President's 2013 Budget Cuts USDA by $32 Million; Increases FDA by $11.5 Million

USDA’s overall spending would be reduced $32 billion, including a cut in crop insurance of $7.4 billion, over the next 10 years under the FY2013 budget sent to Capitol Hill last week by President Obama.

FDA would see an increase in its overall budget of about $11.5 billion, but nearly all of the actual spending increase – 98% -- is predicated upon $654 million in new user fees for agency programs, including new fees for all companies required to register with FDA under the new Food Safety Modernization Act (FSMA). FDA Commissioner Margaret Hamburg said if the President’s budget is enacted, nearly 45% of FDA’s overall spending would be based on user fee collection by 2013.

For the Center for Veterinary Medicine, which regulates the feed industry and animal drugs, overall spending is reduced by about $4 million over FY2012 levels, but the FY2013 Administration proposal would seek collection of $15.09 million in user fees, including a new “food establishment registration fee” – strongly opposed by the feed, grain and other industries regulated by FDA – that is estimated to generate about $5.072 million dollars a year based on the more than 410,000 establishments likely to register, including feed mills, under FSMA.

The other fees collected by CVM include $7.7 million in animal drug approval user fees (negotiated with industry as part of the Animal Drug User Fee Act (ADUFA)), $1.6 million in generic animal drug fees, and $24,000 annually in recall fees.

The Administration is also targeting about $10 million in new spending to increase agency presence in China to improve the safety of imported foods, ingredients and drug components. At USDA, the Administration stopped short of recommending major user fee increases, with minor increases to cover the cost of inspecting meat processing plants after recalls linked to an illness outbreak, and $4 million to be collected from biotech crop applicants to cover department costs.