USDA 2000 BUDGET SUMMARY

The Budget Summary describes the fiscal year 2000 budget for the U.S. Department of Agriculture (USDA). All references to years refer to fiscal year, except where specifically noted. Throughout the booklet, the acronym, 1996 Farm Bill, is used to refer to the Federal Agriculture Improvement and Reform Act of 1996.

The Summary is organized into five sections: Funding Overview, Program Highlights, Initiatives, Agency Programs, and Appendix Tables.

Basic budget terminology:

Program Level represents the gross value of all financial assistance USDA provides to the public. This assistance may be in the form of grants, guaranteed or direct loans, cost-sharing, professional services such as research or technical assistance activities, or in-kind benefits such as commodities.

Budget Authority is the authority to commit funds of the Federal Treasury. Congress provides this authority through annual appropriations acts and substantive legislation which authorizes direct spending. The President's budget requests the Congress to appropriate or otherwise provide an amount of budget authority sufficient to carry out recommended Government programs.

Obligations are commitments of Government funds. In order for USDA to make a valid obligation, it must have a sufficient amount of budget authority to cover the obligation.

Outlays are cash disbursements from the Federal Treasury to satisfy a valid obligation.

Program level measures are used in most instances. However, there are some cases when other measures are used and the reader should take care to note which measure is being used. Also, the reader should understand that many 2000 estimates are very tentative especially where programs are sensitive to weather or economic conditions.

Questions may be directed to the Office of Budget and Program Analysis via e-mail at bca@obpa.usda.gov or telephone at (202) 720-6176.

FUNDING OVERVIEW

2000 Funding Overview

USDA outlays are projected to decline from $63.1 billion in 1993 to an estimated $55.2 billion in 2000 -- a 13 percent reduction, following a one-year increase in 1999. The increase in 1999 is largely due to emergency supplemental funding provided to address the farm economic crisis and funding for the President's Food Aid Initiative.

USDA's 2000 discretionary program outlays, about $15.5 billion, or about 28 percent of total USDA outlays, include the Special Supplemental Nutrition Program for Women, Infants and Children (WIC); rural development; research and technical assistance; soil and water conservation technical assistance; management of the National Forests and Grasslands; State and Private Forestry programs; and domestic and international marketing assistance. Mandatory programs account for the remaining 72 percent of USDA outlays, about $39.7 billion in 2000. These programs provide services as required by law and include the majority of the food assistance programs, commodity programs, and a number of conservation programs. The total USDA program level is projected to decrease from $94.2 billion in 1999 to an estimated $90.1 billion in 2000.

The budget will strengthen the safety net for farmers and low income populations, provide economic opportunities for rural Americans, protect our natural resources and further improve the safety of the food supply. Funding is included within a number of agencies to support programs proposed as segments of multi-agency Administration initiatives. More detailed information is provided under the relevant sections of this document.

   UNITED STATES DEPARTMENT OF AGRICULTURE
            (Dollars in Millions)

                                              Program Level                               Outlays
                                                           1999                Change                 1999                Change
                                                  1998   Current       2000   1999 to        1998   Current       2000   1999 to
               AGENCY / PROGRAM                  Actual  Estimate    Budget     2000        Actual  Estimate    Budget     2000

FARM  AND FOREIGN AGRICULTURAL SERVICES

Farm Service Agency:
  Farm Loan and Grant Programs ...............   $2,158    $2,828    $3,013      $185         $430      $144       $92      -$52
  Conservation Reserve Program ...............    1,760     1,576     1,596        20        1,731     1,580     1,578        -2
  Conservation and Other Programs ............       40        87         0       -87           52        80        52       -28
  Commodity Programs .........................   14,752    24,214    19,548    -4,666        7,891    14,633     9,287    -5,346
  Commodity Credit Corporation Programs ......  (21,240)  (32,318)  (26,988)  (-5,330)     (10,419)  (18,450)  (12,603)  (-5,847)
  Salaries and Expenses ......................      911       966     1,006        40          924       888     1,000       112
    Total, Farm Service Agency ...............   19,621    29,671    25,163    -4,508       11,028    17,325    12,009    -5,316

Risk Management Agency:
  Administrative and Operating Expenses ......       63        64        71         7           68        70        70         0
  Crop Insurance Fund ........................    1,305     1,607     1,694        87        1,205     1,302     1,602       300
    Total, Risk Management Agency ............    1,368     1,671     1,765        94        1,273     1,372     1,672       300

Foreign Agricultural Service:
  Export Credit Guarantees ...................    4,037     4,721     4,506      -215          257       440       473        33
  Market Access Program ......................       90        90        90         0           92        89        91         2
  Export Enhancement Program .................        2       550       494       -56            1       550       494       -56
  Dairy Export Incentive Program .............      110       102        99        -3          130       115       100       -15
  P.L. 480 ...................................    1,138     1,932       987      -945          953     1,749       977      -772
  Section 416(b) Donations:  Ocean Freight and 
    Overseas Distribution Costs ..............                678         3      -675                    649        33      -616
  Food for Progress Program ..................      111       133        91       -42          138       136       112       -24
  Salaries and Expenses ......................      209       200       204         4          179       160       158        -2
    Total, Foreign Agricultural Service ......    5,697     8,406     6,474    -1,932        1,750     3,888     2,438    -1,450
      Total, Farm and Foreign Agricultural Ser   26,686    39,748    33,402    -6,346       14,051    22,585    16,119    -6,466

RURAL DEVELOPMENT

Rural Utilities Service:
  Loans and Grants ...........................    2,837     3,206     3,346       140          347       534       407      -127
  Salaries and Expenses ......................       66        66        68         2           59        59        61         2
    Total, Rural Utilities Service ...........    2,903     3,272     3,414       142          406       593       468      -125

Rural Housing Service:
  Rural Housing Loan and Grant Programs ......    4,998     5,263     5,873       610          925     1,279     1,021      -258
  Salaries and Expenses ......................      412       422       446        24          370       380       400        20
    Total, Rural Housing Service .............    5,410     5,685     6,319       634        1,295     1,659     1,421      -238

Rural Business - Cooperative Service:
  Loans and Grants ...........................    1,306     1,167     1,186        19          288       349       282       -67
  Salaries and Expenses ......................       27        27        28         1           24        24        25         1
    Total, Rural Business - Cooperative Servic    1,333     1,194     1,214        20          312       373       307       -66

Alternative Agricultural Research and
 Commercialization Corporation ...............        7         4        10         6            8         6         9         3

Rural Community Advancement Program ..........   (2,836)   (2,798)   (3,045)     (247)        (580)     (759)     (683)     (-76)
    Total, Rural Development .................    9,653    10,155    10,957       802        2,021     2,631     2,205      -426


a/  Less than $0.5 million.



   UNITED STATES DEPARTMENT OF AGRICULTURE
            (Dollars in Millions)

                                                        Program Level                               Outlays
                                                           1999                Change                 1999                Change
                                                  1998   Current       2000   1999 to        1998   Current       2000   1999 to
               AGENCY / PROGRAM                  Actual  Estimate    Budget     2000        Actual  Estimate    Budget     2000

FOOD, NUTRITION, AND CONSUMER SERVICES

Food and Nutrition Service:
  Food Stamp Program .........................   20,469    21,464    21,730       266       20,041    21,114    21,407       293
  Child Nutrition Programs ...................    9,136     9,504    10,001       497        8,964     9,474     9,919       445
  Women, Infants and Children (WIC) ..........    4,035     4,064     4,205       141        3,890     3,936     4,097       161
  Commodity Assistance Program ...............      248       246       255         9          235       247       251         4
  Food Donations Programs ....................      142       141       151        10          141       142       148         6
  Food Program Administration ................      109       112       121         9          102       107       123        16
    Total, Food and Nutrition Service ........   34,139    35,531    36,463       932       33,373    35,020    35,945       925

  Section 32 Funds ...........................      211       135       116       -19          112       151       135       -16
    Total, Food, Nutrition, and Consumer Servi   34,350    35,666    36,579       913       33,485    35,171    36,080       909

FOOD SAFETY

Food Safety and Inspection Service ...........      679       706       742        36          596       621       151      -470

NATURAL RESOURCES AND ENVIRONMENT

Natural Resources Conservation Service:
  Conservation Operations ....................      629       641       681        40          596       680       680         0
  Watershed and Flood Prevention Operations ..      236       230        83      -147          221       279       176      -103
  Other Conservation Operations ..............       52        61       102        41           95       108        77       -31
  Programs financed by CCC:
    Environmental Quality Incentives Program .      194       174       300       126          101       121       160        39
    Wetlands Reserve Program .................      231       132       209        77           88       179       214        35
    Wildlife Habitat Incentives Program ......       26        24        10       -14            5        14        13        -1
    Farmland Protection Program ..............       17         0        28        28            8         9        10         1
      Total, Natural Resources Conservation Se    1,385     1,262     1,413       151        1,114     1,390     1,330       -60

Forest Service ...............................    3,419     3,404     3,486        82        3,402     3,440     3,330      -110
    Total, Natural Resources and Environment .    4,804     4,666     4,899       233        4,516     4,830     4,660      -170

MARKETING AND REGULATORY PROGRAMS

Agricultural Marketing Service ...............      229       242       256        14          153       158       174        16
Animal and Plant Health Inspection Service ...      533       590       499       -91          526       530       566        36
Grain Inspection, Packers and Stockyards Admin       59        70        70         0           24        27        11       -16
  Total, Marketing and Regulatory Programs ...      821       902       825       -77          703       715       751        36

RESEARCH, EDUCATION, AND ECONOMICS

Agricultural Research Service ................      762       834       857        23          726       816       853        37
Cooperative State Research, Education, & Exten      896       930     1,073       143          843       888       891         3
Economic Research Service ....................       72        65        56        -9           55        55        57         2
National Agricultural Statistics Service .....      118       104       101        -3          124       102       101        -1
  Subtotal, Research, Education, and Economics    1,848     1,933     2,087       154        1,748     1,861     1,902        41
Construction:
  Agricultural Research Service ..............       81        56        44       -12           56        75        70        -5
  Cooperative State Research, Education, & Ext        0         0         0         0           61        40        25       -15
      Total, Research, Education, and Economic    1,929     1,989     2,131       142        1,865     1,976     1,997        21

OTHER ACTIVITIES

Departmental Offices and Centralized Activitie      255       297       322        25          262       302       318        16
Outreach for Socially Disadvantaged Farmers ..        3         3        10         7            1         9        10         1
Office of the Inspector General ..............       63        65        68         3           63        65        68         3
Fund for Rural America .......................        0         0        60        60            9        12        39        27
Support Services Bureau ......................        0         0        90        90            0         0        14        14
Pre - Credit Reform Loan Repayments ..........        0         0         0         0       -2,651    -4,418    -6,423    -2,005
Receipts .....................................        0         0         0         0         -974    -1,087      -822       265
  USDA, TOTAL ................................  $79,243   $94,197   $90,085   -$4,112      $53,947   $63,412   $55,167   -$8,245

PROGRAM HIGHLIGHTS

The Department's FY 2000 Budget supports achievement of its Strategic Goals as follows:

Expand economic and trade opportunities for agricultural producers and other rural residents.

Ensure food for the hungry, and a safe, affordable, nutritious, and accessible food supply.

Promote sensible management of our natural resources.

Following are highlights of the Department's budget proposals in support of these goals:

FARM AND FOREIGN AGRICULTURAL SERVICES

This mission area supports expanded economic and trade opportunities for agricultural producers through commodity and income support, export promotion, farm credit, risk management, and related programs. These programs provide a safety net to help ensure the long-term economic vitality of American farmers and ranchers. International trade and export programs promote economic opportunity by developing and protecting expanded export markets. Income support payments help ensure the economic vitality of producers. The economic viability of a farm sector which is heavily dependent on unstable international markets and unpredictable weather is influenced significantly by the Department's risk management and export programs. The Department also provides farm credit assistance as a lender of last resort, paying particular attention to small, limited resource and minority farmers.

The Administration is committed to working with the Congress to improve the safety net for farmers, particularly with respect to broadening and strengthening the crop insurance program. Under current law, the 2000 budget includes resources to:

Expand crop revenue coverage to protect producers from lower prices and production losses. Revenue coverage, a product developed as a result of the partnership between the Federal government and the private insurance industry, is now available on almost 90 percent of the corn, wheat, cotton, soybeans, and grain sorghum grown in the United States. The budget also includes funding for additional risk management education programs for producers. (See page 28.)

Provide farm credit assistance to over 31,000 farmers in 2000. The budget proposes a total loan level of $3 billion, $183 million more than in 1999, for farm ownership, farm operating and emergency loans. In particular, funding for direct farm ownership loans is $42 million more than the 1999 level of $86 million, and will support loans to almost 1,500 farmers in 2000. At least 19 percent of direct farm ownership loans and 15 percent of direct farm operating loans will be targeted to socially disadvantaged farmers, and 38 percent and 47 percent respectively to limited resource farmers. Primarily due to low interest rates, the cost of the program decreases significantly from $121 million to $77 million. (See page 20.)

Enroll additional acreage into the Conservation Reserve Program (CRP). The CRP produces environmental benefits for the Nation as well as income benefits for farmers. The 2000 budget assumes acreage enrolled in CRP will be about 31.1 million acres in 1999, increasing to 34.4 million acres in 2000, and to an eventual enrollment of 36.4 million acres by 2002. About 30.3 million acres were enrolled in the program at the end of fiscal year 1998. The total enrollment of 34.4 million in 2000 includes acreage enrolled in the 18^th signup, conducted in October through early December 1998 as well as the acreage accepted in the continuous, non-competitive signup which has been underway since September 1996. Acreage enrolled under the continuous signup includes enrollment under the Conservation Reserve Enhancement Program and the National Conservation Buffer Initiative. (See page 22.)

Continue efforts to improve agricultural trade by providing a total program level of nearly $6.5 billion for the Department's international programs and activities. This includes a program level of $4.5 billion for the Commodity Credit Corporation (CCC) export credit guarantee programs, $494 million for the Export Enhancement Program and $90 million for the Market Access Program. The budget also provides a total program level of $987 million for P.L. 480 foreign food assistance programs, which is expected to provide approximately 3.2 million metric tons of commodity assistance in 2000. (See page 31.)

Implement the President's Food Aid Initiative and the emergency and market loss assistance programs authorized by the Congress in 1999. These programs are funded through the Commodity Credit Corporation (CCC). CCC farm income support outlays totalled $7.9 billion in 1998. They are expected to reach $14.6 billion in 1999 and are projected at $9.3 billion in 2000. In 1999, a total of about $1.4 billion will be provided under the President's Food Aid Initiative for purchasing, processing, and shipping wheat overseas. Outlays for emergency spending authorized in the appropriations legislation will total nearly $5.7 billion, including $3.1 billion for market loss payments, $2.4 billion to compensate producers for crop losses, and $0.2 billion for livestock feed assistance. (See page 24.)

RURAL DEVELOPMENT

The Rural Development (RD) mission area helps to improve the quality of life for rural Americans and helps rural businesses and cooperatives compete in the global marketplace. The Administration remains strongly committed to providing economic opportunities to support sound development of rural communities. RD provides financial and technical assistance to help individuals, local communities and rural businesses, concentrating on those with the greatest need. These opportunities include decent, safe, affordable housing, establishment of rural businesses and community facilities, development of modern and affordable water and waste services, and installation of electric and telecommunications services.

The budget provides about $11 billion for direct loans, loan guarantees, grants, and technical assistance -- over $800 million more than the 1999 level. Highlights of the request include:

Funding to support the President's National Homeownership Initiative by making approximately 50,000 more homeownership opportunities available in rural America. The budget requests $1.1 billion in direct loans and $3.2 billion in guaranteed loans for decent, safe, affordable single family housing, representing an increase of nearly 9 percent over 1999. (See page 45.)

A 12 percent increase in funding to provide over 1 million rural Americans with safe, affordable drinking water. Continuation of the program at these levels is consistent with the President's Water 2000 Initiative which is designed to ensure that all rural households have access to clean running water. Included in the request is $503 million in grants and $975 million in loans for technical assistance and financing modern, affordable water and waste services in rural communities. The combined total of loans and grants represents an increase of $156 million over the 1999 level. (See page 43.)

Business and industry loan funding to create or save over 40,000 jobs in rural America. Funding levels of $1 billion in guaranteed loans and $50 million in direct loans reflect the emphasis that this Administration is giving to ensuring that there are more job opportunities in rural America. (See page 47.)

FOOD, NUTRITION, AND CONSUMER SERVICES

This mission area ensures food for the hungry, and a nutritious, accessible food supply. The Department's 2000 budget requests $36.5 billion for Nutrition Assistance Programs for needy Americans. The budget request fully funds the expected needs of the Food Stamp, Child Nutrition, and Special Supplemental Nutrition Program for Women, Infants and Children (WIC) programs. The requested funding level guarantees the nutrition safety net to ensure that all needy Americans, especially children, have access to food and nutrition assistance. The budget includes:

Funding to support 20.1 million Food Stamp participants, including 15,000 under a legislative proposal which would restore Food Stamp eligibility to legal immigrants who entered the U.S. before August 22, 1996, and who have since reached the age of 65. The 2000 budget funds the Food Stamp Program at a program level of $21.7 billion, an increase of $0.3 billion above 1999. The budget will allow the Department to continue its efforts in aggressively fighting error and fraud and implementing the Electronic Benefit Transfer (EBT) system. Additional funding is requested for food stamp nutrition education and for a program to inform the working poor. Also funded in this request is the Food Distribution Program on Indian Reservations, Nutrition Assistance for Puerto Rico, Nutrition Assistance to American Samoa, and the Community Food Projects. Further, the budget requests a $1 billion contingency reserve for the Food Stamp Program. (See page 51.)

$10 billion for Child Nutrition Programs, including $13 million to fund a pilot project to evaluate providing breakfasts to all children regardless of income. This includes funds to provide for additional meals in child care and after school settings as newly authorized by the William F. Goodling Child Nutrition Reauthorization Act of 1998, P.L. 105-336. This level provides for increases in participation and food inflation costs and will allow the Department to undertake a new initiative to improve program integrity. The budget also provides funding for strengthened education efforts on food safety in school meals as part of the President's Food Safety Initiative. (See page 51.)

Funding for 7.5 million participants in the Special Supplemental Nutrition Program for Women, Infants and Children (WIC). The request reflects an increase of $141 million for the WIC program for a total program level of $4.2 billion. (See page 52.)

A $5 million increase to expand the WIC Farmers' Markets program to 4 additional states and Tribal Organization and to serve additional participants within the 35 States and Tribal Organizations already participating. The WIC Farmers' Market Nutrition Program provides WIC participants access to fresh fruits and vegetables and expands the awareness and use of farmers' markets by consumers. The program also provides support to thousands of mostly small, family farmers. The 2000 budget proposes a total of $20 million within the Commodity Assistance Program account for this program. (See page 53.)

Funding to initiate a new Program Integrity Initiative to improve payment accuracy in the Food Stamp and Child Nutrition Programs. It is proposed that a new program integrity initiative begin in 2000 and be funded at $8 million within the Food Program Administration (FPA) account. This funding includes $6 million to be used to measure and improve payment accuracy in the Food Stamp Program and $2 million to improve management oversight of the WIC, Child Nutrition, and Food Distribution Programs.

FOOD SAFETY

This mission area ensures that the Nation's meat, poultry and processed egg product supply is safe, wholesome and properly labeled, and oversees the work of the U.S. Manager for Codex Alimentarius. The meat and poultry inspection system is being modernized through the implementation of the final rule on Pathogen Reduction and Hazard Analysis and Critical Control Point (HACCP) Systems. Both industry and USDA have worked hard to successfully implement HACCP in large plants in 1998. During 1999, HACCP is being implemented in small plants, followed by very small plants in 2000. The 2000 budget requests resources to maintain the inspection workforce and to complete implementation of HACCP and to strengthen programs under the President's Food Safety Initiative. A summary of USDA food safety activities is presented on page 16. The budget includes:

Increased funding to enhance the safety of the Nation's food supply through the President's Food Safety Initiative and further support for HACCP. Funding will be used to minimize food safety risks from farm-to-table through enhanced emergency response coordination with the States and validation of State inspection and laboratory pathogen testing. Funds will also support the conversion of 388 current inspection personnel and hiring 250 new personnel as Consumer Safety Officers. Some of these personnel will be redeployed to cover critical inspection vacancies in very small establishments. These employees will be responsible for conducting scientific testing and inspections and for covering critical inspection vacancies. An increase of $13.7 million is proposed for these enhancements. The President's proposal builds on a strong record of accomplishments to ensure that Americans have the safest food possible. (See page 57.)

Proposed legislation to recover the full cost of providing Federal meat, poultry, and egg products inspection; excluding Grants to States and Special Assistance to States Programs. Charging user fees for Federal inspection services will ensure that sufficient resources are available to provide the mandatory inspection services needed to meet increasing industry demand and would result in savings to the taxpayer. The overall impact on prices as a result of these fees has been estimated to be less than one cent per pound of meat, poultry, and egg products. Appropriated funds are requested to convert the Federal program to user fees and to maintain Federal support of State inspection programs. (See page 58.)

NATURAL RESOURCES AND ENVIRONMENT

The Natural Resources and Environment mission area promotes conservation and sustainable use of natural resources on the Nation's private lands through education, technical and financial assistance. The mission area is also responsible for meeting public demands for recreation, timber and other goods and services through management of over 191 million acres of National Forests and grasslands. The Administration is committed to preserving natural resources for future generations through assistance to farmers, ranchers and other private landowners and through sound management of public lands. The budgets for conservation and Forest Service programs include resources to:

Provide additional technical and financial assistance to enhance the conservation of natural resources, including water quality improvements under the President's Clean Water Action Plan. An increase of $37 million is proposed for Conservation Technical Assistance, for a total of $585 million in 2000. A portion of the increase will support additional technical assistance to operators of animal feeding operations to help them develop and implement waste management plans. The budget also proposes an increase of $126 million, for a total program of $300 million, for the Environmental Quality Incentives Program which provides financial, technical and educational assistance to help landowners address serious challenges impacting soil, water and related natural resources. (See page 60.)

Protect productive farmland, preserve open space, and support smart growth as part of the President's Lands Legacy Initiative. The USDA budget includes $268 million as part of the President's $1 billion Lands Legacy Initiative. Within this amount, $50 million is proposed for a new discretionary Farmland Protection Program, which will provide State and local governments with matching funds for the purchase of permanent conservation easements on farmland threatened by development. Another $118 million will fund acquisition of lands valuable for recreation, wildlife habitat and watershed protection in the National Forests. A new Smart Growth Partnership Program will support $50 million in subsidized loans to help communities protect open spaces, limit sprawl and enhance air and water quality. Funds under the Initiative will also provide grants to protect habitat threatened by development, expand urban greenspaces and protect State and private forests.

Assist troubled USDA borrowers and protect the environment through debt forgiveness under the Debt for Nature Program. This program will provide technical and financial assistance to USDA borrowers with serious cash flow problems who also have environmentally valuable lands. Participants will receive assistance in exchange for the development and implementation of a conservation plan. (See page 63.)

Enhance the ability of the National Forest System to meet multiple demands. A total of $1.4 billion is proposed for management of the National Forests, including $197 million for timber sales to support a sales offer level of at least 3.3 Billion Board Feet (bbf) depending on salvage sales volume. In 1999, 3.6 bbf will be offered for sale. Also included in this account are funding increases of $7 million to improve wilderness management, $24 million to improve wildlife and fish habitat and $11 million for Soil, Water and Air to support watershed improvements, HAZMAT Project implementation and Abandoned Mine Lands Cleanup. In addition, an increase of $8 million is proposed to meet additional needs for rangelands, in particular to slow the spread of invasive exotic weed species on these lands. (See page 65.)

Provide the necessary scientific foundation for sound management of public forest and rangelands. Forest and Rangeland Research is funded at $235 million which is an increase of $38 million over 1999. Additional funds will support the President's initiatives in global climate change and integrated sciences for ecosystem challenges.

MARKETING AND REGULATORY PROGRAMS

The mission of the Marketing and Regulatory agencies is to facilitate the domestic and international marketing of U.S. agricultural products and to ensure the health and care of animals and plants while improving market competitiveness and the economy for the overall benefit of both consumers and American agriculture. The budget proposes funding to:

Protect American agriculture from imported pests and diseases and enhance the marketability of American agricultural products abroad. A total program level of $485 million is proposed for the Animal and Plant Health Inspection Service (APHIS) salaries and expenses account. This includes $178 million for Agricultural Quarantine Inspection (AQI) activities, the frontline defense to protect American agriculture from imported diseases and pests. The budget also includes an increase of $1.7 million to begin development of a new, National rapid assessment and response system for invasive alien plant pests in the U.S. APHIS will contribute substantially to the Department's goal of doubling agricultural exports by placing more emphasis on animal health monitoring and surveillance to strengthen the domestic and international marketability of U.S. livestock and poultry. The agency will also strengthen the Nation's pest detection and exclusion activities to reassure U.S. trade partners of the Department's commitment to pest control and thereby help maintain the market share for U.S. agricultural products. (See page 79.)

Expand economic and trade opportunities for agricultural producers through marketing services. The Agricultural Marketing Service (AMS) budget includes an increase of $1.4 million to expand foreign market news reports; increase reporting on livestock and poultry markets; and identify alternative marketing strategies for small farmers. The budget also includes an increase of $0.6 million to continue implementation of the Organic Certification Program, provide extensive customer outreach, and develop an International Certification Program. (See page 75.)

Collect pesticide and microbiological data to support pest control alternatives and food safety enhancements. For 2000, a total of $19 million is requested for the Pesticide Data Program, including $8.6 million in program increases above 1999. First, as part of the President's Interagency Food Safety Initiative, an increase is requested to broaden the scope of PDP to include microbiological testing of fruits and vegetables. This testing will provide a baseline of microbiological data needed to assess the risks of contamination in the U.S. food supply. USDA and other agencies will use the microbiological data to respond more quickly and effectively to food safety issues. Second, an increase is proposed to provide rapid risk assessments and to collect data for meat, poultry, eggs and drinking water. (See page 75.)

RESEARCH, EDUCATION, AND ECONOMICS

REE programs support the development of new agricultural and forestry systems that will reduce production costs, and find new uses for crops and animal products to expand economic opportunities for farmers and ranchers. The economic and statistical data and analyses developed by REE agencies also provide information on a wide range of topics related to agricultural productivity, trade issues, and rural development. These analyses directly contribute to sound policy-making, management, and marketing decisions.

Total spending for the four REE agencies will be $2.1 billion in 2000, an increase of 8 percent from 1999 levels. Included is $200 million for the National Research Initiative competitive research grants program and $120 million for the Initiative for Future Agriculture and Food Systems. This $120 million initiative, authorized by the Agricultural Research, Extension, and Education Reform Act of 1998, is a program of direct spending for competitively-awarded research, extension, and education grants to address critical emerging issues related to food production; environmental quality and natural resources; and farm income including enhanced economic viability of smaller-scale farmers. Highlights of the REE budget include funding to:

Ensure the availability of environmentally acceptable pest management strategies for agricultural producers. The Vice President has provided specific direction to the Department and to the Environmental Protection Agency to implement the Food Quality Protection Act of 1996 (FQPA), to provide a reasonable transition to new pest control methods for producers of commodities with limited pest control options. This budget provides an additional $36 million for pest control activities, including $25 million for REE pest control research to develop alternative pest control practices to serve as substitutes for chemical pesticides at risk of being restricted or eliminated. Emphasis will be placed on developing interim alternative pest controls for fruits and vegetable crops and on developing long-term pest management systems for all major acreage crops and minimizing pesticide residues in food products and surface and ground water. An additional $5 million is proposed to fund a program of competitive grants for research and technology transfer of short- to intermediate-term methyl bromide replacement strategies. The budget also proposes an increase for additional research needed to develop effective means to control and eradicate invasive alien species. Research will focus on developing pest biology, impact and control technologies to be used in effective and sustainable pest management programs for weeds and other plant pests. (See page 114.)

Empower communities to reduce hunger through gleaning and food recovery. The budget provides $15.8 million in new funds for gleaning and food recovery activities to reduce hunger. Funds will provide financial and technical assistance to non-profit entities actually involved in gleaning and food recovery and will encourage the development of collaborative efforts with state and local governments, public and private entities, and educational institutions. (See page 97.)

Develop a scientific foundation and provide education for better human nutrition. An increase of $20 million is provided for ARS human nutrition research to develop greater understanding of the impacts of nutrition on human health and well-being, with particular emphasis on the role of nutrition in preventing bone loss, cancer and heart diseases. In addition, $20 million is proposed to construct ARS human nutrition research labs in Davis, California and Beltsville, Maryland. An increase of $2.3 million is proposed to continue activities to enhance nutrition education through the Expanded Food and Nutrition Education Program (EFNEP), to provide nutrition education to low-income clientele.

Conduct research and extension needed by agricultural producers to meet immediate and long-term challenges posed by global climate change. REE funding in support of the U.S. Global Change Research Program (GCRP) increases by $16 million from 1999 to 2000. Research supported with these funds would provide information needed to understand how carbon cycles through the earth system, the potential impacts of global change on the sustainability of agriculture, and the economic impacts of climate change mitigation tactics such as carbon sequestration. In addition, the budget proposes an increase of $7 million for ARS research and demonstration projects under the Climate Change Technology Initiative. These projects will help to transfer to users the technology for predicting and adapting to climate change impacts. (See page 116.)

Provide research, extension and analysis related to small-scale, limited resource and socially disadvantaged producers. The budget includes an increase for ERS to lead interagency research to assess the Department's role in providing accessible, analytically-based information on agricultural markets to small, limited resource, and socially disadvantaged farmers. Modifications of market information programs, in accordance with assessment results, could assure better customer service and increased program efficiencies. The CSREES Small Farms Program, funded at $4 million, will provide support to Land-Grant institutions and other partners to develop research, education and extension programs to support small farms. These programs will facilitate the development of public and private sector information networks; provide support to beginning small farmers; and promote marketing and business skills of small farmers.

DEPARTMENTAL ACTIVITIES

Although few support programs have high visibility, they are, nevertheless, vital to USDA's success in providing effective customer service and efficient program delivery. An overarching principle of USDA operations is good management of our human, capital, information, and other infrastructure resources. Selected highlights include funding and actions to:

Ensure the achievement of the Secretary's Civil Rights goals. Civil Rights continues to be one of the Secretary's highest priorities. There are a number of ongoing activities at the Department level and within the agencies to support this priority. In addition, the budget includes a number of proposed funding increases to support USDA civil rights activities. For example:

Recently, President Clinton and Secretary Glickman worked with Congress to enact new legislation that waives the statute of limitations for older discrimination cases and allows USDA to help the farmers and ranchers whose complaints were ignored or not properly processed. The budget includes additional funds for the Office of Civil Rights to process these cases in a timely manner.

The Secretary established the National Commission on Small Farms in July 1997 to examine the status of small farms in the United States and to determine a course of action for USDA to recognize, respect, and respond to their needs. The Commission's report, A Time to Act, which was released last January included 8 policy goals and a comprehensive set of 146 recommendations to improve USDA service to small and beginning farmers. Many of these recommendations have already been carried out, and the budget proposes to increase funding for many of the small farms programs highlighted in the Commission's report.

The Department's Office of Outreach was established to provide leadership and coordination for all USDA outreach activities to assure that all eligible customers have access to USDA programs and services. The budget proposes additional staffing for this office to further strengthen and expand its leadership capabilities.

Create a Unified System of Information Technology Management. The appropriate application of information technology is critical to USDA's ability to deliver programs and services to the public. A strong foundation has been created within USDA to insure that information can be more readily shared across organizational lines and investment decisions are based on sound business principles. Building on this foundation, the Chief Information Officer is continuing to implement a plan to strengthen USDA's management of information technology. The budget provides an increase of $2.4 million for the Chief Information Officer to support the following:

Improving the Departmentwide management and security of telecommunications;

Strengthening the information technology capital planning, review and evaluation processes and refining the Department-wide architecture;

Developing a workforce planning capacity to improve the management of the USDA information technology infrastructure; and

Oversight of the single information technology infrastructure and supporting organization for FFAS, and RD agencies and NRCS.

Improve Financial Management and Reporting. The budget includes an increase of $2 million for the Chief Financial Officer activities. The two primary goals are the implementation of a single, integrated financial information system, and the preparation of financial statements that warrant an unqualified audit opinion. In addition, the Chief Financial Officer coordinates the development of cost accounting standards and systems, modernized methods of payment and collection, implementation of the Government Performance Results Act and the Debt Collection Improvement Act of 1996, improved management of assets and receivables, and improved processes for administering grants and agreements with non-Federal organizations. The Working Capital Fund includes increases for the continued implementation of the Foundation Financial Information System project. These initiatives will provide improved information for decisionmaking and strengthen management accountability.

Streamline and Restructure the County Offices. The Department has made major changes in the county-based field agencies in order to efficiently use declining resources and to improve customer service. USDA is implementing a field office streamlining plan which collocates the county-based agencies (FSA, NRCS, and RD) in one-stop USDA Service Centers. This collocation effort will result in streamlining the total number of field office locations from over 3,700 to about 2,560. All USDA Service Center agency offices throughout the country will have a common telecommunications network allowing efficient e-mail, records transfer, and voice communications to provide for better customer service.

To effectively serve the needs of farmers and others in rural America, the Secretary's streamlining plan continues beyond collocation to create a team approach to program delivery in which the partner agencies share resources in order to maximize customer service and administrative efficiency. The Department is proceeding with administrative convergence to combine three separate structures into one administrative unit. The consolidated administrative structure will:

Deliver better services to local customers and employees;

Help preserve limited budget resources for program delivery;

Provide a new consistency in administrative policy and operations, such as information technology; and

Make better use of limited administrative resources.

The budget proposes a new account, the Support Services Bureau, to provide these consolidated administrative support functions, including information technology. An appropriation of $74 million is requested specifically to support this modernization initiative. In addition, $16 million will be made available from CCC, and transfer authority is requested to merge the central administrative costs into this common account. (See page 107.)

INITIATIVES

INITIATIVES
Program Level
(Dollars in Millions)

                                                1999
                                               Current          2000
         Initiative                            Estimate        Budget

Food Safety Initiative:
  Food Safety and Inspection Service              $18.5         $21.4 
  Food and Nutrition Service                        2.0           2.0 
  Agricultural Research Service                    69.9          81.6
  Coop., State Research, Educ. & Ext. Svc.         24.8          35.8
  Economic Research Service                         0.9           1.4
  Agricultural Marketing Service                    0.1           6.3 
  Office of the Chief Economist                     0.2           0.2 
  National Agricultural Statistics Service           --           2.5
      Total, Food Safety                          116.4         151.2

Gleaning and Food Recovery:
  Coop. State Research, Educ., and Ext. Svc.          0          15.8

Global Change Research Program:
  Agricultural Research Service                    25.9          34.2
  Coop. State Research, Educ., and Ext. Svc.        9.6          16.2
  Economic Research Service                         0.8           1.8
  Natural Resources Conservation Service            1.5          13.7
  Forest Service                                   16.9          22.9
    Total, USGCRP                                  54.7          88.8

Climate Change Technology Initiative:
  Agricultural Research Service                      --           7.0
  Natural Resources Conservation Service             --           3.0
  Forest Service                                     --           6.0
    Total, CCTI                                      --          16.0

Lands Legacy Initiative:
  Forest Service:
    Land Acquisition                              117.9         118.0
    Forest Legacy                                   7.0          50.0
    Urban and Community Forestry                   30.5          40.0 
    Smart Growth - Budget Authority                  --          10.0
    Total, FS                                     155.4         218.0

  Natural Resources Conservation Service:
    Farmland Protection Program.                     --          50.0 a/

      Total, Lands Legacy Initiative             $155.4        $268.0

Clean Action Water Plan:
  Agricultural Research Service                    $1.0          $5.0
  Natural Resources Conservation Service:
  EQIP (mandatory)                                174.0         300.0
  Partnership Grants                                0.0          20.0
  Monitoring                                        0.0           3.0
  Animal Feeding Operations Strategy                0.0          20.0
    Total, NRCS                                   174.0         343.0
  Forest Service                                  280.0         369.0

    Total, Clean Water Action Plan                455.0         717.0

a/ In addition, the budget proposes $27.5 million in mandatory funding
   for the Farmland Protection Program.

INTERAGENCY FOOD SAFETY INITIATIVE

On January 25, 1997, the President announced the Interagency Food Safety Initiative. The initiative included seven components for improving the Federal food inspection system from farm-to-table. Key components include expansion of the Federal food safety surveillance system, improved coordination between Federal, State, and local health authorities, improved risk assessment capabilities, increased inspection, expanded research, consumer education, and strategic planning. In 1999, the focus of the initiative is on enhancing the safety of imported and domestic fruits and vegetables, targeted food safety education, transformation of inspection systems to HACCP, and development of scientific information and tools to control a greater range of food safety hazards. For 2000, the budget will include an increase of $34.8 million for USDA to address a broad range of program needs, including research, improved State inspection programs, surveillance, microbiological testing, and education activities.

GLEANING AND FOOD RECOVERY INITIATIVE

The American agricultural system is one of the most productive and efficient in the world. Nonetheless, 37 million people were living below the official poverty level in 1996, while 27 percent, or 96 billion pounds, of the 356 billion pounds of edible food available for human consumption in the U.S. were lost to human use. The budget includes $15.8 million for new community and university based grant programs of financial and technical assistance to help Americans recover some of that abundance before it is lost and use it to help alleviate hunger and distress. The goal is to increase food recovery by 33 percent, or 500 million pounds. This would provide approximately 500,000 needy individuals with 3 pounds of food per day.

GLOBAL CHANGE RESEARCH PROGRAM

The budget proposes an increase of $34 million for the USDA research program on global change. Research will be aimed at investigating mitigation tactics to minimize the adverse effects of climate change on agricultural production, including effects of changes in temperature, carbon dioxide levels, and other plant stresses. Increased funds are also provided for USDA participation in the National Assessment Activities which are designed to provide a detailed understanding of the consequences of climate change for the Nation. Increases are also provided for soil surveys and inventories to provide baseline soil carbon inventories and develop a soil carbon database. Increases are also provided for studying the economic consequences of climate change, increases in the National Research Initiative Competitive Grants Program for global change, and the UV-B monitoring network. Within the total, $10 million is provided for ARS and FS to participate in the U.S. Global Change Research Program-Carbon Cycle Science Program, to study the role of agriculture and forests in the carbon balance and ways to increase carbon storage in soils.

CLIMATE CHANGE TECHNOLOGY INITIATIVE

Increases are proposed in the budget to support the President's Climate Change Technology Initiative (CCTI) as part of the Research Fund for America. The Department is requesting $16 million to support the initiative in 2000. Within the total increase, $7 million will be devoted to developing technology for predicting and adapting agricultural production to global change impacts. The Forest Service will provide $6 million for increased research on forest and rangeland carbon sequestration and the NRCS will support projects to demonstrate and test various greenhouse gas mitigation strategies and monitoring mechanisms. In total, the ARS budget includes $7 million, the Natural Resources Conservation Service includes $3 million, and the Forest Service research proposal includes $6 million to support this Initiative.

LANDS LEGACY INITIATIVE

As the Nation's population and prosperity grows, there are new challenges to preserve the natural heritage and green spaces that Americans have come to treasure. The 2000 budget proposes a $1 billion National program to protect great places and to provide the tools for localities and States to plan for smart growth and open space preservation. Of this total program $268 million is proposed for USDA through the Forest Service (FS) and the Natural Resources Conservation Service (NRCS).

FS land acquisitions will continue to add lands valuable for recreation, wildlife habitat, and watershed protection to the national forests. The Forest Legacy Program provides funds for the acquisition of easements on private lands to protect critical environmental habitat threatened with development. The Urban and Community Forestry Program provides grants to States and localities to establish, maintain, or expand urban and community forests and related green spaces that serve to support viable communities and neighborhoods. The new Smart Growth Partnership Program is a revolving loan program for States and municipalities to use subsidized loans for smart growth land acquisition and management. This will help communities to protect open spaces, limit sprawl, enhance air and water quality, reduce greenhouse emissions and increase greenspace. The program will be based on the Department's existing Intermediary Relending Program, in which direct loans are provided to intermediate borrowers such as State and local governments, non-profit corporations, Indian tribes and cooperatives which in turn relend the funds to land trusts, private non-profit organizations, etc.

CCC's Farmland Protection Program (FPP) is designed to forge new and enhance existing partnerships between Federal, State and local governments in sharing the costs of acquiring conservation easements. FPP provides technical, and financial assistance to State, tribal and local programs for the purchase of farmland easements on eligible lands to address wetlands, wildlife habitat, soil, water and related natural resource concerns. This program is funded through CCC and the 2000 request level is $28 million. To support the proposed Lands Legacy Initiative, the 2000 budget proposes to provide an additional $50 million in discretionary funding for FPP to enhance Federal support for "smart growth" programs that address urban sprawl issues, protect productive farmland and preserve open space.

CLEAN WATER ACTION PLAN

The budget proposes an increase of $262 million for USDA Clean Water Action Plan (CWAP) activities, for a total funding level of $717 million. In order to improve water quality on the Nation's forested lands, funding for FS programs such as the Stewardship Incentives Program, Rangeland Management, and Forest Stewardship will increase by a total of $89 million over 1999 enacted levels. The budget also proposes an increase of $169 million for NRCS CWAP activities such as monitoring, animal feeding operations, and partnership grants. Included in the NRCS increase is a proposal to increase funding for the Environmental Quality Incentives Program by $100 million over currently authorized levels, to $300 million. This additional funding will provide producers with the needed resources to address water quality issues such as waste management and grazing practices. Lastly, ARS is provided $5 million, an increase of $4 million over 1999 levels, to carry out research on hypoxia, pfiesteria and related problems.

FARM AND FOREIGN AGRICULTURAL SERVICES

MISSION

The mission of the Farm and Foreign Agricultural Services (FFAS) area is to ensure the well-being of U.S. agriculture through delivery of commodity, credit, conservation, insurance, and export programs. FFAS agencies include the Farm Service Agency (FSA), the Risk Management Agency (RMA), and the Foreign Agricultural Service (FAS). The Commodity Credit Corporation (CCC) is the source of funding for most of the conservation and commodity programs administered by FSA and the export programs administered by FAS.

FARM SERVICE AGENCY (FSA)

Program Level
(Dollars in Millions)

                                                              1999
                                              1998           Current          2000
         Program                             Actual          Estimate        Budget

Farm Loan and Grant Programs                 $2,158            $2,828        $3,013
Conservation and Other Programs               1,800             1,663         1,596
Commodity Programs                           14,752            24,214        19,548
Salaries and Expenses                           911               966         1,006

     Total, FSA                             $19,621           $29,671       $25,163

Farm Service Agency
Farm Loan and Grant Programs
Program Level (P.L.) and Budget Authority (B.A.)
(Dollars in Millions)

                                                              1999
                                              1998           Current              2000
                                             Actual          Estimate            Budget

         Program                       P.L.         B.A.   P.L.       B.A.   P.L.        B.A.

Farm Operating Loans:
   Guaranteed Unsubsidized             $754           $9 $1,098        $13 $1,698         $24
   Guaranteed Subsidized                226           22    357         31     97           9
   Direct                               557           37    734         50    500          29
      Total, Operating Loans          1,537           68  2,189         94  2,295          62
Farm Ownership Loans:
   Guaranteed Unsubsidized              424           16    425          7    432           2
   Direct                                84           11     86         13    128           5
      Total, Ownership Loans            508           27    511         20    560           7
Emergency Loans                          59           14     25          6     53           8
Indian Land Acquisition Loans             1            a/     1          a/     1           a/
Credit Sales of Acquired Property        11            1      0          0      0           0
Boll Weevil Eradication                  40            a/   100          1    100           0
      Subtotal, Farm Credit
       Programs                       2,156          110  2,826        121  3,009          77
State Mediation Grants                    2            2      2          2      4           4

   Total, Farm Loan and
      Grant Programs                 $2,158         $112 $2,828       $123 $3,013         $81

a/ Less than $0.5 million.

Demand for the farm loan and grant programs will likely remain very strong given the continuing economic stress in the agricultural sector. Small-scale farmers in particular generally do not have the resources to handle unforeseen economic stresses, and the Department has made a commitment to provide credit assistance to small farmers, many of whom are minority and beginning farmers. Favorable interest rates will allow more guaranteed loans to be made without an increase in the Government subsidy, and more borrowers to be served through guaranteed loans than direct loans. Favorable interest rates also reduce significantly the subsidy cost of the program, from $121 million in 1999 to $77 million in 2000 despite an $183 million overall increase in the loan level. The share of direct loans made at the reduced interest rate for limited resource borrowers would be continued at current levels, about 38 percent for farm ownership loans and about 47 percent for farm operating loans.

The budget provides $2.3 billion in direct and guaranteed farm operating loans, about $100 million more than in 1999. The proposed loan level for direct farm operating loans is $500 million in 2000, the statutory limit. The 2000 funding level for direct and guaranteed farm operating loans will serve an estimated 20,000 beginning and small farmers, about 12,000 of whom will receive direct loans.

For farm ownership loans, the 2000 budget provides for increased loan levels for both direct and guaranteed loans. The direct loan level would be increased from $86 million to $128 million, significantly more than the $85 million level recommended by the Secretary's Civil Rights Action Team. This reflects Secretary Glickman's commitment to improve the opportunities for beginning and small farmers and, in particular, members of socially disadvantaged groups. The program level for guaranteed loans would be increased to about $432 million from $425 million in 1999. In terms of people served, this means that 4,000 beginning and small farmers will be given an opportunity to either acquire their own farm or to save an existing one, 600 more than in 1999. Of those served, about 1,500 will receive direct loans and the rest will receive guarantees.

The budget also provides funding for the emergency loan, Indian acquisition, credit sales, and boll weevil eradication programs. The request for emergency loans is increased to $53 million. Legislation will be proposed to close the eligibility gap between disaster loans provided by USDA and the Small Business Administration, to ensure a seamless Federal emergency loan availability. In addition, funding for State mediation grants is increased from $2 million in 1999 to $4 million in 2000. Mediation benefits family farmers, including many low income and socially disadvantaged farmers, who, because of mediation, are often able to resolve credit and other issues and remain on the farm. This program also supports the Vice President's National Performance Review initiative to achieve savings through the use of alternative dispute resolution. The increased funding will be used to support mediation programs in the 21 States certified in 1998, as well as any additional states which gain certification by 2000. Several States have expressed interest in establishing new programs or expanding their existing programs to include the mediation of other agricultural issues in addition to credit disputes.

Farm Service Agency
Conservation and Other Programs
Program Level
(Dollars in Millions)

                                                              1999
                                              1998           Current          2000
         Program                             Actual          Estimate        Budget

Conservation Reserve Program                 $1,760            $1,576        $1,596
Emergency Conservation Program                   29                84             0
Tree Assistance Program                          11                 3             0
Total, Conservation Programs                 $1,800            $1,663        $1,596

Conservation Reserve Program (CRP). The CRP is a CCC program administered by FSA. The CRP offers producers annual rental payments for a 10- to 15-year period to remove highly erodible cropland and other environmentally sensitive land from production. Participants also receive cost-share help to establish long-term resource-conserving cover. About 30.3 million acres were enrolled in the program at the end of fiscal year 1998.

The 1996 Farm Bill authorized funding for CRP from CCC and provided for new signups through 2002 to increase enrollment to a total of 36.4 million acres. The 15^th signup, conducted in March 1997, was the first major signup since 1996 and the largest CRP signup ever. CCC accepted about 17 million acres of the 23 million acres offered for enrollment. In the 16^th signup, conducted in October and November 1997, CCC accepted about 6 million acres of the 9 million acres that were offered for enrollment. The 2000 budget assumes 5.8 million acres will be accepted in the 18^th signup, conducted in October through early December 1998. As in past signups, acreage offered for enrollment in the 18^th signup was ranked using an environmental benefits index to protect the Nation's natural resource base.

In addition to these scheduled signups, a continuous, non-competitive signup has been underway since September 1996 to enroll land in filter strips, riparian buffers, and similar conservation practices. Acreage enrolled under the continuous signup includes enrollment under the Conservation Reserve Enhancement Program and the National Conservation Buffer Initiative, programs which are designed to target program benefits to achieve specific local and regional conservation goals.

The 2000 budget assumes acreage enrolled under these signups will bring CRP enrollment to about 31.1 million acres in 1999, to 34.4 million acres in 2000, and to an eventual enrollment of 36.4 million acres by 2002.

Emergency Conservation Program (ECP). Under this program, the Department shares the cost of carrying out practices to assist and encourage farmers to rehabilitate farmland damaged by natural disasters. In particular, it addresses those problems which if left untreated would: 1) impair or endanger the land; 2) materially affect the productive capacity of the land; 3) be so costly to rehabilitate that Federal assistance would be required to return the land to productive agricultural use; and 4) represent damage that is unusual in character and not the type which would recur frequently in the same area. Supplemental appropriations provided a total of $34 million for the ECP program in 1998. No funds have been appropriated to date for the program in 1999, and the budget proposes no funding for the program in 2000.

Tree Assistance Program (TAP). TAP provides cost-share payments to orchard and vineyard growers who replant or rehabilitate orchard trees and vineyards lost to damaging weather, including freeze, excessive rainfalls, floods, droughts, tornadoes, and earthquakes. Trees used for pulp and/or timber are excluded from eligibility for cost-share payments. The 1998 Supplemental Appropriations and Rescissions Act, P.L. 105-174, provided $14 million for TAP, of which $3 million remains available for use in 1999.

Farm Service Agency
Commodity Program Outlays
(Dollars in Millions)

                                                              1999
                                              1998           Current          2000
         Program                             Actual          Estimate        Budget

Commodity:
   Feed Grains                               $3,354            $5,716        $3,566
   Wheat                                      2,187             2,918         1,291
   Rice                                         491               707           433
   Upland Cotton                              1,132             1,629           781
   Tobacco                                      376              -254          -143
   Dairy                                        291               435           528
   Soybeans                                     139               450         2,339
   Peanuts                                      -11                 1             a/
   Sugar                                        -30               -48           -41
   Honey                                          a/                1            -1
   Wool and Mohair                                a/                6            -6
   Other Crops                                   49                63           112
      Subtotal                               $7,978           $11,624 b/     $8,859

   Disaster Assistance                            3             2,632             4
   Working Capital                              -36               250           250
   Other c/                                     -54               127           174

         Total, Commodity Programs           $7,891           $14,633        $9,287

a/ Less than $0.5 million.
b/ Includes $3 billion in marketing loss assistance payments
   for feed grains, wheat, rice, upland cotton and dairy.
c/ Includes interest and operating expenses, reimbursable agreements,
   equipment, and an adjustment for Food for Progress commodity purchases.

Commodity loan and income support programs are administered by FSA and financed through CCC. These commodity programs were changed dramatically by provisions of the 1996 Farm Bill. In the past, deficiency payments for producers of feed grains, wheat, upland cotton and rice (contract commodities) were tied to market prices and decreased when market prices were high and increased when market prices were low. The 1996 Farm Bill replaced deficiency payments with fixed production flexibility contract payments. The production flexibility contract payments, based on historical program acreage and yields, are set by law for each of the 7 years, from 1996-2002, and do not vary with market prices or current plantings. About 98 percent of the eligible crop acreage base has been enrolled in production flexibility contracts.

The CCC marketing assistance loan programs for contract commodities and oilseeds have provided producers with some protection against sharp declines in market prices in 1997 and 1998. Marketing assistance loan placements are projected to double between 1997 and 2000, and marketing loan gains and loan deficiency payments are projected to increase from negligible levels to nearly $3.5 billion in the same period.

The 1999 appropriations legislation provided nearly $5.7 billion in emergency assistance to help farmers manage through some of the lowest commodity prices in many years. The emergency funding included $3.1 billion for market loss payments and nearly $2.6 billion to compensate farmers for crop and livestock losses. Included in funding for the crop loss assistance is $400 million in incentive payments for farmers purchasing crop insurance on 1999 crops. The incentive payments underscore the importance of crop insurance programs that will help farmers better manage production risk in the future. The Noninsured Assistance Program (NAP), administered by FSA and funded through CCC, will continue to provide assistance to producers with losses on crops for which insurance is unavailable.

The 1996 Farm Bill also modified CCC loan program provisions for dairy, sugar, and peanuts. Dairy marketing orders are being reformed and consolidated and the price support program will be replaced in fiscal year 2000 with a recourse loan program. With respect to sugar, loan forfeiture fees were imposed, marketing assessments were increased, and marketing allotments were suspended. The peanut program was made no-net-cost (program costs may not exceed program receipts), the minimum national peanut poundage quota was eliminated, and the quota loan rate was reduced. In addition, appropriations legislation for 1999 provided for recourse loan programs for mohair and for the 1998 crop of honey. A new increased tobacco marketing assessment, which replaces the current assessment expiring at the end of the 1998 crop year, is also proposed in the 2000 budget.

Salaries and Expenses. FSA's salaries and expenses account funds all management related activities for FSA programs. FSA also provides administrative support to FAS and to the Risk Management Agency (RMA) under a reimbursable agreement.

The 2000 budget proposes a program level of $1,006 million estimated to support a ceiling of 5,745 Federal staff years and 10,048 non-Federal county staff years. The total program level includes appropriated funds and transfers.

Farm Service Agency
Commodity Credit Corporation
(Dollars in Millions)

                                      Program Levels        Net Outlays
     Program                       FY 1999    FY 2000   FY 1999    FY 2000

Commodity Programs:
  Price Support and Marketing
    Assistance Loans                $8,813    $10,524       $55       $982
  Production Flexibility Contracts   5,544      5,042     5,544      5,042
  Loan Deficiency Payments           1,804      2,713     1,804      2,713
  Market Loss Assistance Pymts       3,058          0     3,058          0
  Noninsured Assistance Payments        67         89        67         89
  Disaster Assistance                2,632          4     2,632          4
  Other Direct Payments                288         10       288         10
  Purchases and Sales                1,314        526       634        -69
  Interest Expenditures                411        450       152        181 
  Other                                283        190       399        335
    Total, Commodity Programs       24,214     19,548    14,633      9,287
Conservation Programs:
  CRP Program Payments               1,508      1,578     1,508      1,578
  Environmental Quality Incentives     174        300       121        160
  Wetlands Reserve Program             128        201       179        214
  Farmland Protection Program            0         28         9         10
    Total, Conservation Programs     1,810      2,107     1,817      1,962
Export Programs:
  Export Credit                      4,721      4,506       440        473
  Market Access Program                 90         90        89         91
  Foreign Market Development
    Cooperator Program                   a/        28         a/        28
  Quality Samples Program                0          2         0          2
  Export Enhancement Program           550        494       550        494
  Dairy Export Incentive Program       102         99       115        100
  Section 416(b) Donations b/          678          3       649         33
  Food for Progress Program            133         91       136        112
  Other                                 20         20        21         21
    Total, Export Programs           6,294      5,333     2,000      1,354
      Subtotal, CCC                 32,318     26,988    18,450     12,603
Pre-credit Reform Loan
  Repayments                             0          0      -246       -240
      Total, CCC                   $32,318    $26,988   $18,204    $12,363

a/ Funded through FAS appropriation in 1999.
b/ Value of commodities to be made available under 416(b) are
 &nbs

USDA 2000 BUDGET SUMMARY

TABLE OF CONTENTS

INTRODUCTION

FUNDING OVERVIEW

PROGRAM HIGHLIGHTS

INITIATIVES

FARM AND FOREIGN AGRICULTURAL SERVICES