The budget committees of both houses of the Legislature moved to eliminate $15 million of the general fund budget allocation to the California Department of Food and Agriculture (CDFA).  While these allocations were a general reduction of $15 million to CDFA, Secretary Ross delivered a plan to the budget committees and the Department of Finance outlining the cuts, fee increases and program reductions they will implement to address the reductions proposed by the Governor and adopted by the Legislature.   

Secretary Ross worked closely with stakeholders including your representatives Chris Zanobini and Debbie Murdock to strategically identify programs where reductions could be made while minimizing the impact on duties of the department as well as where programs could increase fees in order to maintain essential services.  A brief outline of the budget solutions include:

Division of Plant Health and Pest Prevention - cuts of $7.3 million, increase in fees of $2.7 million

Pierce's Disease Control Program - Industry fees will backfill the $1.117 million reduction

Division of Animal Health and Food Safety - $1.038 million in cuts, with approximately $500 thousand in fees proposed.

Division of Measurement Standards - $1.62 million in reduction, approximately $800 thousand in fees backfill program.

General Administrative Services - $1.083 million reduction.

When the House finally approved its seven-month spending bill for FY2011 at 4:30 a.m. last Saturday, included in the package were several amendments to axe funding for controversial federal programs, including funding for the EPA greenhouse gas rulemaking and the agency's recent decision to allow gasoline/ethanol blends at 15%.  Overall, USDA's budget took a disproportionate hit in across-the-board cuts, seeing its spending slashed about 22.5% overall for the remainder of FY2011, a move challenged by nearly 35 national agriculture groups which pointed out other federal departments were taking an average 10% cut. The GOP-controlled House wound up cutting about $61 billion overall from current spending, about $100 billion more than the White House FY2011 budget recommendation, bringing overall spending to just slightly more than FY2008 levels.  While this mollified freshman conservatives, several amendments likely received "aye" votes from members who know the Senate will not adopt the House package in its entirety.   

Several approved amendments would withhold funding for EPA projects, including an amendment that kills off funding for greenhouse gas emissions regulation, another from Rep. Kristi Noem (R, SD) that blocks funds for EPA's air particulate rulemaking; another by Rep. Mike Pompeo (R, KS) killing off $8.4 million in additional funding for EPA's greenhouse gas registry; an amendment blocking funds for EPA's allowed increase in ethanol/gasoline blends to 15% by Rep. John Sullivan (R, OK); an amendment by Rep. Jeff Flake (R, AZ) to stop funding for ethanol infrastructure spending on blender pumps and pipelines; an amendment by Rep. David McKinley (R, WVA) to block EPA from retroactively withdrawing clean water permits, and an amendment by former House Agriculture Committee Chair Bob Goodlatte (R, VA) that withholds funds from EPA to complete its Chesapeake Bay watershed runoff program.  Rep. Blaine Luetkemeyer (R, MO) successfully killed off funding for a Missouri River project study.  Defeated amendments included one by Rep. Ron Kind (D, WI) that sought to kill off a $150-million payment to Brazil's Cotton Institute as part of a World Trade Organization (WTO) decision on U.S. cotton supports, and a move by Rep. Earl Blumenauer (D, OR) to cap federal farm program payments at $250,000 per person.

The focus on FY2011 spending will be on the Senate when it returns next week from the President's Day recess. It's likely the recently approved House package will be dismantled at least in part and rebuilt, but ultimately lacking several of the amendments to cut federal programs approved in the House.  But timing is everything, and the slow-moving Senate is unlikely to approve its package prior to March 4, the day the current continuing resolution that keeps the government running expires.  

Politically, neither party wants to be blamed for shutting down the federal government as happened in 1995 and 1996, but House Speaker John Boehner (R, OH) said this week his chamber will not approve another short-term continuing resolution without at least some spending cuts. Boehner said his party will offer a two-week stopgap funding measure that includes at least another $4 billion in cuts from current spending.   Senate Majority Leader Harry Reid (D, NV) asked the Senate Appropriations Committee to draft a 30-day continuing resolution, calling it "clean" legislation that simply funds the government at current levels for the next month, which Reid pointed out is $41 billion less than recommended in the President's FY2011 budget.   

Senate Minority Leader Mitch McConnell (R, KY) rejected Reid's move, but Reid countered it will allow for negotiation of a "common-sense, long-term solution."  It's also known that Senate Democrat leadership is looking at President Obama's FY2012 budget recommendation to identify programs that can be cut or eliminated as part of the FY2011 spending bill, but are hesitant to tie itself to any arbitrary spending cut number as the House GOP did when it embraced the $100-billion target. 

Apparently confident it can tackle the issue of greenhouse gas emissions more effectively than EPA and pretending the House's antipathy to the EPA action isn't there, USDA this week announced it's launching a three-year project to determine how much greenhouse gas and carbon sequestration is attributable to farming, ranching and forestry.  In its Federal Register notice, USDA said it's preparing technical guidelines that outline "science-based methods to measure the carbon benefits from conservation and land management activities," eventually developing guidelines "that are verifiable and that demonstrate scientific rigor, transparency, scalability and usability."   

The USDA effort will include consultations with federal and state governments, farm and ranch groups, "as well as other interested parties," and will not duplicate "other federal agency" actions.  Ultimately, USDA said the effort will allow farmers and ranchers to have a "user-friendly tool for GHG quantification, that will assist farmers, ranchers and forest owners in improving management practices and identifying actions to reduce greenhouse gas emissions and increase carbon sequestration." The full USDA plan can be found by going to www.usda.gov and following the appropriate links. Comments are due by April 19.

To ensure its regulations - on the books or pending - are not "outmoded, ineffective, insufficient or excessively burdensome," EPA announced this week it will hold a March 14 public meeting in Washington, DC, designed to inform the agency's internal process of regulatory review.  The effort is part of President Obama's executive order to federal agencies to review all regulations to determine if any of them are "job killers."  While independent agencies, including EPA, are not required to participate, the agency says the March public meeting will allow the public to "provide feedback on specific issues, impacts or programs."  The goal is to develop a review plan that would be released to the public in May. Meeting details can be found at www.epa.gov/improvingregulations.

EPA, in a move some say is designed to bolster the agency's cost-awareness image, issued final boiler/incinerator control regulations this week that are slightly less heavy handed than the original proposals, but which critics still say will negatively impact agriculture processing, particularly large operations. The boiler/incinerator Maximum Achievable Control Technology (MACT) rule is designed to cut toxic emissions from existing, new and planned industrial and manufacturing plant boiler and incinerator operations and requires existing operations which exceed EPA limits to be upgraded or replaced.  The rule goes into effect in 2014.   

A bipartisan group of Senators signaled this week they're willing to legislatively rework the EPA rule to make it more user friendly, saying the agency was arbitrarily forced to put out the new regulation by the courts.  Sen. Herb Kohl (D, WI), chair of the Senate Appropriations Committee's subcommittee on agriculture and FDA, called on the agency to "clarify" what the new rule means and how much it will cost, saying he's concerned the requirement for new technology could cost jobs in his state.  Industry says the rules are still too stringent and inflexible. Agriculture Secretary Tom Vilsack said the new rule is "a balanced rule to ensure Americans will have cleaner air, while also retaining important energy choices such as biomass that provide heat and power to rural hospitals and schools. We will continue to work with EPA to ensure that affected owners have the information they need to comply with the rule when it takes effect."  EPA received nearly 5,000 public comments on its original proposed rule which is estimated to affect at least 200,000 facilities across the county.