Order Code RL31195
Report for Congress
Received through the CRS Web
The 2002 Farm Bill:
Overview and Status
Updated June 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, and includes a summary of selected provisions.
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 last omnibus
farm bill, and many of its provisions were due to 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 approved
the conference report on May 8, and the President signed the bill into law (P.L. 107-
171) on May 13, 2002.
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 $273.9 billion
over 6 years (FY2002-2007), according to Congressional Budget Office (CBO)
estimates (March 2002 baseline). Of this total, $51.7 billion is new spending (above
the March 2002 baseline). Of the new spending, $37.6 billion is for commodity
programs; $9.2 billion is for conservation. Total direct spending (baseline plus new)
for food stamps and other nutrition title programs is $149.6 billion over 6 years –
$2.8 billion above baseline.

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Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Budgetary and Trade Constraints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Administration Views . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Selected Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Farm Income and Commodity Price Support (Title I) . . . . . . . . . . . . . . . . . . 7
Conservation and Environment (Title II) . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Foreign Trade and Food Aid (Title III) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Food Stamps and TEFAP (Title IV) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Farm Credit (Title V) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Rural Development (Title VI) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Agricultural Research, Extension, and Education (Title VII) . . . . . . . . . . . 27
Other Provisions (Titles VIII, IX, and X) . . . . . . . . . . . . . . . . . . . . . . . . . . 30
List of Tables
Table 1. 2002 Farm Bill, 6-Year Cost Estimates Budget Authority . . . . . . . . . . . 3
Table 2. 2002 Farm Bill, 10-Year Cost Estimates Budget Authority . . . . . . . . . . 4
Table 3. Loan Rates, Fixed Payment Rates, and Target Prices . . . . . . . . . . . . . 11

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The 2002 Farm Bill: Overview and Status
Most Recent Developments
On May 13, 2002, President Bush signed into law a new 6-year omnibus farm
bill (H.R. 2646; P.L. 107-171). The House had voted, 280 to 141, to approve the
conference report (H.Rept. 107-424) on May 2, 2002, and the Senate approved the
conference report on May 8, 2002, by a vote of 64 to 35. The U.S. Department of
Agriculture (USDA) is now working to begin implementation of the provisions, most
of which take effect this year.
The Senate had approved its version of an 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 The 2002 Farm Bill: Selected Highlights in the CRS Agriculture
Policy and Farm Bill Briefing Book, and farm bill information, including the final
language and statement of managers, posted on the House Agriculture Committee
and Senate Agriculture Committee websites. USDA also has an extensive website
on the new farm bill, including its own side-by-side comparison of previous and new
law.)
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 were set to 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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CRS-2
Budgetary and Trade Constraints
Budget. Like most legislation, the farm bill is considered within federal
budget constraints. The May 2001 congressional budget resolution (H.Con.Res. 83)
reserved, for FY2002-2011, an extra $73.5 billion in direct spending 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 (April 2001)
for such programs for the same 10-year period. Congress used the April 2001 budget
baseline to score the bill, and CBO’s “official” scoring concluded that it would not
exceed the May 2001 congressional budget resolution allowance.
As the bill progressed through Congress, subsequent re-estimates of the federal
budget baseline showed fading budget surpluses in general, and higher than
previously-estimated costs for some farm programs in the new bill (e.g., more recent
projections suggest that some farm prices will be lower than had been projected in
April 2001). These new estimates created some uncertainty regarding available
budgetary resources, and whether enough lawmakers would continue to support the
new spending approved a year earlier. Ultimately, they did.
Tables 1 and 2, below, show respectively, CBO-estimated costs over 6 years
(the term of the new law), and over 10 years. “Baseline” means a continuation of
current law, unchanged; “new spending” is how much costs might increase under the
new law.
Both the April 2001 and March 2002 baseline estimates are shown.

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Table 1. 2002 Farm Bill, 6-Year Cost Estimates
Budget Authority
( in million $)
April 2001 Baseline
March 2002 Baseline
Baseline
New
Total
Baseline
New
Total
Spending
Projected
Spending
Projected
Spending
Spending
Commodity
55,534
31,169
86,703
61,337
37,587
98,924
Support
Conservation
11,583
9,198
20,781
12,075
9,198
21,273
Trade
1,566
532
2,098
1,572
532
2,104
Nutrition (1)
134,556
2,657
137,213
146,820
2,793
149,613
Rural
0
870
870
160
870
1,030
Development
Research
240
520
760
240
520
760
Forestry
0
85
85
0
85
85
Energy
0
366
366
0
405
405
Other
0
(336)
(336)
0
(303)
(303)
Provisions (2)
Total, 6-year
spending
203,479
45,061
248,540
222,204
51,687
273,891

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CRS-4
Table 2. 2002 Farm Bill, 10-Year Cost Estimates
Budget Authority
( in million $)
April 2001 Baseline
March 2002 Baseline
Baseline
New
Total
Baseline
New
Total
Spending
Projected
Spending
Projected
Spending
Spending
Commodity
77,045
47,771
124,816
85,365
56,714
142,079
Support
Conservation
21,412
17,079
38,491
22,089
17,079
39,168
Trade
2,610
1,144
3,754
2,640
1,144
3,784
Nutrition (1) 239,436
6,400
245,836
257,966
6,625
264,591
Rural
0
870
870
160
870
1,030
Development
Research
240
1,323
1,563
240
1,323
1,563
Forestry
0
100
100
0
100
100
Energy
0
405
405
0
405
405
Other
0
(1,594)
(1,594)
0
(1,441)
(1,441)
Provisions (2)
Total, 10-year
340,743
73,497
414,241
368,460
82,819
451,279
spending
Source: CRS compilation of Congressional Budget Office data.
(1) Farm bill changes to nutrition spending include changes to food stamps, the emergency food assistance
program, and child nutrition programs, as well as new spending for demonstration programs. Child nutrition
programs are not included in baseline, since their reauthorization is not addressed by the farm bill.
(2) “Other Provisions” in the farm bill primarily consist of savings associated with the federal crop insurance
program. However, crop insurance is not included in the baseline, since the reauthorization of the program is not
part of the farm bill.
(For more information see What Is the Cost of the 2002 Farm Bill? in the CRS
Agriculture Policy and Farm Bill Briefing Book.)
Trade. The multilateral Uruguay Round Agreement on Agriculture (URAA)
posed another potential constraint on legislators. The URAA limits the United States
to providing no more than $19.1 billion per year worth 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

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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. And, farmers who receive direct payments will be
permitted to update their historical production bases on which such payments are
tied. (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 and/or challenges by
foreign trading partners remains to be seen.
The bill does contain a provision requiring the Secretary of Agriculture to
attempt to keep farm program benefits within the annual URAA limit. Critics have
questioned the feasibility of implementing this so-called “circuit breaker.” Besides
the political difficulties of proposing farm program cutbacks, USDA would face
administrative problems.
If such calculations were made in advance and USDA found that farm support
might exceed the allowable $19.1 billion, would the Secretary have to withhold from
farmers some or all of the year’s expected subsidy? Which commodities and/or
supports would be affected – some of them, or would she make an across-the-board
reduction? What if USDA wrongly predicted that spending would not exceed the
$19.1 billion, but it ultimately did? Defenders of the provision counter that the
provision would not be as complicated as critics contend, suggesting that relatively
modest adjustments in programs and payment levels could be made easily on an as-
needed basis. (See Farm Support Programs and World Trade Commitments, CRS
Report RL30612.)
Meanwhile, the United States is involved in a new round of multilateral trade
negotiations under the aegis of the Word Trade Organization (WTO). Critics
contend that the scope and level of subsidies in the new farm law, and their potential
to perpetuate market distortions, undermine the U.S. argument in the new trade round
that the world’s agricultural subsidies should be further disciplined. Many foreign
officials, and some U.S. analysts, have pointedly noted that the new U.S. farm policy
raises questions about the sincerity of the U.S. negotiating position. The law will
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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encourage other countries to increase their domestic subsidies and/or import barriers
to protect their own farmers, critics add, many of whom are characterizing U.S. farm
policy as highly protectionist and destructive to farmers worldwide, particularly in
developing nations.
Defenders of the bill counter that the United States cannot unilaterally back
away from supporting its farmers before the European Union (EU) and other
competitors agree to do likewise. In the United States, agricultural interests have
long complained that the EU and Japan are permitted, under the URAA, to spend
much more on domestic farm support. The Japanese annual allowable level is
approximately twice the U.S. level, at $37.1 billion versus $19.1 billion. The EU’s
level is likely more than $60 billion when converted from EU to U.S. currency, more
than three times the U.S. level, they argue. Maintaining and even increasing U.S.
subsidies (within allowable limits) provide U.S. negotiators with more leverage in
the negotiations over foreign trade barriers and export subsidies as well as domestic
price supports, defenders argue.

Administration Views
The Administration, by late 2001, was backing away from early criticism of the
evolving farm bill, and was pledging its support for a “generous farm bill.” 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.
By May, the Administration had mounted a vigorous public defense of the new
bill, particularly in response to widespread foreign criticism.
Such Administration support is a marked departure from its 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.

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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.”
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 legislative debate.
Selected Provisions
Farm Income and Commodity Price Support (Title I)2
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 were 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. 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
2 Subject headings are not necessarily synonymous with the names of the Titles in the new
law, but such Titles are where most of the provisions discussed generally are located. CRS
contacts for Title I: 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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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 4 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,
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. The final bill continues marketing loan
benefits for grains, cotton, oilseeds, wool, and honey; it also makes peas, lentils and
chickpeas newly eligible. (See CRS Report 98-744, Agricultural Marketing
Assistance Loans and Loan Deficiency Payments.)

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Supply Management. Most major agricultural groups opposed any
restoration of production control or supply management tools. 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
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.
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.
Final 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 3;
! 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 3);
! 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;
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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CRS-10
! 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
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 is 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) continues, 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 their 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 are provided for graded wool, nongraded wool,
mohair, honey, dry peas, lentils, and chickpeas (see rates in table).
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

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would have made it more difficult to reorganize operations in order to legally exceed
this limit. (See Commodity Program Payment Limits Under the 2002 Farm Bill in
the CRS Agriculture Policy and Farm Bill Briefing Book, and CRS Report RS21138,
Farm Commodity Payment Limits: Comparison of Proposals.)
Table 3. Loan Rates, Fixed Payment Rates, and Target Prices
Crop
Loan Rates
Fixed Payment
Counter-Cyclical
Rates
Target Prices
Prior Law
2002 Law
Prior Law
2002
Prior Law
2002 Law
(2002
(2002/03,
(2002
Law
(1995 level;
(2002/03,
level)
2004/07) *
level)
NA 1996-2002)
2004/07) *
Wheat, $/bu
2.58
2.80, 2.75
0.46
0.52
4.00
3.86, 3.92
Corn, $/bu
1.89
1.98, 1.95
0.26
0.28
2.75
2.60, 2.63
Sorghum,
1.71
1.98, 1.95
0.31
0.35
2.61
2.54, 2.57
$/bu
Barley, $/bu
1.65
1.88, 1.85
0.19
0.24
2.36
2.21, 2.24
Oats, $/bu
1.21
1.35, 1.33
0.021
0.024
1.45
1.40, 1.44
Cotton, $/lb
0.5192
0.52, 0.52
0.0554
0.0667
0.729
0.724,
0.724
Rice, $/cwt
6.50
6.50, 6.50
2.050
2.35
10.71
10.50,
10.50
Soybeans,
5.26
5.00, 5.00
NA
0.44
None
5.80, 5.80
$/bu
Oilseeds,
0.093
0.096,
NA
0.008
None
0.098,
minor, $/lb
0.093
0.101
* Reflects rates that change in some years. NA=not applicable.
(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.)

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CRS-12
Conservation and Environment (Title II)4
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. 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.)
Numerous programs were 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.
4 Title II of the new law contains most but not all of the bill’s conservation provisions. CRS
contact: Jeffrey Zinn, 7-7257.

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CRS-13
Final Bill. The conservation title of the final bill:
! 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.
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

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CRS-14
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:
! 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

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CRS-15
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;
! 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

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CRS-16
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 Aid (Title III)5
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
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).
5 CRS contact: Geoffrey S. Becker, 7-7287.

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CRS-17
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, do they lead to substantially higher farm prices and incomes
– or might direct farm subsidies be more cost-effective? Some critics claim that the
trade 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.
Final Bill. The final 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
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;

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CRS-18
! 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.
(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.)
Food Stamps and TEFAP (Title IV)6
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 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
6 CRS contact: Joe Richardson, 7-7325.

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CRS-19
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 final 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
non-citizens who have resided in the U.S. legally for 5 years (similar to the final 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 final
farm bill, 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.
Final Bill. The final farm bill reauthorizes all expiring food stamp authorities
through FY2007. Drawing on both the House and Senate measures (see sections
below), the agreement:

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CRS-20
! 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.
Funding for food stamp and TEFAP expansions are over 90% of the cost of the
nutrition title. Costs also cover 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
! The quality control system was substantially revamped, easing
pressures on states and giving them new bonuses for high
performance.

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CRS-21
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.)
Farm Credit (Title V)7
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
7 CRS contacts: Jerry Heykoop, 7-0248; Ralph Chite, 7-7296.

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CRS-22
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
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.
Final 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.

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CRS-23
Rural Development (Title VI)8
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.)
Final Bill. Rural development programs are authorized at $870 million for 6
years. The conference committee retained most new rural development programs
8 CRS contact: Tadlock Cowan, 7-7600.

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CRS-24
and initiatives in the Senate and House bills (see below for details) while reducing
the programs’ levels of mandatory authorization. The conferees 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, is 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 by the conference committee, a Rural Strategic
Investment Program is 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 is reduced to $100 million
from $500 million; and local television loan guarantees are reduced by $120 million.
Valued-added Agricultural Market Development Grants are 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) is authorized at $360 million and limited to water and waste water
programs. Finally, the Rural Firefighters and Emergency Personnel Grant Program
is 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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CRS-25
! 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-26
! 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.

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CRS-27
Agricultural Research, Extension, and Education (Title VII)9
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 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 recent
farm bill debate was 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 prompted many lawmakers to call for additional security
for federal and state research facilities, and for increased research on agriculture and
food protection.
9 CRS contact: Jean Rawson, 7-7283.

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Final Bill. The final version of H.R. 2646:
! Permits 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);
! Permits the annual appropriation through FY2007 of such sums as
are necessary to support the endowment for the 1994 (tribally
controlled) land grant institutions; increases the annual payment to
each 1994 Institution from $50,000 to $100,000; and makes the
1994 schools eligible for competitive grants under the Integrated
Activities program of CSREES;
! Increases the matching funds requirement for the 1890 (historically
black) land grant colleges to 100% over 5 years; and raises 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);
! Reauthorizes the Initiative for Future Agriculture and Food Systems,
with funds gradually increased to $200 million annually by FY2006
and FY2007; and encourages grants under the Initiative to support
minority-serving institutions, rural economic development and
several other priority issue areas;
! Authorizes 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;
! Creates a special authority for appropriations to support biosecurity
preparedness and response;
! Provides 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;
! Establishes 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,

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CRS-29
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;
! 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

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planning and response programs, including the modernization and
construction of research facilities.
Other Provisions (Titles VIII, IX, and X)
Competition Issues.10 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 left, in Title X of the final bill, the Senate’s
provisions extending GIPSA authority over swine production contracts, and allowing
contract producers to discuss their contracts.
Forestry.11 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
10 CRS contact: Jerry Heykoop, 7-0248.
11 CRS contact: Ross Gorte, 7-7266.

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CRS-31
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 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 final bill 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 final bill 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.12 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 included some comparable
energy-related provisions, but in other titles.
The conference committee maintained, in a new Title IX, 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 final bill, mandatory spending on energy programs increases 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.13 The final bill, reflecting both the House and Senate bills,
provides 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 final conference report only provides for the Secretary to
prepare a report and to issue regulations on humane treatment of “downers.” The
final 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.
12 CRS contact: Brent Yacobucci, 7-9662.
13 CRS contact: Alex Segarra, 7-9664.

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Other sections in the miscellaneous title (Title X) of the final bill 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.
Conferees did not include a Senate approved provision in the commodities title
(Title I) of the final bill 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. However, the final bill retains the Senate provision for providing $94
million in 2000 crop market loss assistance for apple producers. Examples of the
many other miscellaneous provisions in the final 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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