The release of a president’s budget proposal triggers a lengthy sausage-making process. As we continue examining the 2018 skinny budget proposal released by the Trump White House earlier this spring, it’s important to keep that in mind: the final 2018 budget will probably not look a lot like the president’s proposal, if history is any guide.
That said, a president’s budget is an important philosophical document. It tells us something about an administration’s priorities and worldview. Even if the final budget passed by Congress does not mirror the president’s budget in the details, the philosophy will undoubtedly shape the administration’s approach to the issues.
For those keeping track at home, here’s a quick recap of this year’s rather convoluted budget process. In March, the White House released what analysts called a “skinny” budget proposal for 2018 — a broad overview of certain budgetary priorities that the president hopes Congress will look to as it crafts the 2018 budget this summer (the 2018 fiscal year begins October 1). A much more detailed 2018 budget proposal is expected from the White House later this month. But, you might be saying, didn’t Congress just pass a budget this past week? They did — but for 2017. Not atypically, Congress was delayed in getting the budget passed this year, so the two processes are overlapping. We’ll talk a bit about both the 2017 budget just passed by Congress and the president’s 2018 proposal here.
There is much in the president’s skinny budget proposal that should be of interest to the food, agriculture and sustainability communities. We will know a lot more when the White House releases its full 2018 budget proposal, particularly since it will provide an opportunity, we hope, for newly confirmed Secretary of Agriculture Sonny Perdue to weigh in.
In this piece, we examine what the president’s budget proposal might mean for efforts to build local food systems. Propelled by consumer demand for local food that some estimate could hit $20 billion in the next few years, small businesses and others are working to connect farms with new markets in ways that keep more wealth in farmers’ pockets and increase consumers’ access to local products. It’s exciting, innovative work — and federal support has been an important part of what’s made it possible.
A variety of federal programs support the farmers, food businesses and community groups working to build strong local and regional food systems. Overall, the president’s skinny budget reduces federal support for these programs, sometimes significantly. Consider a few examples:
These are only some of the relevant provisions in the president’s skinny budget proposal. A few things stand out:
First, a non-surgical approach to shrinking the size of the federal workforce may result in federal programs being less responsive to changing and diverse needs, including the needs of “non-traditional” stakeholders like those involved in local food work. During our time in government, we have seen that when resources are stretched, the priority must be to get the money out the door — and taking time to figure out, for example, how to assess an unusual business model for financing becomes much more challenging. Consider the conundrum of a Farm Service Agency loan officer, who acts as a “lender of first opportunity” for farms and ranches that cannot access commercial credit. If the FSA employee is balancing an unsustainable workload, it is much more efficient to provide one $300,000 loan than to process 12 $25,000 loans, or to lend to a corn and bean operation with a clear futures market than to figure out how to loan to a Community Supported Agriculture (CSA) farm. Under the Obama administration, FSA piloted a micro-loan program to further incentivize smaller loans; over 20,000 farms, many of them small, run by beginning farmers, and/or doing local food production, received micro-loans under the program. What will be the fate of this effort if the agency is forced to triage?
Second, the elimination of regional agencies like ARC (and its sister agencies, the Delta Regional Authority and the Northern Border Regional Authority), CDFI support, and USDA field offices could open a chasm between federal resources and local conditions and needs. Those in the local food community know how important it is for programs to be able to adapt to meet the unique needs of a particular place. CDFIs, including credit unions and community development banks, are able to support local businesses well because they are rooted in their communities. Likewise, regional or local representatives from federal agencies can act as a bridge between federal resources and the local context, helping to identify appropriate programs and offering technical assistance. If that connection is eroded, federal resources may become blunt instruments that are increasingly difficult for communities to access, or that don’t work well for them.
Finally, the administration maintains a philosophy throughout the budget proposal that the private sector should be able to fill many of the roles currently filled by federal programs. While we have seen many examples of effective public-private partnerships, the assumption that the private sector would provide services if the federal government got out of the way ignores the history behind the development of many federal programs and the critical role that these programs play in underserved communities or sectors. To return to the CDFI example, the ARC report notes that “The [CDFI] industry emerged over decades as public and private sector players responded to the difficulties that many distressed markets, such as minority, lower-income and rural communities, experienced in accessing mainstream financial services.” Traditional commercial lenders were not working for these communities.
The local foods sector knows this challenge well. New, non-traditional business models with “values” as part of their value proposition, business incubators, cooperatives… these are entities that a traditional lender might not have the capacity or desire to take on. Federal loans or grants can help bring private sector partners to the table. And federal programs that provide technical assistance or help communities test their ideas can set a community up for greater success in accessing public or private resources in the future, and managing them well.
It is interesting to look at the broad principles laid out in the president’s skinny budget in light of the 2017 budget bill finalized this week by Congress. Congress chose to maintain or increase funding in 2017 for many of the programs the president proposes to cut in 2018. Community Development Block Grants are maintained at 2016 levels, while some discretionary Rural Development programs, including Value-Added Producer Grants, see an increase. The Economic Development Administration sees an increase above last year, while the CDFI fund (including the Healthy Food Financing Initiative) is maintained at last year’s levels. The 2017 budget passed by Congress also refrains from closing USDA field offices and increases funding for the Appalachian Regional Commission above previous years.
The disconnect between the president’s 2018 budget proposal and Congress’s decisions for 2017 suggests that we have interesting times ahead. As a reminder, we should expect a more detailed version of the president’s 2018 budget later this month, followed by congressional deliberations throughout the summer and early fall (the 2017 fiscal year ends September 30, so theoretically, Congress will pass a 2018 budget bill by then… though in practice, that rarely happens).
But if the 2017 bill is any indication, there appears, at least for now, to be bipartisan support in Congress for programs that help communities build wealth through revitalized local food systems. It will be up to the local food community to demonstrate the value of continued federal support.
Elanor Starmer is a senior fellow at The George Washington University Food Institute, which first published this piece. She was formerly administrator of USDA’s Agricultural Marketing Service.