Trade Adjustment Assistance for Farmers
Remy Jurenas
SpecialistMark A. McMinimy
Analyst in Agricultural Policy
March 26December 15, 2014
Congressional Research Service
7-5700
www.crs.gov
R40206
Trade Adjustment Assistance for Farmers
Summary
The Trade Adjustment Assistance for Farmers (TAAF) program provides technical assistance and
cash benefits to producers of agriculturalfarm commodities and fishermen who experience adverse
economic effects caused by economic
effects from increased imports. Congress first authorized this program in 2002,
and made
significant changes to it in the 2009 economic stimulus package (P.L. 111-5). The 2009
revisions were intended to make revisions
were aimed at making it easier for commodity producersfarmers and fishermen to qualify for
program benefits, and
provided over $200 million in funding through December 2010.
Subsequently, P.L. 112-40
(enacted in October 2011) authorized $202.5 million through
December 2013. No program activity occurred,new program
activity has occurred since December 2010 because Congress did not appropriatehas not appropriated funds.
The U.S. Department of Agriculture (USDA) is required to follow a two-step process in
administering TAAF program benefits. First, a group of producers must be certified eligible to
apply. Second, a
producer in a certified group must meet specified requirements to be approved to
receive technical assistance and cash paymentsfor benefits.
To be certified, a group must show that imports were a significant cause for at least a 15% decline
in one of the followingthree factors: the price of the commodity, the quantity of the commodity
produced, or
the production value of the commodity. Once a producer group is certified, an
individual producer
within that group must meet three requirements to be approved for program
benefits. These
include technical assistance with a training component, and financial assistance. A
producer must
show that (1) the commodity was produced in the current year and also in one
recent previous year of the previous
three years; (2) the quantity of the commodity produced decreased compared to that in a
previous previous
year, or the price received for the commodity decreased compared to a preceding threeyear three-year
average price; and (3) no benefits were received under any other trade adjustment assistance
program. The training component is intended to help the producer become more competitive in
producing the same or another commodity. Financial assistance (capped at $12,000 over a threeyear period for an approved producer) is to be used to develop and
implement a business
adjustment plan designed to address the impact of import competition.
From 2009 to 2011, USDA certified 10 of the 30 petitions filed by producers of five commodity
groups—shrimp, catfish, asparagus, lobster, and wild blueberries. In FY2010, USDA approved
about 4,500 agricultural producers who applied for training and cash assistance under three
certifications. Under the seven FY2011 certified petitions, USDA approved about 5,700
producers. Program benefits in both years mostly flowed to shrimp producers.
In a 2012 audit of the USDA approved TAAF benefits
for about 4,500 individual producers in FY2010, and for about 5,700 producers in FY2011.
In a 2012 audit of TAAF, the Government Accountability Office recommended that USDA
require spouses who apply for assistance to submit documentation on how they contribute to
producing a commodity, take steps to ensure that the program’s financial assistance component is
used for intended purposes, and adopt a longer-term approach to evaluate its effectiveness. A
2013 audit by USDA’s Office of Inspector General (OIG) identified several shortcomings in
administering the program, including determining eligibility and providing effective oversight.
In the 113th Congress, three bills (S. 1357, H.R. 3939, and H.R. 4163) would authorize appropriations
have authorized
appropriations for the TAAF program at the rate of $90 million annually through December 2020. Program
Program activity, though, would depend on whether Congress appropriates funds. These bills propose no
changes to TAAF’s group certification and individual producer eligibility requirementsappropriated funds. In the end,
Congress did not act on any of these measures. Looking ahead, if ongoing U.S. efforts to
conclude negotiations in two major trade agreements are successful during the 114th Congress,
then legislative interest might turn to reauthorizing the TAAF program, perhaps in tandem with
consideration of other trade-related legislation, such as Trade Promotion Authority (TPA).
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Trade Adjustment Assistance for Farmers
Contents
Rationale for Program...................................................................................................................... 1
Overview of TAAF Program............................................................................................................ 1
Requirements for a Commodity Group to Be Certified............................................................. 2
Individual Producer Eligibility Requirements ........................................................................... 23
Program Benefits ....................................................................................................................... 3
Limitations on Producer Financial Assistance........................................................................... 4
Written Notices to Producers ..................................................................................................... 4
Program Coordination ............................................................................................................... 4
Program Funding ....................................................................................................................... 45
TAAF Program Implementation ...................................................................................................... 5
FY2003-December 2007 ........................................................................................................... 5
FY2009 to Present ..................................................................................................................... 7
Administrative Actions........................................................................................................ 7
Certifications and Producer Approvals................................................................................ 8
GAO Report............................................................................................................................... 9
Legislative Activity in the 112th Congress USDA OIG Audit Called for Improved Oversight .................................................................. 10
Recent Legislative History....................................................................................................... 10...... 11
Legislative Reauthorization of TAAF ..................................................................................... 1011
Other TAA Measures ............................................................................................................... 1112
Legislation Proposed in the 113th Congress ................................................................................... 1213
Prospects for the 114th Congress .................................................................................................... 13
Acknowledgments ......................................................................................................................... 14
Tables
Table 1. TAAF Funding, and Spending by Type of Activity, FY2003-FY2014 .............................. 6
Table 2. Activity Under Trade Adjustment Assistance for Farmers Program,
FY2003-FY2014 ........................................................................................................................... 7
Table 3. Certified TAAF Petitions, FY2004-FY2011 ...................................................................... 8
Contacts
Author Contact Information........................................................................................................... 1214
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Trade Adjustment Assistance for Farmers
Rationale for Program
The origin of the Trade Adjustment Assistance for Farmers program can be traced back to a 2000
Department of Labor report recommending that a separate program be enacted “to assist
agricultural producers and workers affected adversely by imports” if the objective is to assist
them to remain in their current occupations. The report described the existing trade adjustment
assistance (TAA) programs that provided (1) limited technical assistance to help business firms
(including some that produced agricultural and food products) regain economic competitiveness
or to shift into producing other goods, and (2) training assistance to workers (including those
employed by some agricultural firms) to facilitate their transition into other occupations. It noted
that the provision of direct financial assistance (such as income supplements) to farmers, or
efforts to financially enable them to continue producing the commodity adversely affected by
imports rather than help them adjust to employment in other sectors, would be inconsistent with
the objectives of the then-existing TAA programs.1
Observers stated that farmers and ranchers typically did not qualify for the TAA workers program
because they were self-employed (and thus rarely were eligible for unemployment benefits) and
were less likely to want to be retrained for a new occupation (particularly if earning income from
producing other crops or from non-farm sources). Others pointed out that agricultural producers
most likely to be affected by import surges produce a commodity that receives little or no price
protection norand does not receive direct payments under traditional farm subsidy programs.
Frequently cited is the
impact of increased competition that U.S. fruit and vegetable growers, as
well as livestock
producers, have encountered due to imports from Mexico and Canada under the
North American
Free Trade Agreement.2
Overview of TAAF Program
The Trade Act of 2002 established a new Trade Adjustment Assistance for Farmers (TAAF)
program.3 It is administered by theThe U.S. Department of Agriculture’s (USDA’s) Foreign
Agricultural Service (FAS). As amended by the enacted 2009 economic stimulus package (P.L.
111-5, Division B, Subtitle I),4 the program assists agricultural producers who have been
adversely affected by competition from imports of a commodity that they produce. An
“agricultural commodity producer” is defined as a “person that shares in the risk of producing an Agricultural Service (FAS) is
the lead administrative agency for the TAAF program, with responsibility for certifying eligible
commodities and producer groups. USDA’s Farm Service Agency (FSA) has responsibility for
processing and approving individual applications for assistance under TAAF, and for disbursing
cash payments to eligible producers. A third USDA agency, the National Institute for Food and
Agriculture (NIFA), provides training and technical assistance to producers who are approved for
1
Department of Labor, “Report on Trade Adjustment Assistance for Agricultural Commodity Producers,” transmitted
by the Secretary of Labor to the House Ways and Means and Senate Finance Committees on October 26, 2000. This
report was required by §408 of the Trade and Development Act of 2000 (P.L. 106-200).
2
CRS Report RS21182, Trade Adjustment Assistance for Farmers, by Geoffrey S. Becker. This report provides
background on the TAA for Firms and TAA for Workers programs, the extent to which agricultural businesses and
employees in the agricultural sector took advantage of these programs through FY2000, and the legislative
developments that led to TAAF program enactment. For information on the other TAA programs and current issues,
see CRS Report R41922, Trade Adjustment Assistance (TAA) and Its Role in U.S. Trade Policy, by J. F. Hornbeck;
CRS Report R42012, Trade Adjustment Assistance for Workers, by Benjamin Collins, Trade Adjustment Assistance
(TAA) for Workers, by Benjamin Collins; CRS Report RS20210, Trade Adjustment Assistance for Firms: Economic,
Program, and Policy Issues, by Glennon J. HarrisonJ. F. Hornbeck; and CRS Report R40863, Trade Adjustment Assistance for
Communities: The Law and Its Implementation, by Eugene Boyd and Cassandria Dortch.
3
P.L. 107-210, §§141-142, approved August 6, 2002, 116 Stat. 946 (19 U.S.C. 2401 et seq.).
4
American Recovery and Reinvestment Act of 2009, P.L. 111-5, §§1856, 1881-1887, and 1891-1894, approved
February 17, 2009, 123 Stat. 115.
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TAAF benefits. As amended by the enacted 2009 economic stimulus package (P.L. 111-5,
Division B, Subtitle I),4 the program assists agricultural producers who have been adversely
affected by competition from imports of a commodity that they produce. An “agricultural
commodity producer” is defined as a “person that shares in the risk of producing an agricultural
commodity and that is entitled to a share of the commodity for marketing, including
an operator,
a sharecropper, or a person that owns or rents the land on which the commodity is
produced,” or a
person who reports a gain or loss on a federal income tax return from “the trade
or business of
fishing.” Support is available in the form of enhanced technical assistance and seed
money to
enable a producer to formulate and implement a business adjustment plan. Producers of
raw and
natural agricultural commodities (crops, livestock, farm-raised aquatic products, and
wild-caught
seafood that competes with aquaculture products) and of “any class of goods within
an an
agricultural commodity” must follow a two-part process to receive benefits.
First, a producer group must be certified by USDA as eligible to apply for program benefits (see
“Requirements for a Commodity Group to Be Certified”). Second, if the group is certified,
individual producers in that group must meet certain requirements to be approved to receive
technical assistance and cash payments (see “Individual Producer Eligibility Requirements” and
“Program Benefits”).
Requirements for a Commodity Group to Be Certified
A group of agricultural producers can petition the Secretary of Agriculture to be certified as
eligible to participate in the TAAF program (i.e., to qualify for benefits). To certify a commodity
group, the Secretary must determine that the increase in imports of the agricultural commodity
produced by members of the group “contributed importantly”5 to at least a 15% decline in the
national average price, quantity of production, or value of production or cash receipts of the
commodity. In making a determination, the Secretary must compare the volume of imports of
“articles like or directly competitive with the agricultural commodity” produced by the group in
the marketing year in which the petition is filed, to the average volume of imports in the three
preceding marketing years. The addition of two other qualifying factors—“quantity of
production” and “value of production/cash receipts”—besides price gives the Secretary greater
flexibility in determining if a commodity group is eligible to access program benefits.6 The
Secretary has 40 days to make a determination on a group’s petition.
Individual Producer Eligibility Requirements
If the Secretary certifies that a group qualifies for assistance, each producer in the group has 90
days to apply for TAAF benefits. To be eligible, an individual producer must show in the
application submitted to USDA that (1) the agricultural commodity was produced in the year
covered by the group’s petition and in at least one of the three preceding marketing years; (2) the
quantity of the commodity produced in that year has decreased compared to the amount produced
5
4
American Recovery and Reinvestment Act of 2009, P.L. 111-5, §§1856, 1881-1887, and 1891-1894, approved
February 17, 2009, 123 Stat. 115.
5
Defined as “a cause which is important but not necessarily more important than any other cause.”
6
The 2009 amendments in P.L. 111-5 lowered the degree of impact on specified factors due to increased imports that a
producer group had to show from 20% to 15%, and expanded the scope of factors that USDA must look at to determine
if a producer group can qualify to participate in the program (i.e., from just one specified in the original 2002 law, to
the three now). These appear to address two issues that the General Accountability Office (GAO) had identified as
limiting producer participation in the initially authorized TAAF program administered through year-end 2007 (see pp.
2-3 of GAO report cited in footnote 15). One was the difficulty that groups of agricultural producers faced in meeting
eligibility criteria (i.e., demonstrating that the price of the commodity produced had declined by at least 20% and that
imports contributed importantly to the price decline). Also, many producer groups seeking to be recertified for benefits
in a subsequent year saw USDA deny their petitions because of their difficulty in showing that imports of a commodity
had further increased and that the increase noticeably contributed to the fall in price.
6
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Individual Producer Eligibility Requirements
If the Secretary certifies that a group qualifies for assistance, each producer in the group has 90
days to apply for TAAF benefits. To be eligible, an individual producer must show in the
application submitted to USDA that (1) the agricultural commodity was produced in the year
covered by the group’s petition and in at least one of the three preceding marketing years; (2) the
quantity of the commodity produced in that year has decreased compared to the amount produced
in a previous year, or the price received for the commodity in that year has decreased compared to
the average price received in the preceding three marketing years;7 and (3) no cash benefits were
received under the TAA for Workers and TAA for Firms programs, nor were benefits received
based on producing another commodity eligible for TAAF assistance.8
Program Benefits
The changes enacted in 2009 refocus the TAAF program by (1) making technical assistance
available to an eligible producer, and (2) providing financial resources so that a producer can put
into effect a business plan to make adjustments in the operation.
A producer approved for the TAAF program is entitled to receive initial technical assistance (TA)
to improve competitiveness in the production and marketing of the commodity certified to receive
benefits. Such assistance is to include information on what steps could be taken to improve the
yield and marketing of that commodity, and on exploring the feasibility and desirability of
substituting one or more alternative commodities for the one being produced. USDA can provide
supplemental assistance to cover reasonable transportation and subsistence expenses that a
producer incurs in accessing initial technical assistance if provided in a location outside a normal
commuting distance.
A producer who completes this initial phase is eligible to participate in intensive technical
assistance. This includes training courses to assist the producer in improving the competitiveness
of the same commodity or an alternative commodity, and financial assistance to develop an initial
business plan based on the courses completed. USDA is required to approve a producer’s initial
business plan if it reflects the skills gained by the producer through the courses taken. Further,
this plan must demonstrate how the producer will apply these skills to his circumstances. If the
plan is approved, the producer is entitled to not more than $4,000 to implement this plan, or to
develop a long-term business adjustment plan.
A producer who completes the intensive phase and whose initial business plan has been approved
is then eligible for assistance to develop a long-term business adjustment plan. USDA is required
to approve this adjustment plan if it includes steps calculated to materially contribute to the
producer’s economic adjustment to changing market conditions, takes into account the interests
of the workers employed by the producer, and demonstrates that the producer will have sufficient
resources to implement the business plan. If approved, the producer is entitled to $8,000 to
implement this long-term plan.9
7
A producer has the option of instead showing that the county-level price for the commodity on the date a group files a
petition has decreased compared to the average county-level price in the preceding three marketing years.
8
Prior to 2009, a producer had to show (1) the quantity of the commodity that he produced in the most recent year, and
that (2) his most recent year’s net farm income was less than such income in a previous year, (3) he had met with the
Extension Service to obtain information and technical assistance to help him adjust to import competition, and (4) he
did not receive cash benefits under any other TAA program.
9
The 2009 amendments in P.L. 111-5 redirected the type of benefits an individual producer can receive. While a cash
payment previously was based on the automatic application of a formula, the more comprehensive approach in place
now requires a producer to tap available technical assistance before he receives payments intended to assist him to
implement a business plan to adjust to import competition.
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resources to implement the business plan. If approved, the producer is entitled to $8,000 to
implement this long-term plan.9
Limitations on Producer Financial Assistance
The amount of assistance that a producer can receive to implement both the initial business plan
and the long-term business adjustment plan is limited to $12,000 in the 36-month period after
USDA has certified producers of the commodity as eligible for TAAF benefits.10 Further, TAAFeligible producers cannot receive cash benefits under any other TAA program.
An applicant is ineligible for TAAF assistance in any year in which his average adjusted gross
income exceeds the level specified in Section 1001D of the Food Security Act of 1985 as
amended (i.e., $500,000 of non-farm income, or $750,000 of farm income, depending on the
details of the applicant’s involvement in a farm operation, beginning with the 2009 crop year).11
Written Notices to Producers
The Secretary of Agriculture is required to provide written notice to each agricultural commodity
producer in a group certified as eligible to receive benefits. A notice stating the benefits available
to certified producers must also be published in newspapers of general circulation in the areas in
which such producers reside.
Program Coordination
When notified by the International Trade Commission (ITC) that it has begun a safeguard
investigation of a particular agricultural commodity, the Secretary of Agriculture is required to
conduct a study of (1) the number of agricultural commodity producers who are producing a
competitive commodity who have been or are likely to be certified eligible for TAAF, and (2) the
extent to which existing programs could facilitate producers’ adjustment to import competition.12
A safeguard (e.g., in the form of additional tariffs, expanded quota, or another restriction on
imports) is intended to provide relief from the adverse impact of imports when temporary
protection will enable the domestic sector (i.e., producers) to make adjustments to meet import
competition.
Within 15 days after the ITC has determined whether or not injury has occurred and reported its
recommendations to the President, the Secretary must submit a report to the President on the
USDA study’s findings.
Program Funding
Section 1887 of P.L. 111-5 (the American Recovery and Reinvestment Act of 2009, approved
February 17, 2009) authorized and appropriated $90 million in each of FY2009 and FY2010, and
10
9
The 2009 amendments in P.L. 111-5 redirected the type of benefits an individual producer can receive. While a cash
payment previously was based on the automatic application of a formula, the more comprehensive approach in place
now requires a producer to tap available technical assistance before he receives payments intended to assist him to
implement a business plan to adjust to import competition.
10
Prior to 2009, an approved producer could receive up to $10,000 in cash benefits in any 12-month period.
11
For additional information on the new payment limitation rules made by P.L. 110-246, see CRS Report RL34594,
Farm Commodity Programs in the 2008 Farm Bill, by Jim Monke, pp. 14-18.
12
An ITC safeguard investigation would be triggered, under §202 of the Trade Act of 1974, by a petition filed by an
affected party (e.g., trade association or industry group) seeking relief from competition caused by imports that are
traded fairly but which cause or threaten to cause injury to a domestic industry. For additional information on this
safeguard authority and its use, see CRS Report RL31296, Trade Remedies and Agriculture, by Geoffrey S. Becker and
Charles E. Hanrahan.
11
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Within 15 days after the ITC has determined whether or not injury has occurred and reported its
recommendations to the President, the Secretary must submit a report to the President on the
USDA study’s findings.
Program Funding
Section 1887 of P.L. 111-5 (the American Recovery and Reinvestment Act of 2009, approved
February 17, 2009) authorized and appropriated $90 million in each of FY2009 and FY2010, and
$22.5 million for the first quarter of FY2011 (i.e., October to December 2010).13 This provision
also specified that funding shall cover the costs of administering the TAAF program, as well as
the salaries and expenses of USDA employees who administer it. Conferees dropped a Senate
provision (§1701(c)) that would have made TAAF funding available retroactively (i.e., back to
January 1, 2008).14
Section 223 of P.L. 112-40 (Trade Adjustment Assistance Extension Act of 2011, approved
October 23, 2011) authorized $90 million in each of FY2012 and FY2013, and $22.5 million for
the first quarter of FY2014 (i.e., October through December 2013). This provision, unlike those
in the 2002 and 2009 authorizations, did not appropriate any funds. Because Congress
subsequently did not did not
subsequently appropriate funds, USDA did not announce TAAF programs for FY2012,
FY2013,
and the first quarter of FY2014. Authority to operate TAAF expired on December 31, 2013.
TAAF Program Implementation
Because Congress in 2009 significantly revised TAAF’s statutory provisions from those initially
enacted, the following describes how this program operated in the period before, and then in the
period after, these changes. The break between periods reflects the lack of program authority in
the January to September 2008 period.
FY2003-December 2007
Activity under the TAAF in the FY2003-December 2007 period was much lower than authorized
funding levels because of low producer participation and low payments, according to the
Government Accountability Office (GAO).15 Of the $459 million authorized for the 5¼-year
period through December 31, 2007, budget outlays totaled almost $49 million, according to
USDA’s Office of Inspector General (OIG) and USDA’s Foreign Agricultural Service.16 This
included $27.7 million in cash benefits paid to producers, $9.5 million for technical assistance,
and $10.5 million for administrative costs (Table 1).
13
The statute that established the TAAF program (the Trade Act of 2002) authorized and appropriated to USDA funds
not to exceed $90 million for each of FY2003 through FY2007. §1(c) of P.L. 110-89 authorized $9 million in
appropriations for the first quarter of FY2008 (October 1 to December 31, 2007). No funding was authorized during the
remainder of FY2008. Funding for FY2009 became available in mid-May 2009, when the changes made to TAA
programs by P.L. 111-5 took effect.
14
In congressional action subsequently taken to temporarily extend the program, §101 of P.L. 111-344 (Omnibus Trade
Act of 2010, approved December 29, 2010) authorized $10.4 million for the January 1 to February 12, 2011, period.
USDA viewed this six-week period as too short to implement another FY2011 program, so no activity occurred.
15
GAO, Trade Adjustment Assistance: New Program for Farmers Provides Some Assistance, but Has Had Limited
Participation and Low Program Expenditures, at http://gao.gov/products/GAO-07-201, GAO-07-201, December 2006.
16
OIG, Northeast Region, “Audit Report—Trade Adjustment Assistance for Farmers Program,” at
http://www.usda.gov/oig/webdocs/50601-03-HY.pdf, Report No. 506-1-3-Hy, June 2007, p. 2; and USDA, FY2009
Budget Summary and Annual Performance Plan, p. 27.
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included $27.7 million in cash benefits paid to producers, $9.5 million for technical assistance,
and $10.5 million for administrative costs (Table 1).
Table 1. TAAF Funding, and Spending by Type of Activity, FY2003-FY2014
($ in millions)
Outlays / Obligations
Funding
Authority
Fiscal Year
Cash
Payments
to Producers
Technical
Assistance
Training
Administrative
Costs
Total
FY2003
90
0.0
3.6
2.6
6.2
FY2004
90
12.6
0.8
2.9
16.3
FY2005
90
14.4
4.1
2.4
20.9
FY2006
90
0.7
1.0
1.6
3.3
FY2007
90
0.0
0.0
1.0
1.0
FY2008
9a
—
—
—
0.0
459
27.7
9.5
10.5
47.7
FY2009
90
0.0
17.6
7.5
25.1
FY2010
90
61.5
16.4
1.7
79.6
FY2011
22.5b
19.6
0.0
2.9
22.5
81.1
34.0c
12.0
127.2
43.5
22.5d
174.9
Subtotal, FY2003- FY2008
Subtotal, FY2009-FY2011
202.5
TOTAL, FY2003-FY2011
661.5
108.8
FY2012, FY2013, and
Quarter #1 of FY2014FY2014e
202.5
No outlays occurred in these years, because Congress did not
appropriate any funds.
Source: P.L. 107-210; P.L. 110-89; P.L. 111-5; P.L. 111-344, Section 101(c)(12); and P.L. 112-40, Section 223(b)
for funding authority; USDA, OIG (for FY2003-FY2006 outlays); USDA, Foreign Agricultural Service (FAS) for
FY2007 outlays, FY2009 – FY2011 obligations.
a.
Funding was authorized only through December 31, 2007, However; however, USDA did not implement the TAAF
program during this three-month period of FY2008.
b.
P.L. 111-344 added an additional $10.4 million for the January 1 to February 12, 2011, period, to the $22.5
million earlier authorized by P.L. 111-5 for October-December 2010. USDA decided not to use this
spending authority, because the six-week extension was viewed as not long enough to administer a
program. Section 729 of Division A (Agriculture Appropriations Act, 2012) in P.L. 112-55 (Consolidated and
Further Continuing Appropriations Act, 2012) formalized this decision by rescinding this budget authority.
The $22.5 million in authorized funding reflects this rescission.
c.
Under contract with the University of Minnesota’s Center for Farm Financial Management.
d.
Reflecting implementation by four USDA agencies: Foreign Agricultural Service, Economic Research Service,
Farm Service Agency, and National Institute of Food and Agriculture (formerly named Cooperative, State
Research, Education, and Extension Service).
e.
Notwithstanding the funding authority provided from October 1, 2011, through December 31, 2013, no
funds were appropriated for program activity during this period.
Of the 72 petitions filed by producer groups for assistance during the five-year period that USDA
received petitions, USDA certified or approved 30 groups (Table 2). Shrimp and salmon
producers accounted for most of the cash benefits paid out. Producers of Concord grapes, lychees,
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olives, wild blueberries, fresh potatoes, Florida avocadoes, snapdragons, and catfish were among
others that USDA certified to be eligible for assistance (Table 3). About 8,400 producers
qualified for cash payments (Table 2).
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Table 2. Activity Under Trade Adjustment Assistance for Farmers Program,
FY2003-FY2014
Certification Process
Fiscal Year
Producer Applicants Approved
to Receive Benefits
Petitions Filed
Petitions Certified
FY2003
0
—
—
FY2004
25
12
4,512
FY2005
20
14
3,686
FY2006
19
4
208
FY2007
8
0
—
FY2008a
—
—
—
72
30
8,406
FY2009
0
—
—
FY2010
11
3
4,529
FY2011
19
7
5,714
30
10
10,243
TOTAL, FY2003-FY2011
102
40
18,649
FY2012, FY2013, and
Quarter #1 of FY2014
No program activity occurred because funds were not
appropriated.
Subtotal, FY2003-FY2008
Subtotal, FY2009-FY2011
Source: U.S. International Trade Commission, 2004 to 2008 issues of The Year in Trade; USDA, FAS, press
releases and data shown for FY2010-2011 activity.
a.
Program not active because authority expired on December 31, 2007.
FY2009 to Present
Administrative Actions
On August 25, 2009, USDA’s Foreign Agricultural Service published a proposed rule to establish
procedures for a group to request certification of eligibility, and for individual producers to apply
for technical assistance and cash benefits, under the amended TAAF program.17
On March 1, 2010, USDA issued the TAAF interim rule and announced that it would immediately
begin to implement the FY2010 program. This allowed producer groups to submit petitions to be
certified for eligibility, which, if approved, permit individual members of a group to apply for
program benefits.18 For FY2010, USDA accepted petitions through April 14, 2010. It certified 3
of the 11 petitions submitted by producer groups (Table 2). If a petition was approved, eligible
producers had to file applications for assistance within 90 days of the certification.
17
17
Federal Register, Department of Agriculture, Foreign Agricultural Service, “Trade Adjustment Assistance for
Farmers,” August, 25, 2009, pp. 42799-42804, available at http://edocket.access.gpo.gov/2009/pdf/E9-20345.pdf.
18
Federal Register, Department of Agriculture, Foreign Agricultural Service, “Trade Adjustment Assistance for
Farmers,” March 1, 2010, pp. 9087-9093, available at http://edocket.access.gpo.gov/2010/pdf/2010-3984.pdf, and
March 11, 2010, p. 11513, available at http://edocket.access.gpo.gov/2010/pdf/2010-5238.pdf.
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(continued...)
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of the 11 petitions submitted by producer groups (Table 2). If a petition was approved, eligible
producers had to file applications for assistance within 90 days of the certification.
Table 3. Certified TAAF Petitions, FY2004-FY2011
UNDER 2002 ACT CRITERIA
FY2004
FY2005
FY2006
Catfish (multistate)
Lychees (Florida)
Salmon (Alaska)
Salmon (Washington)
Shrimp (Alabama)
Shrimp (Arizona)
Shrimp (Florida)
Shrimp (Georgia)
Shrimp (North Carolina)
Shrimp (South Carolina)
Shrimp (Texas)
Wild Blueberries (Maine)
Concord Grapes (Pennsylvania, New
York, Ohio)
Fresh Potatoes (Idaho)
Lychees (Florida)
Olives (California)
Salmon (Alaska)
Salmon (Washington)
Shrimp (Alabama)
Shrimp (Arizona)
Shrimp (Georgia)
Shrimp (Louisiana)
Shrimp (Mississippi)
Shrimp (North Carolina)
Shrimp (South Carolina)
Shrimp (Texas)
Avocados (Florida)
Concord Grapes (Michigan)
Concord Grapes (Washington)
Snapdragons (Indiana)
FY2007
None
FY2008
No program
UNDER 2009 ACT CRITERIA
FY2009
FY2011
None
American Lobster (Connecticut)
American Lobster (Maine)
American Lobster (Massachusetts)
American Lobster (New Hampshire)
American Lobster (Rhode Island)
Wild Blueberries (Maine)
Shrimp (Alabama, Alaska, Florida,
Georgia, Louisiana, Mississippi, North
Carolina, South Carolina, Texas)
FY2010
Asparagus (California, Michigan,
Washington)
Catfish (National)
Shrimp (Alabama, Florida, Georgia,
Louisiana, Mississippi, North
Carolina, South Carolina, Texas)
Source: General Accountability Office; U.S. Department of Agriculture’s Foreign Agricultural Service.
On May 21, 2010, USDA announced that it will accept petitions for the FY2011 TAAF program
through July 16, 2010. USDA in late September 2010 certified 7 of the 19 producer groups that
submitted petitions (Table 2). Eligible producers had until late December 2010 to file
applications for assistance.
Certifications and Producer Approvals
With the 2009 changes to the TAAF program that eased the criteria for a producer group to be
certified and for individual producers to be approved for program assistance, more of the
(...continued)
March 11, 2010, p. 11513, available at http://edocket.access.gpo.gov/2010/pdf/2010-5238.pdf.
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provided funding has been used than in the FY2003-December 2007 period. USDA committed
$127 million of the almost $203 million authorized for the 2¼-year period ending December
2010. This included $81.1 million in cash benefits and training costs for producers, $34.0 million
for developing the technical assistance resources to be used to provide training, and $12.0 million
for administrative costs (Table 1). Funds obligated under the 2009 amendments represented 63%
of authorized funding. (For comparison, outlays in the earlier period of FY2003 through
December 2007 accounted for 10% of funding authority.)
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Of the 30 petitions filed since FY2009 by producer groups seeking certification (i.e., eligibility to
qualify for assistance), USDA certified 10 groups. These included producers of shrimp, catfish,
lobsters, asparagus, and wild blueberries (Table 3). USDA subsequently approved about 4,500
producers for training assistance and cash benefits in FY2010. Another 5,700 applications were
approved under the FY2011 program (Table 2). USDA data show that most of the benefits under
both years’ programs flowed to shrimp producers in Alaska and along the Gulf and southern
Atlantic states.
As of late FY2012, of the 10,242 producers approved in FY2010 and FY2011 to receive program
benefits, 80% had completed the intensive 12-hour training phase, 79% had completed their
initial business plan, and 61% had completed their long-term business plan.19
Benefits to individual producers are based on the amount of funds authorized each year, and are
available only to those approved to receive technical and financial assistance.20 For the FY2010
program, approved producers were eligible for $12,000 in cash payments (see “Program
Benefits,” above, for details). But because only $22.5 million were available in the shortened
FY2011 period for a larger number of approved applicants than in the previous year, each
producer received pro-rated cash payments.21 USDA estimated that under the FY2011 program,
approved producers will receive $971 for developing and implementing an approved initial
business plan, and an additional $1,943 for preparing and putting into effect an approved longterm business plan (i.e., up to a maximum of $2,914).22 During FY2012, FY2013, and FY2014,
USDA continued to disburse financial assistance to producers approved to receive benefits under
the FY2010 and FY2011 programs as they subsequently met certain benchmarks.
GAO Report
As required by Section 1894 of P.L. 111-5, the Government Accountability Office (GAO) in midJuly 2012 reported on the operation and effectiveness of the 2009 amendments made to the TAAF
statute.23 It found that USDA certified relatively few commodities (five) under the changes made
to the program, but that TAAF benefited most of the farmers and fishermen (over 10,200) who
produced these certified commodities and had been approved to receive assistance. GAO
discovered that the 2009 changes in the criteria used to determine whether a commodity can be
certified were a factor leading to four of the five commodity certifications. For example, FAS
under the pre-2009 criteria would not likely have been able to certify asparagus or shrimp solely
on the basis of a decline in price. But in applying one new criterion—a decrease in the quantity
produced of a commodity—as producers adjusted to increased imports, these two commodities
qualified to be certified.
19
FAS, “TAAF Status Report, as of September 4, 2012,” provided upon request.
§§1892 and 1893 of P.L. 111-5.
21
§298(b) of the Trade Act of 1974 states that if appropriated funds are not sufficient to meet commitments for trade
adjustment assistance to approved agricultural producers in any year, the amounts paid out are required to be reduced
proportionately (19 U.S.C. 2401g(a)).
22
USDA, FAS, “Notice to Program Participants of the Trade Adjustment Assistance (TAA) for Farmers Program” for
FY2010, April 4, 2011; data provided by FAS’s Import Policies and Export Reporting Division for FY2011.
23
GAO, USDA Has Enhanced Technical Assistance for Farmers and Fishermen, but Steps Are Needed to Better
Evaluate Program Effectiveness, GAO-12-731, Jul 12, 2012, available at http://www.gao.gov/assets/600/592320.pdf.
20
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discovered that the 2009 changes in the criteria used to determine whether a commodity can be
certified were a factor leading to four of the five commodity certifications. For example, FAS
under the pre-2009 criteria would not likely have been able to certify asparagus or shrimp solely
on the basis of a decline in price. But in applying one new criterion—a decrease in the quantity
produced of a commodity—as producers adjusted to increased imports, these two commodities
qualified to be certified.
In reviewing how USDA implemented the program, GAO offered three recommendations:
•
Require spouses of producers (i.e., those who share in the risk of producing an
agricultural commodity) who may be eligible to apply for assistance to provide
documentation on how they contribute to producing a certified commodity. This
would address instances where USDA may have approved the applications of
spouses who did not engage in producing a certified commodity, and thus had no
assurance that TAAF assistance was appropriately targeted to intended recipients.
•
Take steps to help ensure that any financial assistance payments made to
producers are used for intended purposes (e.g., by requiring them to detail in their
business plans how they plan to use these funds). This would address the
acknowledgement made by USDA officials that some producers likely use the
payments for unrelated expenses.
•
Broaden the program’s evaluation approach to help ensure that USDA can
comprehensively evaluate the impact of the TAAF program on producers’
competitiveness. GAO noted that the performance measures and surveys used by
USDA do not measure quantifiable outcomes or cover all key areas of the
program. To illustrate, conducting a final survey 6-12 months after producers
complete the program does not allow for gathering insights into their perceptions
of TAAF’s long-term effectiveness. Also, USDA has not corroborated the results
of surveys to help isolate the program’s impact from other influences.
USDA commented that it generally agrees with these recommendations, and that if any future
TAAF program retains the same statutory requirements, it will consider specific ways to address
them.
Legislative Activity in the 112th CongressUSDA OIG Audit Called for Improved Oversight
In an audit report of TAAF dated October 2013, the USDA’s Office of Inspector General (OIG)
identified a number of shortcomings in the administration of the TAAF program. The objective of
the audit was to evaluate the internal controls established by FAS, FSA, and NIFA for
administering the TAAF program, and to assess the program’s policies and procedures. More
specifically, the audit sought to determine whether (1) TAAF program recipients were eligible for
program participation; (2) funds were properly obligated, distributed in a timely fashion, and
accurately calculated; (3) program reporting requirements were met; and (4) oversight was
sufficient to ensure that TAAF was administered in an accountable and equitable manner. A
sampling methodology was developed to carry out this task. In brief, the OIG found the agencies
did not have the appropriate controls in place to ensure that TAAF program participants were
eligible, that payments were accurate, or that oversight was sufficient. The audit made a number
of recommendations that follow from four key findings below. Agency responses to the findings
and recommendations advanced by OIG are included in the audit report.
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1. At the end of FY2009, FAS did not return unobligated TAAF program funds to
the Department of the Treasury, nor did it provide evidence to show that all
remaining funds were needed to meet future financial obligations.
2. FAS did not sufficiently analyze the documentation submitted by producer
groups in support of their request for price pre-certification approvals for their
commodities under a streamlining procedure. As a consequence, FAS applied the
pre-price certification approvals in an overly broad manner, with the result that
two of five such approvals that OIG examined did not meet the criteria
established for approval.
3. Although FAS was the lead agency with oversight responsibility for the TAAF
program, the agency failed to effectively monitor, or conduct reviews of, the two
other agencies’ day-to-day administration of the program, with the result that
OIG identified 85 ineligible producers who participated in the TAAF program
and who received approximately $284,000 in program benefits to which they
were not entitled.
4. NIFA did not ensure that the TAAF program database was in compliance with
federal information system security requirements for certification and
accreditation.
Recent Legislative History
Legislative Reauthorization of TAAF
Because funding for all TAA programs expired on February 12, 2011, the 112th Congress debated
their future for several months.24 An attempt in the House to temporarily extend TAA authorities
through mid-year 2011 became caught up in criticism of their rationale and opposition to the
budget offset proposed to cover program costs. Some Republican Members of the House also
called for linking a TAA extension to a commitment by the Obama Administration to agree to a
timetable to submit the Colombia and Panama free trade agreements (FTAs) to Congress for a
vote. Seeking a way to move both issues forward, the White House and congressional leadership
in August 2011 reached agreement on an approach. TAA program reauthorization would be
handled in a legislative measure separate from any bills to be introduced to implement all pending
FTAs, following this agreed-to multi-step process.
On September 22, 2011, the Senate approved (69-28) the TAA renewal compromise package
(S.Amdt. 633) as an amendment to H.R. 2832 to extend the Generalized System of Preferences
program. This package had been agreed to earlier among the House and Senate committee
chairmen with jurisdiction on trade matters, and the White House. On October 12, 2011, the
24
See footnote 2 for background on all of the other TAA programs.
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House agreed (307-122) to the Senate amendment to its bill. That same day, the House and Senate
also passed three bills to implement the FTAs with South Korea, Colombia, and Panama. The
President signed the GSP/TAA extension measure into law on October 21, 2011 (P.L. 112-40).
The compromise package in P.L. 112-40 contained a few relatively straightforward provisions for
the TAA for FarmersTAAF program. One authorized funding “not to exceed” $90 million in each of
FY2012 and
24
See footnote 2 for background on all of the other TAA programs.
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FY2013, and $22.5 million for the first quarter of FY2014. However, it removed
language language
(included in all previous TAAF authorizations) that would have simultaneously
appropriated appropriated
funds to support this authority. This change effectively made funding subject to
future future
appropriations. Since funds subsequently were not appropriated, the TAAF program did
not not
operate under this extended authority. Another provision significantly expanded the reporting
requirements on TAAF program activity to be submitted to the trade congressional committees,
beginning with FY2012.
Other TAA Measures
A provision in the FY2012 Agriculture appropriations act (§729 of Division A in P.L. 112-55)
rescinded the $10.4 million authorized and appropriated by P.L. 111-344 for the TAAF for the
first six weeks of 2011. USDA had earlier decided not to use this additional funding because the
time period was too short to implement a program (see footnote 14). As scored by the
Congressional Budget Office, this law also appears to have rescinded another $80 million in
TAAF unobligated balances.
Separately, the Obama Administration did not request funds for the TAAF program in FY2012 or
in its budget proposal for FY2013. When asked at a House Agriculture Committee hearing
whether or not the TAAF is included in the Administration’s goal to reauthorize the major TAA
programs, Secretary of Agriculture Tom Vilsack responded that “[w]e will be prepared to do
whatever Congress directs us to do and hopefully will provide us the resources to be able to do an
adequate job of providing assistance and help to [those agricultural] producers who need it.”25
During 2011, Members introduced other bills that would have affected the TAA for Farmers
TAAF program. S.
308, the Trade Extenders Act of 2011, would have extended all TAA programs
through June 30,
2012. Funding for the TAAF program would have been authorized and
appropriated at $90
million for FY2011, and $67.5 million for nine months in FY2012. This bill
also would have
(1) amended health insurance coverage for certain TAA recipients, and (2)
extended two trade
preference programs that provide duty-free treatment for eligible imported
products through mid-2012mid2012—the Generalized System of Preferences26 and the Andean Trade
Preference (ATPA)27
program. S. 1286, the Trade Adjustment Assistance Extension Act of 2011,
would have extended
all TAA programs for five years—through December 31, 2016. TAAF
funding would have been
authorized and appropriated at $90 million for each of FY2011 through FY2016, and $22.5
million for the first quarter of FY2017. Separately, H.R. 2165 would have proposed to repeal all
TAA programs. None of these measures received further consideration.
25
CQ Congressional Transcripts, “House Agriculture Committee Holds Hearing on Reviewing the Pending Free Trade
Agreements,” May 12, 2011.
26
For more information, see CRS Report RL33663, Generalized System of Preferences: Background and Renewal
Debate, by Vivian C. Jones. Congress subsequently did extend the GSP program in approving H.R. 2832 (see
“Legislative Reauthorization of TAAF” above).
27
For more information, see CRS Report RS22548, ATPA Renewal: Background and Issues, by M. Angeles Villarreal.
Congress subsequently did extend ATPA by approving H.R. 3078 to implement the U.S.-Colombia FTA.
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FY2016, and $22.5 million for the first quarter of FY2017. Separately, H.R. 2165 would have
proposed to repeal all TAA programs. None of these measures received further consideration.
Legislation Proposed in the 113th Congress
Three bills in the 113th Congress would extendhave extended authority for the TAAF program through
December 31, 2021. This proposed extension iswas included as part of broad measures to reauthorize
reauthorize all trade adjustment assistance programs and/or to expand TAA coverage to include other
other categories of employees. Section 2(d) of S. 1357, Section 402(d)(3) of H.R. 3939, and Section
Section 204(d) of H.R. 4163 would authorize appropriations to USDA of $90 million annually through
through FY2020, and $22.5 million for the first quarter of FY2021 (i.e., ending December 31,
2020).
However, funding authorized under these bills would not be automatically available,
meaning that
any program activity would depend on whether funds also are appropriated. These
The same three bills also
declare declared that TAAF program requirements in effect as of February 13,
2011, would apply to
have applied to petitions for certification to apply for TAA benefits that are filed
before January 1, 2021. These
bills in effect do not makewould not have made any changes to TAAF’s group
certification and individual producer
eligibility requirements. Further, these bills would directhave
directed USDA to continue to provide TAAF
assistance to individual producers during calendar
2021 that belong to a commodity group
certified before January 1, 2021, as eligible to apply,
provided that (1) funds are available and (2)
a producer is eligible to receive assistance.
Congressional consideration of these TAA-reauthorization measures, as in the 112th Congress,
will likely be debated in the context of other trade legislation. In 2014, the focus will be on what
terms, if at all, trade promotion authority (TPA) might be granted to the executive branch.28 TPA,
also referred to as “fast-track,” provides time-limited authority that Congress uses to set trade
negotiating objectives, establishes consultation requirements, and stipulates that implementing
bills for certain trade agreements be considered under expedited procedures (i.e., no floor
amendments, up or down votes with a simple majority required for passage). Some Members
advocate that TAA reauthorization provisions should be coupled with a TPA measure. Others
counter that TAA measures should be considered on a legislative track separate from any TPA
bill.
Author Contact Information
Remy Jurenas
Specialist in Agricultural Policy
rjurenas@crs.loc.gov, 7-7281
28
Prospects for the 114th Congress
Any future congressional consideration of legislation to reauthorize the TAAF program would
most likely be considered in the context of other trade-related legislation. Ongoing U.S. efforts to
conclude negotiations over two major trade agreements—the Trans-Pacific Partnership (TPP) and
the Transatlantic Trade and Investment Partnership (TTIP)—suggest that a key focus of trade
legislation in the 114th Congress is likely to center on the terms on which trade promotion
authority (TPA) might be granted to the executive branch, if indeed Congress provides for such
expedited consideration.28 TPA, also referred to as “fast-track,” provides time-limited authority
that Congress uses to set trade negotiating objectives, establishes consultation requirements, and
stipulates that implementing bills for certain trade agreements be considered under expedited
procedures (i.e., no floor amendments, and up or down votes with a simple majority required for
passage).
Congress extended Trade Adjustment Assistance for Workers (TAA) in December 2014 as part of
an omnibus appropriations measure for FY2015 (H.R. 83, the Consolidated and Further
Continuing Appropriations Act, 2015), but did not provide funds for the TAAF program. If
Congress decides to consider TPA legislation to facilitate the conclusion of the TPP and TTIP
negotiations, such action could provide an opportunity for Congress to also consider the
reactivation of the TAAF program.
28
For background, see CRS Report IF00002, Trade Promotion Authority (TPA) (In Focus), by William H. Cooper, or
CRS Report RL33743, Trade Promotion Authority (TPA) and the Role of Congress in Trade Policy, by William H.
Cooper.
Congressional Research Service
12Ian F.
Fergusson, or CRS Report R43491, Trade Promotion Authority (TPA): Frequently Asked Questions, by Ian F.
Fergusson and Richard S. Beth.
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Author Contact Information
Mark A. McMinimy
Analyst in Agricultural Policy
mmcminimy@crs.loc.gov, 7-2172
Acknowledgments
Retired CRS Specialist Remy Jurenas was the original author of this report.
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