For other versions of this document, see http://wikileaks.org/wiki/CRS-RL31524 ------------------------------------------------------------------------------ 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 Jasper Womach Agriculture Policy Specialist Resources, Science, and Industry Division Congressional Research Service ~ The Library of Congress The 2002 Farm Bill: Comparison of Commodity Support Provisions with the House and Senate Proposals, and Prior Law Summary A new farm bill, the Farm Security and Rural Investment Act of 2002 (P.L. 107- 171), covering crop years 2002-2007, was signed into law May 13, 2002. Conferees resolved the differences between the H.R. 2646 and S. 1731 and the conference report (H.Rept. 107-424) was adopted by the House on May 2 and the Senate on May 8. The previous farm bill (now prior law) was the Federal Agriculture Improvement and Reform Act of 1996 (P.L. 104-127), popularly called the FAIR Act. Commodity support authority in the FAIR Act (Title I, Agricultural Market Transition Act (AMTA)) was set to expire after crop year 2002. This report provides a side-by-side comparison of prior law (AMTA), with most commodity support provisions of Title I of the new law, and the House and Senate farm bills. There are important similarities and differences between the various versions. The new law takes effect immediately and applies to crops harvested in 2002. While the House bill would have authorized support programs through 2011 (10 years), and the Senate bill 2006 (5 years), conferees agreed to authorize support through 2007 (6 years). As proposed in both bills, conferees agreed to continue marketing assistance loans, first adopted in the 1985 farm bill and extended by AMTA. The new law will continue the annual fixed, decoupled contract payments first adopted under AMTA in 1996. And, as both bills proposed, the new law will restore the counter-cyclical payments (target price deficiency payments) discontinued by AMTA. The peanut support program is transformed to mirror the program for grains and oilseeds. At the more detailed level of commodity loan rates, contract payment rates, counter-cyclical target prices, and payment limitations, the conference report made compromises between the two bills that were adopted as new law. Contents Commodity Support Provisions (Title I) of Prior Law, the House Farm Bill, the Senate Farm Bill, and New Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 A.) Wheat, Corn, Grain Sorghum, Barley, Oats, Upland Cotton, Rice, Soybeans and Other Oilseeds . . . . . . . . . . . . . . . . . . . . . . . . 2 1.) Sign-Up 2.) Base Acres and Payment Acres 3.) Payment Yield 4.) Producer Contract/Agreement 4.) Direct Fixed, Decoupled Payments 2.) Counter-Cyclical Deficiency Payments and Target Prices 3.) Marketing Assistance Loans and LDPs B.) Wool and Mohair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 1.) Marketing Loans and LDPs C.) Honey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 1.) Marketing Assistance Loans and LDPs D.) Extra Long Staple (ELS) cotton, Dry Peas, Lentils and Chickpeas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 1.) Marketing Assistance Loans and LDPs E.) Grazed Wheat, Barley, Oats, and Triticale . . . . . . . . . . . . . . . . . . 16 1.) Payments in Lieu of LDPs F.) High Moisture Corn and Sorghum . . . . . . . . . . . . . . . . . . . . . . . . . 16 1.) Recourse Loans G.) ELS and Upland Seed Cotton . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 1.) Recourse Loans H.) Hard White Wheat Incentive Payments . . . . . . . . . . . . . . . . . . . . 17 1.) Incentive Payments I.) Upland Cotton Competitiveness Provisions for Processors and Exporters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 1.) Marketing Certificates 2.) Import Quotas J.) ELS Cotton Competitiveness Provisions for Processors and Exporters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 K.) Peanuts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 1.) Poundage Quotas and Quota compensation 2.) Nonrecourse Loans / Marketing Assistance Loans 3.) Fixed Payments, Counter-Cyclical Payments, and Marketing Assistance Loans 4.) Payment Limits L.) Sugar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 1.) Price Support Loans 2.) No Net Cost Mandate 3.) Loan Forfeiture Penalty 4.) Import Quotas 5.) Marketing Allotments 6.) In-Kind Payments 7.) Marketing Assessment 8.) Interest Rate on Loans 9.) Storage Facility Loans M.) Dairy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 1.) Milk Price Support 2.) Processor Recourse Loans 4.) Northeast Dairy Compact 5.) Dairy Market Loss Payments 6.) Dairy Export Incentive Program 7.) Dairy Indemnity Program 8.) Fluid Milk Processor Promotion Program 9.) Dairy Product Mandatory Reporting 10.) Dairy Promotion and Research Assessment 11.) Dairy Studies and Reports N.) Tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 1.) Flue-cured Quota 2.) Flue-cured Farm Reconstitutions O.) Specialty Crops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 1.) Mandatory CCC Purchases P.) Payment Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 1.) Fixed Payments, and Counter-Cyclical Payments 2.) Marketing Loan Benefits 3.) Spouse Benefit and 3 Entity Rule 4.) Adjusted Gross Income Limit 5.) Payment Limitation Commission Q.) Livestock Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 R.) Farm Income Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 S.) CCC Commodity Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 T.) Implementing Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 U.) Counter-Cyclical Farm Savings Accounts . . . . . . . . . . . . . . . . . . 35 V.) WTO Limits on Allowable Domestic Support . . . . . . . . . . . . . . . 36 List of Tables Table 1. Fixed Payments: Comparison of Prior Law, New Law, House, and Senate Bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Table 2. Counter-Cyclical Target Prices: Comparison of Prior Law, New Law, House Bill, and Senate Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Table 3. Loan Rates: Comparison of Prior Law, New Law, House Bill, and Senate Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Table 4. Loan/Purchase Rates for Other Commodities: Comparison of Prior Law, New Law, House Bill, and Senate Bill . . . . . . . . . . . . . . . . . . . 40 Table 5. Commodity Program Cost Estimates Compared to Baseline Budget Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Table 6. 2002 Farm Bill, 6-Year Cost Estimates . . . . . . . . . . . . . . . . . . . . . . . . 42 The 2002 Farm Bill: Comparison of Commodity Support Provisions with the House and Senate Proposals, and Prior Law Commodity support programs originated in the 1930s and are permanently authorized by the Agriculture Adjustment Act of 1938 (P.L. 75-430, as amended, 7 U.S.C. 1281 et seq.) and the Agriculture Act of 1949 (7 U.S.C. 1421 et seq.). Spending for these programs is mandatory and funding is carried out through the Commodity Credit Corporation (CCC) (P.L. 80-806, as amended, 15 U.S.C. 714 et seq.). Periodically, the permanent authorities are amended, by what is popularly called a farm bill, to establish new policies for a specified limited future time. That legislation is now replaced by Title I of the Farm Security and Rural Investment Act (FSRIA) of 2002, P.L. 107-171. Commodity and farm income support in the new farm bill is a compromise between a 10-year House bill (H.R. 2646) and 5-year Senate farm bill (S. 1731), resulting in a 6-year bill, covering crop years 2002 through 2007 (Conference report H. Rept. 107-424). The new law replaces the Agricultural Market Transition Act (AMTA, Title I of the Federal Agriculture Improvement and Reform Act, P.L. 104-127, 7 U.S.C. 7201 et seq.), which established commodity support policy for crop years 1996 through 2002. The CCC borrows the money it needs to meet mandatory program spending requirements from the U.S. Treasury. Subsequently, Congress appropriates funds that CCC uses to repay the Treasury. Other programs to facilitate marketing of farm commodities, encourage domestic consumption, and promote exports are authorized in other laws. Furthermore, the USDA has broad powers to support the farm sector and has implemented new programs on occasion without specific legislative direction. The methods of support for wheat, grain sorghum, barley, oats, upland cotton, and rice have long been nearly identical and together these commodities were referred to as the "program crops." Under AMTA, these crops were brought together under a single support framework and were called "contract commodities" because farmers signed Production Flexibility Contracts (PFC) with the CCC. The new FSRIA establishes a "commodity agreement" framework for grains and upland cotton and also makes oilseeds (soybeans and other oilseeds including sunflower seed, rapeseed, canola, safflower, flaxseed, and mustard seed) into "covered commodities." The support program for peanuts also is made almost identical to that for the covered commodities. The following side-by-side compares policy rather than legislative language. Therefore, the phrase "same as" does not mean "identical to." Rather, "same as" means the same or very similar policy framework or design. Prior law (P.L. 104-127) is compared to H.R. 2646, as individually approved by the House and the Senate, and to the new law (P.L. 107-171). CRS-2 Commodity Support Provisions (Title I) of Prior Law, the House Farm Bill, the Senate Farm Bill, and New Law PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 A.) Wheat, Corn, Grain Sorghum, Barley, Oats, Upland Cotton, Rice, Soybeans and Other Oilseeds. 1.) Sign-Up. The sign-up period is required to Establishes a sign-up period, lasting Establishes a sign-up period, that USDA is to provide notice to begin not later than 45 days after not more than 180 days after begins not less 45 days after enactment farmers, as soon as practical after enactment and end August 1, 1996. enactment, during which producers and lasts for 180 days, during which enactment, of the opportunity Production flexibility contracts sign "agreements" covering crop producers sign "contracts" covering sign agreements and establish (PFCs) cover 7 years, 1996 thru years 2002 thru 2011 (10 years). crop years 2002 thru 2006 (5 years). base acres for direct and counter- 2002 crops. [Section 112] [Section 110] [Section 111 as it amends Section 112 cyclical payments. [Section of FAIR Act] 1101] 2.) Base Acres and Payment Acres. Each farm's base acres and payment The base acres for each crop are Same as House bill. [Section 111 as it Same as House and Senate bills. yields are used to calculate the either the acres specified in existing amends Section 111 of FAIR Act] [Section 1101] program benefits to the producer. PFC contracts, or average acres The base acres and yields for planted to eligible crops from 1998 eligible crops are those that would thru 2001. Accommodation is have applied in 1996 under the then made for double cropping, peanut expiring program. Under the acres, and CRP acres. Base acres expiring program, the "acreage cannot exceed total cropland on a CRS-3 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 base" for each program crop is the farm. [Section 103] average acres planted/considered planted the prior 5 years for wheat, Payment acres equal 85% of base Payment acres equal 100% of base Same as House bill. [Section feed grains and the prior 3 years for acres in calculating payment acres in calculating payment amounts. 1101(f)] upland cotton, rice. amounts. [Section 100(9) and [Section 111 as it amends Section 111 103(f)] of FAIR] 3.) Payment Yield. Program payment yields for each The program payment yield for The program payment yield is either: Similar to House bill. Payment crop are frozen at 1986 program each crop is the: payment yield in the yield specified in existing yield is the yield established for levels. [Section 102] effect for 2002 under an existing contracts, or average yield from 1998 the 1995 crop. Oilseed payment production flexibility contract; or a thru 2001. There is no requirement to yield is the average yield from Note: Soybeans and other oilseeds similarly appropriate yield for farms adjust yields back to an 1981-85 1998-01, adjusted back to the are not eligible crops and there are without past contracts. Oilseed equivalent. [Section 111 as it amends national average from 1981-85. no provisions for establishing base yield is the average yield from Section 111 of FAIR Act] Yields for counter-cyclical acres and yields for oilseeds. 1998-01, adjusted back to a 1981- payments may be updated using 85 equivalent. [Section 102] specified formulas. [Section 1102] 4.) Producer Contract/Agreement. a.) Requirements. Eligible producers must sign a Producers must agree during each Same as old law. Producers sign Adopts House bill provision. contract that includes specific crop year to certain requirements in contracts. [Section 111 as it amends [Section 1105] requirements in order to receive order to receive fixed, decoupled Section 111 of FAIR Act] payments. [Section 111] direct payments and counter- cyclical payments. [Section 106] CRS-4 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 1.) Conservation and Wetlands Compliance Producers are required to comply Same as old law. [Section 106] Same as old law. [Section 111 as it Same House and Senate bills and with already existing conservation amends Section 111 of FAIR Act] old law. [Section 1105(1)(A) requirements on highly erodible and (B)] land and with already existing prohibitions on draining wetlands for purposes of crop production. These compliance requirements do not impose any new obligations on producers. [Section 111] 2.) Planting Flexibility and Limitations Farmers are allowed to plant any Same planting flexibility allowance Same planting flexibility allowance as Same as House bill, except if crop except fruits and vegetables as old law, but wild rice is added to old law, but wild rice is added to prohibited crops are planted they (other than lentils, mung beans, and exceptions. [Section 107] exceptions beginning in 2003. may be destroyed before harvest, dry peas) on contract acreage and [Section 113] and planting trees or other there are no planting restrictions on perennial crop producing plants non-contract acreage. Cropland not is prohibited on base acres. planted has to be devoted to a [Section 1106] conserving use to prevent erosion and can not be converted to non- agricultural uses. [Section 118] Violations of planting flexibility No provisions for violations. For first time unintentional violations Same as House bill. limitations generally result in of planting flexibility limitations, the termination of the contract on each penalty shall be a refund or reduction CRS-5 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 farm in which the producer has an of future payments amounting to twice interest. [Section 116] the payment amount on the involved acres. [Section 112] 3.) Change in Farm Ownership or Operator Contract obligations can be Same as old law. [Section 106(c)] Same as House bill. [Section 111 as it Same as old law, and House and assumed by new owners. amends Section 111 of FAIR Act] Senate bills. [Section 1105(b)] Otherwise the contract is terminated. Changing operators does not affect program acres or yields. [Section 117] 4.) Direct Fixed, Decoupled Payments. a.) Eligibility. Eligibility for PFC contracts is Farms with existing PFC contracts, Same as House bill. [Section 111 as it Same as House and Senate bills extended to producers previously and other producers with a history amends Section 111 of FAIR Act] except that these crops are to be enrolled in a grain or cotton of contract crop or oilseed know as "covered crops." program in at least 1 of the 1991-95 production from 1998-01 are Provision is made for expiring crop years. Conservation Reserve eligible for fixed, decoupled CRP acres to be added to the Program cropland expiring or payments on their base acres and agreements. [Section 1103] terminated after Jan. 1, 1995 is yields. Soybeans and other oilseeds eligible. Soybeans and other also are made eligible. These crops oilseeds are not eligible PFC are to be known as "agreement commodities. [Section 111] crops." Provision is made for expiring CRP acres to be added to CRS-6 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 the agreements. [Section 101(a) and 103(a)] b.) Payment Rates. Farmers who sign production Similar framework to old law. Similar framework to old law. Same as House bill. [Section flexibility contracts (PFCs) in 1996 Farmers who sign "agreements" Farmers who sign contracts receive 1105] receive fixed annual payments for 7 receive direct fixed, decoupled fixed, decoupled annual payments, years, unrelated to crops or acreage annual payments, unrelated to crops unrelated to crops or acreage actually actually planted. The payment or acreage actually planted. The planted. The payment quantity for quantity for each commodity is payment amount for each each commodity is 100% of payment 85% of the contract acreage times commodity is payment acres (85% acres times the payment yield times the payment yield times the of base acres) times the payment the payment rate. payment rate. [Section 114] yield times the payment rate. Estimated 2002 contract payment Payment rates are specified for all Payments rates are specified for Payment rates differ slightly rates: years as follows: 2002/03, 2004/05, 2006 as follows: from House bill as follows: Wheat, $0.46/bu Wheat, $0.53/bu Wheat, $0.45, $0.225, $0.113/bu Wheat, $0.52/bu Corn, $0.26/bu Corn, $0.30/bu Corn, $0.27, $0.135, $0.068/bu Corn, $0.28/bu Sorghum, $0.31/bu Sorghum, $0.36/bu Sorghum, $0.31/$0.27, $0.135, Sorghum, $0.35/bu Barley, $0.20/bu Barley, $0.25/bu $0.068/bu Barley, $0.24/bu Oats, $0.021/bu Oats, $0.025/bu Barley, $0.20, $0.10, $0.05/bu Oats, $0.024/bu Cotton, $0.0556/lb Cotton, $0.0667/lb Oats, $0.05, 0.$025, $0.013/bu Cotton, $0.0667/lb Rice, $2.04/cwt Rice, $2.35/cwt Cotton, $0.13, $0.065, $0.0325/lb Rice, $2.35/cwt Soybeans, not a contract crop Soybeans, $0.42/bu Rice, $2.45, $2.40, $2.40/cwt Soybeans, $0.44/bu Other Oilseeds, not contract crops Other Oilseeds, $0.0074/lb Soybeans, $0.55, $0.275, $0.138/bu Other Oilseeds, $0.008/lb [Section 104] Other Oilseeds, $0.01, $0.005, [Section 1103(b)] $0.0025/lb [Section 111 as it amends Section 113 of FAIR Act] CRS-7 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 The law does not specify actual Total payments are to be reduced by No comparable provision. Same as Senate, no provision to payment rates, but states the total $100 million on a pro rata basis reduce spending and devote funds available each year and the (about 2% based on CBO estimates) funds elsewhere. allocation share for each and these funds are to be devoted to commodity. [Section 113] specified rural development programs. [Section 943] c.) Time of Payment. The producer can choose to receive FY2002 PFC payments under old No explicit reference is made to Similar to House bill. [Section 50% of the payment on Dec. 15 or law are to be discontinued after discontinuing payments under PFC 1107] Jan. 15 and the remainder not later enactment, and any amount already contracts, or to payments already made than September 30 of each fiscal paid is to be deducted from the under to old law. year. [Section 112(d)(1 & 2)] amount due under this Act. [Section 108] Fixed, decoupled payments are to be made not later than September 30 of each fiscal year. [Section 104(d)] Alternatively, for FY1999-02, the The producer can choose to receive Same as House bill. [Section 111 as it Same as House and Senate bills producer can choose to receive the an advance of 50% of the payment amends Section 113(d) of FAIR Act] except xxx [Section 1103(d)] full amount or portions at times on or after December 1. [Section during the fiscal year chosen by the 104(d)] producer. [Section 112(d)(3) as added by PL 105-228, Section 2] CRS-8 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 2.) Counter-Cyclical Deficiency Payments and Target Prices. a.) Eligibility. Eliminates counter-cyclical target Restores counter-cyclical target Same as House bill. [Section 111 as it Same as House and Senate bills. price deficiency payments that were price deficiency payments that amends Section 111(a) of the FAIR [Section 1104] enacted in 1973 and functioned ended in 1995. Farms that have Act] through 1995. When effective, signed agreements will receive farmers were paid the difference counter-cyclical payments if between the target price and a lower average market prices are less than season average farm price on a target prices. [Section 101] specified proportion of a farm's crop base acres. b.) Target Prices and Payment Rates. Not applicable. The payment rate for counter- Same as House bill, except that the Same as House bill. [Section cyclical payments is the difference payment amount for each commodity 1001(10)] between the "target price" and the is 100% of base acres times the "effective price." The effective payment yield times the payment rate. price is the higher of (1)the national season average price or (2)the loan rate, plus the direct fixed, decoupled payment rate. The payment amount is the payment rate times the payment acres times the payment yield. Payment acres are CRS-9 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 85% of base acres. Target prices are for all years are Target prices are for all years are Target prices for 2002-03/2004- specified as follows: specified as follows: 07 are specified as follows: Wheat, $4.04/bu Wheat, $3.446/bu Wheat, $3.86/$2.92/bu Corn, $2.78/bu Corn, $2.3472/bu Corn, $2.60/$2.63/bu Sorghum, $2.64/bu Sorghum, $2.3472/bu Sorghum, $2.54/$2.57/bu Barley, $2.39/bu Barley, $2.1973/bu Barley, $2.21/$2.24/bu Oats, $1.47/bu Oats, $1.5480/bu Oats, $1.40/$1.44/bu Upland Cotton, $0.736/lb Upland Cotton, $0.6793/lb Upland Cotton, $0.724/$0.724/lb Rice, $10.82/cwt Rice, $9.2914/cwt Rice, $10.50/$10.50/cwt Soybeans, $5.86/bu Soybeans, $5.7431/bu Soybeans, $5.80/$5.80/bu Other Oilseeds, $0.1036/lb Other Oilseeds, $0.1049/lb Other Oilseeds, [Section 105] [Section 171 as it amends Section $0.098/$0.1010/lb 111,which amends Section 114 of [Section 1104(c)] FAIR Act] 3.) Marketing Assistance Loans and LDPs. a.) Eligibility. Any wheat, feed grains, upland Marketing assistance loans and loan Same as House bill. [Section 121] Similar to House and Senate cotton, and rice produced on PFC deficiency payments (LDPs) are bills, except the list of loan farms is eligible for marketing available for agreement crops commodities differs. [Section assistance loans or LDPs, whether (grains, upland cotton, oilseeds) on 1201] The phrase "loan or not it is produced on contract all farms where they are produced, commodities" is defined to acres. These commodities are not whether or not they have signed include wheat, corn, grain eligible for loan or LDPs if agreements). [Section 121] sorghum, barley, oats, upland produced on farms without cotton, extra long staple cotton, CRS-10 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 contracts. Any oilseed is eligible rice, soybeans, other oilseed, for marketing assistance loans or wool, mohair, honey, dry peas, LDPs, whether or not the farm has lentils, and small chickpeas. a contract. [Section 131] [Section 1001] b.) Term of Loans. Loans on grains and oilseeds are for Same as old law. [Section 123] Same as old law. [Section 121] Similar to old law, and House 9 months beginning on the first of and Senate bills, except the term the month after the loan date. for each commodity, including Loans on upland cotton are for 10 cotton, is 9 months beginning on months beginning on the first of the the first day of the month after month before the loan date. loan is made. [Section 1203] c.) Loan Repayment. For grains and oilseeds, marketing Similar to old law. [Section 124] Similar to old law. [Section 121] Similar to old law, and House assistance loans can be repaid at the and Senate bills. Repayment lesser of the loan rate plus interest, rules for wool, mohair, honey, or the rate determined by USDA dry peas, lentils, and small that minimize forfeitures, minimize chickpeas are the same as for the accumulation of CCC-owned grains and oilseeds. [Section stocks, minimize the cost of 1204] storage, and allow for free and 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 HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 plus interest, or the prevailing world market price adjusted to U.S. quality and location. Additional adjustments to the world price are made when the world price declines to near the loan rate , and when the price of U.S. cotton exceeds the price of competing cotton in the world market. [Section 134] In the event of a default on a loan at the maturity date, the commodity pledged as collateral reverts to CCC ownership. No further action is taken against the borrower because marketing assistance loans are nonrecourse. [Section 131] d.) Loan Deficiency Payments (LDPs). Producers with grain, upland cotton, Same as old law. [Section 125] Same as old law. [Section 121] Similar to old law, and House or oilseeds eligible for marketing and Senate bills. LDPs are assistance loans instead can choose available for all loan to receive loan deficiency commodities with the exception payments. The LDP is the of ELS cotton. [Section 1204] difference between the loan rate and the loan repayment rate established by the USDA. [Section 135] CRS-12 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 e.) Loan Rates. Marketing assistance loans and loan Marketing assistance loans and loan Same as House bill. [Section 121] Same as House and Senate bills. deficiency payments (LDPs) deficiency payments (LDPs) are [Section 1201] continue at rates in effect in 1995. available for loan commodities on Authority is provided for USDA to all farms (not limited to farms with lower the loan rates when stocks agreements for fixed and counter- accumulate. cyclical payments) and any quantity produced on the farm. [Section 121(b)] Loan rates generally are to be notLoan rates generally are to be not Fixed, specific loan rates are as Fixed, specific loan rates are as less than 85% of the moving 5-yearless than 85% of the moving 5-year follows: follows: Olympic average of prices receivedOlympic average of prices received Wheat, $2.9960/bu Wheat, $2.80/$2.75/bu by producers, or more than: by producers, or more than: Corn, $2.0772/bu Corn, $1.98/$1.95/bu Wheat, $2.58/bu Wheat, $2.58/bu Sorghum, $2.0772/bu Sorghum, $1.98/$1.95/bu Corn, $1.89/bu Corn, $1.89/bu Barley, $1.9973/bu Barley, $1.88/$1.85/bu Sorghum, $1.69/bu Sorghum, $1.89/bu Oats, $1.4980/bu Oats, $1.35/$1.33/bu Barley, $1.71/bu Feed Barley, $1.70/bu Cotton, $0.5493/lb Cotton, $0.52/$0.52/lb Malting Barley, $1.65/bu Rice, $6.4914/cwt Rice, $6.50/$6.50/cwt Oats, $1.14/bu Oats, $1.21/bu Soybeans, $5.1931/bu Soybeans, $5.00/$5.00/bu Cotton, $0.5192/lb Cotton, max $0.5192-min $0.50/lb Minor Oilseeds, $0.0949/lb Minor Oilseeds, $0.096/$0.93/lb Rice, max & min $6.50/cwt Rice, must equal $6.50/cwt [Section 171 as it amends Section 121, ELS Cotton, $0.7977, $0.7977/lb Soybeans, max $5.26, min $4.92/bu Soybeans, $4.92/bu which amends Section 132 of the FAIR (ELS Cotton is not eligible for Minor Oilseeds, max $0.093, min Minor Oilseeds, $0.087/lb Act] LDPs) $0.87/lb [Section 122] Dry Peas, $6.33, $6.22/cwt Lentils, $11.94, $11.72/cwt Small Chickpeas, $7.56, $7.43/cwt. Graded Wool, $1.00/lb CRS-13 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 Nongraded Wool and Unshorn Pelts, 40¢/lb Mohair, $4.20/lb [Section 1202] (P.L. 106-224, Section 206(a)(2) Retroactively, for the 2001 crops, as Same as House bill. [Section 169] Same as House and Senate bills. and (3), made loans and LDPs was the case for 2000, LDPs are [Section 1205(f)(2)] available on non-PFC farms only available on non-PFC farms that for crop year 2000.) produced contract crops and oilseeds. [Section 125(f)] Payment limits are covered below in P, 2). B.) Wool and Mohair. 1.) Marketing Loans and LDPs. Wool and mohair support was Marketing loans and LDPs are Similar to House bill, but no support Similar to House bill, except phased out and ended in 1996 by available to all producers at the for mohair. Marketing loans and unshorn pelts are eligible for P.L. 103-130, Section 1, which following rates: LDPs are available to all producers at: LDPs only. repealed the National Wool Act of 1954. However, support was Graded Wool, $1.00/lb Graded Wool, $1.00/lb Graded Wool, $1.00/lb authorized in several subsequent Nongraded Wool, 40¢/lb Nongraded Wool and Unshorn Pelts, Nongraded Wool and Unshorn years. P.L. 106-78 Section 801(h), Mohair, $4.20/lb 40¢/lb Pelts, 40¢/lb authorized recourse loans on 1999 [Section 130] Mohair, na Mohair, $4.20/lb crop mohair. P.L. 106-224, Section [Section 171 as it amends Section 111, [Section 1201, 1202] 204(d), mandated payments on which amends Section 132 of the FAIR 1999 crop wool of $0.20, and on Act] Marketing loan gains and LDPs mohair of $0.40/lb. P.L. 106-387, [While Section 123 provides no loan are limited to $75,000 per person CRS-14 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 Section 814, authorized payments for mohair, Section 171 includes a per year for wool, and separately of $0.20/lb for wool and $0.40 loan for mohair, but the claimed intent $75,000 for mohair. [Section mohair for crop year 2000, up to according to Committee staff is to not 1603] $20 million. Again for crop year support mohair] 2001, P.L. 107-25, Section 5, authorized $16.9 million in direct payments for wool and mohair at rates determined by USDA. C.) Honey. 1.) Marketing Assistance Loans and LDPs. Honey support is repealed. [Section Marketing loans and LDPs at Marketing loans and LDPs at $0.60/lb. Same as House bill. [Section 171] This action followed several $0.60/lb. The term of a loan is 12 The term of the loan is 9 months, 1201,1202] The payment limit is years of agriculture appropriations months, beginning the first day of beginning the first day of the month $75,000 per person per year. bill language that prevented USDA the month after the loan is obtained. after the loan is obtained. [Section [Section 1603] from carrying out the mandatory [Section 131] 124, which amends Section 133 of the honey marketing loan program. FAIR Act] Subsequently, recourse loans were authorized for the 1998, 1999, and 2000 crops by respectively P.L. 105-227, Section 1122; P.L. 106- 78, Section 801; and P.L. 106-224, Section 204. P.L. 106-387, Section 812, made marketing assistance loans and LDPs available on 2000 crop honey at $0.65/lb and CRS-15 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 outstanding recourse loans were converted to nonrecourse marketing loans. D.) Extra Long Staple (ELS) cotton, Dry Peas, Lentils and Chickpeas. 1.) Marketing Assistance Loans and LDPs. ELS cotton is eligible for Same as old law. Marketing loans and LDPs are Similar to Senate bill, except nonrecourse loans, but not LDPs. available on all production at the large chickpeas are not included. [Sections 132 and 134] following rates: [Section 1201-1205].. Loan rates No support is authorized for dry for 2002-03, and 2004-07 are: peas, lentils, large chickpeas, small chickpeas. ELS Cotton, $0.7965 ELS Cotton, $0.7977, $0.7977/lb (ELS cotton is not eligible for LDPs) (ELS cotton is not eligible for Dry Peas, $6.78/cwt LDPs) Lentils, $12.79/cwt Dry Peas, $6.33, $6.22/cwt Large Chickpeas, $17.44/cwt Lentils, $11.94, $11.72/cwt Small Chickpeas, $8.10/cwt Small Chickpeas, $7.56, $7.43/cwt. [Section 1202] The term of each loan is 9 months, beginning the first day of the month after the loan is obtained. [Section 171 as it amends Section 111, which amends Section 132 of the FAIR Act] CRS-16 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 E.) Grazed Wheat, Barley, Oats, and Triticale. 1.) Payments in Lieu of LDPs. P.L. 104-127 made no provision for Wheat, barley, and oats that are Similar to House bill, but includes Similar to House bill, except LDPs on grazed wheat, barley and grazed and not harvested, but would grain sorghum along with wheat, grazed triticale (a genetic cross oat acreage. P.L. 106-224, Section be eligible for LDPs if harvested, barley and oats as eligible crops. of wheat and rye) also is 205, provided for LDPs on grazed will receive LDPs under similar [Section 127] covered. [Section 1206] acres only for 2001 crops. rules to those that apply to harvested crops. Federal crop insurance is not allowed on grazed land agreements. [Section 126] F.) High Moisture Corn and Sorghum. 1.) Recourse Loans. Recourse loans are available on For farms that normally harvest Same as House bill. [Section 121(a)] Same as House bill. [Section high moisture corn and grain corn or sorghum in a high moisture 1209(a)] sorghum. Loan rates are condition, recourse loans are determined by the USDA. Only available at rates set by the USDA. producers with PFC contracts are Farms need not have signed eligible. [Section 137(a)] "agreements." [Section 129(a)] CRS-17 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 G.) ELS and Upland Seed Cotton. 1.) Recourse Loans. Recourse loans are available on Recourse loans are available for No provision is made to support seed Same as House bill. [Section upland seed cotton for farms with all upland and ELS seed cotton, at cotton. 1209(b)] PFC contracts, and on any farm rates set by the USDA. Farms producing ELS seed cotton. need not have signed [Section 137(b)] "agreements." [Section 129(b)] H.) Hard White Wheat Incentive Payments. 1.) Incentive Payments. No special support provision is Same as old law, no support For crop year 2003 through 2005, an Similar to Senate bill, but added for hard white wheat. provision is available for hard white additional $40 million is to be paid to funding is set at $20 million for However, hard white wheat, like all wheat. producers to ensure that hard white the 3 year period. [Section other wheat, does qualify for wheat on not more than 2 million acres 1616] contract payments and marketing meets minimum quality standards. loan program benefits. [Section 167] I.) Upland Cotton Competitiveness Provisions for Processors and Exporters. 1.) Marketing Certificates. Marketing certificates or cash Some changes from old law. Same as old law. [Section 121(b)] Same as House bill for upland payments are made to domestic Marketing certificates or cash cotton. Applies through July 31, CRS-18 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 users and exporters of upland cotton payments are made to domestic 2008. [Section 1207(a)] whenever the 4-week price of U.S. users and exporters of upland cotton cotton gets too high compared to whenever the 4-week price of U.S. world cotton price (i.e., 1.25¢/lb cotton is too high or not high higher), or is not high enough enough (i.e., when the U.S. price compared to the U.S. cotton loan (1) exceeds the world price by rate (i.e., less than 130% higher). 1.25¢/lb, or (2) does not exceed the [Section 136(a)] U.S. cotton loan rate by at least 134%). [Section 127(a)] 2.) Import Quotas. A special import quota is imposed A special import quota is imposed Same as old law. [Section 121(b)] Same as House bill. [Section on upland cotton when U.S. prices on upland cotton when U.S. prices 1207(b)] exceed world prices by 1.25¢ for 10 exceed world prices by 1.25¢ for 4 weeks. [Section 136(b)] weeks. [Section 127(b)] A limited global import quota is Same as old law. [Section 127(b)] Same as old law. [Section 121(b)] Same as old law, and House and imposed on upland cotton when Senate bills. [Section 1207(c)] U.S. prices average 130% of the previous 3-year average of U.S. prices. [Section 136(c) ] J.) ELS C o t t on Competitiveness Provisions for Processors and Exporters. No provision. A special competitiveness program No provision. Same as House bill. Applies is created for ELS cotton with through July 31, 2008. [Section marketing certificates or cash 1208] payments to domestic users and CRS-19 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 exporters under market conditions like those that apply to upland cotton. [Section 128] K.) Peanuts. 1.) Poundage Quotas and Quota compensation. National poundage quota is set to Peanut quotas are terminated and Similar to House bill, but the Repeals all quota provisions, and reflect the projected domestic farmers are compensated $1,000/ton compensation is $1,100 (55¢/lb) adopts Senate quota demand for edible peanuts. The (50¢/lb) ($200/ton/year for 5 years). ($220/ton/yr for 5 years). [Section compensation level of $1,100 price of peanuts sold for domestic [Section 170] 152] (55¢/lb or $220 /ton/year for 5 edible consumption (quota peanuts) years). [Section 1309] is supported through nonrecourse loans at $610/ton (30.5¢/lb). The price of additional peanuts (nonquota peanuts, those exported or crushed for oil and meal) is supported at a competitive level (set by USDA at $132/ton, 6.6¢/lb, in 2001). [Section 155] 2.) Nonrecourse Loans / Marketing Assistance Loans. Nonrecourse loans are replaced by Same as House bill except that the Nonrecourse loans are replaced marketing assistance loans. Loans marketing assistance loan rate is set at by marketing assistance loans. are set at $350/ton (17.5¢/lb) $400/ton (20/lb). [Section 151] Loans are set at $355/ton available for all peanuts produced (17.75¢/lb) available for all CRS-20 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 without distinction of end use. peanuts produced without [Section 167] distinction of end use. [Section 1307] 3.) Fixed Payments, Counter-Cyclical Payments, and Marketing Assistance Loans. No provisions for fixed payments or Support for peanuts designed like Similar to House bill. [Section 151 as Adopts House peanut program for counter-cyclical payments. that for grains, cotton, and oilseeds. it establishes Section 158B in the FAIR designed like that for grains, Rules regarding eligibility, sign-up, Act] cotton, and oilseeds. Rules conservation and wetlands regarding eligibility, sign-up, compliance, planting flexibility, conservation and wetlands , base base acres, payment yields, etc., are acres, payment yields, etc., are similar to those that apply to grains, similar to those that apply to cotton, and oilseeds. [Sections 162, grains, cotton, and oilseeds. 165, 166] [Section 1302] Adopts unique conference provisions on compliance and planting flexibility. [Section 1305, 1306] The assignment of each farm's Same as House bill. [Section 151 as it Adopts House provision with acres and yield to cropland selected establishes Section 158B(b) in the revision specifying that by the producer is done on a one- FAIR Act] assignment must be done by time basis. [Section 162(b)] March 31, 2003, among other provisions. [Section 1302(b)] Fixed, decoupled annual payments Fixed, decoupled contract payments Fixed, decoupled annual CRS-21 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 at the rate of $36/ton (1.8¢/lb) are are the same as House bill. [Section payments at the rate of $36/ton made on 85% of each farms history 151 as it establishes Section 158C in (1.8¢/lb) are made on 85% of of peanut production. [Section 163] the FAIR Act] each farms history of peanut production. [Section 1303] Counter-cyclical deficiency Counter-cyclical deficiency payments Counter-cyclical deficiency payments against a $480/ton against a $520/ton (26¢/lb) target price payments are made when (24¢/lb) target price are made on are made on 85% of each farms history marketing year prices average 85% of each farm's history of of peanut production. [Section 151 as less than the target price of peanut production. [Section 164] it establishes Section 158D in the $495/ton (24.75¢/lb). Payments FAIR Act] are made on 85% of each farm's history of peanut production. Partial payments may be made in advance. [Section 1304] Marketing assistance loans (set at Marketing assistance loan rate set at Similar to House and Senate $350/ton (17.5¢/lb) available for all $400/ton (20¢/lb) available for all bills, except the marketing peanut production without peanut production without distinction assistance loan rate is set at distinction of end use. [Section of end use. [Section 151 as it $355/ton (17.75¢/lb) available 167] establishes Section 158G in the FAIR for all peanuts. [Section Act] 1307(b)] 4.) Payment Limits. Payments limits are not applicable Payments limits for peanuts are Payments received for support of Payments limits for peanuts are to peanuts. separate from other commodities. peanuts are subject to the same limits separate from other [Section 169] Fixed, decoupled as other crops. Peanuts are not treated commodities. Fixed, decoupled peanut payments are subject to a separately. For all crops, the peanut payments are subject to a limit of $50,000 per person, per combination of fixed, decoupled limit of $40,000 per person, per year. The limit on counter-cyclical payments and counter-cyclical year. The limit on counter- CRS-22 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 target price deficiency payments is payments is limited to $75,000 per cyclical target price deficiency $75,000, and the limit on marketing individual, per year. Marketing loan payments is $65,000, and the loan benefits is $150,000. [Section benefits are limited to $150,000. limit on marketing loan benefits 169] [Section 169] is $75,000. [Section 1603] L.) Sugar. 1.) Price Support Loans. Raw cane sugar and refined beet Same nonrecourse loan rates as old Same loan rates as old law. [Section Retains old rates for non- sugar are supported with law, 18¢/lb. raw cane, and 22.9¢/lb. 141(i)] Same in-process sugar loans recourse loans -18¢/lb. raw cane, nonrecourse loans at 18¢ and refined beet. [Section 151(a)] In- as House bill. [Section 141(e)] Same and 22.9¢/lb. refined beet. In- 22.9¢/lb respectively. [Section process sugar is newly eligible for authority to reduce loan rates as House process sugar is newly eligible 156(a) and (b)] The loan rates may loan at 80% of full loan rates. bill. [Section 141(a)] for loan at 80% of full loan rates. be reduced if negotiated reductions [Section 151(e)] Loan rates may be Loan rates may be reduced if in support are achieved for other reduced if competing nations competing nations sufficiently sugar countries. [Section ]156(c)] sufficiently reduce support. [Section reduce support. [Section A recourse loan program when the 151(c)] 1401(a) restates FAIR Act tariff rate quota on imports is less provisions, and adds new than 1.5 million short tons was subsection for in-process sugar eliminated by P.L. 106-387, Section loans] 836. 2.) No Net Cost Mandate. No provision mandating no net Loan program is to be operated at Same no cost policy as House bill. Loan program is to be operated cost. no net cost by avoiding forfeitures. [Section 141(f)] at no net cost by avoiding [Section 151(f)] forfeitures. [Section 1401(a) adds new subsection to FAIR Act] CRS-23 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 3.) Loan Forfeiture Penalty. A forfeiture penalty of 1¢ per pound Forfeiture penalty is retained by The loan forfeiture penalty is Same as Senate bill. Elimination on raw cane sugar (an equivalent preserving Section 156(g) of the eliminated. [Section 141(d)] of forfeiture penalty takes effect amount for beet sugar) is assessed FAIR Act. upon enactment. [Section on loan forfeitures. This effectively 1401(a) drops provision from reduces the level of support. FAIR Act] Change effectively [Section 156(g)] increases support level. 4.) Import Quotas. A global import quota of not less Same as old law. Same as House bill, except authorizes Maintains existing import quota than 1.256 million short tons is set USTR in consultation with USDA to system, and adopts Senate each year by USDA under authority reallocate any shortfall of one reallocation provision giving any of the Harmonized Tariff Schedule country's shipments to the other quota- shortfall of on country's of the United States. The quota is holding countries. [Section 144] shipments to the other quota- allocated among countries by U.S. holding countries. [Section Trade Representative. [HTSUS, 1403] chapter 17, additional U.S. note5. USTR announces a separate allocation for additional sugar entering from Mexico as agreed in the sugar side letter to NAFTA] 5.) Marketing Allotments. The authority to impose mandatory Sugar marketing allotments are Similar to House bill, but provision is Sugar marketing allotments are marketing allotments on domestic restored and are to be shared made for new cane processor entrants restored and are to be shared sugar production is suspended. between beet sugar and raw cane at (including mainland states not between beet sugar and raw cane CRS-24 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 [Section 171(a)(1)(E)] 54.35% and 45.65%. Allotments previously producing cane). [Section at 54.35% and 45.65%. are suspended when imports exceed 143] Allotments are suspended when 1.532 million short tons. [Section imports exceed 1.532 million 152] short tons. Adds authority for USDA to assign unused cane and beet sugar allotments first to sales of sugar in CCC inventory and then to imports under certain conditions. Makes allotment authority effective beginning October 1, 2002. [Section 1403] 6.) In-Kind Payments. No provision. CCC is authorized to make in-kind Same authority to make in-kind Authorizes CCC to make in-kind commodity payments from stored payments for reduced production as p a yments from stored inventories to processors in House bill. [Section 141(f)] inventories in exchange for exchange for reduced sugar reduced production as laid out in production. [Section 151(j)] House and Senate provisions. [Section 1401(a) adds new subsection to FAIR Act] 7.) Marketing Assessment. Processors must pay an assessment The assessment on all sugar Same as House bill. [Section 141(c)] Terminates the sugar marketings on all marketings of sugar to CCC marketings is eliminated. [Section assessment retroactive to equal to a specified percentage of 151(b)] October 1, 2001. [Section the loan rate. [Section 156(f)] P.L. 1401(b)] 106-78, Section 803(b), suspended CRS-25 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 the assessment for FY2000 and FY2001. P.L. 107-76, Section 749, delays remittance of 2002 assessments until September 2, 2002. 8.) Interest Rate on Loans. The interest rate on loans is 1% Interest rate on loans is equal to Same interest rate on loans as House Reduces interest rate on price above the CCC cost of borrowing CCC cost of funds. This is 1% less bill. [Section 141(j)] support loans to sugar processors money. [Section 163] than the interest rate for other by 1%, as in House and Senate commodities. [Section 151(h)] bills. [Section 1401(c)] 9.) Storage Facility Loans. No provisions for storage facility Storage facility construction and Same as House bill. [Section 142] Authorizes storage facility loans, loans. improvement loans are to be made as in House and Senate bills. available to processors. [Section [Section 1402] 153] M.) Dairy. 1.) Milk Price Support. The farm price of milk is indirectly Continues milk price support at Similar to House bill. Continues milk Same as House bill. [Section supported at $9.90/cwt. Support is $9.90/cwt. through purchases of price support at $9.90/cwt. through 1501] achieved through CCC purchases of dairy products, as under old law. purchases of dairy products. However, cheese, butter, and nonfat dry milk Also, as under old law, USDA is USDA is required to adjust purchase at specific prices. [Section 141] permitted to adjust purchase price price relationships between butter and CRS-26 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 Support was scheduled to end after relationships between butter and dry dry milk twice annually to minimize 1999. However, it was continued at milk twice annually to minimize expenditures.[Section 131] $9.90 thru 2000 by P.L. 106-78, expenditures. [Section 141] Section. 807; thru 2001 by P.L. 106-387, Section 742; and thru May 2002 by P.L. 107-76, section 772(a). USDA is permitted to adjust purchase price relationships between butter and dry milk twice annually to minimize expenditures. 2.) Processor Recourse Loans. Recourse loans for commercial House bill repeals processor Same as House bill. Same as House and Senate bills. processors are to be available recourse loans, but they are already beginning in 2001, immediately repealed by P.L. 107-76. after price support is scheduled to end. [Section 142] This was repealed by P.L. 107-76, section 772(b), before it could be implemented. 4.) Northeast Dairy Compact. The Northeast Dairy Compact is No provisions. No provision. Same as House bill. authorized, allowing six New England states to require processors to pay regulated minimum prices CRS-27 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 for Class I (fluid) milk (set by the states at $16.94 in 1997. The Compact authority expired on September 30, 2001. [Section 147] 5.) Dairy Market Loss Payments. P.L. 104-127 did not provide for No provisions. New counter-cyclical market loss Similar to Senate bill, except a market loss assistance. deficiency payments are made on up to single national target price of 8 million pounds of each farm's annual $16.94/cwt is established. Separately, ad hoc emergency production. The total expenditure Producers receive monthly market loss assistance of $200 limit for the life of the program deficiency payments equal to million was authorized for FY1999 (December 1, 2001, thru September 45% of the price difference on (P.L. 105-277), $125 million for 30, 2005) is $500 million for 12 up to 2.4 million pounds of FY2000, (P.L. 106-78), and $473 northeast states, and $1.5 billion for all production per year. The million for FY2001 (P.L. 106-387). other states. For the 12 northeast program is authorized from states, as an alternative to the expired December 1, 2001 through Northeast Dairy Compact, payments September 30, 2005. [Section are made when the monthly average 1502] farm price of Class I milk (fluid use milk) falls below the reference price (target price) of $16.94. The payment rate is equal to 45% of the market price deficiency. For all other states, payments are made when the quarterly average market price falls below the 5- year average for the same quarter. The payment rate is 40% of the deficiency. [Section 132] CRS-28 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 6.) Dairy Export Incentive Program. The Dairy Export Incentive Extends old law. [Section 143(a)] Same as House bill. [Section 133(a)] Same as old law, and House and Program (DEIP) is reauthorized. Senate bills. [Section 1503(a)] The program, first authorized by the 1985 farm bill, pays exporters cash or commodity bonuses to enable them to meet the prices of competitors subsidized sales and to develop new markets. [Section 148] 7.) Dairy Indemnity Program. The Dairy Indemnity Program Authorizes the Dairy Indemnity Same as House bill through September Same as old law, and House and expired September 30, 1995, and is Program through September 30, 30, 2006. [Section 133(b)] Senate bills except producer can not reauthorized by P.L. 104-127. 2011. [Section 143(b)] choose an advance of any However, appropriations made each amount "up to" 50% of the direct year keep the program operating. payment. Applicable through The program indemnifies farmers September 30, 2007. [Section and processors for contamination of 1503(b)] milk by pesticides and certain other toxics. CRS-29 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 8.) Fluid Milk Processor Promotion Program. The Fluid Milk Promotion is Authorizes the Fluid Milk Same as House bill, except that fluid Same as Senate bill. [Section extended thru December 31, 2002. Promotion program as a permanent milk delivered directly to consumer 1506] This research and promotion program, replaces the old statutory residences does not count toward the 3 program is funded by an assessment definition of fluid milk product with million pound minimum requirement on processors of more than 500,000 the definition promulgated in for the processor assessment. [Section pounds per month. USDA regulations, and applies the 134] assessment to processors of 3 million pounds per month or more. [Section 144] 9.) Dairy Product Mandatory Reporting. The Dairy Market Enhancement Makes a technical change in the Same as House bill with technical Same as Senate bill. [Section Act of 2000 (P.L. 106-532) definition of dairy products to changes to definition of manufactured 1504] established a mandatory reporting require milk manufacturers to dairy products. [Section 135] system on dairy product inventories include substantially identical and prices. products in their reports to USDA. [Section 145] 10.) Dairy Promotion and Research Assessment. For FY1997 thru FY2001, the Extends the assessment to imported Same as House bill. [Section 136] Same as House bill. [Section National Dairy Promotion and dairy products. Imports are given 2 1505] Research Board is authorized to seats on the Board. None of the spend funds to develop international importer funds may be used for markets and promote U.S. milk in export promotion. [Section 146] CRS-30 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 those markets. [Section 152] This broadened the activities of the Board, which is funded by a $0.15 per hundredweight assessment on all milk produced and marketed in the 48 states. 11.) Dairy Studies and Reports. The USDA is required to study and Requires USDA to prepare a Requires USDA to study and report no Adopts both House and Senate report on the impact on milk prices, comprehensive evaluation of later than September 30, 2002, on 1) provisions. [Section 1508] producer income, and federal national dairy policies (i.e., price the impacts of terminating all federal support program costs caused by supports, marketing orders, over- price support and supply management increased imports of cheese under order premiums and state pricing programs while enabling the states to WTO commitments. [Section 151] programs, dairy compacts, and manage milk prices and supply, and on export programs). [Section 147] 2) the impacts of changing the standard of identity for fluid milk to require a minimum content commensurate with the average protein content of farm milk. [Section 137] N.) Tobacco. 1.) Flue-cured Quota. No provisions. Same as old law. Reduces the reserve stock level for Similar to Senate, except the flue-cured in the quota determination reserve stock is 60 million CRS-31 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 formula from the greater of 100 pounds. [Section 1610] million pounds or 10% of the national marketing quota, to the greater of 75,000 pounds or 10%. [Section 162] 2.) Flue-cured Farm Reconstitutions. No provisions Same as old law. Allows, for the 2002 crop only, for Same as Senate bill. [Section special farm reconstitutions that 1611] otherwise would violate the prohibition on flue-cured lease and transfer of quota. Requires a study of the prohibition of flue-cured quota lease and transfer. [Section 163] O.) Specialty Crops. 1.) Mandatory CCC Purchases. No provisions of P.L. 104-127 No provision. Mandated specialty crop purchases The amount of Section 32 funds specifically authorize or mandate using CCC funds: $100 million in each that can be carried across fiscal support for specialty crops. of FY2002 and FY2003, $120 million years for use in emergency Subsequently, emergency ad hoc in FY2004, $140 million in FY2005, removals of surplus commodities assistance was mandated for and $170 million in FY2006. is increased from $300 million to specialty crops. P.L. 106-224, Mandated purchases of other $500 million. [Section 1602] Section 203(d), mandated the CCC unspecified commodities, at $30 spend $200 million for purchases million each year. [Section 166] Section 32 purchases of fruits, fruits and vegetables with low vegetables, and specialty crops prices in 1998 and 1999, including shall amount to not less than CRS-32 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 apples, black-eyed peas, cherries, $200 million each fiscal year. citrus, cranberries, onions, melons, [Section 10603] peaches, and potatoes. P.L. 106- 387, Section 811 and Section 816 mandated respectively $100 million in payments to apple growers and $20 million to cranberry growers to compensate for low prices. P.L. 107-25, Section 7(b), mandated the CCC to distribute $133.4 million to states for support of specialty crops. P.) Payment Limits. 1.) Fixed Payments, and Counter-Cyclical Payments. Fixed contract payments are subject Combined fixed, decoupled Fixed, decoupled commodity Fixed, decoupled payments for to a $40,000 per person, per year payments for grains, cotton, and payments combined with counter- grains and oilseeds limited to limit. [Section 115] oilseeds are limited to $50,000 per cyclical target price deficiency $40,000 per year per person. Matching market loss payments year per person. [Section 109] payments for grains, cotton, oilseeds Counter-cyclical payments adopted as emergency assistance Separately, fixed, decoupled and peanuts are subject to a $75,000 limited to $65,000. The same were not subject to payment limits, payments for peanuts are limited to per person, per year limit. [Section limits separately apply to with the practical result effectively $50,000. [Section 169] 169] peanuts. [Section 1603] being the potential doubling of the Counter-cyclical payments for contract payment limit to $80,000. grains, cotton, and oilseeds are subject to a $75,000 per person, per year limit. [Section 109] Separately, counter-cyclical payments for peanuts are limited to $75,000. [Section 169] CRS-33 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 2.) Marketing Loan Benefits. Marketing loan benefits (marketing Marketing loan benefits for grains, Marketing loan benefits for all Marketing loan benefits for loan gains and LDPs) for all crops cotton, and oilseeds combined are commodities (grains, cotton, oilseeds, covered crops (grains and combined are subject to a $75,000 subject to a $150,000 per person, dry peas, lentils, chickpeas, wool, oilseeds), lentils, dry peas, and per person, per year limit. [Section per year limit. [Section 183] honey, and peanuts) combined are small chickpeas limited to 115] The limit was raised to Separately, marketing loan benefits subject to $150,000 per individual, per $75,000. Peanuts, wool, mohair, $150,000 for crop years 1999, 2000, for peanuts are limited to $150,000. year limit. Included in this limit are and honey each have separate and 2001 by respectively P.L. 106- [Section 169] Separately, marketing loan gains, LDPs, loan marketing loan benefit limits of 78, sec. 813; P.L. 106-387, sec. marketing loan benefits for wool forfeiture gains, and commodity $75,000. [Section 1603] 837; and P.L. 107-25, sec. 10). and mohair are limited to $150,000. certificate gains. [Section 169] Exempt from payment limits are [Section 130(f)] Separately, marketing certificates sold to marketing loan benefits for honey farmers at the posted county price are limited to $150,000. [Section and used to pay off marketing 131(f)] assistance loans (authorized by P.L. 106-78, sec. 812). Also exempt for limits are gains from the forfeiture of commodities at loan maturity. 3.) Spouse Benefit and 3 Entity Rule. No change is made to existing Same as old law. A spouse allowance of an additional Same as old law and House bill. policy that allows a spouse to be $50,000 is created. The 3-entity rule is considered a separate person or replaced by applying the limits to allows one person to receive payments from all sources (the so- payments from 2 additional farms. called direct attribution rule.) [Section Either allowance doubles the limit 169] on payments. CRS-34 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 4.) Adjusted Gross Income Limit. No provision. Same as old law. A person with adjusted gross income Same as Senate bill. [Section in excess of $2.5 million is not eligible 1603] for payments (unless 75% or more of income is from farming, ranching, or forestry). [Section 169] 5.) Payment Limitation Commission. No provision. No provision. Creates a 1-year Commission on the Same as Senate bill. [Section Application of Payment Limitations 1605] for Agriculture to analyze and make recommendations on payment limits. [Sections 181-187] Q.) Livestock Assistance. No provision. No provision. Authorizes appropriations up $500 Authorizes appropriation of such million per year for FY2003-2008 for sums as necessary for livestock livestock assistance. [Section 168] assistance. [Section 10104] R.) Farm Income Estimates. No provision. No provision. Requires USDA to make farm income Same as Senate bill. [Section estimates for commercial producers 1615] separate from all farms. [Section 173] CRS-35 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 S.) CCC Commodity Operations. No provision. No provision. CCC is authorized to use private Same as Senate bill. [Section business to carry out commodity 1609] purchases and sales. [Section 174] T.) Implementing Regulations. Regulations to implement Title I Regulations to implement Title I No provision. Same as House bill. [Section shall be issued not later than 90 shall be issued not later than 90 1601(c)] (The 90 periods ends days after enactment (August 12, days after enactment. [Section on August 12, 2002). 2002). [Section 161(d)] 181(c)] U.) Counter-Cyclical Farm Savings Accounts. No provisions in current law. Same as old law. F a r m c o u n t e r - c yc l i c a l s a v i n g s Same as old law and House bill. accounts are authorized as a pilot program in 3 states. Farms with adjusted gross revenue from commodities of at least $50,000 would be able to contribute an unlimited amount into a savings account with limited matching federal contributions (up to $5,000 per fiscal year). Withdrawals are permitted when adjusted gross revenue is less than 90% of the previous 5-year average. [Section 114] CRS-36 PRIOR LAW/POLICY HOUSE BILL, SENATE SUBSTITUTE, NEW LAW (P.L. 104-127) (H.R. 2646) (S. 1731 AMENDED) (P.L. 107-171) COVERS 1996-2002 COVERS 2002-2011 COVERS 2002-2006 COVERS 2002-2007 V.) WTO Limits on Allowable Domestic Support. Under the Uruguay Round If USDA determines that total If USDA notifies Congress that Same as House bill, except the Agreement on Agriculture, the U.S. spending for commodity support support program spending will exceed USDA is instructed to make agreed to an annual limit of $19.1 will exceed the limits accepted by the allowed limits and that adjustments adjustments to ensure billion on spending for domestic the United States in the Uruguay will be made, all spending on the compliance. [Section 1601] trade-distorting subsidies. There is Round Agreement on Agriculture, designated programs will be suspended no similar limit in the law or adjustments may be made to reduce after 18 months unless Congress definition of trade distorting spending to the limits but not below disallows the adjustments. [Section subsidies. the allowable limits. [Section 164] 181(e)] CRS-37 Table 1. Fixed Payments: Comparison of Prior Law, New Law, House, and Senate Bills Fixed Payment Rates Prior Law P.L. 107-171 House Bill Senate Bill 2002 (2002-03/ (2002-11) (2002-06) Crop, unit 2004-07) Wheat, $/bu 0.46 0.52 0.53 0.45/0.225/0.113 Corn, $/bu 0.26 0.28 0.30 0.27/0.135/0.068 Grain Sorghum, $/bu 0.31 0.35 0.36 0.31-0.27/0.135/ 0.068 Barley, $/bu 0.19 0.24 0.25 0.20/0.10/0.05 Oats, $/bu 0.020 0.024 0.025 0.05/0.025/0.013 Upland Cotton, $/lb 0.0554 0.0667 0.0667 0.13/0.065/0.0325 Rice, $/cwt 2.05 2.35 2.35 2.45/1.225/0.6125 Soybeans, $/bu none 0.44 0.42 0.55/0.275/0.138 Minor Oilseeds, $/lb none 0.008 0.74 0.01/0.005/0.0025 Peanuts, $/ton none 36.00 36 all years, 36 ($/lb) (0.018) (0.018) (0.018) Source: Fixed, decoupled payments in old law (P.L. 104-127), conference report H. Rept. 107-424, H.R. 2646; and S. 1731. Payment bases differ between the bills. The conference report makes payments on 85% of the payment acres times the payment yield, and generally the yield is that established for 1995. H.R. 2646 use the same payment base as old law (85% of recent acreage and yield averages from the 1980s). S. 1731 makes payments on 100% of recent acreage and recent yield levels. CRS-38 Table 2. Counter-Cyclical Target Prices: Comparison of Prior Law, New Law, House Bill, and Senate Bill Target Prices Prior Law P.L. 107-171 House Bill Senate Bill (1995 Levels, (2002-03/ (2002-11) (2002-06) Not 2004-07) Applicable Crop, unit 1996-2002) Wheat, $/bu 4.00 3.86/3.92 4.04 3.4460 Corn, $/bu 2.75 2.60/2.63 2.78 2.3472 Grain Sorghum, $/bu 2.61 2.54/2.57 2.64 2.3472 Barley, $/bu 2.36 2.21/2.24 2.39 2.1973 Oats, $/bu 1.45 1.40/1.44 1.47 1.5480 Upland Cotton, $/lb 0.729 0.724/0.724 0.736 0.6739 Rice, $/cwt 10.71 10.50/10.50 10.82 9.2914 Soybeans, $/bu none 5.80/5.80 5.86 5.7431 Minor Oilseeds, $/lb none 0.098/0.101 10.36 0.1049 Peanuts, $/ton none 495/495 480 520 ($/lb) (24.75/24.75) (24) (26) Source: Target prices in old law (P.L. 104-127, conference report H. Rept. 107-424, H.R. 2646, and S. 1731. a Payment bases differ between the bills. The conference report makes payments on 85% of the payment acres times the payment yield, and generally the yield is that established for 1995. H.R. 2646 use the same payment base as old law (85% of recent acreage and yield averages from the 1980s). S. 1731 makes payments on 100% of recent acreage and recent yield levels. CRS-39 Table 3. Loan Rates: Comparison of Prior Law, New Law, House Bill, and Senate Bill Loan Rates Prior Law P.L. 107-171 House Bill Senate Bill 1996-02 a 2002-03/ 2002-11 2002-06 Crop, unit 2004-07 Wheat, $/bu 2.58 2.80/2.75 2.58 2.9960 Corn, $/bu 1.89 1.98/1.95 1.89 2.0772 Grain Sorghum, $/bu 1.69 1.98/1.95 1.89 2.0772 Barley, $/bu 1.71 1.88/1.85 1.65 1.9973 Oats, $/bu 1.14 1.35/1.33 1.21 1.4980 Upland Cotton, $/lb 0.5192 0.52/0.52 0.5192 0.5493 Rice, $/cwt 6.50 6.50/6.50 6.50 6.4914 Soybeans, $/bu 5.26 5.00/5.00 4.92 5.1931 Minor Oilseeds, $/lb 0.093 0.096/0.093 0.087 0.0949 Peanuts, $/ton 610 b 355 350 400 ( $/lb) (30.5) (17.75) (17.5) (20) Source: Loan rates in old law (P.L. 104-127), as adopted in conference report H. Rept. 107-424, H.R. 2646; and S. 1731. a Loan rates are maximum allowable levels. b Support level for quota peanuts, the support level for nonquota peanuts is $174/ton ($0.087/lb) CRS-40 Table 4. Loan/Purchase Rates for Other Commodities: Comparison of Prior Law, New Law, House Bill, and Senate Bill Loan/Purchase Rates Crop Prior Law P.L. 107-171 House Bill Senate Bill 2002 2002-03/04-07 2002-11 2002-06 ELS cotton, $/lb 0.7970 0.7977/0.7977 0.7965 0.7965 Wool, graded, $/lb 0.40 a 1.00/1.00 1.00 1.00 Wool, nongraded, $/lb na 0.40/0.40 0.40 0.40 Mohair $/lb 0.40 a 4.20/4.20 4.20 na b Honey, $/lb 0.65 c 0.60/0.60 0.60 0.60 Peas, dry, $/cwt na 6.33/6.22 na 6.78 Lentils, $/cwt na 11.94/11.72 na 12.79 Chickpeas, large, $/cwt na 7.56/7.43 na 17.44 Chickpeas, small, $/cwt na 7.56/7.43 na 8.10 Sugar, raw cane, $/lb 0.18 0.18/0.18 0.18 0.18 Sugar, beet, $/lb 0.229 0.229/0.18 0.229 0.229 Milk, $/cwt d 9.90 d 9.90/9.90 9.90 e 9.90 (target 16.94) d (target 16.94 and rolling average) f Tobacco, $/lb (adjusted (adjusted (adjusted (adjusted yearly) yearly) yearly) yearly) Flue-cured 1.656 1.656 1.656 1.656 Burley 1.835 1.835 1.835 1.835 Source: Loan/purchase rates for old law (P.L. 104-127) conference Report 107-424, H.R. 2646, and S. 1731. a Support for wool and mohair are provided by P.L. 107-25 (sec5) for the 2001 crop only. b The Senate bill excludes mohair in Section 123, but includes it in Section 171, but the claimed intent is to not provide loans for mohair. c Honey received emergency support in 2000 under P.L. 106-387(Section 812), but not subsequently. d The farm price of milk is supported at $9.90 through purchases of storable nonfat dry milk, butter, and cheese. e The support price is made permanent and a target price is established for 3.5 years. f S.1731 establishes a target price for milk in 12 northeastern states and a rolling average market price for all other states. CRS-41 Table 5. Commodity Program Cost Estimates Compared to Baseline Budget Authority (in millions of dollars) Baseline Budget Cost Estimate Above Baseline Commodity Support Programs Authority Conference Report House Bill Senate Bill 5 Years 10 Years 5 Years 10 Years 5 Years 10 Years 5 Years 10 Years Fixed, Decoupled Payments 19,741 39,481 3,676 9,947 6,435 12,866 9,491 2,731 Counter-Cyclical Payments na na 15,798 29,332 19,249 37,179 5,232 19,081 Marketing Assistance Loans 21,859 26,088 1,500 1,675 (3,419) (5,825) 10,772 18,321 Wool & Mohair na na 99 205 94 202 87 189 Honey (9) (9) 61 101 61 101 61 101 Milk 659 1,246 1,657 2,056 374 773 2,273 2,284 Sugar 229 900 154 430 (15) (18) 254 530 Peanuts (5) (5) 2,582 3,935 2,281 3,483 2,724 4,365 LDPs for Grazing na na 21 28 17 24 17 24 Dry Peas/Lentils/Chickpeas na na 58 116 na na 75 150 Hard White Wheat Incentive Payments na na 20 20 na na 40 40 Apple Market Loss Assistance na na 94 94 na na 100 100 Specialty Crop Purchases na na 56 106 na na 780 780 Step 2 Adjustment thru 7/31/03 na na 75 75 na na 36 36 Payment and Income Limits na na (114) (252) na na (454) (784) Other Programs na na 50 103 na na (925) (1,874) SUM TOTAL 42,474 67,701 25,787 47,971 25,077 48,785 30,563 46,074 Source: Baseline estimates are from Congressional Budget Office, April 9, 2001, calculations. Bill comparison data are categorized by CRS, based on primary data from Congressional Budget Office estimates. The 5-year time period is FY2002-2006, and the 10-year time period is FY2002-2011. Total spending for a commodity program is the sum of baseline budget authority plus the cost above baseline. na, not applicable because current law or the bill does not provide authority for the listed program. CRS-42 Table 6. 2002 Farm Bill, 6-Year Cost Estimates (budget authority in millions of dollars) April 2001 Baseline March 2002 Baseline Baseline New Spending Total Projected Baseline New Spending Total Projected Spending Spending Commodity Support 55,534 31,169 86,703 61,337 37,587 98,924 Conservation 11,583 9,198 20,781 12,075 9,198 21,273 Trade 1,566 532 2,098 1,572 532 2,104 Nutrition (1) 134,556 2,657 137,213 146,820 2,793 149,613 Rural Development 0 870 870 160 870 1,030 Research 240 520 760 240 520 760 Forestry 0 85 85 0 85 85 Energy 0 366 366 0 405 405 Other Provisions (2) 0 (336) (336) 0 (303) (303) Total, 6 years 203,479 45,061 248,540 222,204 51,687 273,891 Source: CRS compilation of Congressional Budget Office data. (1) Farm bill changes to nutrition spending include changes to food stamps, the emergency food assistance program, and child nutrition programs, as well as new spending for demonstration programs. Child nutrition programs are not included in baseline, since their reauthorization is not addressed by the farm bill. (2) "Other Provisions" in the farm bill primarily consist of savings associated with the federal crop insurance program. However, crop insurance is not included in the baseline, since the reauthorization of the program is not part of the farm bill. ------------------------------------------------------------------------------ For other versions of this document, see http://wikileaks.org/wiki/CRS-RL31524