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Wine Industry Insight
NOTE: The author of this article once served as a top aide to the current chairman of the U.S. Senate Appropriations Committee and offers the experience-based caution that anything found in a budget document at this stage is simply quicksand sandwiched between hope and hype.
The newly released Trump budget may have some unpleasant surprises for the wine industry as a whole and the Wine Institute in particular.
While it is far to early to predict what may happen as the budget makes its way through the Congressional mangle-machine process, some reasonable assumptions can be mentioned if nothing more than topics for discussion.
Of most immediate concern could be the proposed 21-percent decrease in the U.S. Department of Agriculture’sÂ $17.9 billion-dollar budget.
According to the Budget Blueprint [premium link] released by the Office of Management and Budget,Â the overall amounts will support “core Departmental and mission critical activities while streamlining, reducing, or eliminating duplicative, redundant, or lower priority programs where the Federal role competes with the private sector or other levels of government.”
The entire USDA blueprint section occupies just a page and a half out of the entire 62-page document. In that brief space it lists 10 points stating, amount other things, thatÂ it will maintain food safety, the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), forest fire protections, and research.
Point 5 stresses that it:
“Continues to support farmer-focused research and extension partnerships at land-grant universities and provides about $350 million for USDAâ€™s flagship competitive research program. In addition, the Budget focuses in-house research funding within the Agricultural Research Service to the highest priority agriculture and food issues such as increasing farming productivity, sustaining natural resources, including those within rural communities, and addressing food safety and nutrition priorities.”
However, it also states that the budget proposal,
“Reduces funding for USDAâ€™s statistical capabilities, while maintaining core Departmental analytical
functions, such as the funding necessary to complete the Census of Agriculture.”
As the chart below — from a 90-page FY2017 budget analysis [premium link] by the non-partisan Congressional Research Service —Â indicates, very little of the USDA’s budget can actually be trimmed.
Because of that, if $4.7 billion is actually cut, a number of services important to the wine industry are likely to be slashed.
President Trump has hammered foreign trade deals and assistance programs which may cause major problems for wine exports and the Wine Institute.
The Blueprint makes no mention of the Foreign Agricultural Service which operates a wide variety of trade and assistance programs.
Also missing from the text is the Market Access Program (MAP) which makes direct export-promotion grants to various agricultural product trade associations such as California’s Wine Institute.
Significantly, approximately one-third of the Wine Institute’s budget comes from the annual MAP subsidy.
As indicated by the Wine Institute’s Fiscal Year 2015 Form 990 [premium link] filed with the Internal Revenue Service, MAP funds accounted for more than $7 million of the trade organization’s $20.92-million in income.
That form 990, obtained fromÂ charity watchdog Guidestar, covered the period from July 1, 2014 to June 30, 2015. All federal non-profit corporations are required by law to make their Form 990s available for public inspection.
Guidestar did not have the Wine Institute’s most recent form, filed in 2016. Wine Industry Insight requested the form from the Wine Institute, but they have not responded.
As indicated by the table below, the California Wine Institute is among scores of agricultural organizations whose grants may be in jeopardy. The size of the list and the substantial clout exercised by some of the major groups like the U.S. Meat Export Federation and the Cotton Council International are likely to make this a formidable lobbying force.
FY 2017 Allocation
|Alaska Seafood Marketing Institute||$4,215,811|
|American Hardwood Export Council, APA-The Engineered Wood Association, Softwood Export Council, and Southern Forest Products Association||$8,660,943|
|American Peanut Council||$2,334,829|
|American Pistachio Growers/Cal-Pure Pistachios, Inc.||$1,734,367|
|American Seed Trade Association||$427,381|
|American Sheep Industry Association||$343,116|
|American Soybean Association||$5,345,376|
|American Sweet Potato Marketing Institute||$198,892|
|Blue Diamond Growers/Almond Board of California||$4,951,405|
|Brewers Association, Inc.||$470,769|
|California Agricultural Export Council||$81,133|
|California Cherry Marketing and Research Board||$586,937|
|California Cling Peach Growers Advisory Board||$495,522|
|California Fresh Fruit Association||$330,656|
|California Olive Committee||$100,000|
|California Pear Advisory Board||$476,790|
|California Prune Board||$3,002,795|
|California Strawberry Commission||$318,801|
|California Table Grape Commission||$3,124,247|
|California Walnut Commission||$4,176,771|
|Cherry Marketing Institute||$307,435|
|Cotton Council International||$14,918,690|
|Cranberry Marketing Committee||$1,904,498|
|Distilled Spirits Council of the United States||$153,104|
|Florida Department of Citrus||$3,880,190|
|Florida Tomato Committee||$283,803|
|Food Export Association of the Midwest USA||$8,516,087|
|Food Export USA Northeast||$9,153,867|
|Ginseng Board of Wisconsin||$451,850|
|Hop Growers of America||$207,793|
|Intertribal Agriculture Council||$750,250|
|Mohair Council of America||$144,074|
|National Association of State Departments of Agriculture||$1,606,323|
|National Confectioners Association||$750,454|
|National Potato Promotion Board||$4,826,422|
|National Renderers Association||$748,477|
|National Sunflower Association||$1,133,121|
|New York Wine and Grape Foundation||$461,932|
|Northwest Wine Promotion Coalition||$1,114,323|
|Organic Trade Association||$845,946|
|Pear Bureau Northwest||$2,894,698|
|Pet Food Institute||$1,069,841|
|Raisin Administrative Committee||$2,887,334|
|Southern United States Trade Association||$6,549,193|
|Sunkist Growers, Inc.||$1,143,326|
|Synergistic Hawaii Agriculture Council||$29,977|
|The Popcorn Board||$332,356|
|U.S. Apple Export Council||$944,272|
|U.S. Dairy Export Council||$4,870,047|
|U.S. Dry Bean Council||$1,009,263|
|U.S. Grains Council||$6,670,888|
|U.S. Hide, Skin and Leather Association||$302,229|
|U.S. Highbush Blueberry Council||$200,000|
|U.S. Livestock Genetics Export, Inc.||$742,369|
|U.S. Meat Export Federation||$13,316,290|
|U.S. Pecan Growers Council||$680,092|
|U.S. Wheat Associates||$6,081,995|
|USA Dry Pea and Lentil Council||$998,698|
|USA Poultry and Egg Export Council||$5,262,689|
|USA Rice Federation, U.S. Rice Producers Association||$2,912,752|
|Washington Apple Commission||$4,863,228|
|Washington State Fruit Commission||$1,759,292|
|Welch Foods, Inc.||$929,245|
|Western U.S. Agricultural Trade Association||$6,881,465|