The Senate passed the $124 billion fiscal year 2010 agricultural appropriations bill – $23 billion is discretionary funding, leaving $101 billion in mandatory spending. Key items in the bill include:

• Dairy support: $350 million for USDA to purchase additional dairy surplus items in an effort to raise dairy prices.

• Nutrition/WIC: $86.092 billion, including mandatory funding for domestic nutrition assistance; WIC is the special supplemental nutrition program for women, infants and children.

• Child Nutrition: School Lunch and Breakfast programs are funded at $16.8 billion in mandatory funding.

• Food Safety: Food Safety and Inspection Service is funded at $1.018 billion, which is $47 million above last year.

• International Food Aid: Food for Peace and the McGovern-Dole Food for Education Program are funded at $1.89 billion – an increase of $564 million.

• Research: USDA research agencies will receive $2.8 billion – an increase of $140 million.

• Animal identification: USDA’s animal identification (ID) program is funded at $7 million.

• Market Access Program (MAP) and Foreign Market Development (FMD): The bill fully funds MAP at $200 million and the FMD program at $34.5 million.
Major issues the House-Senate conference committee will have to resolve include animal ID funding, increased support for dairy and importation of Chinese chicken:

• The House-passed bill provides no funding for USDA’s animal ID program, noting it does not want to continue funding the ID program until USDA develops a comprehensive and effective program.

• The Senate provides additional funding for dairy. Other sectors may want to be included.

• The House bill continues the ban on the importation of processed chicken from China. The Senate allows for poultry imports from China if certain conditions are met, including audits of inspection systems, on-site reviews of slaughter and processing facilities, increased port of entry inspections and repeat reviews at least once a year. This has become a major trade issue between the United States. and China and threatens to develop into a larger trade dispute. USDA Raises Support Price for Dairy — Secretary of Agriculture Tom Vilsack announced USDA was increasing the amount paid for dairy products through the Dairy Product Prices Support Program to help with the economic conditions facing dairy farmers. The increases in dairy support prices, which will be in place from August 2009 through October 2009, will raise the price paid for nonfat dry milk from $0.80/lb. to $0.92/lb., the price paid for cheddar blocks from $1.13/lb. to $1.31/lb., and the price of cheddar barrels from $1.10/lb. to $1.28/lb. USDA estimates this will increase dairy farmers’ revenue by $243 million. The House Agriculture Subcommittee on Livestock, Dairy and Poultry has held a number of hearings on the economic conditions of the dairy industry.

Administration Announces New Strategies for Food Safety - Secretary of Agriculture Tom Vilsack and Secretary of Health and Human Services Kathleen Sebelius announced new strategies to keep America’s food supply safe. USDA’s Food Safety and Inspection Service (FSIS) issued guidance for inspectors to begin conducting routine sampling of bench trim for E. coli. The Food and Drug Administration (FDA) announced it was developing mandatory standards for growing, harvesting and processing fruits and vegetables. Secretary Vilsack said, “The actions we are taking today will result in safer food in our country, which means healthier children and less costly healthcare.”

Summer Recess for Congress — The House of Representatives and Senate are in summer recess until after Labor Day. When Congress returns, the major items will be health care reform, climate change and appropriation bills.

P. Scott Shearer
Vice President
Bockorny Group
Washington, D.C.