On May 1, the House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration held a hearing entitled: “Fiscal Year 2025 Request for the U.S. Department of Agriculture’s (USDA) Farm Production and Conservation (FPAC) Mission Area.” The witnesses in the hearing were:
- The Honorable Robert Bonnie, Under Secretary for FPAC, USDA
- Mr. Terry J. Cosby, Chief, Natural Resources Conservation Service (NRCS), USDA
- Mr. Zach Ducheneaux, Administrator, Farm Service Agency (FSA), USDA
- Ms. Marcia Bunger, Administrator, Risk Management Agency (RMA), USDA
Below is a summary of the hearing prepared by Delta Strategy Group. It includes several high-level takeaways from both panels, followed by summaries of opening statements and witness testimonies and a summary of the Q&A portion of the hearing.
Key Takeaways
The following is a summary of some of the topics explored in today’s hearing. Each is discussed in further detail in the Discussion section below.
- One topic in yesterday’s hearing discussed Treasury’s 40B and 45Z tax credits from the Inflation Reduction Act (IRA) for biofuels, NRCS goals, and proposed funding for FPAC.
- Representative Ashley Hinson (R-IA) asked Undersecretary Bonnie about the Treasury’s biofuel tax credit guidance and expressed concern that bundling conservation practices will be disadvantageous for American ag producers. Hinson asked USDA whether it will commit to offering non-bundled options for producers going forward. USDA said that it will ultimately be Treasury’s decision, but they are working to open more pathways for producers.
SUMMARY
Opening Statements and Testimony
Chairman Andy Harris (R-MD)
- USDA’s decision to waive crop insurance premiums for disadvantaged farmers under the 2022 Emergency Relief Program has sparked controversy. This selective approach contradicts the principle that natural disasters affect all farmers equally. USDA’s allocation of taxpayer funds to support NRCS equity agreements and the cancellation of farm loans for distressed borrowers have raised concerns about fairness and impartiality. These initiatives deviate from the agency’s core mission of providing equitable farm bill programs and disaster assistance. Any diversion of resources, such as the use of the Commodity Credit Corporation (CCC) for unauthorized programs like climate partnerships, undermines Congressional authority and detracts from the agency’s primary mission of serving farmers.
Ranking Member Sanford Bishop (D-GA)
- FPAC has been successful in cutting down the time it takes to apply for an FSA loan. NRCS has a new expedited application process to immediately approve funds for the major conservation programs. USDA has overseen tremendous growth in livestock insurance participation.
Robert Bonnie, Under Secretary for FPAC, USDA
- American agriculture is crucial to our economy, generating over $1 trillion annually. Despite challenges like unpredictable weather and market volatility, FPAC strengthens the agricultural safety net. In 2023, the RMA provided a record $207 billion in crop insurance protection across 540 million acres. USDA has been focused on crop insurance, introducing innovations like hurricane insurance and expanded coverage for livestock producers.
- FSA delivered over $16.9 billion in farm programs and loans, supporting financially distressed farmers. The IRA allocated $2.3 billion to aid over 42,000 farmers and ranchers. NRCS enrolled more farmers and acres in voluntary conservation programs thanks to historic investments in climate-smart agriculture. FPAC has streamlined program participation and improved efficiency. The budget prioritizes effective support for farmers, ranchers, and forest owners for future generations.
Discussion
Biofuels
Hinson (R-IA): I am concerned that the bundling approach to the 40B Treasury tax credit for biofuels will disadvantage many farmers who are not able to implement multiple climate-smart practices in an agronomically viable way. What factors led to the administration’s decision to write the credit that way? Bonnie: Sustainable aviation fuel (SAF) is a critical opportunity for U.S. agriculture. Treasury’s update to the Greenhouse gases, Regulated Emissions, and Energy use in Technologies (GREET) model is a foundation for a longer game, and USDA is committed to working with the interagency working group to refine the model in favor of U.S. ag.
Hinson (R-IA): Does USDA anticipate that the bundling requirement will also apply to the 45Z tax credit? Bonnie: USDA is heavily engaged in the process, but ultimately, it is Treasury’s rule.
NRCS
Bishop (D-GA): How would USDA use the $30 million budget request for NRCS assistance? Bonnie: USDA uses partnership agreements across everything the agency does, and outreach is critical to get funds out of the door; Cosby: USDA has seen an influx of interest in NRCS programs, and $30 million would help us continue outreach and engagement efforts to support farmers.
Bishop (R-MS): What is NRCS doing to support farmers in adopting sustainable conservation practices that address drought while assuring long-term ag viability? Bonnie: NRCS has several outside partners that help us with technical assistance while implementing various programs.
Farm Bill
Letlow (R-LA): Is USDA expanding quality loss programs? Bunger: Since the 2018 Farm Bill, RMA has incorporated twenty crops with quality loss option features. RMA will continue to evaluate this concern.
CCC
Harris (D-CA): Is USDA planning to use any part of CCC funding to allocate to climate-smart commodities this fiscal year? Bonnie: No.