Farm Safety Net Provisions in a 2013 Farm
Bill: S. 954 and H.R. 2642

Dennis A. Shields
Specialist in Agricultural Policy
Randy Schnepf
Specialist in Agricultural Policy
July 24, 2013
Congressional Research Service
7-5700
www.crs.gov
R42759


Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642

Summary
The farm commodity provisions of the Food, Conservation, and Energy Act of 2008, as amended
(P.L. 110-246, the 2008 farm bill) expire with the 2013 crop year. Consequently, the 113th
Congress has been considering an omnibus farm bill that would establish the direction of
agricultural policy for the next five years. On June 10, 2013, the Senate approved its version of
the farm bill, S. 954, the Agriculture Reform, Food and Jobs Act of 2013. On July 11, 2013, the
House approved its bill, H.R. 2642, which did not contain a Nutrition title as in the Senate bill.
Conference on the two measures is pending.
Among the many provisions, both bills would reshape the structure of farm commodity support,
retroactively reauthorize several disaster programs, and expand coverage under the federal crop
insurance program. These three areas of federal support for farmers are often collectively called
the “farm safety net.” Commodity programs under the original 2008 farm bill cover only crops
harvested in 2008 through 2012, and were extended for an additional crop year in the American
Taxpayer Relief Act of 2012 (P.L. 112-240, the fiscal cliff bill). Unlike farm commodity
programs, the federal crop insurance program, which provides subsidized insurance policies for
producers, is permanently authorized under the Federal Crop Insurance Act of 1980. Five disaster
assistance programs under the 2008 farm bill expired on September 30, 2011, and under the farm
bill extension, Congress provided authority to appropriate funds (but no actual funding) for three
livestock programs and a tree assistance program.
Under both S. 954 and H.R. 2642, farm support for traditional program crops is restructured by
eliminating direct payments. Direct payments—made to producers and landowners based on
historical production and fixed payment rates for corn, wheat, soybeans, cotton, rice, peanuts, and
other “covered” crops—have accounted for most farm program spending in recent years. As
under current law, both bills authorize farm programs (with new program names) that would
make payments when crop prices (or revenue) fall below a reference price (or historical average
revenue). Authority is continued for marketing assistance loans, which provide additional low-
price protection at “loan rates” specified in current law (with an adjustment made to cotton). The
Senate bill covers only crop years 2014-2018, and it suspends permanent price support authority
under the Agricultural Adjustment Act of 1938 and Agricultural Adjustment Act of 1949 until
program authority in S. 954 expires in 2018. In contrast, the House bill covers crop year 2014 and
each succeeding crop year (i.e., no program expiration date) and repeals permanent law.
In both bills, approximately three-fourths of the 10-year, $46 billion-$47 billion in savings (as
estimated by the Congressional Budget Office) associated with the proposed elimination of
current farm programs would be used to offset the cost of revising farm programs (Title I),
enhancing crop insurance (Title XI in the Senate bill and Title X in the House bill), and
retroactively reauthorizing four disaster programs (beginning FY2012). The two bills provide
programs for covered crops, except cotton, which would have its own program (a crop insurance
product called Stacked Income Protection Plan or STAX). Proponents of farm programs and
federal crop insurance are attempting to address the issue of “shallow losses”—crop losses not
covered currently by crop insurance—as well as provide disaster assistance for livestock
producers. Critics contend that the proposals contain overly generous farm and crop insurance
subsidies and shift additional commodity market risk to the federal government.

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Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642

Contents
Introduction ...................................................................................................................................... 1
Overview .......................................................................................................................................... 1
Proposed Farm Commodity Program Revisions.............................................................................. 2
Both Bills Retain a Counter-Cyclical Price Program ................................................................ 4
Both Bills Retain a Revenue-Based Program ............................................................................ 5
Crop Insurance Enhancements ......................................................................................................... 7
Supplemental Coverage Option (SCO) ..................................................................................... 7
Stacked Income Protection Plan (STAX) .................................................................................. 8
Crop Insurance Studies and Other Provisions ........................................................................... 9
Conservation Provisions for Crop Insurance ........................................................................... 10
Noninsured Crop Disaster Assistance Program (NAP) ........................................................... 10
Disaster Programs Reauthorized .................................................................................................... 10
Farm Program Payment Limit Changes ......................................................................................... 11
Dairy and Sugar ............................................................................................................................. 12
Cost Estimates ............................................................................................................................... 12

Figures
Figure 1. Selected Provisions from Title I (Commodity Programs) and
Title X (Crop Insurance) in H.R. 2642 and Title XI (Crop Insurance) in S. 954 ......................... 3
Figure 2. Counter-Cyclical Price (CCP) Program Example: Rice ................................................... 4
Figure 3. Agriculture Risk Coverage (ARC) ................................................................................... 6
Figure 4. ARC Payment Under County Option: Kansas Wheat Example ....................................... 6
Figure 5. An Illustration of Crop Insurance Indemnities and Farm Revenue Program
Payments Under 2013 Farm Bill Assuming Major Revenue Loss ............................................... 8

Tables
Table 1. Baseline for Mandatory Farm Bill Programs, FY2014-FY2023...................................... 13
Table 2. CBO Estimated Change to Baseline: Farm Safety Net Programs, 2014-2023 ................ 14

Appendixes
Appendix A. S. 954 (Title I) and H.R. 2642 (Title I): Commodity Programs ............................... 15
Appendix B. S. 954 (Title XI) and H.R. 2642 (Title X): Crop Insurance ...................................... 29
Appendix C. S. 954 (Title XII) and H.R. 2642 (Title XI): Noninsured Crop Assistance
Program ...................................................................................................................................... 38

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Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642

Contacts
Author Contact Information........................................................................................................... 39

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Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642

Introduction
The farm commodity provisions of the Food, Conservation, and Energy Act of 2008, as amended
(P.L. 110-246, the 2008 farm bill) expire with the 2013 crop year. Consequently, the 113th
Congress has been considering an omnibus farm bill that would establish the direction of
agricultural policy for the next five years. On May 14, 2013, the Senate Agriculture Committee
reported its version of the bill (S. 954, the Agriculture Reform, Food and Jobs Act of 2013),
which was approved by the full Senate on June 10, 2013 (vote of 66-27). On May 15, 2013, the
House Agriculture Committee completed markup of its version of the bill (H.R. 1947, the Federal
Agriculture Reform and Risk Management Act of 2013), and floor action began in mid-June.
However, on June 20, the full House voted to reject the bill (vote of 195-234). Three weeks later,
the full House debated a variation of the defeated bill that excluded a Nutrition title but included
all of the adopted floor amendments to all of the other titles. This revised bill (H.R. 2642) was
approved by the House by a 216-208 vote. Conference on the two measures is pending.
This report compares the so-called “farm safety net” provisions in the two bills. The broader
farming community uses the term farm safety net to refer to the combination of (1) farm
commodity price and income support programs in the 2008 farm bill, (2) federal crop insurance
(permanently authorized) under the Federal Crop Insurance Act of 1980 as amended, and (3) five
disaster assistance programs in the 2008 farm bill, which are currently unfunded. Title I of both
versions of the 2013 farm bill contains commodity and disaster program provisions, and
modifications to the current crop insurance program are in Title XI of the Senate bill and Title X
of the House bill. Both bills would reshape the structure of farm commodity support, reauthorize
several disaster programs, and expand crop insurance coverage.
Overview
Current farm support for traditional program crops includes direct payments, the counter-cyclical
price (CCP) program, and the Average Crop Revenue Election (ACRE) program.
• Direct payments—made to producers and landowners based on historical
production and fixed payment rates for corn, wheat, soybeans, cotton, rice,
peanuts, and other “covered” crops—have accounted for most farm program
spending in recent years.
• CCP payments are made when crop prices fall below a “target price” (minus the
direct payment rate). As an alternative to CCP, producers may select ACRE,
which makes payments when crop revenue drops below a guarantee based on
historical revenue.
• Marketing assistance loans provide additional low-price protection at “loan rates”
specified in current law.1
Under both the Senate-passed (S. 954) and House-passed (H.R. 2642) 2013 farm bills, direct
payments are eliminated and programs are authorized to replace CCP and ACRE with

1 For additional background on current programs and issues shaping the farm bill debate, see CRS Report R42040,
Farm Safety Net Proposals in the 112th Congress.
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Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642

conceptually similar programs with new names, payment triggers, and payment formulas. In both
bills, approximately three-fourths of the 10-year, $46 billion-$47 billion in savings (as estimated
by the Congressional Budget Office) associated with the proposed elimination of current farm
programs would be used to offset the cost of updating farm programs (Title I), enhancing crop
insurance (Title XI in the Senate bill and Title X in the House bill), and retroactively
reauthorizing four disaster programs (beginning FY2012). The two titles account for a combined
$12.4 billion savings over 10 years in the Senate bill (of $17.9 billion in total savings across all
titles) and $9.8 billion in the House bill (of $12.9 billion). These titles address the issue of
“shallow losses” (losses incurred by crop producers that are not covered currently by crop
insurance) and provide disaster assistance for livestock producers.
Figure 1 summarizes major provisions in the commodity and crop insurance titles of the two
bills. A comprehensive, section-by-section comparison of all titles in the two bills is in CRS
Report R43076, The 2013 Farm Bill: A Comparison of the Senate-Passed (S. 954) and House-
Passed (H.R. 2642) Bills with Current Law
.
Proposed Farm Commodity Program Revisions
Both S. 954 and H.R. 2642 would eliminate direct payments. Direct payments account for most
of current commodity spending and are made to producers and landowners based on historical
production of farm program crops. Both bills also borrow conceptually from current farm
commodity programs by updating price and/or revenue programs designed to enhance risk
protection for producers of “covered” crops. Importantly, the Senate bill covers only crop years
2014-2018. It also suspends permanent price support authority under the Agricultural Adjustment
Act of 1938 and Agricultural Adjustment Act of 1949, which would increase price supports well
above current market levels and create substantial government outlays. This provision is designed
to motivate Congress to reexamine agricultural and related policy (not just farm programs) when
program authority in S. 954 expires in 2018. In contrast, the House bill covers crop year 2014 and
each succeeding crop year (i.e., no program expiration date) and repeals permanent law.
Proponents expect this approach to better protect beneficiaries of farm programs in the long run.
Covered commodities are wheat, oats, barley, corn, grain sorghum, long grain rice, medium grain
rice, pulse crops (dry peas, lentils, small chickpeas, and large chickpeas), soybeans, other
oilseeds, and peanuts. In response to a World Trade Organization case brought against the United
State by Brazil, cotton is not included as a program commodity; instead it is covered by a new
insurance product (see “Stacked Income Protection Plan (STAX)”. For farm programs, producers
do not pay any fees or premiums for participating, unlike the federal crop insurance program,
which offers subsidized policies to producers of a wide variety of crops.
Under both the Senate-passed (S. 954) and House-passed (H.R. 2642) 2013 farm bills, farm
support for traditional program crops is restructured by eliminating direct payments,2 the counter-
cyclical price (CCP) program, and the Average Crop Revenue Election (ACRE) program.
Authority is continued for marketing assistance loans, which provide additional low-price
protection at “loan rates” specified in current law (with an adjustment made to the cotton loan
rate). A brief summary of the major commodity provisions is provided below. For details on all
sections in Title I (except dairy and sugar provisions), see Appendix A.

2 In the House bill, direct payments continue at a reduced level for cotton in crop years 2014 and 2015.
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Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642

Figure 1. Selected Provisions from Title I (Commodity Programs) and
Title X (Crop Insurance) in H.R. 2642 and Title XI (Crop Insurance) in S. 954


Source: CRS Report R43076, The 2013 Farm Bill: A Comparison of the Senate-Passed (S. 954) and House-Passed
(H.R. 2642) Bills with Current Law
.
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Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642

Both Bills Retain a Counter-Cyclical Price Program
A counter-cyclical price program makes a farm payment when prices for covered crops decline
below certain levels. The counter-cyclical price (CCP) program from the 2008 farm bill is
replaced by Adverse Market Payments or AMP in S. 954 and Price Loss Coverage or PLC in H.R.
2642. To better protect producers in a market downturn, the price guarantees (called “reference
prices” in both bills) that determine payment levels are set in statute and increased relative to
current “target prices.” A broad exception applies in S. 954 to the reference price for crops other
than rice and peanuts, where it is calculated as 55% of a rolling five-year average (excluding the
high and low years). For an example of higher price parameters, see Figure 2.
Figure 2. Counter-Cyclical Price (CCP) Program Example: Rice
(H.R. 2642 would increase price protection for producers via a new reference price)

$/cwt
20
18
16
Proposed Reference
Price (H.R. 2642)

14
$14.00
12
Monthly Average Farm Price
10
Current CCP Trigger*
8
* $8.15 = $10.50 (target price) minus $2.35 (direct
payment rate)

6
CCP payments
4
2
01990
1995
2000
2005
2010

Source: CRS, using USDA/NASS historical price data.
Notes: Monthly price shown to illustrate price variability. CCP payments are calculated using the season-average
farm price (not monthly prices).
The payment rate is the difference between the reference price and the national farm price3 or
loan rate, if higher. S. 954 continues current policy by making payments on 85% of historical
plantings
(or “base acres”), a provision designed to minimize the program’s effect on planting
decisions. In contrast, the House bill pays on 85% of planted acreage to better align payments
with producer risk. Also, to better protect producers in a price downturn, under the House bill,

3 Market price is national midseason price (5-month average) in the House bill and 12-month average in the Senate bill.
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Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642

producers may update payment yields (average yield per planted acre during 2008-2012,
excluding high and low, times 90%). Under the Senate bill, yield updating is available only for
rice and peanuts, based on yields from 2009 to 2012.
During the farm bill debate in recent years, including development of farm bill proposals in the
112th Congress, commodity groups representing rice and peanut producers have led efforts to
retain a reference price option as part of the overall farm program because they prefer price
protection by establishing statutory minimum price support rather than revenue protection (based
on historical prices) that can decline over time and erode the safety net.4 During committee mark-
up of S. 954, an amendment to eliminate AMP for crops other than rice and peanuts failed.
Both Bills Retain a Revenue-Based Program
A revenue-based program is designed to cover a portion of a farmer’s out-of-pocket revenue loss
(referred to as “shallow loss”) relative to an annual crop revenue guarantee based on historical
farm prices and yields. The revenue-based program in the 2008 farm bill, Average Crop Revenue
Election (ACRE),5 is eliminated and replaced by Agriculture Risk Coverage (ARC) in S. 954 and
Revenue Loss Coverage or (RLC) H.R. 2642. Payments are made on planted acres when actual
crop revenue drops below a specified percentage of historical or “benchmark” revenue (88% in S.
954 and 85% in H.R. 2642. The producer absorbs the first portion of the shortfall (12% in S. 954
and 15% in H.R. 2642). The government absorbs the next 10% of revenue shortfall because the
per-acre payment rate is capped at 10% of benchmark revenue. Remaining losses are backstopped
by crop insurance if purchased at sufficient coverage levels by the producer.
In the Senate bill under ARC, farmers can select coverage at either the county or individual farm
level (to cover more localized losses), and any payments are made in addition to AMP. In the
House bill, coverage under RLC is available at only the county level,6 and the program is not
available in combination with PLC. For both bills, payments would be in addition to any crop
insurance indemnities.
A major distinction between these revenue-based farm programs and producer-purchased crop
insurance is that the price component farm program guarantee is based on deviations from five-
year historical crop prices (subject to reference prices used in the PLC program, which serve as
minimums), while crop insurance is based on expected market prices for the upcoming season.
Consequently, revenue-based farm programs can provide a revenue guarantee that is higher than
what might be available through crop insurance if historical prices are high relative to expected
market prices.
See Figure 3 and Figure 4 for a conceptual illustration and hypothetical example of the ARC
program.

4 In contrast to S. 954, the 2012 Senate-passed farm bill (S. 3240) provided for only a revenue-based program and did
not provide for a counter-cyclical price program. For details of the 2012 farm bill proposals, see CRS Report R42552,
The 2012 Farm Bill: A Comparison of Senate-Passed S. 3240 and the House Agriculture Committee’s H.R. 6083 with
Current Law
.
5 Producers choose between CCP (price-based) or ACRE (revenue-based).
6 The RLC guarantee is based on county yields, possibly making local farm losses more likely to be covered than under
the current Average Crop Revenue Election (ACRE) program under the 2008 farm bill. ACRE is state-based and can
therefore trigger payments less frequently (large losses in one part of the state can be offset by gains in another part).
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Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642

Figure 3. Agriculture Risk Coverage (ARC)

Source: CRS, hypothetical example.
Figure 4. ARC Payment Under County Option: Kansas Wheat Example

Source: CRS, hypothetical example.


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Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642

Crop Insurance Enhancements
The federal crop insurance program makes available subsidized crop insurance to producers who
purchase a policy to protect against individual farm losses in yield, crop revenue, or whole farm
revenue. More than 100 crops are insurable. The program is permanently authorized by the
Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) but is often modified in farm bills.
In contrast to farm programs in Title I, where spending is reduced substantially, both versions of
the farm bill increase funding for crop insurance (Title X in the House bill and Title XI in the
Senate bill) relative to baseline levels. Crop insurance baseline funding (budget authority) for
FY2014-FY2023 is estimated by CBO at $84.1 billion.7 H.R. 2642 would increase spending by
$8.9 billion over the period and S. 954 would increase spending by $5.0 billion, according to
CBO projections. Two new insurance products—Supplemental Coverage Option (SCO) and the
Stacked Income Protection Plan (STAX) for cotton—account for most of the additional cost. (The
CBO score for each major provision appears in Table 2, below).
Many provisions of the crop insurance title are very similar in both bills. A major exception is a
provision in S. 954, which was adopted as a floor amendment by a vote of 59-33, that reduces
crop insurance premium subsidies by 15 percentage points for producers with average adjusted
gross income greater than $750,000.8
Also in Senate floor action, an amendment to provide mandatory funding of $5 million to
maintain crop insurance program integrity was adopted without dissent, 94-0, and an amendment
to eliminate premium subsidies for tobacco crop insurance was defeated (44-72).
For details on all sections of the crop insurance title, see Appendix B.
Supplemental Coverage Option (SCO)
Under both bills, a new crop insurance policy is authorized to address the issue of “shallow
losses,” or losses incurred by producers but not covered currently by crop insurance. The
Supplemental Coverage Option (SCO) would be available for purchase by crop producers as an
additional policy to cover part of the deductible under the producer’s underlying policy. SCO is
an area-wide (e.g., county) yield or revenue loss policy, whereby an indemnity is paid on area
losses between 10% and the deductible level (e.g., 25%) selected by the producer within the
underlying individual policy. SCO policies would be made available for all crops (not just
program crops) if sufficient data are available. Premium is subsidized at 65%. Coverage would
begin no later than the 2014 crop year. If the farmer participates in ARC under Title I of the
Senate bill, a 10% deductible under SCO is increased to 22%. In the House bill, acres covered by
RLC are not eligible for SCO (i.e., producers of crops other than cotton, which would be covered
by STAX, cannot select RLC and purchase an SCO policy).

7 Based on CBO’s May 2013 baseline assuming an extension of current law.
8 The average government subsidy for crop insurance premiums was 62.8% in 2012. Prior to the House floor vote on
the farm bill on June 20, 2013 (which was rejected by a vote of 195-234), the House rejected H.Amdt. 216 by a vote of
208-217. It would have limited premium subsidies to those producers with an adjusted gross income under $250,000,
limited per-person premium subsidies to $50,000, and capped crop insurance providers’ reimbursement of
administrative and operating expenses at $900 million and reduced their rate of return to 12%.
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Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642

Figure 5 illustrates how crop insurance and farm programs would interact under each bill. The
bar on the left depicts the expected revenue (prior to planting) under a typical crop insurance
revenue policy with a 30% deductible (the farmer absorbs the first 30% of the loss). Under the
House committee bill and assuming the farmer selects the PLC option, an SCO policy can be
purchased to cover part of the deductible (see PLC column). If a loss occurs on the farm, an initial
indemnity is triggered under the farmer’s individual crop insurance policy as depicted by the
green box. A second indemnity from the SCO would be paid (depicted by the blue box) if there is
also a loss at the county level. Overall, the farmer incurs a loss of approximately 10% (white box
at top). A separate PLC payment would be made if the farm price is below the reference price. If a
producer selects the Revenue Loss Coverage (RLC) rather than PLC (see RLC column), the
acreage is not eligible for SCO and only an RLC payment (red box) would be made if triggered.
Under the Senate bill (see S. 954 column), which allows a producer to participate in both the
ARC revenue program and SCO, the SCO indemnity (blue) would be smaller but would fill
(potentially) the gap between the ARC payment (red) and the individual policy indemnity (green).
Figure 5. An Illustration of Crop Insurance Indemnities and Farm Revenue Program
Payments Under 2013 Farm Bill Assuming Major Revenue Loss

Actual Revenue Plus Insurance Indemnities and
Revenue Program Payments
Crop Insurance
H.R. 2642*
S. 954
STAX**
Expected Revenue
PLC
RLC
d
Loss (10%)
Loss (15%)
Loss (12%)
Loss (10%)
iel
y

Deductible
e
SCO
STAX
g
(e.g., 30%)
ARC (10%)
RLC (10%)
a
Indemnity
Indemnity
SCO
er
(20%)
(20%)
v
Loss (5%)
Indemnity (8%)
Insurance
r a
guarantee
Indiv.
Indiv.
Indiv.
Indiv.
-y
0

Indemnity
Indemnity
Indemnity
Indemnity
1
Example:
mes
70%
actual price
actual price
actual price
actual price
ti
coverage
e
(individual
ric
p

policy)
X
X
X
X
d
cte
e

actual yield
actual yield
actual yield
actual yield
p
x
E


Source: CRS.
Notes: The expected revenue for a crop insurance policy is calculated before the planting season and is based
on the expected market price for that year. “Loss” is portion of total loss (relative to expected revenue)
absorbed by the farmer. The average premium subsidy for crop insurance policies was 62.8% in 2012; the subsidy
would be 65% for SCO and 80% for STAX. Maximum revenue program payment for RLC and ARC is 10% of
benchmark revenue (red box in chart).
Stacked Income Protection Plan (STAX)
Both bills would handle cotton separately from the other major program crops in an attempt to
resolve Brazil’s long-standing World Trade Organization (WTO) case against the U.S. cotton
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Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642

program.9 In lieu of the farm revenue programs proposed in Title I, both versions of the farm bill
include a new cotton program comprised of a stand-alone, county-based revenue insurance policy
called the Stacked Income Protection Plan (STAX). Similar to SCO, STAX sets a revenue
guarantee based on expected county revenue (but not revenue or yield as under SCO). Producers
could purchase this policy in addition to their individual crop insurance policy (as done for SCO)
or as a stand-alone policy.
As under SCO, the indemnity from STAX, if triggered by a revenue loss at the county level,
covers part of the deductible under the individual policy. (See far right column of Figure 5.)
Specifically, STAX would indemnify losses in county revenue of greater than 10% of expected
revenue but not more than the deductible level (e.g., 25%) in the underlying individual policy (or
not more than 30% if used as stand-alone policy). A payment rate multiplier of 120% is available
if producers want to increase the amount of protection per acre. The farmer subsidy as a share of
the policy premium is set at 80% for STAX. As with all crop insurance policies, the price
guarantee is based on current market prices. In a previous farm bill proposal in 2012, specifically
the 2012 House committee bill (H.R. 6083), a minimum price of $0.6861 per pound would have
been used in the calculation of the insurance guarantee if it was higher than the expected market
price.
Under a STAX policy setting, which has been advanced by the U.S. cotton sector, producers
would forgo benefits from a revised farm program in order to comply with the WTO cotton case.
In particular, STAX participants would not be eligible for benefits available to other program
crops, such as ARC, yield updating, RLC, and counter-cyclical price payments with reference
prices in PLC or AMP. Brazil has yet to formally sign off on STAX as a solution to the WTO
cotton case. U.S.-Brazil negotiations in this case are ongoing and will likely hinge on the eventual
farm bill treatment of cotton.
Crop Insurance Studies and Other Provisions
Additional crop insurance changes in both bills are designed to expand or improve crop insurance
for other commodities, including specialty crops. Provisions in both bills revise the value of crop
insurance for organic crops to reflect prices of organic (not conventional) crops. Separately, the
bills require USDA to conduct more research on whole farm revenue insurance with higher
coverage levels than currently available. Also in both bills are studies on the feasibility of
insuring (1) specialty crop producers for food safety and contamination-related losses, (2) swine
producers for a catastrophic disease event, (3) producers of catfish against reduction in the margin
between the market prices and production costs, (4) commercial poultry production against
business disruptions caused by integrator bankruptcy, (5) poultry producers for a catastrophic
event, and (6) producers of biomass sorghum or sweet sorghum grown as feedstock for renewable
energy. (In the Senate bill, an adopted floor amendment requires a study for alfalfa insurance.) A
peanut revenue insurance product also is mandated.
Separately, a provision in S. 954 makes payments available to producers who purchase private-
sector index weather insurance, which insures against specific weather events and not actual loss.
A provision in H.R. 2642 requires USDA to notify the public of any planned modification to
insurance policies (and provide for a comment period) during the preceding crop year.

9 For more information, see CRS Report RL32571, Brazil’s WTO Case Against the U.S. Cotton Program.
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Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642

Conservation Provisions for Crop Insurance
For conservation purposes, a provision in Title XI of S. 954 reduces crop insurance subsidies and
noninsured crop disaster assistance for the first four years of planting on native sod acreage. The
same provision in the House bill would apply only to the Prairie Pothole National Priority Area
(i.e., portions of Iowa, Minnesota, Montana, North Dakota, and South Dakota). In Title II of the
Senate-passed bill only (§2609), crop insurance premium subsidies are available only if producers
are in compliance with wetland conservation requirements and conservation requirements for
highly erodible land.10 For more information on conservation compliance, see CRS Report
R42459, Conservation Compliance and U.S. Farm Policy.
Noninsured Crop Disaster Assistance Program (NAP)
Producers who grow a crop that is currently ineligible for crop insurance may be eligible for a
payment under USDA’s Noninsured Crop Disaster Assistance Program (NAP). NAP has
permanent authority under Section 196 of the Federal Agriculture Improvement and Reform Act
of 1996 (7 U.S.C. 7333). To be eligible for a NAP payment, a producer first must apply for
coverage under the program. Like catastrophic crop insurance, NAP applicants must also pay an
administrative fee ($250 per year). In order to receive a NAP payment, a producer must
experience at least a 50% crop loss caused by a natural disaster, or be prevented from planting
more than 35% of intended crop acreage. For any losses in excess of the minimum loss threshold,
a producer can receive 55% of the average market price for the covered commodity.
In order to improve coverage for crops covered under NAP, both bills (in Title XII in the Senate
bill and Title XI in the House bill) provide additional coverage at 50% to 65% of established yield
and 100% of average market price. Premium for additional coverage is 5.25% times the product
of the selected coverage level and value of production (acreage times yield times average market
price). In both bills, the premium for additional coverage is reduced by 50% for limited resource,
beginning, and socially disadvantaged farmers. In the Senate bill only, for producers with fruit
crop losses in 2012, payments associated with additional coverage are made retroactively (minus
premium fees) in counties declared a disaster due to freeze or frost. The Senate bill also increases
the base NAP fee and eliminates NAP for crops and grasses used for grazing to reduce overlap
with livestock disaster programs in Title I.
Disaster Programs Reauthorized
Five disaster programs were established in the 2008 farm bill for weather-induced losses in
FY2008-FY2011. Both 2013 farm bills retroactively reauthorize four programs covering livestock
and tree assistance, specifically FY2012-FY2018 for the Senate bill and beginning FY2012 and
continuing without an expiration date for the House bill. The crop disaster program from the 2008
farm bill (i.e., Supplemental Revenue Assistance, or SURE) is not reauthorized in either bill, but
elements of it have been folded into the new ARC in the Senate bill by allowing producers to
protect against farm-level revenue losses (the House bill has only a county-based revenue

10 During House floor debate in June 2013, an amendment by Representatives Thompson (CA) and Fortenberry (NE)
was withdrawn that would have required a conservation compliance plan in order to receive crop insurance premium
subsidies.
Congressional Research Service
10

Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642

program). S. 954 also provides disaster benefits to tree fruit producers who suffered crop losses in
2012 (see above). The following four programs would be reauthorized:
1. Livestock Indemnity Program (LIP), which would compensate ranchers for a
portion of market value for livestock mortality caused by a disaster (65% in
Senate bill, 75% in the House bill);
2. Livestock Forage Disaster Program (LFP), which would compensate for grazing
losses due to qualifying drought conditions or fire on rangeland managed by a
federal agency (both bills increase the payment amount from the 2008 farm bill
in some cases);
3. Emergency Assistance for Livestock, Honeybees, and Farm-Raised Catfish
(ELAP), which would provide annual funding of $15 million (Senate bill) and
$20 million (House bill) to compensate producers for disaster losses not covered
under other disaster programs; and
4. Tree Assistance Program (TAP), which would provide payments to eligible
orchardists and nursery growers to cover 65% of the cost of replanting trees or
nursery stock (70% previously) and 50% of the cost of pruning/removal
following a natural disaster (in excess of 15% mortality in both cases).
Farm Program Payment Limit Changes
Farm commodity programs have certain limits that cap payments (currently $105,000 per person)
and set eligibility based on adjusted gross income (AGI, currently a maximum of $500,000 per
person for nonfarm income and $750,000 for farm income). The two bills are somewhat similar
and diverge from current law, with S. 954 reducing the farm program payment limit to $50,000
per person for combined AMP and ARC payments and adding a $75,000 limit on loan deficiency
payments (LDPs). Under H.R. 2642, the limit for all Title I payments would be $125,000, of
which LDPs would be limited to $75,000 and other payments including PLC, RLC, and
transitional direct payments to $50,000. The House bill combines peanuts into the limit with other
commodities, while the Senate bill continues separate but equal limits for peanuts.
Both the Senate and House bills change the threshold to be considered “actively engaged” and to
qualify for payments, by effectively requiring personal labor in the farming operation.
Both bills also tighten limits on AGI, with a combined AGI limit of $750,000 in S. 954 and
$950,000 in H.R. 2642. Proponents of the changes to AGI assert that the new provisions represent
a tightening of the limit. However, some high-income individuals who have been disqualified
under the 2008 farm bill might be restored to eligibility, primarily because the proposed
combined limit in both bills is higher than the current nonfarm AGI limit.11
The House bill caps overall farm program spending at $16.96 billion for FY2014-FY2020 for
combined payments under Price Loss Coverage and Revenue Loss Coverage (collectively called
Farm Risk Management Election).

11 CRS Congressional Distribution Memorandum, Unintended Consequences of Returning to a Single AGI Limit for
Farm Program Eligibility
, September 10, 2012.
Congressional Research Service
11

Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642

For disaster programs, S. 954 retains the combined $100,000 per person payment limit for LIP,
LFP, and ELAP and retains the separate limit of $100,000 for TAP. H.R. 2642 contains a
combined payment limit of $125,000 per person for LIP, LFP, and ELAP and a separate limit of
$125,000 for TAP.
Dairy and Sugar
For dairy policy, both bills contain similar, significant changes, including elimination of the dairy
product price support program, the Milk Income Loss Contract (MILC) program, and export
subsidies. These are replaced by a new program, which makes payments to participating dairy
producers when the national margin (average farm price of milk minus average feed costs) falls
below $4.00 per hundredweight (cwt.), with coverage at higher margins available for purchase. A
provision in S. 954 makes participating producers subject to a separate program, which reduces
incentives to produce milk when margins are low—this provision is not present in H.R. 2642.
In addition, H.R. 2642 requires USDA to adhere to standard rulemaking procedures and to
determine the market impacts of the new program during the rulemaking process. Separately,
federal milk marketing orders have permanent statutory authority and continue intact. However,
S. 954 (but not H.R. 2642) includes two additional provisions: one that requires USDA to use a
specified pre-hearing procedure to consider alternative formulas for Class III milk product
pricing, and a second that requires USDA to analyze and report on the potential effects of
replacing end-product pricing with alternative pricing procedures. For more information on dairy
policy, see CRS Report R42736, Dairy Policy Proposals in the Next Farm Bill.
The objective and structure of the sugar program are left unchanged in both bills, but the Senate
bill reauthorizes the program through the 2018 crop year, while the House bill reauthorizes the
program without an expiration date. For more information, see CRS Report R42551, Sugar
Program Proposals for the Next Farm Bill.

Cost Estimates
Funding to write the next farm bill is based on the Congressional Budget Office’s (CBO’s)
baseline projection of the cost of mandatory farm bill programs, and on varying budgetary
assumptions about whether programs will continue. The CBO baseline projection is an estimate at
a particular point in time of what federal spending on mandatory programs likely would be under
current law. The May 2013 CBO baseline projection is the “scoring baseline” against which S.
954 and H.R. 2642 have been measured.
According to the May 2013 baseline, expected outlays for all mandatory farm bill programs under
current law are $973 billion during FY2014-FY2023 (Table 1). Of this amount, budget authority
for farm safety net programs is $143 billion over the 10-year period, including $59 billion for
commodity programs and $84 billion for crop insurance. Disaster programs do not have baseline
funding, since they expired ahead of other farm support programs. From a budget perspective,
programs with a continuing baseline are assumed to go on under current law. These amounts can
be used to reauthorize the same programs; reallocated among these and other programs; used as
savings for deficit reduction; or used as offsets to help pay for other provisions. For more
information on the overall farm bill score and budget situation, see CRS Report R42484, Budget
Issues Shaping a Farm Bill in 2013
.
Congressional Research Service
12

Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642

Table 1. Baseline for Mandatory Farm Bill Programs, FY2014-FY2023
(expected outlays in millions of dollars)
5-year
10-year
(FY2014-
(FY2014-
2008 Farm Bill Title and Program
FY2018)
FY2023)
Title I and XII – Farm Safety Net
69,480 142,870
Programs
Title I – Commodity Programs
29,888
58,765
Title XII – Crop Insurance
39,592
84,105
Title II – Conservation
28,373
61,567
Title IV – Nutrition
393,930
764,432
All other titles
2,158
4,036
Total 493,941
972,905
Source: CRS analysis based on the CBO baseline (May 2013). For more information, see CRS Report R42484,
Budget Issues Shaping a Farm Bill in 2013.
Notes: Crop insurance appears in Title XI of the Senate farm bill and Title X of the House farm bill. Nutrition
includes only the Supplemental Nutrition Assistance Program (SNAP) and related programs, because both House
and Senate Agriculture committees have jurisdiction.

Table 2 shows the CBO scores of both versions of the farm bill, with a detailed breakout for their
respective farm safety net provisions. For just the farm safety net programs, the 10-year savings
amount is $12.8 billion in S. 954 and $9.6 billion in H.R. 2642. Approximately three-fourths of
the 10-year, $46 billion-$47 billion in savings associated with the proposed elimination of current
farm programs would be used to offset the cost of revising farm programs (Title I), enhancing
crop insurance (Title XI in the Senate bill and Title X in the House bill), and retroactively
reauthorizing four disaster programs. The 10-year savings from commodity programs in the
House committee bill is $18.7 billion and savings in the Senate bill is $17.4 billion. In contrast to
scoring savings under Title I, expenditures for crop insurance in both bills increase relative to
baseline levels. The increase is about $4 billion lower in the Senate bill, in part because the new
revenue program contains an option for a farm-level guarantee that is expected to reduce demand
for crop insurance and offset some costs associated with the crop insurance changes.




Congressional Research Service
13

Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642

Table 2. CBO Estimated Change to Baseline: Farm Safety Net Programs, 2014-2023
(change in outlays in millions of dollars)
2013 Farm Bill Title
Description
S. 954
H.R. 2642
(A) Commodity Programs (Title I)
-17,442
-18,699
Repeal Direct Payments
Fixed payments
-40,842
-40,019
Repeal Counter-cyclical Payment
Variable payment (price)
-1,519
-1,519
Repeal Average Crop Revenue Election
Variable payment (revenue)
-4,719
-4,719
Payments
Price/Revenue Programs
Variable payment (price or revenue)
+26,809a +23,369
Dairy Program (see notes)
Margin insurance/market stabilization
+302
+436
Disaster Programs
Livestock and tree assistance
+2,382
+3,674
Other Commodity Provisions
Miscellaneous/Marketing Loan Program
+145
+152
(B) Crop Insurance (Title XI in Senate bill, Title X in House bill)
+4,999
+8,914
Supplemental Coverage Option
Additional crop insurance policy for
+2,247 +3,850
shallow losses
Catastrophic Policy Premiums
Reduce premiums
-469
-469
Enterprise Units
Units for irrigated/nonirrigated land
+586
+586
Adjustment in APH Yields
Increase yields for guarantees
+406
+936
Stacked Income Protection for Cotton
New insurance policy for cotton
+3,693
+3,693
(STAX)
Peanut Revenue Crop Insurance
New insurance policy for peanuts
+269
+269
Beginning Farmer Provisions
Increase benefits to new farmers
+283
+283
Crop Production on Native Sod
No payments on converted land
-178
-118
Participation Effects of Commodity
New commodity program reduces
-2,038 -574
Programs
demand for crop insurance
Other Crop Insurance Provisions
Miscel aneous/Implementation
+200
+85
Equitable Relief for Specialty Crop
Increase delivery cost reimbursement
not applicable
+205
Producers
to insurance companies
Coverage Level by Practice
Allow coverage level to vary
not applicable
+168
(C) Noninsured Crop Disaster
Increase coverage levels
-346 +161
Assist. Program (NAP) (Title XII)
Total Farm Safety Net (A+B+C)
-12,789
-9,624
Source: CRS, using CBO cost estimates of S. 954 (May 17, 2013, at http://cbo.gov/publication/44248), H.R. 2642
(July 11, 2013, at http://www.cbo.gov/sites/default/files/cbofiles/attachments/hr2642asIntroduced_0.pdf), and H.R.
1947 (May 23, 2013, at http://cbo.gov/publication/44271).
Notes: - = savings, + = additional costs. PLC/RLC cost is reduced by shifting some payments beyond 10-year
scoring window. Figures may not add due to rounding, and because indicated scores at the program level for the
House bill are from CBO cost estimate for H.R. 1947. Total farm bill savings across all titles: $17.894 billion in S.
954, $12.885 billion in H.R. 2642 (excludes nutrition title), and $33.397 billion in H.R. 1947 (includes a nutrition
title).
a. Total equals $3.06 billion for Adverse Market Payments and $23.749 billion for Agricultural Risk Coverage.

Congressional Research Service
14


Appendix A. S. 954 (Title I) and H.R. 2642 (Title I): Commodity Programs
Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)
Direct Payments


Direct payments (DPs) are available to
Repeals direct payments. [Sec. 1101]
Identical to the Senate bill, except payments for upland
producers on farms with base acres (historical
cotton continue for crop years 2014 and 2015 with
plantings) of covered commodities (wheat, corn,

payment acres equal to 70% of base acres in 2014 and
grain sorghum, barley, oats, upland cotton, rice,
60% in 2015. [Sec. 1101]
soybeans, and other oilseeds). [7 U.S.C. 8713]
Covers 2008-2013 crop years. Direct payment

rates are fixed in statute [7 U.S.C. 7913(b)] and
do not vary based on market price. Payment
amount = direct payment rate, times 85% of base
acres [7 U.S.C. 7911], times direct payment yield
[7 U.S.C. 7912]. (Exception: payment acreage is
83.3% of base acres for crop years 2009-2011.)
Direct payments for peanuts authorized separately.
[7 U.S.C. 8753]
Price-Based Payments


Counter-cyclical payments (CCPs) are
Repeals counter-cyclical payments. [Sec. 1102]
Repeals counter-cyclical payments. [Sec. 1102]
available for same commodities as for direct
payments plus pulse crops. [7 U.S.C. 8714] Covers Establishes program for adverse market payments
Establishes Price Loss Coverage (PLC) for producers
2008-2013 crop years. Payment rate is difference
(AMP) for crop years 2014-2018 for the same crops as
of commodities covered by CCPs except upland cotton.
between target price in statute (see below) and
those covered by CCPs (except upland cotton). Payment
Covers 2014 crop year and each succeeding crop year.
national average market price (or loan rate, if
rate is the difference between the reference price and the Payment rate is difference between reference price and
higher), minus the direct payment rate. Counter-
12-month national average market price (or loan rate, if
national midseason market price (or loan rate, if higher).
cyclical payments for peanuts authorized separately. higher), Covered commodities are wheat, corn, grain
USDA shall submit to Congress an annual report that
[7 U.S.C. 8754(a)(1)-(3)]
sorghum, barley, oats, long grain rice, medium grain rice,
evaluates the impact of PLC (and RLC below) on
pulse crops (dry peas, lentils, small chickpeas, and large
plantings, production, prices, and program costs. [Sec.
chickpeas), soybeans, other oilseeds, and peanuts. Cotton
1104-1107]
is not covered under AMP but is eligible for the Stacked
Income Protection Plan (STAX) for producers of upland

cotton (see Title XI). USDA is required to consider
popcorn as a covered commodity. [Sections 1104-1107]

CRS-15


Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)
Target prices for 2013:
Reference prices:
Reference prices:
Wheat, bu., $4.17
Long grain rice, cwt., $13.30
Wheat, bu., $5.50
Corn, bu., $2.63
Medium grain rice, cwt., $13.30
Corn, bu., $3.70
Grain sorghum, bu., $2.63
Peanuts, ton, $523.77
Grain sorghum, bu., $3.95
Barley, bu., $2.63
All other covered commodities: 55% times the average
Barley, bu., $4.95
national marketing year average price for the most recent
Oats, bu., $1.79
5 crop years, excluding each of the crop years with the
Oats, bu., $2.40
Upland cotton, lb., $0.7125
highest and lowest prices.
Upland cotton, none (covered by STAX program Title
XI)
Long grain rice, cwt., $10.50

Long grain rice, cwt., $14.00
Medium grain rice, cwt., $10.50

Medium grain rice, cwt., $14.00
Soybeans, bu., $6.00

(for rice, price is increased 15% for temperate japonica
Other oilseeds, cwt., $12.68

rice)
Dry peas, cwt., $8.32

Soybeans, bu., $8.40
Lentils, cwt., $12.81

Other oilseeds, cwt., $20.15
Small chickpeas, cwt., $10.36

Dry peas, cwt., $11.00
Large chickpeas, cwt., $12.81

Lentils, cwt., $19.97
Peanuts, ton, $495

Small chickpeas, cwt., $19.04


Large chickpeas, cwt., $21.54


Peanuts, ton, $535
Payment amount = Payment rate times 85% of
Payment amount = Payment rate times 85% of base
Payment amount = Payment rate times 85% of total
base acres times counter-cyclical program yield for
acres planted to crop times existing counter-cyclical
acres planted to crop (and 30% of acres of “prevented
the farm (generally based on 1998-2001 data). [7
program yield (for rice and peanuts, yields may be
plantings”) times existing counter-cyclical program yield
U.S.C. 7912]
updated with 2009-2012 data). Base acres for peanuts
may be updated using 2009-2012 plantings.
(or updated yields equal to 90% of 2008-2012 average
yield per planted acre). Payment acres cannot exceed
Payment is made on or after October 1 fol owing the
farm base acres.
completion of the marketing year.
Payment is made on or after October 1 following the

completion of the marketing year.
CRS-16


Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)
Revenue-Based Payments


For covered commodities and peanuts, Average
Repeals Average Crop Revenue Election (ACRE)
Repeals Average Crop Revenue Election (ACRE)
Crop Revenue Election (ACRE) payments are program. [Sec. 1103]
program. [Sec. 1103]
available to producers as an alternative to CCPs.
Revenue payment based on a two-part trigger: (1) if Establishes Agriculture Risk Coverage (ARC)
Establishes Revenue Loss Coverage (RLC) as an
actual state revenue is less than a guaranteed state
program for crop years 2014-2018 for the same crops as
alternative to PLC for 2014 crop year and each
level for the commodity, and (2) if actual farm
covered by AMP, and payment is made in addition to
succeeding crop year for the same crops as those under
revenue is less than a farm ACRE benchmark for
AMP. For ARC, producers select either farm or county
PLC. Farmers make a one-time, irrevocable election on a
the commodity. Payment amount equals the
option. The election is a one-time, irrevocable decision
commodity-by-commodity and farm-by-farm basis to
product of (1) the lesser of (a) the ACRE program
applicable to all acres under the operational control of
receive RLC payment instead of PLC. The program is
guarantee minus actual state revenue or (b) 25% of
the producers. [Sections 1104, 1105, 1108, 1110]
similar to ARC but provides for only a county revenue
the ACRE program guarantee, times (2) 83.3% (for
guarantee (i.e., no farm-level option). [Sections 1104—
Payments made on planted (or prevented from being
crop years 2009-2011) or 85% (2012-2013) of the
1107]
planted) acres when actual crop revenue (actual yield
acreage planted of the covered commodity (not to
times higher of national farm price or reference price)
Revenue loss trigger (guarantee) is based on 85% of
exceed base acres of the commodity), times (3) the
drops below 88% of the benchmark revenue (see below).
historical revenue (compared with 88% in S. 954). Actual
5-year Olympic average farm yield divided by the 5-
Per-acre payment rate equals the difference between per-
county revenue is actual county yield times the higher of
year Olympic average state yield (Olympic average
acre guarantee (88% times benchmark revenue) and
the midseason price or the loan rate.
drops lowest and highest year). For producers who
actual revenue. Maximum payment rate is 10% of
participate in ACRE, loan rates under the marketing benchmark revenue per acre. For benchmark revenue,

assistance loan program are reduced 30% and
farmer can elect either a farm option or county option:
direct payments are reduced by 20%. [7 U.S.C.
8715]


(1) Farm level: 5-year farm yield times 5-year average
No farm option available,
national price (averages exclude highest and lowest
years). Payment equals difference between the per-acre

guarantee and actual per-acre revenue times 65% of

eligible planted acres (and 45% of prevented-planted
acreage), or

(2) County level: 5-year county yield times 5-year
Payment is made on 85% of planted acres and 30% of
average national price (averages exclude highest and
prevented planted acres.
lowest years). Payment equals the difference between the
per-acre guarantee and actual per-acre revenue times

80% of eligible planted acres (and 45% of prevented
plantings).
CRS-17


Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)

No comparable provision.
For all crops, reference prices (see PLC) are used as
minimum prices in the revenue guarantee.

Separate guarantees are to be calculated for irrigated and
Separate guarantees are to be calculated for irrigated and
nonirrigated crops and differentiated by class of sunflower nonirrigated crops.
seeds, barley (using malting prices), and wheat.

Eligible program acres cannot exceed average total acres
Payment acres capped at total farm base acres,
planted (or prevented from being planted) to covered
commodities and upland cotton on the farm during 2009-
2012.

Payment is made on or after October 1 fol owing the
Payment is made on or after October 1 following the
completion of the marketing year.
completion of the marketing year.

In combination with AMP/ARC, producers may purchase
Supplemental Coverage Option (SCO) is not available in
an additional insurance policy cal ed Supplemental
combination with RLC but may be purchased with PLC.
Coverage Option (SCO) under Title XI (crop insurance).
No comparable provision.
No comparable provision.
The total amount of PLC and RLC payments during
FY2014-2020 shal not exceed $16,956.5 million. If
necessary, individual producer payments will be reduced
to avoid exceeding program cap. [Sec. 1107]
Nonrecourse Marketing Loans and Other Recourse Loans

Nonrecourse marketing loans are available for
General y continues current law to cover 2014-2018 crop Identical to the Senate bill except applies to 2014 crop
any amount of a loan commodity (see list below)
years for all loan commodities (including peanuts). [Sec.
and each succeeding annual crop. [Sec. 1201]
produced in crop years 2008-2013. [7 U.S.C.
1201]
8731] Nonrecourse marketing loans for peanuts
are authorized separately. [7 U.S.C. 8757]

For peanuts, nonrecourse marketing loans available
in crop years 2008-2013. May be obtained through
marketing cooperative or association approved by
USDA. Storage to be provided on a non-
discriminatory basis and under any additional
requirements. Payment of peanut storage costs
authorized for 2008-2013 crops. [7 U.S.C.
8757(a)(4)-(7)]

CRS-18


Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)
Loan commodities and loan rates:
Loan commodities same as current law. [Sec. 1201]
Identical to the Senate bill. [Sec. 1201]
Wheat, per bushel (bu.), $2.94 ($2.75 in 2008,
For 2014-2018 crop years, loan rates same as current law For 2014 and each succeeding crop year, same as the
2009)
except for upland cotton. The loan rate for upland cotton Senate bill except the lower bound for the upland cotton
Corn, bu., $1.95
is changed from $0.52 per lb. to the simple average of the
loan rate is $0.47 per pound. [Sec. 1202]
Grain sorghum, bu., $1.95
adjusted prevailing world price for the two immediately
Barley, bu., $1.85
preceding marketing years, but not less than $0.45 per
Oats, bu., $1.33
pound or more than $0.52 per pound. [Sec. 1202]
Upland cotton, lb., $0.52
Extra-long staple (ELS) cotton, lb., $0.7977
Long grain rice, hundredweight (cwt.), $6.50
Medium grain rice, cwt., $6.50
Soybeans, bu., $5.00
Other oilseeds, cwt., $10.09 ($9.30 in 2008, 2009)
Dry peas, cwt., $5.40 ($6.22 in 2008)
Lentils, cwt., $11.28 ($11.72 in 2008)
Small chickpeas, cwt., $7.43
Large chickpeas, cwt., $11.28 (not applicable in
2008)
Graded wool, lb., $1.15 ($1.00 in 2008, 2009)
Nongraded wool, lb., $0.40
Mohair, lb., $4.20

Honey, lb., $0.69 ($0.60 in 2008, 2009)
[7 U.S.C. 8732 (a)(b)(c)]
Peanuts, ton, $355 [7 U.S.C. 8757(b)]
Establishes a single loan rate in each county for
each kind of “other oilseeds” [7 U.S.C. 8732(d)]
Term of loans: 9 months after the day the loan is
Same as current law. [Sec. 1203]
Identical to the Senate bill. [Sec. 1203]
made; no extensions. [7 U.S.C. 8733] Same term
for peanuts. [7 U.S.C. 8757(c)]
Loan repayment: Loans may be repaid at the
Same as current law. [Sec. 1204]
Identical to the Senate bill. [Sec. 1204]
lesser of (1) the loan rate plus interest, (2) a rate
based on average market prices during the
preceding 30-day period, or (3) a rate determined
by USDA that will minimize forfeitures,
accumulation of stocks, storage costs, market
impediments, and discrepancies in benefits across
CRS-19


Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)
states and counties. Excludes upland cotton, rice,
ELS cotton, confectionery and each other kind of
sunflower seed (other than oil sunflower seed). [7
U.S.C. 8734(a)]
Provides USDA authority to
temporarily, and on a short-term basis only, adjust
the repayment rates in the event of a severe
disruption to marketing, transportation or related
infrastructure. [7 U.S.C. 8734(h)] Similar
provisions for peanuts. [7 U.S.C. 8757(d)]
For upland cotton, long grain rice, and medium
grain rice, repayment may be at the lesser of the
loan rate plus interest, or the prevailing world price
for the commodity adjusted to U.S. quality and
location. [7 U.S.C. 8734(b)]
For ELS cotton, repayment must be at the loan rate
plus interest. [7 U.S.C. 8734(c)]
For confectionery and other kinds of sunflower
seeds (other than oil sunflower seed), loans must
be repaid at the lesser of (1) the loan rate plus
interest, or (2) the repayment rate for oil sunflower
seed. [7 U.S.C. 8734(f)]
For 2008-2011 crop years, USDA provides cotton
Payments reauthorized for 2014-2018 crop years with
Payments reauthorized for 2014 crop year and each
storage payments at the same rates as provided for
20% rate reduction. [Sec. 1204]
succeeding crop year; rate reduction is 10%. [Sec. 1204]
the 2006 crop, but reduced by 10%. Beginning with
2012 crop year, the rates are reduced by 20%. [7
U.S.C. 8734(g)]

Loan deficiency payments (LDP) are available
For 2014-2018 crop years, same as current law. [Sec.
For 2014 and each succeeding crop year, same as the
to producers who agree to forego marketing loans.
1205]
Senate bill. [Sec. 1205]
LDP computed by multiplying the payment rate (the
amount that the loan rate exceeds the rate at
which a marketing loan may be repaid) for the
commodity times the quantity of the commodity
produced. Loan deficiency payments available for
unshorn pelts or hay and silage, even though they
are not eligible for marketing loans. ELS cotton is
CRS-20


Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)
not eligible. Payment rates determined using the
rate in effect as of the date that producers request
payment (producers do not need to lose beneficial
interest). [7 U.S.C. 8735] Same provision for
peanuts. [7 U.S.C. 8757(e)]
Payments in lieu of LDP for grazed acreage of
For 2014-2018 crop years, same as current law, except
For 2014 and each succeeding crop year, same as the
wheat, barley, oats, or triticale. [7 U.S.C. 8736]
payment is based on yield used for Agriculture Risk
Senate bill, except payment is based on yield used for
Coverage. [Sec. 1206]
Price Loss Coverage. [Sec. 1206]
Special marketing loan provisions for upland
Provisions not extended.
Provisions extended without an expiration date beginning
cotton impose a special import quota on upland
August 1, 2014. [Sec. 1207]
cotton through July 31, 2013, when price of U.S.
cotton, delivered to a definable and significant
international market, exceeds the prevailing world
market price for 4 weeks. [7 U.S.C. 8737(a)]
Limited global import quota is imposed on upland
cotton when U.S. prices average 130% of the
previous 3-year average of U.S. prices [7 U.S.C.
8737(b)]

Economic adjustment assistance to users of
Same as current law. [Sec. 1207]
Same as Senate bill except assistance begins August 1,
upland cotton provides assistance to domestic
2013. [Sec. 1207]
users of upland cotton for uses of al cotton
regardless of origin to acquire, construct, install,
modernize, develop, convert, or expand land, plant,
buildings, equipment, facilities, or machinery. Rate
was 4¢/lb. between August 1, 2008, and July 31,
2012, and declined to 3¢/lb. effective beginning
August 1, 2012. [7 U.S.C. 8737(c)]
Special competitiveness program for ELS
Same as current law through July 31, 2019. [Sec. 1208]
Same as the Senate bill except program continues without
cotton provides payments to domestic users and
an expiration date. [Sec. 1208]
exporters whenever the world market price for the
lowest priced ELS cotton is below the prevailing
U.S. price for a competing growth of ELS cotton for
a 4-week period; and the lowest priced competing
growth of ELS cotton is less than 134% of the loan
rate for ELS cotton. Effective through July 31, 2013.
CRS-21


Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)
[7 U.S.C. 8738]
Recourse loans for high moisture feed grains
For 2014-2018 crop years, same as current law. [Sec.
For 2014 and each succeeding crop year, same as the
and seed cotton are available for farms that
1209]
Senate bill. [Sec. 1209]
normal y harvest corn or sorghum in a high
moisture condition at rates set by the USDA. For
recourse loans for seed cotton, repayment is at
loan rate plus interest. [7 U.S.C. 8739]
Adjustments of loan rates are authorized for
Same as current law. [Sec. 1210]
Nearly identical to the Senate bill except removes certain
any commodity (other than cotton) based on
mandatory provisions to quality adjustments. [Sec. 1210]
differences in grade, type, quality, location, and
other factors. Allows county loan rates as low as
95% of the U.S. average, if it does not increase
outlays; prohibits adjustments that would increase
the national average loan rate. For cotton, loan
rates may be adjusted for differences in quality
factors. [7 U.S.C. 8740]; [7 U.S.C. 8758] for
peanuts.
Conservation Compliance/Producer Agreement

Eligibility for direct payments, counter-cyclical
Same as current law, with application to the new Adverse
Same as Senate bill, with application to Price Loss
payments, or average crop revenue election
Market Payment (AMP) and Agriculture Risk Coverage
Coverage (PLC) and Revenue Loss Coverage (RLC).
payments requires producers to comply with
(ARC) programs [Sec. 1109] and continued compliance
House bill excludes requirement for production reports
conservation, wetland, and planting flexibility
requirement to receive benefits under the marketing
and use of crop insurance data. [Sec. 1108]
requirements; use base acres for agricultural or
assistance loan program. [Sec. 1201]
conserving use, and not for nonagricultural

commercial, industrial, or residential use; control
To receive ARC payments, producer must annually

noxious weeds and maintain sound agricultural
report data on production in addition to acreage. The
practices. Producers must submit annual acreage
Secretary is to use data reported by the producer for

reports for all cropland on the farm. [7 U.S.C.
crop insurance requirements to meet obligations for

8716 (a)] Same provision for peanuts. [7 U.S.C.
program payments without additional submissions to
8755(a)] Under Title II (Conservation) of the 2008 USDA. [Sec. 1109]
farm bill (P.L. 110-246), benefits under the

marketing loan program are subject to
conservation compliance for highly erodible land
[16 U.S.C. 3811(a)(1)(A)]
and for Swampbuster
[16 U.S.C. 3812(a)(1)].
CRS-22


Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)

See also Title II Conservation, whereby in order to
No comparable provision.
receive crop insurance premium subsidies, a producer
must be in compliance with highly erodible land
conservation requirements and wetland requirements.
[Sec. 2609]
Supplemental Agricultural Disaster Assistance (Funding expired on 9/30/11)
Beginning in 2008, five new disaster programs were
SURE is not reauthorized. Other four programs are
Same as Senate bill, except programs are authorized and
authorized and funded for disasters occurring on or reauthorized retroactively with mandatory funding from
funded without an expiration date. [Sec. 1501]
before 9/30/11. [7 U.S.C. 1531] Program funding
the Commodity Credit Corporation for FY2012 through
derived from a transfer of 3.08% of annual customs
FY2018. [Sec. 1501]

receipts to the newly created Agricultural Disaster

Relief Trust Fund. [19 U.S.C. 2497(a)] Under P.L.

112-240, al but SURE (below) reauthorized (but

not funded) for FY2012 and FY2013.
The five programs: (1) Supplemental Revenue
LIP payment rate is reduced from 75% to 65% of the
LIP payment rate remains at 75%.
Assistance (SURE) Payments for crops (not just
market value of livestock.
farm program crops); compensates producers for a
portion of losses that are not eligible for an
For LFP, payment is triggered by eligible forage losses,
For LFP, retains program language in 2008 farm bill. In
indemnity payment under a crop insurance policy;
which may be determined by either (1) drought
certain cases, farm payment amount is increased
(2) Livestock Indemnity Program (LIP), which
conditions as measured by the U.S. Drought Monitor
compared with program established in 2008 farm bill. For
compensated ranchers at a rate of 75% of market
report, or (2) low precipitation (at least 50% below
example, an eligible livestock producer that owns or
value for livestock mortality caused by a disaster;
normal level in a county during a calendar year). The
leases grazing land or pastureland that is physically
(3) Livestock Forage Disaster Program (LFP) for
monthly payment rate is equal to 50% of estimated feed
located in a county that is rated as having at least a D3
grazing losses due to qualifying drought conditions
costs. Coverage continues for losses due to fire on public
(extreme drought) intensity in any area of the county at
(as determined by the U.S. Drought Monitor
rangeland. LFP is to serve as the sole source of livestock
any time during the normal grazing period for the county
report) or fire on rangeland managed by a federal
forage assistance, combining the livestock forage
is eligible to receive assistance equal to 3 monthly
agency, with monthly payments equal to 60% of
assistance functions of ELAP and the noninsured crop
payments compared with 2 monthly payments under the
estimated feed costs; (4) Emergency Assistance for
disaster assistance program (NAP). Producers may also
2008 farm bill.
Livestock, Honeybees, and Farm-Raised Catfish
receive assistance for eligible forage losses that occur due
(ELAP), which provided up to $50 million annual y
to weather-related conditions other than drought or fire.
to compensate producers for disaster losses not
Maximum funding for ELAP is $15 million annual y.
Maximum funding for ELAP is $20 million annually.
CRS-23


Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)
covered under other disaster programs; and (5)
TAP payment rate for replanting is reduced from 70% to
Same as Senate bill.
Tree Assistance Program (TAP), which provided
65%.
payments to eligible orchardists and nursery
growers to cover 70% of the cost of replanting
trees or nursery stock and 50% of the cost of
pruning/removal following a natural disaster.
Maximum payments set at $100,000 per person per Retains the combined $100,000 per person payment limit
Combined payment limit of $125,000 per person for LIP,
year for first four programs combined. TAP has a
for LIP, LFP, and ELAP. Retains the separate limit of
LFP, and ELAP. Separate limit of $125,000 for TAP.
separate limit of $100,000.
$100,000 for TAP.
No comparable provision.
No comparable provision.
Establishes a National Drought Council within USDA to
develop a comprehensive National Drought Policy Action
Plan for delineating and integrating responsibilities among
federal agencies for drought preparedness, mitigation,
research, risk management, training, and emergency relief.
[Sec. 1502]
Administrative Provisions

Payment Limitations

Establishes the maximum amount of payments per
Establishes a limit on Agriculture Risk Coverage (ARC)
Establishes a limit on all Title I payments, including Price
year to a person or legal entity for the sum of all
and adverse market payments, and reinstates limits on
Loss Coverage and Revenue Loss Coverage payments,
covered commodities, except peanuts. Peanuts
marketing loan gains and LDPs.
marketing loan gains and LDPs, and direct payments made
have a separate but equal payment limitation.
—ARC and adverse market payments for the sum of all
to upland cotton for 2014 and 2015. Combines al
—Direct payments: $40,000
covered commodities except peanuts: $50,000
covered commodities under one limit.
—Direct payments under ACRE: $40,000 minus
—ARC and adverse market payments for peanuts:
—All Title I payments for the sum of all covered
the reduction required for an ACRE participant.
$50,000
commodities, including peanuts, $125,000, of which:
—Counter-cyclical payments: $65,000
—Marketing loan gains/LDP for sum of all commodities
—PLC and RLC payments: $50,000
—ACRE payments: $65,000 plus the reduction in
except peanuts: $75,000
—Marketing loan gains and LDP: $75,000. [Sec. 1603]
the limit from the direct payment limit.
—Marketing loan gains/LDP for peanuts: $75,000 [Sec.
—Marketing loan gains/LDP: no limit. [7 U.S.C.
1603]
1308 (a)-(d)]
Payments are attributed to a person by accounting
Continues other payment limit provisions such as direct
Similar to Senate bill, with additional clarification for
for the direct and indirect ownership in any legal
attribution, with the exception of the definition of active
doubling the limits for spouses, and definitions of legal
entity. Payments made directly to a person are
personal management (see below).
entitles [Sec. 1603].
combined with the person’s pro rata share of
payments from a legal entity. Payments to a legal

CRS-24


Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)
entity cannot exceed the limits above, and are
attributed to persons. Attribution of payments to
legal entities is traced to four levels of ownership. If
a payment has not been al ocated to an individual
after four levels of ownership, the payment to the
first-level entity is reduced on a pro-rata basis. [7
U.S.C. 1308 (e)-(h)]

To be eligible for payments, persons must be
Deletes “active personal management” from the definition Same as Senate bill, with minor clarification differences.
“actively engaged” in farming. Actively engaged, in
of actively engaged in farming. Effectively requires
[Sec. 1603A]
general, is defined as making a significant
personal labor in the farming operation to be considered
contribution of (i) capital, equipment or land, and
actively engaged. Members of legal entities collectively
(ii) personal labor or active personal management.
would need to make a significant contribution of personal
Also, profits are to be commensurate with the level labor. Adds a special class of “farm managers” that may be
of contributions, and contributions must be at risk.
considered actively engaged by providing management but
Legal entities can be actively engaged if members
not personal labor. However the Secretary would take
col ectively contribute personal labor or active
into account the size and complexity of the operation and
personal management. Special classes allow
whether such management requirements are normal y
landowners to be considered actively engaged if
needed by similar operations, A farm manager must be
they receive income based on the farm’s operating
the only person to qualify an operation, may qualify only
results, without providing labor or management,
one operation, and must manage an operation that
Spouses are considered actively engaged if the
doesn’t share resources with another that col ectively
other spouse meets the qualification. [7 U.S.C.
receives more than the payment limitations. Separately,
1308-1]
clarifies that for the special class of landowner, a
“landowner share-rents the land at a rate that is usual and
customary” and that government payments are
commensurate. [Sec. 1604]
Adjusted Gross Income (AGI) Limitation
Prohibits farm commodity program benefits to an
Eliminates the distinction between non-farm AGI and
Eliminates the distinction between non-farm AGI and
individual or entity if adjusted gross income
farm AGI, and establishes a limit on total AGI. For most
farm AGI, and establishes a limit on total AGI. For some
exceeds certain thresholds. For this purpose, AGI
individuals, this tightens the limit. For some individuals
individuals, this tightens the limit if they use most of the
is divided into two parts: farm AGI and non-farm
with non-farm AGI between $500,000 and $750,000, it
former $500,000 and $750,000 limits. For other
AGI. Uses a 3-year average when comparing to the
may restore program eligibility if farm AGI is low. Uses a
individuals, it may restore program eligibility if AGI is
limit.
3-year average when comparing to the limit. Applies AGI
concentrated to either the farm or non-farm component
limits through 2018.
(e.g., non-farm AGI between $500,000 and $950,000 and
low farm AGI). Uses a 3-year average when comparing to
the limit. Repeals expiration date of applicability.
CRS-25


Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)
—$500,000 limit on non-farm AGI to qualify for
—$750,000 limit on total AGI to qualify for and receive
—$950,000 limit on total AGI to qualify for and receive
and receive any farm commodity program benefits,
ARC and adverse market payments, marketing loan gains
PLC and RLC payments, marketing loan gains or loan
Milk Income Loss Contract (MILC) program,
or loan deficiency payments, supplemental agricultural
deficiency payments, supplemental agricultural disaster
noninsured crop assistance (NAP), or disaster
disaster assistance, and noninsured crop assistance. [Sec.
assistance, noninsured crop assistance, and conservation
payments.
1605]
programs. [Sec. 1604]
—$750,000 limit on farm AGI to qualify for and
receive direct payments, but counter-cyclical,
ACRE and marketing loan benefits may continue if
farm AGI exceeds $750,000. [7 U.S.C. 1308-
3a(b)(1)]

For FY2012 only, a separate, additional $1 million
AGI limit applies to direct payments [P.L. 112-55,
Sec. 745]

For conservation programs, $1 million limit on non-
Eliminates the USDA waiver authority for
Eliminates the separate AGI limit for conservation
farm AGI, unless more than 66.66% of AGI is farm
“environmentally sensitive land of special significance.”
programs, including the exception for 2/3 of AGI being
AGI. Provides USDA discretion to waive the limit
Continues $1 million limit on non-farm AGI, and the
farm AGI, and—like the Senate bill—the USDA waiver
for “environmentally sensitive land of special
exception, for conservation programs. [Sec. 2610]
authority for “environmentally sensitive land of special
significance." [7 U.S.C. 1308-3a(b)(2)]
significance.” Applies the same $950,000 total AGI limit
to the conservation programs as for the farm commodity
programs. [Sec. 1604(a)]
Other Administrative Provisions


Authorizes use of funds, facilities, and authorities of
Same as current law. [Sec. 1601]
Similar to the Senate bill; separate provision specifies
the Commodity Credit Corporation (CCC) to
promulgating regulations no later than 21 months after
carry out Title I. Determinations by USDA shall be
date of enactment. [Sec. 1601]
final. Allows promulgation of regulations, and
adjusting expenditures if they will exceed allowable
support levels under the Uruguay Round
Agreements. [7 U.S.C. 8781]
Suspends the permanent price support authority of
Same as current law, except applies to 2014-2018 crop
Repeals permanent price support authority under
the Agricultural Adjustment Act of 1938 and the
years, and milk through December 31, 2018. [Sec. 1602]
Agricultural Adjustment Act of 1938 and Agricultural
Agricultural Adjustment Act of 1949 for the 2008-
Adjustment Act of 1949. [Sec. 1602]
13 crops (covered commodities, peanuts, and
sugar), and for milk through December 31, 2013. [7
Establishes new “permanent law.” For 2014 and each
U.S.C. 8782]
succeeding crop year, authority continues without an
CRS-26


Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)
expiration date for Price Loss Coverage and Revenue
Loss Coverage [Sections 1104-1107], and Nonrecourse
Marketing Loans. [Sec. 1201] The Dairy Producer Margin
Insurance Program is authorized without an expiration
date. [Sec. 1401]
Provides payments to “geographically disadvantaged Reauthorizes through FY2018. [Sec. 1606]
Reauthorizes program without an expiration date.
farmers” in insular areas, Alaska, and Hawaii for
[Sec. 1605]
transporting a commodity or input more than 30
miles. Reimbursement based on federal salary
differentials defined elsewhere, with maximum of
25% transportation cost. Authorizes $15 million of
discretionary appropriations annually for FY2009-
13. [7 U.S.C. 8792]
Exempts producers from liability for certain
Same as current law. [Sec. 1607]
Identical to the Senate bill. [Sec. 1606]
deficiencies in col ateral to secure any nonrecourse
loan. [7 U.S.C. 7284]
Requires regulations that describe the
Same as current law. [Sec. 1608]
Identical to the Senate bill. [Sec. 1607]
circumstances allowing payments to a deceased
person to settle an estate, and to stop payments
for those ineligible. Requires USDA to reconcile tax
identification numbers with IRS data twice a year to
determine living status. [7 U.S.C. 7284]
Any person who receives an adverse program
Adds authorization for the Assistant Secretary of
No comparable provision.
decision from USDA’s Farm Service Agency, Risk
Administration to administer law and regulations that
Management Agency, Natural Resources
relate to competitive and excepted service position in
Conservation Service, or the three USDA Rural
NAD. [Sec. 1609]
Development agencies may file an appeal with the
National Appeals Division (NAD), an independent
office that reports directly to the Secretary of
Agriculture. Its mission is to provide fair and timely
hearings and appeals to USDA program
participants. [7 U.S.C. 6992]
No comparable provision.
Provides technical corrections. [Sec. 1610]
Provides technical corrections. [Sec. 1608]
CRS-27


Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)
Requires that assignment of payments must be
Same as current law. [Sec. 1611]
Identical to the Senate bill. [Sec. 1609]
done in accordance with USDA regulations. [7
U.S.C. 8784]

Requires tracking of program benefits under
Same as current law. [Sec. 1612]
Identical to the Senate bill. [Sec. 1610]
Commodity and Conservation titles that are made
directly or indirectly to individuals and entities. [7
U.S.C. 8785]

Requires that, if USDA approves a program
Same as current law. [Sec. 1613]
Identical to the Senate bill. [Sec. 1611]
document containing signatures of applicants, it
shall not subsequently determine it to be
inadequate or invalid unless the person signing the
document knowingly and willfully falsified the
evidence of signature authority or a signature. [7
U.S.C. 8790]

Provides $50 million of mandatory funds from the
Provides $97 million of mandatory funds from the CCC
The Secretary shall make available $100 million to
CCC to implement Title I. [7 U.S.C. 8793]
to implement Title I. USDA is to reduce administrative
implement Title I. Also directs USDA to maintain base
burdens on participants, improve information
acres and payment yields for covered commodities (and
coordination among agencies, and take advantage of new
upland cotton), with separate bases acres for long grain
technologies to deliver programs to producers. [Sec.
and medium grain rice. [Sec. 1612]
1614]
USDA may not disclose information about an
Adds language to clarify and strengthen the conditions
Prohibits the Secretary of Agriculture, USDA employee,
agricultural operation, farming or conservation
necessary to release data about farms to state and local
contractor, or officer or employee of another federal
practice, or land that was provided by the producer government agencies. [See Miscellaneous title – Sec.
agency from disclosing information provided by a
or landowner in order to qualify for a USDA
12202]
producer or owner of agricultural land concerning the
program, See Miscellaneous title for more
operation, farming or conservation practices, or the land
information. [7 U.S.C. 8791; also known as
itself in order to participate in USDA or other federal
Section 1619 of the 2008 farm bill]
programs. Specifies certain exceptions; disclosures must
be reported to House and Senate Agriculture
Committees. [Sec. 1613]

CRS-28


Appendix B. S. 954 (Title XI) and H.R. 2642 (Title X): Crop Insurance
Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)
New or Revised Insurance Products
Permanently authorized by the Federal Crop
Retains current program and makes available to crop
SCO provision is similar to the Senate bill. Coverage is
Insurance Act, the federal crop insurance program
producers an additional policy called Supplemental
triggered only if the area loss exceeds 10% and policy
makes available subsidized crop insurance to
Coverage Option (SCO) to cover part of the deductible
coverage does not exceed the difference between 90%
producers who purchase a policy to protect against
under the producer’s underlying policy. SCO is an area-
and the coverage level selected by the producer for the
individual farm losses in yield, crop revenue, or
wide (e.g., county) yield or revenue loss policy, whereby
underlying policy. Also, acres covered by Revenue Loss
whole farm revenue. In general, policies offer a
an indemnity is paid on area losses not more than the
Coverage (RLC) or STAX (see below) are not eligible for
guarantee at the individual farm level or area-wide
deductible level (e.g., 25%) selected by the producer for
SCO. [Sec. 10003]
(e.g., county) level. The producer selects coverage
the underlying individual policy. On the SCO policy, the
level and absorbs the initial loss through the
farmer incurs a deductible equal to 10% of the producer’s

deductible. The insurance guarantee is based on the expected crop value. If the farmer participates in ARC

expected market price (i.e., no statutory minimum
under Title I, the deductible is 22%. SCO policies are to
prices as in some farm programs).
be made available for all crops if sufficient data are

available. Premium subsidized at 65%. Coverage to begin

no later than the 2014 crop year. [Sec. 11001] A crop
margin coverage option is available as a single policy or in

combination with a yield or revenue loss policy. [Sec.
11002]

Crop insurance policies are available for more than
Beginning with the 2014 crop, the FCIC shal make
STAX provision is same as in Senate bill. [Sec. 10016]
100 crops, including farm program crops such as
available to producers of upland cotton the Stacked
wheat, corn, soybeans, cotton, peanuts, and rice, as
Income Protection Plan (STAX), which is a revenue-

well as many specialty crops, fruit trees, pasture,
based, area-wide policy that may be purchased as a stand-

rangeland, and forage crops. Area-wide policies are
alone policy or purchased in addition to any other
available for some but not al program crops.
individual or area policy. Indemnifies losses in county

Policies are sold and serviced through private
revenue of greater than 10% of expected revenue but not

insurance companies. Insurance companies’ losses
more than the deductible level (e.g., 25%) selected by the
are reinsured by USDA, and their administrative
producer for the underlying individual policy (or not
and operating costs are reimbursed by the federal
more than 30% if used as stand-alone policy). Premium
government. Crop insurance is administered by the
subsidy is 80%. For individual producers, indemnities for
U.S. Department of Agriculture’s (USDA's) Risk
STAX and other policies cannot overlap. Includes a
Management Agency (RMA), which operates and
provision that allows use of recent yields in the guarantee.
manages the Federal Crop Insurance Corporation
A factor of not more than 120% is available to increase
(FCIC) [7 U.S.C. 1501 et seq.]
protection per acre [Sec. 11013]
CRS-29


Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)

Beginning with the 2014 crop, the FCIC shal make
By crop year 2014, FCIC is required to make available a
available a revenue crop insurance program for peanuts
revenue policy for peanut producers [Sec. 10010 and
based on a price equal to the Rotterdam price index for
Sec. 10017] as in Senate bill and a margin coverage policy
peanuts, as adjusted to reflect the farmer stock price of
for rice producers. [Sec. 10010]
peanuts in the United States. [Sec. 11014]

Requires FCIC to improve coverage for organic
By 2015, requires FCIC to offer price elections for al
Extends 2008 farm bill provision to improve organic crop
crops. [U.S.C. 1522(c)(10)]
organic crops that reflect prices of organic (not
insurance. [Sec. 10021]
conventional) crops. FCIC must submit an annual report
to Congress on crop insurance for organic crops. [Sec.
11027]

FCIC shal not conduct any pilot program that
FCIC may conduct a pilot program to provide financial
No comparable provision.
provides insurance protection against a risk if a
assistance for producers of underserved crops and
policy is generally available from private companies.
livestock (including specialty crops) to purchase an index-
[7 U.S.C. 1523(a)]
based weather insurance product from a qualified private
insurance company. The subsidy shall not exceed 60% of
the estimated premium amount. Unlike FCIC policies, the
private insurance companies would maintain exclusive
rights to rate and manage the policies. Provides
mandatory funds of $10 million per year for FY2014
through FY2018. [Sec. 11030]
Policy Fees and Premiums


Catastrophic yield policies (CAT) are available for
To reduce government costs, the CAT premium (fully
Identical to the Senate bill. [Sec. 10004]
yield losses greater than 50%. Premium is fully
paid by government) shal be reduced by the percentage
subsidized, and producer pays an administrative fee
equal to the difference between the average loss ratio
of $300 per crop per county. [7 U.S.C.
(premiums divided by indemnities times 100) for the crop
1508(d)(2)]
and 100%, plus a reasonable reserve. [Sec. 11003]
Administrative fee on CAT policy is waived for
Fee is also waived for beginning farmers or ranchers.
Identical to the Senate bill. [Sec. 10015]
limited resources farmers. [7 U.S.C.
[Sec. 11032]
1508(b)(5)(E)]
Premium subsidies for buy-up coverage (above
Beginning farmers or ranchers shal receive premium
Identical to the Senate bill. [Sec. 10015]
CAT) depend on level of coverage. [7 U.S.C.
assistance that is 10 percentage points greater than
1508(e)]
provided to others. Other provisions are also designed to
assist beginning farmers and ranchers. [Sec. 11032]
CRS-30


Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)
No comparable provision.
Establishes an adjusted gross income (AGI) limit on crop
No comparable provision.
insurance subsidies. Beginning with the 2014 reinsurance
year (2014 crop year), crop insurance premium subsidies
are reduced by 15 percentage points for producers with
average AGI greater than $750,000. Reduction in effect
only after USDA, in consultation with the Government
Accountability Office, determines that the change does
not (1) significantly increase premiums for producers at
lower income levels, (2) reduce crop insurance coverage
availability, or (3) increase total cost of the crop insurance
program. [Sec. 11033]
FCIC may provide a performance-based premium No change from current law.
Repeals provision. [Sec. 10005]
discount for a producer of an agricultural
commodity who has good insurance or production
experience relative to other producers in the same
area. [7 U.S.C. 1508(d)]
Enterprise Units and Coverage
Crops are insured based on geographic units
The subsidy for enterprise and whole farm units is made
Identical to the Senate bill. [Sec. 10006]
defined in the insurance policy. The basic unit
permanent (previously a pilot basis). [Sec. 11004]
covers land in one county with the same
tenant/landlord. An optional unit is a basic unit
divided into smaller units by township section. An
enterprise unit covers all land of a single crop in a
Beginning with the 2014 crop year, separate enterprise
Identical to the Senate bill. [Sec. 10007] Also, beginning
county for a producer, regardless of
units will be available for irrigated and nonirrigated
with the 2015 crop year, a producer who grows a crop
tenant/landlord structure. A whole farm unit covers acreages of crops. [Sec. 11005]
on both dry land and irrigated land may elect a different
more than one crop. For a policy with an
coverage level for each production practice. [Sec. 10014]
enterprise or whole farm unit paragraph, on a pilot
basis
, the percentage of the premium paid by the
government shall provide the same dollar amount
of premium subsidy per acre as for other units, up
to 80%. [7 U.S.C. 1508(e)(5)]
Data Collection for Yield Guarantees; Yield Adjustments

FCIC bases policy guarantees on a producer’s
Specifically directs FCIC to use county data collected by
Identical to the Senate bill. [Sec. 10008]
actual production history (APH) for the crop, or on USDA’s Risk Management Agency and/or National
CRS-31


Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)
county yields for area-wide policies. The APH is
Agricultural Statistics Service. If such data are not
based on producer yields for the prior 4 to 10
available, it may use other data considered appropriate by
years. [7 U.S.C. 1508(g)(2)]
the Secretary of Agriculture. [Sec. 11006]

If, for one or more of the crop years used to
Beginning with the 2014 crop year, the yield plug is
For all crop years, the yield plug is increased to 70% of
establish the producer’s actual production history
increased to 65% of the applicable transitional yield. [Sec.
the applicable transitional yield. [Sec. 10009]
of an agricultural commodity, the producer's
11007]
recorded or appraised yield of the commodity was
less than 60% of the applicable transitional yield
(based on 10-year historical county average yield),
FCIC shall either exclude any of such recorded or
appraised yield or replace each excluded yield with
a yield equal to 60% of the applicable transitional
yield. Concept is known as a “yield plug.” [7 U.S.C.
1508(g)(4)(B)]

Policy Research Development, Review, and Approval

Under sections 522 and 523 of the Federal Crop
Al ows FCIC to conduct research and development
Same as Senate bill except crop list adds rice, peanuts,
Insurance Act, FCIC may enter into contracts to
activities to maintain or improve existing policies or
alfalfa, and pennycress, and excludes dedicated energy
carry out research and development for new crop
develop new policies. Highest research priorities become
crops. [Sec. 10020] Authorizes FCIC to enter into
insurance policies (but may not conduct research
policies that increase participation by producers of
partnerships with public and private entities for the
itself). FCIC shall establish as one of the highest
underserved agricultural commodities, including sweet
purpose of increasing the availability of loss mitigation,
research priorities the development of a pasture,
sorghum, sorghum for biomass, specialty crops,
financial, and other risk management tools or improving
range, and forage program. It shall provide a
sugarcane, and dedicated energy crops. [Sec. 11028]
analysis tools and technology regarding compliance. [Sec.
payment to an applicant for research and
10022]
development costs. FCIC may approve up to 50%
of the projected total research and development
costs to be paid in advance to an applicant. [7
U.S.C. 1522]


FCIC shall review any policy developed under section
Identical to the Senate bill. [Sec. 10010]
522(c)or any pilot program developed under section 523
and submit the policy or program to the Board if it finds
that the policy or program will likely result in a viable and
marketable policy and would provide coverage in a
significantly improved form. [Sec. 11008]
CRS-32


Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)

For cost reimbursement, the 50% limitation may be
Up to 75% of the projected cost may be paid in advance.
waived and, upon request of the submitter, an additional
[Sec. 10010]
25% advance payment may be made. [Sec. 11018]

FCIC is required to contract for studies on the feasibility
Similar to the Senate bill; excludes study on insurance for
of insuring (1) specialty crop producers for food safety
seafood harvesters. [Sec. 10021]
and contamination-related losses [Sec. 11020], (2) swine
producers for a catastrophic disease event [Sec. 11021],
(3) producers of fresh-water catfish against reduction in
the margin between the market value of catfish and
selected production costs (the FCIC Board shall review
this policy and approve it under certain conditions) [Sec.
11022]
, (4) commercial poultry production against
business disruptions caused by integrator bankruptcy and
poultry producers for a catastrophic event [Sec. 11023],
(5) seafood harvesters [Sec. 11023], and producers of
biomass sorghum or sweet sorghum grown as feedstock
for renewable energy [Sec. 11025], and (6) alfalfa
producers. [11026]
FCIC shal include independent reviews as part of
No comparable provision.
Any modification to be made in the terms or conditions
the consideration of any policy or plan or insurance
of any policy or plan of insurance shall not take effect
(or modification of such a policy). [7 U.S.C.
unless the Secretary publishes the modification in the
1505(e)]
Federal Register and on the website of FCIC and provides
for a subsequent period of public comment not later than
60 days before June 30 during the preceding crop year for
fall-planted crops and not later than 60 days before
November 30 during the preceding crop year for spring-
planted crops. The Secretary may waive this requirement
if an emergency situation is declared by the Secretary
upon notice to Congress. [Sec. 10025]
Adjusted Gross Revenue (AGR) and AGR-Lite
FCIC is to conduct activities or enter into contracts to
Identical to the Senate bill, except maximum liability is
policies insure revenue of the entire farm rather
develop a whole farm risk management insurance plan
$1.25 million. [Sec. 10021]
than an individual crop. Both use a producer's five-
(with liability up to $1.5 million) that pays an indemnity if
year historical farm average revenue as reported on gross farm revenue is below 85% (compared with 80%
the Internal Revenue Service (IRS) tax return form
currently). Coverage may include value of packing,
(Schedule F or equivalent forms). Coverage levels
packaging or other on-farm activities. FCIC may provide
range from 65% to 80% of historical revenue. [7
diversification-based discounts for producers with
CRS-33


Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)
U.S.C. 1523]
diversified operations. FCIC is to submit a report to
Congress on the feasibility of additional coverage,
including an analysis of potential market distortions. [Sec.
11019]

A private sector entity can propose an insurance
For private sector submissions, directs FCIC to establish
No comparable provision.
plan to be added to the FCIC portfolio of products. priorities for specific types of submissions. [Section
A process must be established to review and
11009] As part of the submission process, the applicant
approve products. [7 U.S.C. 1508(h)]
must consult with producer groups potential y affected.
[Sec. 11010]
FCIC may conduct a pilot program approved by the Eliminates the requirement that FCIC evaluate pilot
Identical to the Senate bill. [Sec. 10023]
Board to evaluate whether a proposal or new risk
programs and submit a report to Congress. [Sec. 11029]
management tool is suitable for the marketplace
and addresses the needs of producers. [7 U.S.C.
1523(a)]

Crop Production on Native Sod and Conservation Compliance

Subject to a geographic condition below, native sod
Nationwide, for native sod during the first four years of
Same as Senate bill, except provision only applies to the
planted to an insurable crop (over 5 acres) is
planting, crop insurance premium subsidies are 50
Prairie Pothole National Priority Area. [Sec. 10013]
ineligible for crop insurance and the noninsured
percentage points less than under current schedule and
crop disaster assistance program for the first 5
yield guarantees are affected. Also, no benefits are
years of planting. May apply to virgin prairie
available under NAP or general commodity programs.
converted to cropland only in the Prairie Pothole
Requires annual report on the change in cropland areas
National Priority Area, if elected by the state. [7
and the number of acres of native sod converted to
U.S.C. 1508(o)]
cropland in each county and state. [Sec. 11035]
See
Title II for a provision that establishes a prerequisite
No comparable provision.
that a producer must be in compliance with conservation
requirements and wetland requirements in order to
receive crop insurance premium subsidies. [Sec. 2609]
Standard Reinsurance Agreement and Risk-Sharing

The Standard Reinsurance Agreement (SRA)
Any savings generated from a renegotiated SRA must be
Same as Senate bill [Sec. 10012]. Also directs FCIC to
between FCIC and private companies defines
used for programs administered by the Risk Management
make an additional annual expense reimbursement of $41
expense reimbursements and risk-sharing by the
Agency. [Sec. 11011]
mil ion (for reinsurance years 2011 through 2015) to
government, including the terms under which the
insurance companies selling polices for crops not eligible
government provides subsidies and reinsurance

for benefit under Title I (i.e., specialty crops). [Sec.
(i.e., insurance for insurance companies) on eligible
CRS-34


Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)
crop insurance contracts sold or reinsured by

10011]
insurance companies. FCIC may renegotiate the
SRA once every 5 years. [7 U.S.C. 1508(k)]


Miscellaneous Crop Insurance Provisions
Under an insurance policy, if an agricultural
FCIC shall establish procedures to al ow insured

commodity does not meet established quality
producers not more than 120 days to settle claims
standards, actual production (used for determining
involving corn that is determined to have low test weight.
the indemnity) is reduced accordingly. [7 U.S.C.
Authority for this provision terminates 5 years after
1508(m)]
implementation of the provision. [Sec. 11012]
Inaccurate information on an insurance application
FCIC shall establish procedures that allow an agent and
Similar provision as in the Senate bill. [Sec. 10018]
can result in noncompliance, which voids the policy
approved insurance provider to correct information
and may disqualify the producer for up to 5 years.
regarding producer name and eligibility information that is
[7 U.S.C. 1515(c)]
provided by a producer for the purpose of obtaining
coverage. [Sec. 11015]
USDA, an approved insurance provider and its
No comparable provision.
If authorized by a producer, USDA’s Farm Service Agency
employees and contractors, and any other person
shall provide to an insurance agent or approved insurance
may not disclose to the public information
provider any information or maps that may assist the
furnished by a producer. [7 U.S.C. 1502(c)]
agent or provider insuring the producer. USDA shall
annual y publish the names of Members of Congress and
Cabinet Secretaries (and immediate families) who
purchase additional coverage (i.e., not a catastrophic
policy), the associated subsidy amount, and the federal
portion of indemnities paid in the event of a loss. Also,
for each private insurance provider, USDA shall disclose
the underwriting gains earned, and the amount paid for
administrative and operating expenses and any Federal
portion of indemnities and reinsurance. [Sec. 10001]
Adjustments to producer premiums are prohibited
No comparable provision.
To deter potential violators, FCIC is required to publish
as an inducement to purchase crop insurance, with
in detail (but without disclosing identities) any violations
few exceptions. [7 U.S.C. 1508(a)(9)]
of this provision, including sanctions imposed. [Sec.
10002]

CRS-35


Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)
All information provided to the public by the
Requires FCIC and RMA to use plain language when
No comparable provision.
agency shal be in plain, understandable language. [5
issuing regulations and guidance related to plans and
U.S.C. 601 note relating to regulatory planning
polices of crop insurance, and to improve its website for
and review]
producers seeking information on crop insurance.
Requires a report to Congress describing the
Department’s efforts. [Sec. 11037]
USDA is to ensure that new hardware and
USDA shall develop and implement an acreage report
Identical to the Senate bill, except notification date is July
software for administering the program are
streamlining initiative project to allow producers to
1, 2015. [Sec. 10019]
compatible with that already used by USDA
report acreage and other information directly to USDA.
agencies in order to maximize data sharing needed
FCIC may use up to $25 million in fiscal 2014 and $10 to
for proper program delivery. [7 U.S.C. 1515(j)]
$15 million per year for FY2015 through FY2018 from
Funding is provided from the insurance fund: $15
the insurance fund. USDA shal notify Congress on the
mil ion for each of FY2008 through FY2010 and not
status of the project no later than July 1, 2013. [Sec.
more than $9 million in FY2011. [7 U.S.C. 1515(k]
11016]
FCIC may use up to $3.5 million of the insurance
Adds authority to use up to $5 million of the insurance
No comparable provision.
fund to pay for costs associated with implementing
fund to pay for costs associated with maintaining program
plans of insurance and for review of policies. [7
integrity and compliance activities. [Sec. 11017]
U.S.C. 1516(b)(2)]
The Secretary shall develop and implement a
Adds provision requiring the U.S. Government
No comparable provision.
coordinated plan for the Farm Service Agency to
Accountability Office to conduct a study regarding
assist FCIC in monitoring the crop insurance
fraudulent claims filed, and benefits provided under the
program. [7 U.S.C. 1515(d)]
crop insurance program. [Sec. 11038]
The Agricultural Management Assistance Program
Authorizes $23 million in mandatory CCC funding
Repeals the National Organic Certification Cost-Share
provides financial assistance to producers in 16
annual y (FY2014-FY2018) and combines the two
program. [Sec. 9004] Removes tree plantings and soil
specific states to mitigate risk through financial
programs to include (1) organic certification cost share
erosion control from the list of approved practices.
instruments, diversification, or resource
assistance (50% of funds); (2) activities to support risk
Permanently authorizes $10 million in annual mandatory
conservation practices. Provides $15 million in
management education and outreach under the Federal
funding with 30% to NRCS (conservation), 10% to AMS
annual mandatory funding in FY2008 through
Crop Insurance Act (26% of funds); and (3) agricultural
(organic certification), and 60% RMA (risk management).
FY2014, and $10 million each fiscal year thereafter.
management assistance grants to producers in states with
[Sec. 2506 in Title II—Conservation]
Requires 50% for conservation, 40% for risk
low federal crop insurance participation, for various
management, and 10% for organic certification. [7
conservation purposes (24% of funds). Per-person

U.S.C. 1524] Section 10606 of the 2002 farm bill
payments are limited to $50,000 in any one year. [Sec.
established a National Organic Certification Cost-
11034]
Share Program to help producers and handlers of
organic products obtain certification. Provided $22
CRS-36


Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)
million in mandatory funding in FY2008 (available
until expended). [7 U.S.C. 6523]
No comparable provision.
Provides technical amendments. [Sec. 11036]
Provides technical amendments. [Sec. 10024]
Noninsured Crop Assistance Program for
See S. 954 (Title XII) and H.R. 2642 (Title XI): for a
See Title XI for a provision that enhances NAP [Sec.
crops not insurable. The Noninsured Crop
provision that enhances NAP and provides payments for
11306]
Assistance Program (NAP) has permanent authority fruit crop losses in 2012. [Sec. 12204]
under Section 196 of the Federal Agriculture
Improvement and Reform Act of 1996, and receives
such sums as necessary in mandatory funding.
Growers of crops not insurable under the crop
insurance program are eligible for NAP. [7 USC
7333]

CRS-37


Appendix C. S. 954 (Title XII) and H.R. 2642 (Title XI): Noninsured Crop
Assistance Program

Senate-Passed 2013 Farm Bill
House-Passed 2013 Farm Bill
Current Law/Policy
(S. 954, June 10, 2013)
(H.R. 2642, July 11, 2013)
Noninsured Crop Assistance Program. The
Reauthorizes through FY2018, and makes available
Similar to the Senate bill except as indicated below. [Sec.
Noninsured Crop Assistance Program (NAP) has
additional coverage for NAP at 50% to 65% of established
11306]
permanent authority under Section 196 of the
yield and 100% of average market price. Premium for
Federal Agriculture Improvement and Reform Act
additional coverage is 5.25% times the product of the

of 1996, and receives such sums as necessary in
selected coverage level and value of production (acreage

mandatory funding. Growers of crops not insurable
times yield times average market price). The premium for
under the crop insurance program are eligible for
additional coverage is reduced by 50% for limited

NAP. A payment is made to an eligible producer
resource, beginning, and socially disadvantaged farmers.

whose actual production is less than 50% of the
established (historical) yield for the crop. The
For producers with fruit crop losses in 2012, payments
No comparable provision.
payment rate is 55% of the average market price.
associated with additional coverage are made

Producers pay a fee of $250 per crop per county,
retroactively (minus premium fees) in counties declared a
or $750 per producer per county, not to exceed
disaster due to freeze or frost.

$1,875 per producer. [7 USC 7333]
Eliminates NAP for crops/grasses used for grazing (to
No comparable provision.
reduce overlap with livestock disaster programs in Title
I—Commodity Programs), ferns, and tropical fish.

Increases base NAP fee to $260 per crop per county, or
No comparable provision.
$780 per producer per county, not to exceed $1,950 per
producer. [Sec. 12204]

Noninsured Crop Assistance Program. See
Bioenergy Coverage in Noninsured Crop
No comparable provision.
description above.
Assistance Program. Amends the 1996 farm bill (7
U.S.C. 7333) to add crops grown for feedstock for
renewable biofuel, renewable electricity, or biobased
products. [Sec. 12205]


CRS-38

Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642


Author Contact Information

Dennis A. Shields
Randy Schnepf
Specialist in Agricultural Policy
Specialist in Agricultural Policy
dshields@crs.loc.gov, 7-9051
rschnepf@crs.loc.gov, 7-4277

Congressional Research Service
39