On May 12, the House Appropriations Committee released the subcommittee draft of the FY2012 Agriculture Appropriations bill, which was subsequently marked up in the Agriculture Subcommittee.  The agencies and programs in this bill will receive a total of $125.5 billion in both discretionary and mandatory funding, a reduction of more than $7 billion from the President’s request.  Discretionary funding is reduced by $2.7 billion from last year’s level of $17.2 billion, a cut of over $5 billion from the President’s FY2012 request. However, mandatory (automatic) funding in the bill increases by nearly $3 billion over last year to a total of $108 billion and equals more than 86percent of the total funding in the bill.  Below is a summary of key bill highlights:

Rural Development: The bill provides $2.1 billion for rural development programs, a decrease of $338 million from last year’s level (17 percent), and $109 million below the President’s FY2012 request.

• 502 Single Family Direct Loans:  $40 million is provided to support $846 million in direct loans (program authority cut of $276 million) and $24 billion in guaranteed loans (same as FY11 and $12 billion above FY10).   
• 504 Very Low-Income Repair Loans and Grants:  Eliminates loan program but provides $32 million for grants ($8 million below FY11)
• 515 Rental Housing Loans:  Program level of $58.6 million, down from $69.5 million in FY11
• 521 Rental Assistance Grants: $890 million is provided for rural rental assistance, $63 million below last year’s level.
• 523 Mutual/Self-Help Housing Grants:  The bill provides $22 million, $14 million below last year’s level.
• 538 Rental Housing Guaranteed Loans:  Eliminates funding for account which had a program level of $129 million in FY10 and $30.9 million in FY11
• Community Facilities Program:  Provides $18 million to support grants and up to $1.1 billion in direct loans.  While the grants and subsidies were cut from last year’s level of $41.3 million, the overall loan program was increase by $647 million.  $3 million is specifically directed to the Rural Community Development Initiative, down from $5 million in FY11 and $6.3 million in FY10.
• Rural Economic Development Loans (REDLEG):  Provides $33.07 million for direct loans while blocking $155 million from interest on the cushion of credit payments of rural electric cooperatives and permanently cancels $155 million in credit payments from the account.
• Rural Cooperative Development Grants: The bill provides $22.5 million for Rural Cooperative Development grants, a decrease of $7 million from last year’s level.  This account includes $12.5 million for value-added agricultural product market development grants.
• Business and Industry Program:  $64.5 million ($20.78 million below last year) is provided for the Business and Industry Program to support $626.95 million in loans for rural businesses.  This is down from the FY11 program level of $822 million and FY10 level of $889 million.
• Rural Water and Waste Programs: $500 million is provided for rural water and waste grant and loan programs, $27 million below last year’s level.  This is expect to support $730 million in rural water and waste loans, down $242 million from the FY11 CR.
• Distance Learning and Telemedicine Program: The bill provides $15 million for grants, down $53 million from FY11 CR.
• Rural Electric and Telecommunication Loans: The legislation provides for $7.3 billion in loan authority ($500 million below last year) for electric and telephone loans to help rural communities maintain these basic utilities.