Highlights of Selected Agriculture, Energy, and Environment Programs in the President’s FY 2013 Budget Request

March 12, 2012

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On February 13, President Obama released his FY 2013 budget request, which marks the beginning of the annual budget and appropriations process. The President’s budget requests $154.7 billion in overall funding for USDA - $7.1 billion (4.6 percent) more than allotted in FY 2012. The President’s FY 2013 budget requests $23 billion in discretionary funding for the United States Department of Agriculture (USDA) - $700 million (3.0 percent) less than the level enacted for FY 2012. The Administration aims to reduce mandatory “farm bill” spending by $32 billion over the next decade by eliminating direct farm payments, reducing subsidies to crop insurance companies, streamlining programs, and closing offices. The President requested $27.2 billion in discretionary funding for the Department of Energy (DOE) – $856 million (3.2 percent) more than the level enacted for FY 2012. The budget request seeks to offset these increases by reducing tax incentives to the oil and gas industries. The President’s request for the Environmental Protection Agency (EPA) reduces discretionary funding - for the third consecutive year – to $8.3 billion, or 1.2 percent less than the enacted FY 2012 level. The Department of the Interior would receive a minimal reduction of $100 million under the President’s budget – the proposed $11.4 billion represents a 3.2 percent reduction as compared to the FY 2012 enacted level. 

From the United States Department of Agriculture (USDA) 

President’s FY 2013 Budget Request for the USDA (in millions) 

The President’s FY 2013 budget seeks to reduce the discretionary spending for USDA by $32 billion over the next decade by eliminating direct farm payments, reducing subsidies to crop insurance companies, streamlining programs, and closing offices. Since FY 2010, USDA funding levels have fallen 12 percent as the department continues to modernize and streamline key programs. The administration requested $827 million in discretionary conservation program funding – a decrease from the FY 2011($898 million) and FY 2012 ($851 million) enacted levels.

President’s FY 2013 Budget Request for the USDA Programs of Interest (in millions) 

1. Includes a permanent reduction to the program of 759,632 acres ($68 million reduction over 5 years)
2. The additional $200 million will add an additional 12 million new acres to the program in 2013.
3. The total shown includes the SARE baseline in addition to the SARE Federal State Matching Grant Program and the SARE Professional Development Grant Program (SARE-PDP)

* Subject for reauthorization in 2012.

Commodity Programs 

Commodity Credit Corporation (CCC) The Commodity Credit Corporation (CCC) provides funding for commodity programs administered by the Farm Service Agency (FSA) and many “farm bill” conservation programs. The CCC is a federally owned and operated entity within USDA created with the intent to stabilize commodity market prices and producer income through loan and payment programs, as well as moderating food supply levels. The President’s FY 2013 budget requests $9.119 billion for the corporation – which includes $960 million for the Tobacco Trust Fund. This is an increase of $314 million from FY 2012.  

In addition to his focus on risk management tools for farmers, the President has also requested $171 million in CCC funding for “... aiding in the development of new and additional markets, marketing facilities, and uses for such commodities.” This funding will support the production of bio-based jet fuel through a partnership with the Department of Energy (DOE) and the United States Navy. 

Direct Payments to Farms For commodities, the budget request highlights the administration’s commitment to re-evaluating the safety net for farmers by eliminating direct payments to farms and reducing subsidies by 2 percent to crop insurance companies. The President’s budget requests would reduce crop insurance spending by $7.6 billion over the next decade.  

Average Crop Revenue Election Payments (ACRE) While there is consensus between Congress and the administration over the elimination of direct payments, the reductions to crop insurance subsidies and an increase to the Average Crop Revenue Election payments (ACRE) program have raised some concerns. Crop insurance subsidies already witnessed reductions in the 2008 “Farm Bill” and both the House and Senate Agriculture Committee chairmen have signaled their dismay with the reductions - they see the subsidies as an important risk management tool. The 2 percent reduction would come from the 60 percent of crop insurance premiums that are paid by the taxpayer. As for ACRE, the program has seen low participation, as compared to direct and counter-cyclical payment programs, signaling the need for the potential overhaul to the complex program. In FY 2011, about 1.6 million farms participated in the direct and counter-cyclical payment programs, while about 140,000 farms were enrolled in ACRE in 2011.

Loan Incentives, Rural Development and Farm Loans 

Environmental Quality Incentives Program (EQIP) Under the President’s budget request, EQIP would maintain flat-funding as compared to the 1.4 billion enacted in FY 2012. Funds will continue the implementation of best practice conservation techniques for private landowners. 

Wetlands Reserve Program (WRP) The President’s budget does not include new funding for WRP. The 2008 “Farm Bill” authorized 3,041,200 acres for enrollment under the program. With the program set for reauthorization in 2012, the President’s budget only includes $224 million for the continued enrollment of the 185,800 remaining acres under the program. 

Grasslands Reserve Program (GRP) The President’s budget does not include new funding for GRP. The 2008 “Farm Bill” authorized 1.2 acres for enrollment under the program. With the program set for reauthorization in 2012, the President’s budget only includes $5 million for continued enrollment of remaining acreage under the program. 

Farm and Ranch Lands Protection Program (FRPP) The President’s budget request for FRPP includes $50 million in new funding. This will increase the acreage allowed for enrollment to 60,000 acres. 

Wildlife Habitat Incentives Program (WHIP) WHIP would receive a $23 million increase over the FY 2012 enacted level. The $73 million in funding would increase acreage of public lands for fish and wildlife habitats to 1.2 million acres. 

Voluntary Public Access and Habitat Incentive Program (VPA-HIP) The President’s budget request includes $5 million to support the continued servicing of existing contracts. The VPA-HIP was authorized at $50 million in the 2005 “Farm Bill;” however, no funds are available in 2012. 

Rural Business Enterprise Grants (RBEG) Under the President’s budget request, funding for RBEG grants will remain at $10 million and RBEG direct loans would remain at $33 million.

Renewable Energy 

Biomass Crop Assistance Program (BCAP) While the President’s budget does not include new funding for BCAP – it does provide funding to support long-term contracts made with the Farm Service Agency (FSA). While other BCAP obligational authority was set at $17 million in the Consolidated Appropriations Act of 2012 – with the statutory authority to make new contracts ending in 2012 - these long-term contracts have a 15 year lifespan.  

Renewable Energy for America Program (REAP) The budget request does not include new funding for REAP, since the program is scheduled for reauthorization in 2012, the request did include $19 million in discretionary funding to support loan guarantees. 

Conservation Stewardship Program (CSP) The FY 2013 request for this program increased by more than $200 million to $972 million. The 2008 Farm Bill replaced the Conservation Security Program with a new Conservation Stewardship Program which is distinguished from the old program in that it encourages participants to undertake new conservation activities in addition to maintaining and managing existing conservation activities. Also, the new program operates under an annual acreage limitation rather than a funding cap. The proposed budget of nearly $1.0 billion will allow CSP to enroll 12 million new acres during 2013 in addition to servicing prior year contracts. 

Research & Education 

Sustainable Agriculture Research and Education (SARE) The President’s budget request includes $22.7 million in funding for SARE. This proposed $3.5 million increase will support the implementation of the Federal-State Matching Grant program – a program targeting state-level agriculture research, education and extension initiatives. 

Organic Transitions Research Program (OTR) The budget request maintains level funding - $4 million – for OTR in FY2013. 

Agriculture and Food Research Initiative (AFRI) AFRI, the largest competitive research grant program, would receive $325 million under the budget request - $61 million increase (23 percent) over the FY 2012 enacted level. 

Organic Research and Education Initiative (OREI) With the program set for reauthorization in 2012, the President’s budget does not include new funds for the program. 

Specialty Crop Research Initiative (SCRI) With the program set for reauthorization in 2012, the President’s budget does not include new funds for the program. 

Beginning Farmer and Rancher Development Program (BFRDP) With the program set for reauthorization in 2012, the President’s budget does not include new funds for the program. 

National Sustainable Agriculture Information Service (ATTRA) The budget request maintains level funding - $2.25 million – for ATTRA in FY2013. 

From the Department of Energy (DOE)

President’s FY 2013 Budget Request for DOE (in millions) 

The President’s FY 2013 budget request for the Department of Energy maintains his focus on strong investments in clean and renewable energy development and a move from traditional fossil fuel energy programs. As previously mentioned, the President requested $27.2 billion in discretionary funding for the Department of Energy (DOE) – $856 million (3.2 percent) more than the level enacted for FY 2012 - to support his energy initiatives. 

President’s FY 2013 Budget Request for the DOE Programs of Interest (in millions) 

Weatherization Assistance Grants Program (WAP) The President’s budget requests $139 million in discretionary funding for the Weatherization Assistance Grants Program (WAP) - $71 million more than the $68 million enacted in FY 2012. WAP saw a 60 percent decrease to its funding under the Consolidated Appropriations Act of 2012.  This increase will support certified training programs in a continued effort to expand job creation in the clean energy industry. WAP enables low-income families to make energy efficiency improvements to their homes, allowing them to reduce their monthly energy bills. The DOE provides funding to states, territories, and tribal governments, which manage the day-to-day details of the program through local community action agencies, nonprofit organizations, and local governments that provide these weatherization services.  

State Energy Grants Program (SEP) The President’s budget requests $49 million in discretionary funding for the State Energy Grants Program (SEP) - $1 million less than enacted in FY 2012. SEP provides financial and technical assistance to states through formula and competitive grants. States use their formula grants to develop state strategies and goals to address their energy priorities. Competitive grant solicitations for the adoption of energy efficiency/renewable energy products and technologies are issued annually based on available funding. States provide a 20 percent match under SEP annual formula allocations. 

From the Environmental Protection Agency (EPA)

President’s FY 2013 Budget Request for EPA (in millions) 

The President’s FY 2013 budget request decreases funding for the EPA by approximately $105 million to $8.3 billion, a 1.2 percent decrease from the $8.4 billion enacted in FY 2012. This would be the third year of decreased funding for the agency – with $50 million in proposed savings due to the elimination of EPA programs that have completed their goal or can be accomplished through continued partnerships with the states. EPA would also see decreased funding for climate and air regulation – under the President’s budget request that reductions funding for these activities to $473 million.
 

President’s FY 2013 Budget Request for the EPA Programs of Interest (in millions) 

Clean Water State Revolving Fund (CWSRF) The President’s FY 2013 budget proposal would reduce the Clean Water State Revolving Fund to $1.175 billion - $291 million less than the FY 2012 enacted level.

Drinking Water State Revolving Fund (DWSRF) The budget requests $850 million – a $68 million decrease from the FY 2012 enacted level.

Brownfields Cleanup Under the President’s budget request, funding for the Brownfields Cleanup grant program would decrease $1.6 million to $93.2 million in FY 2013. 

Diesel Emissions Reduction The President’s budget continues reductions to grants that go to states for retrofitting cars and trucks to reduce air pollution from diesel engines. The Diesel Emissions Reduction Grant Program would be reduced from $30 million to $15 million in FY 2013. 

Superfund The budget request proposes a $63 million reduction to the Superfund program – a 6 percent reduction in funding from the FY 2012 enacted level. Although the administration has signaled that these reductions will not endanger the health of these communities, the reduction in funding would impact the number of assessments and general remedial actions taken moving forward. 

Leaking Underground Storage Tanks (LUST) The LUST program funding would be reduced by $25 million – the budget requests $104.1 million for FY 2013.

From the Department of the Interior 

President’s FY 2013 Budget Request for the Department of the Interior (in millions) 

Funding for the Department of the Interior received a minimal reduction under the President’s budget - $100 million less than the $11.4 billion enacted in FY 2012. The agency also touts large gains in revenue, with an estimated $14 billion in revenue generated by Interior programs. The President’s budget also seeks to streamline agency activities by eliminating or reducing the capacity of low priority initiatives, postpones new projects, and modernizing agency operations. These proposed changes could reduce spending by $516.8 million as compared to FY 2012. 

President’s FY 2013 Budget Request for the Department of the Interior Programs of Interest (in millions)

Abandoned Mine Land Reclamation The President’s budget seeks to reform the program by eliminating unrestricted payments to states that have completed certification for the coal reclamation activities. The budget also proposes to reform an Abandoned Mine Land Reclamation program for abandoned hard-rock sites supported by fees generated in mineral production by making the remaining funding for the program competitive. 

From the Department of Health and Human Services (HHS)*

*This update includes the Low Income Home Energy Assistance (LIHEAP) budget request. LIHEAP, in conjunction with the Weatherization Assistance Program, represents the cornerstone of the federal and state partnership to administer public energy assistance. 

Low Income Home Energy Assistance (LIHEAP) The President’s proposal includes $3.0 billion for the Low Income Home Energy Assistance Program (LIHEAP).  There is $2.8 billion in base grants and $200 million in contingency funds.  This proposal is down $452 million from FY 2012 levels.   
 

Additional Materials

FY 2013 Related Budgets Documents 

• Office of Management and Budget Overview Page - http://www.whitehouse.gov/omb/budget/Overview/
• Department of Agriculture - http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/agr.pdf
• Department of Energy -http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/doe.pdf
• Environmental Protection Agency - http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/epa.pdf
• EPA Budget in Brief - http://www.epa.gov/planandbudget/annualplan/FY2013_BIB.pdf
• Department of the Interior - http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/interior.pdf
• Fiscal Year 2013 Interior Budget in Brief - http://www.doi.gov/budget/2013/13Hilites/toc.html  

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