pest and disease management function, P.L. 108-199 provides an
increase of $18.3 million for emerging plant pests (totaling $93.7 million), $5.2
million more than the Senate, but $2.5 million less than the House. This increase is
allocated with $8 million for citrus canker, $4 million for Asian long-horned beetle,
$4.8 million for glassy-winged sharpshooter, and $1.5 million for Emerald Ash
Borer. The conferees request reports from USDA on controlling Emerald Ash Borer
(by March 1, 2004) and Asian long-horned beetle (by January 1, 2004). The

agreement also increases funding for chronic wasting disease by $3.6 million
(totaling $18.6 million), $1.8 million more than the House but $1.4 million less than
the Senate. Appropriations also rise for control of grasshoppers, Mormon crickets,
cormorants, and other pests and diseases.
As in past years, Congress encourages the Secretary to transfer funds from other
Departmental accounts (generally the Commodity Credit Corporation (CCC)) for
emergency eradication and indemnification programs. The agency transferred over
$390 million in CCC funds for such purposes in FY2003. (Separately, the
conference report notes that $10 million of CCC funds should be used for tree
replacement and indemnification for losses due to citrus canker in Florida.)
In the plant and health monitoring function, the conferees increase emergency
management systems by $640,000, partially to increase the number of available doses
of foot and mouth disease (FMD) vaccine. P.L. 108-199 funds a $2 million
biosecurity program, in addition to other funds related to agroterrorism preparedness,
such as database development and veterinary diagnostics. The conferees instruct the
Secretaries of Agriculture and Homeland Security to coordinate efforts to assist states
with agroterrorism preparedness. They also direct that diagnostic work at Plum
Island should remain focused on agriculture.
Regarding cost sharing, P.L. 108-199 incorporates a Senate provision
prohibiting funds from being used to issue a final rule that would have required states
to match certain federal funds. Conferees also adopted another Senate amendment
allowing citrus canker assistance funds (in the Agricultural Assistance Act of 2003)
to be used for tree replacement.
P.L. 108-199 reflects language from a Sense of the Senate amendment that
USDA should not allow imports of live cattle from any country known to have BSE
(bovine spongiform encephalopathy, also known as “mad cow disease”) unless the
country complies with guidelines of the World Organization for Animal Health.
Agricultural Marketing Service. AMS is responsible for promoting the
marketing and distribution of U.S. agricultural products in domestic and international
markets. The FY2004 consolidated appropriations act (P.L. 108-199) provides
budget authority of $94.2 million for AMS in FY2004, compared with the House-
passed level of $92.7 million and the Senate-passed level of nearly $94 million. The
Administration request was $91.8 million; $91.5 million was provided in FY2003.
The AMS levels include annual appropriations for marketing services and for
payments to states and territories. Conferees approved the Senate’s additional $2
million in FY2004 budget authority for payments to states and territories (funded last
year at $1.3 million), and earmarked the $2 million increase specifically for the
Wisconsin Department of Agriculture, Trade, and Consumer Protection for the
creation of specialty markets.

More than $15 million of the AMS appropriation represent funds transferred
from the permanent Section 32 account. Further, AMS uses additional Section 32
monies (not reflected in the above totals) to pay for government purchases of surplus
farm commodities that are not supported by ongoing farm price support programs.
(For an explanation of this account, see CRS Report RS20235, Farm and Food
Support Under USDA’s Section 32 Program.) Also not included in the above AMS
budget authority levels are approximately $195 million in various user fees that fund
numerous agency activities.
The Senate appropriations committee report encourages USDA to use all
existing Section 32 authorities to continue the $6 million Fruit and Vegetable Pilot
Program (providing free fresh fruits and vegetables to students in 25 schools),
authorized under Section 4305 of the 2002 farm bill (P.L. 107-171). On a separate
but related matter, the report also notes that Section 10603 of the farm bill requires
USDA to purchase at least $200 million annually of fruits, vegetables, and other
specialty crops, and reminds the Department that farm bill report language expected
that the purchases were to be in addition to any existing purchases. So far, USDA
has interpreted the farm bill language by counting existing purchases toward the $200
million minimum. In another area, the Senate report notes that it was including, in
the committee’s recommended increase for AMS, an additional $477,000 (for a total
of $1.5 million) for the National Organic Program, which, the report stated, should
be used to hire an executive director for the National Organic Standards Board, create
a peer review panel to oversee USDA’s accreditation process for organic certifiers,
and pay expenses for volunteer technical advisers to the program.
Country-of-Origin Labeling. The 2002 farm bill (P.L. 107-171) contained
a requirement that many retailers provide country-of-origin labeling (COOL) for
fresh fruits and vegetables, ground and fresh cuts of red meats, wild and farmed fish,
and peanuts, starting on September 30, 2004. P.L. 108-199 delays most
implementation for 2 years. The new implementation date is September 30, 2006,
for all covered commodities except wild and farmed fish, which are still subject to
the original deadline. The House-passed bill had included a provision, added in
committee, to prohibit the use of FY2004 funds to implement COOL for meats only.
A House floor amendment to strike this committee provision was defeated, 208-193.
The Senate version had not included a delay in COOL implementation. Rather, the
full Senate had approved a resolution insisting that conferees not agree to the House
position. (For background, see CRS Report 97-508 ENR, Country-of-Origin
Labeling for Foods.)
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, including in livestock and meat
products. GIPSA has been working 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 of
competition on farm prices. The consolidated FY2004 appropriations act (P.L. 108-

199) provides an appropriation of $35.9 million for GIPSA salaries and expenses.

As approved by the House, H.R. 2673 would have provided $39.7 million, the same
level as in FY2003 and $2 million below the Administration request. The Senate-
passed version would have set the GIPSA appropriation at $35.6 million in FY2004,
approximately $4 million below FY2003 and $6 million below the Administration
request.
In addition to the annual appropriation, another $42.5 million is expected to be
collected through existing GIPSA user fees. Neither the House- nor Senate-passed
bill assumed adoption of the Administration’s proposal for new user fees in FY2004
to replace $28.8 million in appropriations. Approximately $5 million of the proposed
new fees would have come from charges for the costs of developing, reviewing, and
maintaining official U.S. grain standards; the other $24 million would have come
from new license fees imposed on packers, live poultry dealers, poultry processors,
stockyard owners, market agencies, dealers and swine contractors covered by the
Packers and Stockyards Act (PSA). In their report, conferees expressed concern
about the Secretary’s transfer in July 2003 of $2 million from the salaries and
expenses account to the user fee account for grain export inspection and weighing
services. Conferees directed the Administration to “take all necessary steps to adopt
and implement a fee structure that fully funds the services provided.”
Report language accompanying the original House committee-reported
appropriations bill notes that no resources are provided for packer audits. The
Administration requested $1 million in FY2004 GIPSA funds to implement a new
pilot program to audit the four largest beef packers, intended for “better financial
protection to the regulated industries through heightened financial scrutiny of the Top
Four.” Also, $500,000 was proposed to conduct a comprehensive, industry-wide
review of the PSA and its regulations. The Act has not undergone a comprehensive
review since its enactment in 1921 despite “dramatic structural changes” in the
industry since then, USDA observed. After receiving industry participant input,
“GIPSA will clarify its views on competition in the industries it regulates. These
activities may result in future increases in the number and complexity of
investigations conducted by GIPSA and the monies recovered or returned to the
regulated industries,” the Department added in its proposal.
The House Appropriations Committee stated in its report that it “continues to
be concerned about the economic impacts of packer control, feeding, or ownership
[of livestock] on local communities.” Observing that it had provided FY2003
funding “for a comprehensive, objective study of the issues surrounding a ban on
packer ownership,” the committee states that it expects the Department to provide
regular updates on its progress.
The Administration’s FY2004 budget summary also noted that some of the new
funds proposed for the Secretary’s office for “crosscutting” trade and biotechnology
activities may be provided to GIPSA for its expanded biotechnology activities. P.L.

108-199 earmarks $150,000 to GIPSA for these purposes, out of a total of $3.3
million provided by conferees to all of USDA for this request.
Rural Development
USDA’s stated 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, the
Rural Economic Partnership Zones, and the National Rural Development Partnership.
The FY2004 consolidated appropriations act (P.L. 108-199) provides a total
appropriation of $2.462 billion for USDA rural development programs, which in part
supports an $11.098 billion loan authorization level for rural economic and
community development programs. The Senate and House measures recommended
approximately $131 million and $65 million more, respectively, in budget authority
and $36 million and $1.386 billion more, respectively, in loan authorization level
than the conference agreement provides. P.L. 108-199 also provides $170 million
more in budget authority and $3.203 billion more in loan authorization than the
Administration’s requested appropriation.
Reductions in Mandatory Spending and General Provisions. In
general provisions, P.L. 108-199 prohibits the expenditure of any funds to carry out
several mandatory rural development programs authorized by the 2002 farm bill
(P.L.107-171). Each of these programs is funded through the borrowing authority
of USDA’s Commodity Credit Corporation, and does not require an annual
appropriation. The provisions prohibit the use of appropriated funds for the salaries
and expenses associated with these programs, which effectively blocks funding for
these programs. In total, P.L. 108-199 prohibits $293 million in mandatory rural
development spending for the following programs: The Rural Strategic Investment
Program (Congressional Budget Office-estimated savings of $100 million); the Rural
Firefighters and Emergency Personnel Program ($10 million); Enhancement of Rural
Access to Broadband Services ($20 million); the Renewable Energy Systems and
Energy Efficiency Improvements Program ($23 million); the Rural Business
Investment Program ($100 million); and the Value-Added Agricultural Product¹
Market Development Grants program ($40 million). While the original House-
passed bill recommended prohibiting expenditures to carry out the Value-Added

¹ While funding to carry out the Rural Business Investment Program is prohibited, an
exemption is made for funds used to begin initial review of grant applications for the
program.
Note: The FY2004 consolidated appropriations act (P.L. 108-199, H.R. 2673) contains a
0.59 percent across-the-board rescission in all discretionary accounts. Enacted FY2004
funding levels in this report do not reflect the effects of this rescission.

grants program, the Senate bill did not contain this prohibition. The Senate bill
recommended that no funds be spent to carry out provisions of the Rural Business
Investment Program ($100 million). The House bill did not contain this provision.
While prohibiting the mandatory funding for the Renewable Energy Systems
and Energy Efficiency Improvements Program, P.L. 108-199 does provide $23
million in funding for the program, bringing budget authority to the level authorized
in the 2002 farm bill, but doing so through a discretionary appropriation. Both the
House- and Senate-passed bills contained this recommendation. P.L. 108-199 also
includes bill language to provide guaranteed loans for this program, and also provides
$15 million in discretionary funding for the Value-Added grants program.
In other general provisions, P.L. 108-199 provides $1.5 million for the Northern
Great Plains Regional Authority, half of the amount recommended by the Senate bill.
The Authority was created in the 2002 farm bill and authorized at $30 million each
fiscal year, FY2002-FY2007. This is the first year that funding has been provided
for the program. P.L. 108-199 also provides $1 million to the Denali Commission
for improving solid waste disposal sites that currently threaten rural drinking water
supplies in Alaska. This was also half the amount recommended by the Senate
measure. The House bill did not make recommendations for these programs.
Rural Community Advancement Program (RCAP). The RCAP,
authorized by the 1996 farm bill (P.L.104-127), consolidates funding for 13 rural
development loan and grant programs into three accounts: Community Facilities,
Rural Utilities, and Business-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. 108-199 provides $757.4 million in budget authority for the three
RCAP accounts, approximately $10 million less than the Senate-passed measure, $56
million more than the House-passed bill, and $280 million more than requested by
the Administration.
Within the three streams of RCAP funding, P.L. 108-199 provides funding of
$76 million for the Community Facilities account. Through earmarking, the
conference agreement provides $30 million for the Rural Utility Service’s High
Energy Cost Grants account (by transfer) and $22 million for Economic Impact
Initiative Grants for facilities in communities with high unemployment/economic
depression. These amounts are $2 million and $1 million less respectively than the
Senate-passed bill had recommended. The House-passed bill made no
recommendation for these programs. P.L. 108-199 also adopts the Senate and House
bill recommendations directing $6 million of the funding for rural community
programs for a Rural Community Development Initiative targeting low-income rural
areas and Native American Tribes. The Senate bill noted that demand for the direct
community facilities loan program far exceeds available funding, and, in report
language, encouraged the Department to consider establishing a program level of

$500,000,000 to meet these demands. The conference agreement does not include
this language.
For the Rural Utilities account within RCAP, P.L. 108-199 provides $605
million. The account supports water and waste-water loans and grants and solid
waste grants and is, by far, the largest of the three RCAP accounts. As with the
House and Senate bills, language is included in the conference agreement that further
earmarks RCAP water/waste-water funding for Native American Tribes ($24
million), Alaska Native villages ($28 million), and the Colonias ($25 million) along
the U.S.-Mexican border. The Senate bill had recommended $30 million for Alaska
villages, while the House measure made no such earmark P.L. 108-199 also provides
$13 million for the circuit rider program and earmarks two additional circuit rider
contracts for Alaska. The circuit rider program provides technical assistance to small
rural water and waste-water systems. P.L. 108-199 further earmarks approximately
$12.6 million of the RCAP account for water and waste-water development in
Empowerment Zones/Enterprise Communities and Rural Economic Area
Partnerships, about $10 million more than the Senate had recommended and the same
as recommended by the House measure. P.L. 108-199 also earmarks $2 million for
grants to statewide private non-profit television stations, $3 million less than the
Senate recommendation. P.L. 108-199 also provides $1 million for improvements to
individually owned water wells, half of the amount recommended by the Senate. The
House made no recommendation for the program.
Finally, P.L. 108-199 provides $76.5 million for the Rural Business Services
account within RCAP, which is $5 million and $3.5 million more than the House and
Senate recommendations, respectively. P.L. 108-199 also earmarks $8.5 million for
business development in Empowerment Zones/Enterprise Communities and Rural
Economic Area Partnerships.
Rural Housing Service. For the RHS, P.L. 108-199 provides a $1.376
billion appropriation for FY2004, which in part supports a total rural housing loan
authorization of $4.362 billion. P.L. 108-199 provides $129.5 million and $147.7
million less in total budget authority than recommended by the Senate and House
measures respectively, and is $170 million less than requested. This reduced budget
authority, however, supports a loan authorization level that is only slightly less than
the House recommendation and about $9 million more than the Senate
recommendation. P.L. 108-199 provides a loan authorization level of $4.092 billion
for Section 502 single family guaranteed loans, the largest account of the Rural
Housing Insurance Fund portfolio. The Senate-recommended loan authorization
level and Administration request for this account are slightly less than this amount
and are the same as recommended by the House bill.
P.L. 108-199 provides $232 million in housing loan subsidies, with Section 502
single family loans accounting for half of the direct subsidies ($165.9 million). This
is $667,000 more than the Senate recommendation and $79,000 less than the House
recommendation, but $19.6 million more in total subsidies than requested. P.L. 108-

199 provides approximately $50 million for Section 515 rental housing subsidies,

the same as recommended by the House bill and only slightly less than the Senate
recommendation.
For the Rural Rental Assistance program, P.L. 108-199 provides $584 million.
This is $137 million and $147 million less, respectively, than the Senate and House
recommendations and $156 million less than the budget request. Conferees included
report language expressing concern that past Section 521 rental assistance budget
requests have been overstated, resulting in substantial unliquidated balances in that
account. In particular, the conferees note that appropriations for 5-year rental
assistance contracts have been sufficient for an average period of 6.5 years.
Accordingly, P.L. 108-199 changes the contract term from 5 years to 4 years. The
conferees also provide the Secretary with the authority to carry over unexpended
funds at the completion of the 4-year contract period.
P.L. 108-199 also provides $46.2 million for the rural housing assistance grants,
the same as recommended by the Senate and $4 million more than recommended by
the House bill. For the farm labor account, P.L. 108-199 provides $36.3 million, the
same as recommended by the House and $3.3 more than recommended by the Senate.
P.L. 108-199 also provides $34 million for the mutual and self-help housing grants,
the same as recommended by the Senate and only slightly less than the House bill
recommendation.
P.L. 108-199 does not include the Senate recommendation to provide $2 million
for the Historic Barn Preservation Program authorized by the 2002 farm bill.
Rural Utilities Service. P.L. 108-199 provides a total appropriation of
$102.3 million for rural utility programs, which supports, in part, a loan authorization
level of $6.681 billion. This is $18.7 million more in budget authority than
recommended by the House-passed bill and $4 million less than in the Senate-passed
bill. It is also $1.390 billion more in loan authorization than recommended by the
House bill, $45 million less than the Senate recommendation, and $3.160 billion
more than the Administration requested. Budget authority for the Rural
Electrification and Telecommunications Loan account is approximately the same as
recommended by both the House and Senate bills. P.L. 108-199 adopts the loan
authorization level recommended by the Senate bill. This level is $950 million more
than the House bill and $2.47 billion more than requested. As recommended by both
the House and Senate bills, and as requested by the Administration, P.L. 108-199
effectively terminates electric and telecommunication loan subsidies.
For the Rural Telephone Bank (RTB), P.L. 108-199 provides $173.5 million in
FY2004 loan authorization, but no loan subsidies. This is the same as proposed by
the Senate bill. The House bill recommended neither loan authorization nor direct
loan subsidies for RTB, the same as requested by the Administration. In furtherance
of the privatization of the RTB, the conferees also include a provision limiting the
retirement of Class A stock in the RTB.

In other RUS programs, P.L. 108-199 provides an FY2004 loan authorization
level of $300 million for the Distance Learning and Telemedicine program, $250
million more than requested, but the same as recommended by both House and
Senate bills. P.L. 108-199 also provides $39 million in grants for this program, $14
million more than the House recommendation and $1 million less than the Senate
recommendation. P.L. 108-199 also provides a loan authorization level of $602
million for rural broadband telecommunications, $266 million more than
recommended by the House and requested by the Administration, and $45 million
less than recommended by the Senate bill. For broadband direct loan subsidies and
grants, P.L. 108-199 provides $13.1 million and $9 million respectively. This is $19
million more than recommended by the House bill and $4 million less than
recommended by the Senate measure. No funding was provided for broadband direct
loan subsidies in FY2003. For purposes of loans and grants under these programs,
P.L. 108-199 also adopts the Senate definition of a rural area as one outside an
incorporated city or town and with a population of 20,000 residents or less.
Rural Business-Cooperative Service. P.L. 108-199 provides an FY2004
appropriation of $84 million for the RBS accounts to support rural business
development and expansion. This is $12 to $13 million more than the levels
recommended by the House and Senate bills and $46 million more than requested.
P.L. 108-199 adopts the loan subsidy and authorization levels for the Rural
Development Loan Fund as recommended by the House and Senate bills and as
requested by the Administration. P.L. 108-199 also adopts the Senate
recommendation to provide $15 million in loan authorization for the Rural Economic
Development Loan account, approximately $1 million less than the House measure
and the same as requested. For Rural Cooperative Development grants, P.L. 108-199
provides $24 million. This is $11 and $15 million more respectively than the House
and Senate measures.
Within the RBS appropriation, P.L. 108-199 provides an FY2004 appropriation
of $12.7 million for the Empowerment Zone/Enterprise Community Initiative
(EZ/EC), approximately $1.7 million more than the House measure and $1.7 less
than the Senate recommendation. The Administration made no funding request for
the program. The conference report also provides $1 million for the two rural EZs
(Aroostook County, Maine and Middle Rio Grande FUTURO communities) chosen
in Round III of the Empowerment Zone competition.
For more information on USDA rural development programs, see the CRS
Electronic Briefing Book, Agriculture Policy, page on “Rural Development,” at
[ http://www.congress.gov/brbk/html/ebagr22.html] .
Food and Nutrition Programs
The FY2004 consolidated appropriations act (P.L. 108-199) provides total
funding of $47.3 billion for USDA nutrition programs, an increase of $5.4 billion
over FY2003 spending for these programs. The final amount is higher than the $44.2

billion recommended by the Administration, the $46.3 billion proposed by the
Senate, and the $44.1 billion proposed by the House because of higher than originally
projected unemployment resulting in greater participation in income-tested programs.
Food and Nutrition programs include the food stamp program, child nutrition
programs (e.g., school lunch, breakfast, summer food, child care, special milk, etc.),
the special supplemental nutrition program for women, infants and children (WIC),
and various commodity donation programs.
The food stamp program, the largest of the federal nutrition programs, is
expected to serve over 21 million people in FY2004, according to Administration
estimates. For FY2004, Congress agreed to total funding of $30.9 billion for food
stamp and related programs. This is $4.6 billion more than FY2003 spending; $3.2
billion more than the Administration request and House proposal, and $1 billion
more than the Senate proposal. The final amount funds food stamp expenses (food
benefits, administration, and the Food Distribution Program on Indian Reservations)
at $26.4 billion, the food stamp contingency reserve at $3 billion, $1.4 billion for
Puerto Rico and American Samoa, and $140 million for the emergency food
assistance program (EFAP). Food stamp expenses are funded at the Senate proposed
level ($2.2 billion more than the Administration request and House proposal) because
more recent projections indicate higher than originally expected unemployment.
Another difference between the finally enacted amount and the Administration,
House, and Senate proposals is in the reserve fund, which was raised from $2 billion
to $3 billion. Other food stamp related programs (Puerto Rico and American Samoa
and EFAP) are funded at the same levels as were proposed by the House and Senate
bills but slightly more ($5 million) than the Administration request. The final law
also contains language amending the Food Stamp Act to ensure that food stamp
benefits in FY2004 for Alaska and Hawaii are not lower than those in FY2003.
Child Nutrition programs receive a total of $11.417 billion² under the finally
enacted law. This is $837 million more than FY2003 spending for these programs,
and $1 million less than was proposed by the Administration and the House- and
Senate-passed bills. The difference reflects a reduction from $6 million to $5 million
for a certification study by the FNS. Child nutrition funding is used to assist with the
costs of meal service programs in schools, child and adult care, and summer and
after-school programs, milk programs, and related nutrition and administrative
support. The largest program, the school lunch program, served subsidized meals to
some 28.7 million children in FY2003. For FY2004 it would receive an estimated
$6.7 billion and serve 29.1 million children, according to USDA estimates.
Conference report language encourages the Secretary of Agriculture to take action
to prevent purchases for the school lunch program of chicken treated with
fluoroquinolones (an antibiotic treatment).

² This does not reflect some $400 million in surplus commodities purchased and donated to
child nutrition programs using section 32 agricultural surplus removal funds.
Note: The FY2004 consolidated appropriations act (P.L. 108-199, H.R. 2673) contains a
0.59 percent across-the-board rescission in all discretionary accounts. Enacted FY2004
funding levels in this report do not reflect the effects of this rescission.

Several child nutrition programs and provisions due to expire at the end of of
FY2003 were temporarily extended through March 31, 2004 in separate legislation
(P.L.108-134) after the Congress was unable to agree on a comprehensive child
nutrition reauthorization bill. These programs include: (1) the summer food service
program and summer food service pilot projects; (2) authority for the use of
agricultural funds to buy commodities for food programs; (3) provisions relating to
eligibility for private non-profit child and adult care food providers, and (4) a
provision extending a provision permitting the exclusion of military housing
allowances for free and reduced price meal eligibility.
WIC program funding authority, which expired at the end of FY2003, was not
among the expiring programs temporarily reauthorized by P.L.108-134.
Nevertheless, the program was funded in the FY2004 consolidated appropriations act
at $4.64 billion. This program provides monthly food packages to low-income
pregnant and postpartum mothers and children under age 5 who are at nutritional
risk. The amount provided by P.L. 108-199 is the same as that recommended by the
Senate; $51 million less than the House proposal; $130 million less than the
Administration request; and $56.8 million less than the FY2003 appropriation. The
Senate committee report (S. Rept.108-107) justified the agreed-upon FY2004
reduction in appropriated funds from FY2003 on the basis of lower than originally
projected FY2003 participation rates and a slight decrease in WIC food package
costs. Moreover, according to the Administration, there will be $125 million in
unexpended reserve funds from FY2003 that can be used in FY2004. The report
projected that the final funding level of $4.64 billion would be adequate to maintain
participation at the FY2003 level of approximately 7.8 million.
An Administration proposal to remove funding for the Farmers’ Market
Nutrition Program (FMNP)³ from the WIC budget, and instead, fund this activity
under the Commodity Assistance Program (CAP, see below) was not adopted in the
final law. The House-passed bill concurred with this change; the Senate bill did not.
The final law sets $23 million ($2 million less than the Senate bill) as the amount of
WIC funds to be spent on the FMNP. It also allows not less than $15 million of
WIC funds for a breastfeeding support initiative, and up to $25 million for
management information systems. Up to $4 million of WIC funds are permitted to
be used for pilot projects to combat childhood obesity, $1 million less than the Senate
bill recommendation.
The Commodity Assistance Program (CAP) is a category created by
appropriators to combine funding for a variety of commodity donation programs
authorized by several agriculture laws. Programs include the commodity
supplemental food program (CSFP); emergency food assistance program (EFAP)
administrative grants; and funding for Food Donations and Pacific Island Assistance.

³ The FMNP provides coupons to WIC recipients to use to purchase fresh foods at farmers’
markets.
Note: The FY2004 consolidated appropriations act (P.L. 108-199, H.R. 2673) contains a
0.59 percent across-the-board rescission in all discretionary accounts. Enacted FY2004
funding levels in this report do not reflect the effects of this rescission.

The finally enacted law provides a total of $150 million for these programs, instead
of the $166 million proposed by the Administration and the House and the $145
million proposed by the Senate. This is $13.4 million less than the amount spent for
these programs in FY2003. Of the amount appropriated, the CSFP is funded at
$98.92 million. The CFSP provides monthly food packages made up of commodities
to low-income pregnant and postpartum women, children under 6 and elderly
persons. The final law provides $3.93 million more than the Administration request,
and the House and Senate recommended levels. Conference report language
indicates the conferees’ intent that the funding maintain the same caseload in FY2004
as that existing at the end of FY2003. The final CAP funding also provides $50
million to support the administrative costs of distributing commodities through the
EFAP, and $1.081 million for food donations for disasters and Pacific Island
assistance, and contains language authorizing assistance to nuclear-affected islands.
Food and Drug Administration (FDA)
The Food and Drug Administration (FDA), an agency of the Department of
Health and Human Services (DHHS), is responsible for regulating the safety of
foods, drugs, biologics (e.g., vaccines), and medical devices. The agency is funded
by a combination of congressional appropriations and various user fee revenues,
assessed primarily for the pre-market review of drug and medical device applications.
The total amount of user fees to be collected each year is set in FDA’s annual
appropriations act. The FY2004 consolidated appropriations act (P.L. 108-199)
provides a total program level of $1.704 billion. Of this amount, $1.387 billion is
appropriated for FDA salaries and expenses, an increase of $6 million over the
$1.381 billion appropriated for FY2003, but $19 million less than the Administration
request of $1.406 billion. P.L. 108-199 also appropriated $7 million to pay for
construction and maintenance of FDA’s buildings and facilities. In addition, P.L.

108-199 allows FDA to collect a total of $309.7 million in user fees during FY2004,

an amount 14.5% higher than the $270.5 million in user fees for FY2003.
User Fees
Total user fee revenues, which have risen steadily over the past 10 years,
account for nearly 18% of FDA’s total program level this year. The Prescription
Drug User Fee Act (PDUFA), reauthorized as part of the 2002 Public Health Security
and Bioterrorism Preparedness and Response Act (P.L. 107-188), allows FDA to
collect user fees for the review of drug and biologic applications. P.L. 108-199 sets
these fees at $249.8 million, as the President requested, an increase of $26.9 million
over the $222.9 million for FY2003. In addition, the new Medical Device User Fee
and Modernization Act (MDUFMA) of 2002 (P.L. 107-250) authorizes the agency
to charge user fees for medical device applications as well. P.L. 108-199 calls for
$31.7 million in medical device user fee assessments, an increase over the $25.1
million for FY2003. Moreover, the President signed the new Animal Drug User Fee
Act of 2003 (P.L. 108-130) on November 18, 2003, and the conference committee

recommended that $5 million be derived from these fees. The FDA also receives
$23.2 million in user fee revenues from mammography clinics, color certification
receipts, and export certificates.
Counterterrorism Activities
The conference report provides $20.5 million for FDA’s counterterrorism
activities in FY2004, the same as the budget request. These funds are consolidated
under the category of food safety as part of the DHHS’s overall strategy to protect the
nation’s food supply, and include $5 million in grants to states, $5 million for
laboratory protection, and another $10.5 million to support FDA’s new food facility
registration system. This initiative, mandated under the Bioterriorism Act of 2002,
requires all food facilities, both domestic and foreign, to register with the FDA.
Unified Financial Management System
FDA’s Unified Financial Management System (UFMS), which integrates the
Department’s financial management structure, provides HHS leaders with a more
timely and coordinated view of critical financial management information.
Conference report language includes a total of $9.445 million for the UFMS, an
increase of $1.145 million. The conferees directed that, from this total amount, no
less than $4.5 million is to be invested in improvements to FDA’s legacy systems,
and cannot be used for UFMS contracts or global UFMS costs.
Food
Conference report language continues to support $1.9 million for research at the
New Mexico University Laboratory to develop rapid test methods for microbiological
pathogens found in fruits and vegetables and to develop models and data analysis to
facilitate implementation of FDA’s rules on food safety, homeland security,
bioterrorism, and other initiatives.
In three other issues related to food, conferees (1) agreed to an appropriation of
$21.607 million for Bovine Spongiform Encephalopathy (BSE) prevention activities;
(2) allocated $692,000 for the food center’s adverse event reporting system; and (3)
set aside a total of $10.9 million for the regulation of dietary supplements, a
$500,000 increase over FY2003. The conference report concurs with a Senate
provision that directs the agency to spend no less than $250,000 to process comments
on its March 5, 2003 proposed rule to require warning labels on dietary supplements
containing ephedrine alkaloids.
Seafood
In report language, the conferees said they expect FDA to devote no less than
$250,000 to continuing work with the Interstate Shellfish Sanitation Commission

(ISSC) and at least $250,000 to promoting educational and research activities related
to shellfish safety in general and Vibrio vulnificus in particular. On other seafood
safety issues, the conference committee let stand a House requirement that FDA
produce a report describing its current efforts for controlling temperature
requirements for imported seafood; the Senate urged FDA to promote new cost-
effective technologies to control temperatures. The House required the FDA to report
on the sampling frequency and violation rates for chloramphenicol contamination in
farm-raised imported shrimp, while the Senate encouraged the agency to increase its
frequency of inspections.
Drug Issues
The conferees directed FDA to spend no less than $53.8 million for its generic
drugs program, confirming that the timely approval of generic drug products plays
an important role in addressing the high cost of prescription drugs. An $8 million
increase over the FY2003 level, the amount is $5 million less than the $13 million
increase called for in the budget request. Nevertheless, both the House and Senate
committees said this funding level — coupled with the pay increases for the program
— will allow the agency to hire 28 more reviewers and examiners and review at least
85 percent of generic drug applications within 6 months of submission. In separate
but related legislation, the President signed into law on December 8, 2003, the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (H.R. 1),
which contains a provision to close existing loopholes in the Hatch-Waxman patent
law and, in so doing, speed up the availability of less costly generic drugs for
consumers.
Conferees rejected a House-passed provision that would have blocked FDA
from preventing individuals, wholesalers, and pharmacists from importing cheaper
FDA-approved prescription drugs from foreign suppliers. The recently enacted
Medicare reform legislation also includes a provision to let pharmacists and drug
wholesalers import prescription drugs from Canada, but only if the DHHS Secretary
first certifies to Congress that the drugs will be safe and provide substantial cost
savings for American consumers.
To address other drug-related issues, conference report language provides $8
million to reduce review times and increase the number of generic drugs on the
market; $4 million to improve pediatric labeling under the Best Pharmaceuticals for
Children Act; $3 million for activities related to patient safety; and $650,000 to
support FDA’s over-the-counter (OTC) drug program. Acknowledging the important
role OTC drugs play in the nation’s healthcare system, Congress directed that the
OTC funds be used to hire and train additional employees to improve the OTC drug
review process and work towards finalizing the OTC drug monograph system. In
addition, the conferees provided $13.3 million to support grants and contracts under
the Orphan Products Grants Program.

Commodity Futures Trading Commission (CFTC)
The Commodity Futures Trading Commission (CFTC) is the independent
regulatory agency charged with oversight of derivatives markets. The CFTC’s
functions include oversight of trading on the futures exchanges, registration and
supervision of futures industry personnel, prevention of fraud and price manipulation,
and investor protection. Although most futures trading is now related to financial
variables (interest rates, currency prices, and stock indexes), Congressional oversight
is vested in the Agricultural Committees because of the market’s historical origins
as an adjunct to agricultural trade. For FY2004, the consolidated appropriations act
(P.L. 108-199) provides $90.4 million , which is $2 million more than the House-
and Senate-passed measures and the Administration request, and $5 million above
the FY2003 appropriation. The Senate-reported version of the bill had originally
provided $90.4 million. However, an adopted floor amendment in the Senate
reduced CFTC funding by $2 million to offset the added cost of a rural development
amendment. The final enacted level in effect is the same as the Senate-reported level.
In earlier Senate floor action on the appropriations measure, the Senate rejected
by a vote of 41-56 an amendment offered by Senator Feinstein that would have given
the Commodity Futures Trading Commission (CFTC) and Federal Energy Regulatory
Commission (FERC) new powers to regulate energy trading and marketing. The
amendment would have required currently unregulated dealers in over-the-counter
derivatives contracts based on energy products to report certain data to the CFTC,
and would have increased the anti-fraud authority available to both regulators.
Proponents of such legislation have argued that the collapse of Enron and the
California electricity crisis were signs of a dangerous regulatory gap. Opponents
believe that regulators have adequate authority to pursue fraud and manipulation
under current law, and point to ongoing enforcement actions against Enron and other
energy traders as evidence of this.

Table 3. USDA and Related Agencies Appropriations,
FY2004 Budget Request, House Bill, Senate Bill and Enacted,
vs. FY2003 Enacted
(budget authority, in millions of $)
FY2003 FY2004Ad mi n i - FY2004House- FY2004Senate- FY2004Enacted
Agency or Major ProgramEnactedstrationPassed Passed(P.L.
(1) Request Bill Bill 108-199)
Title I — Agricultural Programs
Agric. Research Service (ARS)
Regular Appropriation 1,153.81,011.31,049.91,091.51,152.7
Supplemental (P.L. 108-11)110.0000 0
Coop. State Research Education and
Extension Service (CSREES)1,117.21,003.41,108.51,117.81,119.6
Economic Research Service (ERS)68.776.771.469.971.4
National Agric. Statistics Serv.(NASS)138.4136.2129.8128.9128.9
Animal and Plant Health Inspection
Service (APHIS) 692.7699.9730.5712.0725.6
Agric. Marketing Service (AMS)91.591.892.794.094.2
Grain Inspection , Packers and
Stockyards Admin. (GIPSA)39.741.739.735.635.9
Food Safety & Inspection Serv. (FSIS)754.8797.1785.3783.8784.5
Farm Service Agency (FSA) Salaries
and Expenses970.41,016.81,016.8988.8988.8
FSA Farm Loans - Subsidy Level 226.8210.7200.2194.3196.7
*Farm Loan Authorization3,937.03,518.43,385.63,248.5 3,264.9
FSA Farm Loans- Salaries and
Administrative Expenses285.3298.1298.1291.0291.0
Risk Management Agency (RMA)
Salaries and Expenses70.278.571.571.471.4
Federal Crop Insurance Corp. Fund ⁽³⁾2,886.03,368.03,368.03,368.03,368.0
Commodity Credit Corp. (CCC) ⁽³⁾16,285.017,275.017,275.017,275.017,275.0
Other Agencies and Programs 564.5665.6501.8554.7521.8
Total, Agricultural Programs
Regular Appropriation 25,346.726,770.826,739.226,775.226,825.5
Supplemental Appropriations110.0 — - — - — - — -
Title II — Conservation Programs

FY2003 FY2004Ad mi n i - FY2004House- FY2004Senate- FY2004Enacted
Agency or Major ProgramEnactedstrationPassed Passed(P.L.
(1) Request Bill Bill 108-199)
Conservation Operations819.6703.6850.0826.6853.0
Watershed Surveys and Planning11.15.011.110.010.6
Watershed & Flood Prevention109.340.090.055.087.0
Watershed Rehabilitation Program29.810.040.029.829.8
Resource Conservation &50.749.952.951.051.9
Development
Farm Bill Technical Assistance0432.2000
Total, Conservation 1,021.31,241.61,044.8973.21,033.1
Title III — Rural Development
Rural Community Advancement
Program (RCAP)901.8477.9701.0769.5757.4
Salaries and Expenses144.8147.5146.5140.9141.9
Rural Housing Service (RHS)1,567.41,546.11,523.91,507.71,376.2
* RHS Loan Authority4,156.04,319.04,364.74,352.84,362.1
Rural Business-Cooperative Service50.339.071.670.784.0
* RBCS Loan Authority55.055.056.155.055.0
Rural Utilities Service (RUS)112.081.383.6106.4102.3
* RUS Loan Authority6,120.73,521.05,291.06,725.56,680.5
Total, Rural Development2,777.02,292.62,527.22,593.82,462.5
* Rural Development, Total Loan
Authority 10,331.8 7,895.0 9,711.8 11,133.3 11,097.6
Title IV — Domestic Food Programs
Child Nutrition Programs10,580.111,418.411,418.411,418.411,417.4
WIC Program 4,696.04,769.24,588.34,639.24,639.2
Food Stamp Program26,313.727,746.027,746.029,948.0 30,946.0
Commodity Assistance Program163.4166.1166.1145.7150.0
Food Donation Programs1.10000
Nutrition Programs Administration135.7144.8140.5138.3138.3
Total, Food Programs41,890.644,245.444,059.946,290.347,291.6
Title V — Foreign Assistance

FY2003 FY2004Ad mi n i - FY2004House- FY2004Senate- FY2004Enacted
Agency or Major ProgramEnactedstrationPassed Passed(P.L.
(1) Request Bill Bill 108-199)
Foreign Agric. Service (FAS)129.1140.8133.9131.6132.1
Public Law (P.L.) 480
Regular Appropriation1,334.71,320.91,327.91,326.01,326.0
Supplemental (P.L. 108-11)369.00000
McGovern-Dole International Food for
Education Program050.056.925.050.0
CCC Export Loan Salaries4.04.34.34.154.15
Total, Foreign Assistance
Regular Appropriation1,467.81,516.01,523.01,486.81,512.3
Suppl em ent al 369.0 0 0 0
Title VI — FDA & Related Agencies
Food and Drug Administration1,381.71,406.11,395.21,392.21,394.0
Commodity Futures Trading
Commission (CFTC)85.488.488.488.490.4
Total, FDA & CFTC1,467.11,494.61,483.71,480.61,484.4
Title VII — General Provisions303.408.54.523.0
Total, before adjustments:
Regular Appropriations74,231.977,561.177,386.379,602.480,632.3
Supplemental Appropriations479.00000
Grand Total74,752.977,561.177,386.379,602.480,632.3
CBO Scorekeeping Adjustments ⁽⁴⁾-141.268.0106.089.0-2.4
Grand Total, Including CBO
Scorekeeping Adjustments and74,611.777,629.177,492.379,691.4 80,629.9
Emergency Spending
Addendum:
Division N, Title II (P.L. 108-7)
Disaster Assistance Provisions⁽⁵⁾3,084.00000
Division H, Sect.102
(FY2004 Conf. Rept.)
California Wildfire Assistance ⁽⁶⁾0000175.0
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 total appropriation.
(1) FY2003 enacted levels include amounts appropriated for USDA and related agencies in the
Consolidated Appropriations Act, 2003 (P.L. 108-7) adjusted for the 0.65% across-the-board rescission
in all discretionary programs (with the exception of the WIC program which was specifically exempted
from the rescission), and the $479 million in supplemental FY2003 agriculture appropriations provided
by the Wartime Supplemental Appropriations Act, 2003.
(2) The FY2004 omnibus conference agreement (H.R. 2673) contains a 0.59% across-the-board
rescission in all non-defense discretionary accounts. Figures in this table are as reported by the
conferees and do not include the effect of the rescission.
(3) 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 FY2003 and FY2004 are USDA estimates of the necessary appropriations.
(4) Scorekeeping adjustments reflect the savings or cost of provisions that affect mandatory programs,
plus the permanent annual appropriation made to USDA’s Section 32 program.
(5) 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-FY2013). This additional spending
does not appear in the grand total listed above.
(6) Division H of P.L.108-199 contains $225 million in supplemental funding for various USDA
assistance programs (including $50 million for USDA’s Forest Service, which is funded under the
Interior appropriations bill). Spending for this assistance was offset in the conference agreement by a
mandated rescission of $225 million from the Federal Emergency Management Agency (FEMA).