Order Code RL31195
Report for Congress
Received through the CRS Web
The 2002 Farm Bill: Overview and Status
Updated May 3, 2002
Geoffrey S. Becker and Jasper Womach, Coordinators
Specialists in Agricultural Policy
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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The 2002 Farm Bill: Overview and Status
Summary
Note: The online CRS Agriculture Policy and Farm Bill Briefing Book covers many
aspects of the farm bill.
Federal farm support, nutrition, agricultural trade and food aid, conservation,
credit, marketing, rural development, agricultural research, and related policies are
governed by a variety of separate laws. Although these laws may be considered and
as free-standing legislation, many of them are evaluated periodically, revised, and
renewed through an omnibus, multi-year farm bill. The Federal Agriculture
Improvement and Reform (FAIR) Act of 1996 (P.L. 104-127) was the most recent
omnibus farm bill, and many of its provisions expire in 2002.

On May 2, 2002, the House voted, 280 to 141, to approve the conference report
on a 6-year omnibus farm bill (H.R. 2646; H.Rept. 107-424). The Senate is expected
to vote on the conference report shortly, and the President announced on May 2 that
he would sign the bill into law. Both chambers earlier had passed differing versions
of a new bill, and conferees had been laboring on a compromise since March.
The final version continues marketing loans and fixed payments, and creates
new counter-cyclical assistance tied to target prices (similar in some ways to a
guaranteed per-bushel pricing system eliminated in 1996) for grains, cotton, and
oilseeds, with continued planting flexibility and no supply controls. The bill extends,
with modifications, dairy and sugar support (the bill creates new counter-cyclical
payments for dairy), and it overhauls the peanut program by replacing quotas with
a support program like that for other major crops. The final bill also contains titles
to expand conservation program funding; reauthorize agricultural export and food
aid programs; and amend and extend research, nutrition (food stamps), credit, and
rural development activities, among others.
Total direct (mandatory budget authority) spending in the bill is $458 billion
over 10 years (FY2002-2011), according to Congressional Budget Office (CBO)
estimates. Of this total, $73.5 billion is new spending (above baseline), as permitted
under the FY2001 budget resolution. Of the new spending, $47.8 billion is for
commodity programs; $17.1 billion is for conservation. Total direct spending
(baseline plus new) for food stamps and other nutrition title programs is $251.9
billion over 10 years – $6.4 billion above baseline.
CBO estimated that the final bill would result in new budget authority over 6
fiscal years (FY2002-2007) of $45.1 billion, of which $31.2 billion would be for
commodity support.

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Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Budgetary and Trade Constraints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Administration Views . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Selected Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Farm Income and Commodity Price Support . . . . . . . . . . . . . . . . . . . . . . . . 5
Conservation and Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Foreign Trade and Food Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Farm Credit and Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Rural Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Agricultural Research, Extension, and Education . . . . . . . . . . . . . . . . . . . . 21
Food Stamps and TEFAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Other Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
List of Tables
Table 1. Farm Bill Cost Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Table 2. Conference Agreement: Loan Rates, Direct Payment Rates, and Target
Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

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The 2002 Farm Bill: Overview and Status
Most Recent Developments
On May 2, 2002, the House voted, 280 to 141, to approve the conference report
on a 6-year omnibus farm bill (H.R. 2646; H.Rept. 107-424). The Senate is expected
to vote on the conference report shortly, and the President announced on May 2 that
he would sign the bill into law.
Late on April 25, 2002, the chairmen of the House and Senate Agriculture
Committees announced that they had reached a tentative compromise on the bill,
which had been in a conference committee since March.
The Senate had approved its omnibus 5-year (2002-2006) farm bill (reported as
S. 1731 and passed as H.R. 2646) on February 13, 2002, by a vote of 58 to 40. The
full House, on October 5, 2001, had approved (by a vote of 291-120) its new 10-year
omnibus farm bill (H.R. 2646). The bill would have extended major farm, food, and
related programs through 2011.

(See also House, Senate, and Conference Farm Bills Compared: Selected
Highlights in the CRS Agriculture Policy and Farm Bill Briefing Book, and the farm
bill information, including the final language and statement of managers, posted on
the House Agriculture Committee and Senate Agriculture Committee websites.)
Overview
Federal farm support, food assistance, agricultural trade, marketing, and related
policies are governed by a variety of separate laws. Although these laws may be
considered and passed as free-standing legislation, many of them are evaluated
periodically, revised, and renewed through an omnibus, multi-year farm bill. The
Federal Agriculture Improvement and Reform (FAIR) Act of 1996 (P.L. 104-127)
was the most recent omnibus farm bill, and many of its provisions expire in 2002.
The heart of every omnibus farm bill is farm income and commodity price
support policy – namely the methods and levels of support that the federal
government provides to agricultural producers. However, farm bills also typically
include titles on agricultural trade and foreign food aid, conservation and
environment, domestic food assistance (primarily food stamps), agricultural credit,
rural development, agricultural research and education, and other programs.

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Budgetary and Trade Constraints
Budget. Like most legislation, the farm bill is considered within federal
budget constraints. The congressional budget resolution (H.Con.Res. 83), completed
in May 2001, reserved, for FY2002-2011, an extra $73.5 billion in direct spending
in order to accommodate the cost of legislative changes in farm and related
programs. This allowance is over and above the projected Congressional Budget
Office (CBO) baseline for such programs for the same 10-year period. Subsequent
re-estimates of the baseline, showing fading budget surpluses and higher than
previously-estimated costs for some programs in the act, created some uncertainty
regarding available budgetary resources. However, Congress will continue to use
the spring 2001 budget baseline to score the bill. As of May 2002, Congress and the
Administration appeared committed to spending the full $73.5 billion.
Table 1 shows the CBO-estimated cost of the farm, food, and related programs
in the bill under a continuation of current law, unchanged (“April 2001 Baseline”);
how costs would increase under the House and Senate bills, and conference
agreement, respectively. These estimates cover 10 fiscal years (FY-2002-2011), the
term of the original House bill, even though the conference version is a 6-year bill.
Table 1. Farm Bill Cost Estimates
Budget Category
10 Years (FY2002-FY2011)
Budget Authority in Million $
April 2001
Increase
Total (Base
Baseline
House
Senate Conference Plus Conf.)
Commodity Support
69,868
48,785
45,974
47,771
117,639
Crop Insurance
37,243
0
-1,901
-1,901
35,342
Conservation
21,412
15,787 21,3031
17,079
38,491
Credit
0
0
71
0
0
Forestry
5,674
268
326
100
5,774
Trade/Food Aid
3,990
1,436
2,110
1,144
5,134
Agricultural Research
360
1,160
1,068
1,323
1,683
Rural Development*
204
2,150
2,281
1,275
1,479
Food Stamps**
245,509
3,648
8,308
6,400
251,909
Other Programs/Agencies
0
224
97
307
307
Total
384,260
73,458
79,636
73,497
457,757
Source: CBO. Figures represent budget authority (not outlay) estimates for programs requiring direct spending.
All estimates relative to April 2001 Budget Resolution baseline. Other programs in the bill are funded through
annual appropriations, for which additional costs will be incurred.
*Includes energy title costs. Senate and conference have separate rural development energy titles, but costs
are combined here.
**Includes approximately $650 million in non foodstamp costs.
CBO estimated that the final bill would result in new budget authority over 6
fiscal years (FY2002-2007) of $45.1 billion, of which $31.2 billion would be for
commodity support. However, commodity program authorizations usually apply to
a crop or marketing year, which is not synonymous with a fiscal year. For example,
some crop year costs could occur in a subsequent fiscal year.
Not included in table 1 is $2.4 billion in new “disaster” assistance that was
added to the farm bill by the Senate, but not adopted by conferees. This aid was

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designated as emergency funding and therefore would not – had it survived
conference – be counted, for scoring purposes, toward the $73.5 billion budget
limitation on new farm bill mandatory spending. Such disaster assistance could be
considered in a separate, supplemental funding bill for FY2002.
CBO in early March had to adjust its projected cost of the Senate bill upward
by $6.1 billion after discovering an error in its earlier calculations. This now put the
10-year cost of the Senate bill about $6.1 billion above the budget resolution
allowance and made conference negotiations more difficult. (Table 1 reflects the
adjustment.)
Trade. The multilateral Uruguay Round Agreement on Agriculture (URAA)
poses another constraint by limiting, to no more than $19.1 billion per year, the value
of domestic farm supports most likely to distort production and trade (these are so-
called “amber box” programs). The agreement spells out rules for determining
whether a policy is market distorting or whether it is exempt from the annual subsidy
calculation. According to USDA’s Economic Research Service (ERS):
The U.S. has so far met commitments under the URAA, but surges in direct
payments to producers after 1997 in response to low market prices have raised
concerns that domestic subsidy levels might eventually exceed the ceiling on
domestic supports established under the URAA. U.S. support is expected to
remain below its ceiling under current farm programs, but increases in support
under new programs could cause a compliance problem with the URAA
commitments...[and] could hamper efforts in the new multilateral trade talks to
accomplish U.S. goals for liberalizing international trade and getting other
countries to reduce domestic support to their agriculture sectors and increase
market access.1
The bill continues a system of direct payments not tied to current production or
prices of specific commodities, which, proponents believe, will not have to be
counted as trade distorting and therefore are not subject to URAA farm subsidy
limits. They also believe that the bill’s conservation-related programs are among
those that are exempt from the limits. However, the bill continues crop marketing
loan benefits and the dairy price support program, which already have been classified
as trade-distorting (and thus are counted toward URAA annual limits); further, the
bill creates a new “countercyclical” program that also is likely to be subjected to
such limits. (See “Farm Income and Commodity Price Support” later in this report
for an explanation of these programs.)
Whether these and other types of subsidies in the bill ultimately result in future
URAA compliance problems remains to be seen. The bill contains a provision
requiring the Secretary of Agriculture to attempt to keep farm program benefits
within the annual WTO limit. Critics have questioned the feasibility of
implementing this provision. (See Farm Support Programs and World Trade
Commitments, CRS Report RL30612.)
1 USDA, Economic Research Service. “Aligning U.S. Farm Policy With World Trade
Commitments,” Agricultural Outlook, January-February 2002, p. 12.

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Administration Views
The Administration, by late 2001, was backing away from its early criticism of
the evolving farm bill, and was pledging its support for a “generous farm bill” –
more specifically, for the $73.5 billion provided through last year’s congressional
budget resolution. On May 2, 2002, the President said he would sign the final bill,
commenting:
I am pleased that the compromise agreement on the farm bill resulted in better
balanced commodity loan rates; spending that is no longer front-loaded; and the
strongest conservation provisions of any farm bill ever passed by Congress. The
final provisions of the farm bill are also consistent with America's international
trade obligations, which will strengthen our ability to open foreign markets for
American farm products. While this compromise agreement did not satisfy all of
my objectives, I am pleased that this farm bill provides a generous and reliable
safety net for our Nation's farmers and ranchers and is consistent with the
principles I outlined.
The President’s remarks are a departure from earlier criticisms. On October 3,
2001, as the House began to debate its bill, the White House Office of Management
and Budget (OMB) issued a Statement of Administration Policy stating that it did not
support H.R. 2646 because it would encourage overproduction of commodities, fail
to help farmers most in need, jeopardize global markets, and boost federal spending
at a time of economic uncertainty.
The OMB Statement of Administration Policy on the Senate bill, issued
December 5, 2001, argues that S. 1731 would: stimulate overproduction (partly
through higher crop loan rates); result in higher consumer milk prices; hurt U.S. farm
trade by among other things risking U.S. ability to meet current trade obligations and
undermining U.S. efforts to phase out worldwide export subsidies in the future;
authorize ineffective conservation programs; poorly direct farm aid by increasing
payments regardless of need; weaken accountability in domestic nutrition programs;
and result in unknown budget costs.
Previously, on September 19, 2001, the Administration had released a 120-page
report, Food and Agricultural Policy: Taking Stock for the New Century, which
concludes, among other things, that farm policy should be tailored to reflect the wide
differences among U.S. farms and farming practices. Current programs tend to tilt
benefits most heavily toward highly efficient commercial farms (which enables them
to expand operations and lower costs even more), with no direct relationship between
benefits and a farm’s financial need. Landowners, not necessarily farm operators,
benefit the most through higher land values and higher farmland rental rates caused
by current support programs, the report states. Farm policy must promote “more
sustainable prosperity” for farmers, relying on the market and not government for
long-term support, although government could provide aid for “unexpected events”
beyond their control, according to the report.
The report also argues that trade policy not only must focus on more access to
foreign markets, but also be supported by domestic policies that meet U.S. trade
obligations and provide the latitude “to pursue ambitious goals in trade negotiations.”
Domestic farm policy must not reduce competitiveness, and seek to expand farm

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export opportunities. The report suggests that future policy should shift emphasis
from traditional commodity price supports toward the demand side of agriculture –
focusing on marketing and consumption, particularly overseas. Conservation
programs, food safety and affordability, nutrition, and rural development also are
addressed.
Despite its periodic comments on farm policy in general and the farm bill in
particular, the Administration was not viewed by most observers as a major influence
in the debate.
Selected Provisions
Farm Income and Commodity Price Support2
The 1996 farm bill significantly revised federal farm commodity policy. (See
CRS Report RS20848, Farm Commodity Programs: A Short Primer.) Title I, the
Agricultural Market Transition Act (AMTA), replaced production-based deficiency
payments (the difference between legislated target prices and lower market prices)
for wheat, feed grains, upland cotton, and rice with fixed “production flexibility
contract” (PFC) payments. These payments are made irrespective of market prices
or current planting choices. AMTA authorized $36 billion in PFC payments over the
7-year life of the law to producers with a participation history in the previous
commodity programs. PFC contract payments are projected at $4.1 billion for
FY2001. Previous annual supply controls, including crop-specific acreage bases and
cropland set-asides, were ended by the 1996 law. (See CRS Report RS20271,
Grains, Cotton, and Oilseeds: Federal Commodity Support.)
In addition, AMTA maintained the price guarantees of the marketing assistance
loan program for contract commodities, soybeans and other oilseeds, and extra long
staple (ELS) cotton. This counter-cyclical program makes up the difference between
low market prices and specified commodity nonrecourse loan rates with direct
payments. CCC net outlays for marketing assistance loan gains and loan deficiency
payments (LDPs) were $6.4 billion in FY2000, an estimated $5.6 billion in FY2001,
and a projected $4.9 billion in FY2002 according to USDA.
AMTA continued market price support programs for sugar and peanuts, which
operate through CCC loans and import quotas. The 1996 law also scheduled the
elimination of the longstanding dairy price support program, but Congress has since
continued it. Permanent tobacco price support authority was not modified in 1996.
Persistently low commodity prices stimulated four years of large ad hoc
emergency farm aid packages amounting to approximately $23 billion in non-
disaster related farm income assistance, over and above amounts already authorized
by AMTA. About $18 billion went to PFC contract holders. Much of the rest was
for special subsidies for producers of soybeans, peanuts, tobacco, milk, honey, wool,
2 CRS contacts: Jasper Womach, 7-7237; Geoffrey S. Becker, 7-7287; Remy Jurenas, 7-7281
(sugar and peanuts); Ralph Chite, 7-7296 (dairy).

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and mohair. The most recent congressional “emergency” action was P.L. 107-25,
which provided $5.5 billion to be paid out in FY2001 as allowed for in the budget
resolution (H.Con.Res. 83).
Most farm interests have supported a more certain method of funding future
counter-cyclical income support than ad hoc laws. The options below, except as
noted, mainly apply to policies for grains, cotton, and oilseeds.
PFC Payments. Most (although not all) producer groups support
continuation of annual lump sum assistance like PFC payments. Some wanted PFC
eligibility expanded to include soybeans, and possibly even such commodities as
tobacco, peanuts, milk, wool, mohair, apples, cranberries, which all recently received
direct payments under the emergency assistance laws. Critics contend that such
payments are quickly capitalized into land prices and rents. The final bill continues
direct payments that are similar in concept to PFC payments, and adds soybeans and
other oilseeds as eligible crops.
Counter-Cyclical Assistance. There has been wide support for a new
counter-cyclical assistance program that is more generous than now provided
through marketing loans. Early proposals differed in detail but shared a common
objective of providing more support when farm prices and/or incomes decline than
provided under current law. The final conference bill contains new counter-cyclical
assistance, tying such support to per-bushel or per-pound target prices for individual
commodities – not revenue, income, or receipts. (See CRS Report RS20913, Farm
Counter-Cyclical Assistance.)
Marketing Loan Assistance. There also has been wide support to continue
marketing assistance loans (including loan deficiency payments, LDPs). However,
several groups called for higher loan rates. Others proposed “re-balancing” current
loan rates by raising them to a level equivalent to soybeans (which are not currently
a PFC commodity). The final bill continues marketing loan benefits for grains,
cotton, oilseeds, wool, and honey; the Senate also makes peas, lentils and chickpeas
newly eligible. (See CRS Report 98-744, Agricultural Marketing Assistance Loans
and Loan Deficiency Payments.)
Supply Management. Most major agricultural groups oppose any
restoration of production control or supply management tools. However, the
National Farmers Union and the National Farmers Organization proposed voluntary
set-asides for crops – with loan rates increasing as more acres are removed from
production – and also commodity reserve programs that (when prices are low) pay
producers to store crops on the farm until prices rise. The final bill does not re-
introduce these policy tools.
Price-Supported Commodities. Support programs for tobacco, peanuts,
sugar, and milk maintain farm prices above what the market might otherwise dictate.
Nonrecourse price support loans and marketing quotas apply to virtually all U.S.
tobacco and to peanuts. Sugar utilizes nonrecourse loans and tariff rate quotas to
support prices and limit the entry of less expensive imports. Milk price support is
provided through: direct USDA purchases of dairy products at specified prices; milk
marketing orders (which pool receipts and set classified prices for most fluid grade

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milk); and comparatively high duties on imported milk products.3 Critics, including
the WTO, consider these subsidies to be highly production and trade distorting.
Supporters contend that these programs are effective in maintaining farm incomes
and low cost to taxpayers. The final bill continues the sugar and dairy programs, and
alters the peanut program to function similarly to the grains and cotton programs.
The bill also adds a new counter-cyclical direct payment for dairy producers.
“Green” Payments. Some contend that farmers’ incomes can be enhanced
through so-called green payments, which provide financial incentives based not on
the commodities they produce, but rather in exchange for practices that protect land,
water, air quality, and/or wildlife; or possibly offer scenic, recreational, or open
space amenities. Critics counter that good stewardship of the land should be a
responsibility and obligation of all farmers and not require government payments.
(See the next section, “Conservation and Environment.”)
Risk Management. Another proposed alternative would phase out all
supports tied to the production of specified commodities and replace them with
assistance designed to encourage producers to expand their use of various risk
management tools. The subsidized federal crop insurance program is an existing risk
management program. However, some argue for a broader approach that might
include a combination of whole farm revenue insurance, income stabilization
accounts, more use of futures markets, contracts with commodity buyers, and other
options. A comprehensive bill introduced by Senator Lugar (S. 1571) embraced such
an approach, but it was not adopted in the final bill.
Conference Bill. Among the grains, cotton, and oilseeds provisions in the
final version of H.R. 2646 are:
! Fixed, decoupled payments (like the current PFC contract payments)
at rates shown in the table 2 (page 9);
! New counter-cyclical deficiency payments that make up the
difference between a crop’s average market price plus the fixed
decoupled payment, and its “target price” (see table 2);
! Continuation of marketing assistance loans (and LDPs) generally at
higher than current rates (see table). Fixed, decoupled payments and
counter-cyclical payments would apply to 85% of each farm’s
AMTA base or updated acres, and AMTA crop yields;
! Fixed decoupled payments and counter-cyclical payments are
calculated at 85% of each farm’s base acres and crop yields as set in
1996 Act; producers can update bases. Those who update bases can
also update yields for counter-cyclical payments;
! Continued flexibility to plant most crops (except fruits and
vegetables) on base acres, and no USDA annual acreage control
authority;
! Beginning with 2003 crops, separate annual limits of $40,000 for
fixed payments; $65,000 for counter-cyclical payments; $75,000 for
3 Until October 1, 2001, when it expired, the Northeast Interstate Dairy Compact authorized
producers there to receive higher prices than the national level. For an explanation, see CRS
Issue Brief IB97011, Dairy Policy Issues.

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marketing loan gains (however, no limit on gains from generic
commodity certificates when provided by USDA in lieu of cash).
The so-called “three-entity” rule and husband wife rule were both
retained, effectively doubling these dollar limits. Farm program
participation is restricted to those with less than $2.5 million per
year in adjusted gross income (3-year average). (Peanuts have a
separate payment limitation.)

A new peanut program would be similar to other crop support, with fixed
decoupled payments of $36/ton, a target price of $495/ton, and loan rate of $355/ton;
marketing quotas would be ended, with compensation of $220/ton/year for 5 years
(a total of $1,100/ton) paid to quota holders for lost asset values. Also, sugar support
at 18¢/lb. (raw cane) and 22.9¢/lb. (refined beet) would continue, with the no-net-
cost rule re-established, the marketing assessment eliminated, and the loan forfeiture
penalty eliminated. Sales of domestic sugar will be subject to marketing allotments.
Dairy will continue to be supported through the dairy price support program at
the current level of $9.90 per hundredweight (cwt.), as proposed by both the House
and the Senate, with the program scheduled to expire December 31, 2007. Farm
milk prices are supported at this level through government purchases of surplus dairy
products from dairy processors. Separately, conferees also adopted a
counter-cyclical direct payment program for dairy farmers as proposed by the Senate,
but with several modifications. Whenever the minimum monthly fluid milk price
falls below $16.94/cwt., all producers nationwide will receive a payment equal to
45% of the price shortfall. Producers will be allowed to receive a payment on up to
2.4 million pounds of annual milk production. The counter-cyclical payment
program expires on September 30, 2005. CBO estimates the cost of these payments
at $1.3 billion over the 3 ½ year life of the program.
Marketing loans and LDPs would be provided for graded wool, nongraded
wool, mohair, honey, dry peas, lentils, and chickpeas (see rates in table).
The additional 10-year cost (budget authority) of the conference bill’s
commodity provisions are estimated by CBO to be $47.8 billion over and above a
projected current services baseline of $69.9 billion. Thus, total commodity spending
under the bill would be nearly $118 billion.
House-Senate Differences. The House bill put more of the support benefit
into fixed, decoupled payments while the Senate bill put more benefits into loan
deficiency payments. The fixed, decoupled payments are not tied to current
production or prices and so are not considered to be potentially trade distorting (i.e.,
“amber box”). In contrast, higher loan rates generate increased benefits when
market prices are low and so serve as counter-cyclical assistance – thereby likely to
fall into the amber box. The cost of such varying payments also are difficult to
predict in the future, making farm spending budget projections uncertain at best.
Another important difference was the Senate plan to limit support payments
more strictly than the House version, to $225,000 per individual ($275,000 for a
couple), including marketing loan benefits, fixed payments, counter-cyclical
payments, plus gains from commodity certificates and forfeitures. The rules also
would have made it more difficult to reorganize operations in order to legally exceed

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this limit. (See CRS Report RS21138, Farm Commodity Payment Limits:
Comparison of Proposals.)
Table 2. Conference Agreement: Loan Rates, Direct Payment
Rates, and Target Prices
Direct Payment
Crop
Loan Rates
Target Prices
Rates
2002-03,
2004-07
2002-2007
2002-03, 2004-07
Wheat, $/bu
2.80, 2.75
0.52
3.86, 3.92
Corn, $/bu
1.98, 1.95
0.28
2.60, 2.63
Sorghum, $/bu
1.98, 1.95
0.35
2.54, 2.57
Barley, $/bu
1.88, 1.85
0.24
2.21, 2.24
Oats, $/bu
1.35, 1.33
0.024
1.40, 1.44
Cotton, $/lb
0.52, 0.52
0.0667
0.724, 0.724
Rice, $/cwt
6.50, 6.50
2.35
10.50, 10.50
Soybeans, $/bu
5.00, 5.00
0.44
5.80, 5.80
Oilseeds, minor, $/lb
0.096, 0.093
0.008
0.098, 0.1010
Peanuts, $/ton*
355, 355
36, 36
495, 495
Wool, graded, $/lb
1.00, 1.00
Wool, nongrd., $/lb
0.40, 0.40
Mohair $/lb
4.20, 4.20
Honey, $/lb
0.60, 0.60
Sugar, raw cane, $/lb
0.18, 0.18
Sugar, beet, $/lb
0.229, 0.229
Peas, dry, $/cwt
6.33, 6.22
Lentils, $/cwt
11.94, 11.72
Chickpeas, small,
7.56, 7.43
$/cwt
Milk, $/cwt**
9.90, 9.90
16.94, 16.94
Source: House Committee on Agriculture, April 30, 2002.
*Peanut quota holders also receive a buyout payment of 11 cts./lb. per year for 5 years
* *$9.90 is the level of farm price support under the dairy product purchase program; it is not a loan rate. See text
for an explanation of milk target price program (i.e., counter-cyclical payments) which differs from that for crops.

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(See: CRS Report RL31251, Commodity Support Provisions: Comparison of
Current Law with House and Senate Farm Bills; CRS Issue Brief IB97011, Dairy
Policy Issues; CRS Issue Brief IB95117, Sugar Policy Issues; CRS Report RL30924,
Peanut Program Policy Issues; CRS Report RS20896, Farm Commodity Programs:
Wool and Mohair; CRS Report RS20759, Farm Commodity Programs: Honey; and
separate entries in the Agriculture Policy and Farm Bill Briefing Book on Farm
Income and Commodity Price Support Programs; Grains, Cotton, and Oilseeds: Farm
Bill Policy; Sugar Program; the Dairy Price Support Program; Dairy Farmer Counter-
Cyclical Assistance; and the Peanut Program.)
Conservation and Environment4
The conservation title both amends existing programs and adds new ones to
protect or restore agricultural lands and provide resource and environmental benefits
to society.5 USDA agencies implement current conservation policies through a
combination of cost sharing payments and technical assistance, backed by education
and research for numerous land retirement and working land programs. Participation
in these programs is voluntary.
Starting with the omnibus farm bill in 1985, Congress expanded the conservation
mission significantly beyond its traditional focus on controlling soil erosion and
providing water to enhance production. The goals now include wetlands protection,
wildlife habitat protection and development, and air and water quality improvement,
among others. Since the 1996 farm bill was enacted, new issues have emerged,
including sequestering carbon and addressing global climate change, producing energy
from biomass, protecting and restoring grasslands, reducing non-point water pollution
caused by very large animal feeding operations, and addressing other “off-farm”
environmental impacts.
Over the years, Congress has added new conservation tools, including controls
over environmentally fragile lands and wetlands for producers who want to receive
federal farm benefits, and easements to protect resource values while keeping the land
under the control of the farmer. The expanded conservation effort is reflected in
funding levels. Conservation activities at USDA received just over $1 billion in
FY1985; they now receive more than $3 billion annually. However, most of this
growth has been for land retirement and easements (e.g., the Conservation Reserve and
Wetlands Reserve Programs, CRP and WRP), while the other activities have grown
little or not at all in real terms. In the 1996 farm bill, funding for five conservation
programs was moved from discretionary spending, subject to the annual appropriations
process, to mandatory funding through the CCC. Funding of mandatory conservation
programs totaled just over $2 billion in FY2001, according to CBO. (See CRS Report
RL30331, Conservation Spending in Agriculture: Trends and Implications, for a
tabulation of programs and review of spending over the past 20 years.)
4 CRS contact: Jeffrey Zinn, 7-7257.
5 Title II of both the House and Senate bills contains most but not all of the bill’s
conservation provisions; some can be found in other titles as well.

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Numerous programs are scheduled to expire by the end of FY2002. During
several days of hearings in 2001, the agriculture committees explored program and
policy options. Farm groups generally suggested increasing funds for existing
programs and reducing conservation impediments to farm operations. Other interest
groups, while supporting some of the farmer proposals, recommended more substantial
changes. One broader approach encompassing the idea of “green payments” was
introduced by Chairman Harkin in a freestanding bill (S. 932) before being
incorporated, as the Conservation Security Program, into the Senate-approved farm
bill.
Conference Bill. The conservation title of the conference report:
! Increases the CRP acreage cap from 36.4 million to 39.2 million acres,
and retains language directing the Secretary to give priority to areas
where ongoing projects could be rapidly completed;
! Reauthorizes the WRP and increases the acreage cap to 2.275 million
acres;
! Provides increasing annual funding for the Environmental Quality
Incentives Program (EQIP) to reach a level of $1.3 billion annually,
with 60% of program money to go to livestock producers and 40% to
crop producers; and redefines the purpose of EQIP to promote
agricultural production and environmental quality as compatible
goals;
! Provides for the Wildlife Habitat Incentives Program (WHIP) in
FY2002 – $15 million, FY2003 – $30 million, FY2004 – $60 million
FY2005-07 – $85 million;
! Provides for the Farmland Protection Program (FPP) in FY2002 –
$50 million, FY2003 – $100 million, FY2004-05 – $125 million,
FY2006 – $100 million, and FY2007 – $97 million;
! Provides $254 million to create a new, 2 million acre Grasslands
Reserve Program, with 40% of the funds going to 10-, 15-, and 20-
year contracts similar to those under the CRP, and 60% going to 30-
year and permanent easements;
! Reauthorizes the Small Watershed Rehabilitation Program and
authorizes appropriation of $275 million in total through FY2007;
! Gives priority for annual funding of conservation programs to states
that have not received at least $12 million in cumulative conservation
funding in that fiscal year;
! Provides $2 billion in new mandatory funding for a Conservation
Security Program that makes incentive payments to farmers for
adopting and expanding natural resource stewardship practices;
! Provides that money for technical assistance would come from the
mandatory funding for each program;
! Permits a wide range of state, local, and non-governmental groups to
become certified providers of technical assistance to producers
participating in the new and expanded conservation programs
authorized in Title II.
Total mandatory spending in the conservation was scored by CBO at $38.5 billion
(10 years, budget authority), of which $17.1 billion is new money.

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House Bill. Final approval of H.R. 2646, including a conservation title, came
in the House after it adopted a manager’s amendment removing several controversial
conservation provisions from the committee-reported bill. For example, the committee
version would have transferred administration of some conservation programs from
USDA’s Natural Resources Conservation Service (NRCS) to USDA’s Farm Service
Agency (FSA), and limited the penalties for farming wetlands (“swampbuster”) only
to the year in which the infraction occurred. After the manager’s amendment was
adopted, committee leaders led a successful effort to defeat (200-226) the so-called
Kind-Boehlert amendment, a bipartisan alternative conservation title endorsed by
many environmental organizations. This amendment, a revised version of the Work
Lands Stewardship Act (H.R. 2375), would have shifted $1.9 billion annually from
support for grains, cotton, and oilseeds in H.R. 2646 to the conservation title, to fund
a variety of expanded conservation activities.
The conservation provisions in Title II of the House-passed bill provided about
$15.8 billion in new budget authority by the end of FY2011. Major changes:
! Increased the CRP enrollment ceiling from 36.4 million acres to 39.2
million acres, and expanded the small wetlands pilot program from six
states to all states;
! Allowed 150,000 acres to be enrolled into the WRP annually;
! Increased annual funding for the Environmental Quality Incentives
Program (EQIP) gradually from $200 million in FY2002 to $1.5
billion in FY2010 and FY2011, created a new cost-sharing program
for ground and surface water protection that starts at $30 million and
grows to $60 million annually, allowed EQIP contracts with
participants to be as short as 1 year, and increased individual contracts
to $50,000 annually and $200,000 in total;
! Allowed certified third parties to provide technical assistance, with
rules for a certification program within 6 months of enactment;
! Increased funding for the Wildlife Habitat Incentives Program (WHIP)
from $25 million in FY2002 to $50 million in FY2010;
! Increased funding for the Farmland Protection Program (FPP) to no
more than $50 million annually, and made certain non-profits eligible
to participate;
! Permanently reauthorize the Resource Conservation and Development
(RC&D) Program;
! Established a new 2 million acre grassland reserve, with a spending
cap of $254 million in mandatory funding over 10 years;
! Establish a new Farmland Stewardship Program to better coordinate
conservation programs on eligible lands, with all spending to come
through other programs;
! Provided $15 million annually for rehabilitation of aging small
watershed projects; and
! Repealed several programs that are not being actively implemented.
Senate Bill. Title II of the Senate bill amended and reauthorized many of the
same programs as H.R. 2646, but only through FY2006. CBO estimated that the
Senate bill would increase budget authority for conservation by about $11.8 billion
through FY2006 and about $21.3 billion through FY2011. Provisions:

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CRS-13
! Authorized new water conservation programs to allow the Department
to purchase water rights from willing sellers, temporarily or
permanently. One program would allow easements to be purchased
on up to 500,000 acres under the Conservation Reserve Enhancement
Program, with priority given to protecting endangered species, among
other specified purposes (to be in accord with all applicable state
laws). Second, a new water benefits program would provide funds to
eligible states to improve instream flows, promote water conservation,
or purchase water rights, funded at $25 million in FY2002 and
increasing to $100 million annually in FY2004-2006;
! Created a new Conservation Security Program to provide payments to
all producers who practice conservation, with payment levels, up to
specified limits, dependent upon which of three levels of conservation
they practice;
! Authorized payments for technical assistance in support of all
mandatory conservation programs;
! Allowed certified third parties to provide technical assistance under
standards to be developed by USDA;
! Protected the privacy of personal information related to conservation
programs;
! Required the Secretary to examine the opportunities to consolidate
and coordinate conservation programs, and to implement the Soil and
Water Resources Conservation Act by April 30, 2005;
! Increased the CRP enrollment ceiling from 36.4 million acres to 40.5
million acres, expand the small wetlands pilot program from six states
to all states, allow certain economic uses of CRP lands (with reduced
payments), provided longer terms for new hardwood tree contracts,
required a USDA study of the economic and social effects of the CRP,
and removed the continuous enrollment option from the county
enrollment ceiling of 25% of cropland;
! Allowed 250,000 acres to be enrolled into the WRP annually (with up
to 25,000 of these acres to be enrolled in a new Wetlands Reserve
Enhancement Program), and limited total WRP enrollment to 2.225
million acres;
! Funded EQIP starting at $500 million in FY2002 and gradually
increasing to $1.5 billion in FY2006, provided enhanced assistance to
beginning and limited resource producers, expanded eligible practices
to include comprehensive nutrient management plans, allowed
contracts with participants to be as short as 3 years, limited payments
an individual or entity can receive to $30,000 a year or $150,000 per
contract longer than 4 years, and used a portion of EQIP monies to
fund programs for competitive grants for innovative conservation
practices, water conservation in the Southern Plains, and a pilot
program for drinking water supplies;
! Prevented farm program benefits on land converted to agricultural
production unless it meets specified requirements;
! Created a new partnership program to assist producers to address
environmental issues or to address conservation issues on a watershed
basis, using 5% of the funding provided for EQIP;
! Made the RC&D Program a permanent authorization;

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CRS-14
! Increased funding for WHIP from $50 million in FY2002 to $355
million in FY2006, used at least 15% of the funds for projects related
to threatened and endangered species, and not more than 15% of the
funds to enroll lands for at least 15 years to protect “essential plant
and animal habitat”;
! Authorized new programs to purchase flood plain easements
(Watershed Risk Reduction Program), to support organic farming
research, to establish a retirement program for wetlands and adjoining
areas where cranberries are grown (Cranberry Acreage Reserve), to
develop a water management plan for the Klamath River basin; to
initiate a source water protection program, and to initiate a Great
Lakes Basin Erosion Control Program;
! Authorized a grazing lands conservation program to replace one
authorized in Sec. 386 of the 1996 farm bill, and provided $60 million
annually for it;
! Reauthorized the FPP, providing $150 million in FY2002 and
increasing to $500 million in FY2006, made certain non-profits
eligible to participate, and used up to $10 million of the funds made
available annually to initiate a new market viability program;
! Set a minimum annual overall conservation funding level at $12
million per state;
! Expanded state market programs, funded through the CCC;
! Established a new 2 million acre grasslands reserve, and allow
easements to be held by certain private organizations; and
! Restated the provisions creating State Technical Committees to
specify membership and responsibilities.
(See: CRS Report RL31255, Resource Conservation Title: Comparison of
Current Law with House and Senate Farm Bills; CRS Issue Brief IB96030, Soil and
Water Conservation Issues; and CRS Report RL31131, Selected Conservation
Proposals for the Next Farm Bill. A short discussion of conservation with links to
other documents can be found in Conservation and Environment in the CRS
Agriculture Policy and Farm Bill Briefing Book.)
Foreign Trade and Food Aid6
Exports are viewed by most U.S. agricultural groups as critical to farm prosperity.
Thus, trade titles in omnibus farm bills are important vehicles for addressing
agricultural trade problems, export assistance, and foreign food aid programs. Other
policy venues also are important. For example, negotiations are under way in the
World Trade Organization (WTO) to strengthen multilateral agricultural trade rules.
Regional and bilateral trade negotiations also will affect conditions of competition for
U.S. farm products.
Provisions of the 1996 Law. Title II of the 1996 farm bill extended and
amended the major U.S. foreign food aid and agricultural export programs. It
reauthorized through FY2002 Titles I, II, and III of P.L. 480 (the Food for Peace
program), which respectively provide concessional financing of U.S. agricultural
6 CRS contact: Geoffrey S. Becker, 7-7287.

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exports, commodity donations for humanitarian and development activities, and
bilateral development grants of food. The farm bill extended to FY2002, at previously
authorized funding levels, export credit guarantees for agricultural sales (the so-called
GSM programs). It also extended, at reduced spending levels, the Export
Enhancement Program (EEP, an export subsidy program) and the Market Access
Program (MAP, which assists in the export promotion of U.S. farm products), as well
as the Foreign Market Development Cooperator Program (FMDP).
Selected Issues. In renewing the food aid and export assistance programs, the
107th Congress was confronted with questions of policy direction and funding. Levels
of spending and volumes of product subsidized under EEP and the Dairy Export
Incentive Program (DEIP) are subject to limitations under the Uruguay Round
Agreement on Agriculture (URAA). In practice, EEP has been used very little in
recent years; DEIP has been used to the limits of the URAA. Market promotion
programs like MAP, the food aid programs, and export credits (GSM) are not
considered to be trade distorting under the current URAA, and therefore are not subject
to spending disciplines. Foreign trading partners challenge this assertion, countering
that the United States has utilized food aid and export credits as ways to dispose of
heavily subsidized farm surpluses, thereby distorting trade.
Some have questioned whether export subsidy and promotion support actually
increases overseas sales or simply displaces what would have occurred anyway. Even
if sales increase, there are questions about whether they lead to substantially higher
farm prices and incomes – or whether direct farm subsidies might be more cost-
effective. Some critics claim that these programs benefit primarily large food and
export companies (who can afford to pay for promotion activities themselves) or
foreign buyers more than U.S. producers. Defenders cite studies claiming positive
outcomes from such spending. Similar questions arise with regard to foreign food aid.
One issue was whether to mandate the Global Food for Education Initiative,
launched as a $300 million pilot program by the Clinton Administration to help
establish school and pre-school food programs in developing countries.
Conference Bill. The conference version of H.R. 2646, in Title III,
reauthorizes, generally through 2007, the major foreign food aid and agricultural
export programs. Selected provisions of Title III would:
! Reauthorize MAP, with funding at $100 million in FY2002, $110
million in FY2003, $125 million in FY2004, $140 million in FY2005,
and $200 million in FY2006 and FY2007;
! Reauthorize FMDP with funding at $34.5 million annually through
FY2007;
! Reauthorize EEP, DEIP (in Title I) and Export Credit Guarantees
through FY2007, generally at current funding levels;
! Reauthorize P.L. 480 Food for Peace through FY2007, eliminate the
annual $1 billion cap on Title II spending, increase the minimum level
of commodities to 2.5 million metric tons per year, fund

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CRS-16
transportation, storage and handling at between 5% and 10% of annual
Title II funding, and make other program changes;
! Reauthorize FFP through FY2007, increase funding caps for the
program, and set minimum annual tonnages at 400,000 metric tons,
among other program changes;
! Authorize the President to establish the “McGovern-Dole
International Food for Education and Child Nutrition Program”
providing U.S. agricultural commodities and financial and technical
assistance for foreign preschool and school feeding programs and for
pregnant and nursing women and young children, with funding
mandated at $100 million in FY2003 and subject to appropriation in
FY2004-2007;
! Reauthorize the Bill Emerson Humanitarian Trust, the Emerging
Markets, and Farmer-to-Farmer programs through FY2007;
! Create an exporter assistance program (with $2 million annually in
CCC funds) to address foreign barriers to U.S. specialty crop exports.
The final conference agreement requires, in 2 years, retailers to provide country-
of-origin information to consumers for meat, fruits, vegetables, seafood, and peanuts;
the program is voluntary until then. Not in the conference version is a Senate-passed
provision which would have ended the current statutory restriction against private
financing of agricultural sales to Cuba, and a Senate-passed provision that would have
prohibited USDA quality stamps on imported meats.
Total additional 10-year cost (budget authority, above baseline) of the trade title
was estimated by CBO to be $1.144 billion. (See CRS Issue Brief IB10077,
Agricultural Trade Issues in the 107th Congress; CRS Report RS20997, Farm Bill
Trade and Food Aid Provisions, and Farm Bill Trade and Food Aid Provisions and
Agricultural Trade and Foreign Food Aid in the CRS Agriculture Policy and Farm Bill
Briefing Book.)
Farm Credit and Finance7
Omnibus farm bills commonly contain a credit title that makes policy changes to
USDA agricultural credit programs and addresses issues that relate to commercial
lenders, such as the Farm Credit System (FCS, a confederation of federally chartered,
member owned banks and associations) and commercial banks. Credit is an important
production input for many farmers. Long-term credit is used to finance purchases of
real estate, and shorter-term loans finance production input expenses such as livestock,
seed, feed, fuel, and fertilizer.
USDA’s Farm Service Agency (FSA) serves as a lender of last resort to eligible
family-sized farmers whose financial condition is too weak to permit them to obtain
commercial credit. FSA provides direct loans to farmers and also guarantees the
7 CRS contacts: Jerry Heykoop, 7-0248; Ralph Chite, 7-7296.

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timely repayment of principal and interest on certain loans made by commercial
lenders. FSA makes and guarantees real estate and operating loans, and also makes
direct emergency disaster loans. These loan programs have permanent authority under
the Consolidated Farm and Rural Development Act, and unlike the farm commodity
programs, do not require periodic reauthorization. However, Congress frequently uses
the farm bill to make changes to loan program terms, conditions, and eligibility
requirements.
Conference Bill. The final bill generally reauthorizes USDA farm lending
programs and provides greater access to USDA farm credit programs for beginning
farmers and ranchers. It increases the percentage that USDA may lend for down
payment loans and extends the duration of these loans; and establishes a pilot program
to encourage beginning farmers to be able to purchase farms on a land contract basis.
The measure extends emergency loans for losses due to USDA-imposed animal or
plant quarantines. Regarding shared appreciation agreements (SAAs), the Secretary
may modify a recapture loan on which a payment has become delinquent; reamortized
loans may not exceed 25 years and may not reduce outstanding principal or unpaid
interest. Conferees also adopted Senate provisions dealing with FCS (see below).
House Bill. Title V, the credit title of House-passed H.R. 2646, required some
program operational and administrative changes, and altered or expanded certain
eligibility and benefit provisions for FSA farm loans. Among the major provisions:
removal (through the end of 2006) of the requirement that an FSA borrower has to
“graduate” to a commercial lender; an extension of a requirement, through 2011, that
USDA earmark a certain portion of FSA loans for beginning farmers; offering an
interest-rate buydown program on certain loans; and, prohibiting USDA from
collecting any payments under shared appreciation agreements, through December 31,
2002. Title V of the House version also authorized FSA emergency disaster loans to
mitigate the effects of increased energy costs and USDA imposed animal quarantines,
and allowed loans to horse breeders experiencing losses from mare reproductive loss
syndrome.
Senate Bill. The Senate-passed bill also required a number of operational and
administrative changes in FSA farm lending programs. Among other things, the bill
altered certain eligibility and benefit provisions, including provisions to make loans
more available to beginning farmers. Another provision allowed borrowers with SAAs
to enter into 25-year easements for agricultural and conservation purposes. The Senate
credit title also enabled CoBank (an FCS arm) to finance facilities for storage and
handling in foreign countries that purchase U.S. farm products, by allowing CoBank
to finance equipment and facilities off the farm.
CBO scored mandatory budget authority under the Senate bill at $66 million (over
10 years) due to reduced receipts under the new SAA provision; neither the conference
nor the House bill would increase current mandatory budget authority.

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CRS-18
Rural Development8
The 1980 Rural Policy Act (P.L.96-355) designates USDA as the lead federal
agency for coordinating rural development. The stated mission of the rural
development agencies within USDA is to enhance rural communities by targeting
financial and technical resources in areas of greatest need. Four agencies in USDA are
responsible for the mission area: the Rural Housing Service (RHS), the Rural Business-
Cooperative Service (RBS), the Rural Utilities Service (RUS), and the Office of
Community Development, which provides community development support through
Rural Development’s field offices. The mission area also administers the rural portion
of the Empowerment Zones and Enterprise Communities Initiative and the National
Rural Development Partnership.
The rural development title of past farm bills has supported local business
development and expansion and the physical infrastructure of rural areas, e.g.,
subsidies for housing, electricity, telephones, water and waste disposal, and community
facilities. More recently, policymakers have pushed for programs that support
innovative and alternative industry development, enhanced telecommunications access,
as well as new funding mechanisms. Pressure for such alternatives has continued as
policymakers recognize the changing structure of agriculture and the diversity of rural
communities. Some rural areas have grown and prospered during the last decade,
particularly those within commuting distances of metro areas. Other rural areas are
falling further behind as their primary industries (including agriculture) either decline
or adapt to a global marketplace and economy that often means fewer employment
opportunities and lost population, especially in farm-dependent areas.
Local investment strategies, notably value-added agriculture – e.g., regional food
processing plants, cooperatives, organic farming – are being promoted by many in the
farm sector. While holding promise for agriculture and surrounding communities,
there are limits on how many yogurt plants, small dairy processors, or food processors
can be supported by these local economies, especially with increasingly global
competition in these sectors.
Thus, the kinds of rural entrepreneurship seen in the past (e.g., in the above types
of value-added enterprises) may give way to future forms of rural entrepreneurship that
build around new, or previously ignored resources. Among the possibilities are
investment in environmental entrepreneurship or environmental capital, public-private
development of carbon emission markets and sustainable land management
innovations tied to national (clean water) and international agreements (carbon
emissions), and environmentally sensitive land use for non-agricultural purposes (e.g.,
recreation). New forms of agricultural production and marketing, particularly
agriculture within metro regions, also suggest future possibilities for enhancing rural
opportunities. (See Rural Development in the CRS Agriculture Policy and Farm Bill
Briefing Book.)
Conference Bill. Rural development programs were authorized at $870 million
for 6 years. The conference committee retained most new rural development programs
and initiatives in the Senate and House bills (see below for details) while reducing the
8 CRS contact: Tadlock Cowan, 7-7600.

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programs’ levels of mandatory authorization. The committee reduced the House direct
authorization amount by $305 million and the Senate direct authorization amount by
$841 million. A portion of this reduction reflects repeal of the Fund for Rural America
in both House and Senate versions of the farm bill.
Neither the Rural Endowment Program, authorized for $82 million in the Senate
version, nor the Rural Entrepreneurs and Microenterprise Assistance Program,
authorized at $50 million, was retained in the conference report. Although the
National Rural Cooperative and Business Equity Fund, authorized at $150 million in
the Senate version, was also deleted in the conference committee, a Rural Strategic
Investment Program was funded at $100 million. The conference committee
authorized $280 million in loan guarantees for the Rural Business Investment Program
while reducing the level of loan subsidies by $20 million.
In other programs, Broadband Service to Rural Areas was reduced to $100 million
from $500 million; and local television loan guarantees were reduced by $120 million.
Valued-added Agricultural Market Development Grants were reduced from $75
million per year to $40 million per year. A one-time removal of backlogged
applications for pending rural development loans and grants (estimated by the CBO at
$454 million) was authorized by the conference committee at $360 million and limited
to water and waste water programs. Finally, the Rural Firefighters and Emergency
Personnel Grant Program was reduced from $130 million to $50 million.
House Bill. Funding authorization for rural development programs in recent
farm bills has consisted almost entirely of discretionary funding. The Fund for Rural
America (Section 793 of the 1996 farm bill (P.L. 104-127) was an exception. Title
VI of the House-passed bill provided $3.6 billion in estimated budget authority for
rural development in FY2002-2011, of which $1.45 billion was discretionary
authorization (subject to annual appropriation) and $2.15 billion was direct
(mandatory) authorization.
Mandatory Funding
! Authorized $20 million per fiscal year for new local television
broadcast signal loan guarantees to rural areas under the Launching
Our Communities’ Access to Local Television Act of 2000. Amended
the 2000 Agricultural Risk Protection Act (P.L.106-224) to authorize
$50 million annually FY2002-2011 from the CCC for new
value-added agricultural market development grants. Not less than $5
million of this funding for FY2002 and not less than $10 million for
FY2003-2004 was provided for grants to establish Agriculture
Innovation Centers for technical assistance to value-added agricultural
businesses.
! Authorized $15 million from the CCC for each fiscal year through
2011 for a new Pilot Program for Strategic Regional Development
Plans and Implementation in ten rural communities in states with a
large proportion of rural residents.
! Authorized $30 million per year from the CCC to extend Community
Water Assistance Grants through FY2011.

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! Provided for $100 million annually in additional mandatory rural
development spending from the CCC. The new funding to be
allocated as follows: $45 million for the Program for Strategic
Regional Development Plans and Implementation; $45 million for
Community Water Assistance Grants; $10 million for value-added
agricultural market development grants. This provision was adopted
on a House floor vote, 235 to 183; funds were to be transferred from
grains, cotton and oilseeds support in the bill to pay for it.
Discretionary Funding
! Created a USDA Rural Water Grassroots Source Water Protection
Program and authorized funding at $5 million per fiscal year.
! Provided authorization for rural water and waste facility grants in
amounts deemed necessary rather than being limited to 75% of the
cost of developing a facility.
! Increased loan limits from $25 million to $100 million for certain
other rural development loan programs; and loans and guarantees for
renewable energy systems were also revised.
! Provided grants to non-profit organizations to construct or refurbish
individually-owned household water well systems for low and
moderate-income households.
! Extended various RBS and RUS loan and grant program
authorizations to 2011.
Senate Bill. The rural development title (Title VI) of the Senate bill provided
an estimated $3.4 billion in rural development authorization for FY2002-2006, of
which about $1.71 billion was direct (mandatory) budget authority and $1.69 billion
was discretionary (subject to annual appropriations). As with H.R.2646, the Senate bill
included mandatory funding for several new initiatives and discretionary funding
authorization to support new loan and grant programs and a range of existing loan and
grant programs.
Mandatory Funding
! Authorized a new Rural America Infrastructure Account for a one-
time expenditure (estimated cost is $700 million) to close the backlog
of pending rural development loans and grants.
! Provided $100 million per year for new grants and loans at 4% or
market rate for broadband access and targeted grants to communities
of 20,000 or fewer.
! Authorized $82 million for FY2002-2003 and such sums as necessary
in FY2004-2006 for a new Rural Endowment Program to develop
long-term planning in economically depressed communities.
! Authorized $75 million annually for new value-added agriculture
market development grants with a 5% set-aside for organic products
and priority given to grant proposals under $200,000. Authorized
$130 million for a new program to train firefighters and emergency
medical personnel.

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CRS-21
! Created two venture equity capital mechanisms for rural areas (1) the
National Rural Cooperative and Business Equity Fund. The Fund
would match the first $150 million provided by private investors; $50
million of the private funds would be guaranteed up to $300 million;
(2) the Rural Business Investment Corporations (RBICs). Private
equity firms could apply to USDA to form Rural Business Investment
firms that may receive leverage equal to 300% of its private capital.
The provision authorized $120 million in loan subsidies and grants.
A Senate floor amendment limited to 10% investments in areas
containing a city with a population greater than 100,000. Both funds
to be administered through the Small Business Administration.
Discretionary Funding
! Extended, modified, and/or increased various RBS and RUS loan and
grant program authorization to 2006.
! Provided $5 million each year FY2002-2006 for grants to
broadcasting systems.
! Established a new Rural Entrepreneurs and Microenterprise
Assistance Program with appropriations authority of $10 million per
fiscal year for 5 years.
! Authorized an increase in water and waste disposal funding from $590
million to $1.5 billion per year.
! Authorized $30 million per year to regional development
organizations.
! Created a new Rural Telework Centers program and provided $30
million annually.
! Authorized $25 million annually for a new Barn Preservation
Program.
! Provided $25 million annually for grants to senior citizen programs.
! Authorized of $51 million for new SEARCH grants to provide
technical assistance to very small communities in meeting
environmental goals.
! Established the Northern Great Plains Regional Authority and
provides $30 million in authorization for each year fiscal year, 2002-
2006.
Both the Senate and House bills authorized the National Rural Development
Partnership.
Agricultural Research, Extension, and Education9
1996 Farm Bill. Title VIII of the 1996 farm bill authorized USDA’s agricultural
research, extension, and education programs and modified public agricultural research
policy. Also, a research-related provision in the rural development title of the 1996
Act authorized a competitive grants program (the Fund for Rural America) to support
rural development projects and rural-focus research projects. Although not
subsequently fully funded by appropriators, the Fund marked a significant change in
9 CRS contact: Jean Rawson, 7-7283.

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CRS-22
that federal money for the program ($100 million annually for 3 years, of which
roughly one-third was for research grants) was to be transferred directly to USDA from
the U.S. Treasury instead of being appropriated.
1998 Research Legislation. In 1998 Congress passed separate legislation
superseding Title VIII of the 1996 farm bill, making several significant reforms and
reauthorizing USDA’s research, extension, and education programs through 2002. The
Agricultural Research, Extension, and Education Reform Act of 1998 (P.L. 105-185)
extended the new provisions contained in the 1996 farm bill (including the Fund for
Rural America) and adopted additional policy changes to: (1) require greater
accountability for program relevance and merit on the part of institutions receiving
federal funds; (2) increase the funding authority for multi-state research projects; (3)
phase in a matching funds requirement for the 1890 (historically black) colleges; and,
(4) authorize several new research programs. Of the latter, the most significant is a 5-
year, $600 million Initiative for Future Agriculture and Food Systems, a competitive
grants program intended to promote cutting-edge research in the areas of genomics,
biotechnology, food safety, new uses for agricultural products, natural resource
management, and farm profitability. Congress authorized funding for the program –
$120 million annually – to come directly from savings in mandatory spending
stemming from reforms made in the food stamp program in 1997.
Selected Issues. In part because of difficulties in obtaining consistent
financing for the innovative funding mechanisms authorized in the 1996 farm bill and
the 1998 research reform law (the Fund for Rural America and the Initiative for Future
Agriculture and Food Systems), a primary research policy issue in the current farm bill
debate is funding. In June 2001, a bipartisan group of 49 House members, including
24 from the House Agriculture Committee, wrote to Agriculture and Appropriations
Committee leaders urging that a portion of the budget increase set aside for agriculture
be used to double funding for research programs over the next 5 years, including $500
million in the coming year. In addition, the September 11, 2001 terrorist attacks have
prompted many lawmakers to call for additional security for federal and state research
facilities, and for increased research on agriculture and food protection.
Conference Bill. The conference report of H.R. 2646 would:
! Permit the annual appropriation through FY2007 of such sums as are
necessary for research at the state agricultural experiment stations and
the Cooperative Extension System (currently limited to $850 million
and $420 million, respectively);
! Permit the annual appropriation through FY2007 of such sums as are
necessary to support the endowment for the 1994 (tribally controlled)
land grant institutions; increase the annual payment to each 1994
Institution from $50,000 to $100,000; and make the 1994 schools
eligible for competitive grants under the Integrated Activities program
of CSREES;
! Increase the matching funds requirement for the 1890 (historically
black) land grant colleges to 100% over 5 years; and raise the
minimum amount that can be appropriated for research and extension
at the 1890 schools to a fixed percentage of the amounts appropriated
for 1862 schools (15% for research; 25% for extension);

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CRS-23
! Provide $1.3 billion through FY2007 for the Initiative for Future
Agriculture and Food Systems; and encourage grants under the
Initiative to support minority-serving institutions, rural economic
development and several other priority issue areas;
! Authorize appropriations for grants to schools in the U.S. Territories
(renamed “insular areas” for the purposes of Title VII) to support
distance education and teaching programs at insular area land grant
schools;
! Create a special authority for appropriations to support biosecurity
preparedness and response;
! Provide a one-time allocation of $8 million in FY2002 in CCC funds
to support the activities of Girl Scout, Boy Scout, FFA, and 4-H
groups in rural areas, with appropriations authorized in subsequent
years;
! Establish a program to make grants to colleges, agencies or
organizations that can provide training, education, and technical
assistance to beginning farmers and ranchers.
House Bill. Title VII (Research and Related Matters):
! Reauthorized research programs through 2011; this includes the
Initiative for Future Agriculture and Food Systems, to be funded
through the CCC (instead of U.S. Treasury transfers) at a total of
$1.16 billion to be distributed in equal amounts over a 7-year period;
! Sought to increase funding for the 1890 colleges by gradually
increasing the matching funds requirement from its current level of
50%, to 60% in 2003 and to 100% in 2007 (rising in 10% increments
from 2003);
! Initiated a 50% matching funds requirement for the land grant colleges
in the “insular areas,” (redefined to include Puerto Rico, Virgin
Islands, Guam, American Samoa, N. Mariana Islands, Micronesia, the
Marshall Islands, and Palau), and established a competitive grants
program to strengthen the teaching programs at those colleges;
! For the tribally controlled land grant colleges (the 1994 Institutions),
(1) authorized direct appropriations to take the place of the
endowment fund established by the 1994 law; (2) doubled the
authority for annual federal payments to each institution to $100,000;
and (3) made the 1994 schools eligible to receive formula funds for
research and extension under the Hatch and Smith-Lever Acts;
! Created a new subtitle that amends the Research Facilities Act (7
U.S.C. 390 et seq.) to permit the assessment of civil penalties to cover
damage from violence against agricultural research facilities.
Senate Bill. The research title (also Title VII) among other things:
! Increased annual appropriations authority for agricultural experiment
station research in the states from $850 million to $1.5 billion and for
state extension programs from $420 million to $500 million for 2002
to 2006;

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CRS-24
! Raised mandatory funding for the Initiative for Future Agriculture and
Food Systems from $120 million to $225 million annually, and
expressed the sense of Congress that federal investments in food and
agricultural research should double over the next 5 years;
! Similarly to H.R. 2646, mandated greater support for research at the
insular area institutions (those in Puerto Rico, Guam, and other U.S.
territories) by requiring increases in state matching funds, and
authorizing an appropriation of $4 million per year for a distance
education program for those institutions;
! Increased the matching funds requirement for the 1890 (historically
black) land grant colleges and mandated annual appropriations that are
at least 15% of the amount appropriated for the 1862 institutions;
! Created a competitive grants program for the construction and
modernization of food and agricultural research facilities;
! Permitted higher federal reimbursements for indirect costs associated
with research grants (these had been capped at 19%, well below the
35% average for most federally supported research);
! Established a training and technical assistance program on risk
management for beginning farmers and ranchers;
! Created a 5-year, $60 million extension grant program to promote the
development of electronic commerce enterprises in rural areas;
! Made grants to youth organizations (e.g., Girl and Boy Scouts, 4-H,
Future Farmers of America) for expanding programs in rural areas;
! Included a biosecurity subtitle to: (1) establish an Agriculture
Infrastructure Security Fund that would be used to support science to
protect animal and plant health and the food supply; (2) establish a 15-
member commission to advise the Secretary on use of the fund; and
(3) authorize a total of $300 million over 3 years for biosecurity
planning and response programs, including the modernization and
construction of research facilities.
Food Stamps and TEFAP10
Among the domestic food assistance programs administered by the USDA, two
are noteworthy in the context of the farm bill. Authorization of appropriations, and
other authorities related to the Food Stamp program and The Emergency Food
Assistance Program (TEFAP), expire at the end of FY2002.
Food Stamp Issues. Although food stamp enrollment is now increasing, it is
about one-third below its peak in the spring of 1994 and only 10% higher than the all-
time low. Over half of this decline came from a sharp drop in the rate at which those
who are eligible actually participate.
State officials, program advocates, and supporters of the 1996 welfare reform law
(with its goal of moving families from welfare to work) maintain that various aspects
of food stamp eligibility, benefit, and administrative rules thwart participation and
effective administration, especially in the case of working poor families and the
elderly. They point to overly complex policies and food stamp rules that differ too
10 CRS contact: Joe Richardson, 7-7325.

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CRS-25
greatly from those applied by states in administering Temporary Assistance for Needy
Families (TANF) programs and Medicaid. They assert that the food stamp “quality
control” system penalizes too many states too harshly for erroneous benefit/eligibility
determinations (pressuring them to “over-administer” the program). Finally, some
believe that benefit levels (especially for working families with children) are not high
enough to merit the effort involved in applying for and maintaining eligibility.
The continued ineligibility of many legally resident noncitizens and the confusion
engendered by the rules governing their eligibility also have sparked reform proposals.
Well over 500,000 legally resident low-income noncitizens remain ineligible for food
stamps, although 1998 amendments restored eligibility to some who were made
ineligible for food stamps by the 1996 welfare reform law, and several states are
funding food stamps for others.
Food Stamp Reform Agendas. There has not been a unified reform agenda,
and most alternatives for change would impose significant new costs. Many states call
for simplified federal food stamp rules, much greater state control over program
policies, and more standardized benefit/eligibility rules that will make it easier on both
administrators and applicants/recipients. They also want major revision of the quality
control system. Program advocates emphasize the inadequacy of benefits and the need
to restore eligibility to noncitizens. Although they support reform of the quality
control system and selective changes to make eligibility/benefit determinations simpler
for applicants, they resist vesting too much decision-making with states and tampering
with what they see as a nationally uniform food stamp “safety net.” Welfare reform
supporters also agree with quality control reforms, but stress the need to ensure that
the food stamp program fulfills a major role in supporting the working poor as its first
priority.
The Administration. The Administration’s food stamp reform package
(announced with its FY2003 budget) included: (1) increasing benefits modestly for
larger households (similar to the farm bill conference agreement, see below), (2)
standardizing or giving states control over several rules to ease administrative burdens
on program operators and applicants/recipients, (3) excluding the value of one vehicle
per adult when judging eligibility, (4) making eligible all low-income noncitizens who
have resided in the U.S. legally for 5 years (similar to the conference agreement on the
farm bill, see below), (5) restructuring and reducing spending for employment and
training programs for food stamp recipients (similar to the farm bill conference
agreement, see below), (6) ending automatic eligibility for some TANF beneficiaries,
and (7) substantially reforming the food stamp quality control system to penalize fewer
states and give bonuses to states performing well (although in a different way than the
farm bill conference agreement, see below). It had an estimated 10-year cost of $4.2
billion.
TEFAP Issues. Federal food donations under TEFAP have recently increased,
and private-sector donations to emergency feeding organizations are on the rise. But
many contend that federal help has not kept pace with growing demand and is well
below what is required. Perhaps more important, they argue that the costs of storing
and distributing food given out by state/local providers (whether privately or federally
donated) are seriously underfunded.

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CRS-26
Conference Bill. The farm bill conference agreement reauthorizes all expiring
food stamp authorities through FY2007. Drawing on both the House and Senate
measures (see sections below), the agreement:
! Expands eligibility for noncitizens by making eligible all low-income
legal permanent resident noncitizen children (without regard to their
date of entry) and other individuals (legal permanent residents,
refugees/asylees) who have resided in the United States for 5 or more
years (these changes account for 40% of the cost of the nutrition title
of the agreement and are expected to affect some 390,000 persons
when fully implemented);
! Raises benefits to larger households modestly (by increasing the
amount of income that is disregarded when setting their benefits);
! Allows states to provide “transitional” food stamp benefits for 5
months to families leaving TANF;
! Sets up a number of state options to reduce recipient reporting
requirements, simplify benefit calculations, and conform income and
asset eligibility rules with those of other public assistance programs;
! Increases funding for nutrition assistance grants (in lieu of food
stamps) to Puerto Rico and American Samoa; and
! Revamps the quality control system to (1) dramatically reduce the
number of states sanctioned (only those with persistently high rates of
erroneous benefit and eligibility determinations would be penalized)
and (2) grant bonus payments to states with exemplary administrative
performance.
The conference agreement also reauthorizes TEFAP through FY2007, increases
funding for TEFAP food purchases by $40 million a year, and raises the appropriations
authorization for distribution costs from $50 million to $60 million a year.
The 10-year CBO cost estimate for the nutrition title (IV) of the agreement is $6.4
billion (budget authority) and $6.97 billion (outlays). This includes funding for food
stamp and TEFAP expansions (over 90% of the cost). It also encompasses extra
money for Puerto Rico and American Samoa, funding for commodity purchases for
child nutrition programs, and added funds for the WIC farmers’ market program
(FY2002 only) and the farmers’ market program for seniors.
House Bill. The House bill reauthorized all expiring food stamp authorities
through FY2011. It also included significant structural changes intended to increase
benefits to families with children and ease burdens on administrators and
applicants/recipients:
! Benefits to larger households were raised modestly by disregarding
more of their income;
! Administrative burdens were lightened by allowing states to conform
the way they count income for food stamp purposes to the methods
they use in their TANF or Medicaid programs;
! States were allowed to provide “transitional” food stamp benefits for
6 months to families leaving TANF for work; and

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CRS-27
! The quality control system was substantially revamped, easing
pressures on states and giving them new bonuses for high
performance.
For TEFAP, the House bill reauthorized, and significantly increased funding for,
food purchases and distribution costs through FY2011.
The 10-year CBO cost estimate for the food stamp and TEFAP provisions of the
House bill was $3.64 billion (budget authority/outlays above baseline). Additional
spending for a Seniors Farmers’ Market Nutrition program totaled $150 million.
Senate Bill. The Senate bill reauthorized all expiring food stamp authorities
through FY2006. It also included amendments that – much like the House bill – raised
benefits to larger households, allowed states to conform rules to TANF and Medicaid
and grant transitional food stamps, eased quality control penalties, and instituted new
bonus payments to states for high performance. However, it went well beyond the
House measure, primarily by:
! Expanding eligibility for noncitizens (more extensively than proposed
by the Administration);
! Setting up state options to: establish when eligibility will be
redetermined, reduce recipient reporting requirements, simplify
benefit calculations, and conform asset eligibility rules with TANF
and Medicaid standards;
! Increasing benefits for recipients with very high shelter costs;
! Liberalizing and simplifying work requirements for able-bodied adults
without dependents;
! Ending limits on spending of work/training funds and changing the
federal share of this spending; and
! Permitting use of food stamp benefits to buy dietary supplements.
The Senate measure also extended TEFAP authorizations through FY2006 and,
as with the House bill, increased funding for food purchases and distribution costs.
Overall, the CBO estimate for the 10-year increase in food stamp and TEFAP
spending engendered by the Senate bill was $8.32 billion (budget authority above the
baseline) or $8.89 billion (outlays above the baseline) – although, as noted, the bill was
a 5-year extension. Additional spending for commodity purchases for child nutrition
programs and farmers’ market and other initiatives totaled $440 million. Costs were
included in both Title I and Title IV of the bill.
(See Food Stamps and TEFAP in the CRS Agriculture Policy and Farm Bill
Briefing Book.)

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Other Provisions
Competition Issues.11 Provisions in Title IX of the House bill would have
created an Interagency Task Force on Agricultural Competition, and authorized
appropriations to enhance the capability of USDA’s Grain Inspection, Packers and
Stockyards Administration (GIPSA) to review competitive implications of structural
change in the meat packing industry, with sums specifically earmarked to hire
attorneys. The Senate bill contained provisions that would: remove mandatory
arbitration clauses from livestock contracts and allow for dispute settlement through
other legal means in addition to arbitration; extend GIPSA authority to include
livestock production contracts (currently, GIPSA protects broiler farmers who grow
under contract and livestock producers who sell directly to packers, but it does not
have authority over livestock producers who grow under contract.); and allow contract
producers to discuss the contract with advisors and enforcement agencies even if the
contract contains a confidentiality clause.
Among the more contentious conference issues was the Senate-passed ban on
packer ownership or control (to such an extent that the producer is no longer
“materially participating” in the production) of livestock for more than 14 days prior
to slaughter. Conferees did not include this ban in the final bill, and also deleted the
Senate’s provisions dealing with arbitration clauses. Both House provisions were
dropped, too. However, conferees adopted Senate provisions extending GIPSA
authority over swine production contracts, and allowing contract producers to discuss
their contracts.
Forestry.12 The House and Senate bills both contained forestry titles (Title VIII
in each). Both would reauthorize the Forest Service’s Office of International Forestry
and the Renewable Resources Extension Act; and would double the authorized funding
for forestry extension. Both bills would authorize “stewardship end result contracts,”
where the Forest Service could require timber purchasers to reduce wildfire fuel levels,
essentially trading goods (timber) for services (fuel reduction); authorize the
Agriculture and Interior Secretaries to make grants to biomass-to-energy facility
operators “to offset the costs incurred to purchase” potentially hazardous wildfire
fuels; and authorize a new program to assist local governments fight fires.
The House bill would replace the existing Forestry Incentives and Stewardship
Incentives Programs with a new coordinated Forest Land Enhancement Program to
provide cost-sharing to private landowners for planning and implementing sustainable
forestry practices, with $20 million annually in mandatory appropriations. The Senate
bill would reauthorize the Forestry Incentives Program (the Stewardship Incentives
Program is permanently authorized), and would create a new sustainable forest
management program, with $48 million annually in mandatory appropriations. The
Senate bill also would: create a new forestry cooperatives grant program (with $2
million annually in mandatory spending); a new program to help states with watershed
issues on nonfederal lands; a new Chesapeake Bay Watershed Forestry Program; a new
Suburban and Community Forestry and Open Space Initiative; a new Office of Tribal
11 CRS contact: Jerry Heykoop, 7-0248.
12 CRS contact: Ross Gorte, 7-7266.

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CRS-29
Relations and Assistance to Tribal Governments; a new research and treatment
program for Sudden Oak Death Syndrome; and a new Adaptive Ecosystem Restoration
Program for Arizona and New Mexico. (See CRS Report RL31065, Forestry
Assistance Programs.)
The conference agreement reauthorizes the Forest Service’s Office of
International Forestry and the Renewable Resources Extension Act, and doubles the
authorized funding for forestry extension. It generally follows the House bill in
replacing the Forestry and Stewardship Incentives Programs with a new Forest Land
Enhancement Program, with $100 million in mandatory appropriations through
FY2007, but with some modifications to purposes and practices based on the Senate
bill. The agreement also authorizes a new program to assist local governments in
fighting wildfires, but does not include “stewardship end results contracts” or biomass-
to-energy facility grants to reduce hazardous wildfire fuels. It also does not include
several other programs contained in the Senate bill.
Energy.13 The Senate approved a new energy title creating a variety of
competitive grant and/or loan programs targeted at conversion of biomass to fuels and
chemicals, development of renewable energy, improvements in agricultural energy
efficiency, and development of hydrogen and fuel cell technologies for farm
applications. In addition, the title would require the federal government to purchase
of bio-based products, if available. The House bill includes some comparable energy-
related provisions, but in other titles.
The conference committee maintained most of the provisions of the Senate
version, but at reduced funding levels. The conferees also added funding for the
Commodity Credit Corporation Bioenergy Program, which pays biofuels (mainly
ethanol and biodiesel) producers who expand their production capacity. Under the
conference agreement, mandatory spending on energy programs would increase by
$366 million between FY2002 and FY2006, and by $450 million through FY2011,
according to CBO. (See CRS Report RL31271, Energy Provisions of the Farm Bill:
Comparison of Current Law With House and Senate Bills.)
Miscellaneous.14 The conference report, and both the House and Senate bills,
provide for increased authorized funding for the outreach program for socially
disadvantaged farms, from $10 million to $25 million per year. While House and
Senate bills proposed making it illegal to buy, sell, transfer, or drag non-ambulatory
(“downer”) animals, the conference report only provides for the Secretary to prepare
a report and to issue regulations on humane treatment of “downers.” The conference
bill, like the House and Senate bills, make it illegal, in certain instances, to transport
animals across state lines (or for export) for participation in animal fighting ventures.
Other sections in the miscellaneous title of the conference agreement include:
explicit authority for the Secretary of Agriculture to provide economic and disaster
assistance to livestock and dairy producers, subject to appropriations; and an increase
in Section 32 carryover authority from $300 million to $500 million annually.
13 CRS contact: Brent Yacobucci, 7-9662.
14 CRS contact: Alex Segarra, 7-9664.

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Conferees did not include a Senate approved provision in the commodities title
(Title I) that would have provided $2.4 billion in new “disaster” assistance, including
$1.8 billion for 2001 crop losses, and $500 million for livestock producers for calendar
year 2001 losses in a county that received an emergency designation. The conference
bill retains the Senate provision for providing $94 million in 2000 crop market loss
assistance for apple producers. This aid was designated as emergency funding and
therefore would not be counted, for scoring purposes, toward the $73.5 budget
limitation on new farm bill mandatory spending. Examples of the many other
miscellaneous provisions in the conference bill, most located in Title X, include:
! Overhaul of virtually all animal health protection laws administered
by USDA’s Animal and Plant Health Inspection Service, in order to
consolidate and update them (see CRS Report RL31350, Updating
Animal Health Protection Statutes: Comparison of Current Law with
the Senate Farm Bill and House Proposals);
! Creation of a national organic certification cost-share program;
! A new farmers market promotion program;
! A new Assistant Secretary of Agriculture for Civil Rights;
! Establishment of a Food Safety Commission;
! An amendment to the definition of ‘animal’ under the Animal Welfare
Act to exclude some animals used in laboratory studies;
! A program for public education regarding the use of biotechnology in
agriculture; and
! Stiffer criminal penalties for violations of the Plant Protection Act of
2000.

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