What Is the “Farm Bill”?
Renée Johnson
Specialist in Agricultural Policy
Jim Monke
Specialist in Agricultural Policy
December 10, 2010October 3, 2012
Congressional Research Service
7-5700
www.crs.gov
RS22131
CRS Report for Congress
Prepared for Members and Committees of Congress
What Is the “Farm Bill"?
Summary
The 112th Congress likely will consider reauthorization of the 2008 farm bill (P.L. 110-246, Food,
Conservation, and Energy Act of 2008) because much of the current law expires in 2012. Both
chambers held hearings in 2010 to hear how the 2008 law is working and what changes farmers
and other interest groups want in the next bill. The Administration and other deficit reduction task
forces have submitted budget proposals to reduce farm supports, and these approaches are at odds
with those of many farm sector advocates, who support the status quo.
The 2008 farm bill contained 15 titles covering support for commodity crops, horticulture and
livestock, conservation, nutrition, trade and food aid, agricultural research, farm credit, rural
development, energy, forestry, and other related programs. It also included tax-related provisions
to offset some new spending initiatives in the rest of the bill. The bill succeeds the 2002 farm bill
(P.L. 107-171) and guides most federal farm and food policies through FY2012. The farm bill
undergoes review and reauthorization roughly every five years.
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What Is the “Farm Bill"?
Contents
What Is the “Farm Bill”?.............................................................................................................1
What Is the Cost?........................................................................................................................2
What Are the Current Budgetary Constraints? .............................................................................4
What Are the Other Policy Challenges?.......................................................................................5
Farm Sector Economics ........................................................................................................5
Commodity Policy Reform and Equity Considerations ..........................................................6
International Trade Agreements.............................................................................................7
Figures
Figure 1. Net Farm Income and Government Payments, 1960-2010.............................................5
Figure 2. Farm Sector Debt-to-Asset Ratio, 1960-2010................................................................5
Tables
Table 1. Cost of the 2008 Farm Bill (P.L. 110-246)......................................................................3
Appendixes
Appendix. Key Farm Bill Provisions by Title ..............................................................................8
Contacts
Author Contact Information ...................................................................................................... 12
Congressional Research Service
What Is the “Farm Bill"?
What Is the “Farm Bill”?
A variety of federal laws—permanent and expiring—govern an array of agricultural and food
programs. Although many of these policies can be and sometimes are modified through
freestanding authorizing legislation or as part of other laws, the omnibus, multi-year farm bill
provides a predictable opportunity for policymakers to address agricultural and food issues more
comprehensively.
The Food, Conservation, and Energy Act of 2008 (P.L. 110-246, “2008 farm bill”) is the most
recent omnibus farm bill. It was enacted into law on June 18, 2008, and succeeded the 2002 farm
bill. 1 The farm bill governs federal farm and food policy, covering a wide range of programs and
provisions, and, as noted above, undergoes review and renewal roughly every five years. The
2008 farm bill contains 15 titles encompassing commodity price and income supports, farm
credit, trade, agricultural conservation, research, rural development, energy, and foreign and
domestic food programs such as food stamps and other nutrition programs, among other
programs. The box below shows the titles of the 2008 farm bill and briefly describes some
provisions in each title. Additional information on the major titles is in the Appendix. More
detailed information on the 2008 bill is in CRS Report RL34696, The 2008 Farm Bill: Major
Provisions and Legislative Action.
The “farm bill” is renewed about every five years.2 The omnibus nature of the bill can create
broad coalitions of support among sometimes conflicting interests for policies that individually
might not survive the legislative process. This breadth also can stir fierce competition for
available funds, particularly among producers of different commodities, or between those who
have differing priorities for farm subsidies, conservation, nutrition, or other programs.
Many in Congress have historically defended farm support programs as a means to ensure that the
United States has continued access to the most abundant, safest, and most affordable food
supplies in the world. However, there are long-standing criticisms of farm support programs.
Some question the overall effectiveness of farm programs and the cost to taxpayers and
consumers. Others question whether continued farm support is even necessary, given that many
of these programs were established many decades ago and are considered by some to be no longer
compatible with current national economic objectives, global trading rules, and federal budgetary
or regulatory policies.
The breadth of farm bills has steadily expanded in recent decades to include new and expanding
agricultural interests. For example, conservation and bioenergy once were not part of the farm
bill, but now are central elements of agricultural policy. 3 Also, the 2008 farm bill included two
new bill titles with horticulture and livestock provisions. The 2008 debate also differed from
previous farm bills in terms of the number and scope of proposals seeking changes to existing
legislation, some of which gained support within and outside Congress. These included proposals
from state organizations, national farm groups, commodity associations, conservation,
recreational and rural development organizations, faith-based groups, and several other nontraditional interest groups.
1
Farm Security and Rural Investment Act of 2002 (P.L. 107-171).
2
There have been seven omnibus farm bills since the 1970s (2008, 2002, 1996, 1990, 1985, 1981, 1977). Prior farm
legislation was in 1973, 1970, 1965, 1956, 1954, 1949, 1948, 1938, and 1933.
3
The conservation title was added in 1985; the energy title was added in the 2002 farm bill.
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The 2008 Farm Bill: Titles and Selected Programs and Policies
•
Title I, Commodities: Income support to growers of selected commodities, including wheat, feed grains,
cotton, rice, oilseeds, peanuts, sugar, and dairy. Support is largely through direct payments, counter-cyclical
payments, and marketing loans. Other support mechanisms include government purchases for dairy, and
marketing quotas and import barriers for sugar.
•
Title II, Conservation: Environmental stewardship of farmlands and improved management practices through
land retirement and working lands programs, among other programs geared to farmland conservation,
preservation, and resource protection.
•
Title III, Agricultural Trade and Food Aid: U.S. agricultural export and international food assistance
programs, and program changes related to various World Trade Organization (WTO) obligations.
•
Title IV, Nutrition: Domestic food and nutrition and commodity distribution programs, such as food stamps
and other supplemental nutrition assistance.
•
Title V, Farm Credit: Federal direct and guaranteed farm loan programs, and loan eligibility rules and policies.
•
Title VI, Rural Development: Business and community programs for planning, feasibility assessments, and
coordination activities with other local, state, and federal programs, including rural broadband access.
•
Title VII, Research: Agricultural research and extension programs, including biosecurity and response,
biotechnology, and organic production.
•
Title VIII, Forestry: USDA Forest Service programs, including forestry management, enhancement, and
agroforestry programs.
•
Title IX, Energy: Bioenergy programs and grants for procurement of biobased products to support
development of biorefineries and assist eligible farmers, ranchers, and rural small businesses in purchasing
renewable energy systems, as well as user education programs.
•
Title X, Horticulture and Organic Agriculture: A new farm bill title covering fruits, vegetables, and other
specialty crops and organic agriculture.
•
Title XI, Livestock: A new farm bill title covering livestock and poultry production, including provisions that
amend existing laws governing livestock and poultry marketing and competition, country-of-origin labeling
requirements for retailers, and meat and poultry state inspections, among other provisions.
•
Title XII, Crop Insurance and Disaster Assistance: A new farm bill title covering the federal crop
insurance and disaster assistance previously included in the miscellaneous title (not including the supplemental
disaster assistance provisions in the Trade and Tax title).
•
Title XIII, Commodity Futures: A new farm bill title covering reauthorization of the Commodity Futures
Trading Commission (CFTC) and other changes to current law.
•
Title XIV, Miscellaneous: Other types of programs and assistance not covered in other bill titles, including
provisions to assist limited-resource and socially disadvantaged farmers, and agricultural security, among others.
•
Title XV, Trade and Tax Provisions: A new title covering tax-related provisions intended to offset spending
initiatives for some programs, including those in the nutrition, conservation, and energy titles. The title also
contains other provisions, including the new supplemental disaster assistance and disaster relief trust fund, and
other tax-related provisions such as customs user fees.
What Is the Cost?
The farm bill sets the policies for an array of agricultural programs and, when mandatory
spending is used to fund them, pays for them. Discretionary programs authorized in the farm bill
are paid for separately in annual appropriations bills.
Table 1 provides a title-by-title breakdown of the mandatory spending estimates for the 2008
farm bill at enactment, covering the five-year period FY2008-FY2012.
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Table 1. Cost of the 2008 Farm Bill (P.L. 110-246)
(estimated outlays at enactment for mandatory programs)
5-yr. cost
($ billion)
Annual
average
($ billion)
Percent
share (%)
Title
Policy Issue
1
Commodities
41.6
8.3
67%
2
Conservation
24.1
4.8
15%
3
Trade/Food Aid
1.9
0.4
8%
4
Nutritiona
188.9
37.8
8%
5
Credit
-0.3
2%
6
Rural Development
0.194
0.0
1%
7
Research
0.321
0.1
1%
8
Forestry
0.038
0.0
0.23%
9
Energy
0.643
0.1
0.14%
10
Horticulture/Organic
0.402
0.1
0.11%
11
Livestock
0.001
0.0
0.07%
12
Crop Insurance
21.9
4.4
0.01%
13
Commodity Futures
0
0.0
0.00%
14
Miscellaneousb
6.4
1.3
0%
15
Disaster Assistance
3.8
0.8
-0.5%
15
Tax/Other
(4.8)
-1.0
-1.7%
283.9
56.8
Total
(1.4)
100%
Source: CRS Report R41195, Actual Farm Bill Spending and Cost Estimates, based on CBO estimates.
a. New outlays for the expanded Fresh Fruit and Vegetable Program required in the nutrition title, $274
million (FY2008-FY2012) and $1.020 billion (FY2008-FY2017), are not reflected in this table because they
are effectively offset with money from permanent appropriations under Section 32, mandated in Title XIV.
b. Excludes estimates for crop insurance previously included as part of the 2002 farm bill’s miscellaneous
provisions. Other provisions in the 2008 farm bill include provisions for socially disadvantaged and limited
resource producers, agricultural security, and Section 32, among others.
When the 2008 farm bill was enacted, the Congressional Budget Office (CBO) estimated the total
cost of the farm bill at $284 billion over five years (FY2008-FY2012) and $604 billion over ten
years (FY2008-FY2017), including existing programs and changes enacted. These costs reflect
mandatory outlays that do not require appropriations actions.
The overwhelming share (97%) of estimated total net outlays for programs in the 2008 farm bill
was anticipated to be spent on four titles: nutrition (67%), farm commodity support (15%),
conservation (9%), and crop insurance (8%). Of the $284 billion in projected total five-year net
outlays for programs under the farm bill—including revenue and cost-offset provisions in the
bill—about $189 billion was expected to support the cost of food stamps4 and certain other
nutrition assistance programs, $42 billion was expected to support commodity crops, $24 billion
was expected to support mandatory conservation programs, and $22 billion was expected to
4
Renamed in the 2008 farm bill as the Supplemental Nutrition Assistance Program (SNAP).
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support crop insurance. For FY2008-FY2012, the 2008 farm bill also included nearly $4 billion in
new spending for supplemental farm disaster assistance (included under Title XV). Another $10
billion was expected to be spent on trade, horticulture and livestock production, rural
development, research, forestry, and energy, among other programs.
What Are the Current Budgetary Constraints?
Similar to the conditions during debate on the 2008 farm bill, the upcoming farm bill debate is
likely to be driven in part by relatively large budget deficits and growing demands for fiscal
constraint. In fact, the budget situation may be more difficult than in past farm bills because of
growing federal budget deficits and new pay-as-you-go budget rules enacted in 2010.5
This is very different than budget conditions that existed for the 2002 farm bill, which was
written during a brief period of budget surplus at the turn of the millennium. The budget
resolution that funded the 2002 farm bill allowed the Agriculture Committees to spend $73 billion
more than the baseline over the 10-year budget window.6 In contrast, the 2008 farm bill was
basically budget-neutral. The latter was unusual in that $10 billion of tax provisions (over 10
years) outside the jurisdiction of the Agriculture Committees were used to create offsets for new
provisions, presumably for nutrition programs. The procedural difficulties of reaching budget and
policy compromises with multiple committees of jurisdiction (particularly the House and Senate
Agriculture Committees and the House Ways and Means and Senate Finance Committees)
prolonged the development of the farm bill. Given such difficulties in 2007 and 2008, many hope
to keep the finances of the 2012 farm bill within the jurisdiction of the Committee of
Agriculture. 7
Even a “simple” extension of the 2008 farm bill may be difficult. While some programs (like
most of the farm subsidies and nutrition assistance) have assumed future funding in the baseline,
others (mostly newer programs) do not. Specifically, 37 programs across 12 titles of the 2008
farm bill do not have funding beyond 2012 and could cost about $10 billion (over five years) to
renew. This is about 10% of the $100 billion five-year cost of the 2008 farm bill if the nutrition
title is excluded. For more details on this subset of programs, see CRS Report R41433,
Previewing the Next Farm Bill: Unfunded and Early-Expiring Provisions.
At the same time, broad deficit reduction proposals are specifically targeting agricultural
subsidies. The President’s fiscal commission, as well as the Bipartisan Debt Reduction Task Force
and the current and past Administrations, each have submitted detailed proposals to reduce farm
support. These proposals are opposed by many farm sector advocates, who support the status quo.
For additional background information, see CRS Report R41195, Actual Farm Bill Spending and
Cost Estimates.
5
See CRS Report R41157, The Statutory Pay-As-You-Go Act of 2010: Summary and Legislative History.
6
Each year, CBO issues a “baseline budget” for all federal spending under current law over a multi-year period.
Projected spending in the baseline represents CBO’s estimate at a particular point in time of what federal spending and
revenues likely would be under current law if no policy changes were made over the projected period. The baseline
serves as a benchmark or starting point for future budget analyses. Whenever new legislation (such as a farm bill) is
introduced that affects federal mandatory spending, its impact is measured as a difference from the baseline.
7
Jerry Hagstrom, “Peterson: No Offset From Environmental Program,” Congress Daily (National Journal), April 16,
2010, at http://www.nationaljournal.com/congressdaily/eep_20100416_2225.php?mrefid=lingospot.
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Consequently, in an era of deficit reduction and possible budget reconciliation, Congress faces
difficult choices about how much total support to provide agriculture, and how to allocate it
among competing constituencies.
What Are the Other Policy Challenges?
Commodity price and income support policies are usually a contentious components of a farm
bill. Proponents of the current approach to the farm commodity programs want a stronger safety
net. Opponents of the status quo often cite cost and budget concerns, and point to other competing
policy priorities, including equity concerns across the farm sector, supporting small farms, trade
commitments, specialty crops, nutrition, conservation, or rural development.
Farm Sector Economics
The general economic state of the farm sector often plays a role in the outcome of the farm bill
debate. Currently, net farm income is relatively favorable; however, income levels can vary
significantly from year to year. Overall, the U.S. Department of Agriculture (USDA) reports that
net farm income was $81.6 billion in 2010, up 31% from 2009 and 26% above the 10-year
average (Figure 1). Volatility is high from often unpredictable market prices and input costs.
Some look at the high level of income and say agriculture does not need as much support. Others
look at the same data and see a need for a safety net because of the volatility.
Figure 1. Net Farm Income and
Government Payments, 1960-2010
Billion dollars
100
Figure 2. Farm Sector Debt-to-Asset
Ratio, 1960-2010
25%
Net farm income
Government payments
90
80
20%
70
15%
60
50
10%
40
30
5%
20
10
0
1960
1970
1980
1990
2000
2010
Source: CRS Report RS21977, Agricultural Credit:
Institutions and Issues, using USDA data.
0%
1960
1970
1980
1990
2000
2010
Source: CRS Report RS21977, Agricultural Credit:
Institutions and Issues, using USDA data.
Government payments, including commodities and conservation, have been comparatively steady
(around $12 billion per year) since 2007, reflecting the fixed nature of direct payments and
conservation programs. Since then, the payments in the commodity programs may be
characterized more as income support rather than risk management, since nearly the same amount
is paid annually regardless of variability in income. This is because market prices are above
government price support triggers, and some subsidy programs are not being used or needed.
Farmers’ debt position during the global financial crisis also has remained fairly strong, with
relatively low debt compared to high asset prices. The farm sector’s ratio of debt compared to
assets is near a record low level (about 12%, Figure 2).
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Commodity Policy Reform and Equity Considerations
The traditional approach to agricultural policy has been to focus on the farm commodity
programs and variations of the long-standing farm safety net. The 2008 farm bill added revenuebased support to the commodity programs. In the past, counter-cyclical support was tied only to
prices, but some farmers wanted payments to respond to low-yield situations even when market
prices are high. The new program, called the Average Crop Revenue Election (ACRE), has been
criticized as highly complex and not responsive enough to local conditions or some commodities.
Participation has been lower than expected. Will the next farm bill continue the program or revise
it to make it more attractive? Some would rather shift support dollars to better revenue-based crop
insurance programs. Others prefer the status quo. The 2008 farm bill also added a “permanent”
disaster assistance program (Supplemental Revenue Assistance, SURE)—a pool of money for
disasters without needing supplemental appropriations. This program also has met with mixed
reviews, and continuation likely will be debated on policy and budget grounds.
Calls from some groups to reform current farm policies are often based on arguments for the need
for greater equitable distribution of support within the farming sectors. Farm program critics point
out that farm bill dollars are not equitably shared across the sector. Subsidies flow to a limited
number of staple commodities—mainly grains, oilseeds, cotton, milk, and sugar—and not to
fruits, vegetables, or livestock. Also, subsidies are proportional to production, allowing larger
farms to receive more than smaller ones. Critics want to address these imbalances.
One option could be to further tighten annual payment limits. Another option would be to use the
available funding to better promote production of other farm commodities and domestic food
systems. This might include increased fruits and vegetables for a range of domestic food
programs, such as the National School Lunch Program (NSLP) and other programs. Other options
might be to target support to a wider range of agricultural producers, such as smaller-sized farms,
organic producers, local food systems, direct-to-market producers, and sustainable farming
operations. Defenders of the status quo counter that U.S. farm policy is designed to ensure
domestic productivity, global competitiveness, and food security—regardless of farm size—and
that efficiency should not be penalized by reducing support to successful large operations.
Rural development is invoked by some who seek a more equitable distribution of support. Critics
of past farm bills say that rural development policy remains unfocused and under-funded. They
argue that the farm bill’s emphasis on commodity programs ignores the fact that most farmers
earn a majority of their incomes from nonfarm sources, that farm subsidies may go to landlords in
non-rural areas, and that most rural residents are no longer farmers. Rural development supporters
call for shifting resources into programs that expand the nonfarm economic base and support new
sources of competitive advantage in rural areas. Proponents of the commodity programs argue
that farm payments are a primary contributor to rural economic activity.
Alternatively, conservation and bioenergy are raised by others seeking equity for environmental
sustainability. Farm bill conservation policies usually have focused on reducing soil erosion and
protecting water quality and quantity through land retirement and working lands policies. In
recent years, conservation policy has shifted to reducing the off-farm impacts of agricultural
activities. Finding a balance between regulatory and voluntary policy options to address
environmental issues from agriculture will continue to shape the debate.
Bioenergy has become increasingly important to agriculture and rural communities. One-third of
U.S. corn production is converted into ethanol, up from 7% a decade ago. Many want the farm
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bill to offer incentives for farm-based energy production. However, some caution that ethanol has
relied heavily on federal incentives (such as tax credits and tariffs), and that its competitiveness
hinges on relatively high oil prices and/or anticipated technologies (cellulosic ethanol). Some also
have expressed concern that expanded use of bioenergy is unlikely to reduce the nation’s
dependence on petroleum imports. Biofuels policies may also have unintended consequences in
other areas of agricultural policy. The high demand for biofuels feedstocks (e.g., corn) may
adversely impact other areas such as the price of food and animal feed, and conservation practices
that retain plant material on erodible land.
Such challenges to the current U.S. farm policy were voiced during the 2008 farm bill debate, as
several nontraditional agriculture groups provided recommendations on policy changes to
Congress. The policy recommendations of these diverse interests ranged from maintaining current
programs to substantially altering or eliminating them. Some of these proposals were
incorporated into legislation introduced by Members who sought to challenge the existing farm
legislation through comprehensive and broad-based legislative changes. Others in Congress were
reluctant to change existing programs that are strongly supported by long-time beneficiaries.
Similar tensions are likely to continue to influence and shape the next farm bill debate.
International Trade Agreements
The farm bill debate has also been influenced by obligations concerning the design and size of
farm subsidies under the World Trade Organization (WTO) Agreement on Agriculture, as well as
by the U.S. position in the Doha Round of multilateral negotiations.
The United States is one of the world’s largest agricultural producers and exporters, and U.S.
farm policy is thus constantly evaluated against WTO rules. The importance of U.S. WTO
commitments is highlighted by the so-called “Brazil cotton case,” in which a WTO dispute
settlement panel ruled against the U.S. cotton program. The United States is expected to bring its
programs into WTO compliance or be subject to WTO-sanctioned retaliation. Thus, a key
question for policymakers is how new farm programs will affect U.S. trade commitments.
Similar considerations were voiced during the 2008 farm bill debate, given concerns about
whether U.S. farm policies were compatible with negotiations as part of the Doha Round of
international negotiations. Although progress in the Doha Round has long been stalled, criticisms
and legal challenges by some WTO member countries of current U.S. farm programs have
continued. Many U.S. trading partners have also publicly stated that any proposed changes to
U.S. domestic support programs should also meet broader objectives for farm trade policy reform.
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Appendix. Key Farm Bill Provisions by Title
Following is a summary of the types of provisions and programs of individual titles in the 2008
farm bill. More detailed information is in CRS Report RL34696, The 2008 Farm Bill: Major
Provisions and Legislative Action.
Title I: Commodity Programs
For the major commodity crops—grains, oilseeds, and cotton—the 2008 farm bill generally
continued the farm commodity price and income support framework of the 2002 farm bill. It
revised payment limitations by tightening some annual limits and relaxing others, and adjusted
target prices and loan rates for some commodities. It continued the direct payment, countercyclical payment, and marketing loan programs for the 2008-2012 crop years. The bill created a
pilot revenue-based counter-cyclical program—the Average Crop Revenue Election (ACRE)
program—beginning with the 2009 crop year. It also included a pilot program for planting
flexibility, and restricted payments on acres developed for residential use.
For dairy, the 2008 farm bill extended, with modifications, two federal programs that support
milk prices and dairy farm income—the dairy price support program (DPSP) and the Milk
Income Loss Contract (MILC) program. It also authorized farmers to voluntarily enter into
forward price contracts as part of the federal milk marketing order program, among other dairyrelated provisions. The bill also continued the sugar program that supports prices for domestic
producers and processors. To address the possibility of increased sugar imports from Mexico
under the North American Free Trade Agreement, the 2008 farm bill mandated an 85% market
share for U.S. sugar producers and created a sugar-for-ethanol program to sell surplus sugar to
ethanol producers. Across all commodities, when the 2008 farm bill was enacted, CBO estimated
that five-year mandatory outlays for the title would total $41.6 billion (FY2008-FY2012).
For more detailed information, see CRS Report RL34594, Farm Commodity Programs
in the 2008 Farm Bill, CRS Report RL34036, Dairy Policy and the 2008 Farm Bill, and CRS
Report RL34103, Sugar Policy and the 2008 Farm Bill.
Title II: Conservation
The 2008 farm bill reauthorized almost all 2002 farm bill conservation programs, modified
several programs, and created several new conservation programs. The bill made changes to
and/or expanded both working lands programs, such as the Environmental Quality Incentives
Program and the (renamed) Conservation Stewardship Program, and land retirement programs,
such as the Conservation Reserve Program and the Farmland Protection Program. Program
changes addressed eligibility requirements, program definitions, enrollment and payment limits,
contract terms, evaluation and ranking criteria, and other administrative issues, among other
program conditions. Producer coverage across most programs was also expanded to include
beginning, limited-resource, and socially disadvantaged producers; specialty crop producers; and
producers transitioning to organic production. The bill also created new conservation programs to
address emerging issues and priority resource areas, and also new subprograms under existing
programs. When the 2008 farm bill was enacted, CBO estimated that five-year mandatory outlays
for the title would total $24.1 billion (FY2008-FY2012). See CRS Report RL34557,
Conservation Provisions of the 2008 Farm Bill.
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Title III: Trade
The 2008 farm bill reauthorized and amended USDA’s food aid, export market development, and
export credit guarantee programs. The bill reauthorized the largest U.S. food aid program, the P.L.
480 food aid program, along with other smaller programs that provide food aid to countries
promoting the development of market-oriented agricultural sectors (Food for Progress) or school
feeding and nutrition programs (the McGovern-Dole International School Feeding and Child
Nutrition Program). It also established a pilot program for local and regional purchase of
commodities for famine prevention. The farm bill terminated some export programs, while
selected others received increased funding. When the 2008 farm bill was enacted, CBO estimated
that mandatory outlays for the title would total nearly $1.9 billion (FY2008-FY2012). See CRS
Report RS22905, Agricultural Export Provisions of the 2008 Farm Bill, and CRS Report
RS22900, International Food Aid Provisions of the 2008 Farm Bill.
Title IV: Nutrition
The 2008 farm bill’s nutrition title accounted for well over half of all spending covered by the
bill, with the overwhelming majority financing the Food Stamp program. The most significant
issues in this title addressed administration of, eligibility for, and benefits under the Food Stamp
program, funding for The Emergency Food Assistance Program (TEFAP), and support for a
program making free fresh fruits and vegetables available in schools. The bill extended expiring
authorities in covered programs (generally through FY2012) and increased spending for most
programs. When the 2008 farm bill was enacted, CBO estimated that five-year mandatory outlays
for the title would total $188.9 billion (FY2008-FY2012). See CRS Report RL33829, Domestic
Food Assistance and the 2008 Farm Bill.
Title V: Credit
The 2008 farm bill enacted relatively minor changes to the permanent statutes for two
government-related farm lenders: the USDA Farm Service Agency (FSA) and the Farm Credit
System (FCS). When the 2008 farm bill was enacted, CBO estimated that these changes would
result in total cost savings over five years of about $1.4 billion (FY2008-FY2012) from increased
payments by the Farm Credit System to a government insurance fund. See CRS Report RS21977,
Agricultural Credit: Institutions and Issues.
Title VI: Rural Development
The 2008 farm bill reauthorized and/or amended rural development loan and grant programs and
authorized several new provisions, including rural infrastructure, economic development, and
broadband and telecommunications development, among other programs. The bill created several
new programs intended to assist with regional development strategies and provided technical and
financial assistance for rural businesses. When the 2008 farm bill was enacted, CBO estimated
that mandatory outlays for the title would total $0.2 billion (FY2008-FY2012). See CRS Report
RL34126, Rural Development Provisions of the 2008 Farm Bill.
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Title VII: Research
The 2008 farm bill reorganized the administration of USDA’s research, extension, and economic
agencies within the mission area. The farm bill created a new entity called the National Institute
of Food and Agriculture (NIFA) to carry out extramural research, including both formula-funded
and competitively awarded programs. NIFA replaced the Cooperative State, Education, and
Extension Service (CSREES), which prior to the 2008 farm bill was the primary USDA
extramural funding agency. Intramural research continues to be carried out by the Agricultural
Research Service (ARS), Economic Research Service (ERS), and National Agricultural Statistics
Service (NASS). The 2008 farm bill established a new competitive research program, the
Agriculture and Food Research Initiative (AFRI), and expanded mandatory funding for this
mission area. When the 2008 farm bill was enacted, CBO estimated that mandatory outlays for
the title would total $0.3 billion (FY2008-FY2012). For more information, see CRS Report
R40819, Agricultural Research, Education, and Extension: Issues and Background.
Title VIII: Forestry
The 2008 farm bill made changes to existing forestry programs, allowed one to expire, and
created some new programs to assist local entities in protecting forests threatened with
conversion to non-forest uses, and to restore forests damaged by natural disaster, among other
programs. The bill also established priorities for forestry assistance funding, required statewide
forest resource assessments, and created a new coordinating committee to oversee state assistance
funding. The bill amended existing law to restrict imports of illegally logged wood and modified
income tax deductions for qualified timber gains. When the 2008 farm bill was enacted, CBO
estimated that mandatory outlays for the title would total $40 million (FY2008-FY2012). For
more information, CRS Report RL33917, Forestry in the 2008 Farm Bill.
Title IX: Energy
The 2008 farm bill reauthorized, expanded, and/or modified existing programs, and created new
programs and initiatives to promote biofuels and cellulosic ethanol production. The bill included
provisions supporting farm and community renewable energy systems, including the production,
marketing, and processing of biofuel feedstocks other than corn starch. It expanded research,
education, and demonstration programs for advanced biofuels, and also established USDA
coordination of federal biobased energy efforts. The bill also expanded federal procurement of
biofuels and bio-refinery repowering projects. When the 2008 farm bill was enacted, CBO
estimated that mandatory outlays for the title would total $0.6 billion (FY2008-FY2012). For
more information, see CRS Report RL34130, Renewable Energy Programs in the 2008 Farm
Bill.
Title X: Horticulture and Organic Agriculture
The 2008 farm bill included new programs and increased spending for horticulture and organic
production under a new bill title. About half of this increased spending was targeted to expand the
Specialty Crop Block Grant Program, which provides funds to state agriculture departments for
U.S. specialty crop marketing, promotion, research, and other activities. The bill also provided
new mandatory funding for growth of farmers’ markets and for transitioning producers to organic
production. It also authorized funding for a new federal-state cooperative pest and disease early
Congressional Research Service
10
What Is the “Farm Bill"?
detection program, and provided for price reporting and organic data collection, among other
provisions. When the 2008 farm bill was enacted, CBO estimated that mandatory outlays would
total $0.4 billion (FY2008-FY2012). See CRS Report RL33520, Specialty Crops: 2008 Farm Bill
Issues.
Title XI: Livestock
The 2008 farm bill included new livestock-related provisions under a new bill title. The bill made
changes to existing laws governing livestock and poultry marketing and competition, including
specifying that producers may not be forced into mandatory arbitration in livestock or poultry
contracts, allowing producers to decline arbitration prior to entering into the contract, enabling
producers to litigate a contract dispute where the principal part of their production occurs, and
requiring additional reporting and tracking of enforcement action under the Packers and
Stockyards Act. The bill modified country-of-origin labeling (COOL) requirements for retailers,
opened the way for state-inspected meat and poultry to enter interstate commerce, and extended
mandatory safety inspection to catfish. When the 2008 farm bill was enacted, CBO estimated that
mandatory outlays for the title would total $1 million (FY2008-FY2012). See CRS Report
RL33958, Animal Agriculture: 2008 Farm Bill Issues.
Title XII: Crop Insurance and Disaster Assistance Programs
The 2008 farm bill provided for changes to the crop insurance program, along with other disaster
assistance provisions, under a new bill title. The bill contained several revisions to the crop
insurance program, many of which were designed to reduce program costs. When the 2008 farm
bill was enacted, CBO estimated net savings of $3.9 billion over five years (FY2008-FY2012),
mostly through changes in the timing of premium receipts from farmers, and payments to the
companies. The title also included other disaster assistance provisions, including the addition of
the Small Business Disaster Response and Loan Improvements Act of 2008, which makes
significant changes to the Small Business Administration’s (SBA’s) response to disaster.
(Agricultural disaster assistance is addressed in Title XV.) CBO had estimated that five-year
outlays for the title would total $21.9 billion (FY2008-FY2012). See CRS Report RL34207, Crop
Insurance and Disaster Assistance in the 2008 Farm Bill.
Title XIII: Commodity Futures
The 2008 farm bill included a title that reauthorized appropriations for the Commodity Futures
Trading Commission (CFTC) through FY2013, also amending the Commodity Exchange Act.
Title XIV: Miscellaneous
The miscellaneous title in the 2008 farm bill included various provisions affecting research,
energy, and rural development, as well as provisions covering socially disadvantaged and limitedresource producers, agricultural security, and uses of Section 32 (farm and food support), among
other provisions. When the 2008 farm bill was enacted, CBO estimated that mandatory outlays
for the title would total $6.4 billion (FY2008-FY2012).
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What Is the “Farm Bill"?
Title XV: Trade and Tax Provisions
The 2008 farm bill included a title containing various trade and tax provisions. This title also
included provisions creating a new permanent Supplemental Agricultural Disaster Assistance
(SURE) program. The supplemental revenue assistance payment program for crop producers is
designed to compensate eligible producers for a portion of crop losses that are not eligible for an
indemnity payment under the crop insurance program (i.e., the portion of losses that is part of the
deductible on the policy). When the 2008 farm bill was enacted, CBO estimated that mandatory
outlays for the permanent disaster program would total $3.8 billion (FY2008-FY2012). See CRS
Report RL34207, Crop Insurance and Disaster Assistance in the 2008 Farm Bill.
The bill’s tax provisions addressed a range of conservation, energy, and agriculture issues, among
others. Among the largest revenue-raising provisions are an extension of customs user fees and a
change in the estimated tax payment of corporations. When the 2008 farm bill was enacted, CBO
estimated that these provisions would generate a $10 billion offset over 10 years (FY2008FY2017).
Author Contact Information
Renée Johnson
Specialist in Agricultural Policy
rjohnson@crs.loc.gov, 7-9588
Congressional Research Service
Jim Monke
Specialist in Agricultural Policy
jmonke@crs.loc.gov, 7-9664
12?
Summary
The farm bill is an omnibus, multi-year piece of authorizing legislation that governs an array of
agricultural and food programs. Although agricultural policies sometimes are created and changed
by freestanding legislation or as part of other major laws, the farm bill provides a predictable
opportunity for policymakers to comprehensively and periodically address agricultural and food
issues. The farm bill is renewed about every five years.
The Food, Conservation, and Energy Act of 2008 (P.L. 110-246, “2008 farm bill”) is the most
recent omnibus farm bill, and was enacted into law in June 2008. The farm bill is due for
reauthorization, as portions of the 2008 farm bill expired beginning September 30, 2012. Some
programs expire at the end of a farm bill and would cease to operate altogether unless
reauthorized; in other cases new activities might not be initiated—either for lack of program
authority or available funding.
The 112th Congress has considered several options to address reauthorization of the farm bill. The
Senate approved its version of a farm bill (S. 3240) in June 2012. In the House, a farm bill (H.R.
6083) was approved by the House Agriculture Committee in July 2012 and awaits consideration
by the full House of Representatives. Congress also considered various options for extending the
current farm bill, among other options.
The most recent Congressional Budget Office (CBO) “baseline” budget (Mach 2012) estimates
that about $993 billion of mandatory outlays are available for farm bill programs over the next
decade (FY2013-FY2022). Within this total, an estimated $772 billion (78%) would be available
for the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) as
part of the bill’s nutrition title. Another $154 billion (16%) would be available for farm
commodity support and crop insurance, and $64 billion (6%) for agricultural conservation.
Congressional Research Service
What Is the Farm Bill?
Contents
What Is the Farm Bill?..................................................................................................................... 1
What Is the Cost?............................................................................................................................. 3
2008 Farm Bill at Enactment..................................................................................................... 3
2012 House and Senate Farm Bill Proposals............................................................................. 3
What Are the Key Issues?................................................................................................................ 5
Deficit Reduction and the Budget ............................................................................................. 5
Nutrition Assistance................................................................................................................... 5
Farm Commodity Policy Reform .............................................................................................. 6
Disaster Assistance .................................................................................................................... 7
The Rest of the Farm Bill .......................................................................................................... 7
Figures
Figure 1. March 2012 CBO Baseline of Mandatory Outlays for Farm Bill Titles........................... 4
Tables
Table 1. 2012 Farm Bill Budget: Baseline, Scores, and Proposed Outlays, by Title....................... 4
Contacts
Author Contact Information............................................................................................................. 7
Congressional Research Service
What Is the Farm Bill?
What Is the Farm Bill?
The farm bill is an omnibus, multi-year piece of authorizing legislation that governs an array of
agricultural and food programs. Although agricultural policies sometimes are created and changed
by freestanding legislation or as part of other major laws, the farm bill provides a predictable
opportunity for policymakers to comprehensively and periodically address agricultural and food
issues. The farm bill is renewed about every five years.1
Since the 1930s, farm bills traditionally have focused on farm commodity price and income
support for a handful of staple commodities—corn, soybeans, wheat, cotton, rice, and dairy. Yet
farm bills have grown in breadth in recent decades. Among the most important additions have
been nutrition assistance, conservation, horticulture, and bioenergy programs. The omnibus
nature of the farm bill can create broad coalitions of support among sometimes conflicting
interests for policies that individually might not survive the legislative process. This also can stir
fierce competition for funds. In recent years, more parties have become involved in the farm bill
debate, including national farm groups, commodity associations, state organizations, and nutrition
and public health officials, as well as advocacy groups representing conservation, recreation, rural
development, faith-based interests, local food systems, and certified organic production.
The Food, Conservation, and Energy Act of 2008 (P.L. 110-246, “2008 farm bill”) is the most
recent omnibus farm bill. It was enacted in June 2008 and succeeded the 2002 farm bill. The 2008
farm bill contained 15 titles encompassing commodity price and income supports, farm credit,
trade, agricultural conservation, research, rural development, energy, and foreign and domestic
food programs, among other programs.2 (See titles described in text box below.)
Without a new farm bill or an extension, some programs expire at the end of a farm bill and will
cease to operate altogether unless reauthorized; in addition, new activities might not be
initiated—either for lack of program authority or available funding. Nutrition assistance programs
need reauthorization, if they are to continue. The farm commodity programs not only expire, but
would revert to permanent law dating back to the 1940s. Many discretionary programs would not
have statutory authority to receive appropriations in future years. Other farm bill programs have
permanent authority and do not need to be reauthorized. Nonetheless, they may be included in a
farm bill to make changes for policy or budgetary goals. Crop insurance is the major example of a
permanently authorized program that is still addressed in the farm bill.
Currently, the farm bill is due for reauthorization, as portions of the 2008 farm bill expired
beginning September 30, 2012.3 The 112th Congress has considered several options to address
reauthorization of the farm bill. In the House, a farm bill (H.R. 6083) was approved by the House
Agriculture Committee in July 2012 and awaits consideration by the full House of
Representatives.4 Congress also considered various options for extending the current farm bill,
among other options.
1
There have been sixteen farm bills since the 1930s (2008, 2002, 1996, 1990, 1985, 1981, 1977, 1973, 1970, 1965,
1956, 1954, 1949, 1948, 1938, and 1933). Farm bills have become increasingly omnibus in nature since 1973 with the
inclusion of a nutrition title.
2
CRS Report RL34696, The 2008 Farm Bill: Major Provisions and Legislative Actionhttp://www.crs.gov/pages/
Reports.aspx?PRODCODE=RL34696.
3
CRS Report R42442, Possible Extension or Expiration of the 2008 Farm Bill, and CRS Report R41433, Expiring
Farm Bill Programs Without a Budget Baseline.
4
CRS Report R42552, The 2012 Farm Bill: A Comparison of Senate-Passed S. 3240 and the House Agriculture
(continued...)
Congressional Research Service
1
What Is the Farm Bill?
The 2008 Farm Bill (P.L. 110-246): Functions and Major Issues, by Title
•
Title I, Commodity Programs: Provided income or other types of support (“safety net”) to farmers that
grow the major commodity crops—wheat, corn, soybeans, cotton, and rice. Included programs to help farmers
manage production risks, including volatile weather, natural disasters, as well as market fluctuations. Support to
farmers was largely through direct payments, counter-cyclical payments, and marketing loans. Other support
mechanisms included government purchases for dairy, and marketing quotas and import barriers for sugar.
•
Title II, Conservation: Encouraged environmental stewardship of farmlands and improved management
practices through a range of land retirement and/or working lands programs, among other programs geared to
farmland conservation, preservation, and resource protection. Working lands programs include: Environmental
Quality Incentives Program (EQIP) and Conservation Stewardship Program (CSP). Land retirement programs
included: Conservation Reserve Program (CRP) and the Wetlands Reserve Program (WRP), among others.
•
Title III, Trade: Provided support for U.S. agricultural export programs and international food assistance
programs. Major programs included: Market Access Program (MAP) and the primary U.S. food aid program, the
P.L. 480 program, and other programs. Additionally, addressed program changes related to World Trade
Organization (WTO) obligations.
•
Title IV, Nutrition: Provided nutrition assistance for households and individuals through programs such as the
Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) and The Emergency Food
Assistance Program (TEFAP), among other types of supplemental nutrition assistance. Additionally, provided
support for a program making fresh fruits and vegetables available in schools, and other types of support for
child nutrition programs.
•
Title V, Credit: Provided support for federal direct and guaranteed loans to farmers and ranchers, and loan
eligibility rules and policies.
•
Title VI, Rural Development: Supported business and community programs for planning, feasibility
assessments, and coordination activities with other local, state, and federal programs. Programs include rural
development loan and grant programs and authorized several new provisions, rural infrastructure, economic
development, and broadband and telecommunications development, among other programs.
•
Title VII, Research, Extension, and Related Matters: Supported agricultural research and extension
programs that help farmers and ranchers become more efficient, innovative, and productive. Other types of
research programs included biosecurity and response, biotechnology, and organic production.
•
Title VIII, Forestry: Supported forestry management programs run by the U.S. Forest Service.
•
Title IX, Energy: Supported the development of farm and community renewable energy systems through
various programs, grants, and procurement assistance initiatives. Provisions covered the production, marketing,
and processing of biofuel feedstocks; expanded research, education, and demonstration programs for advanced
biofuels; USDA coordination of federal biobased energy efforts; grants for procurement of biobased products to
support development of biorefineries; assistance for eligible farmers, ranchers, and rural small businesses in
purchasing renewable energy systems; and user education programs, among other programs.
•
Title X, Horticulture: Supported the production of specialty crops—fruits, vegetables, tree nuts, and
floriculture and ornamental products—through a range of initiatives, including market promotion; plant pest and
disease prevention; and public research; among other initiatives. Additionally, provided assistance to certified
organic agricultural production.
•
Title XI, Livestock: Addressed a range of programs affecting livestock or poultry producers.
•
Title XII, Crop Insurance and Disaster Assistance: Provided for federal crop insurance and disaster
assistance, including policies for crop insurance coverage and risk management.
•
Title XII, Miscellaneous: Other types of programs and assistance not covered in other bill titles, including
provisions to assist limited-resource and socially disadvantaged farmers, and agricultural security, among others.
(...continued)
Committee’s H.R. 6083 with Current Law.
Congressional Research Service
2
What Is the Farm Bill?
What Is the Cost?
The farm bill sets the policies for an array of agricultural programs. Legislatively, the farm bill
authorizes programs in two spending categories: mandatory and discretionary. Mandatory
programs generally operate as entitlements; the farm bill pays for them based on multi-year
budget estimates when the law is enacted via the Congressional Budget Office (CBO) “baseline.”
Discretionary programs are authorized in the farm bill for their scope; they are not funded in the
farm bill, but instead are subject to annual appropriations. While both types of programs are seen
as important, mandatory programs and related budget issues often dominate the farm bill debate.
2008 Farm Bill at Enactment
When the 2008 farm bill was enacted, CBO estimated the total cost of mandatory programs at
$284 billion over five years (FY2008-FY2012) and $604 billion over 10 years (FY2008FY2017). The overwhelming share (97%) of estimated total net outlays for programs in the 2008
farm bill was anticipated to be spent on four titles: nutrition, farm commodity support, crop
insurance, and conservation. Of the $284 billion in projected total five-year net outlays for
programs under the farm bill, about $189 billion (67%) was for the Supplemental Nutrition
Assistance Program (SNAP, formerly known as food stamps) and certain other nutrition
assistance programs. An estimated $42 billion (15%) was expected for farm commodity support
and $22 billion (8%) for crop insurance.5 An estimated $24 billion (9%) was expected to support
mandatory conservation programs. Another $10 billion was expected to be spent on trade,
horticulture and livestock production, rural development, research, forestry, and energy, among
other programs.6 Actual spending for these programs differed from these original estimates.7
2012 House and Senate Farm Bill Proposals
If current law were continued, CBO estimates that mandatory outlays would be $993 billion over
10 years (FY2013-FY2022, Table 1). This “baseline” serves as a starting point for how much is
available to spend on the next farm bill.8 Within this total, an estimated $772 billion (78%) would
be available for SNAP (Figure 1). Another $154 billion (16%) would be available for farm
commodities and crop insurance, and $64 billion (6%) for conservation. The remaining roughly
$3 billion (less than one-half of 1%) would be available for the other farm bill titles (trade,
horticulture, energy, rural development, research and forestry). These costs reflect mandatory
outlays, and do not reflect discretionary spending for programs authorized in the farm bill and
paid for separately in annual appropriations bills. Table 1 also reflects estimates for the House
committee and Senate farm bill proposals in 2012, which could reduce farm bill spending by
3.5% and 2.3%, respectively, as discussed in the next section.
5
Another $4 billion was allocated for supplemental farm disaster assistance (FY2008-2012) in the miscellaneous title.
CRS Report RL34696, The 2008 Farm Bill: Major Provisions and Legislative Action.
7
CBO periodically re-estimates the baseline. New estimates show how changing economic conditions affect automatic
entitlement outlays under current law. Increases in projected costs from prior year baselines may indicate that more
people qualify for benefits, but the increase does not require budgetary offsets. Likewise, reductions in projected costs
may indicate that less price support is needed, but reductions do not create savings that could offset new spending. For
more information, see CRS Report R41195, Actual Farm Bill Spending and Cost Estimates.
8
CRS Report R42484, Budget Issues Shaping a 2012 Farm Bill
6
Congressional Research Service
3
What Is the Farm Bill?
Table 1. 2012 Farm Bill Budget: Baseline, Scores, and Proposed Outlays, by Title
(outlays in millions of dollars, 10-year total FY2013-FY2022)
2012 Farm Bill Titles
CBO Score of Bill
(change to baseline)
Outlays Proposed
(Baseline + Score)
CBO
Baseline
(outlays)
S. 3240
H.R. 6083
S. 3240
H.R. 6083
I
Commodities
62,944
-19,428
-23,584
43,516
39,360
II
Conservation
64,067
-6,374
-6,148
57,693
57,919
III
Trade
3,442
0
0
3,442
3,442
IV
Nutrition
772,109
-4,000
-16,075
768,109
756,034
V
Credit
-2,665
0
0
-2,665
-2,665
VI
Rural Development
25
+115
+105
140
130
VII
Research
214
+681
+546
895
760
VIII
Forestry
9
+9
+4
18
13
IX
Energy
750
+780
0
1,530
750
X
Horticulture
1,080
+360
+435
1,440
1,515
XI
Crop Insurance
90,867
+5,036
+9,523
95,903
100,390
XII
Miscellaneous
0
-319
+50
-319
50
992,842
-23,140
-35,144
969,702
957,698
Total
Source: CRS Report R42484, Budget Issues Shaping a 2012 Farm Bill, using the CBO baseline (March 2012) and
CBO cost estimates of Senate-passed S. 3240 (July 9, 2012), and House-drafted H.R. 6083 (July 26, 2012),
Figure 1. March 2012 CBO Baseline of Mandatory Outlays for Farm Bill Titles
(10-year budget outlays FY2013-FY2022 in billions of dollars by farm bill title)
10-yr baseline: $993 billion over FY2013-22
Crop Insurance,
91
Commodities,
63
Conservation,
64
Nutrition,
772
Trade, 3.442
Horticulture,
1.080
Energy, 0.750
Rural Dev., 0.025
Research, 0.214
Forestry, 0.009
Source: CRS, using the March 2012 CBO baseline.
Congressional Research Service
4
What Is the Farm Bill?
What Are the Key Issues?
Deficit Reduction and the Budget
Budget issues are among the primary factors affecting the development of a new farm bill. The
desire by many to redesign farm policy and reallocate the remaining farm bill budget—in a
sequestration and deficit reduction environment—is driving much of the farm bill debate.
Political dynamics concerning sequestration and broader deficit reduction goals leave open
difficult questions about how much and when the farm bill budget may be reduced. In this
context, Congress faces difficult choices about how much total support to provide for agriculture,
and how to allocate that support among competing constituencies.
Several high-profile congressional and Administration deficit reduction proposals have targeted
agricultural programs specifically.9 Across-the-board reductions to many farm bill programs also
could occur in 2013 unless Congress avoids an automatic budget sequestration process, though
nutrition assistance is exempt from sequestration, and crop insurance and some farm commodity
and conservation outlays in 2013 appear to be exempt.10
Compared to the $993 billion baseline of outlays over the 10-year period, the Senate-passed farm
bill, S. 3240, would reduce spending by $23.1 billion (-2.3%); and the House-reported bill, H.R.
6083, would reduce it by $35.1 billion (-3.5%, Table 1). The $23 billion 10-year reduction in the
Senate bill is consistent with a joint House and Senate agriculture committees’ proposal to the
Joint Select Committee on Deficit Reduction in the fall of 2011. The $35 billion reduction over
10 years in the House committee bill is consistent with the scale of budget reconciliation
instructions in the House budget resolution for FY2013. The bills make fairly similar budgetary
changes to the farm commodity programs, crop insurance, and conservation from a combined
budget perspective. However, the changes to nutrition assistance are more stark between the bills,
with a $4 billion reduction in the Senate bill and $16 billion reduction in the House committee
bill. The reduction in the House committee bill is considered excessive by some groups and too
small by others.
Nutrition Assistance
The Supplemental Nutrition Assistance Program (SNAP), formerly called the Food Stamp
Program, provides benefits to increase the food purchasing power of eligible low-income
households. SNAP reaches a large share of low-income households. In April 2012, 46 million
persons in 22 million households benefitted from SNAP.11
The nutrition share of the farm bill budget has increased over time. When the 2008 farm bill was
enacted, the nutrition title was 67% of the 10-year total ($406 billion out of $604 billion). Five
years later, it is 78% of the total ($772 billion out of $993 billion). This trend does not mean,
however, that the nutrition programs have grown at the expense of the agricultural programs.
9
CRS Report R42484, Budget Issues Shaping a 2012 Farm Bill.
Office of Management and Budget, Report Pursuant to the Sequestration Transparency Act of 2012, Sept. 2012.
11
CRS Report R42505, Supplemental Nutrition Assistance Program (SNAP): A Primer on Eligibility and Benefits.
10
Congressional Research Service
5
What Is the Farm Bill?
Nonetheless, the growth in nutrition spending has been highlighted and is being considered for
reduction, as discussed in the previous section.
Two nutrition issues stand out among those being considered in the 2012 farm bill: becoming
eligible for SNAP benefits based on participation in other low-income assistance programs
(“categorical eligibility”),12 and how minimal payments from the Low-Income Home Energy
Assistance Program (LIHEAP) can affect SNAP benefit calculations.13 The House committee and
Senate farm bills are identical on the LIHEAP change, but only the House bill would restrict
categorical eligibility.
Farm Commodity Policy Reform
Farm commodity price and income support programs raise farm income by making direct
payments and reducing financial risks from uncertain weather and market conditions. Programs
with government-set target prices (or revenue benchmarks) offer payments when market prices
(or farm revenue) fall below support levels. Simultaneously, the federal crop insurance program
protects producers against losses in crop revenue or yield through federally subsidized policies
purchased by producers.14
The commodity programs usually are a contentious component of a farm bill. Proponents want a
strong safety net for farmers, while opponents often cite costs relative to other policy priorities.
Critics point out that farm bill dollars are not equitably shared across the sector. Benefits flow to a
limited number of staple commodities—mainly corn, soybeans, wheat, cotton, rice, dairy, and
sugar—and not to fruits, vegetables, or livestock. Subsidies are proportional to production,
allowing larger farms to receive more than smaller ones. The farm economy also plays a role in
the outcome. In recent years, farm sector income has been historically high, though variability has
increased.15 Some say agriculture does not need as much support as in prior years; others look at
the same data and see high volatility justifying an enhanced safety net.
Of the non-nutrition funding available in the farm bill (about $221 billion over 10 years), $91
billion is available for crop insurance, $63 billion is available for farm commodity price and
income supports, and $64 billion is available for conservation. The combined change that is
proposed in the House committee bill to the farm commodity program and crop insurance (-$14.1
billion over 10 years) is similar to those programs in the Senate bill (-$14.4 billion), though each
chamber takes a somewhat different approach to reform.
The House committee and Senate farm bills propose to restructure the farm programs by
eliminating fixed direct payments and the existing counter-cyclical price and revenue programs.
Some of the savings from eliminating direct payments would be used to offset the cost of new
farm programs and enhance crop insurance. Both bills borrow conceptually from current
programs, revising and renaming them to enhance price or revenue protection for producers.16
12
CRS Report R42054, The Supplemental Nutrition Assistance Program: Categorical Eligibility.
CRS Report R42591, 2012 Farm Bill: Changing the Treatment of LIHEAP Receipt in the Calculation of SNAP
Benefits.
14
CRS Report R40532, Federal Crop Insurance: Background and Issues.
15
CRS Report R40152, U.S. Farm Income.
16
CRS Report R42759, Farm Safety Net Provisions in a 2012 Farm Bill: S. 3240 and H.R. 6083.
13
Congressional Research Service
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What Is the Farm Bill?
Disaster Assistance
In the summer of 2012, drought spread across much of the United States and adversely affected
agricultural producers. As of October 3, 2012, the Secretary of Agriculture has designated nearly
2,100 counties as disaster areas. Agricultural disaster assistance has been common on an ad hoc
basis since the 1980s. The 2008 farm bill also added “permanent” agricultural disaster assistance
programs—permanent in the sense that a pool of money was available for disasters without
needing supplemental appropriations, but not permanent in that authority expired in September
2011 without a budget for reauthorization. The 2012 drought fueled congressional interest in
reauthorizing disaster programs.17
Five disaster programs were established in the 2008 farm bill for weather-induced losses in
FY2008-FY2011. Both the House and Senate farm bills would reauthorize four programs
covering livestock and tree assistance for FY2012-FY2017. The crop disaster program from the
2008 farm bill (i.e., Supplemental Revenue Assistance, or SURE) is not reauthorized in either
bill, but elements of it are folded into the Senate bill by allowing producers to protect against
farm-level revenue losses (not included in House bill). The Senate farm bill also provides disaster
benefits to tree fruit producers who suffered crop losses in 2012.
In the absence of action House floor action on the committee-approved farm bill, the House
passed a limited disaster assistance bill (H.R. 6233) on August 2, 2012. The House bill would
extend for one year (for losses through September 30, 2012) the same four disaster provisions that
are extended for six years in the omnibus farm bill proposals.
The Rest of the Farm Bill
Beyond nutrition, farm commodity programs, disaster assistance and the budget, the breadth of
the rest of the farm bill reflects important issues for various constituencies. The House committee
and Senate proposals for the new farm bill indicate some differences in the direction of continued
funding for various horticulture and specialty crop programs, bioenergy programs, conservation
program reorganization, rural development and research programs. For more details of specific
provisions in the farm bill proposals, see CRS Report R42552, The 2012 Farm Bill: A
Comparison of Senate-Passed S. 3240 and the House Agriculture Committee’s H.R. 6083 with
Current Law.
Author Contact Information
Renée Johnson
Specialist in Agricultural Policy
rjohnson@crs.loc.gov, 7-9588
17
Jim Monke
Specialist in Agricultural Policy
jmonke@crs.loc.gov, 7-9664
CRS Report RS21212, Agricultural Disaster Assistance.
Congressional Research Service
7