Farm Disaster Bills in the 108th Congress: A Comparison

Farm Disaster Bills in the 108th Congress: A Comparison

Order Code RL31700
Report for Congress
Received through the CRS Web
Farm Disaster Bills
in the 108th Congress:
A Comparison
Updated January 24, 2003
Ralph M. Chite
Specialist in Agricultural Policy
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

Farm Disaster Bills in the 108th Congress:
A Comparison
Summary
Much of the United States has been affected by drought the past two years
which has had an adverse impact on crop and livestock production. At issue in
Congress is whether proposed disaster assistance should be provided, and if so,
whether there should be equivalent reductions in spending on other federal programs.
Proponents of additional assistance claim that the currently available farm disaster
programs do not adequately address farmers’ needs. The President and other
advocates of fiscal restraint insist that any new spending have budgetary offsets.
On January 23, 2003, the Senate adopted an omnibus appropriations bill for
FY2003 (H.J.Res. 2) which contains a Cochran amendment (S.Amdt. 204) providing
$3.1 billion in economic and disaster assistance for agricultural producers. An
estimated $2.04 billion of the assistance is supplemental direct payments to producers
of various crops. If a county received a disaster declaration in either 2001 or 2002,
eligible growers can receive a supplemental payment, with no distinction of whether
the producer has been affected by a natural disaster. S.Amdt. 204 revises an earlier
adopted amendment (S.Amdt. 1), which provided similar assistance without a
disaster designation requirement. The adopted amendment also contains $350 million
in livestock assistance and $375 million for other specified crops. The total cost of
the amendment was offset as part of a 1.6% across-the-board reduction in all non-
defense discretionary spending in the resolution. H.J.Res. 2 currently is in
conference, with no comparable provisions in the House version.
In contrast, several other measures have been introduced to provide emergency
funding with no offsets. S.Amdt. 79 (Daschle) provides an estimated $6 billion in
crop and livestock disaster payments for 2001 and 2002 losses. It was defeated on the
Senate floor by a vote of 39-56. A comparable Pomeroy bill (H.R. 160) is pending
in the House. S. 125 (Roberts) offers similar crop and livestock assistance, but
requires farmers to choose to receive payments for either 2001 or 2002 (estimated
cost of $4 billion). H.R. 92 (Graves) provides crop payments only for 2001 or 2002
losses, at an estimated cost of $2.9 billion. It also allows producers with crop losses
of 20 to 35%, who traditionally have been ineligible for disaster payments, to receive
a payment. H.R. 257 (Burns) makes payments for the 2002 crop year only and
provides livestock assistance to those producers who have not already received a
payment under USDA’s Livestock Compensation Program (LCP), at a total estimated
cost of $2.8 billion. H.R. 307 (Moran, KS) requires producers to choose either 2001
or 2002 for crop and livestock assistance and reduces livestock payments by any
payments received under the LCP, at an estimated cost of $3.4 billion.
Some Members justify making disaster payments without any budget offsets,
because USDA currently expects lower spending on FY2003 farm programs than
earlier estimates. CBO recently estimated that farm commodity support spending in
FY2003 likely will be $5.6 billion below earlier projections. However, current
budget rules do not allow the re-estimate to be scored as savings.
(This report will be updated.)

Farm Disaster Bills in the 108th Congress:
A Comparison

Topic or Issue
S. Amdt. 204
S. Amdt 79 (Daschle)
S. 125 (Roberts)
H.R. 257 (Burns)
H.R. 307
H.R. 92
(Cochran)
H.R. 160 (Pomeroy)
(Moran, KS)
(Graves)
Status
Adopted 59-35 on Jan.
On Jan. 22, 2003, S.
Pending.
Pending.
Pending.
Pending.
22, 2003, as an amend-
Amdt. 79 was defeated
ment to H.J. Res. 2 (the
39-56 as a proposed
FY2003 Omnibus Appro-
amendment to H.J. Res.
priations Act). (S. Amdt.
2.
204 replaces farm assis-
tance contained in S.
H.R. 160 is pending.
Amdt. 1 to H.J. Res. 2,
adopted earlier.)
H.J. Res. 2, as amended
was passed by the Senate,
69-29, on Jan. 23, 2003.
Crop Assistance
Eligible Years of
Not applicable.
2001 and 2002 crop
2001 or 2002 crop
2002 crop year only.
Same as S. 125
Same as S. 125
Crop Losses
years. Producer can apply
years. Producer can
for both years.
choose either crop year,
not both.
Program
Makes supplemental di-
All of these measures require that crop assistance be provided in the same manner as the 2000 crop
Provides a new
Framework
rect payments to all farm-
year disaster payment program authorized by Section 815 of P.L. 106-387 and implemented by
payment formula
ers who: 1) are eligible
USDA’s Farm Service Agency. A countywide disaster declaration is not required to be eligible for
that is based on, but
under the 2002 farm bill
assistance.
is different from,
(P.L. 107-171) for direct
the 2000 crop di-
payments for a 2002
saster program.
crop, (wheat, feed grains,
(See “Payment For-
cotton, rice, oilseeds and
mula” below for
peanuts), and, 2) their
details.)
county was declared a
disaster area by the Presi-
dent or USDA in either
2001 or 2002. A producer
who is not in a disaster
area, but who grows a
covered commodity listed
above, and can prove a

CRS-2
Topic or Issue
S. Amdt. 204
S. Amdt 79 (Daschle)
S. 125 (Roberts)
H.R. 257 (Burns)
H.R. 307
H.R. 92
(Cochran)
H.R. 160 (Pomeroy)
(Moran, KS)
(Graves)
crop loss in excess of
35% in either 2001 or
2002, is also eligible for a
payment.
Farm Eligibility
Crop insurance on a 2001
As the program was ad-
Potentially the same as
Same as S. 125
Same as S. 125
Covers all crops
Requirements
or 2002 crop is not a pre-
ministered in the 2000
S. Amdt. 79 and H.R.
and H.R. 257, ex-
that have incurred
and Crop Insur-
requisite for receiving a
crop year: All commer-
160, except that recipi-
cept that a
losses due to dam-
ance Purchase
supplemental payment.
cially grown crops are
ents of a disaster pay-
producer who
aging weather, or
However, a recipient
eligible for assistance
ment must agree to pur-
waived crop insur-
related conditions.
Requirement
must obtain at least the
regardless of whether a
chase crop insurance or
ance need only
No crop insurance
catastrophic (CAT) level
producer had a crop in-
enroll in NAP for the
obtain the
purchase require-
of crop insurance for the
surance policy, waived
next three crop years.
catastrophic level
ment.
next 2 years. (CAT cove-
available crop insurance,
of insurance
rage is free, except for a
or grew a non-insurable
coverage for the
$100 administrative fee.)
crop. All producers who
next 3 years. S.
If crop insurance is un-
waived crop insurance
125 and H.R. 257
available, the producer
and receive a disaster
require farmers to
must pay the administra-
payment for that crop
purchase
tive fee for enrollment in
year, must purchase at
additional insur-
the noninsured assistance
least the catastrophic
ance beyond the
program (NAP).
level of crop insurance
catastrophic level.
for the next two crop
years.
Payment Calcula-
Eligible recipients will
As the program was administered in the 2000 crop year: All eligible producers must have at least a
Establishes a new
tion
receive 42% of the Direct
35% crop loss in the relevant crop year. For losses in excess of the 35% threshold, producers with
payment formula:
Payment received on the
crop insurance and those who grew a crop for which insurance was not available receive a payment
1) Producers with
2002 crop, under USDA-
equal to 65% of a relevant price for that commodity. Producers who waived crop insurance are
losses between
’s ongoing Direct and
slightly penalized and receive 60% of the price of the commodity on losses in excess of 35%.
20% and 35%
Counter-cyclical Pay-
would receive a
ments Program.
payment, when tra-
ditionally they have
not; 2) Producers

CRS-3
Topic or Issue
S. Amdt. 204
S. Amdt 79 (Daschle)
S. 125 (Roberts)
H.R. 257 (Burns)
H.R. 307
H.R. 92
(Cochran)
H.R. 160 (Pomeroy)
(Moran, KS)
(Graves)
with losses between
35% and 55%
would receive a
larger payment than
under the other
bills; 3) All produc-
ers with losses in
excess of 55%
would have the
same payment rate,
a level which is less
than the other bills.
Rationale is that
large losses are al-
ready covered by
crop insurance,
while small losses
generally are not
covered.
Miscellaneous
1) Assistance of $100
No additional crop provisions.
Crop Assistance
million for either direct
Provisions
payments or grants to
states, to assist producers
of fruits and vegetables,
as determined by USDA;
2) Payments of $80 mil-
lion to sugar beet pro-
ducers who experienced
production losses to the
2002 crop;
3) An estimated $80 mil-
lion to sugar cane pro-
cessors and producers in
any county that was de-

CRS-4
Topic or Issue
S. Amdt. 204
S. Amdt 79 (Daschle)
S. 125 (Roberts)
H.R. 257 (Burns)
H.R. 307
H.R. 92
(Cochran)
H.R. 160 (Pomeroy)
(Moran, KS)
(Graves)
clared a disaster area in
2002;
4) An estimated $53 mill-
ion in economic assis-
tance to tobacco farmers;
5) Direct payments of
$50 million for assistance
to producers and first
handlers of the 2002 crop
of cottonseed;
6) A $10 million grant to
the state of Texas for crop
producers who experi-
enced economic losses in
2002 caused by the fail-
ure of Mexico to deliver
water to the U.S. under a
treaty;
7) A reimbursement of
$1.65 million to New
Mexico farmers for losses
incurred in 2002 and
2003 caused by federal
pesticide spraying.
Individual
Total amount of supple-
As the program was administered in the 2000 crop year: Benefits are limited
Same as S. Amdt.
No provision.
Payment Limits
mental direct payments
to $80,000 per person. No one with an annual gross income of $2.5 million
79, H.R. 160, S.
for one or more covered
or more in the previous tax year is eligible.
125 and H.R. 257,
commodities cannot ex-
except that the sum
ceed $40,000 per person
of disaster
(which is equal to, but
payments, crop
separate from, the pay-
insurance
ment limit for Direct Pay-
payments,
ments under the 2002
noninsured assis-
farm bill.)
tance payments

CRS-5
Topic or Issue
S. Amdt. 204
S. Amdt 79 (Daschle)
S. 125 (Roberts)
H.R. 257 (Burns)
H.R. 307
H.R. 92
(Cochran)
H.R. 160 (Pomeroy)
(Moran, KS)
(Graves)
and crop market-
ings cannot exceed
the value of the
crop in the absence
of losses.
Authorized
All funding is to come
Such sums as are necessary to fully fund payments, using the borrowing authority of USDA’s Commodity Credit
Source of Funds
from the borrowing au-
Corporation as the source of funds.
for Crop Assis-
thority of USDA’s Com-
tance
modity Credit Corpora-
tion.
Budgetary
Funds are made available
Budget emergency is declared by Congress upon passage of the bill, hence
No emergency
Contains no budget
Treatment of
out of the regular appro-
no budget offsets are required. Funds are made available to the extent that
funding declara-
offsets, and no
Crop Assistance
priations for FY2003, as
the President submits a request to Congress for a specific dollar amount and
tion in the bill.
budget emergency
part of a 1.6% across-the-
concurs with the congressional emergency designation,
Bill states that the
declaration.
board reduction in all
outlays for
discretionary accounts in
FY2003 farm
the omnibus appropria-
commodity price
tions bill. Hence, no bud-
support programs
get emergency declara-
will be approxi-
tion is required.
mately $5.6 billion
below original esti-
mates, primarily
because disasters
have reduced crop
production and
increased farm
prices. Anticipates
that cost of the bill
will not exceed the
$5.6 billion “sav-
ings.” (Note: cur-
rent budget law
does not allow

CRS-6
Topic or Issue
S. Amdt. 204
S. Amdt 79 (Daschle)
S. 125 (Roberts)
H.R. 257 (Burns)
H.R. 307
H.R. 92
(Cochran)
H.R. 160 (Pomeroy)
(Moran, KS)
(Graves)
“savings” from
budget re-
estimates to be
used as offsets for
new spending.)
CBO Scoring of
Estimated at $2.04 billion
Estimated at $4.5 billion
Estimated at $3.06 bil-
Estimated at $2.7
Estimated at $2.9
Estimated at $2.9
Crop Assistance
for the supplemental di-
for the crop loss provi-
lion for the crop loss
billion as of Jan. 6,
billion, as of early
billion, as of Octo-
rect payments and $375
sions, as of early Septem-
provisions, as of Sep-
2003. Subject to
January 2003.
ber 2002. Subject
million for the miscella-
ber 2002. Subject to
tember 2002. Subject to
change, since
Subject to change,
to change, since
neous crop provisions.
change, since funding is
change, since funding
funding is such sums
since funding is
funding is such
such sums as are neces-
is such sums as are nec-
as are necessary.
such sums as are
sums as are neces-
sary.
essary. (Estimate is
necessary.
sary.
lower than S. Amdt.
79, because S. 125
requires farmers to
choose between 2001
and 2002 crop losses.)
Livestock Assistance
Eligible Years of
2001 or 2002 losses. Pro-
2001 and 2002 losses.
Same as S. Amdt. 204.
Same as S. Amdt.
Same as
No livestock provi-
Livestock Losses
ducer can choose either
Producer can apply for
204.
S. Amdt. 204.
sions.
year, not both.
both years.
Livestock
Assistance to be provided
Assistance to be provided
Assistance to be pro-
Assistance to be pro-
Assistance to be
No livestock provi-
Program
in the same manner as
in the same manner as the
vided in the same man-
vided in the same
provided under the
sions.
Framework
two USDA programs: 1)
2000 Livestock Assis-
ner as the 1999 Live-
manner as the 2002
authority of Sec-
the 2002 Livestock Com-
tance Program,
stock Assistance Pro-
Livestock Compen-
tion 10104 of the
pensation Program
authorized by Section
gram (LAP).
sation Program
2002 farm bill
(LCP), a program initi-
806 of P.L. 106-387.
(LCP).
(P.L. 107-171).
ated by USDA, and 2) the
(Note: The 1999 and
1999 Livestock Assis-
2000 programs had near-
tance Program (LAP).
ly identical program eli-

CRS-7
Topic or Issue
S. Amdt. 204
S. Amdt 79 (Daschle)
S. 125 (Roberts)
H.R. 257 (Burns)
H.R. 307
H.R. 92
(Cochran)
H.R. 160 (Pomeroy)
(Moran, KS)
(Graves)
gibility and loss require-
ments. )
Natural Disaster
For LCP assistance: A
A producer must be in a
A producer must be in
Same conditions as
Same as S. 125,
No livestock provi-
Declaration
producer must be in a
county that has been de-
a county that has been
S. 125. except that a
except that any
sions.
county that has been de-
clared a disaster area by
declared a disaster area
producer who has
payment received
clared a disaster area by
either the President or
by either the President
already received a
under this bill must
either the President or
USDA in the year for
or USDA in either cal-
payment under the
be offset by any
USDA in either calendar
which the assistance is
endar year 2001 or
2002 LCP may not
payment already
year 2001, 2002, or in
sought.
2002.
receive a livestock
received by the
2003 up to the date of
payment under this
2002 LCP.
enactment.
bill.
For LAP assistance: the
disaster declaration had
to be in either 2001 or
2002.
Livestock
Offers payments to eligi-
As administered in both 1999 and 2000: the Live-
Provides LCP pay-
Section 10104 of
No livestock provi-
Program
ble producers in a county
stock Assistance Program (LAP) provides direct
ments to any eligible
P.L. 107-171 au-
sions.
Eligibility
declared a disaster any-
payments to eligible livestock producers who suf-
producer in a county
thorizes the Secre-
time between Jan. 1,
fered grazing losses due to natural disasters during
declared a disaster
tary to provide as-
2001 and the date of
the eligible calendar year. A county must have suf-
any time in 2001 or
sistance to dairy
enactment, and who did
fered a 40 percent or greater loss of available graz-
2002, who has not
and other livestock
not already receive a pay-
ing for at least 3 consecutive months as a result of
already received an
to cover economic
ment under the 2002
damage due to drought, hot weather, disease, insect
LCP payment.
losses when they
Livestock Compensation
infestation, flood, fire, hurricane, earthquake, severe
occur. Section
Program (LCP).
storms, or other disasters during the eligible crop
10104 allows
Amendment includes
year. The maximum grazing loss allowable for pay-
USDA to use any
catfish as an eligible
ment is 80 percent. Eligibility for LAP benefits for
form of livestock
commodity. (The 2002
an individual producer is based on whether a natural
assistance the Sec-
LCP made direct pay-
disaster caused the producer in an approved county
retary deems ap-
ments to eligible produc-
to suffer a 40 percent or greater loss of grazing for 3
propriate, subject
ers who operated in a
or more consecutive months during the eligible
to an appropria-
county declared a disaster
calendar year.
tion.

CRS-8
Topic or Issue
S. Amdt. 204
S. Amdt 79 (Daschle)
S. 125 (Roberts)
H.R. 257 (Burns)
H.R. 307
H.R. 92
(Cochran)
H.R. 160 (Pomeroy)
(Moran, KS)
(Graves)
area (or had a disaster
designation application
pending) between Jan. 1,
2001 and Sept. 19, 2002.)
A separate provision
makes available $250
million to the Livestock
Assistance Program
(LAP) for 2001or 2002
forage losses. (See next
column for a description
of LAP benefits.)
Definition of
Under the LCP, eligible
Based on previous years’ (1999 and 2000) imple-
Under the LCP, eli-
Not specified. Left
No livestock provi-
Livestock
livestock is limited to
mentation of the LAP, eligible livestock is defined
gible livestock is
to the discretion of
sions.
beef and dairy cattle,
as beef and dairy cattle, buffalo or beefalo when
limited to beef and
the Secretary of
buffalo and beefalo, and
maintained on the same basis as beef cattle, sheep,
dairy cattle, buffalo
Agriculture.
sheep and goats. It spe-
goats, swine, and equine animals used commercially
and beefalo, and
cifically excludes swine,
for human food or kept for the production of food or
sheep and goats. It
poultry, horses and any
fiber on the owner’s farm.
specifically excludes
beef, dairy, buffalo or
swine, poultry,
beefalo that are under
horses and any beef,
500 lbs. Amendment
dairy, buffalo or
would include catfish as
beefalo that are un-
an eligible commodity.
der 500 lbs.
Also contains a sense of
the Senate provision stat-
ing that USDA should
consider expanding feed
assistance programs to
include pork producers.
(See next column for
LAP definition of live-

CRS-9
Topic or Issue
S. Amdt. 204
S. Amdt 79 (Daschle)
S. 125 (Roberts)
H.R. 257 (Burns)
H.R. 307
H.R. 92
(Cochran)
H.R. 160 (Pomeroy)
(Moran, KS)
(Graves)
stock.)
Limitations on
Benefits are limited to $40,000 per person. No one with an annual gross income of $2.5 million or more
Applies the
No livestock provi-
Livestock
in the previous tax year is eligible.
adjusted gross in-
sions.
Payments
come (AGI) limita-
tion in Section
1604 of the 2002
farm bill (P.L.
107-171) i.e., pro-
ducers who have a
3-year average
AGI in excess of
$2.5 million are
ineligible for live-
stock payments,
unless 75% or
more of the AGI is
derived from agri-
cultural production
or forestry.
Replenishment of
Requires the CCC to re-
S. Amdt. 79 (Daschle)
No provision.
No provision.
Same as S. Amdt.
No provision.
Section 32 Funds
plenish Section 32 with
requires the Secretary of
1 to H. J. Res. 2
$250 million.
Agriculture to transfer
funds from the Commod-
ity Credit Corp. to Sec-
tion 32 to reimburse Sec-
tion 32 for all crop and
livestock assistance pay-
ments made with Section
32 funds. (Approximate
amount of transfer is
$900 million, all of
which represents
payments made under the
2002 Livestock Compen-
sation Program).
Note: H.R. 160 does not

CRS-10
Topic or Issue
S. Amdt. 204
S. Amdt 79 (Daschle)
S. 125 (Roberts)
H.R. 257 (Burns)
H.R. 307
H.R. 92
(Cochran)
H.R. 160 (Pomeroy)
(Moran, KS)
(Graves)
contain this provision,
representing the only ma-
jor difference between S.
Amdt. 79 and H.R. 160.
Authorized Live-
Such sums as are neces-
Such sums as are necessary to fully fund livestock payments, using the borrowing authority of
No livestock provi-
stock Funding
sary to fully fund live-
USDA’s Commodity Credit Corporation as the source of funding.
sions.
stock payments under the
Livestock Compensation
Program. A specific ap-
propriation of $250 mil-
lion for the Livestock
Assistance Program.
Both programs use the
borrowing authority of
USDA’s Commodity
Credit Corporation as the
source of funding.
Budgetary
Funds are drawn out of
Budget emergency is declared by Congress upon passage of the bill, hence
Proponents of the
No livestock provisions.
Treatment of
the regular appropriations
no budget offsets are required. Funds are made available to the extent that
measure contend
Livestock Assis-
for FY2003, as part of a
the President submits a request to Congress for a specific dollar amount and
that the “savings”
tance
1.6% across-the-board
concurs with the congressional emergency designation,
from lower antici-
reduction in all discre-
pated costs for
tionary accounts in the
FY2003 farm
omnibus appropriations
commodity price
bill. Hence, no budget
support programs
emergency declaration is
compensate for all
required.
crop and livestock
disaster payment
spending in the
bill. (Note: current
budget law does
not allow
“savings” from
budget re-
estimates to be
used as offsets for
new spending.

CRS-11
Topic or Issue
S. Amdt. 204
S. Amdt 79 (Daschle)
S. 125 (Roberts)
H.R. 257 (Burns)
H.R. 307
H.R. 92
(Cochran)
H.R. 160 (Pomeroy)
(Moran, KS)
(Graves)
CBO Scoring of
Cost of the livestock pro-
Estimated cost of the
Estimated cost of the
Estimated cost of the
Estimated cost of
No livestock provi-
Livestock Assis-
visions is: 1) $100 mil-
livestock provisions is
livestock provisions is
livestock provisions
the livestock provi-
sions.
tance
lion for the Livestock
$1.45 billion, as of early
$970 million, as of
is $100 million, as of
sions is $250 mil-
Compensation Program,
September 2002. Subject
early September 2002.
January 2003. Sub-
lion. Subject to
estimated as of Jan. 2003
to change, since funding
Subject to change,
ject to change, since
change, since
and, 2) $250 million for
is “such sums as are nec-
since funding is “such
funding is “such
funding is “such
the Livestock Assistance
essary.”
sums as are necessary.”
sums as are
sums as are neces-
Program.
necessary.”
sary.”
Total Authorized New Spending
Combined Total
$3.1 billion
$6.9 billion for S. Amdt.
$4.0 billion.
$2.8 billion
$3.4 billion
$2.9 billion
Estimated Cost of
79 (Daschle), and
All Provisions in
$6 billion for H.R. 160
Bill (CBO Score)
(Pomeroy).
The cost of S. Amdt. 79
(Daschle) is
approximately $900 mil-
lion higher than H.R. 160
because of the provision
to transfer funds from the
Commodity Credit Corp.
to Section 32 .