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Dairy Facts 2016

President’s Budget Touches on Topics Affecting Dairy

Feb 10, 2016

The cost of administering the Federal Milk Marketing Order system may be increasing, according to estimates included in President Obama’s Fiscal Year 2017 budget, which was submitted yesterday to Congress. Industry-funded assessments are expected to increase to $60 million, which is a 15-percent increase over the $52 million that was collected from milk handlers in 2015.

Also included in the budget document is a request to allow the Office of Management and Budget to review the federal milk marketing budget and regulations, consistent with its government-wide oversight role. Congress currently prohibits OMB from reviewing the federal milk marketing budget and its regulations in annual appropriations bills.

Several other proposals in the budget would have an impact on the dairy industry, including expanded summer meal programs for children, funding to support the implementation of the Food Safety Modernization Act, and increases in agricultural research and for oversight of the commodities futures market.

Expanding Summer Feeding with Electronic Benefits

The budget proposes to expand summer feeding programs for children who do not have access to subsidized meals when school is not in session. Under the president’s proposal, families of school-aged children eligible for free and reduced-price meals through the National School Lunch program (NSLP) would receive an electronic benefit transfer (EBT) of $45 a month per child during the summer months.

The expanded benefits would cost $12 billion over 10 years with approximately 10 percent of states participating in 2017. That means almost one million low-income children would receive benefits in the summer of 2017, and the number would increase to nearly 20 million children by 2026 when all states would be eligible.

The U.S. Department of Agriculture has conducted pilot programs of summer benefits to test which foods would be eligible for purchase. Congress has also expressed interest in expanding USDA’s pilot EBT program.

“The Senate Agriculture Committee recently approved legislation that would expand summer EBT benefits to allow families to purchase foods permitted under the Special Supplemental Nutrition Program for Women, Infants and Children,”  said Ruth Saunders. “Both the White House and Congress have expressed interest in expanding summer feeding options for children, and this will help increase milk and dairy consumption outside of the normal school year,” said Saunders.   

Aiding FDA With Food Safety Implementation

According to the president’s budget, the Food and Drug Administration is asking for an additional $18.4 million and the authority to collect $193.2 million in user fees to support ongoing implementation of the Food Safety Modernization Act. The funds would be earmarked for increasing state capacity to implement the produce safety rules and for implementing the Foreign Supplier Verification Program.

In addition, the Centers for Disease Control and Prevention would receive $52 million for food safety activities such as monitoring, surveillance and analysis of data, along with providing technical guidance, training and technology to state health departments.

Encouraging Research and Oversight

Other provisions in the proposed budget include $700 million for the Agriculture and Food Research Initiative (AFRI),  which is a peer-reviewed competitive grants program administered by USDA. This amount is the full funding level authorized by Congress when it established AFRI in the 2008 Farm Bill and double the $350 million made available in FY 2016. AFRI-funded projects cover  fundamental and applied agricultural sciences, including farm efficiency and profitability, ranching, renewable energy, forestry (both urban and agroforestry), aquaculture, rural communities and entrepreneurship, human nutrition, food safety, biotechnology and conventional breeding.  

The 2017 budget also seeks $330 million for the Commodity Futures Trading Commission (CFTC), which oversees the futures market and over-the-counter derivatives. By comparison, Congress approved $250 million for the commission in the 2016 budget. The request is part of a controversial goal of the Obama administration to double the budgets for both the CFTC and the Securities and Exchange Commission by 2021, when compared to 2015 levels, to enforce the Dodd–Frank Wall Street Reform and Consumer Protection Act. Commonly known as Dodd-Frank, the law affects all federal financial regulatory agencies and almost every part of the nation's financial services industry.

Next Steps?

Congress will begin its annual budget and appropriations process early this spring. After the Administration submitted its proposed budget to Congress yesterday, Republican congressional leaders stated that they are unlikely to approve many of the Administration’s funding proposals. However, some areas of the food and agriculture budget are likely to be considered as Congress begins to draft appropriations bills for FY 2017.

For more information, contact Ruth Saunders, vice president of policy and legislative affairs for IDFA, at  

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