April 9, 2001

Secretary of Agriculture Ann Veneman Monday unveiled a budget for fiscal year 2002 that calls for $63.3 billion in outlays and a fiscal 2002 program level (the gross value of all financial assistance) of $95 billion. The figures compare to $70 billion and $95 billion, respectively, in fiscal 2001. Rather than try to project any emergency spending for farmers in fiscal 2002, USDA will propose to rely on the $513 billion contingency fund proposed by President Bush for agriculture and defense department emergencies.

Addressing what undoubtedly is the administration's most pressing agricultural issue, the budget includes an additional $32 million in fiscal 2001-2002 to increase inspection personnel to protect against animal and plant diseases like foot-and-mouth at major U.S. ports of entry.

The fiscal 2002 budget provides $849 million in program funding for USDA's Animal Plant Health and Inspection Service (APHIS), a $174 million increase over 2001. The budget also strengthens the Agriculture Quarantine Inspection Program (AQI), designed to help protect the United States against animal diseases like foot-and-mouth and BSE, by requesting $13 million in additional program support.

Veneman also announced the authorization of an additional $32 million to hire approximately 350 additional personnel at critical ports and international airports to protect against pests and diseases. This authorization of personnel includes 127 permanent officers and technicians, 27 canine officers, 173 temporary inspector positions and 20 veterinarians. These positions are over and above the levels indicated in the fiscal 2001 and 2002 budgets and will be financed from available revenues in the APHIS user fee account. This decision provides an additional $13.5 million in resources for fiscal 2001 and $18.6 million in 2002 for staffing.

The Food Safety Inspection Service (FSIS) is fully funded at $716 million, an increase of $21 million over 2001. The budget includes an increase for pay and benefits to support the FSIS workforce, including 7,600 meat and poultry inspectors. A $1 million increase is included for import-export inspections and a $6 million increase is requested for laboratory services.

In addition, the budget:

–Provides $126 million in funding for the Foreign Agricultural Service (FAS), a $6.4 million increase over FY 2001. This additional funding is to help strengthen USDA's capability to address technical trade issues and to strengthen market intelligence capabilities for overseas posts. Funding for USDA's Export Guarantee Programs are estimated at $3.9 billion, an increase of more than $100 million over FY 2001. The Foreign Market Development Program, the Market Access Program, Quality Samples Program and Export Enhancement Program will remain at 2001 levels, totaling $598 million. Funding for the Dairy Export Incentive Program is estimated at $42 million, slightly above the current 2001 estimate.

--Implements the new Agricultural Risk Protection Act so farmers have the benefits of improved crop insurance as soon as possible. This requires $141 million above FY 2001. The budget proposes "such sums as necessary" for the mandatory costs associated with the corp insurance program including premium subsidies, indemnity payments (in excess of premiums), underwriting gains paid to private companies, reimbursements to private companies for delivery expenses and other authorized expenditures.

Significant reforms were made to the crop insurance program by Congress including an increase in subsidies for crop insurance implemented for the 2001 crop. Those rates will remain in place for 2002, Veneman said. Farmers already have begun to buy higher levels of coverage, and more are choosing revenue insurance which protests against market losses as well as production losses. That trend is expected to continue in 2002.