“Section 32” is a permanent appropriation that since 1935 has earmarked the equivalent of 30% of annual customs receipts to support the farm sector through a variety of activities. Today, most of this annual appropriation is transferred to the U.S. Department of Agriculture (USDA) account that funds child nutrition programs (i.e., $5.7 billion transferred of approximately $7 billion total). However, the Secretary of Agriculture has long had broad discretion in how to spend the non-transferred (unobligated and carry-over) money, which now amounts to approximately $1.5 billion annually. The Secretary historically has chosen to use much of this non-transferred money to purchase non-price-supported commodities like meats, poultry, fruits, vegetables, and fish, which are diverted to school lunch and other domestic food programs; and to fund farm economic and disaster relief activities, among other things.
The 110th Congress in May 2008 passed a new omnibus farm bill (P.L. 110-234). Provisions in this new law now spell out more explicitly how the Secretary is to use the annual Section 32 appropriation. One section of P.L. 110-234 requires new higher minimum levels of fruit, vegetable, and nut purchases (in fresh, frozen, canned, or dried forms) to support domestic nutrition programs. A separate section requires the Department to use Section 32 to fund a fresh fruit and vegetable program for participating elementary schools, with spending to grow from $105 million in FY2009 to $150 million by FY2012. Another part of the new law delineates how the Secretary is to allocate the annual Section 32 appropriation—in order to cover the cost of the fresh fruit and vegetable purchases.
Separately, USDA’s FY2008 appropriation (part of the Consolidated Appropriations Act, 2008, P.L. 110-161) also appears to limit somewhat the availability of Section 32 monies. It rescinds a total of $684 million, including $184 million that otherwise was projected to be available in FY2008 for surplus purchases (called “Estimated Future Needs” in AMS budget parlance) and $500 million in prior unobligated balances. These congressional actions may be expected, in effect, to limit the wide discretion that policymakers have long exercised with regard to program spending under this account. Meanwhile, various Members of Congress and their constituents still want to ensure that a portion of the Section 32 fund will continue to be available—and be used, when necessary—to help producers recover at least a portion of their losses when natural disasters or unanticipated economic setbacks arise and to help domestic nutrition programs through surplus purchases.
According to an article in the Elmira Star-Gazette on Feb. 1, 2014:
Senators Schumer and Gillibrand petitioned for the USDA to purchase the surplus grapes to keep grape juice prices stable. New York has 381 grape growers and over 9,700 acres of Concord vineyards, and the industry is expected to have a strong year of production. “The USDA’s decision to heed our call and purchase more grapes ahead of this year’s harvest is a win-win for New York growers and individuals receiving nutrition assistance,” Schumer said in a statement. “More juice sales mean more profits for our growers.”
Surplus grapes purchases will come from Winegrape Growers Inc., an association of grape farmers; Clearview Farms in Branchport, Yates County; and Giancarelli Brothers in Weedsport, Cayuga County.
The USDA will use Section 32 funds to purchase the grapes, which are used to purchase agriculture products that in turn used for nutrition programs, such as the school-lunch program.
In a press release dated Jan 31, 2014, Tom Reed explains it differently:
Rep. Tom Reed praised the decision by the U.S. Department of Agriculture (USDA) to purchase $11.5 million dollars worth of Concord grape juice. Reed weighed in heavily with the USDA Agriculture Secretary leading up to the decision requesting that they make the bonus purchase to stabilize the Concord market after the bumper crop of 2013. Reed led a letter with fellow New York Reps. Richard Hanna, Brian Higgins and Bill Owens to Secretary Vilsack encouraging the USDA to implement the bonus buy in August 2013.
“Agriculture is the backbone of our economy in the Southern Tier and the Finger Lakes and we need to be supporting local growers and farmers anyway we can,” Reed said. “I am very pleased to see that this funding was approved to help farmers deal with unexpected crop years and market conditions. In addition to supporting our local farmers through the program, the juice purchased by USDA will go to schools across the country for healthy lunch programs.
The Lake Erie grape region covers roughly 30,000 acres and is the oldest and largest Concord region in the world. Many vineyards throughout the Finger Lakes grow Concords as well.
Evidently our Democratic Senators and our Republican representative agree on several things.
- Federal spending in NYS and the 23rd Congressional District to buy surplus farm products isn’t a bad thing even if it means higher prices for consumers.
- Spending to buy surplus grape production isn’t a case of government picking winners and losers even though the beneficiaries are named.
- When hunger isn’t enough to justify spending on relief, the need to dispose of surplus agricultural production may do.
On behalf of school children, we can be glad that the surplus is grape juice rather than some farm product that would be less welcome in school lunches.
Whether the Secretary of Agriculture acted on his own initiative, listened to NY’s Democratic Senators, or Western NY’s Republican Representatives, we aren’t to know. But for sure all our legislators will claim credit.
© William Hungerford – January 2014