Senate appropriators issue FY21 spending plan for USDA, FDA

• Senate FY21 ag appropriations bill prioritizes ag research, rural development, allocates $23.4 billion in discretionary funding
• Report language directs USDA to amend hemp rule, questions decision to lift ban on Brazilian beef
• Senate panel proposes funding increase for FDA, but urges agency to act against "mislabeled" plant-based products

The Republican-controlled Senate Agriculture Appropriations Committee has released $153 billion fiscal 2021 spending bill for USDA and FDA, featuring increases for agricultural research and rural development, as well as language that urges USDA to rethink its 2019 rule on hemp.

The draft Agriculture, Rural Development, Food and Drug Administration and Related Agencies Appropriations bill would allocate $23.4 billion in discretionary funding, including $3.2 billion for FDA.

That falls just under the $24 million in discretionary funding outlined in the agriculture spending plan proposed by House Democrats in July.

Featuring ramped up funding for farm direct, guaranteed and emergency loans, as well as $10 million to bolster mental health support for producers through the Farm and Ranch Assistance Network, as well as $5 million for the Rural Innovation Stronger Economy (RISE) Grant Program, the bill seeks to provide farmers and ranchers with the support they need "during these challenging times," said Committee Chairman John Hoeven (R-N.D.).

The Senate bill comes as part of a package of 12 measures the committee released on Tuesday (November 10), as Congress works to pass FY2021 funding legislation. Fiscal year 2021 already started October 1, so the government has been relying on a continuing resolution (CR) to keep programs and agencies funded. The current CR expires December 11.

Senate proposes $3.1 million for rural development

Allocating $3.1 billion to rural development, the proposed legislation earmarks $400 million in new funding for USDA's ReConnect pilot, that provides grants and loans to expand broadband service to rural areas and that has been slated to receive $990 in the House ag appropriations proposal.

However, in the 150-page report that accompanies the Senate bill, the committee directed USDA to report on how it plans to transition from the ReConnect Pilot to new farm bill authorized rural broadband efforts and warned that "the current application process creates barriers to participation." The report, therefore, directed USDA to allow "entities of any structure, including partnerships and infrastructure applications, to apply provided sufficient assurances are given that broadband service will be provided to the subject area through contractual arrangements."

Bill seeks to boost funding for ag research, APHIS

Just like the House bill, the Senate appropriations proposal earmarks $3.3 billion for agricultural research programs, a slight boost for $3.2 million in fiscal 2020. The proposal allocates $1.51 billion for the Agricultural Research Service (ARS) and $1.54 billion for the National Institute of Food and Agriculture (NIFA), and a $10 million increase for the Agriculture and Food Research Initiative (AFRI).

"This funding will support investments in the research and development of new technologies and varieties to improve the productivity, sustainability, and quality of American agriculture," the committee said. "The bill also fully funds the President's request to support the continued establishment of the National Bio and Agro-Defense Facility."

In addition, the bill earmarks $1.4 billion for the Farm Service Agency (FSA), representing an increase of $20 million above FY20 enacted levels. The bill also prohibits the closure of FSA county offices and provides resources for IT improvements and personnel.

The bill is also looking to increase funding for USDA's Animal and Plant Health Inspection Service (APHIS) and would provide $1.06 billion for the department, an increase of more than $14 million above FY20 enacted levels.

Report language questions USDA hemp rule

Meanwhile, the Senate committee report questioned USDA's 2019 interim final rule on hemp, noting that it "creates roadblocks for farmers," as it includes an "unrealistic" timeframe for testing, requires a sampling of only flowering tops and sets an "arbitrary negligence threshold of 0.5 percent."

While hemp is defined under a federal statute as having no more than 0.3% THC, USDA has proposed a negligence threshold of 0.5%, meaning that farmers would have to destroy crops that exceed that level.

Echoing the concerns of many stakeholders and hemp advocates, the committee directed USDA to amend the interim final rule "to ensure that any final rule is based on science and will ensure a fair and reasonable regulatory framework for commercial hemp production in the United States," according to the report.

"In addition, the Committee encourages the Secretary to utilize current Agricultural Research Service research to revise the hemp sampling and testing protocols," lawmakers wrote.

FSIS gets full funding but lawmakers question lifting of ban on beef from Brazil

On the food front, the Senate bill proposed allocating $1.07 billion to fully fund USDA's Food Safety and Inspection Service (FSIS) - a move that the committee says would promote "the safety and productivity of the nation's $186 billion meat and poultry industry" and provide support for more than 8,000 frontline inspectors and more than 6,400 meat, poultry and egg facilities in the United States.

Lawmakers, however, also questioned FSIS' decision to lift the ban on raw Brazilian beef imports and included language in the report directing the agency to report - within 120 days - on strategies it is using to ensure that imports are meeting necessary safety standards.

Committee urges FDA to act against "misbranded" plant-based products

On the FDA side, Senate lawmakers have proposed allocating $3.21 billion in discretionary funding, which the committee says represents "$40 million net increase to base funding for medical products, food safety activities, and infrastructure needs." That is roughly equivalent to the House bill, which proposed a $41 million net increase.

Proposed Senate funding for FDA includes $1 million for foodborne outbreaks and $5 million for cannabis and cannabis derivatives.

While the committee's report praised FDA's inspection and enforcement actions targeting misbranded dietary supplements, it also included language urging the agency to enforce its standards of identity for dairy and act against plant-based products that use dairy labeling terms.

"The Committee is concerned about the proliferation of products marketed using standards of identity for dairy products that do not contain dairy ingredients and the lack of enforcement of these products," lawmakers wrote in the report. The committee also directed FDA to "implement an updated enforcement approach and report to the Committee within 90 days of enactment of this Act on steps taken to enforce against dairy imitation products marketed using dairy names."

It remains to be seen when the House and Senate will finalize the FY2021 ag appropriations. However, at least one lawmaker - House Majority Leader Steny Hoyer (D-Md.) - has stated that FY21 appropriations will be a priority for the lame duck session.

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.