The 2002 Farm Bill: Comparison of Commodity Support Provisions with the House and Senate Proposals, and Prior Law

The 2002 Farm Bill: Comparison of Commodity Support Provisions with the House and Senate Proposals, and Prior Law

Order Code RL31524
Report for Congress
Received through the CRS Web
The 2002 Farm Bill: Comparison of Commodity
Support Provisions with the House and Senate
Proposals, and Prior Law
August 1, 2002
name redacted
Agriculture Policy Specialist
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

The 2002 Farm Bill: Comparison of Commodity Support
Provisions with the House and Senate Proposals, and
Prior Law
Summary
A new farm bill, the Farm Security and Rural Investment Act of 2002 (P.L. 107-
171), covering crop years 2002-2007, was signed into law May 13, 2002. Conferees
resolved the differences between the H.R. 2646 and S. 1731 and the conference
report (H.Rept. 107-424) was adopted by the House on May 2 and the Senate on May
8. The previous farm bill (now prior law) was the Federal Agriculture Improvement
and Reform Act of 1996 (P.L. 104-127), popularly called the FAIR Act. Commodity
support authority in the FAIR Act (Title I, Agricultural Market Transition Act
(AMTA)) was set to expire after crop year 2002.
This report provides a side-by-side comparison of prior law (AMTA), with most
commodity support provisions of Title I of the new law, and the House and Senate
farm bills. There are important similarities and differences between the various
versions.
The new law takes effect immediately and applies to crops harvested in 2002.
While the House bill would have authorized support programs through 2011 (10
years), and the Senate bill 2006 (5 years), conferees agreed to authorize support
through 2007 (6 years). As proposed in both bills, conferees agreed to continue
marketing assistance loans, first adopted in the 1985 farm bill and extended by
AMTA. The new law will continue the annual fixed, decoupled contract payments
first adopted under AMTA in 1996. And, as both bills proposed, the new law will
restore the counter-cyclical payments (target price deficiency payments) discontinued
by AMTA. The peanut support program is transformed to mirror the program for
grains and oilseeds. At the more detailed level of commodity loan rates, contract
payment rates, counter-cyclical target prices, and payment limitations, the conference
report made compromises between the two bills that were adopted as new law.

Contents
Commodity Support Provisions (Title I) of Prior Law, the House Farm Bill,
the Senate Farm Bill, and New Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
A.) Wheat, Corn, Grain Sorghum, Barley, Oats, Upland Cotton,
Rice, Soybeans and Other Oilseeds . . . . . . . . . . . . . . . . . . . . . . . . 2
1.) Sign-Up
2.) Base Acres and Payment Acres
3.) Payment Yield
4.) Producer Contract/Agreement
4.) Direct Fixed, Decoupled Payments
2.) Counter-Cyclical Deficiency Payments and Target Prices
3.) Marketing Assistance Loans and LDPs
B.) Wool and Mohair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.) Marketing Loans and LDPs
C.) Honey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.) Marketing Assistance Loans and LDPs
D.) Extra Long Staple (ELS) cotton, Dry Peas, Lentils and Chickpeas
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.) Marketing Assistance Loans and LDPs
E.) Grazed Wheat, Barley, Oats, and Triticale . . . . . . . . . . . . . . . . . . 16
1.) Payments in Lieu of LDPs
F.) High Moisture Corn and Sorghum . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.) Recourse Loans
G.) ELS and Upland Seed Cotton . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.) Recourse Loans
H.) Hard White Wheat Incentive Payments . . . . . . . . . . . . . . . . . . . . 17
1.) Incentive Payments
I.) Upland Cotton Competitiveness Provisions for Processors
and Exporters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.) Marketing Certificates
2.) Import Quotas
J.) ELS Cotton Competitiveness Provisions for Processors and
Exporters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
K.) Peanuts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
1.) Poundage Quotas and Quota compensation
2.) Nonrecourse Loans / Marketing Assistance Loans
3.) Fixed Payments, Counter-Cyclical Payments, and
Marketing Assistance Loans
4.) Payment Limits
L.) Sugar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
1.) Price Support Loans
2.) No Net Cost Mandate
3.) Loan Forfeiture Penalty
4.) Import Quotas
5.) Marketing Allotments
6.) In-Kind Payments
7.) Marketing Assessment
8.) Interest Rate on Loans
9.) Storage Facility Loans

M.) Dairy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
1.) Milk Price Support
2.) Processor Recourse Loans
4.) Northeast Dairy Compact
5.) Dairy Market Loss Payments
6.) Dairy Export Incentive Program
7.) Dairy Indemnity Program
8.) Fluid Milk Processor Promotion Program
9.) Dairy Product Mandatory Reporting
10.) Dairy Promotion and Research Assessment
11.) Dairy Studies and Reports
N.) Tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
1.) Flue-cured Quota
2.) Flue-cured Farm Reconstitutions
O.) Specialty Crops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
1.) Mandatory CCC Purchases
P.) Payment Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
1.) Fixed Payments, and Counter-Cyclical Payments
2.) Marketing Loan Benefits
3.) Spouse Benefit and 3 Entity Rule
4.) Adjusted Gross Income Limit
5.) Payment Limitation Commission
Q.) Livestock Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
R.) Farm Income Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
S.) CCC Commodity Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
T.) Implementing Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
U.) Counter-Cyclical Farm Savings Accounts . . . . . . . . . . . . . . . . . . 35
V.) WTO Limits on Allowable Domestic Support . . . . . . . . . . . . . . . 36
List of Tables
Table 1. Fixed Payments: Comparison of Prior Law, New Law, House,
and Senate Bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Table 2. Counter-Cyclical Target Prices: Comparison of Prior Law,
New Law, House Bill, and Senate Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Table 3. Loan Rates: Comparison of Prior Law, New Law, House Bill,
and Senate Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Table 4. Loan/Purchase Rates for Other Commodities: Comparison of
Prior Law, New Law, House Bill, and Senate Bill . . . . . . . . . . . . . . . . . . . 40
Table 5. Commodity Program Cost Estimates Compared to
Baseline Budget Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Table 6. 2002 Farm Bill, 6-Year Cost Estimates . . . . . . . . . . . . . . . . . . . . . . . . 42

The 2002 Farm Bill: Comparison of
Commodity Support Provisions with the
House and Senate Proposals, and Prior Law
Commodity support programs originated in the 1930s and are permanently
authorized by the Agriculture Adjustment Act of 1938 (P.L. 75-430, as amended, 7
U.S.C. 1281 et seq.) and the Agriculture Act of 1949 (7 U.S.C. 1421 et seq.).
Spending for these programs is mandatory and funding is carried out through the
Commodity Credit Corporation (CCC) (P.L. 80-806, as amended, 15 U.S.C. 714 et
seq.). Periodically, the permanent authorities are amended, by what is popularly
called a farm bill, to establish new policies for a specified limited future time. That
legislation is now replaced by Title I of the Farm Security and Rural Investment Act
(FSRIA) of 2002, P.L. 107-171. Commodity and farm income support in the new
farm bill is a compromise between a 10-year House bill (H.R. 2646) and 5-year
Senate farm bill (S. 1731), resulting in a 6-year bill, covering crop years 2002
through 2007 (Conference report H. Rept. 107-424). The new law replaces the
Agricultural Market Transition Act (AMTA, Title I of the Federal Agriculture
Improvement and Reform Act, P.L. 104-127, 7 U.S.C. 7201 et seq.), which
established commodity support policy for crop years 1996 through 2002.
The CCC borrows the money it needs to meet mandatory program spending
requirements from the U.S. Treasury. Subsequently, Congress appropriates funds
that CCC uses to repay the Treasury. Other programs to facilitate marketing of farm
commodities, encourage domestic consumption, and promote exports are authorized
in other laws. Furthermore, the USDA has broad powers to support the farm sector
and has implemented new programs on occasion without specific legislative
direction.
The methods of support for wheat, grain sorghum, barley, oats, upland cotton,
and rice have long been nearly identical and together these commodities were
referred to as the “program crops.” Under AMTA, these crops were brought together
under a single support framework and were called “contract commodities” because
farmers signed Production Flexibility Contracts (PFC) with the CCC. The new
FSRIA establishes a “commodity agreement” framework for grains and upland cotton
and also makes oilseeds (soybeans and other oilseeds including sunflower seed,
rapeseed, canola, safflower, flaxseed, and mustard seed) into “covered commodities.”
The support program for peanuts also is made almost identical to that for the covered
commodities.
The following side-by-side compares policy rather than legislative language.
Therefore, the phrase “same as” does not mean “identical to.” Rather, “same as”
means the same or very similar policy framework or design. Prior law (P.L. 104-127)
is compared to H.R. 2646, as individually approved by the House and the Senate, and
to the new law (P.L. 107-171).

CRS-2
Commodity Support Provisions (Title I) of Prior Law, the House Farm Bill, the Senate Farm Bill, and New Law
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
A.) Wheat, Corn, Grain
Sorghum, Barley, Oats,
Upland Cotton, Rice,
Soybeans and Other
Oilseeds.
1.) Sign-Up.
The sign-up period is required to
Establishes a sign-up period, lasting
Establishes a sign-up period, that
USDA is to provide notice to
begin not later than 45 days after
not more than 180 days after
begins not less 45 days after enactment
farmers, as soon as practical after
enactment and end August 1, 1996.
enactment, during which producers
and lasts for 180 days, during which
enactment, of the opportunity
Production flexibility contracts
sign “agreements” covering crop
producers sign “contracts” covering
sign agreements and establish
(PFCs) cover 7 years, 1996 thru
years 2002 thru 2011 (10 years).
crop years 2002 thru 2006 (5 years).
base acres for direct and counter-
2002 crops. [Section 112]
[Section 110]
[Section 111 as it amends Section 112
cyclical payments. [Section
of FAIR Act]
1101]
2.) Base Acres and
Payment Acres.
Each farm’s base acres and payment
The base acres for each crop are
Same as House bill. [Section 111 as it
Same as House and Senate bills.
yields are used to calculate the
either the acres specified in existing
amends Section 111 of FAIR Act]
[Section 1101]
program benefits to the producer.
PFC contracts, or average acres
The base acres and yields for
planted to eligible crops from 1998
eligible crops are those that would
thru 2001. Accommodation is
have applied in 1996 under the then
made for double cropping, peanut
expiring program. Under the
acres, and CRP acres. Base acres
expiring program, the “acreage
cannot exceed total cropland on a

CRS-3
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
base” for each program crop is the
farm. [Section 103]
average acres planted/considered
planted the prior 5 years for wheat,
Payment acres equal 85% of base
Payment acres equal 100% of base
Same as House bill. [Section
feed grains and the prior 3 years for
acres in calculating payment
acres in calculating payment amounts.
1101(f)]
upland cotton, rice.
amounts. [Section 100(9) and
[Section 111 as it amends Section 111
103(f)]
of FAIR]
3.) Payment Yield.
Program payment yields for each
The program payment yield for
The program payment yield is either:
Similar to House bill. Payment
crop are frozen at 1986 program
each crop is the: payment yield in
the yield specified in existing
yield is the yield established for
levels. [Section 102]
effect for 2002 under an existing
contracts, or average yield from 1998
the 1995 crop. Oilseed payment
production flexibility contract; or a
thru 2001. There is no requirement to
yield is the average yield from
Note: Soybeans and other oilseeds
similarly appropriate yield for farms
adjust yields back to an 1981-85
1998-01, adjusted back to the
are not eligible crops and there are
without past contracts. Oilseed
equivalent. [Section 111 as it amends
national average from 1981-85.
no provisions for establishing base
yield is the average yield from
Section 111 of FAIR Act]
Yields for counter-cyclical
acres and yields for oilseeds.
1998-01, adjusted back to a 1981-
payments may be updated using
85 equivalent. [Section 102]
specified formulas. [Section
1102]
4.) Producer
Contract/Agreement.
a.) Requirements.
Eligible producers must sign a
Producers must agree during each
Same as old law. Producers sign
Adopts House bill provision.
contract that includes specific
crop year to certain requirements in
contracts. [Section 111 as it amends
[Section 1105]
requirements in order to receive
order to receive fixed, decoupled
Section 111 of FAIR Act]
payments. [Section 111]
direct payments and counter-
cyclical payments. [Section 106]

CRS-4
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
1.) Conservation and
Wetlands Compliance
Producers are required to comply
Same as old law. [Section 106]
Same as old law. [Section 111 as it
Same House and Senate bills and
with already existing conservation
amends Section 111 of FAIR Act]
old law. [Section 1105(1)(A)
requirements on highly erodible
and (B)]
land and with already existing
prohibitions on draining wetlands
for purposes of crop production.
These compliance requirements do
not impose any new obligations on
producers. [Section 111]
2.) Planting Flexibility
and Limitations
Farmers are allowed to plant any
Same planting flexibility allowance
Same planting flexibility allowance as
Same as House bill, except if
crop except fruits and vegetables
as old law, but wild rice is added to
old law, but wild rice is added to
prohibited crops are planted they
(other than lentils, mung beans, and
exceptions. [Section 107]
exceptions beginning in 2003.
may be destroyed before harvest,
dry peas) on contract acreage and
[Section 113]
and planting trees or other
there are no planting restrictions on
perennial crop producing plants
non-contract acreage. Cropland not
is prohibited on base acres.
planted has to be devoted to a
[Section 1106]
conserving use to prevent erosion
and can not be converted to non-
agricultural uses. [Section 118]
Violations of planting flexibility
No provisions for violations.
For first time unintentional violations
Same as House bill.
limitations generally result in
of planting flexibility limitations, the
termination of the contract on each
penalty shall be a refund or reduction

CRS-5
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
farm in which the producer has an
of future payments amounting to twice
interest. [Section 116]
the payment amount on the involved
acres. [Section 112]
3.) Change in Farm
Ownership or Operator
Contract obligations can be
Same as old law. [Section 106(c)]
Same as House bill. [Section 111 as it Same as old law, and House and
as s um ed by new owners .
amends Section 111 of FAIR Act]
Senate bills. [Section 1105(b)]
Otherwise the contract is
terminated. Changing operators
does not affect program acres or
yields. [Section 117]
4.) Direct Fixed,
Decoupled Payments.
a.) Eligibility.
Eligibility for PFC contracts is
Farms with existing PFC contracts,
Same as House bill. [Section 111 as it
Same as House and Senate bills
extended to producers previously
and other producers with a history
amends Section 111 of FAIR Act]
except that these crops are to be
enrolled in a grain or cotton
of contract crop or oilseed
know as “covered crops.”
program in at least 1 of the 1991-95
production from 1998-01 are
Provision is made for expiring
crop years. Conservation Reserve
eligible for fixed, decoupled
CRP acres to be added to the
Program cropland expiring or
payments on their base acres and
agreements. [Section 1103]
terminated after Jan. 1, 1995 is
yields. Soybeans and other oilseeds
eligible. Soybeans and other
also are made eligible. These crops
oilseeds are not eligible PFC
are to be known as “agreement
commodities. [Section 111]
crops.” Provision is made for
expiring CRP acres to be added to

CRS-6
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
the agreements. [Section 101(a)
and 103(a)]
b.) Payment Rates.
Farmers who sign production
Similar framework to old law.
Similar framework to old law.
Same as House bill. [Section
flexibility contracts (PFCs) in 1996
Farmers who sign “agreements”
Farmers who sign contracts receive
1105]
receive fixed annual payments for 7
receive direct fixed, decoupled
fixed, decoupled annual payments,
years, unrelated to crops or acreage
annual payments, unrelated to crops
unrelated to crops or acreage actually
actually planted. The payment
or acreage actually planted. The
planted. The payment quantity for
quantity for each commodity is
payment amount for each
each commodity is 100% of payment
85% of the contract acreage times
commodity is payment acres (85%
acres times the payment yield times
the payment yield times the
of base acres) times the payment
the payment rate.
payment rate. [Section 114]
yield times the payment rate.
Estimated 2002 contract payment
Payment rates are specified for all
Payments rates are specified for
Payment rates differ slightly
rates:
years as follows:
2002/03, 2004/05, 2006 as follows:
from House bill as follows:
Wheat, $0.46/bu
Wheat, $0.53/bu
Wheat, $0.45, $0.225, $0.113/bu
Wheat, $0.52/bu
Corn, $0.26/bu
Corn, $0.30/bu
Corn, $0.27, $0.135, $0.068/bu
Corn, $0.28/bu
Sorghum, $0.31/bu
Sorghum, $0.36/bu
Sorghum, $0.31/$0.27, $0.135,
Sorghum, $0.35/bu
Barley, $0.20/bu
Barley, $0.25/bu
$0.068/bu
Barley, $0.24/bu
Oats, $0.021/bu
Oats, $0.025/bu
Barley, $0.20, $0.10, $0.05/bu
Oats, $0.024/bu
Cotton, $0.0556/lb
Cotton, $0.0667/lb
Oats, $0.05, 0.$025, $0.013/bu
Cotton, $0.0667/lb
Rice, $2.04/cwt
Rice, $2.35/cwt
Cotton, $0.13, $0.065, $0.0325/lb
Rice, $2.35/cwt
Soybeans, not a contract crop
Soybeans, $0.42/bu
Rice, $2.45, $2.40, $2.40/cwt
Soybeans, $0.44/bu
Other Oilseeds, not contract crops
Other Oilseeds, $0.0074/lb
Soybeans, $0.55, $0.275, $0.138/bu
Other Oilseeds, $0.008/lb
[Section 104]
Other Oilseeds, $0.01, $0.005,
[Section 1103(b)]
$0.0025/lb
[Section 111 as it amends Section 113
of FAIR Act]

CRS-7
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
The law does not specify actual
Total payments are to be reduced by
No comparable provision.
Same as Senate, no provision to
payment rates, but states the total
$100 million on a pro rata basis
reduce spending and devote
funds available each year and the
(about 2% based on CBO estimates)
funds elsewhere.
al l ocation share for each
and these funds are to be devoted to
commodity. [Section 113]
specified rural development
programs. [Section 943]
c.) Time of Payment.
The producer can choose to receive
FY2002 PFC payments under old
No explicit reference is made to
Similar to House bill. [Section
50% of the payment on Dec. 15 or
law are to be discontinued after
discontinuing payments under PFC
1107]
Jan. 15 and the remainder not later
enactment, and any amount already
contracts, or to payments already made
than September 30 of each fiscal
paid is to be deducted from the
under to old law.
year. [Section 112(d)(1 & 2)]
amount due under this Act.
[Section 108] Fixed, decoupled
payments are to be made not later
than September 30 of each fiscal
year. [Section 104(d)]
Alternatively, for FY1999-02, the
The producer can choose to receive
Same as House bill. [Section 111 as it
Same as House and Senate bills
producer can choose to receive the
an advance of 50% of the payment
amends Section 113(d) of FAIR Act]
except xxx [Section 1103(d)]
full amount or portions at times
on or after December 1. [Section
during the fiscal year chosen by the
104(d)]
producer. [Section 112(d)(3) as
added by PL 105-228, Section 2]

CRS-8
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
2.) Counter-Cyclical
Deficiency Payments and
Target Prices.
a.) Eligibility.
Eliminates counter-cyclical target
Restores counter-cyclical target
Same as House bill. [Section 111 as it
Same as House and Senate bills.
price deficiency payments that were
price deficiency payments that
amends Section 111(a) of the FAIR
[Section 1104]
enacted in 1973 and functioned
ended in 1995. Farms that have
Act]
through 1995. When effective,
signed agreements will receive
farmers were paid the difference
counter-cyclical payments if
between the target price and a lower
average market prices are less than
season average farm price on a
target prices. [Section 101]
specified proportion of a farm’s
crop base acres.
b.) Target Prices and
Payment Rates.
Not
applicable.
The payment rate for
counter-
Same as House bill, except that the
Same as House bill. [Section
cyclical payments is the difference
payment amount for each commodity
1001(10)]
between the “target price” and the
is 100% of base acres times the
“effective price.” The effective
payment yield times the payment rate.
price is the higher of (1)the national
season average price or (2)the loan
rate, plus the direct fixed,
decoupled payment rate. The
payment amount is the payment rate
times the payment acres times the
payment yield. Payment acres are

CRS-9
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
85% of base acres.
Target prices are for all years are
Target prices are for all years are
Target prices for 2002-03/2004-
specified as follows:
specified as follows:
07 are specified as follows:
Wheat, $4.04/bu
Wheat, $3.446/bu
Wheat, $3.86/$2.92/bu
Corn, $2.78/bu
Corn, $2.3472/bu
Corn, $2.60/$2.63/bu
Sorghum, $2.64/bu
Sorghum, $2.3472/bu
Sorghum, $2.54/$2.57/bu
Barley, $2.39/bu
Barley, $2.1973/bu
Barley, $2.21/$2.24/bu
Oats, $1.47/bu
Oats, $1.5480/bu
Oats, $1.40/$1.44/bu
Upland Cotton, $0.736/lb
Upland Cotton, $0.6793/lb
Upland Cotton, $0.724/$0.724/lb
Rice, $10.82/cwt
Rice, $9.2914/cwt
Rice, $10.50/$10.50/cwt
Soybeans, $5.86/bu
Soybeans, $5.7431/bu
Soybeans, $5.80/$5.80/bu
Other Oilseeds, $0.1036/lb
Other Oilseeds, $0.1049/lb
Other Oilseeds,
[Section 105]
[Section 171 as it amends Section
$0.098/$0.1010/lb
111,which amends Section 114 of
[Section 1104(c)]
FAIR Act]
3.) Marketing
Assistance Loans and LDPs.
a.) Eligibility.
Any wheat, feed grains, upland
Marketing assistance loans and loan
Same as House bill. [Section 121]
Similar to House and Senate
cotton, and rice produced on PFC
deficiency payments (LDPs) are
bills, except the list of loan
farms is eligible for marketing
available for agreement crops
commodities differs. [Section
assistance loans or LDPs, whether
(grains, upland cotton, oilseeds) on
1201] The phrase “loan
or not it is produced on contract
all farms where they are produced,
commodities” is defined to
acres. These commodities are not
whether or not they have signed
include wheat, corn, grain
eligible for loan or LDPs if
agreements). [Section 121]
sorghum, barley, oats, upland
produced on farms without
cotton, extra long staple cotton,

CRS-10
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
contracts. Any oilseed is eligible
rice, soybeans, other oilseed,
for marketing assistance loans or
wool, mohair, honey, dry peas,
LDPs, whether or not the farm has
lentils, and small chickpeas.
a contract. [Section 131]
[Section 1001]
b.) Term of Loans.
Loans on grains and oilseeds are for
Same as old law. [Section 123]
Same as old law. [Section 121]
Similar to old law, and House
9 months beginning on the first of
and Senate bills, except the term
the month after the loan date.
for each commodity, including
Loans on upland cotton are for 10
cotton, is 9 months beginning on
months beginning on the first of the
the first day of the month after
month before the loan date.
loan is made. [Section 1203]
c.) Loan Repayment.
For grains and oilseeds, marketing
Similar to old law. [Section 124]
Similar to old law. [Section 121]
Similar to old law, and House
assistance loans can be repaid at the
and Senate bills. Repayment
lesser of the loan rate plus interest,
rules for wool, mohair, honey,
or the rate determined by USDA
dry peas, lentils, and small
that minimize forfeitures, minimize
chickpeas are the same as for
the accumulation of CCC-owned
grains and oilseeds. [Section
stocks, minimize the cost of
1204]
storage, and allow for free and
c o m p e t i t i v e d o m es t i c an d
international marketing. [Section
134]
For upland cotton, loans can be
repaid at the lesser of the loan rate

CRS-11
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
plus interest, or the prevailing world
market price adjusted to U.S.
quality and location. Additional
adjustments to the world price are
made when the world price declines
to near the loan rate , and when the
price of U.S. cotton exceeds the
price of competing cotton in the
world market. [Section 134]
In the event of a default on a loan at
the maturity date, the commodity
pledged as collateral reverts to CCC
ownership. No further action is
taken against the borrower because
marketing assistance loans are
nonrecourse. [Section 131]
d.) Loan Deficiency
Payments (LDPs).
Producers with grain, upland cotton,
Same as old law. [Section 125]
Same as old law. [Section 121]
Similar to old law, and House
or oilseeds eligible for marketing
and Senate bills. LDPs are
assistance loans instead can choose
a v a i l a b l e f o r a l l l o a n
to receive loan deficiency
commodities with the exception
payments. The LDP is the
of ELS cotton. [Section 1204]
difference between the loan rate and
the loan repayment rate established
by the USDA. [Section 135]

CRS-12
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
e.) Loan Rates.
Marketing assistance loans and loan
Marketing assistance loans and loan
Same as House bill. [Section 121]
Same as House and Senate bills.
deficiency payments (LDPs)
deficiency payments (LDPs) are
[Section 1201]
continue at rates in effect in 1995.
available for loan commodities on
Authority is provided for USDA to
all farms (not limited to farms with
lower the loan rates when stocks
agreements for fixed and counter-
accumulate.
cyclical payments) and any quantity
produced on the farm. [Section
121(b)]
Loan rates generally are to be not
Loan rates generally are to be not
Fixed, specific loan rates are as
Fixed, specific loan rates are as
less than 85% of the moving 5-year
less than 85% of the moving 5-year
follows:
follows:
Olympic average of prices received
Olympic average of prices received
Wheat, $2.9960/bu
Wheat, $2.80/$2.75/bu
by producers, or more than:
by producers, or more than:
Corn, $2.0772/bu
Corn, $1.98/$1.95/bu
Wheat, $2.58/bu
Wheat, $2.58/bu
Sorghum, $2.0772/bu
Sorghum, $1.98/$1.95/bu
Corn, $1.89/bu
Corn, $1.89/bu
Barley, $1.9973/bu
Barley, $1.88/$1.85/bu
Sorghum, $1.69/bu
Sorghum, $1.89/bu
Oats, $1.4980/bu
Oats, $1.35/$1.33/bu
Barley, $1.71/bu
Feed Barley, $1.70/bu
Cotton, $0.5493/lb
Cotton, $0.52/$0.52/lb
Malting Barley, $1.65/bu
Rice, $6.4914/cwt
Rice, $6.50/$6.50/cwt
Oats, $1.14/bu
Oats, $1.21/bu
Soybeans, $5.1931/bu
Soybeans, $5.00/$5.00/bu
Cotton, $0.5192/lb
Cotton, max $0.5192-min $0.50/lb
Minor Oilseeds, $0.0949/lb
Minor Oilseeds, $0.096/$0.93/lb
Rice, max & min $6.50/cwt
Rice, must equal $6.50/cwt
[Section 171 as it amends Section 121,
ELS Cotton, $0.7977, $0.7977/lb
Soybeans, max $5.26, min $4.92/bu
Soybeans, $4.92/bu
which amends Section 132 of the FAIR
(ELS Cotton is not eligible for
Minor Oilseeds, max $0.093, min
Minor Oilseeds, $0.087/lb
Act]
LDPs)
$0.87/lb
[Section 122]
Dry Peas, $6.33, $6.22/cwt
Lentils, $11.94, $11.72/cwt
Small Chickpeas, $7.56,
$7.43/cwt.
Graded Wool, $1.00/lb

CRS-13
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
Nongraded Wool and Unshorn
Pelts, 40¢/lb
Mohair, $4.20/lb
[Section 1202]
(P.L. 106-224, Section 206(a)(2)
Retroactively, for the 2001 crops, as
Same as House bill. [Section 169]
Same as House and Senate bills.
and (3), made loans and LDPs
was the case for 2000, LDPs are
[Section 1205(f)(2)]
available on non-PFC farms only
available on non-PFC farms that
for crop year 2000.)
produced contract crops and
oilseeds. [Section 125(f)]
Payment limits are covered below
in P, 2).
B.) Wool and Mohair.
1.) Marketing Loans and
LDPs.
Wool and mohair support was
Marketing loans and LDPs are
Similar to House bill, but no support
Similar to House bill, except
phased out and ended in 1996 by
available to all producers at the
for mohair. Marketing loans and
unshorn pelts are eligible for
P.L. 103-130, Section 1, which
following rates:
LDPs are available to all producers at:
LDPs only.
repealed the National Wool Act of
1954. However, support was
Graded Wool, $1.00/lb
Graded Wool, $1.00/lb
Graded Wool, $1.00/lb
authorized in several subsequent
Nongraded Wool, 40¢/lb
Nongraded Wool and Unshorn Pelts,
Nongraded Wool and Unshorn
years. P.L. 106-78 Section 801(h),
Mohair, $4.20/lb
40¢/lb
Pelts, 40¢/lb
authorized recourse loans on 1999
[Section 130]
Mohair, na
Mohair, $4.20/lb
crop mohair. P.L. 106-224, Section
[Section 171 as it amends Section 111,
[Section 1201, 1202]
204(d), mandated payments on
which amends Section 132 of the FAIR
1999 crop wool of $0.20, and on
Act]
Marketing loan gains and LDPs
mohair of $0.40/lb. P.L. 106-387,
[While Section 123 provides no loan
are limited to $75,000 per person

CRS-14
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
Section 814, authorized payments
for mohair, Section 171 includes a
per year for wool, and separately
of $0.20/lb for wool and $0.40
loan for mohair, but the claimed intent
$75,000 for mohair. [Section
mohair for crop year 2000, up to
according to Committee staff is to not
1603]
$20 million. Again for crop year
support mohair]
2001, P.L. 107-25, Section 5,
authorized $16.9 million in direct
payments for wool and mohair at
rates determined by USDA.
C.) Honey.
1.) Marketing
Assistance Loans and LDPs.
Honey support is repealed. [Section
Marketing loans and LDPs at
Marketing loans and LDPs at $0.60/lb.
Same as House bill. [Section
171] This action followed several
$0.60/lb. The term of a loan is 12
The term of the loan is 9 months,
1201,1202] The payment limit is
years of agriculture appropriations
months, beginning the first day of
beginning the first day of the month
$75,000 per person per year.
bill language that prevented USDA
the month after the loan is obtained.
after the loan is obtained. [Section
[Section 1603]
from carrying out the mandatory
[Section 131]
124, which amends Section 133 of the
honey marketing loan program.
FAIR Act]
Subsequently, recourse loans were
authorized for the 1998, 1999, and
2000 crops by respectively P.L.
105-227, Section 1122; P.L. 106-
78, Section 801; and P.L. 106-224,
Section 204. P.L. 106-387, Section
812, made marketing assistance
loans and LDPs available on 2000
crop honey at $0.65/lb and

CRS-15
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
outstanding recourse loans were
converted to nonrecourse marketing
loans.
D.) Extra Long Staple
(ELS) cotton, Dry Peas,
Lentils and Chickpeas.
1.) Marketing Assistance
Loans and LDPs.
ELS cotton is eligible for
Same as old law.
Marketing l oans and LDPs are
Similar to Senate bill, except
nonrecourse loans, but not LDPs.
available on all production at the
large chickpeas are not included.
[Sections 132 and 134]
following rates:
[Section 1201-1205].. Loan rates
No support is authorized for dry
for 2002-03, and 2004-07 are:
peas, lentils, large chickpeas, small
chickpeas.
ELS Cotton, $0.7965
ELS Cotton, $0.7977, $0.7977/lb
(ELS cotton is not eligible for LDPs)
(ELS cotton is not eligible for
Dry Peas, $6.78/cwt
LDPs)
Lentils, $12.79/cwt
Dry Peas, $6.33, $6.22/cwt
Large Chickpeas, $17.44/cwt
Lentils, $11.94, $11.72/cwt
Small Chickpeas, $8.10/cwt
Small Chickpeas, $7.56,
$7.43/cwt.
[Section 1202]
The term of each loan is 9 months,
beginning the first day of the month
after the loan is obtained. [Section 171
as it amends Section 111, which
amends Section 132 of the FAIR Act]

CRS-16
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
E.) Grazed Wheat, Barley,
Oats, and Triticale.
1.) Payments in Lieu of
LDPs.
P.L. 104-127 made no provision for
Wheat, barley, and oats that are
Similar to House bill, but includes
Similar to House bill, except
LDPs on grazed wheat, barley and
grazed and not harvested, but would
grain sorghum along with wheat,
grazed triticale (a genetic cross
oat acreage. P.L. 106-224, Section
be eligible for LDPs if harvested,
barley and oats as eligible crops.
of wheat and rye) also is
205, provided for LDPs on grazed
will receive LDPs under similar
[Section 127]
covered. [Section 1206]
acres only for 2001 crops.
rules to those that apply to
harvested crops. Federal crop
insurance is not allowed on grazed
land agreements. [Section 126]
F.) High Moisture Corn
and Sorghum.
1.) Recourse Loans.
Recourse loans are available on
For farms that normally harvest
Same as House bill. [Section 121(a)]
Same as House bill. [Section
high moisture corn and grain
corn or sorghum in a high moisture
1209(a)]
sorghum. Loan rates are
condition, recourse loans are
determined by the USDA. Only
available at rates set by the USDA.
producers with PFC contracts are
Farms need not have signed
eligible. [Section 137(a)]
“agreements.” [Section 129(a)]

CRS-17
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
G.) ELS and Upland Seed
Cotton.
1.) Recourse Loans.
Recourse loans are available on
Recourse loans are available for
No provision is made to support seed
Same as House bill. [Section
upland seed cotton for farms with
all upland and ELS seed cotton, at
cotton.
1209(b)]
PFC contracts, and on any farm
rates set by the USDA. Farms
producing ELS seed cotton.
need not have signed
[Section 137(b)]
“agreements.” [Section 129(b)]
H.) Hard White Wheat
Incentive Payments.
1.) Incentive Payments.
No special support provision is
Same as old law, no support
For crop year 2003 through 2005, an
Similar to Senate bill, but
added for hard white wheat.
provision is available for hard white
additional $40 million is to be paid to
funding is set at $20 million for
However, hard white wheat, like all
wheat.
producers to ensure that hard white
the 3 year period. [Section
other wheat, does qualify for
wheat on not more than 2 million acres
1616]
contract payments and marketing
meets minimum quality standards.
loan program benefits.
[Section 167]
I.) Upland Cotton
Competitiveness Provisions
for Processors and
Exporters.
1.) Marketing Certificates.
Marketing certificates or cash
Some changes from old law.
Same as old law. [Section 121(b)]
Same as House bill for upland
payments are made to domestic
Marketing certificates or cash
cotton. Applies through July 31,

CRS-18
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
users and exporters of upland cotton
payments are made to domestic
2008. [Section 1207(a)]
whenever the 4-week price of U.S.
users and exporters of upland cotton
cotton gets too high compared to
whenever the 4-week price of U.S.
world cotton price (i.e., 1.25¢/lb
cotton is too high or not high
higher), or is not high enough
enough (i.e., when the U.S. price
compared to the U.S. cotton loan
(1) exceeds the world price by
rate (i.e., less than 130% higher).
1.25¢/lb, or (2) does not exceed the
[Section 136(a)]
U.S. cotton loan rate by at least
134%). [Section 127(a)]
2.) Import Quotas.
A special import quota is imposed
A special import quota is imposed
Same as old law. [Section 121(b)]
Same as House bill. [Section
on upland cotton when U.S. prices
on upland cotton when U.S. prices
1207(b)]
exceed world prices by 1.25¢ for 10
exceed world prices by 1.25¢ for 4
weeks. [Section 136(b)]
weeks. [Section 127(b)]
A limited global import quota is
Same as old law. [Section 127(b)]
Same as old law. [Section 121(b)]
Same as old law, and House and
imposed on upland cotton when
Senate bills. [Section 1207(c)]
U.S. prices average 130% of the
previous 3-year average of U.S.
prices. [Section 136(c) ]
J . ) E L S C o t t o n
Competitiveness Provisions
for Processors and Exporters.
No provision.
A special competitiveness program
No provision.
Same as House bill. Applies
is created for ELS cotton with
through July 31, 2008. [Section
marketing certificates or cash
1208]
payments to domestic users and

CRS-19
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
exporters under market conditions
like those that apply to upland
cotton. [Section 128]
K.) Peanuts.
1.) Poundage Quotas
and Quota compensation.
National poundage quota is set to
Peanut quotas are terminated and
Similar to House bill, but the
Repeals all quota provisions, and
reflect the projected domestic
farmers are compensated $1,000/ton
compensation is $1,100 (55¢/lb)
a d o p t s S e n a t e q u o t a
demand for edible peanuts. The
(50¢/lb) ($200/ton/year for 5 years).
($220/ton/yr for 5 years). [Section
compensation level of $1,100
price of peanuts sold for domestic
[Section 170]
152]
(55¢/lb or $220 /ton/year for 5
edible consumption (quota peanuts)
years). [Section 1309]
is supported through nonrecourse
loans at $610/ton (30.5¢/lb). The
price of additional peanuts
(nonquota peanuts, those exported
or crushed for oil and meal) is
supported at a competitive level (set
by USDA at $132/ton, 6.6¢/lb, in
2001). [Section 155]
2.) Nonrecourse Loans /
Marketing Assistance Loans.
Nonrecourse loans are replaced by
Same as House bill except that the
Nonrecourse loans are replaced
marketing assistance loans. Loans
marketing assistance loan rate is set at
by marketing assistance loans.
are set at $350/ton (17.5¢/lb)
$400/ton (20/lb). [Section 151]
Loans are set at $355/ton
available for all peanuts produced
(17.75¢/lb) available for all

CRS-20
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
without distinction of end use.
peanuts produced without
[Section 167]
distinction of end use. [Section
1307]
3.) Fixed Payments,
Counter-Cyclical Payments,
and Marketing Assistance
Loans.
No provisions for fixed payments or
Support for peanuts designed like
Similar to House bill. [Section 151 as
Adopts House peanut program
for counter-cyclical payments.
that for grains, cotton, and oilseeds.
it establishes Section 158B in the FAIR
designed like that for grains,
Rules regarding eligibility, sign-up,
Act]
cotton, and oilseeds. Rules
conservation and wetlands
regarding eligibility, sign-up,
compliance, planting flexibility,
conservation and wetlands , base
base acres, payment yields, etc., are
acres, payment yields, etc., are
similar to those that apply to grains,
similar to those that apply to
cotton, and oilseeds. [Sections 162,
grains, cotton, and oilseeds.
165, 166]
[Section 1302] Adopts unique
conference provisions on
compliance and planting
flexibility. [Section 1305, 1306]
The assignment of each farm’s
Same as House bill. [Section 151 as it
Adopts House provision with
acres and yield to cropland selected
establishes Section 158B(b) in the
revision specifying that
by the producer is done on a one-
FAIR Act]
assignment must be done by
time basis. [Section 162(b)]
March 31, 2003, among other
provisions. [Section 1302(b)]
Fixed, decoupled annual payments
Fixed, decoupled contract payments
F i x e d , d e c o u p l e d a n n u a l

CRS-21
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
at the rate of $36/ton (1.8¢/lb) are
are the same as House bill. [Section
payments at the rate of $36/ton
made on 85% of each farms history
151 as it establishes Section 158C in
(1.8¢/lb) are made on 85% of
of peanut production. [Section 163]
the FAIR Act]
each farms history of peanut
production. [Section 1303]
C ounter-cycl i cal defi ci ency
Counter-cyclical deficiency payments
Counter-cyclical deficiency
payments against a $480/ton
against a $520/ton (26¢/lb) target price
payments are made when
(24¢/lb) target price are made on
are made on 85% of each farms history
marketing year prices average
85% of each farm’s history of
of peanut production. [Section 151 as
less than the target price of
peanut production. [Section 164]
it establishes Section 158D in the
$495/ton (24.75¢/lb). Payments
FAIR Act]
are made on 85% of each farm’s
history of peanut production.
Partial payments may be made in
advance. [Section 1304]
Marketing assistance loans (set at
Marketing assistance loan rate set at
Similar to House and Senate
$350/ton (17.5¢/lb) available for all
$400/ton (20¢/lb) available for all
bills, except the marketing
peanut production wi thout
peanut production without distinction
assistance loan rate is set at
distinction of end use. [Section
of end use. [Section 151 as it
$355/ton (17.75¢/lb) available
167]
establishes Section 158G in the FAIR
for all peanuts. [Section
Act]
1307(b)]
4.) Payment Limits.
Payments limits are not applicable
Payments limits for peanuts are
Payments received for support of
Payments limits for peanuts are
to peanuts.
separate from other commodities.
peanuts are subject to the same limits
s e p a r a t e f r o m o t h e r
[Section 169] Fixed, decoupled
as other crops. Peanuts are not treated
commodities. Fixed, decoupled
peanut payments are subject to a
separately. For all crops, the
peanut payments are subject to a
limit of $50,000 per person, per
combination of fixed, decoupled
limit of $40,000 per person, per
year. The limit on counter-cyclical
payments and counter-cyclical
year. The limit on counter-

CRS-22
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
target price deficiency payments is
payments is limited to $75,000 per
cyclical target price deficiency
$75,000, and the limit on marketing
individual, per year. Marketing loan
payments is $65,000, and the
loan benefits is $150,000. [Section
benefits are limited to $150,000.
limit on marketing loan benefits
169]
[Section 169]
is $75,000. [Section 1603]
L.) Sugar.
1.) Price Support Loans.
Raw cane sugar and refined beet
Same nonrecourse loan rates as old
Same loan rates as old law. [Section
Retains old rates for non-
sugar are s upported with
law, 18¢/lb. raw cane, and 22.9¢/lb.
141(i)] Same in-process sugar loans
recourse loans -18¢/lb. raw cane,
nonrecourse loans at 18¢ and
refined beet. [Section 151(a)] In-
as House bill. [Section 141(e)] Same
and 22.9¢/lb. refined beet. In-
22.9¢/lb respectively. [Section
process sugar is newly eligible for
authority to reduce loan rates as House
process sugar is newly eligible
156(a) and (b)] The loan rates may
loan at 80% of full loan rates.
bill. [Section 141(a)]
for loan at 80% of full loan rates.
be reduced if negotiated reductions
[Section 151(e)] Loan rates may be
Loan rates may be reduced if
in support are achieved for other
reduced if competing nations
competing nations sufficiently
sugar countries. [Section ]156(c)]
sufficiently reduce support. [Section
reduce support. [Section
A recourse loan program when the
151(c)]
1401(a) restates FAIR Act
tariff rate quota on imports is less
provisions, and adds new
than 1.5 million short tons was
subsection for in-process sugar
eliminated by P.L. 106-387, Section
loans]
836.
2.) No Net Cost Mandate.
No provision mandating no net
Loan program is to be operated at
Same no cost policy as House bill.
Loan program is to be operated
cost.
no net cost by avoiding forfeitures.
[Section 141(f)]
at no net cost by avoiding
[Section 151(f)]
forfeitures. [Section 1401(a)
adds new subsection to FAIR
Act]

CRS-23
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
3.) Loan Forfeiture
Penalty.
A forfeiture penalty of 1¢ per pound
Forfeiture penalty is retained by
The loan forfeiture penalty is
Same as Senate bill. Elimination
on raw cane sugar (an equivalent
preserving Section 156(g) of the
eliminated. [Section 141(d)]
of forfeiture penalty takes effect
amount for beet sugar) is assessed
FAIR Act.
upon enactment. [Section
on loan forfeitures. This effectively
1401(a) drops provision from
reduces the level of support.
FAIR Act] Change effectively
[Section 156(g)]
increases support level.
4.) Import Quotas.
A global import quota of not less
Same as old law.
Same as House bill, except authorizes
Maintains existing import quota
than 1.256 million short tons is set
USTR in consultation with USDA to
system, and adopts Senate
each year by USDA under authority
reallocate any shortfall of one
reallocation provision giving any
of the Harmonized Tariff Schedule
country’s shipments to the other quota-
shortfall of on country’s
of the United States. The quota is
holding countries. [Section 144]
shipments to the other quota-
allocated among countries by U.S.
holding countries. [Section
Trade Representative. [HTSUS,
1403]
chapter 17, additional U.S. note5.
USTR announces a separate
allocation for additional sugar
entering from Mexico as agreed in
the sugar side letter to NAFTA]
5.) Marketing Allotments.
The authority to impose mandatory
Sugar marketing allotments are
Similar to House bill, but provision is
Sugar marketing allotments are
marketing allotments on domestic
restored and are to be shared
made for new cane processor entrants
restored and are to be shared
sugar production is suspended.
between beet sugar and raw cane at
(including mainland states not
between beet sugar and raw cane

CRS-24
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
[Section 171(a)(1)(E)]
54.35% and 45.65%. Allotments
previously producing cane). [Section
at 54.35% and 45.65%.
are suspended when imports exceed
143]
Allotments are suspended when
1.532 million short tons. [Section
imports exceed 1.532 million
152]
short tons. Adds authority for
USDA to assign unused cane and
beet sugar allotments first to
sales of sugar in CCC inventory
and then to imports under certain
conditions. Makes allotment
authority effective beginning
October 1, 2002. [Section 1403]
6.) In-Kind Payments.
No provision.
CCC is authorized to make in-kind
Same authority to make in-kind
Authorizes CCC to make in-kind
commodity payments from stored
payments for reduced production as
p a y m e n t s f r o m s t o r e d
inventories to processors in
House bill. [Section 141(f)]
inventories in exchange for
exchange for reduced sugar
reduced production as laid out in
production. [Section 151(j)]
House and Senate provisions.
[Section 1401(a) adds new
subsection to FAIR Act]
7.) Marketing
Assessment.
Processors must pay an assessment
The assessment on all sugar
Same as House bill. [Section 141(c)]
Terminates the sugar marketings
on all marketings of sugar to CCC
marketings is eliminated. [Section
assessment retroactive to
equal to a specified percentage of
151(b)]
October 1, 2001. [Section
the loan rate. [Section 156(f)] P.L.
1401(b)]
106-78, Section 803(b), suspended

CRS-25
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
the assessment for FY2000 and
FY2001. P.L. 107-76, Section 749,
delays remittance of 2002
assessments until September 2,
2002.
8.) Interest Rate on
Loans.
The interest rate on loans is 1%
Interest rate on loans is equal to
Same interest rate on loans as House
Reduces interest rate on price
above the CCC cost of borrowing
CCC cost of funds. This is 1% less
bill. [Section 141(j)]
support loans to sugar processors
money. [Section 163]
than the interest rate for other
by 1%, as in House and Senate
commodities. [Section 151(h)]
bills. [Section 1401(c)]
9.) Storage Facility
Loans.
No provisions for storage facility
Storage facility construction and
Same as House bill. [Section 142]
Authorizes storage facility loans,
loans.
improvement loans are to be made
as in House and Senate bills.
available to processors. [Section
[Section 1402]
153]
M.) Dairy.
1.) Milk Price Support.
The farm price of milk is indirectly
Continues milk price support at
Similar to House bill. Continues milk
Same as House bill. [Section
supported at $9.90/cwt. Support is
$9.90/cwt. through purchases of
price support at $9.90/cwt. through
1501]
achieved through CCC purchases of
dairy products, as under old law.
purchases of dairy products. However,
cheese, butter, and nonfat dry milk
Also, as under old law, USDA is
USDA is required to adjust purchase
at specific prices. [Section 141]
permitted to adjust purchase price
price relationships between butter and

CRS-26
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
Support was scheduled to end after
relationships between butter and dry
dry milk twice annually to minimize
1999. However, it was continued at
milk twice annually to minimize
expenditures.[Section 131]
$9.90 thru 2000 by P.L. 106-78,
expenditures. [Section 141]
Section. 807; thru 2001 by P.L.
106-387, Section 742; and thru May
2002 by P.L. 107-76, section
772(a). USDA is permitted to
adjust purchase price relationships
between butter and dry milk twice
annually to minimize expenditures.
2.) Processor Recourse
Loans.
Recourse loans for commercial
House bill repeals processor
Same as House bill.
Same as House and Senate bills.
processors are to be available
recourse loans, but they are already
beginning in 2001, immediately
repealed by P.L. 107-76.
after price support is scheduled to
end. [Section 142] This was
repealed by P.L. 107-76, section
772(b), before it could be
implemented.
4.) Northeast Dairy
Compact.
The Northeast Dairy Compact is
No provisions.
No provision.
Same as House bill.
authorized, allowing six New
England states to require processors
to pay regulated minimum prices

CRS-27
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
for Class I (fluid) milk (set by the
states at $16.94 in 1997. The
Compact authority expired on
September 30, 2001. [Section 147]
5.) Dairy Market Loss
Payments.
P.L. 104-127 did not provide for
No
provisions.
New counter-cyclical market
loss
Similar to Senate bill, except a
market loss assistance.
deficiency payments are made on up to
single national target price of
8 million pounds of each farm’s annual
$16.94/cwt is established.
Separately, ad hoc emergency
production. The total expenditure
Producers receive monthly
market loss assistance of $200
limit for the life of the program
deficiency payments equal to
million was authorized for FY1999
(December 1, 2001, thru September
45% of the price difference on
(P.L. 105-277), $125 million for
30, 2005) is $500 million for 12
up to 2.4 million pounds of
FY2000, (P.L. 106-78), and $473
northeast states, and $1.5 billion for all
production per year. The
million for FY2001 (P.L. 106-387).
other states. For the 12 northeast
program is authorized from
states, as an alternative to the expired
December 1, 2001 through
Northeast Dairy Compact, payments
September 30, 2005. [Section
are made when the monthly average
1502]
farm price of Class I milk (fluid use
milk) falls below the reference price
(target price) of $16.94. The payment
rate is equal to 45% of the market
price deficiency. For all other states,
payments are made when the quarterly
average market price falls below the 5-
year average for the same quarter. The
payment rate is 40% of the deficiency.
[Section 132]

CRS-28
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
6.) Dairy Export Incentive
Program.
The Dairy Export Incentive
Extends old law. [Section 143(a)]
Same as House bill. [Section 133(a)]
Same as old law, and House and
Program (DEIP) is reauthorized.
Senate bills. [Section 1503(a)]
The program, first authorized by the
1985 farm bill, pays exporters cash
or commodity bonuses to enable
them to meet the prices of
competitors subsidized sales and to
develop new markets. [Section
148]
7.) Dairy Indemnity
Program.
The Dairy Indemnity Program
Authorizes the Dairy Indemnity
Same as House bill through September
Same as old law, and House and
expired September 30, 1995, and is
Program through September 30,
30, 2006. [Section 133(b)]
Senate bills except producer can
not reauthorized by P.L. 104-127.
2011. [Section 143(b)]
choose an advance of any
However, appropriations made each
amount “up to” 50% of the direct
year keep the program operating.
payment. Applicable through
The program indemnifies farmers
September 30, 2007. [Section
and processors for contamination of
1503(b)]
milk by pesticides and certain other
toxics.

CRS-29
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
8.) Fluid Milk Processor
Promotion Program.
The Fluid Milk Promotion is
Authorizes the Fluid Milk
Same as House bill, except that fluid
Same as Senate bill. [Section
extended thru December 31, 2002.
Promotion program as a permanent
milk delivered directly to consumer
1506]
This research and promotion
program, replaces the old statutory
residences does not count toward the 3
program is funded by an assessment
definition of fluid milk product with
million pound minimum requirement
on processors of more than 500,000
the definition promulgated in
for the processor assessment. [Section
pounds per month.
USDA regulations, and applies the
134]
assessment to processors of 3
million pounds per month or more.
[Section 144]
9.) Dairy Product
Mandatory Reporting.
The Dairy Market Enhancement
Makes a technical change in the
Same as House bill with technical
Same as Senate bill. [Section
Act of 2000 (P.L. 106-532)
definition of dairy products to
changes to definition of manufactured
1504]
established a mandatory reporting
require milk manufacturers to
dairy products. [Section 135]
system on dairy product inventories
include substantially identical
and prices.
products in their reports to USDA.
[Section 145]
10.) Dairy Promotion
and Research Assessment.
For FY1997 thru FY2001, the
Extends the assessment to imported
Same as House bill. [Section 136]
Same as House bill. [Section
National Dairy Promotion and
dairy products. Imports are given 2
1505]
Research Board is authorized to
seats on the Board. None of the
spend funds to develop international
importer funds may be used for
markets and promote U.S. milk in
export promotion. [Section 146]

CRS-30
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
those markets. [Section 152]
This broadened the activities of the
Board, which is funded by a $0.15
per hundredweight assessment on
all milk produced and marketed in
the 48 states.
11.) Dairy Studies and
Reports.
The USDA is required to study and
Requires USDA to prepare a
Requires USDA to study and report no
Adopts both House and Senate
report on the impact on milk prices,
comprehensive evaluation of
later than September 30, 2002, on 1)
provisions. [Section 1508]
producer income, and federal
national dairy policies (i.e., price
the impacts of terminating all federal
support program costs caused by
supports, marketing orders, over-
price support and supply management
increased imports of cheese under
order premiums and state pricing
programs while enabling the states to
WTO commitments. [Section 151]
programs, dairy compacts, and
manage milk prices and supply, and on
export programs). [Section 147]
2) the impacts of changing the
standard of identity for fluid milk to
requi re a minimum con t en t
commensurate with the average
protein content of farm milk. [Section
137]
N.) Tobacco.
1.) Flue-cured Quota.
No provisions.
Same as old law.
Reduces the reserve stock level for
Similar to Senate, except the
flue-cured in the quota determination
reserve stock is 60 million

CRS-31
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
formula from the greater of 100
pounds. [Section 1610]
million pounds or 10% of the national
marketing quota, to the greater of
75,000 pounds or 10%. [Section 162]
2.) Flue-cured Farm
Reconstitutions.
No provisions
Same as old law.
Allows, for the 2002 crop only, for
Same as Senate bill. [Section
special farm reconstitutions that
1611]
otherwise would violate the
prohibition on flue-cured lease and
transfer of quota. Requires a study of
the prohibition of flue-cured quota
lease and transfer. [Section 163]
O.) Specialty Crops.
1.) Mandatory CCC
Purchases.
No provisions of P.L. 104-127
No provision.
Mandated specialty crop purchases
The amount of Section 32 funds
specifically authorize or mandate
using CCC funds: $100 million in each
that can be carried across fiscal
support for specialty crops.
of FY2002 and FY2003, $120 million
years for use in emergency
Subsequently, emergency ad hoc
in FY2004, $140 million in FY2005,
removals of surplus commodities
assistance was mandated for
and $170 million in FY2006.
is increased from $300 million to
specialty crops. P.L. 106-224,
Mandated purchases of other
$500 million. [Section 1602]
Section 203(d), mandated the CCC
unspecified commodities, at $30
spend $200 million for purchases
million each year. [Section 166]
Section 32 purchases of fruits,
fruits and vegetables with low
vegetables, and specialty crops
prices in 1998 and 1999, including
shall amount to not less than

CRS-32
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
apples, black-eyed peas, cherries,
$200 million each fiscal year.
citrus, cranberries, onions, melons,
[Section 10603]
peaches, and potatoes. P.L. 106-
387, Section 811 and Section 816
mandated respectively $100 million
in payments to apple growers and
$20 million to cranberry growers to
compensate for low prices. P.L.
107-25, Section 7(b), mandated the
CCC to distribute $133.4 million to
states for support of specialty crops.
P.) Payment Limits.
1.) Fixed Payments, and
Counter-Cyclical Payments.
Fixed contract payments are subject
Combined fixed, decoupled
Fixed, decoupled commodity
Fixed, decoupled payments for
to a $40,000 per person, per year
payments for grains, cotton, and
payments combined with counter-
grains and oilseeds limited to
limit. [Section 115]
oilseeds are limited to $50,000 per
cyclical target price deficiency
$40,000 per year per person.
Matching market loss payments
year per person. [Section 109]
payments for grains, cotton, oilseeds
Counter-cyclical payments
adopted as emergency assistance
Separately, fixed, decoupled
and peanuts are subject to a $75,000
limited to $65,000. The same
were not subject to payment limits,
payments for peanuts are limited to
per person, per year limit. [Section
limits separately apply to
with the practical result effectively
$50,000. [Section 169]
169]
peanuts. [Section 1603]
being the potential doubling of the
Counter-cyclical payments for
contract payment limit to $80,000.
grains, cotton, and oilseeds are
subject to a $75,000 per person, per
year limit. [Section 109]
Separatel y, counter-cyclical
payments for peanuts are limited to
$75,000. [Section 169]

CRS-33
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
2.) Marketing Loan Benefits.
Marketing loan benefits (marketing
Marketing loan benefits for grains,
Marketing loan benefits for all
Marketing loan benefits for
loan gains and LDPs) for all crops
cotton, and oilseeds combined are
commodities (grains, cotton, oilseeds,
covered crops (grains and
combined are subject to a $75,000
subject to a $150,000 per person,
dry peas, lentils, chickpeas, wool,
oilseeds), lentils, dry peas, and
per person, per year limit. [Section
per year limit. [Section 183]
honey, and peanuts) combined are
small chickpeas limited to
115] The limit was raised to
Separately, marketing loan benefits
subject to $150,000 per individual, per
$75,000. Peanuts, wool, mohair,
$150,000 for crop years 1999, 2000,
for peanuts are limited to $150,000.
year limit. Included in this limit are
and honey each have separate
and 2001 by respectively P.L. 106-
[Section 169] Separately,
marketing loan gains, LDPs, loan
marketing loan benefit limits of
78, sec. 813; P.L. 106-387, sec.
marketing loan benefits for wool
forfeiture gains, and commodity
$75,000. [Section 1603]
837; and P.L. 107-25, sec. 10).
and mohair are limited to $150,000.
certificate gains. [Section 169]
Exempt from payment limits are
[Section 130(f)] Separately,
marketing certificates sold to
marketing loan benefits for honey
farmers at the posted county price
are limited to $150,000. [Section
and used to pay off marketing
131(f)]
assistance loans (authorized by P.L.
106-78, sec. 812). Also exempt for
limits are gains from the forfeiture
of commodities at loan maturity.
3.) Spouse Benefit and 3
Entity Rule.
No change is made to existing
Same as old law.
A spouse allowance of an additional
Same as old law and House bill.
policy that allows a spouse to be
$50,000 is created. The 3-entity rule is
considered a separate person or
replaced by applying the limits to
allows one person to receive
payments from all sources (the so-
payments from 2 additional farms.
called direct attribution rule.) [Section
Either allowance doubles the limit
169]
on payments.

CRS-34
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
4.) Adjusted Gross
Income Limit.
No provision.
Same as old law.
A person with adjusted gross income
Same as Senate bill. [Section
in excess of $2.5 million is not eligible
1603]
for payments (unless 75% or more of
income is from farming, ranching, or
forestry). [Section 169]
5.) Payment Limitation
Commission.
No provision.
No provision.
Creates a 1-year Commission on the
Same as Senate bill. [Section
Application of Payment Limitations
1605]
for Agriculture to analyze and make
recommendations on payment limits.
[Sections 181-187]
Q.) Livestock Assistance.
No provision.
No provision.
Authorizes appropriations up $500
Authorizes appropriation of such
million per year for FY2003-2008 for
sums as necessary for livestock
livestock assistance. [Section 168]
assistance. [Section 10104]
R.) Farm Income
Estimates.
No provision.
No provision.
Requires USDA to make farm income
Same as Senate bill. [Section
estimates for commercial producers
1615]
separate from all farms. [Section 173]

CRS-35
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
S.) CCC Commodity
Operations.
No provision.
No provision.
CCC is authorized to use private
Same as Senate bill. [Section
business to carry out commodity
1609]
purchases and sales. [Section 174]
T.) Implementing
Regulations.
Regulations to implement Title I
Regulations to implement Title I
No provision.
Same as House bill. [Section
shall be issued not later than 90
shall be issued not later than 90
1601(c)] (The 90 periods ends
days after enactment (August 12,
days after enactment. [Section
on August 12, 2002).
2002). [Section 161(d)]
181(c)]
U.) Counter-Cyclical
Farm Savings Accounts.
No provisions in current law.
Same as old law.
F a r m c o u n t e r - c yc l i c a l s a v i n g s
Same as old law and House bill.
accounts are authorized as a pilot
program in 3 states. Farms with
adjusted gross revenue from
commodities of at least $50,000 would
be able to contribute an unlimited
amount into a savings account with
limited matching federal contributions
(up to $5,000 per fiscal year).
Withdrawals are permitted when
adjusted gross revenue is less than
90% of the previous 5-year average.
[Section 114]

CRS-36
PRIOR LAW/POLICY
HOUSE BILL,
SENATE SUBSTITUTE,
NEW LAW
(P.L. 104-127)
(H.R. 2646)
(S. 1731 AMENDED)
(P.L. 107-171)
COVERS 1996-2002
COVERS 2002-2011
COVERS 2002-2006
COVERS 2002-2007
V.) WTO Limits on
Allowable Domestic Support.
Under the Uruguay Round
If USDA determines that total
If USDA notifies Congress that
Same as House bill, except the
Agreement on Agriculture, the U.S.
spending for commodity support
support program spending will exceed
USDA is instructed to make
agreed to an annual limit of $19.1
will exceed the limits accepted by
the allowed limits and that adjustments
a d j u s t m e n t s t o e n s u r e
billion on spending for domestic
the United States in the Uruguay
will be made, all spending on the
compliance. [Section 1601]
trade-distorting subsidies. There is
Round Agreement on Agriculture,
designated programs will be suspended
no similar limit in the law or
adjustments may be made to reduce
after 18 months unless Congress
definition of trade distorting
spending to the limits but not below
disallows the adjustments. [Section
subsidies.
the allowable limits. [Section
164]
181(e)]

CRS-37
Table 1. Fixed Payments: Comparison of Prior Law, New Law,
House, and Senate Bills
Fixed Payment Rates
Prior Law
P.L. 107-171
House Bill
Senate Bill
2002
(2002-03/
(2002-11)
(2002-06)
Crop, unit
2004-07)
Wheat, $/bu
0.46
0.52
0.53
0.45/0.225/0.113
Corn, $/bu
0.26
0.28
0.30
0.27/0.135/0.068
Grain Sorghum, $/bu
0.31
0.35
0.36
0.31-0.27/0.135/ 0.068
Barley, $/bu
0.19
0.24
0.25
0.20/0.10/0.05
Oats, $/bu
0.020
0.024
0.025
0.05/0.025/0.013
Upland Cotton, $/lb
0.0554
0.0667
0.0667
0.13/0.065/0.0325
Rice, $/cwt
2.05
2.35
2.35
2.45/1.225/0.6125
Soybeans, $/bu
none
0.44
0.42
0.55/0.275/0.138
Minor Oilseeds, $/lb
none
0.008
0.74
0.01/0.005/0.0025
Peanuts, $/ton
none
36.00
36
all years, 36
($/lb)
(0.018)
(0.018)
(0.018)
Source: Fixed, decoupled payments in old law (P.L. 104-127), conference report H. Rept. 107-424,
H.R. 2646; and S. 1731. Payment bases differ between the bills. The conference report makes
payments on 85% of the payment acres times the payment yield, and generally the yield is that
established for 1995. H.R. 2646 use the same payment base as old law (85% of recent acreage and
yield averages from the 1980s). S. 1731 makes payments on 100% of recent acreage and recent yield
levels.

CRS-38
Table 2. Counter-Cyclical Target Prices: Comparison of Prior
Law, New Law, House Bill, and Senate Bill
Target Prices
Prior Law
P.L. 107-171
House Bill
Senate Bill
(1995 Levels,
(2002-03/
(2002-11)
(2002-06)
Not
2004-07)
Applicable
Crop, unit
1996-2002)
Wheat, $/bu
4.00
3.86/3.92
4.04
3.4460
Corn, $/bu
2.75
2.60/2.63
2.78
2.3472
Grain Sorghum, $/bu
2.61
2.54/2.57
2.64
2.3472
Barley, $/bu
2.36
2.21/2.24
2.39
2.1973
Oats, $/bu
1.45
1.40/1.44
1.47
1.5480
Upland Cotton, $/lb
0.729
0.724/0.724
0.736
0.6739
Rice, $/cwt
10.71
10.50/10.50
10.82
9.2914
Soybeans, $/bu
none
5.80/5.80
5.86
5.7431
Minor Oilseeds, $/lb
none
0.098/0.101
10.36
0.1049
Peanuts, $/ton
none
495/495
480
520
($/lb)
(24.75/24.75)
(24)
(26)
Source: Target prices in old law (P.L. 104-127, conference report H. Rept. 107-424, H.R. 2646, and
S. 1731. a Payment bases differ between the bills. The conference report makes payments on 85%
of the payment acres times the payment yield, and generally the yield is that established for 1995.
H.R. 2646 use the same payment base as old law (85% of recent acreage and yield averages from the
1980s). S. 1731 makes payments on 100% of recent acreage and recent yield levels.

CRS-39
Table 3. Loan Rates: Comparison of Prior Law, New Law,
House Bill, and Senate Bill
Loan Rates
Prior Law
P.L. 107-171
House Bill
Senate Bill
1996-02 a
2002-03/
2002-11
2002-06
Crop, unit
2004-07
Wheat, $/bu
2.58
2.80/2.75
2.58
2.9960
Corn, $/bu
1.89
1.98/1.95
1.89
2.0772
Grain Sorghum, $/bu
1.69
1.98/1.95
1.89
2.0772
Barley, $/bu
1.71
1.88/1.85
1.65
1.9973
Oats, $/bu
1.14
1.35/1.33
1.21
1.4980
Upland Cotton, $/lb
0.5192
0.52/0.52
0.5192
0.5493
Rice, $/cwt
6.50
6.50/6.50
6.50
6.4914
Soybeans, $/bu
5.26
5.00/5.00
4.92
5.1931
Minor Oilseeds, $/lb
0.093
0.096/0.093
0.087
0.0949
Peanuts, $/ton
610 b
355
350
400
( $/lb)
(30.5)
(17.75)
(17.5)
(20)
Source: Loan rates in old law (P.L. 104-127), as adopted in conference report H. Rept. 107-424, H.R.
2646; and S. 1731. a Loan rates are maximum allowable levels. b Support level for quota peanuts, the
support level for nonquota peanuts is $174/ton ($0.087/lb)

CRS-40
Table 4. Loan/Purchase Rates for Other Commodities: Comparison of
Prior Law, New Law, House Bill, and Senate Bill
Loan/Purchase Rates
Crop
Prior Law
P.L. 107-171
House Bill
Senate Bill
2002
2002-03/04-07
2002-11
2002-06
ELS cotton, $/lb
0.7970
0.7977/0.7977
0.7965
0.7965
Wool, graded, $/lb
0.40 a
1.00/1.00
1.00
1.00
Wool, nongraded, $/lb
na
0.40/0.40
0.40
0.40
Mohair $/lb
0.40 a
4.20/4.20
4.20
na b
Honey, $/lb
0.65 c
0.60/0.60
0.60
0.60
Peas, dry, $/cwt
na
6.33/6.22
na
6.78
Lentils, $/cwt
na
11.94/11.72
na
12.79
Chickpeas, large, $/cwt
na
7.56/7.43
na
17.44
Chickpeas, small, $/cwt
na
7.56/7.43
na
8.10
Sugar, raw cane, $/lb
0.18
0.18/0.18
0.18
0.18
Sugar, beet, $/lb
0.229
0.229/0.18
0.229
0.229
Milk, $/cwt d
9.90 d
9.90/9.90
9.90 e
9.90
(target 16.94) d
(target 16.94
and rolling
average) f
Tobacco, $/lb
(adjusted
(adjusted
(adjusted
(adjusted
yearly)
yearly)
yearly)
yearly)
Flue-cured
1.656
1.656
1.656
1.656
Burley
1.835
1.835
1.835
1.835
Source: Loan/purchase rates for old law (P.L. 104-127) conference Report 107-424, H.R. 2646, and S. 1731.
a Support for wool and mohair are provided by P.L. 107-25 (sec5) for the 2001 crop only. b The Senate bill
excludes mohair in Section 123, but includes it in Section 171, but the claimed intent is to not provide loans for
mohair. c Honey received emergency support in 2000 under P.L. 106-387(Section 812), but not subsequently.
d The farm price of milk is supported at $9.90 through purchases of storable nonfat dry milk, butter, and cheese.
e The support price is made permanent and a target price is established for 3.5 years. f S.1731 establishes a
target price for milk in 12 northeastern states and a rolling average market price for all other states.

CRS-41
Table 5. Commodity Program Cost Estimates Compared to Baseline Budget Authority
(in millions of dollars)
Baseline Budget
Cost Estimate Above Baseline
Commodity Support Programs
Authority
Conference Report
House Bill
Senate Bill
5 Years
10 Years
5 Years
10 Years
5 Years
10 Years
5 Years
10 Years
Fixed, Decoupled Payments
19,741
39,481
3,676
9,947
6,435
12,866
9,491
2,731
Counter-Cyclical Payments
na
na
15,798
29,332
19,249
37,179
5,232
19,081
Marketing Assistance Loans
21,859
26,088
1,500
1,675
(3,419)
(5,825)
10,772
18,321
Wool & Mohair
na
na
99
205
94
202
87
189
Honey
(9)
(9)
61
101
61
101
61
101
Milk
659
1,246
1,657
2,056
374
773
2,273
2,284
Sugar
229
900
154
430
(15)
(18)
254
530
Peanuts
(5)
(5)
2,582
3,935
2,281
3,483
2,724
4,365

LDPs for Grazing
na
na
21
28
17
24
17
24
Dry Peas/Lentils/Chickpeas
na
na
58
116
na
na
75
150
Hard White Wheat Incentive Payments
na
na
20
20
na
na
40
40
Apple Market Loss Assistance
na
na
94
94
na
na
100
100
Specialty Crop Purchases
na
na
56
106
na
na
780
780
Step 2 Adjustment thru 7/31/03
na
na
75
75
na
na
36
36
Payment and Income Limits
na
na
(114)
(252)
na
na
(454)
(784)
Other Programs
na
na
50
103
na
na
(925)
(1,874)
SUM TOTAL
42,474
67,701
25,787
47,971
25,077
48,785
30,563
46,074
Source: Baseline estimates are from Congressional Budget Office, April 9, 2001, calculations. Bill comparison data are categorized by CRS, based on primary data from Congressional
Budget Office estimates. The 5-year time period is FY2002-2006, and the 10-year time period is FY2002-2011. Total spending for a commodity program is the sum of baseline budget
authority plus the cost above baseline. na, not applicable because current law or the bill does not provide authority for the listed program.

CRS-42
Table 6. 2002 Farm Bill, 6-Year Cost Estimates
(budget authority in millions of dollars)
April 2001 Baseline
March 2002 Baseline
Baseline
New Spending
Total Projected
Baseline
New Spending
Total Projected
Spending
Spending
Commodity Support
55,534
31,169
86,703
61,337
37,587
98,924
Conservation
11,583
9,198
20,781
12,075
9,198
21,273
Trade
1,566
532
2,098
1,572
532
2,104
Nutrition (1)
134,556
2,657
137,213
146,820
2,793
149,613
Rural Development
0
870
870
160
870
1,030
Research
240
520
760
240
520
760
Forestry
0
85
85
0
85
85
Energy
0
366
366
0
405
405
Other Provisions (2)
0
(336)
(336)
0
(303)
(303)
Total, 6 years
203,479
45,061
248,540
222,204
51,687
273,891
Source: CRS compilation of Congressional Budget Office data.
(1) Farm bill changes to nutrition spending include changes to food stamps, the emergency food assistance program, and child nutrition programs, as well
as new spending for demonstration programs. Child nutrition programs are not included in baseline, since their reauthorization is not addressed by the
farm bill.
(2) “Other Provisions” in the farm bill primarily consist of savings associated with the federal crop insurance program. However, crop insurance is not
included in the baseline, since the reauthorization of the program is not part of the farm bill.

EveryCRSReport.com
The Congressional Research Service (CRS) is a federal legislative branch agency, housed inside the
Library of Congress, charged with providing the United States Congress non-partisan advice on
issues that may come before Congress.
EveryCRSReport.com republishes CRS reports that are available to al Congressional staff. The
reports are not classified, and Members of Congress routinely make individual reports available to
the public.
Prior to our republication, we redacted names, phone numbers and email addresses of analysts
who produced the reports. We also added this page to the report. We have not intentional y made
any other changes to any report published on EveryCRSReport.com.
CRS reports, as a work of the United States government, are not subject to copyright protection in
the United States. Any CRS report may be reproduced and distributed in its entirety without
permission from CRS. However, as a CRS report may include copyrighted images or material from a
third party, you may need to obtain permission of the copyright holder if you wish to copy or
otherwise use copyrighted material.
Information in a CRS report should not be relied upon for purposes other than public
understanding of information that has been provided by CRS to members of Congress in
connection with CRS' institutional role.
EveryCRSReport.com is not a government website and is not affiliated with CRS. We do not claim
copyright on any CRS report we have republished.