Order Code RL33934
Farm Bill Legislative Action in the 110th Congress
Updated January 31, 2008
Renée Johnson, Coordinator,
Geoffrey S. Becker, Tom Capehart, Ralph M. Chite,
Tadlock Cowan, Ross W. Gorte, Charles E. Hanrahan,
Remy Jurenas, Jim Monke, Jean M. Rawson, Randy Schnepf,
Jasper Womach and Jeffrey A. Zinn
Resources, Science, and Industry Division
Joe Richardson
Domestic Social Policy Division

Farm Bill Legislative Action in the 110th Congress
Summary
The farm bill governs federal farm and food policy and is renewed about every
five years. The 110th Congress is seeking to revise the current farm bill (P.L. 107-
171), which covers a wide range of programs including commodity price and income
support, agricultural conservation, farm credit, research, rural development, and
foreign and domestic food programs, among others.
The House completed floor action on its version of the farm bill (H.R. 2419) on
July 27, 2007. The Senate Agriculture Committee approved its version (S. 2302) on
October 25, 2007. On December 14, the Senate completed floor action on the farm
bill, which was offered as a substitute to H.R. 2419 (Farm, Nutrition, and Bioenergy
Act of 2007). Conference negotiations between the House and Senate are anticipated
to start in early 2008.
Both the House and Senate farm bills seek many of the same types of changes
to existing legislation and programs, but there are numerous differences. For farm
commodities (Title I), both the House and Senate bills generally continue the
framework of the 2002 farm bill, revise payment limitations (both by tightening and
relaxing certain limits), and adjust support prices for some commodities. The House
bill offers a one-time choice between a new national-based “revenue counter-cyclical
payment” and the traditional counter-cyclical program. The Senate bill offers a one-
time choice between a new state-level “average crop revenue” program and the
traditional direct, counter-cyclical and marketing loan programs.
Both bills would add new provisions to address horticulture and livestock
issues, some in new stand-alone titles. Both bills add new mandatory funding for
specialty crop block grants and support organic production. New animal provisions
address meat and poultry inspections, and country-of-origin labeling. The Senate bill
also addresses meat packer ownership of livestock and other competition issues.
The nutrition title (Title IV) of both bills diverge substantially on both the total
level of new funding provided for nutrition programs and the allocation of the new
funding among programs. However, in most cases, the bills include very similar
policy changes: increased food stamp benefits and loosened eligibility standards, and
increased funding for fresh fruits and vegetables in most domestic food programs.
For conservation (Title II), international trade and food aid (Title III), credit
(Title V), rural development (Title VI), research (Title VII), forestry (Title VIII), and
energy (Title IX), both bills reauthorize, expand, and/or modify many of the existing
programs, create new programs and initiatives, or allow some programs to expire.
For credit, both bills expand borrowing opportunities for beginning and socially
disadvantaged farmers. For research, both bills would reorganize USDA’s research,
extension, and economic agencies. Other provisions include changes to the current
crop insurance program in both bills, and provisions in the Senate bill providing
permanent disaster assistance and addressing agricultural security. Both the House
and Senate bills also contain provisions that would make certain changes to tax laws,
which are intended to offset new spending initiatives in the respective bills.

Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Brief Bill Comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2002 Farm Bill Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Projected Cost of the 2007 Farm Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Five-Year versus Ten-Year Estimated Costs . . . . . . . . . . . . . . . . . . . . . . . . . 7
The Administration’s Reaction and Recommendations . . . . . . . . . . . . . . . . 7
Issue Summary of the House and Senate Farm Bills . . . . . . . . . . . . . . . . . . . . . . . 8
Commodity Support and Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . 8
Farm Bill Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Grains, Oilseeds, and Cotton Support . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Dairy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Sugar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Crop Insurance and Disaster Assistance . . . . . . . . . . . . . . . . . . . . . . . 13
Specialty Crops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Competition, Livestock Marketing, and Regulatory Programs . . . . . . . . . . 16
Reportable Meat and Poultry Registries . . . . . . . . . . . . . . . . . . . . . . . 18
Catfish Grading and Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Food from Cloned Animals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Domestic Food Programs and Nutrition . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Conservation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Bioenergy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Rural Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Forestry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Agricultural Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Research Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Agricultural Trade and Food Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Food Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Agricultural Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Farm Service Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Farm Credit System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Agricultural Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Appendix: 2007 Farm Bill Timeline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
List of Tables
Table 1. CBO Estimated Costs for the
House and Senate 2007 Farm Bills (FY2008-FY2012) . . . . . . . . . . . . . . . . 6

Key CRS Policy Staff
Area of Expertise
Name
Telephone
Report Coordinator/Overview;
Renée Johnson
7-9588
Livestock and Competition
Jim Monke
7-9664
Food and Feed Grain Support
Jasper Womach
7-7237
Ralph M. Chite (dairy)
7-7296
Other Commodity Support Programs
Remy Jurenas (sugar)
7-7281
Randy Schnepf (cotton)
7-4277
Payment Limits
Planting Flexibility
Jim Monke
7-9664
Farm Credit
Crop Insurance
Ralph M. Chite
7-7296
Disaster Assistance
Conservation
Jeffrey A. Zinn
7-0248
Randy Schnepf
7-4277
Energy
Tom Capehart
7-2425
Agricultural Trade and Food Aid
Charles E. Hanrahan
7-7235
Specialty Crops; also Agricultural
Jean M. Rawson
7-7283
Research, Extension, & Economics
Meat and Poultry Inspection;
Marketing and Regulatory Programs;
Geoffrey S. Becker
7-7287
Food Safety
Rural Development
Tadlock Cowan
7-7600
Forestry
Ross Gorte
7-7266
Domestic Food Assistance and
Joe Richardson
7-7325
Nutrition Programs

Farm Bill Legislative Action
in the 110th Congress
Most Recent Developments
The House and Senate completed action on their respective versions of a new
farm bill in 2007. However, conference action has been delayed in part because of
differences between Congress and the Administration over the inclusion of tax
provisions in the bill, and the Administration’s demand for additional reform of
commodity programs. Conferees have not been named, although committee staff
have been conferring on many provisions. Congress extended many provisions of
the 2002 farm bill through March 15, 2008, since these provisions were set to expire
in 2007. Among the possible options facing Congress:
! Complete action on a new farm bill by March 15 or further extend
the 2002 farm bill by several weeks in order for Congress to
complete action this year.
! Allow the 2002 farm bill to expire and revert to 1949 permanent
law, which covers only basic commodities and not many other
programs in current law (see CRS Report RL34154, Possible
Expiration of the 2002 Farm Bill,
for more information).
! Extend current law for a year or more, postponing further
consideration of a new farm bill until the next Congress.
Overview
A periodic omnibus farm bill, renewed about every five years, governs federal
farm and food policy. The Farm Security and Rural Investment Act of 2002 (P.L.
107-171) is the most recent farm bill, covering a wide range of programs including
commodity price and income support, farm credit, agricultural conservation,
research, rural development, and foreign and domestic food programs, among others.
Many provisions of the 2002 farm bill expired in 2007.1

In anticipation of the 2007 farm bill, both the House and Senate Agriculture
Committees conducted hearings in Washington and across the country during 2006,
and continued to hold hearings early in 2007.2 Early in 2007, the chairmen of both
1 Certain provisions were extended until March 15, 2008, under the Consolidated
Appropriations Act for FY2008 (P.L. 110-161).
2 Information on House and Senate Agriculture Committee hearings is at [http://agriculture.
(continued...)

CRS-2
the House and Senate Agriculture Committees indicated their intention to complete
work on a new farm bill prior to the August 2007 recess, with full congressional
action by September. The House Agriculture Committee conducted its markup of its
version of the farm bill (H.R. 2419) in mid-July, and completed House floor action
on July 27, 2007. The Senate Agriculture Committee approved its version (S. 2302)
on October 25, 2007. On December 14, the Senate completed floor action on the
farm bill, which was offered as a substitute to H.R. 2419 (Farm, Nutrition, and
Bioenergy Act of 2007). Conference negotiations between the House and Senate are
anticipated to start in January 2008. (See the “2007 Farm Bill Timeline” text box at
the end of this report for a listing of the major actions that have occurred during the
farm bill debate.)
This report describes the major provisions that are in the House and Senate farm
bills. These include proposed changes to commodity support and risk management
policies and programs (such as direct payments, payment limits, revenue and counter-
cyclical payments, crop insurance and disaster assistance, planting flexibility, and
specialty crops), as well as provisions affecting conservation, bioenergy, rural
development, forestry, agricultural research, competition, trade and food aid,
agriculture credit, and domestic food programs and nutrition. Both the House and
Senate bills also contain provisions that would make certain changes to tax laws,
which are intended to offset new spending initiatives in the 2007 farm bill.
More detailed information on specific programs and provisions included in these
two bills are available in a series of separate CRS Reports. CRS Report RL34228,
Comparison of the House and Senate 2007 Farm Bills, provides a side-by-side
comparison of how some of the major provisions in the House and Senate bills could
change current law. Information about what might happen if Congress does not enact
a new farm bill is provided in CRS Report RL34154, Possible Expiration of the 2002
Farm Bill
. These reports and other farm bill information can be found at the CRS
Farm Bill and Farm Policy current legislative issues Web page at [http://apps.crs.gov/
cli/cli.aspx?PRDS_CLI_ITEM_ID=641&from=3&fromId=1].
CRS Report RS22131, What Is the ‘Farm Bill,’ describes the current policy
setting that has influenced the development of the 2007 farm bill. In brief, the 2007
farm bill debate has differed from the 2002 debate in some important ways. First, this
farm bill faces potentially significant budgetary and spending constraints. Second,
current debate continues to be influenced by constraints due to U.S. trade
commitments and obligations under existing multilateral agreements. Third, the
Administration has submitted its own detailed proposal for the 2007 farm bill,
whereas in recent farm bills the Administration has not issued specific
recommendations. Finally, many other groups, including both traditional and non-
agricultural interests, also have submitted specific recommendations that range from
maintaining the status quo to making dramatic policy changes.
2 (...continued)
house.gov/hearings/index.html] and [http://agriculture.senate.gov/Hearings/hearings.cfm].

CRS-3
Congressional Action
As of December 2007, both the House and Senate have completed action on
their respective versions of the farm bill, passed as H.R. 2419 (Farm, Nutrition, and
Bioenergy Act of 2007). Conference negotiations between the two chambers are
anticipated to start in early 2008.
Brief Bill Comparison
Both the House and Senate farm bills seek many of the same types of changes
to existing legislation and programs, but there are numerous differences. For
commodities (Title I), both bills generally continue the framework of the 2002 farm
bill, revise payment limitations, and adjust target prices and loan rates for some
commodities. Both bills cover the 2008 through 2012 crop years. The House bill
would offer a one-time choice for a national-based “revenue counter-cyclical
payment” beginning in 2008, while the Senate bill would offer a one-time choice for
a state-level “average crop revenue” program beginning in 2010.
Both the House and Senate bills would add new provisions to address
horticulture and livestock issues. However, whereas the House bill creates a new
horticulture title, the Senate bill instead creates a new livestock title. The House and
Senate bills both add new horticulture provisions providing mandatory funding for
specialty crop block grants and add new provisions supporting organic production,
among other provisions. New animal provisions include changes in meat and poultry
inspections, and country-of-origin labeling requirements; the Senate bill also includes
extensive provisions affecting packer ownership and other competition issues.
The nutrition title (Title IV) of the House and Senate farm bills diverge
substantially on both the total level of new funding provided for nutrition programs
and the allocation of the new funding among programs. However, in most cases, the
bills include very similar policy changes: increased food stamp benefits and loosened
eligibility standards, greater funding for the fresh fruit and vegetable program in
schools and The Emergency Food Assistance Program (TEFAP). Under the farm
bills’ international food aid and trade provisions (Title III), both the House and
Senate bills would reauthorize funding for USDA’s international food aid export
market development, export credits, and export guarantees, as well as address
barriers to U.S. agriculture exports.
Under the conservation (Title II), energy (Title IX), rural development (Title
VI), and forestry titles (Title IX), both the House and the Senate bills reauthorize,
expand, and/or modify many of the existing programs, and create new programs and
initiatives, or allow some programs to expire. In some cases, there are numerous
differences between the House and Senate bills for individual provisions within these
titles. Both the House and Senate bill also reauthorize, expand, and/or modify many
of the existing provisions under the research title (Title VII). Both bills seek to
reorganize the administration of USDA’s research, extension, and economic
agencies; however, the House bill would further require the President to submit a
unified annual budget across agencies and establish a new national institution to
administer all competitive programs.

CRS-4
Both bills also would expand borrowing opportunities under USDA’s Farm
Service Agency loan program (Title V). Among other provisions are changes to the
current crop insurance program. Provisions in the Senate bill would also provide for
permanent disaster assistance and address agricultural security and animal quarantine
inspections.
The report section titled “Issue Summary of the House and Senate Farm Bills”
provides a more detailed description of the major provisions in both bills.
This report does not include a detailed discussion of some of the revenue and
offsetting cost provisions that are contained in both the House and Senate farm bills
but are outside the jurisdiction of the agriculture committees. These provisions
would make certain changes to tax laws that are intended to offset additional
spending in the farm bill, and were added by both chambers in order to comply with
current pay-go budget rules.
In the House bill, the Congressional Budget Office (CBO) estimates that these
revenue and offsetting provisions would account for $5.95 billion in savings over
five years (FY2008-FY2012).3 These provisions amend the tax code to limit certain
benefits affecting foreign-based firms; change the timing of corporate taxes; establish
a conservation of resources fee for producing federal oil and gas leases in the Gulf
of Mexico; and repeal existing oil and gas royalties. These provisions were added
to the House bill largely as part of a manager’s amendment during the House floor
debate. For more information on these provisions, see CRS Report RL33768, Major
Tax Issues in the 110th Congress.

Revenue and offsetting provisions in the Senate farm bill provide a CBO-
estimated net savings of $5.6 billion over five years (FY2008-FY2012).4 These
provisions amend the tax code to curtail the use of tax shelters and make other
changes, including accelerating the effective date of existing restrictions on
sale/lease-back transactions, modifying the optional method of computing net
earnings from self employment, and other agriculture-related and revenue provisions.
These provisions originated from a bill approved by the Senate Finance Committee
(S. 2242, S.Rept. 110-206), which contained a set of tax provisions related to energy,
conservation, and agriculture. On the Senate floor, S. 2242 was merged with the
Senate Agriculture Committee farm bill (S. 2302), which served as the basis for the
Senate substitute to the House-passed farm bill. CRS Report RL33768, Major Tax
Issues in the 110th Congress,
provides more information on these provisions.
3 CBO estimates of the House-passed bill, H.R. 2419, Oct. 5, 2007, at [http://www.cbo.gov/
ftpdocs/86xx/doc8686/hr2419HPassed.pdf].
4 See CBO estimates of S.Amdt. 3500, offered as a substitute for H.R. 2419, Nov. 6, 2007,
at [http://www.cbo.gov/ftpdocs/87xx/doc8791/CombinedSenateAgLtr.pdf] and CBO
estimates of S. 2242, Heartland, Habitat, Harvest, and Horticulture Act of 2007, Oct. 29,
2007, at [http://www.cbo.gov/ftpdocs/87xx/doc8760/Heartland.pdf].

CRS-5
2002 Farm Bill Extension
The Consolidated Appropriations Act for FY2008 (P.L. 110-161), which funds
most domestic programs for FY2008, extends certain provisions of the 2002 farm bill
until March 15, 2008. The duration of the extension is expected to be sufficient for
conference negotiations to resolve differences between the House- and Senate-passed
farm bills. A new farm bill is expected to become effective for the 2008 crop year
for most of the supported farm commodities, and for other programs for the
remainder of FY2008 and beyond.
Division A of the Consolidated Appropriations Act covers agricultural
programs; Section 751 contains the farm bill extension. The extension states that,
unless otherwise excepted, 2002 farm bill provisions in effect on September 30,
2007, shall continue until March 15, 2008. Three conservation programs are funded
at specific levels (Farmland Protection Program at $97 million/year, Ground and
Surface Water Conservation at $60 million/year, and Wildlife Habitat Incentives
Program at $85 million/year). The dairy and sugar programs are included in the
extension. The dairy price support program would have expired December 31 and
would have been replaced with costlier support provisions in permanent law. Price
support loan programs for wool and mohair also are extended since those crop years
begin on January 1.
Programs that are not extended by the consolidated appropriations act include
the direct, counter-cyclical, and marketing loan programs for the 2008 crop year for
all other supported commodities, peanut storage payments, agricultural management
assistance for conservation, community food projects in the food stamp program, the
rural broadband program, value-added market development grants, federal
procurement of biobased products (2002 farm bill, Sec. 9002), the biodiesel fuel
education program (Sec. 9004), and the renewable energy systems program (Sec.
9006).
Projected Cost of the 2007 Farm Bill
Over the five-year time frame (FY2008-FY2012) of the proposed 2007 farm
bill, total spending is estimated by CBO to be $286.2 billion in the House-passed bill
and $285.8 billion in the Senate version of the bill.5 Table 1 provides a breakdown
of spending in each bill by major program area. Each bill has as its basis the March
2007 CBO baseline budget, which contains $280.3 billion in projected spending for
all farm bill-related programs.
5 Estimates reflect the cost of the bills’ mandatory programs only. The bills also include
authorization of appropriations for discretionary programs not included in these estimates.

CRS-6
Table 1. CBO Estimated Costs for the
House and Senate 2007 Farm Bills (FY2008-FY2012)
Commodity
Conser-
Trade/
Crop
Energy
Nutrition
Othera
Total
Support
vation
Aid
Insur.
(Outlays in Billion $)
House Farm Bill
5-Year Total (FY2008-FY2012)
March 2007 Baseline
36.5
21.6
0.0
1.7
192.2
25.7
2.6
280.3
CBO Score:House Bill
(1.0)
2.8
2.4
0.6
4.2
(4.0)
0.9
5.9
Total Est. Spending
35.5
24.4
2.4
2.3
196.4
21.7
3.5
286.2
Offsets/Revenueb




— —

(6.0)
Estimated Cost after




— —

Offsets/Rev.
280.2
Senate Farm Bill
5-Year Total (FY2008-FY2012)
March 2007 Baseline
36.5
21.6
0.0
1.7
192.2
25.7
2.6
280.3
CBO Score: Senate Bill
(3.5)
4.4
1.0
0.1
5.3
(3.7)
1.9
5.5
Total Est. Spending
33.0
26.0
1.0
1.8
197.5
22.0
4.5
285.8
Offsets/Revenueb







(5.6)
Estimated Cost after

Offsets/Rev.







280.2
Source: Compiled by CRS using the Congressional Budget Office (CBO) March 2007 baseline and the CBO scores of the House-
passed farm bill (H.R. 2419) and the Senate substitute amendment to H.R. 2419 which consolidates the Senate Agriculture
Committee reported 2007 farm bill (S. 2302) with the Senate Finance Committee’s provisions (S. 2242).
a. In the March 2007 baseline, the “other’ category includes agricultural research, rural development, and forestry, among other
areas of spending. Other in the House 2007 farm bill is primarily for new specialty crop assistance, and minority and beginning
farmer assistance. Other in the Senate farm bill includes new spending for a permanent disaster payment program, specialty crop
assistance, and rural development.
b. “Offsets/revenue” represents offsetting receipts and increases in revenue that are included in the House and Senate farm bills,
but are outside the jurisdiction of the agriculture committees. These are included in the bill to offset the cost of new spending in
the House and Senate bills that is in excess of the budget baseline.
CBO estimates new authorized spending (above the baseline) of $5.9 billion in
the House bill and $5.5 billion in the Senate version. As required by the FY2008
budget resolution, this new spending must be offset by comparable reductions in
spending or increases in revenue. The House bill contains $6.0 billion and the Senate
version $5.9 billion in revenue offsets that in effect make both versions budget-
neutral. These offsets are outside the jurisdiction of the agriculture committees, but
are provided by actions taken in the House Ways and Means and Senate Finance
Committees. For more background on the farm bill and the budget, see CRS Report
RS22694, Farm Bill Budget and Costs.
Under the House bill, CBO estimates five-year spending increases of $4.2
billion for the farm bill’s nutrition programs (mostly food stamps), $2.8 billion for
farm conservation programs, and $2.4 billion for energy programs. Under the Senate
bill, CBO estimates spending increases of $5.3 billion for nutrition programs, $4.4
billion for conservation programs, and $1.0 billion for energy programs. CBO
estimates spending reductions in both bills for commodity support programs and

CRS-7
other programs, particularly crop insurance, with some changes reflecting a shift in
the timing of payments to score savings for budgetary purposes.
Five-Year versus Ten-Year Estimated Costs
The House and the Senate bills differ in their respective 5-year (FY2008-
FY2012) and 10-year (FY2008-FY2017) budget estimates of new spending authority.
According to CBO, both the House and Senate bills contain between $5 billion and
$6 billion in new outlays over 5 years. However, over 10 years, the House bill has
$14.0 billion in net new spending compared with $8.7 billion in the Senate bill. This
difference reflects new spending in the House bill over the full 10-year period,
whereas the Senate bill extends new spending only over the 5-year period for most
authorized programs. This difference also reflects spending differences between the
two bills for farm commodity support in Title I.
Both bills separately meet budget requirements by offsetting new spending with
revenue (tax) provisions and other cost savings. However, for many of the Senate
farm bill titles, new spending ends after the 5-year life of the farm bill or costs are
delayed until the second 5 years. This affects new spending provisions in the
nutrition, conservation, and energy titles, among other titles and programs. In the
House bill, most of the new spending measures are effective over the 10-year budget
horizon of the bill. Because of these budget differences and approaches to program
changes, reconciling differences between the House and Senate may be difficult
within budgetary restrictions.
For example, enhancements made to the nutrition title in the House bill are
permanent, whereas the Senate terminates most of their enhancements after FY2012.
This effectively removes the new spending provided by the Senate version of the
farm bill. Likewise the commodity titles of the two bills have discrepancies in their
5- and 10-year costs. The House bill begins its changes in the first year, while the
Senate bill delays implementation of a major new program. This results in the Senate
bill scoring larger savings than the House in the first 5 years and delaying new
program costs until later years.
The Administration’s Reaction and Recommendations
The Administration has indicated it would likely veto the House and Senate
farm bills, if either is presented to the President as the final farm bill. Among the
reasons cited by the Administration is the inclusion of certain revenue and tax-related
provisions in both bills. Other cited reasons include concerns that the House and
Senate bills do not go far enough to implement policy changes favored by the
Administration, including cuts in farm income subsidies, as well as concerns about
possible incompatibility with U.S. obligations under the World Trade Organization
(WTO), among other policy issues and budgetary concerns.6
6 See Office of Management and Budget (OMB), “Statement of Administration Policy H.R.
2419 — Food and Energy Security Act of 2007 (Senator Harkin (D) Iowa),” Nov. 6, 2007,
at [http://www.whitehouse.gov/omb/legislative/sap/110-1/hr2419sap-s.pdf]; and OMB,
(continued...)

CRS-8
The Administration’s position statement refers to its own policy
recommendations for the 2007 farm bill, which were released in January 2007.
These recommendations proposed to alter many aspects of the current commodity
support system and other existing farm bill programs.7 The Administration’s stated
approach for designing its 2007 farm bill recommendations was to take a
“reform-minded and fiscally responsible approach to making farm policy more
equitable, predictable and protected from challenge.”8 In part, this referred to the
Administration’s perceived need to more evenly distribute federal program spending
and benefits across a larger share of the U.S. farm community, as well as the
perceived need to modify current farm programs to better comply with WTO
obligations and limit future legal challenges from other countries. For more
information on the USDA proposal, see CRS Report RL33916, The USDA 2007
Farm Bill Proposal: Possible Questions
.
Issue Summary of the
House and Senate Farm Bills
The following is a discussion of the major topics and issues in the House and
Senate farm bills.
Commodity Support and Risk Management
Farm Bill Extension. Although the Consolidated Appropriations Act for
FY2008 extends certain otherwise expiring provisions of the 2002 farm bill until
March 15, 2008, it does not extend the direct, counter-cyclical, and marketing loan
programs for the 2008 crop year. Only the price support loan programs for wool and
mohair are extended since those marketing years begin on January 1. The dairy and
sugar programs also are included in the extension. The dairy price support program
would have expired December 31 and would have been replaced with costlier support
provisions in permanent law. However, for all of the other supported commodities,
permanent law would not begin to take effect until the wheat harvest begins in June
2008, leaving time for conferees to enact a new farm bill. For more background, see
CRS Report RL34154, Possible Expiration of the 2002 Farm Bill.
Grains, Oilseeds, and Cotton Support. Both the House and Senate farm
bills generally continue the framework of the 2002 farm bill, revise payment
6 (...continued)
“Statement of Administration Policy H.R. 2419 — Farm, Nutrition and Bioenergy Act of
2007 (Rep. Peterson (D) MN),” July 25, 2007, at [http://www.whitehouse.gov/
omb/legislative/sap/110-1/hr2419sap-r.pdf]. Also see USDA, “Transcript of Remarks by
Acting Agriculture Secretary Chuck Conner,” Dec. 5, 2007, Release No. 0368.07.
7 USDA, USDA’s 2007 Farm Bill Proposals, January 31, 2007, at [http://www.usda.gov/
documents/07finalfbp.pdf]. Reports and other related materials are at [http://www.usda.
gov/wps/portal/!ut/p/_s.7_0_A/7_0_1UH?navid=FARM_BILL_FORUMS].
8 USDA, “Johanns Unveils 2007 Farm Bill Proposals,” Release No. 0020.07, January 31,
2007, at [http://www.usda.gov/wps/portal/usdahome].

CRS-9
limitations by tightening some limits and relaxing others, and adjust target prices and
loan rates for some commodities. Both bills cover the 2008 through 2012 crop years.
The House bill would offer a one-time choice for a national-based “revenue counter-
cyclical payment” beginning in 2008, while the Senate bill would offer a one-time
choice for a state-level “average crop revenue” (ACR) program beginning in 2010.
The CBO estimate of the House bill’s Title I programs is a reduction of $973
million over five years (-2.7% compared with the $36.5 billion farm commodity
support baseline budget estimate), and a reduction of $825 million over 10 years. For
the Senate bill, the CBO score for the comparable commodity provisions (excluding
crop insurance and specialty crops) is a reduction of about $4.2 billion over five years
and a reduction of $1.7 billion over 10 years. The Senate bill has a larger difference
between the 5- and 10-year scores because of the delayed implementation of the ACR
program and the relatively sooner reduction in direct payments for ACR participants
compared with outlays in the ACR program. For more background, see CRS Report
RS21999, Farm Commodity Programs and the 2007 Farm Bill.
Payment Limits. Payment limits in current law set the maximum amount of
farm program payments that a person can receive at $360,000 per year. In addition,
an income test denies payments to households with adjusted gross income (AGI) over
$2.5 million, unless more than 75% comes from farming. The debate over payment
limits usually focuses on the size of farms that should be supported, whether
payments should be proportional to production or limited per individual, and the need
to reduce spending. For more background, see CRS Report RS21493, Payment
Limits for Farm Commodity Programs: Issues and Proposals
.
Both the House and Senate farm bills make several changes to payment limits,
some tightening the limits and others relaxing the limits. Limits are tightened in both
bills by (1) reducing the AGI limit, (2) eliminating the “3-entity rule,” which allows
individuals to double their payments by having multiple ownership interests, and (3)
requiring “direct attribution” of payments to a natural person instead of to a
corporation, general partnership, etc. Payment limits are relaxed in both bills by
eliminating the $75,000 limit on the marketing loan program. The latter change is
in response to perceived abuse of commodity certificates, which were unlimited and
used to avoid the limit. Instead of applying the existing marketing loan limit to all
marketing loan options (as proposed in the Dorgan/Grassley amendment), both bills
resolve the inconsistency by eliminating the marketing loan limit altogether. The
House bill also raises the limit on direct payments from $40,000 to $60,000. The
Senate bill lowers the limit on counter-cyclical payments from $65,000 to $60,000.
The Senate bill preserves a separate limit for peanuts, which the House bill combines
with other commodities.
Some opponents to further tightening payment limits point out that the limit is
reduced from $360,000 to $250,000 in the House bill and to $200,000 in the Senate
bill, and that no additional restrictions are needed. However, advocates for tighter
limits respond by saying that this comparison, which suggests a reduction, is
misleading since payment limits are eliminated for marketing loans — one of the
components of the $360,000 limit. The lower limits in the House and Senate bill are
only for two types of payments (direct and counter-cyclical) instead of three (direct,
counter-cyclical, and marketing loans).

CRS-10
Regarding the AGI limit, the House bill lowers the AGI limit to $1 million with
no exceptions beginning in the 2008 crop year, and to $500,000 for individuals who
do not earn more than 67% of their income from farming. The Senate bill gradually
lowers the AGI limit, but does not have a firm upper cap like the House bill and does
not lower it by as much or as quickly. In the 2009 crop year, the Senate bill lowers
the AGI limit to $1 million for individuals who do not earn more than 67% of their
income from farming. For 2010-2012, the Senate bill has a $750,000 AGI cap for
the same individuals.
Two Senate floor amendments on payment limits failed to get 60 votes to avoid
a filibuster and thus were not adopted. An amendment by Senators Grassley and
Dorgan to lower the limit on payments from $360,000 to $250,000 and apply the
limits to all marketing loan options did not achieve a 60-vote requirement by a vote
of 56-43 (S.Amdt. 3695). An amendment by Senator Klobuchar to tighten the AGI
limit to $250,000 unless more than 67% of AGI is farm income, and to $750,000
with no exceptions, did not achieve a 60-vote requirement by a vote of 48-47
(S.Amdt. 3810).
CBO scores the payment limit changes in the House bill to save $227 million
over five years. For the Senate bill, the CBO score is lower, a savings of $191
million over five years, owing to the smaller reduction and delayed implementation.
The Administration continues to express a veto threat over the lack of tighter
payments limits in either bill, particularly the AGI limit, as the Administration had
proposed ($200,000 AGI limit with no exceptions).
Direct Payments and Base Acres. Direct payments are fixed annual
payments based on historical production. Recent high commodity prices and high
farm incomes have made it difficult for some to justify the annual $5 billion in direct
payments. Both the House and Senate bills would extend direct payments through
the 2012 crop year. However, to score savings, both bills would eliminate the
advanced installment of direct payments in the last year of the farm bill (2012).
According to CBO, this would shift about $1.1 billion of payments into a later fiscal
year without reducing total payments to farmers. In the Senate bill, participants in
the ACR program (described next) would not receive direct payments, but would
instead receive a “fixed” $15/acre payment regardless of the commodity as one
component of the ACR program. Based on expectations of participation in the ACR
program, the reduction in direct payments because of the interaction with ACR is
estimated at about $7 billion through FY2012, and $25 billion over 10 years.
The House bill also would eliminate direct and counter-cyclical payments to
recipients entitled to less than $25, and permanently deny program participation to
people convicted of defrauding USDA. The Senate bill adds a new rule that would
eliminate base acres on land that had been subdivided into multiple residential units
or other non-farming uses. Prior rules have eliminated base only for land developed
for nonagricultural commercial or industrial use. The Senate bill also codifies into
statute existing USDA regulations that commodity payments to estates be limited to
two years (but without exception), and it requires annual reports to Congress on
payments to estates. This provision is in response to a 2007 GAO report showing

CRS-11
that farm commodity payments continue to be paid to deceased farmers or their
estates beyond the two-year regulation.
Counter-cyclical Payments. Counter-cyclical payments provide automatic
payments to farmers when market prices are below a target price set in statute.
Historically, farm commodity programs have focused on price, while crop insurance
programs have focused on yield. But producers have cited insufficient government
support during drought years when yields are low and prices are high, because they
have little to sell and receive no counter-cyclical price support. The National Corn
Growers Association and the USDA advocate for revenue-based support.
The Senate bill would offer farmers a choice between traditional program
payments and an ACR payment. The ACR plan is based on whether actual state-
level revenue drops below an expected revenue target, crop by crop. The program
would begin with the 2010 crop year and participation would apply to all of the
covered crops on a farm for the remainder of the farm bill. Instead of the traditional
direct, counter-cyclical, and marketing loan program, the ACR program offers a $15
per acre direct payment for every crop, a revenue-based payment, and recourse loans.
The ACR provision consumed much of the time during Senate Agriculture
Committee markup, particularly over an amendment that was adopted that would not
allow crop insurance premiums to be rerated (reduced) for ACR participants. The
concern was that ACR participants in the lower-risk primary growing regions would
no longer buy high levels of crop insurance, thus causing insurance premiums to rise
for other growers who would be left in a smaller, riskier pool of farms. The CBO
score of the Senate bill’s ACR program is an additional cost of $4.1 billion through
FY2012 and $29 billion over 10 years. The 10-year score is relatively higher because
the ACR does not begin until the 2010 crop year, and some payments are delayed
until the end of the marketing year, putting more costs into the second 5-year
window. These costs include both the “fixed” and the revenue-counter components
of ACR and thus must be combined with scoring of direct payments to make a
complete comparison. In the 5-year score, the ACR and direct payment provisions
together save about $4 billion; in the 10-year score, they cost about $3.4 billion.
The House bill would offer farmers a one-time choice between the existing price
counter-cyclical payments and a new “revenue counter-cyclical payment.” The
House bill’s option would replace only the price-based counter-cyclical payment,
leaving direct payments and marketing loans unchanged. The House’s revenue-based
option is modeled largely on the Administration’s proposal. CBO says the House’s
counter-cyclical program changes would save $652 million over five years.
For the traditional price-based counter-cyclical program, the House bill would
increase target prices for six commodities and slightly reduce the target price for
cotton. The Senate bill adjusts the same commodities plus sorghum, and adds
counter-cyclical support for dry peas, lentils, and chickpeas. Both bills eliminate
advance counter-cyclical payments in 2011 and delay final payments.
Marketing Loans and Related Assistance. The House bill increases
support prices for seven commodities and reduces support prices for two. The Senate
bill adjusts the same seven commodities as the House, plus one more, and adds large
chickpeas to the list of eligible commodities. The House bill sets the loan repayment

CRS-12
price for cotton at the Far East price. The Senate bill has only a recourse loan for
participants in the ACR program, thus eliminating many of the subsidy benefits of
the nonrecourse loan program. CBO estimates that the House bill changes would
cost $615 million over five years; the estimate for the Senate bill’s provisions would
be for savings of $538 million after adjusting for ACR changes that reduce
participation in the marketing loan program. Both bills create a new payment for
domestic users of upland cotton to build or modernize buildings and equipment.
CBO scores this cotton users provision at $427 million over five years in the House
bill and $337 million in the Senate bill.
Planting Flexibility, Fruits and Vegetables, and the WTO. The direct
payments program gives producers the flexibility to make planting choices based on
actual market conditions instead of subsidy rules, but there are prohibitions on
planting fruits, vegetables, and wild rice on program crop base acres. The purpose
of the planting restriction is to protect growers of unsubsidized fruits and vegetables
from competing with production on subsidized cropland. However, there have been
some reported problems with the policy. The WTO determined that the restrictions
are inconsistent with the rules of a minimally distorting subsidy, which could
jeopardize the “green box” classification for direct payments.
Both the House and Senate farm bills do not change the fruit and vegetable
planting restriction, although they create a pilot program allowing up to 10,000 acres
of tomatoes to be grown on base acres in Indiana with a corresponding one-year
reduction in payment acres (the Senate’s provision applies only to the 2008 and 2009
crop years). For participants in the ACR program, the Senate bill offers additional
planting flexibility for fruits and vegetable for processing on up to 10,000 acres in
each of seven Midwestern states. These additional flexibilities, however, do not
address concerns about WTO compliance. USDA proposes to eliminate the fruit and
vegetable planting restriction completely. For more information, see CRS Report
RL34019, Eliminating the Planting Restrictions on Fruit and Vegetables in the Farm
Commodity Programs
.
Dairy. Two federal programs that support milk prices and dairy farm income
are expiring in 2007 — the dairy price support program (DPSP) and the Milk Income
Loss Contract (MILC) program. Both the House and Senate farm bills would extend
the dairy support program for five years (through 2012), but would modify it to
directly support the prices of certain manufactured dairy products at mandated levels
rather than supporting the farm price of milk.
Under expiring current law, the MILC program pays participating farmers 34%
of the difference between a target price of $16.94 per hundredweight (cwt.) and the
monthly market price for farm fluid milk in New England, when the market price is
below the target. Per farm payments are limited to the first 2.4 million lbs. of annual
milk production. Both the House and Senate bills extend the program through
September 30, 2012. However, the Senate bill would increase the payment rate from
34% to 45% of the price shortfall, and would increase the payment limit to 4.15
million lbs. of annual production for the next five years. CBO estimates that these
two Senate modifications would increase the cost of the program by $441 million
over five years. The House bill would extend the program at the expiring level of
support.

CRS-13
A third federal dairy policy tool, federal milk marketing orders, require dairy
processors to pay a minimum price for farm milk depending on its end use. Federal
orders are permanently authorized, but a number of issues have been brought to the
attention of Congress for the farm bill debate. Dairy processors are seeking a change
in statute to exempt them from paying the federal milk marketing order minimum
price whenever they forward contract prices with dairy farmers. Both bills authorize
a temporary forward contract program (through September 30, 2012) and contain
safeguards designed to ensure that dairy farmers are not compelled by processors to
participate in the program. Both bills also would authorize a commission to review
and evaluate federal milk marketing order policies and procedures and require the
commission to report its findings within two years of its first meeting. For more
information, see CRS Report RL34036, Dairy Policy and the 2007 Farm Bill.
Sugar. The sugar program is designed to guarantee the price received by
growers and processors of sugarcane and sugar beets, but at no cost to the U.S.
Treasury. To accomplish this, USDA limits the amount of sugar that processors can
sell domestically under “marketing allotments” and restricts imports, in order to keep
market prices above support levels. This way, the incentive exists for sugar cane
processors and beet refiners to repay nonrecourse price support loans9 extended by
USDA rather than hand over processed sugar as payment (commonly referred to as
loan forfeitures).
To address the potential for a U.S. sugar surplus caused by unrestricted imports
from Mexico under the North American Free Trade Agreement (NAFTA) and
projected loan forfeitures, both the House and Senate farm bills would mandate a
sugar-for-ethanol provision. USDA would be required to purchase U.S.-produced
sugar roughly equal to excess imports, if necessary to maintain market prices above
support levels. Sugar purchased would then be sold to bioenergy producers for
processing into ethanol. USDA’s Commodity Credit Corporation would provide
open-ended funding for this program. Other provisions would increase the raw sugar
and refined beet loan rates, and tighten the rules (i.e., remove discretionary authority)
that USDA exercises to implement marketing allotments and/or administer import
quotas. The key difference is that the Senate bill would increase loan rates by some
6-7% compared to the House measure’s near 3%. Though CBO scores some savings
with the ethanol program, it projects the sugar program will cost about $650 million
over five years.
For more background, see CRS Report RL34103, Sugar Policy and the 2007
Farm Bill.
Crop Insurance and Disaster Assistance. The federal crop insurance
program is designed to protect crop producers from unavoidable risks associated with
9 A type of loan where farmers or processors pledge a commodity as collateral to obtain a
loan from the Commodity Credit Corporation (CCC) at a commodity-specific, per-unit loan
rate. The borrower may repay the loan, with interest, within a specified period and regain
control of the commodity. Alternatively, the commodity can be forfeited to the CCC with
no penalty if market prices fall below the loan rate at the end of the term. The government
takes no recourse beyond accepting the commodity as full settlement of the loan.

CRS-14
adverse weather, weather-related plant diseases, and insect infestations. Although
the scope of the crop insurance program has widened significantly over the past 25
years, the anticipated goal that it would replace ad hoc disaster payments has not
been achieved.
The crop insurance program is permanently authorized and hence does not
require consideration in the farm bill. Some policymakers have expressed interest
in expanding the crop insurance program in the context of the farm bill and/or
complementing it with a permanent disaster payment program. However, many view
the crop insurance program as a potential target for program cost reductions, where
savings could be used to fund new initiatives in various titles of the farm bill. The
Administration and others contend that the private companies should be required to
absorb more of the program losses, and that the reimbursement rate for their
operating expenses needs to be reduced as a means of reducing federal costs. The
insurance companies and many farm groups are concerned that significant reductions
in federal support will negatively impact the financial health of the crop insurance
industry and possibly jeopardize the delivery of crop insurance, particularly in high-
risk areas.
Both the House and Senate farm bills contain several revisions to the crop
insurance program. Many of these changes are cost-saving measures, which CBO
has estimated would save an estimated $3 to $4 billion in outlays over five years
(FY2008-FY2012). In both measures, approximately $2.5 to $2.7 billion of this
estimated savings would be achieved through changes in the timing of premium
receipts from farmers, and payments to the companies, neither of which would have
any financial bearing on participating farmers or insurers. However, a portion of the
five-year savings is realized by requiring insurance companies and farmers to share
more in program costs and risks. In both bills, farmers would be required to pay
higher fees for catastrophic coverage and for participation in the noninsured
assistance program. The House bill reduces reimbursements to private companies
for their administrative and operating expenses on all plans of insurance, while the
Senate bill reduces the reimbursement for policies other than for catastrophic
coverage. The House bill also requires the insurance companies to share more of
their underwriting gains with the government. An amendment (S.Amdt. 3419) to the
Senate farm bill that would have required the private companies to share their gains
with the government and further reduce their expense reimbursement was defeated
on the Senate floor.
The Senate farm bill also contains authority for a five-year, $5.1 billion
permanent disaster payment program that would be funded through a transfer of
funds from customs receipts. A similar permanent disaster program was considered
as part of the House farm bill in committee, but was removed because of cost
considerations.

For more information on crop insurance and disaster assistance, see CRS
Report RL34207, Crop Insurance and Disaster Assistance: 2007 Farm Bill Issues,
and CRS Report RS21212, Agricultural Disaster Assistance.

CRS-15
Specialty Crops. Sales of specialty crops, such as fruits, vegetables, and tree
nuts, account for nearly one-third of U.S. crop cash receipts and one-fifth of U.S.
agricultural exports, according to USDA. When floriculture, greenhouse, and nursery
crop sales are included, total specialty crops account for nearly 50% of all U.S. farm
crop cash receipts. However, specialty crop producers are not eligible for commodity
income support programs; also, few provisions in the farm bill’s 2002 conservation,
trade, research, and nutrition titles specifically address the specialty crop industry.
For more information, see CRS Report RL33520, Specialty Crops: 2007 Farm Bill
Issues
.
One of the key provisions in both the House and Senate farm bills is the
reauthorization of the specialty crop block grant program established by the Specialty
Crops Competitiveness Act of 2004 (P.L. 108-465). Under this program, each state
receives a grant to support marketing research and promotion to enhance the
competitiveness of specialty crops grown in the state. Mandatory funding levels
differ between the House and Senate bills: the House bill would provide $365 million
for the program over five years; the Senate bill would provide $270 million over five
years. Under the authority of the 2004 act, Congress appropriated $7 million for the
specialty crop block grant program in both FY2006 and FY2007. (Actual spending
estimates cited here and below for the Senate-passed bill are subject to change
pending completion of the final text of the Senate bill.)
A second component of the House and Senate bills is the addition of provisions
supporting organic production. Both bills would reauthorize the National Organic
Cost-share Program10 by providing a one-time transfer of $22 million in FY2008
(available until expended) to help defray farmers’ costs for obtaining certification
under the National Organic Program; both bills would raise the amount that an
individual farmer can receive in cost-share assistance from $500 to $750. Both the
House and Senate farm bills also include mandatory funding for data collection on
organically grown crops: the Senate provides $5 million for organic data collection
and price reporting; the House provides $3 million in funding. Other provisions in
the House bill would authorize appropriations of $50 million over five years to
provide technical assistance and cost-sharing grants to farmers seeking to convert
from conventional to organic production. Other provisions in the Senate bill would
increase authorized incremental funding levels for the National Organic Program for
use in compliance and oversight; and would exempt organic farms from assessments
under the commodity promotion programs.
Another provision in both bills is mandatory funding to expand the existing
Farmers’ Market Promotion Program into a Farmers Marketing Assistance Program:
the House calls for $32 million in mandatory funding; the Senate would provide $30
million. Both bills also would create a Healthy Food Enterprise Development
program, although each would take a differing approach. This program addresses the
issue of the availability of affordable, nutritious fresh foods in low-income
communities and neighborhoods. Both the House and Senate bills also specify the
purchase of specialty crops using Section 32 funds, in addition to purchases required
10 In the 2002 farm bill, Congress established this program and provided a one-time transfer
of $5 million in mandatory funds to help transition farmers to organic production.

CRS-16
in the 2002 farm bill. Other provisions in the House bill include increased funding
of specialty crops for USDA nutrition programs; authority for larger disaster
payments to tree fruit producers for weather-related losses; and funding for pest and
disease control programs. Other provisions in the Senate bill would provide $24
million in new money for technical assistance to address export barriers for specialty
crops, among other provisions.
A major organizational difference between the House and Senate bills is that the
House bill contains a title on Horticulture and Organic Agriculture (Title X),
whereas the Senate bill does not contain a separate title and instead includes these
provisions under Subtitle F of Title I (Producer Income Protection).
Competition, Livestock Marketing,
and Regulatory Programs

Rapid changes have occurred in recent decades in the structure and business
methods of agriculture in general and of animal agriculture in particular. Production
and marketing have been moving toward fewer and larger operations (sometimes
referred to as consolidation or concentration), and toward vertical integration,
although the pace of these changes has varied widely across the sectors. Debate has
revolved around the impact of such changes on farm prices, on the traditional system
of independent, family-based agriculture, on consumers, and on global
competitiveness. Inherent in these questions is the role government should play in
monitoring and regulating agricultural markets. For more information see CRS
Report RL33958, Animal Agriculture: 2007 Farm Bill Issues.
The Senate bill contains a title on Livestock, Marketing, Regulatory, and
Related Programs (Title X) that is based in part on a wide-ranging bill (S. 622)
introduced earlier by its chairman. One major change in Title X would prohibit most
major packers from owning, feeding, or controlling livestock except within 14 days
of slaughter. Another major provision would establish at USDA a new Special
Counsel for Agricultural Competition to investigate and prosecute violations of
competition laws. Other provisions in Title X would: change the Agricultural Fair
Practices Act to expand coverage to producer members of associations and handlers,
and to strengthen USDA’s oversight and enforcement of the act; give USDA stronger
enforcement authorities over live poultry dealers under the Packers and Stockyards
Act; require that any arbitration clauses in production contracts between integrators
and animal producers are voluntary for both sides; and generally require integrators
to provide at least 90 days’ notice before terminating a contract with a producer who
has made a capital investment of at least $100,000 to fulfill the contract. The House-
passed bill does not contain comparable “competition” provisions, although it does
require USDA to issue regulations on what arbitration provisions are to be permitted
in contracts.
The Senate livestock and marketing title would require USDA to issue rules to
protect proprietary and/or confidential business information that farmers and ranchers
disclose in the course of participation in an animal identification system. The Senate
bill also establishes a new program for mandatory daily product information
reporting for dairy, and amends existing swine and pork provisions, under the

CRS-17
Livestock Mandatory Price Reporting program administered by USDA’s Agricultural
Marketing Service (AMS).
Country-of-Origin Labeling. The 2002 farm bill (§10816 of P.L. 107-171)
required retailers to provide country-of-origin labeling (COOL) for fresh produce, red
meats, peanuts, and seafood by September 30, 2004. Congress has twice postponed
implementation for all but seafood; COOL now must be implemented by September
30, 2008. COOL does not apply to processed versions of these products, to poultry,
a competing meat, or to dining-out establishments. Vigorous debate has continued
over whether this new program is desirable and necessary, its purposes, and its likely
impacts on farmers, processors, retailers and consumers. Opponents of mandatory
COOL prefer a voluntary or market-driven program or at least some relaxation of the
COOL law’s compliance language. Supporters continue to seek Congress’s and
USDA’s assurance that the mandatory program will be implemented expeditiously.
For a more detailed description of the law, requirements and issues see CRS Report
97-508, Country-of-Origin Labeling for Foods.
Both the House and Senate farm bills would implement the mandatory program
on its current schedule. However, for red meats, it creates several new types of label
categories that are intended to facilitate and simplify compliance in specifying the
country or countries of the products. For all covered commodities, the bill also
would ease recordkeeping and verification requirements, and lower noncompliance
penalties. The House bill also extends COOL to goat meat. The Senate bill further
adds chicken (which competes with red meats in the market and which, unlike red
meats, primarily is domestically produced) and macadamia nuts as covered
commodities. The Senate bill also would create a separate new COOL requirement
for ginseng.
State-Inspected Meat and Poultry. Federal law now prohibits
state-inspected meat and poultry plants from shipping their products across state
lines, a ban that many states and small plants want to overturn. Limiting
state-inspected products to intrastate commerce is unfair, many state agencies and
state-inspected plants argue, because the 27 current state-operated programs by law
already must be, and are, “at least equal” to the federal system. Those who oppose
allowing state-inspected products in interstate commerce argue that state programs
are not required to have, and do not have, the same level of safety oversight as the
federal, or even the foreign, plants. Both the House and Senate farm bills would
enable state-inspected plants to sell products in interstate commerce, but under
divergent policy approaches.
Under the Senate bill, state-inspected plants with 25 employees or less could opt
into a new program that subjects them to federal laws and oversight, for which they
would gain the federal mark of inspection and the ability to ship interstate. They
would still be inspected by state employees, but these employees would be under the
supervision of a federal employee who will oversee training, inspection, compliance,
and other activities. States would receive at least 60% reimbursement of their costs
(compared with 50% under the existing federal-state program, which could also
continue), and 100% reimbursement if they test more frequently than USDA (i.e., the
Department’s Food Safety and Inspection Service, or FSIS) does, among other things.

CRS-18
The Senate language reportedly is a compromise package acceptable to both
opponents and supporters of the House language (below).
The House-passed farm bill also would enable meat and poultry that is not
federally inspected to be shipped across state lines, as long as the state programs
adopted standards identical to those of USDA along with any additional changes
USDA required. Moreover, the bill would enable many plants currently under
federal inspection to apply for state inspection and continue to ship interstate.
Opponents of this change fear that many would seek to opt out of the federal system
if they believed that could receive more lenient oversight by the states — an assertion
that state proponents dismiss. (For background, see CRS Report RL34202, State-
Inspected Meat and Poultry: Issues for Congress
.)
Reportable Meat and Poultry Registries. A provision in the Senate but
not House bill would require USDA to establish “reportable food registries” for meat
and poultry and their products, whereby establishments would have to report
whenever there were a probability of such foods causing adverse health
consequences. The FDA amendments legislation passed in 2007 (P.L. 110-85)
establishes a similar registry for FDA-regulated foods. Another Senate-passed
provision would require meat and poultry establishments to include a recall plan in
their FSIS-approved risk prevention plans.
Food Safety Commission. Recent food safety incidents linked to both
imported and domestic foods have brought into focus the need if any for changes in
federal food safety oversight. At issue is whether the current system has the statutory
authorities, resources, and structural organization to protect consumers from unsafe
food. The Senate bill would establish a Congressional Bipartisan Food Safety
Commission that would be required to report, within one year, on recommendations
for modernizing food programs. Furthermore, the President would be required to
send to Congress proposed legislation based on the commission’s recommended
statutory changes. (See also CRS Report RL34152, Food Safety: Selected Issues and
Bills in the 110th Congress
.)
Catfish Grading and Inspection. The Senate bill would provide for two
USDA initiatives affecting farm-raised domestic catfish: authorizing a voluntary
grading program administered through the Agricultural Marketing Service, and
mandating safety inspection of such products by FSIS (i.e., making catfish an
amenable species along with the major meat and poultry species). The House bill
lacks this language.
Food from Cloned Animals. FDA has asked companies to refrain
voluntarily from marketing meat and milk from cloned animals or their progeny until
it can complete a final assessment of their safety. The Senate bill contains a
provision, not in the House version, that would prohibit FDA from issuing a final risk
assessment or from lifting the voluntary moratorium until completion of newly
mandated studies on the safety and market impacts of introducing products from
cloned animals.

CRS-19
Domestic Food Programs and Nutrition
The farm bill’s nutrition title accounts for more than half of all spending on
programs/activities covered by the bill; the majority of which finances the Food
Stamp program. The most significant issues in (and provisions of) this title are those
dealing with administration of, eligibility for, and benefits under the Food Stamp
program, fruit and vegetable support policies, and spending for The Emergency Food
Assistance Program (TEFAP).
Both the House and Senate farm bills diverge greatly in the amount of new
spending (above that expected under current nutrition program laws) in their nutrition
titles. Over the next five years (FY2008-FY2012), CBO estimates place the net cost
of the House nutrition title at $4.2 billion (budget authority and outlays) versus the
Senate’s $5.4 billion (budget authority)/$5.3 billion (outlays).11 They also diverge
in where they spend the money. The House bill devotes 78% of new funding to
changes in law that would produce new food stamp spending, 14% to extra funding
for The Emergency Food Assistance Program (TEFAP), and 7% to spending on an
expanded program offering free fresh fruits and vegetables in schools. The Senate
bill’s food stamp provisions consume 66% of its total, compared to 21% for
expansion of the fruit and vegetable initiative and 10% for TEFAP.
The House and Senate bills also differ in another matter. The House bill makes
its changes part of permanent law, producing a 10-year cost estimate of $11.5 million
(budget authority and outlays). On the other hand, most of the Senate’s major
revisions (e.g., increased food stamp benefits) would terminate after FY2012,
resulting in a much lower 10-year cost — added budget authority and outlays of $5.6
billion (only slightly above its 5-year cost).
However, the House and Senate bills are very similar in most of the actual
policy changes they propose. They both would rename the Food Stamp program
(although with different names).12 They both would significantly increase food stamp
benefits: boosting the minimum disregard of income (the “standard deduction”),
lifting caps on the disregard of income used for dependent-care expenses, and
increasing the minimum benefit guarantee. They both would loosen eligibility rules
for food stamps by indexing the dollar limit on allowable liquid assets and
disregarding as assets all retirement savings/plans and education savings. They both
significantly increase guaranteed spending for TEFAP. They both substantially
expand support for the free fresh fruit and vegetable program. They both would
allow the exercise of geographic preference when procuring food for child nutrition
programs.
In addition to the basic differences over how much to spend it total and how
much to direct to food stamps vs. the fresh fruit and vegetable program, the two bills
11 Actual spending estimates subject to change pending completion of the final text of the
Senate bill.
12 The House-passed bill chooses the Secure Supplemental Nutrition Assistance program;
the Senate committee bill opts for the Food and Nutrition program, as has the
Administration (which also proposed renaming the program).

CRS-20
differ in some policy choices, partially because of funding decisions. The House bill
extends all expiring nutrition program authorities through FY2012; the Senate
committee bill extends them indefinitely. The House bill imposes substantial limits
on states’ ability to “privatize” administration of the Food Stamp program; the Senate
bill opts for increased scrutiny of state privatization initiatives. The Senate bill
includes a number of initiatives not in the House-passed version: e.g., loosened rules
governing the food stamp eligibility of able-bodied adults without dependents
(ABAWDs), revisions to food stamp administrative rules aimed at easing access to
food stamps, added money for the Senior Farmers’ Market Nutrition program,
community food projects, and farmers’ market infrastructure projects, funding for
projects to evaluate the use of the Food Stamp program to promote health and
nutrition, eventually allowing the use of food stamps to purchase dietary
supplements.
For more information, see CRS Report RL33829, Domestic Food Assistance:
The 2007 Farm Bill and Other Legislation in the 110th Congress.
Conservation
Both the House and Senate farm bills would reauthorize almost all current
conservation programs. A significant change in the Senate bill would be to create a
new Conservation Stewardship Incentives Program by closely coordinating the
Conservation Security Program (CSP) and the Environmental Quality Incentives
Program (EQIP) , and set a target of enrolling more than 13 million acres annually
using about $1.3 billion in additional funding above the current baseline. It would
fund most conservation programs at FY2007 authorized levels through FY2012. The
House bill also would greatly alter the CSP, but in very different ways. It would halt
funding for new CSP signups until FY2012, and would increase funding for EQIP,
the Wetland Reserve Program (WRP), the renamed Farm and Ranchland Protection
Program (FRPP), and the Grasslands Reserve Program (GRP). Programs in which
funding would not be increased under either bill include the Wildlife Habitat
Incentives Program (WHIP), the Conservation Reserve Program (CRP), which would
continue to be authorized at 39.2 million acres, and the WRP, which would continue
to seek to enroll 250,000 acres per year. However, funding for WRP is counted as
new budget authority and totals $1.9 billion over five years.
Both the House and Senate bills would expand the range of USDA conservation
activities. Topics receiving new or additional emphasis in the title in one or both
bills include forestry, endangered species, invasive species, cooperative conservation
among multiple land owners, innovative conservation efforts, pollinator protection,
location-specific programs for places like the Chesapeake Bay, Upper Mississippi
River and Sacramento River watersheds, and the development of a structure to
support the use of market-based approaches in conservation. Both bills would
authorize enhanced land retirement programs where states supplement federal funds
for the WRP and the GRP, modeled after a similar component of the CRP. Each bill
has provisions not found in the other bill. For example, the Senate bill would
authorize a new conservation program to respond to emergencies, which would
replace the two current programs; the House bill would set an overall fiscal year
payment limit of $60,000 for any single conservation program and $125,000 for all
but three programs (excluded programs are WRP, FRPP, and GRP). Also, the bills

CRS-21
address some topics in different ways. For example, the Senate bill would create a
stand-alone program for Chesapeake Bay restoration within EQIP, while the House
bill has several Chesapeake Bay provisions scattered throughout the title.
The CSP would be altered by both bills, but in very different ways. The Senate
bill would replace the CSP, with its complex three-tiered structure and four types of
payments, with a Conservation Stewardship Program, under which participants
would address priority resources of concern to specified standards, termed a
stewardship threshold. It requires that more than 13 million acres be enrolled each
year. Under the House bill, new enrollments could be accepted only after FY2012
and participants would receive a single payment, called a Stewardship Enhancement
Payment.
Numerous other legislative proposals for conservation were introduced in both
the House and Senate bills. For more information, see CRS Report RL34060,
Conservation and the 2007 Farm Bill, for more information on conservation
programs and past conservation funding, see CRS Report RL33556, Soil and Water
Conservation: An Overview
, and for more information on proposed program funding
in both bills, see CRS Report RL34178, Funding Levels for Conservation Programs
in the 2007 Farm Bill
.
Bioenergy
Interest in renewable energy has grown rapidly since late 2005 due, in large part,
to a strong rise in domestic and international fuel prices and a dramatic acceleration
in domestic biofuel production (mostly ethanol). Many policymakers view
agriculture-based biofuels as both a catalyst for rural economic development and a
response to growing energy import dependence. Renewable energy’s current role in
the 2002 farm bill is contained in the farm bill’s energy title (Title IX) and
concentrates on grants, loan, and loan guarantees to foster research on agriculture-
based renewable energy, to share development risk, and to promote the adoption of
renewable energy systems. USDA’s Bioenergy Program (Sec. 9006 of P.L. 107-
171) — whose funding expired in FY2006 — has been the primary exception in that
it provided incentives to expand actual production of bioenergy.
Both the House and Senate farm bills retain Title IX as the energy title, but with
modifications. Both bills expand and extend several energy provisions from the 2002
farm bill with substantial increases in funding and a heightened focus on developing
cellulosic ethanol production. Existing energy programs retained and extended with
mandatory funding include the federal biobased product preference program, the
biorefinery development grant and loan guarantee program, the renewable energy
systems and energy efficiency improvements program, the Biomass Research and
Development Act, the USDA bioenergy program, and the Biodiesel Fuel Education
Program. Both bills establish a new program — the Bioenergy Reserve Program in
the House version and the Biomass Crop Transition Assistance Program in the Senate
— with mandatory funding to stimulate and facilitate the production, harvest,
storage, and processing of cellulosic-based biomass feedstock. In addition, a variety
of studies, research and demonstration projects, and pilot programs targeted to
specific issues within the renewable energy purview that would be subject to annual
appropriations are included in the two bills.

CRS-22
Funding levels for the provisions of the energy title vary somewhat under the
two farm bills. The House-passed version authorizes $3.2 billion in new mandatory
funding and over $1.4 billion in discretionary funding, whereas the Senate committee
farm bill authorized $1.1 billion in new mandatory funding and over $2 billion in
discretionary funding for provisions of the energy title.13 These provisions would be
funded through various revenue and cost offset provisions that are included in both
the House- and the Senate-passed bills. These revenue and cost offset provisions
vary significantly within each bill. The funding of new or extended energy
provisions hinge on the ultimate resolution of such differences in conference.
For more information on agriculture and bioenergy, see CRS Report RL34130,
Renewable Energy Policy in the 2007 Farm Bill; CRS Report RL32712, Agriculture-
based Renewable Energy Production
; CRS Report RL33290, Fuel Ethanol:
Background and Public Policy Issues
; and CRS Report RL33928, Ethanol and
Biofuels: Agriculture, Infrastructure, and Market Constraints Related to Expanded
Production
. Also see CRS Report RL33572, Biofuels Incentives: A Summary of
Federal Programs
.
Many of the federal programs that currently support renewable energy
production in general, and agriculture-based energy production in particular, are
outside the purview of USDA and have legislative origins outside of the farm bill.
For example, the new energy act signed into law by the President on December 19,
2007 (P.L. 110-140) covers a wide range of topics with extensive attention to
biofuels. In particular, it includes a dramatic expansion of the renewable fuels
mandate to 36 billion gallons by 2022 with carve-outs for biodiesel (1 billion gallons
by 2012), cellulosic ethanol (16 billion gallons by 2022), and corn-starch ethanol (15
billion gallons by 2015). Legislative proposals focused on renewable energy are
summarized in CRS Report RL33831, Energy Efficiency and Renewable Energy
Legislation in the 110th Congress
.
Rural Development
More than 88 programs administered by 16 different federal agencies target rural
economic development. The Rural Development Policy Act of 1980 (P.L. 96-355),
however, named USDA the lead federal agency for rural development. USDA
administers most of the existing rural development programs and has the highest
average of program funds going directly to rural counties (approximately 50%).
Three mission agencies, Rural Housing Service, Rural Business-Cooperative Service,
and Rural Utilities Service, administer the various loan and grant programs. More
information on these programs is in CRS Report RL31837, An Overview of USDA
Rural Development Programs
.
Both the House and Senate farm bills reauthorize and/or amend existing rural
development loan and grant programs and create several new provisions. The Senate
bill authorizes a new interest rate structure for water and wastewater projects. Unlike
the House-passed bill, the Senate-passed bill includes four mandatory-funded
13 Actual spending estimates subject to change pending completion of the final text of the
Senate bill.

CRS-23
programs. These provisions include loan guarantees to rural hospitals, loans and
grants for rural child care facilities, a rural microenterprise assistance program, and
one-time funding of backlogged applications for rural water projects. The House bill
also authorizes new assistance to rural hospitals and clinics and a rural
microenterprise program, but provides discretionary funding support.

Other new provisions in the Senate bill include a Center for Healthy Food
Access and Enterprise Development, artisanal cheese centers, support for locally-
produced agricultural food products, grants for assisting employment opportunities
for disabled individuals in rural areas, and a rural collaborative investment program.
This latter program, which would provide equity capital to rural areas, has
similarities with the Rural Strategic Investment Program reauthorized by the House
bill. The Senate bill would also change the 2002 definition of “rural area” to exclude
certain areas (particular census blocks) based on housing density criteria. The
Secretary would have certain discretionary powers in designating an area as “rural.”
The Senate bill also includes a provision contained in the House bill that requires the
Secretary to prepare a report assessing the various definitions of “rural” and the effect
these various definitions have on programs administered by USDA Rural
Development.
Broadband development in rural areas is also a prominent feature in both bills.
Subtitle C to Title VI proposes a Connect the Nation Act to encourage state
initiatives to improve broadband service. The Senate bill also reauthorizes the
Distance Learning and Telemedicine program and amend the program’s title to
include library connectivity, public television, and distance learning. Both bills
reauthorize and amend the Access to Broadband Telecommunications Service in
Rural Areas; authorize a National Center for Rural Telecommunications Assessment;
and direct the Secretary to conduct a comprehensive rural broadband strategy.
Other provisions in the Senate bill reauthorize the Rural Economic Area
Partnership, water and waste water programs, Rural Business Opportunity Grants,
SEARCH grants, value-added product grants, and the National Rural Development
Partnership. The Delta Regional Authority and the Northern Great Plains Regional
Authority also are reauthorized. The Senate bill authorizes a new regional
development authority, the Northern Borders Economic Development Commission,
targeted to certain counties in New York, New Hampshire, Maine, and Vermont.
Other provisions reauthorize and amend the Rural Business Investment Program and
Multi-jurisdictional Regional Planning Organizations, which were not included in the
House bill. The Senate measure also authorizes a new Northern Border Economic
Development Commission that targets counties in New York, Maine, Vermont, and
New Hampshire. Two provisions in the Senate bill would reserve funds under the
Community Facilities program to particular areas and give priority to projects with
high non-federal shares of funds.
For more information, see CRS Report RL34126, Rural Development and the
2007 Farm Bill.
Forestry

CRS-24
Farm bills typically deal with forestry both directly, usually in a forestry title,
and indirectly (such as including forests and forestry practices in more general
conservation programs). For a description of existing programs, see CRS Report
RL31065, Forestry Assistance Programs.
Both the House and Senate farm bills include a forestry title (Title VIII) with
several sections addressing statewide forest resource planning. One section would
establish “national private forest conservation priorities” as (1) conserving and
managing working forest landscapes for multiple values and uses; (2) protecting
forests from threats and restoring appropriate forest types; and (3) enhancing public
benefits from private forests. Other sections would require statewide assessments
and strategies for forest resources (with periodic revision). The House bill also
would create a new Forest Resource Coordinating Committee, require the
competitive allocation of a portion of state assistance funding (based on how the
statewide assessments and strategies fulfill the national priorities), and allow up to
5% of state assistance funding for competitively allocated innovative projects to
address the national priorities. The Senate bill would create a new community forest
and open space conservation grant program for local entities to protect forests
threatened with conversion to non-forest uses, would amend existing law to restrict
imports of illegally logged wood, and would provide for forestry conservation bonds.
Both bills would extend, through 2012, the authorization for the Office of
International Forestry. The House bill also would extend the authorization for the
Rural Revitalization Technologies Program and for Healthy Forest Reserves under
the Healthy Forests Restoration Act of 2003 (P.L. 108-148, 16 U.S.C. §§6501, et
seq.), while the Senate bill would extend the authorization for Renewable Resource
Extension. Other House bill provisions include an Emergency Forest Restoration
Program to provide assistance for restoration efforts for forests damaged by natural
factors, and a competitive grant program to Hispanic-serving institutions to increase
diversity in forestry and related fields. Other Senate bill provisions provide for tribal-
Forest Service cooperative relations and assistance, allow contract modification
options for certain Forest Service timber sales, and encourage the President to ensure
lumber imports consistent with the U.S.-Canada Softwood Lumber Agreement.
Agricultural Research
Under the mission area called Research, Extension, and Economics (REE), the
USDA is responsible for conducting agricultural research at the federal level, and for
providing partial support for cooperative research, extension, and post-secondary
agricultural education programs in the states. The USDA’s intramural activities are
carried out by the Agricultural Research Service (ARS), Economic Research Service
(ERS), National Agricultural Statistics Service (NASS), National Agriculture Library
(NAL). The federally funded extramural activities are managed by the Cooperative
State Research, Education, and Extension Service (CSREES). For more information
on these agencies’ activities, see CRS Report RL33327, Agricultural Research,
Education, and Extension: Issues and Background
.
The issues confronting Congress concerning federal agricultural research can
be generally categorized under two topics: the structure of the management
organization, and the level of research funding. These are long-standing issues.

CRS-25
Congress addressed the management issue in the 2002 farm bill by directing the
USDA to examine and report on the structure of Agricultural Research Service
(ARS) management and the merits of establishing a National Institute of Food and
Agriculture (possibly modeled after the National Institutes of Health). With respect
to funding, there has long been a struggle under persistent budget constraints to
obtain increased appropriations even sufficient to keep up with inflation. With farm
commodity support as a model, the research community has attempted to obtain a
portion of its money in of mandatory funds, with less reliance on discretionary
appropriations.
The USDA task force report, National Institute for Food and Agriculture: A
Proposal, was issued July 2004.14 The proposal was presented to Congress in
USDA’s 2007 Farm Bill Proposals.15 While the USDA task force was conducting
its review, the National Association of State Universities and Land-Grant Colleges
(NASULGC) developed a proposal called Create Research, Extension, and Teaching
Excellence for the 21st Century
(CREATE-21).16 CREATE-21 was presented to
Congress as H.R. 2398 and S. 1094.
The research provisions in both the House and Senate farm bills draw heavily
on the recommendations of the USDA and NASULGC.17
Research Management. The House version would create, within the Office
of the Under Secretary for Research, Education, and Economics, an overall
coordinating organization known as the National Agricultural Research Program
Office (NARPO) with six specialized directors. Additionally, the House-passed bill
would establish a National Institute of Food and Agriculture (NIFA) within the
Cooperative State Research, Education, and Extension Service (CSREES) that would
oversee extramural competitive research grants only.
The Senate bill explicitly designates the Under Secretary as the coordinator of
research between ARS and NIFA. However, the bill would establish a NIFA that
reports to the Secretary of Agriculture (not through the Under Secretary). NIFA
would replace CSREES to plan, coordinate, and manage all extramural USDA
research, education, and extension funds (competitive grants, capacity building
grants, and formula funds).
Funding. The House bill authorizes $865 million in total mandatory research
funding over the five-year life of the farm bill. The Organic Research and Extension
Initiative would receive $25 million in total mandatory funds for FY2008-FY2012,
14 National Institute for Food and Agriculture: A Proposal, report of the Research,
Education, and Economics Task Force of USDA, July 2004. The report is available online
at [http://www.ars.usda.gov/Research/Research.htm].
15 A link to the USDA farm bill research proposal is at [http://www.usda.gov/wps/portal/
!ut/p/_s.7_0_A/7_0_1UH?contentidonly=true&contentid=2007_Farm_Bill_Title7.xml].
16 Available at [http://www.create-21.org/].
17 A more complete examination of the issues and legislative proposal is in CRS Report
RS22693, Agricultural Research, Education, and Extension in the 2007 Farm Bill.

CRS-26
and $25 million in annual appropriations authority for FY2009-FY2012. A new
Specialty Crop Research Initiative would receive a total of $215 million in mandatory
funds, in addition to annual appropriations authority of $100 million for FY2008-
FY2012. The effort to improve the safety of fresh cut produce would be provided an
additional total of $25 million in mandatory funds to supplement the annual
appropriation. The House bill preserves mandatory funding of $200 million for
IFAFS for FY2010-2012. Discretionary programs would be maintained largely as
in the previous farm bill and most would be authorized to receive appropriations of
such sums as necessary.
The Senate bill would provide $160 million in total mandatory research funds
over the five-year life of the farm bill.18 Like the House bill, the Senate would
authorize a new Organic Research and Extension Initiative, but with $16 million in
mandatory funds for FY2008-FY2012. Also, a new Specialty Crop Research
Initiative would receive $16 million in annual mandatory funds for FY2008-FY2012.
Mandatory funds for the Initiative for Future Agricultural and Food Systems (IFAFS)
would be eliminated and replaced with annual appropriations of such sums as
necessary. As with the House bill, discretionary programs in the Senate bill would
be maintained largely as in the previous farm bill and most would be authorized to
receive appropriations of such sums as necessary.
Agricultural Trade and Food Aid
Farm bills have included a trade title with legislative authority for programs
that subsidize, finance, or promote commercial agricultural exports and that provide
international food assistance. Title III of the 2002 farm bill currently provides
authorization for these two kinds of programs. Both the House and Senate farm bills
extend authorization for these programs through FY2012, with increased funding for
selected export and food aid programs.
Trade. The trade title of the Senate-passed bill extends USDA’s export market
development programs through 2012. It increases funding for export promotion in
the Market Access Program (MAP) by $94 million over five fiscal years and the
Foreign Market Development Program (FMDP) by $22 million, also over five fiscal
years. The House-passed bill increases MAP funding by $125 million over five
years, but keeps FMDP funding at the current level of $34.5 million annually. MAP
promotes mainly high value farm exports, while FMDP promotes bulk or generic
commodity exports. Both Senate and House bills revise the export credit guarantee
programs to bring them into compliance with a WTO dispute settlement decision in
the U.S.-Brazil cotton case which the United States lost. Both bills eliminate the 1%
cap on origination fees for export credit guarantees and repeal legislative authority
for an intermediate export credit guarantee program (3-10 years). Both bills repeal
legislative authority for very short term (six months to one year) guarantees. The
Administration requested repeal of this program because of defaults and evidence of
fraudulent activity. The Senate bill repeals authority for the Export Enhancement
Program (EEP), a direct export subsidy, while the House bill reauthorizes EEP
18 Actual spending estimates subject to change pending completion of the final text of the
Senate bill.

CRS-27
through 2012. The Administration requested repeal of EEP because, it argued, the
program had been inactive since 1995 and repealing it would be in line with the U.S.
effort to eliminate all export subsidies in on-going multilateral trade negotiations.

Both bills increase funding for the Technical Assistance for Specialty Crops
(TASC) program which focuses on eliminating sanitary and phytosanitary (food
safety) barriers to U.S. agricultural exports. The House bill authorizes appropriations
to strengthen U.S. representation in international standard-setting bodies, and both
bills provide for assistance to limited-resources persons and organizations to address
unfair trade practices and reduce foreign trade barriers.
Food Aid. The United States is the world’s largest provider of food aid,
accounting for about 60% of total global food aid over the last decade. Most U.S.
food aid is provided via P.L. 480 Title II which authorizes the donation of U.S.
agricultural commodities for emergency relief or for use in development projects.
Both bills extend P.L. 480 food aid programs through 2012; the House bill
authorizes appropriations for P.L. 480 Title II humanitarian donations of $2.5 billion
annually. If appropriated, that amount would represent a very substantial increase
over the $1.2 billion appropriated annually in recent years. Both versions of the farm
bill also increase the amount of cash that could be allocated to private voluntary
organizations to pay for project related expenses. Both bills contain hard earmarks,
i.e., not subject to waivers, for non-emergency or development food aid. In this
regard, the Senate bill stipulates that $600 million of Title II funds would be made
available for development assistance programs, while H.R. 2419 provides that not
less than $450 million annually would be made available for development programs.
Both bills reauthorize other smaller programs that provide food aid to countries
that are promoting the development of market-oriented agricultural sectors (Food for
Progress) or for school feeding and nutrition programs (the McGovern-Dole
International School Feeding and Child Nutrition Program). The Senate bill raises
the cap on CCC-funded transportation of commodities in the Food for Progress
Program, while the House-passed bill reauthorizes this program without change. The
Senate bill reauthorizes the McGovern-Dole program and provides for discretionary
funding of $300 million annually. The House bill, however, changes the funding
basis of McGovern-Dole from discretionary to mandatory and increases spending
from $140 million in FY2009 to $300 million in FY2012. Both bills reauthorize the
Bill Emerson Humanitarian Trust, which provides food aid in the event of
unanticipated food needs.
The Administration’s sole farm bill food aid proposal was for legislative
authority to allocate up to 25% of funds for humanitarian food aid (through P.L. 480
Title II) to local or regional purchase of commodities for emergency relief. Local or
regional purchases, the Administration argued, would make the U.S. response to
emergencies more timely and cost-effective. Opponents of the proposal, however,
maintain that it would undermine the coalition of producers, shippers, and charitable
organizations that support U.S. food aid and result in less U.S. food aid being
provided. The Senate bill would authorize a $25 million per year pilot program to
explore how local or regional purchase of food in emergency situations might be
used. While the House-passed bill did not make provision for the use of P.L. 480
funds for local or regional purchases of commodities, it stipulated that $40 million

CRS-28
of funds authorized annually for the International Disaster and Famine Assistance
(IDFA) program, administered by the U.S. Agency for International Development,
be made available for famine prevention and relief. IDFA funds have been used for
local or regional purchases of agricultural commodities in emergency situations, in
addition to other emergency supplies.
For background information on farm bill trade and food aid programs, see CRS
Report RL33553, Agricultural Export and Food Aid Programs; for a discussion of
food aid and the farm bill, see CRS Report RL344145, International Food Aid and
the 2007 Farm Bill
; for a discussion of export programs and the farm bill, see CRS
Report RL34227, Agricultural Exports and the 2007 Farm Bill.
Agricultural Credit
Farm bills usually contain provisions that modify the permanent statutes for two
government-related farm lenders. First, the USDA Farm Service Agency (FSA) is
a federal government lender of last resort that makes direct loans or guarantees loans
to farmers who cannot qualify for commercial loans. Second, the Farm Credit
System (FCS) is a private lender with a statutory requirement, and limitation, to lend
to farmers and certain farm-related businesses. For more information, see CRS
Report RS21977, Agricultural Credit: Farm Bill Issues.
Farm Service Agency. Both the House and Senate farm bills would (1)
further prioritize and subsidize Farm Service Agency lending for beginning and
socially disadvantaged farmers, (2) increase lending limits per individual to $300,000
(up from $200,000) for each of the direct farm ownership and direct operating loan
programs, and (3) extend and expand the guarantee program for seller-financed land
loans. For conservation projects, the House-passed bill would create a conservation
loan guarantee program, while the Senate-passed bill would make more conservation
programs eligible for FSA farm loans and give priority to beginning farmers and
ranchers. Regarding “term limits” on guaranteed operating loans, which require
farmers to graduate from FSA credit to commercial lenders, the House bill would
extend the suspension of the enforcement of “term limits,” but only until January 1,
2008; the Senate bill would permanently eliminate term limits for such loans. The
Senate bill also would create a pilot program of “individual development accounts”
for beginning farmers and ranchers.
The Pigford Decision. The Senate-passed bill would permit any claimant
in the Pigford decision (a 1999 suit based on past discrimination against minority
farmers applying for USDA loans) who has not received compensation to petition in
civil court to obtain such compensation. The total amount of payment and debt relief
would be limited to $100 million. USDA would be restricted from beginning a
foreclosure if the borrower can show foreclosure is related to a Pigford claim. A
similar provision is also included in the House-passed bill. See CRS Report
RS20430, The Pigford Case: USDA Settlement of a Discrimination Suit by Black
Farmers
.
Farm Credit System. In recent years, FCS has sought to expand its lending
authority beyond traditional farm loans and into more rural housing and non-farm
businesses. In early 2006, FCS released a report titled Horizons, which highlighted

CRS-29
perceived needs for greater lending authority to serve rural America. Commercial
banks oppose expanding FCS lending authority, saying that the availability of
commercial credit in rural areas is not constrained, and that FCS’s government-
sponsored enterprise (GSE) status provides an unfair competitive advantage.
Neither the House nor the Senate bill contain any expansion of Farm Credit
System lending authority as proposed under Horizons. Although the House
Agriculture Committee included limited expansions, an adopted floor amendment
sponsored by the House Financial Services Committee chairman and ranking
member removed those provisions (expansion of the population cutoff for rural
housing loans from 2,500 population to 6,000 population; adding a general
agribusiness category to the list of eligible borrowers, but limited to renewable
energy projects only; and replacing the borrower stock-holding requirement with the
discretion of the institution).
Committee jurisdiction had been called into question by letters from the House
Financial Services Committee to the Agriculture Committee, in which Financial
Services asserted their jurisdiction for nonfarm lending and its specific opposition
to Horizons. The Administration came out against FCS expansion in a Statement of
Administration Policy for the House bill. The past chairman of the Farm Credit
Administration, the federal regulator, also voiced opposition.
Agricultural Security
The Senate bill includes an Agricultural Security subtitle in Title XI
(Miscellaneous). The House bill does not include any comprehensive section on
agricultural security, but does include a provision related to possession of foreign
animal disease viruses in the research title. Members of both the House and Senate
considered, but did not offer or adopt, amendments to transfer agricultural border
inspectors back to USDA.
Regarding foreign animal diseases, the Senate bill would compel USDA to issue
a permit to DHS to possess and work with live foot and mouth disease (FMD) virus
at the proposed and yet-to-be-built National Bio- and Agro-Defense Facility, subject
to compliance with USDA rules for handling “select agents.” The House bill’s
approach is more complicated, with possible contradictions between FMD
restrictions and select agent rules. For more information, see CRS Report RL34160,
The National Bio- and Agro-Defense Facility: Issues for Congress.

CRS-30
Appendix: 2007 Farm Bill Timeline
May 2005 — One of the first comprehensive sets of recommendations for the next farm bill
is released by a major agricultural trade association, followed by proposal by other
major interest groups and organizations (both traditional farm and other nonfarm
groups).
July 7, 2005 — U.S. Department of Agriculture (USDA) begins its series of 52 farm bill
forums starting in Nashville, TN, and covering nearly all states (excl. Louisiana and
Mississippi due to Hurricane Katrina.).
February 6, 2006 — House Committee on Agriculture begins farm bill listening field
hearings in Fayetteville, NC, and other hearings to review federal farm policy.
June 23, 2006 — Senate Agriculture, Nutrition, and Forestry Committee begins regional
farm bill hearings in Albany, GA, and other hearings to review federal farm policy.
January 2007 — House and Senate Agriculture Committees begin hearings on selected
farm bill topics.
January 31, 2007 — USDA releases its farm bill recommendations, covering each title of
the current law.
February 2007 — One of the first comprehensive bills recommending broad changes to
current law is introduced in the Senate, followed by other broad-based bill introduced
by others in the House and Senate.
March 21, 2007 — Congressional Budget Office (CBO) releases its multi-year March
baseline estimate of spending, providing the starting point for the budget allocation for
the new farm bill.
March 21, 2007 — House Committee on Agriculture begins subcommittee markup on
individual titles of the farm bill, proceeding through June 19, 2007.
May 17, 2007 — Congress approves the FY2008 budget resolution, adopting the baseline
budget as the fiscal parameters and including a $20 billion reserve for the new farm
bill.
July 17, 2007 — House Committee on Agriculture begins full committee markup on
individual titles of the farm bill (H.R. 2419), proceeding through July 19, 2007.
July 26-27, 2007 — Floor debate and passage of H.R. 2419 in the House.
October 4, 2007 — Senate Finance Committee approves a bill (S. 2242) that would create
new tax credits and a disaster trust fund for farmers, as part of the 2002 farm bill
reauthorization.
October 24, 2007 — Senate Agriculture Committee begins full committee markup on
individual titles of the farm bill (S. 2302), proceeding through October 25, 2007.
November 5, 2007 — Senate floor debate begins, with the Senate Agriculture Committee
Chairman offering an amended Senate bill as a substitute (S.Amdt. 3500) to H.R.
2419. The bill includes provisions in S. 2242.

CRS-31
November 16, 2007 — Further action in the Senate is delayed when a key vote in the
Senate fails to invoke cloture on the Senate version of the farm bill.
December 14, 2007 — Floor debate and passage of the Senate version of the farm bill,
which was offered as a substitute to H.R. 2419 (Farm, Nutrition, and Bioenergy Act
of 2007).
December 26, 2007 — The Consolidated Appropriations Act for FY2008 (P.L. 110-161)
is signed into law and extends certain expiring provisions of the 2002 farm bill until
March 15, 2008.
Early 2008 — House and Senate conferees are expected to complete action on a conference
agreement.