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

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.

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. 107171), 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 (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 Establishes a sign-up period, lasting not more than 180 days after enactment, during which producers sign “agreements” covering crop years 2002 thru 2011 (10 years). [Section 110] Establishes a sign-up period, that begins not less 45 days after enactment and lasts for 180 days, during which producers sign “contracts” covering crop years 2002 thru 2006 (5 years). [Section 111 as it amends Section 112 of FAIR Act] USDA is to provide notice to farmers, as soon as practical after enactment, of the opportunity sign agreements and establish base acres for direct and countercyclical payments. [Section 1101] The base acres for each crop are Same as House bill. [Section 111 as it either the acres specified in existing amends Section 111 of FAIR Act] PFC contracts, or average acres planted to eligible crops from 1998 thru 2001. Accommodation is made for double cropping, peanut acres, and CRP acres. Base acres cannot exceed total cropland on a Same as House and Senate bills. [Section 1101] A.) Wheat, Corn, Grain Sorghum, Barley, Oats, Upland Cotton, Rice, Soybeans and Other Oilseeds. 1.) Sign-Up. The sign-up period is required to begin not later than 45 days after enactment and end August 1, 1996. Production flexibility contracts (PFCs) cover 7 years, 1996 thru 2002 crops. [Section 112] 2.) Base Acres and Payment Acres. Each farm’s base acres and payment yields are used to calculate the program benefits to the producer. The base acres and yields for eligible crops are those that would have applied in 1996 under the then expiring program. Under the expiring program, the “acreage CRS-3 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 base” for each program crop is the average acres planted/considered planted the prior 5 years for wheat, feed grains and the prior 3 years for upland cotton, rice. HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 farm. [Section 103] Payment acres equal 85% of base acres in calculating payment amounts. [Section 100(9) and 103(f)] Payment acres equal 100% of base Same as House bill. [Section acres in calculating payment amounts. 1101(f)] [Section 111 as it amends Section 111 of FAIR] 3.) Payment Yield. Program payment yields for each The program payment yield for crop are frozen at 1986 program each crop is the: payment yield in levels. [Section 102] effect for 2002 under an existing production flexibility contract; or a Note: Soybeans and other oilseeds similarly appropriate yield for farms are not eligible crops and there are without past contracts. Oilseed no provisions for establishing base yield is the average yield from acres and yields for oilseeds. 1998-01, adjusted back to a 198185 equivalent. [Section 102] The program payment yield is either: the yield specified in existing contracts, or average yield from 1998 thru 2001. There is no requirement to adjust yields back to an 1981-85 equivalent. [Section 111 as it amends Section 111 of FAIR Act] Similar to House bill. Payment yield is the yield established for the 1995 crop. Oilseed payment yield is the average yield from 1998-01, adjusted back to the national average from 1981-85. Yields for counter-cyclical payments may be updated using specified formulas. [Section 1102] 4.) Producer Contract/Agreement. a.) Requirements. Eligible producers must sign a contract that includes specific requirements in order to receive payments. [Section 111] Producers must agree during each Same as old law. Producers sign Adopts House bill provision. crop year to certain requirements in contracts. [Section 111 as it amends [Section 1105] order to receive fixed, decoupled Section 111 of FAIR Act] direct payments and countercyclical payments. [Section 106] CRS-4 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 Same as old law. [Section 111 as it amends Section 111 of FAIR Act] Same House and Senate bills and old law. [Section 1105(1)(A) and (B)] Farmers are allowed to plant any Same planting flexibility allowance crop except fruits and vegetables as old law, but wild rice is added to (other than lentils, mung beans, and exceptions. [Section 107] dry peas) on contract acreage and there are no planting restrictions on non-contract acreage. Cropland not planted has to be devoted to a conserving use to prevent erosion and can not be converted to nonagricultural uses. [Section 118] Same planting flexibility allowance as old law, but wild rice is added to exceptions beginning in 2003. [Section 113] Same as House bill, except if prohibited crops are planted they may be destroyed before harvest, and planting trees or other perennial crop producing plants is prohibited on base acres. [Section 1106] Violations of planting flexibility No provisions for violations. limitations generally result in termination of the contract on each For first time unintentional violations Same as House bill. of planting flexibility limitations, the penalty shall be a refund or reduction PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 1.) Conservation and Wetlands Compliance Producers are required to comply Same as old law. [Section 106] with already existing conservation requirements on highly erodible 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 CRS-5 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 farm in which the producer has an interest. [Section 116] SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 of future payments amounting to twice 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)] assumed by new owners. Otherwise the contract is terminated. Changing operators does not affect program acres or yields. [Section 117] Same as House bill. [Section 111 as it Same as old law, and House and amends Section 111 of FAIR Act] Senate bills. [Section 1105(b)] 4.) Direct Fixed, Decoupled Payments. a.) Eligibility. Eligibility for PFC contracts is extended to producers previously enrolled in a grain or cotton program in at least 1 of the 1991-95 crop years. Conservation Reserve Program cropland expiring or terminated after Jan. 1, 1995 is eligible. Soybeans and other oilseeds are not eligible PFC commodities. [Section 111] Farms with existing PFC contracts, Same as House bill. [Section 111 as it and other producers with a history amends Section 111 of FAIR Act] of contract crop or oilseed production from 1998-01 are eligible for fixed, decoupled payments on their base acres and yields. Soybeans and other oilseeds also are made eligible. These crops are to be known as “agreement crops.” Provision is made for expiring CRP acres to be added to Same as House and Senate bills except that these crops are to be know as “covered crops.” Provision is made for expiring CRP acres to be added to the agreements. [Section 1103] CRS-6 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 the agreements. [Section 101(a) and 103(a)] b.) Payment Rates. Farmers who sign production flexibility contracts (PFCs) in 1996 receive fixed annual payments for 7 years, unrelated to crops or acreage actually planted. The payment quantity for each commodity is 85% of the contract acreage times the payment yield times the payment rate. [Section 114] Similar framework to old law. Farmers who sign “agreements” receive direct fixed, decoupled annual payments, unrelated to crops or acreage actually planted. The payment amount for each commodity is payment acres (85% of base acres) times the payment yield times the payment rate. Similar framework to old law. Same as House bill. [Section Farmers who sign contracts receive 1105] fixed, decoupled annual payments, unrelated to crops or acreage actually planted. The payment quantity for each commodity is 100% of payment acres times the payment yield times the payment rate. Estimated 2002 contract payment rates: Wheat, $0.46/bu Corn, $0.26/bu Sorghum, $0.31/bu Barley, $0.20/bu Oats, $0.021/bu Cotton, $0.0556/lb Rice, $2.04/cwt Soybeans, not a contract crop Other Oilseeds, not contract crops Payment rates are specified for all years as follows: Wheat, $0.53/bu Corn, $0.30/bu Sorghum, $0.36/bu Barley, $0.25/bu Oats, $0.025/bu Cotton, $0.0667/lb Rice, $2.35/cwt Soybeans, $0.42/bu Other Oilseeds, $0.0074/lb [Section 104] Payments rates are specified for 2002/03, 2004/05, 2006 as follows: Wheat, $0.45, $0.225, $0.113/bu Corn, $0.27, $0.135, $0.068/bu Sorghum, $0.31/$0.27, $0.135, $0.068/bu Barley, $0.20, $0.10, $0.05/bu Oats, $0.05, 0.$025, $0.013/bu Cotton, $0.13, $0.065, $0.0325/lb Rice, $2.45, $2.40, $2.40/cwt Soybeans, $0.55, $0.275, $0.138/bu Other Oilseeds, $0.01, $0.005, $0.0025/lb [Section 111 as it amends Section 113 of FAIR Act] Payment rates differ slightly from House bill as follows: Wheat, $0.52/bu Corn, $0.28/bu Sorghum, $0.35/bu Barley, $0.24/bu Oats, $0.024/bu Cotton, $0.0667/lb Rice, $2.35/cwt Soybeans, $0.44/bu Other Oilseeds, $0.008/lb [Section 1103(b)] CRS-7 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 The law does not specify actual payment rates, but states the total funds available each year and the allocation share for each commodity. [Section 113] HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 Total payments are to be reduced by No comparable provision. $100 million on a pro rata basis (about 2% based on CBO estimates) and these funds are to be devoted to specified rural development programs. [Section 943] NEW LAW (P.L. 107-171) COVERS 2002-2007 Same as Senate, no provision to reduce spending and devote funds elsewhere. c.) Time of Payment. The producer can choose to receive 50% of the payment on Dec. 15 or Jan. 15 and the remainder not later than September 30 of each fiscal year. [Section 112(d)(1 & 2)] FY2002 PFC payments under old law are to be discontinued after enactment, and any amount already paid is to be deducted from the 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 producer can choose to receive the full amount or portions at times during the fiscal year chosen by the producer. [Section 112(d)(3) as added by PL 105-228, Section 2] The producer can choose to receive Same as House bill. [Section 111 as it an advance of 50% of the payment amends Section 113(d) of FAIR Act] on or after December 1. [Section 104(d)] No explicit reference is made to Similar to House bill. [Section discontinuing payments under PFC 1107] contracts, or to payments already made under to old law. Same as House and Senate bills except xxx [Section 1103(d)] CRS-8 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 2.) Counter-Cyclical Deficiency Payments and Target Prices. a.) Eligibility. Eliminates counter-cyclical target price deficiency payments that were enacted in 1973 and functioned through 1995. When effective, farmers were paid the difference between the target price and a lower season average farm price on a specified proportion of a farm’s crop base acres. Restores counter-cyclical target Same as House bill. [Section 111 as it price deficiency payments that amends Section 111(a) of the FAIR ended in 1995. Farms that have Act] signed agreements will receive counter-cyclical payments if average market prices are less than target prices. [Section 101] Same as House and Senate bills. [Section 1104] b.) Target Prices and Payment Rates. Not applicable. The payment rate for countercyclical payments is the difference between the “target price” and the “effective price.” The effective 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 Same as House bill, except that the Same as House bill. [Section payment amount for each commodity 1001(10)] is 100% of base acres times the payment yield times the payment rate. CRS-9 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 85% of base acres. Target prices are for all years are Target prices are for all years are specified as follows: specified as follows: Wheat, $4.04/bu Wheat, $3.446/bu Corn, $2.78/bu Corn, $2.3472/bu Sorghum, $2.64/bu Sorghum, $2.3472/bu Barley, $2.39/bu Barley, $2.1973/bu Oats, $1.47/bu Oats, $1.5480/bu Upland Cotton, $0.736/lb Upland Cotton, $0.6793/lb Rice, $10.82/cwt Rice, $9.2914/cwt Soybeans, $5.86/bu Soybeans, $5.7431/bu Other Oilseeds, $0.1036/lb Other Oilseeds, $0.1049/lb [Section 105] [Section 171 as it amends Section 111,which amends Section 114 of FAIR Act] Target prices for 2002-03/200407 are specified as follows: Wheat, $3.86/$2.92/bu Corn, $2.60/$2.63/bu Sorghum, $2.54/$2.57/bu Barley, $2.21/$2.24/bu Oats, $1.40/$1.44/bu Upland Cotton, $0.724/$0.724/lb Rice, $10.50/$10.50/cwt Soybeans, $5.80/$5.80/bu Other Oilseeds, $0.098/$0.1010/lb [Section 1104(c)] Marketing assistance loans and loan Same as House bill. [Section 121] deficiency payments (LDPs) are available for agreement crops (grains, upland cotton, oilseeds) on all farms where they are produced, whether or not they have signed agreements). [Section 121] Similar to House and Senate bills, except the list of loan commodities differs. [Section 1201] The phrase “loan commodities” is defined to include wheat, corn, grain sorghum, barley, oats, upland cotton, extra long staple cotton, 3.) Marketing Assistance Loans and LDPs. a.) Eligibility. Any wheat, feed grains, upland cotton, and rice produced on PFC farms is eligible for marketing assistance loans or LDPs, whether or not it is produced on contract acres. These commodities are not eligible for loan or LDPs if produced on farms without CRS-10 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 contracts. Any oilseed is eligible for marketing assistance loans or LDPs, whether or not the farm has a contract. [Section 131] NEW LAW (P.L. 107-171) COVERS 2002-2007 rice, soybeans, other oilseed, wool, mohair, honey, dry peas, lentils, and small chickpeas. [Section 1001] b.) Term of Loans. Loans on grains and oilseeds are for Same as old law. [Section 123] 9 months beginning on the first of the month after the loan date. Loans on upland cotton are for 10 months beginning on the first of the month before the loan date. Same as old law. [Section 121] Similar to old law, and House and Senate bills, except the term for each commodity, including cotton, is 9 months beginning on the first day of the month after loan is made. [Section 1203] Similar to old law. [Section 121] Similar to old law, and House and Senate bills. Repayment rules for wool, mohair, honey, dry peas, lentils, and small chickpeas are the same as for grains and oilseeds. [Section 1204] c.) Loan Repayment. For grains and oilseeds, marketing Similar to old law. [Section 124] assistance loans can be repaid at the lesser of the loan rate plus interest, or the rate determined by USDA that minimize forfeitures, minimize the accumulation of CCC-owned stocks, minimize the cost of storage, and allow for free and com p et i t i v e d o m estic and international marketing. [Section 134] For upland cotton, loans can be repaid at the lesser of the loan rate CRS-11 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) 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 Payments (LDPs). Deficiency Producers with grain, upland cotton, Same as old law. [Section 125] or oilseeds eligible for marketing assistance loans instead can choose to receive loan deficiency payments. The LDP is the difference between the loan rate and the loan repayment rate established by the USDA. [Section 135] Same as old law. [Section 121] Similar to old law, and House and Senate bills. LDPs are available for all loan commodities with the exception of ELS cotton. [Section 1204] CRS-12 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 e.) Loan Rates. Marketing assistance loans and loan deficiency payments (LDPs) continue at rates in effect in 1995. Authority is provided for USDA to lower the loan rates when stocks accumulate. Loan rates generally are to be not less than 85% of the moving 5-year Olympic average of prices received by producers, or more than: Wheat, $2.58/bu Corn, $1.89/bu Sorghum, $1.69/bu Barley, $1.71/bu Marketing assistance loans and loan Same as House bill. [Section 121] deficiency payments (LDPs) are available for loan commodities on all farms (not limited to farms with agreements for fixed and countercyclical payments) and any quantity produced on the farm. [Section 121(b)] Loan rates generally are to be not less than 85% of the moving 5-year Olympic average of prices received by producers, or more than: Wheat, $2.58/bu Corn, $1.89/bu Sorghum, $1.89/bu Feed Barley, $1.70/bu Malting Barley, $1.65/bu Oats, $1.14/bu Oats, $1.21/bu Cotton, $0.5192/lb Cotton, max $0.5192-min $0.50/lb Rice, max & min $6.50/cwt Rice, must equal $6.50/cwt Soybeans, max $5.26, min $4.92/bu Soybeans, $4.92/bu Minor Oilseeds, max $0.093, min Minor Oilseeds, $0.087/lb $0.87/lb [Section 122] Fixed, specific loan rates are as follows: Wheat, $2.9960/bu Corn, $2.0772/bu Sorghum, $2.0772/bu Barley, $1.9973/bu Oats, $1.4980/bu Cotton, $0.5493/lb Rice, $6.4914/cwt Soybeans, $5.1931/bu Minor Oilseeds, $0.0949/lb [Section 171 as it amends Section 121, which amends Section 132 of the FAIR Act] Same as House and Senate bills. [Section 1201] Fixed, specific loan rates are as follows: Wheat, $2.80/$2.75/bu Corn, $1.98/$1.95/bu Sorghum, $1.98/$1.95/bu Barley, $1.88/$1.85/bu Oats, $1.35/$1.33/bu Cotton, $0.52/$0.52/lb Rice, $6.50/$6.50/cwt Soybeans, $5.00/$5.00/bu Minor Oilseeds, $0.096/$0.93/lb ELS Cotton, $0.7977, $0.7977/lb (ELS Cotton is not eligible for LDPs) 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 (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 Nongraded Wool and Unshorn Pelts, 40¢/lb Mohair, $4.20/lb [Section 1202] (P.L. 106-224, Section 206(a)(2) and (3), made loans and LDPs available on non-PFC farms only for crop year 2000.) Retroactively, for the 2001 crops, as Same as House bill. [Section 169] was the case for 2000, LDPs are available on non-PFC farms that produced contract crops and oilseeds. [Section 125(f)] Same as House and Senate bills. [Section 1205(f)(2)] Marketing loans and LDPs are Similar to House bill, but no support available to all producers at the for mohair. Marketing loans and following rates: LDPs are available to all producers at: Similar to House bill, except unshorn pelts are eligible for LDPs only. Graded Wool, $1.00/lb Nongraded Wool, 40¢/lb Mohair, $4.20/lb [Section 130] Graded Wool, $1.00/lb Nongraded Wool and Unshorn Pelts, 40¢/lb Mohair, $4.20/lb [Section 1201, 1202] Payment limits are covered below in P, 2). B.) Wool and Mohair. 1.) Marketing Loans and LDPs. Wool and mohair support was phased out and ended in 1996 by P.L. 103-130, Section 1, which repealed the National Wool Act of 1954. However, support was authorized in several subsequent years. P.L. 106-78 Section 801(h), authorized recourse loans on 1999 crop mohair. P.L. 106-224, Section 204(d), mandated payments on 1999 crop wool of $0.20, and on mohair of $0.40/lb. P.L. 106-387, Graded Wool, $1.00/lb Nongraded Wool and Unshorn Pelts, 40¢/lb Mohair, na [Section 171 as it amends Section 111, which amends Section 132 of the FAIR Act] [While Section 123 provides no loan Marketing loan gains and LDPs are limited to $75,000 per person CRS-14 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 Section 814, authorized payments of $0.20/lb for wool and $0.40 mohair for crop year 2000, up to $20 million. Again for crop year 2001, P.L. 107-25, Section 5, authorized $16.9 million in direct payments for wool and mohair at rates determined by USDA. SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 for mohair, Section 171 includes a loan for mohair, but the claimed intent according to Committee staff is to not support mohair] per year for wool, and separately $75,000 for mohair. [Section 1603] Marketing loans and LDPs at $0.60/lb. The term of the loan is 9 months, beginning the first day of the month after the loan is obtained. [Section 124, which amends Section 133 of the FAIR Act] Same as House bill. [Section 1201,1202] The payment limit is $75,000 per person per year. [Section 1603] C.) Honey. 1.) Marketing Assistance Loans and LDPs. Honey support is repealed. [Section 171] This action followed several years of agriculture appropriations bill language that prevented USDA from carrying out the mandatory honey marketing loan program. Subsequently, recourse loans were authorized for the 1998, 1999, and 2000 crops by respectively P.L. 105-227, Section 1122; P.L. 10678, 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 Marketing loans and LDPs at $0.60/lb. The term of a loan is 12 months, beginning the first day of the month after the loan is obtained. [Section 131] CRS-15 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) 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. nonrecourse loans, but not LDPs. [Sections 132 and 134] No support is authorized for dry peas, lentils, large chickpeas, small chickpeas. Marketing loans and LDPs are Similar to Senate bill, except available on all production at the large chickpeas are not included. [Section 1201-1205].. Loan rates following rates: for 2002-03, and 2004-07 are: ELS Cotton, $0.7965 (ELS cotton is not eligible for LDPs) Dry Peas, $6.78/cwt Lentils, $12.79/cwt Large Chickpeas, $17.44/cwt Small Chickpeas, $8.10/cwt 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] ELS Cotton, $0.7977, $0.7977/lb (ELS cotton is not eligible for LDPs) Dry Peas, $6.33, $6.22/cwt Lentils, $11.94, $11.72/cwt Small Chickpeas, $7.56, $7.43/cwt. [Section 1202] CRS-16 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 Wheat, barley, and oats that are grazed and not harvested, but would be eligible for LDPs if harvested, will receive LDPs under similar rules to those that apply to harvested crops. Federal crop insurance is not allowed on grazed land agreements. [Section 126] Similar to House bill, but includes grain sorghum along with wheat, barley and oats as eligible crops. [Section 127] Similar to House bill, except grazed triticale (a genetic cross of wheat and rye) also is covered. [Section 1206] For farms that normally harvest Same as House bill. [Section 121(a)] corn or sorghum in a high moisture condition, recourse loans are available at rates set by the USDA. Farms need not have signed “agreements.” [Section 129(a)] Same as House bill. [Section 1209(a)] E.) Grazed Wheat, Barley, Oats, and Triticale. 1.) Payments in Lieu of LDPs. P.L. 104-127 made no provision for LDPs on grazed wheat, barley and oat acreage. P.L. 106-224, Section 205, provided for LDPs on grazed acres only for 2001 crops. F.) High Moisture Corn and Sorghum. 1.) Recourse Loans. Recourse loans are available on high moisture corn and grain sorghum. Loan rates are determined by the USDA. Only producers with PFC contracts are eligible. [Section 137(a)] CRS-17 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 Recourse loans are available for all upland and ELS seed cotton, at rates set by the USDA. Farms need not have signed “agreements.” [Section 129(b)] No provision is made to support seed cotton. Same as House bill. [Section 1209(b)] For crop year 2003 through 2005, an additional $40 million is to be paid to producers to ensure that hard white wheat on not more than 2 million acres meets minimum quality standards. [Section 167] Similar to Senate bill, but funding is set at $20 million for the 3 year period. [Section 1616] Same as old law. [Section 121(b)] Same as House bill for upland cotton. Applies through July 31, G.) ELS and Upland Seed Cotton. 1.) Recourse Loans. Recourse loans are available on upland seed cotton for farms with PFC contracts, and on any farm producing ELS seed cotton. [Section 137(b)] H.) Hard White Wheat Incentive Payments. 1.) Incentive Payments. No special support provision is Same as old law, no support added for hard white wheat. provision is available for hard white However, hard white wheat, like all wheat. other wheat, does qualify for contract payments and marketing loan program benefits. I.) Upland Cotton Competitiveness Provisions for Processors and Exporters. 1.) Marketing Certificates. Marketing certificates or cash Some changes from old law. payments are made to domestic Marketing certificates or cash CRS-18 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 users and exporters of upland cotton whenever the 4-week price of U.S. cotton gets too high compared to world cotton price (i.e., 1.25¢/lb higher), or is not high enough compared to the U.S. cotton loan rate (i.e., less than 130% higher). [Section 136(a)] payments are made to domestic users and exporters of upland cotton whenever the 4-week price of U.S. cotton is too high or not high enough (i.e., when the U.S. price (1) exceeds the world price by 1.25¢/lb, or (2) does not exceed the U.S. cotton loan rate by at least 134%). [Section 127(a)] 2008. [Section 1207(a)] A special import quota is imposed Same as old law. [Section 121(b)] on upland cotton when U.S. prices exceed world prices by 1.25¢ for 4 weeks. [Section 127(b)] Same as House bill. [Section 1207(b)] 2.) Import Quotas. A special import quota is imposed on upland cotton when U.S. prices exceed world prices by 1.25¢ for 10 weeks. [Section 136(b)] A limited global import quota is Same as old law. [Section 127(b)] imposed on upland cotton when U.S. prices average 130% of the previous 3-year average of U.S. prices. [Section 136(c) ] Same as old law. [Section 121(b)] Same as old law, and House and Senate bills. [Section 1207(c)] J.) ELS C o t t on Competitiveness Provisions for Processors and Exporters. No provision. A special competitiveness program No provision. is created for ELS cotton with marketing certificates or cash payments to domestic users and Same as House bill. Applies through July 31, 2008. [Section 1208] CRS-19 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 Similar to House bill, but the compensation is $1,100 (55¢/lb) ($220/ton/yr for 5 years). [Section 152] Repeals all quota provisions, and adopts Senate quota compensation level of $1,100 (55¢/lb or $220 /ton/year for 5 years). [Section 1309] Nonrecourse loans are replaced by Same as House bill except that the marketing assistance loans. Loans marketing assistance loan rate is set at are set at $350/ton (17.5¢/lb) $400/ton (20/lb). [Section 151] available for all peanuts produced Nonrecourse loans are replaced by marketing assistance loans. Loans are set at $355/ton (17.75¢/lb) available for all 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 reflect the projected domestic demand for edible peanuts. The price of peanuts sold for domestic edible consumption (quota peanuts) 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] Peanut quotas are terminated and farmers are compensated $1,000/ton (50¢/lb) ($200/ton/year for 5 years). [Section 170] 2.) Nonrecourse Loans / Marketing Assistance Loans. CRS-20 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 without distinction of end use. [Section 167] NEW LAW (P.L. 107-171) COVERS 2002-2007 peanuts produced without 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 for counter-cyclical payments. that for grains, cotton, and oilseeds. it establishes Section 158B in the FAIR Rules regarding eligibility, sign-up, Act] conservation and wetlands compliance, planting flexibility, base acres, payment yields, etc., are similar to those that apply to grains, cotton, and oilseeds. [Sections 162, 165, 166] Adopts House peanut program designed like that for grains, cotton, and oilseeds. Rules regarding eligibility, sign-up, conservation and wetlands , base acres, payment yields, etc., are similar to those that apply to grains, cotton, and oilseeds. [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 acres and yield to cropland selected establishes Section 158B(b) in the by the producer is done on a one- FAIR Act] time basis. [Section 162(b)] Adopts House provision with revision specifying that assignment must be done by March 31, 2003, among other provisions. [Section 1302(b)] Fixed, decoupled annual payments Fixed, decoupled annual Fixed, decoupled contract payments CRS-21 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) 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] Counter-cyclical deficiency payments against a $480/ton (24¢/lb) target price are made on 85% of each farm’s history of peanut production. [Section 164] Counter-cyclical deficiency payments against a $520/ton (26¢/lb) target price are made on 85% of each farms history of peanut production. [Section 151 as it establishes Section 158D in the FAIR Act] Counter-cyclical deficiency payments are made when marketing year prices average less than the target price of $495/ton (24.75¢/lb). Payments 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 $350/ton (17.5¢/lb) available for all peanut production without distinction of end use. [Section 167] Marketing assistance loan rate set at $400/ton (20¢/lb) available for all peanut production without distinction of end use. [Section 151 as it establishes Section 158G in the FAIR Act] Similar to House and Senate bills, except the marketing assistance loan rate is set at $355/ton (17.75¢/lb) available for all peanuts. [Section 1307(b)] Payments limits are not applicable Payments limits for peanuts are to peanuts. separate from other commodities. [Section 169] Fixed, decoupled peanut payments are subject to a limit of $50,000 per person, per year. The limit on counter-cyclical Payments received for support of peanuts are subject to the same limits as other crops. Peanuts are not treated separately. For all crops, the combination of fixed, decoupled payments and counter-cyclical Payments limits for peanuts are separate from other commodities. Fixed, decoupled peanut payments are subject to a limit of $40,000 per person, per year. The limit on counter- 4.) Payment Limits. CRS-22 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 target price deficiency payments is $75,000, and the limit on marketing loan benefits is $150,000. [Section 169] payments is limited to $75,000 per individual, per year. Marketing loan benefits are limited to $150,000. [Section 169] cyclical target price deficiency payments is $65,000, and the limit on marketing loan benefits is $75,000. [Section 1603] Same nonrecourse loan rates as old law, 18¢/lb. raw cane, and 22.9¢/lb. refined beet. [Section 151(a)] Inprocess sugar is newly eligible for loan at 80% of full loan rates. [Section 151(e)] Loan rates may be reduced if competing nations sufficiently reduce support. [Section 151(c)] Same loan rates as old law. [Section 141(i)] Same in-process sugar loans as House bill. [Section 141(e)] Same authority to reduce loan rates as House bill. [Section 141(a)] Retains old rates for nonrecourse loans -18¢/lb. raw cane, and 22.9¢/lb. refined beet. Inprocess sugar is newly eligible for loan at 80% of full loan rates. Loan rates may be reduced if competing nations sufficiently reduce support. [Section 1401(a) restates FAIR Act provisions, and adds new subsection for in-process sugar loans] L.) Sugar. 1.) Price Support Loans. Raw cane sugar and refined beet sugar are supported with nonrecourse loans at 18¢ and 22.9¢/lb respectively. [Section 156(a) and (b)] The loan rates may be reduced if negotiated reductions in support are achieved for other sugar countries. [Section ]156(c)] A recourse loan program when the tariff rate quota on imports is less than 1.5 million short tons was eliminated by P.L. 106-387, Section 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 (P.L. 104-127) COVERS 1996-2002 3.) Loan Penalty. HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 Forfeiture A forfeiture penalty of 1¢ per pound Forfeiture penalty is retained by The loan forfeiture penalty on raw cane sugar (an equivalent preserving Section 156(g) of the eliminated. [Section 141(d)] amount for beet sugar) is assessed FAIR Act. on loan forfeitures. This effectively reduces the level of support. [Section 156(g)] is Same as Senate bill. Elimination of forfeiture penalty takes effect upon enactment. [Section 1401(a) drops provision from FAIR Act] Change effectively increases support level. Same as House bill, except authorizes USTR in consultation with USDA to reallocate any shortfall of one country’s shipments to the other quotaholding countries. [Section 144] Maintains existing import quota system, and adopts Senate reallocation provision giving any shortfall of on country’s shipments to the other quotaholding countries. [Section 1403] The authority to impose mandatory Sugar marketing allotments are Similar to House bill, but provision is marketing allotments on domestic restored and are to be shared made for new cane processor entrants sugar production is suspended. between beet sugar and raw cane at (including mainland states not Sugar marketing allotments are restored and are to be shared between beet sugar and raw cane 4.) Import Quotas. A global import quota of not less Same as old law. than 1.256 million short tons is set each year by USDA under authority of the Harmonized Tariff Schedule of the United States. The quota is allocated among countries by U.S. Trade Representative. [HTSUS, 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. CRS-24 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 [Section 171(a)(1)(E)] HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 54.35% and 45.65%. Allotments previously producing cane). [Section are suspended when imports exceed 143] 1.532 million short tons. [Section 152] at 54.35% and 45.65%. Allotments are suspended when imports exceed 1.532 million 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] CCC is authorized to make in-kind Same authority to make in-kind commodity payments from stored payments for reduced production as inventories to processors in House bill. [Section 141(f)] exchange for reduced sugar production. [Section 151(j)] Authorizes CCC to make in-kind p a yments from stored inventories in exchange for reduced production as laid out in House and Senate provisions. [Section 1401(a) adds new subsection to FAIR Act] Processors must pay an assessment The assessment on all sugar Same as House bill. [Section 141(c)] on all marketings of sugar to CCC marketings is eliminated. [Section equal to a specified percentage of 151(b)] the loan rate. [Section 156(f)] P.L. 106-78, Section 803(b), suspended Terminates the sugar marketings assessment retroactive to October 1, 2001. [Section 1401(b)] 6.) In-Kind Payments. No provision. 7.) Marketing Assessment. CRS-25 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) 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] loans. improvement loans are to be made available to processors. [Section 153] Authorizes storage facility loans, as in House and Senate bills. [Section 1402] M.) Dairy. 1.) Milk Price Support. The farm price of milk is indirectly supported at $9.90/cwt. Support is achieved through CCC purchases of cheese, butter, and nonfat dry milk at specific prices. [Section 141] Continues milk price support at $9.90/cwt. through purchases of dairy products, as under old law. Also, as under old law, USDA is permitted to adjust purchase price Similar to House bill. Continues milk Same as House bill. [Section price support at $9.90/cwt. through 1501] purchases of dairy products. However, USDA is required to adjust purchase price relationships between butter and CRS-26 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) 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. 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.) Compact. Northeast Same as House and Senate bills. Dairy The Northeast Dairy Compact is No provisions. authorized, allowing six New England states to require processors to pay regulated minimum prices No provision. Same as House bill. CRS-27 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 New counter-cyclical market loss deficiency payments are made on up to 8 million pounds of each farm’s annual production. The total expenditure limit for the life of the program (December 1, 2001, thru September 30, 2005) is $500 million for 12 northeast states, and $1.5 billion for all other states. For the 12 northeast states, as an alternative to the expired Northeast Dairy Compact, payments are made when the monthly average 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 5year average for the same quarter. The payment rate is 40% of the deficiency. [Section 132] Similar to Senate bill, except a single national target price of $16.94/cwt is established. Producers receive monthly deficiency payments equal to 45% of the price difference on up to 2.4 million pounds of production per year. The program is authorized from December 1, 2001 through September 30, 2005. [Section 1502] 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. market loss assistance. Separately, ad hoc emergency market loss assistance of $200 million was authorized for FY1999 (P.L. 105-277), $125 million for FY2000, (P.L. 106-78), and $473 million for FY2001 (P.L. 106-387). CRS-28 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 Same as House bill. [Section 133(a)] Same as old law, and House and Senate bills. [Section 1503(a)] The Dairy Indemnity Program Authorizes the Dairy Indemnity Same as House bill through September expired September 30, 1995, and is Program through September 30, 30, 2006. [Section 133(b)] not reauthorized by P.L. 104-127. 2011. [Section 143(b)] However, appropriations made each year keep the program operating. The program indemnifies farmers and processors for contamination of milk by pesticides and certain other toxics. Same as old law, and House and Senate bills except producer can choose an advance of any amount “up to” 50% of the direct payment. Applicable through September 30, 2007. [Section 1503(b)] PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 6.) Dairy Export Incentive Program. The Dairy Export Incentive Extends old law. [Section 143(a)] Program (DEIP) is reauthorized. 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. CRS-29 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 8.) Fluid Milk Processor Promotion Program. The Fluid Milk Promotion is extended thru December 31, 2002. This research and promotion program is funded by an assessment on processors of more than 500,000 pounds per month. Authorizes the Fluid Milk Promotion program as a permanent program, replaces the old statutory definition of fluid milk product with the definition promulgated in USDA regulations, and applies the assessment to processors of 3 million pounds per month or more. [Section 144] Same as House bill, except that fluid Same as Senate bill. [Section milk delivered directly to consumer 1506] residences does not count toward the 3 million pound minimum requirement for the processor assessment. [Section 134] 9.) Dairy Product Mandatory Reporting. The Dairy Market Enhancement Act of 2000 (P.L. 106-532) established a mandatory reporting system on dairy product inventories and prices. Makes a technical change in the Same as House bill with technical Same as Senate bill. [Section definition of dairy products to changes to definition of manufactured 1504] require milk manufacturers to dairy products. [Section 135] include substantially identical products in their reports to USDA. [Section 145] 10.) Dairy Promotion and Research Assessment. For FY1997 thru FY2001, the National Dairy Promotion and Research Board is authorized to spend funds to develop international markets and promote U.S. milk in Extends the assessment to imported Same as House bill. [Section 136] dairy products. Imports are given 2 seats on the Board. None of the importer funds may be used for export promotion. [Section 146] Same as House bill. [Section 1505] CRS-30 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) 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 report on the impact on milk prices, producer income, and federal support program costs caused by increased imports of cheese under WTO commitments. [Section 151] Requires USDA to prepare a comprehensive evaluation of national dairy policies (i.e., price supports, marketing orders, overorder premiums and state pricing programs, dairy compacts, and export programs). [Section 147] Requires USDA to study and report no Adopts both House and Senate later than September 30, 2002, on 1) provisions. [Section 1508] the impacts of terminating all federal price support and supply management programs while enabling the states to manage milk prices and supply, and on 2) the impacts of changing the standard of identity for fluid milk to require a minimum content commensurate with the average protein content of farm milk. [Section 137] Same as old law. Reduces the reserve stock level for flue-cured in the quota determination N.) Tobacco. 1.) Flue-cured Quota. No provisions. Similar to Senate, except the reserve stock is 60 million CRS-31 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 formula from the greater of 100 million pounds or 10% of the national marketing quota, to the greater of 75,000 pounds or 10%. [Section 162] NEW LAW (P.L. 107-171) COVERS 2002-2007 pounds. [Section 1610] 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. specifically authorize or mandate support for specialty crops. Subsequently, emergency ad hoc assistance was mandated for specialty crops. P.L. 106-224, Section 203(d), mandated the CCC spend $200 million for purchases fruits and vegetables with low prices in 1998 and 1999, including Mandated specialty crop purchases using CCC funds: $100 million in each of FY2002 and FY2003, $120 million in FY2004, $140 million in FY2005, and $170 million in FY2006. Mandated purchases of other unspecified commodities, at $30 million each year. [Section 166] The amount of Section 32 funds that can be carried across fiscal years for use in emergency removals of surplus commodities is increased from $300 million to $500 million. [Section 1602] Section 32 purchases of fruits, vegetables, and specialty crops shall amount to not less than CRS-32 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 apples, black-eyed peas, cherries, citrus, cranberries, onions, melons, peaches, and potatoes. P.L. 106387, 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. NEW LAW (P.L. 107-171) COVERS 2002-2007 $200 million each fiscal year. [Section 10603] P.) Payment Limits. 1.) Fixed Payments, and Counter-Cyclical Payments. Fixed contract payments are subject to a $40,000 per person, per year limit. [Section 115] Matching market loss payments adopted as emergency assistance were not subject to payment limits, with the practical result effectively being the potential doubling of the contract payment limit to $80,000. Combined fixed, decoupled payments for grains, cotton, and oilseeds are limited to $50,000 per year per person. [Section 109] Separately, fixed, decoupled payments for peanuts are limited to $50,000. [Section 169] Counter-cyclical payments for grains, cotton, and oilseeds are subject to a $75,000 per person, per year limit. [Section 109] Separately, counter-cyclical payments for peanuts are limited to $75,000. [Section 169] Fixed, decoupled commodity payments combined with countercyclical target price deficiency payments for grains, cotton, oilseeds and peanuts are subject to a $75,000 per person, per year limit. [Section 169] Fixed, decoupled payments for grains and oilseeds limited to $40,000 per year per person. Counter-cyclical payments limited to $65,000. The same limits separately apply to peanuts. [Section 1603] CRS-33 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 Marketing loan benefits for grains, cotton, and oilseeds combined are subject to a $150,000 per person, per year limit. [Section 183] Separately, marketing loan benefits for peanuts are limited to $150,000. [Section 169] Separately, marketing loan benefits for wool and mohair are limited to $150,000. [Section 130(f)] Separately, marketing loan benefits for honey are limited to $150,000. [Section 131(f)] Marketing loan benefits for all commodities (grains, cotton, oilseeds, dry peas, lentils, chickpeas, wool, honey, and peanuts) combined are subject to $150,000 per individual, per year limit. Included in this limit are marketing loan gains, LDPs, loan forfeiture gains, and commodity certificate gains. [Section 169] Marketing loan benefits for covered crops (grains and oilseeds), lentils, dry peas, and small chickpeas limited to $75,000. Peanuts, wool, mohair, and honey each have separate marketing loan benefit limits of $75,000. [Section 1603] 2.) Marketing Loan Benefits. Marketing loan benefits (marketing loan gains and LDPs) for all crops combined are subject to a $75,000 per person, per year limit. [Section 115] The limit was raised to $150,000 for crop years 1999, 2000, and 2001 by respectively P.L. 10678, sec. 813; P.L. 106-387, sec. 837; and P.L. 107-25, sec. 10). Exempt from payment limits are marketing certificates sold to farmers at the posted county price and used to pay off marketing 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. policy that allows a spouse to be considered a separate person or allows one person to receive payments from 2 additional farms. Either allowance doubles the limit on payments. A spouse allowance of an additional Same as old law and House bill. $50,000 is created. The 3-entity rule is replaced by applying the limits to payments from all sources (the socalled direct attribution rule.) [Section 169] CRS-34 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 4.) Adjusted Income Limit. HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 Gross 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] 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] 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] No provision. Requires USDA to make farm income Same as Senate bill. [Section estimates for commercial producers 1615] separate from all farms. [Section 173] 5.) Payment Limitation Commission. No provision. Q.) Livestock Assistance. No provision. R.) Estimates. No provision. Farm Income CRS-35 PRIOR LAW/POLICY (P.L. 104-127) COVERS 1996-2002 S.) CCC Operations. HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 Commodity 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 shall be issued not later than 90 days after enactment (August 12, 2002). [Section 161(d)] Regulations to implement Title I No provision. shall be issued not later than 90 days after enactment. [Section 181(c)] Same as House bill. [Section 1601(c)] (The 90 periods ends on August 12, 2002). 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 (P.L. 104-127) COVERS 1996-2002 HOUSE BILL, (H.R. 2646) COVERS 2002-2011 SENATE SUBSTITUTE, (S. 1731 AMENDED) COVERS 2002-2006 NEW LAW (P.L. 107-171) COVERS 2002-2007 If USDA determines that total spending for commodity support will exceed the limits accepted by the United States in the Uruguay Round Agreement on Agriculture, adjustments may be made to reduce spending to the limits but not below the allowable limits. [Section 181(e)] If USDA notifies Congress that support program spending will exceed the allowed limits and that adjustments will be made, all spending on the designated programs will be suspended after 18 months unless Congress disallows the adjustments. [Section 164] Same as House bill, except the USDA is instructed to make adjustments to ensure compliance. [Section 1601] V.) WTO Limits on Allowable Domestic Support. Under the Uruguay Round Agreement on Agriculture, the U.S. agreed to an annual limit of $19.1 billion on spending for domestic trade-distorting subsidies. There is no similar limit in the law or definition of trade distorting subsidies. CRS-37 Table 1. Fixed Payments: Comparison of Prior Law, New Law, House, and Senate Bills Fixed Payment Rates Prior Law 2002 Crop, unit P.L. 107-171 (2002-03/ 2004-07) House Bill (2002-11) Senate Bill (2002-06) 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 0.020 0.024 0.025 0.05/0.025/0.013 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, $/ton ($/lb) none 36.00 (0.018) 36 (0.018) all years, 36 (0.018) Oats, $/bu Upland Cotton, $/lb 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 Crop, unit Prior Law (1995 Levels, Not Applicable 1996-2002) P.L. 107-171 (2002-03/ 2004-07) House Bill (2002-11) Senate Bill (2002-06) 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, $/ton ($/lb) none 495/495 (24.75/24.75) 480 (24) 520 (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 1996-02 a Crop, unit P.L. 107-171 2002-03/ 2004-07 House Bill 2002-11 Senate Bill 2002-06 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 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 ( $/lb) 610 b (30.5) 355 (17.75) 350 (17.5) 400 (20) Upland Cotton, $/lb 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 ELS cotton, $/lb Prior Law 2002 P.L. 107-171 2002-03/04-07 House Bill 2002-11 Senate Bill 2002-06 0.7970 0.7977/0.7977 0.7965 0.7965 0.40 a 1.00/1.00 1.00 1.00 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 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 (target 16.94) d 9.90 e 9.90 (target 16.94 and rolling average) f (adjusted yearly) 1.656 1.835 (adjusted yearly) 1.656 1.835 (adjusted yearly) 1.656 1.835 (adjusted yearly) 1.656 1.835 Wool, graded, $/lb Wool, nongraded, $/lb Sugar, raw cane, $/lb Tobacco, $/lb Flue-cured Burley 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) Commodity Support Programs Cost Estimate Above Baseline Baseline Budget Authority 5 Years Conference Report 10 Years 5 Years House Bill 10 Years 5 Years Senate Bill 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 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) 42,474 67,701 25,787 47,971 25,077 48,785 30,563 46,074 Marketing Assistance Loans SUM TOTAL 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 Baseline New Spending March 2002 Baseline Total Projected Spending Baseline New Spending Total Projected 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 1,566 532 2,098 1,572 532 2,104 134,556 2,657 137,213 146,820 2,793 149,613 0 870 870 160 870 1,030 240 520 760 240 520 760 Forestry 0 85 85 0 85 85 Energy 0 366 366 0 405 405 Other Provisions (2) 0 (336) (336) 0 (303) (303) 203,479 45,061 248,540 222,204 51,687 273,891 Trade Nutrition (1) Rural Development Research Total, 6 years 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 all 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 intentionally 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.