Biden’s FY 2024 USDA Budget Wants FSA as ‘Lender of First Opportunity’

Farm Journal
Farm Journal
(Farm Journal)

Budget proposals focus on conservation, research, lending and farm bill

USDA would ease housing costs in rural areas, continue to work on climate change and under President Joe Biden’s budget request for $30.1 billion in discretionary funding. More detailed information is scheduled for release next week. Link for details.

  • Under current law, USDA’s total outlays for 2024 are estimated at $228.3 billion. Outlays for mandatory programs are $190.8 billion, 83.6% of total outlays. Mandatory programs provide services required by law but are not funded through annual appropriations acts. Mandatory outlays include crop insurance, most nutrition assistance programs, farm commodity and trade programs, and several conservation programs. The remaining $37.5 billion, or 16.4%, of outlays are for discretionary programs such as: the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), food safety, rural development loans and grants, research and education, soil and water conservation technical assistance, animal and plant health, management of national forests, wildland firefighting, other Forest Service activities, and domestic and international marketing assistance.
  • Of $228 billion in total outlays, including discretionary ($37.5 billion) and mandatory ($190.8 billion), 71% will go to nutrition assistance, 13% for farm, conservation, and commodity programs, with 5% for forestry and 12% for “other.”

    Budget Ag 2

    Budget ag
  • For climate activities, USDA is investing more than $12 billion, up $1.9 billion from FY 2023 levels, “to combat the climate crisis through all aspects of the food and agricultural systems by focusing on climate science, clean energy innovation, mitigation via climate-smart land management practices, and adaptation and resilience.”

    Via conservation efforts like the Environmental Quality Incentives Program (EQIP), Agricultural Conservation Easement Program (ACEP), Regional Conservation Partnership Program (RCPP), and Conservation Technical Assistance (CTA), USDA said it can support up to 280,000 farmers and ranchers in applying conservation to around 125 million acres of land.

    The budget includes $1.02 billion in discretionary spending for Private Lands Conservation Operations, of which $904 million is for CTA programs and $118 million is for Soil Survey, Snow Survey, and Plant Materials Centers. USDA said that will go toward their “priority” of addressing climate change — climate-smart agriculture and climate hubs.
  • Significant hiring for the Natural Resources Conservation Service (NRCS), as the agency will be integrating soil carbon monitoring as part of establishing a soil health monitoring network. NRCS would receive $1.2 billion, or $208 million more than the FY 2023 enacted level, to continue conservation work to sequester carbon and reduce greenhouse gas emission from agriculture.
  • Funding from the Inflation Reduction Act (IRA) is noted, including $8.45 billion for EQIP, $1.4 billion for ACEP, $4.95 billion for RCPP, and $3.25 billion for the Conservation Stewardship Program (CSP), all of which are to be used between 2023 and 2031.
  • Agricultural research, education and outreach would see an increase of $299 million above fiscal 2023 levels, bringing overall agricultural research-related spending to more than $4 billion.
  • Proposes $400 million in new funding for rural broadband through USDA’s ReConnect grant and loan program, supplementing funding provided separately through the bipartisan infrastructure spending law. Appropriators provided $348 million in fiscal 2023 for the program that gives grants and loans to deploy broadband to unserved areas, especially tribal areas.
  • USDA wants to broaden its lending programs via legislative changes it wants enacted that it said will be budget neutral. “Agricultural producers know Farm Service Agency (FSA) as the lender of last resort, but FSA is now striving to be the lender of first opportunity, providing the resources to succeed and helping producers receive the assistance they need to continue farming, to build and maintain their competitive-edge, and to access more, new, and better markets to achieve a robust and competitive agriculture sector,” the budget said.

    The limit for microloans would be increased from $50,000 to $100,000 under the plan.
  • The administration wants to eliminate the limit on the years that a borrower can apply for direct operating direct farm ownership loans. The farming experience required for direct farm ownership loans would be reduced from three years to one year, with a waiver of the experience requirement for farmers with an established mentor.
  • Proposes eliminating a requirement that low-income borrowers repay subsidy costs for single-family direct loans while also proposing a $331 million increase above the fiscal 2023 enacted level for the department’s multifamily housing program. The administration says eliminating the subsidy repayment would put the department’s loan program on par with other departments. 

    The administration also says rural housing stock will become more resilient under a  proposal “to require energy and water efficiency improvements and green features” in the department’s  rural housing programs. It is unclear if the administration is referring to a regulatory change.
  • Crop insurance is briefly mentioned, with USDA proposing to make the pandemic-related pilot program for crop insurance to encourage cover crops a permanent component of the crop insurance program. Estimated outlays for the effort would be $75 million, with a 10-year cost of $1 billion. The goal is to increase the voluntary adoption of these practices, apparently a response to congressional Republicans who voice worry that climate practices will become mandatory or that farmers, ranchers and forestland owners who opt for conservation practices not tied to climate mitigation will be penalized.
  • There are no proposals to retarget benefits under the program away from larger producers toward smaller or underserved producers.
  • Regarding farm bill safety net programs, USDA notes the small amounts that will be paid out for the program in FY 2024 but offers no suggestions on how to change the programs moving forward.

    USDA said its budget would provide funding for the “staffing resources necessary to implement the 2023 Farm Bill,” with the administration saying it looked forward to working with Congress and others to “identify shared priorities for the 2023 Farm Bill that position USDA to seamlessly continue implementation and build on the historic legislative achievements of the first two years of the Biden administration.”
  • The new farm bill, USDA said, will be “an historic opportunity” to shift the program from “one that benefits a few to one that benefits many.” Further, USDA wants to work with Congress to “create opportunity and new revenue streams for American farmers, ranchers, and producers of all sizes through climate smart agriculture and forestry, biobased products, renewable energy, local and regional food systems, and other value-added opportunities.” USDA also hopes the farm bill will address climate change “through voluntary incentives to reduce climate risk and improvements to crop insurance,” but again the document offers no specific examples of how to achieve such goals.
  • To boost access to free school lunches, the budget calls for expanding use of a “community eligibility provision” that allows schools in high-poverty areas to offer meals at no cost to students even children do not meet income eligibility limits. The proposal would benefit nine million children at a cost of $14.6 billion over 10 years.
  • The administration cautioned farm bill writers pursuing time limits for food aid under the Supplemental Nutrition Assistance Program, which receives mandatory funding and currently serves about 41 million people. Congress allowed states to waive time limits on SNAP benefits for able-bodied adults without dependents during much of the Covid-19 pandemic but those exemptions will end on May 11 with the expiration of the public health emergency.
  • Pledges to continue a department initiative to cover overtime inspection fees for small and very small meat and poultry facilities as part of its agenda “to develop more diverse, robust, and resilient local and regional supply chains by targeting funding to increase the production capacity among smaller producers.”
  • Continue efforts to raise the pay of wildland firefighters to $15 an hour to make the Forest Service, a part of USDA, competitive with state fire agencies. The administration calls for a total of $316 million more than Congress provided in fiscal 2023 for the Forest Service and Interior Department to be used for higher pay. The Forest Service also would receive $323 million to implement its 10-year Wildfire Crisis Strategy designed to increase the scale of fuel and restoration efforts within high-risk fire sheds.


Latest News

First Thing Today | March 22, 2023

Bears controlled price action overnight, with corn, soybean and wheat futures trading solidly lower and near their session lows this morning.

After the Bell | March 21, 2023

After the Bell | March 21, 2023

Pro Farmer's Daily Advice Monitor

Pro Farmer editors provide daily updates on advice, including if now is a good time to catch up on cash sales.

New Spat in Lengthy Contract Negotiations for U.S. West Coast Dockworkers

Xi invites Putin to visit China as two leaders sign pacts and discuss war cooperation

Ahead of the Open | March 21, 2023

Corn, soybeans and wheat finished higher and near their session highs overnight, which should fuel followthrough buying this morning.

First Thing Today | March 21, 2023

Light corrective buying has surfaced in some of the grain and soy futures early this morning after they faced pressure for much of overnight trade.