Budget Issues That Shaped the 2014 Farm Bill

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R42484

Budget Issues That Shaped the 2014 Farm Bill

Summary

Congress returns to the “farm bill” about every five years to establish an omnibus policy for food

and agriculture. Deficit reduction influenced the Agricultural Act of 2014 (P.L. 113-79; 2014 farm

bill) throughout its legislative development. Related political dynamics sometimes forced

Congress to make difficult choices concerning how much total support to provide for agriculture

and nutrition, and how to allocate it among competing constituencies.

The farm bill authorizes programs in two spending categories: mandatory and discretionary.

Mandatory programs generally operate as entitlements; the farm bill pays for them using multiyear budget estimates when the law is enacted. Discretionary programs are authorized for their

scope, but are not funded in the farm bill; they are subject to appropriations. While both types of

programs are important, mandatory programs often dominate the farm bill debate.

At enactment of the 2014 farm bill, the Congressional Budget Office (CBO) estimated the total

cost of mandatory programs would be $489 billion over the next five years (FY2014-FY2018).

Four farm bill titles account for most of the mandatory spending. Of the projected net outlays

over five years, about 80% ($391 billion over five years) is for the Supplemental Nutrition

Assistance Program—SNAP, formerly food stamps. Farm commodity support and crop insurance

are expected to account for a combined 13% of mandatory program costs ($65 billion), with

another 6% of costs in USDA conservation programs ($28 billion). Programs in all other farm bill

titles are expected to account for about 1% of all mandatory expenditures.

In terms of change from the former farm bill, the budgetary impact of the 2014 farm bill is

measured relative to what the 2008 farm bill would have spent had it continued—that is, the CBO

baseline. The May 2013 CBO baseline projected that the mandatory programs of the 2008 farm

bill would have spent $973 billion over the next 10 years (FY2014-FY2023). This “baseline”

already had been reduced by $6.4 billion to reflect the effects of sequestration.

Compared to the baseline, the 2014 farm bill—at enactment—reduced projected spending and the

deficit by $16.6 billion (-1.7%) over the 10-year period FY2014-FY2023. Over the 5-year period

through FY2018, the enacted farm bill reduces projected spending by $5.3 billion (-1.1%). If the

baseline had not already been reduced by sequestration, the enacted 2014 farm bill could have

been credited for reducing spending by $23 billion over 10 years. But since sequestration already

had been factored into the baseline, the official score is the $16.6 billion 10-year reduction.

The net reduction is composed of some titles receiving more funding than in the past, while other

titles receive less. Titles with reductions provide budgetary offsets to pay for titles with increased

spending, and the rest of the savings go to deficit reduction. Budgetary savings totaling $26.3

billion are scored in the nutrition, farm commodity subsidies, and conservation titles. Additional

funding totaling $9.8 billion is provided for the crop insurance, research, bioenergy, horticulture,

rural development, trade, and forestry titles.

The enacted 2014 farm bill saves less (is projected to spend more) than either the House-passed

or Senate-passed proposals. Over 10 years, the House-passed proposal would have reduced

spending by $51.9 billion (-5.3%); the Senate-passed proposal would have reduced spending by

$17.9 billion (-1.8%).

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Budget Issues That Shaped the 2014 Farm Bill

Contents

The Agricultural Act of 2014: Budget in Brief ................................................................................ 1

Budget Background ......................................................................................................................... 3

Farm Bill Spending Is a Subset of Agricultural Appropriations ................................................ 3

What Is the CBO Baseline? ....................................................................................................... 5

CBO Baseline That Was Available to Write the 2014 Farm Bill ............................................... 6

Budget Sequestration ............................................................................................................... 12

Sequestration in FY2013 ................................................................................................... 12

Sequestration in the FY2014-FY2023 Baseline ................................................................ 13

The 2014 Farm Bill, and House and Senate Bills .......................................................................... 14

Baseline ................................................................................................................................... 15

Score (Change to Baseline) ..................................................................................................... 15

Observations About the 10-year Score Totals ................................................................... 23

Observations of the Year-by-Year Scores .......................................................................... 24

Net Projected Outlays (Baseline + Score) ............................................................................... 25

Additional Observations ................................................................................................................ 26

Shares of the Farm Bill Baseline ............................................................................................. 26

Farm Bill Programs Without Baseline ..................................................................................... 28

Possible Expiration and Reversion to Permanent Law ............................................................ 29

Perspective on Scores and Broad Deficit Reduction Proposals............................................... 30

Effect on Discretionary Spending............................................................................................ 30

Figures

Figure 1. Projected Outlays in the 2014 Farm Bill .......................................................................... 2

Figure 2. Agriculture Appropriations Relationship to Farm Bill Baseline ...................................... 3

Figure 3. Ten-Year Mandatory Baseline for 2008 Farm Bill Titles (May 2013) ............................. 8

Figure 4. Mandatory Baseline for 2008 Farm Bill Titles, by Year................................................... 9

Figure 5. Ten-Year Mandatory Baseline for Agricultural Programs (May 2013) .......................... 11

Figure 6. Ten-Year Scores of the 2014 Farm Bill, and House and Senate Bills ............................ 17

Figure 7. Score of the 2014 Farm Bill, by Title and Fiscal Year.................................................... 25

Figure 8. Projected Outlays under the Baseline, Proposals, and 2014 Farm Bill .......................... 26

Figure A-1. Score of the 2013 House Farm Bill H.R. 2642, by Title and Fiscal Year ................... 31

Figure B-1. Score of the 2013 Senate Farm Bill S. 954, by Title and Fiscal Year ......................... 37

Tables

Table 1. 2014 Farm Bill Budget: Baseline, Scores, and Projected Outlays by Title ........................ 2

Table 2. Mandatory Baseline for 2008 Farm Bill Programs (May 2013) ........................................ 9

Table 3. Impact of Sequestration on the May 2013 CBO Baseline for FY2014-FY2023 ............. 13

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Budget Issues That Shaped the 2014 Farm Bill

Table 4. Budget for the 2014 Farm Bill: Baseline, Scores, and Projected Outlays ....................... 17

Table 5. Score of Mandatory Programs in the Agricultural Act of 2014 ....................................... 18

Table 6. Shares of Projected Farm Bill Outlays, and Growth From 2008 to 2014 ........................ 28

Table A-1. Score of Mandatory Programs in the House-Passed 2013 Farm Bill (H.R.

2642, as combined with H.R. 3102) ........................................................................................... 32

Table B-1. Score of Mandatory Programs in the Senate-Passed 2013 Farm Bill (S. 954) ............ 38

Table C-1. Broad Deficit Reduction Proposals That Affect Farm Bill Programs .......................... 42

Appendixes

Appendix A. Score of the House Farm Bill (H.R. 2642, as combined with H.R. 3102) ............... 31

Appendix B. Score of the Senate Farm Bill (S. 954) ..................................................................... 37

Appendix C. Broad Deficit Reduction Proposals .......................................................................... 42

Contacts

Author Contact Information........................................................................................................... 43

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Budget Issues That Shaped the 2014 Farm Bill

The Agricultural Act of 2014: Budget in Brief

Deficit reduction influenced the Agricultural Act of 2014 (P.L. 113-79; 2014 farm bill) throughout

its legislative development. Questions about the availability of mandatory funding, trends over

time, and sequestration affected the suite of policies that were enacted. Congress returns to the

“farm bill” about every five years to establish an omnibus policy for food and agriculture.1

The farm bill authorizes programs in two spending categories: mandatory and discretionary.

Mandatory programs generally operate as entitlements; the farm bill pays for them using multiyear budget estimates when the law is enacted. Discretionary programs are authorized for their

scope, but are not funded in the farm bill; they are subject to appropriations. While both types of

programs are important, mandatory programs often dominate the farm bill debate.2

The 2014 farm bill was enacted on February 7, 2014. The previous farm bill, the 2008 farm bill,

expired in 2012 and was extended through 2013.3 The 2014 farm bill had been in development for

over two years, with committee bills originating in 2012 and passing the Senate (S. 3240), but not

reaching the House floor (H.R. 6083), in part because of budget concerns. In 2013, new bills were

introduced in the House (H.R. 1947) and passed in the Senate (S. 954). But the House rejected the

committee bill and—for the first time in 40 years—separated food stamps from the farm bill. Two

separate bills were passed—one for farm programs (H.R. 2642) and the other for the

Supplemental Nutrition Assistance Program (SNAP, formerly food stamps; H.R. 3102). The

House bills were recombined for conference with the Senate (H.R. 2642, H.Rept. 113-333).4

The range of deficit reduction proposals indicates the importance of the budget. Some broad

deficit reduction plans proposed reducing the farm bill by $10 billion to $179 billion. The

Agriculture committees’ reductions ranged from $17.8 billion over 10 years in the Senate bill, to

$51.9 billion in the recombined House bill. The enacted reduction was $16.6 billion over 10

years, but even this has been referred to, unofficially, as a $23 billion because of sequestration.5

At enactment of the 2014 farm bill, the Congressional Budget Office (CBO) estimated the total

cost of mandatory programs at $489 billion over the next five years (FY2014-FY2018). Four

farm bill titles account for most of the mandatory spending. Of the projected net outlays, about

80% ($391 billion over five years) is for SNAP. Farm commodity support and crop insurance are

expected to account for a combined 13% of mandatory program costs ($65 billion), with another

6% of costs in USDA conservation programs ($28 billion). Programs in all other farm bill titles

are expected to account for about 1% of all mandatory expenditures (Figure 1).

If the 2008 farm bill had continued, CBO estimated that mandatory outlays would have been

$494 billion for the five-year period. Compared to this baseline, the 2014 farm bill reduces

projected spending and the deficit by $5.3 billion (-1.1%) over five years. The net reduction is

composed of some titles receiving more funding, while other titles provide offsets (Table 1).

For more on the scope of a farm bill, see CRS Report RS22131, What Is the Farm Bill?

The budget issues discussed on this page will be explained in greater detail throughout this report.

For more on expiration and extension, see CRS Report R42442, Expiration and Extension of the 2008 Farm Bill.

For more on policy issues, see CRS Report R43076, The 2014 Farm Bill (P.L. 113-79): Summary and Side-by-Side.

For budget enforcement during the legislative process, deficit reduction was measured as the 10-year reduction in

spending compared to a baseline projection. This is separate from the fact that the farm bill is a 5-year authorization.

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Budget Issues That Shaped the 2014 Farm Bill

Figure 1. Projected Outlays in the 2014 Farm Bill

(five-year projected mandatory outlays FY2014-FY2018 in billions of dollars by title)

Source: CRS, using CBO’s 2014 farm bill cost estimates (http://www.cbo.gov/publication/45049).

Table 1. 2014 Farm Bill Budget: Baseline, Scores, and Projected Outlays by Title

(mandatory outlays in millions of dollars, five-year total FY2014-FY2018)

2014 Farm Bill Titles

CBO baseline (May

2013) FY2014-FY2018

CBO Score (change to

baseline) of P.L. 113-79

Projected Outlays

(Baseline + Score) of

P.L. 113-79

Commodities

29,888

-6,332

23,556

4.8%

Conservation

28,373

-208

28,165

5.8%

III

Trade

1,718

+64

1,782

0.4%

Nutrition

393,930

-3,280

390,650

79.9%

Credit

-1,011

-0.2%

Rural Dev.

+205

218

0.04%

VII

Research

111

+689

800

0.2%

VIII

Forestry

0.002%

Energy

+541

625

0.1%

Horticulture

536

+338

874

0.2%

Crop Ins.

39,592

+1,828

41,420

8.5%

XII

Misc. (NAP)

705

+839

1,544

0.3%

493,941

-5,310a

488,631a

100.0%

Total, Direct Spending

Source: CRS, using the CBO baseline and 2014 farm bill cost estimates (http://www.cbo.gov/publication/45049).

Including changes in revenues, the 5-year net impact on the deficit is an estimated change of -$5.361 billion.

On a 10-year basis, the score is -$16.608 billion, with 10-year projected outlays of $956.4 billion.

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Budget Issues That Shaped the 2014 Farm Bill

Budget Background

Farm Bill Spending Is a Subset of Agricultural Appropriations

Federal spending on agriculture can be divided several ways. Understanding budget terminology

and the methods of determining federal spending is important when analyzing farm bill spending.

The federal budget for agriculture-related programs is about $145 billion in FY2014; farm bill

programs are a subset of that amount. The total can be divided several ways using terms such as

mandatory and discretionary spending. Moreover, some parts of the annual Agriculture

appropriation are not in the jurisdiction of one or both of the Agriculture authorizing committees

for the farm bill (Figure 2).

Figure 2. Agriculture Appropriations Relationship to Farm Bill Baseline

(appropriated annual budget authority in billions of dollars)

Source: CRS, based on amounts in the FY2014 Consolidated Appropriations Act, P.L. 113-76.

Notes: The graph is based on appropriations committee jurisdiction. It excludes the Commodity Futures

Trading Commission, USDA administration, and general provisions. Authorizing committee jurisdiction is with

House and Senate Agriculture committees, except for child nutrition and WIC (House Education and

Workforce; Senate Agriculture), and FDA (House Commerce; Senate Health, Education, Labor & Pensions).

SNAP = Supplemental Nutrition Assistance Program; CCC = Commodity Credit Corp.; WIC = Special

Supplemental Nutrition Program for Women, Infants, and Children; CSFP = Commodity Supplemental Food

Program; FDA = Food and Drug Admin.; FSA = Farm Service Agency; RMA = Risk Management Agency; FSIS =

Food Safety Inspection Service; APHIS = Animal and Plant Health Inspection Service.

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Budget Issues That Shaped the 2014 Farm Bill

Of the $145 billion total FY2014 Agriculture appropriation (P.L. 113-76),

•

about $125 billion was for mandatory programs (entitlements that are authorized

both inside and outside the farm bill),

•

of which about $106 billion was for mandatory programs that are authorized

in the farm bill, and

•

$19 billion was for child nutrition programs that are authorized outside the

farm bill and not in the jurisdiction of the House Agriculture Committee,

and $21 billion was for discretionary programs (partially authorized in the farm

bill).

Discretionary spending (the green pie slice and stacked column in Figure 2) is controlled by

annual appropriations acts and is under the jurisdiction of the House and Senate Appropriations

Committees. The farm bill may authorize discretionary appropriations, but the programs are not

funded until an appropriation is made. Most agency operations (salaries and expenses) are paid

for with discretionary funds. The primary discretionary programs are the Special Supplemental

Nutrition Program for Women, Infants, and Children (WIC) and the Commodity Supplemental

Food Program (CSFP); the Food and Drug Administration (FDA); agricultural research; most

rural development programs; the Food for Peace and other international food aid programs;

agricultural credit and administration of farm supports; meat and poultry inspection; certain

conservation programs; and food marketing, plant and animal health, and regulatory programs.

For mandatory spending (the salmon-colored slices in Figure 2), the Agriculture appropriation

carries the amounts, but does not pay for them or generally determine the amounts. Mandatory

spending is controlled by authorizing legislation and—for farm bill programs—is under the

jurisdiction of the House and Senate Agriculture Committees.6 The primary mandatory spending

categories carried in the Agriculture appropriations bill are the:

•

Supplemental Nutrition Assistance Program (SNAP, formerly called food

stamps)—designed primarily to increase the food purchasing power of eligible

low-income households to help them buy a nutritionally adequate low-cost diet;

•

Commodity Credit Corporation (CCC)—the funding mechanism for most

mandatory farm bill programs, including the farm commodity programs and

some conservation, trade, research, horticulture, bioenergy, and rural

development programs;

•

crop insurance—a risk management tool that offers subsidized premiums to

farmers and administrative payments and reinsurance to private insurance

companies;

•

some Section 32 programming—Section 32 is a separate account funded by

customs receipts and created to assist non-price-supported commodities; and

However, over time, as the Agriculture committees began providing mandatory funds in the farm bill to programs that

generally may have been considered discretionary, appropriators have argued that this reduces their oversight, and

sometimes have limited mandatory outlays using changes in mandatory program spending (CHIMPS). See CRS Report

R43110, Agriculture and Related Agencies: FY2014 and FY2013 (Post-Sequestration) Appropriations.

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Budget Issues That Shaped the 2014 Farm Bill

•

child nutrition programs—to fund meals, snacks, and milk for children (and, in

one program, some adults) in congregate, institutional settings. The account

includes funding for the National School Lunch Program, among other programs.

Differences over what is included in the Agriculture appropriations bill—as compared with the

farm bill—primarily can be attributed to certain nutrition programs and the Food and Drug

Administration.

•

The child nutrition programs and WIC, which are in Agriculture appropriations,

are not part of the farm bill because they are not in the jurisdiction of the House

Agriculture Committee (the Senate Agriculture Committee does have

jurisdiction).

•

The Food and Drug Administration (FDA), part of Agriculture appropriations, is

not in the jurisdiction of the House or Senate Agriculture Committees (House

Commerce Committee; and Senate Health, Education, Labor & Pensions

Committee).

•

The Commodity Futures Trading Commission is in the jurisdiction of both the

House and Senate Agriculture Committees, and the House Agriculture

Appropriations Subcommittee (but not the Senate Agriculture Appropriations

Subcommittee).

Allocating and determining mandatory spending is one of the primary purposes of the farm bill.

The farm bill “pays for” mandatory spending by creating the necessary budget authority, using

resources available under budget enforcement rules. The rest of this report focuses on mandatory

spending and its allocation during the legislative process.

What Is the CBO Baseline?

Funding to write new legislation (e.g., a new farm bill) is based on Congressional Budget Office

(CBO) baseline projections of the cost of current laws (e.g., existing farm bill programs) and

budgetary assumptions about whether programs will continue. These amounts are shown in the

CBO baseline projections for mandatory spending (what is available) and in the budget scores of

proposed bills (changes to the baseline). CBO develops the baseline and scores of bills under the

supervision of the House and Senate Budget Committees. This process sets the mandatory budget

for the farm bill.7

The CBO baseline is an estimate (projection) at a particular point in time of what future federal

spending on mandatory programs would be under current law. The 2014 farm bill was developed

throughout 2013, and passed in January 2014, using the CBO baseline projection from May

2013.8

CBO periodically re-estimates the baseline to incorporate changes in economic conditions. When

CBO updates the baseline (an update of a projection without any changes to law), the revision

does not trigger budget enforcement mechanisms that require an increase to be paid for or allow

savings to be claimed. Instead, the update shows how changing economic conditions affect

For more information, see CRS Report 98-560, Baselines and Scorekeeping in the Federal Budget Process.

The May 2013 CCC baseline is at http://cbo.gov/publication/44202; for SNAP, see http://cbo.gov/publication/44211.

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projected outlays under current law. That is, increases in projected costs from last year’s baseline

to this year’s re-estimate (e.g., because more people qualify for entitlements) do not require

offsets to pay for higher costs. Likewise, reductions in projected costs from last year’s baseline to

this year’s re-estimate (e.g., because less government intervention is needed) do not create

savings that can be used to pay for (offset) other programs.

The baseline serves as a benchmark or starting point for assessing changes from proposed

legislation. When new bills affect mandatory spending, the impact of a bill (or its “score”) is

measured as a difference from the baseline. Projected increases in costs above the baseline (that

is, a score greater than zero) may be subject to budget rules such as statutory or other types of

PAYGO.9 Reductions in cost below the baseline (that is, a score less than zero) provide savings

for deficit reduction or offsets that can be used to help pay for other provisions that have a cost.

From a budget perspective, programs with a continuing baseline are assumed to go on under

current law, and have their own funding available for reauthorization if policymakers want them

to continue. Normally, a program that receives mandatory funding in the last year of its

authorization will be assumed to continue at that level of funding into the future as if there were

no change in policy.10 This allows major farm bill provisions such as the farm commodity

programs or nutrition assistance to be reauthorized periodically without assuming that funding

will cease or following zero-based budgeting. However, some programs may not be assumed to

continue in the budget baseline beyond the end of a farm bill because11

•

the program did not receive new mandatory budget authority during the last year

of a farm bill, or

•

the baseline during the last year of a farm bill is below a minimum $50 million

scoring threshold that is needed to continue a baseline, or

•

the budget committees and agriculture committees did not give the program a

baseline in the years beyond the end of the farm bill—either to reduce the

program’s 10-year cost when the farm bill was written, or to prevent a continuing

baseline.12

CBO Baseline That Was Available to Write the 2014 Farm Bill

Budget enforcement rules use a 10-year period to measure the future effect of proposed

legislation. Therefore, regardless of the length of an authorization (e.g., that the farm bill usually

covers a 5-year period), the budget effects and baseline are discussed in 1-, 5-, and 10-year

increments for budget enforcement purposes.

PAYGO generally requires that direct spending and revenue legislation enacted into law not increase the deficit. It

does not address deficit increases that are projected to occur under existing law, nor does it apply to discretionary

spending. See CRS Report R41157, The Statutory Pay-As-You-Go Act of 2010: Summary and Legislative History.

The Balanced Budget and Emergency Deficit Control Act of 1985 (P.L. 99-177, 2 U.S.C. 907(b)(2)), as amended,

specifies that expiring mandatory spending programs are assumed to continue in the budget baseline if they have

outlays of more than $50 million in the current year and were created before the Balanced Budget Act of 1997.

For more, see a later section and CRS Report R41433, Expiring Farm Bill Programs Without a Budget Baseline.

Programs established after the Balanced Budget Act of 1997 are not automatically assumed to continue, and are

assessed program by program in consultation with the House and Senate Budget Committee (2 U.S.C. 907(b)(2)(A)(i)).

See also CBO, The Budget and Economic Outlook, p. 22, at http://cbo.gov/sites/default/files/cbofiles/attachments/

43907-BudgetOutlook.pdf.

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Budget Issues That Shaped the 2014 Farm Bill

The May 2013 CBO baseline for mandatory farm bill programs was $973 billion for the 10-year

period FY2014-FY2023 (Figure 3).13 This may be considered the amount that was available to

write the 2014 farm bill. This baseline already reflected a reduction of $6.4 billion over the 10year baseline because of the effects of sequestration (discussed later in this section).

Of the total amount, most of the $973 billion post-sequestration baseline was for domestic

nutrition assistance programs ($764 billion, or 79%), primarily the Supplemental Nutrition

Assistance Program (SNAP).14 The rest, about $208 billion, was divided among various

agriculture-related programs, primarily crop insurance ($84 billion, or 8.6%), farm commodity

price and income supports ($59 billion, or 6.0%), and conservation ($62 billion, or 6.3%). Less

than 1% of the baseline was for mandatory spending on international trade ($3.4 billion),

horticulture programs ($1.1 billion), and the miscellaneous title ($1.4 billion for the Noninsured

Assistance Program, NAP).

The baseline showed that the 2008 farm bill’s programs, if they were to continue, were expected

to spend about $100 billion per year through FY2016, and then decline through the rest of the

baseline period to about $95 billion per year in 2023. The nutrition portion was expected to

decline, while conservation and crop insurance outlays were expected to increase (Figure 4).

Table 2 lists the baseline totals shown in Figure 3 and Figure 4, and the amounts for individual

programs that had baseline within each title. The table provides data for each year FY2014FY2018, the 5-year total (FY2014-FY2018), and the 10-year total (FY2014-FY2023).

Table 2 also shows an alternative total that is slightly smaller. Some programs had baseline for

expected outlays that remained from the 2008 farm bill, but were not considered to have funding

available for reauthorization beyond the end of the 2008 farm bill. These include the Wetlands

Reserve Program, Grasslands Reserve Program, Biomass Crop Assistance Program and other

bioenergy programs, Rural Microenterprise Assistance Program, and organic and specialty crops

research. Without these programs, the 10-year baseline for “continuing” farm bill programs was

$949 million smaller. The alternative 10-year total was thus $972 billion, and the alternative total

for the non-nutrition agricultural programs still rounded to $208 billion.

Figure 5 shows the baselines for the individual programs comprising the $208 billion 10-year

subtotal of the non-nutrition programs (all of the programs except SNAP). The colors assigned to

the programs are consistent with the colors of the titles in earlier figures, and show which

programs in each title have the most baseline.

In the farm commodity programs, “direct payments” were the primary program with a mandatory

funding baseline. Direct payments had become vulnerable politically in a high farm-income

environment because they were made regardless of market price and farm income conditions.15

The other farm commodity programs that make “counter-cyclical payments” did not have much

baseline in May 2013 because high market prices for farm commodities had reduced payments.

CBO, “May 2013 Baseline for the 2008 Farm Bill Programs and Provisions, by Title,” unpublished, May 2013. See

also “Updated Budget Projections: Fiscal Years 2013 to 2023,” May 14, 2013, at http://cbo.gov/publication/44172.

The farm bill baseline includes SNAP but not child nutrition programs (e.g., school lunch) due to jurisdictional

differences (see earlier discussion of Figure 2).

For background, see CRS Report R42759, Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642.

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The crop insurance baseline was larger than for the farm commodity programs, and considered by

most farmers and policymakers to be the most important remaining component of the farm

“safety net.” Premium subsidies to farmers were the largest component, but reimbursements to

insurance companies for delivery expenses and underwriting gains were not insignificant.

Figure 3.Ten-Year Mandatory Baseline for 2008 Farm Bill Titles (May 2013)

(10-year expected outlays FY2014-FY2023 in billions of dollars by farm bill title)

Source: CRS, using the May 2013 CBO baseline.

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Figure 4. Mandatory Baseline for 2008 Farm Bill Titles, by Year

(annual expected outlays in billions of dollars by farm bill title)

Source: CRS, using the May 2013 CBO baseline.

Table 2. Mandatory Baseline for 2008 Farm Bill Programs (May 2013)

(expected outlays in millions of dollars)

5- and 10-year totals

FY2014

FY2015

FY2016

FY2017

FY2018

FY2014FY2018

FY2014FY2023

5,309

6,184

6,628

6,001

5,766

29,888

58,765

4,538

22,692

45,384

Counter-cyclical, ACRE, Marketing loans

170

1,142

1,548

979

755

4,594

8,414

MILC and other dairy assistance

161

284

Economic assistance to cotton mills

237

473

WTO Settlement with Brazila

147

Interest and operating expenses

130

144

143

552

1,259

Other

329

331

328

259

257

1,504

2,805

Conservation

5,203

5,412

5,660

5,895

6,203

28,373

61,567

Conservation Reserve Program

2,174

2,207

2,291

2,258

2,314

11,244

23,350

Conservation Security/Stewardship Prog.

1,057

1,333

1,523

1,760

1,978

7,651

18,906

Environmental Quality Incentives Prog.

1,233

1,365

1,474

1,524

1,565

7,161

15,240

Farmland Protection Program

147

148

147

148

150

740

1,490

Wildlife Habitat Incentives Program

360

754

Farm Bill Titles and Programsa

Commodity Programs (CCC)

Direct payments

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Budget Issues That Shaped the 2014 Farm Bill

5- and 10-year totals

FY2014

FY2015

FY2016

FY2017

FY2018

FY2014FY2018

FY2014FY2023

Wetlands Reserve Programa

370

145

537

Agricultural Water Enhancement Prog.

288

568

Chesapeake Bay Watershed Program

240

475

Agricultural Management Assistance

106

Grassland Reserve Programa

112

Emergency Forestry Conserv. Reserve

344

1,718

3,435

Market Access Program (MAP)

200

1,000

2,000

Export donations ocean transportation

100

500

1,000

Foreign market development cooperator

173

345

Specialty crop technical assistance

80,020

79,457

79,481

78,204

76,767

393,930

764,432

-178

-197

-205

-211

-220

-1,011

-2,240

111

243

Feedstock Flexibility Program

228

Other (expiring programs, incl. BCAP)a

Horticulture and Organic Agriculture

116

105

536

1,061

Specialty Crop Block Grants

275

550

Plant Pest & Disease Management

250

500

Farmers Markets; Clean Plant Networka

6,380

8,325

8,227

8,276

8,386

39,592

84,105

Premium Subsidy

4,477

5,830

5,770

5,819

5,919

27,815

59,545

Delivery Expenses

1,047

1,380

1,354

1,343

1,335

6,459

13,175

Underwriting Gains

856

1,115

1,103

1,113

1,132

5,318

11,384

141

705

1,410

141

705

1,410

97,447

99,797

100,402

98,776

97,519

493,941

972,905

Nutrition

80,020

79,457

79,481

78,204

76,767

393,930

764,432

Non-nutrition

17,427

20,340

20,920

20,573

20,752

100,011

208,473

Farm Bill Titles and Programsa

III

Trade (CCC)

Nutrition (SNAP)b

Creditc

Rural Development

Rural Microenterprise Assistance Prog.a

VII

Research and Related Matters

Organic; Specialty Crop; Beg. Farmersa

VIII

Forestry

Healthy Forest Reserve Programa

XII

Energy

Crop Insurance

Miscellaneous

Noninsured Crop Assistance Program

Total—Farm Bill Baseline

Congressional Research Service

Budget Issues That Shaped the 2014 Farm Bill

5- and 10-year totals

FY2014

FY2015

FY2016

FY2017

FY2018

FY2014FY2018

FY2014FY2023

-670

-186

-35

-10

-8

-909

-949

Remainder for all continuing programs

96,777

99,611

100,367

98,766

97,511

493,032

971,956

Remainder for non-nutrition programs

16,757

20,154

20,885

20,563

20,744

99,102

207,524

Farm Bill Titles and Programsa

Alternate total

Minus baseline of programs not continuinga

Source: CRS, using the May 2013 CBO baseline.

Some programs have outlays listed during the baseline period but were not considered to have funding

(budget authority) to continue beyond the end of the 2008 farm bill. Other programs and titles in the 2008

farm bill are not listed because they did not have future budget baseline, even though they received

mandatory funding in FY2008-FY2012. These are discussed in CRS Report R41433, Expiring Farm Bill

Programs Without a Budget Baseline.

The nutrition title of the farm bill includes only the Supplemental Nutrition Assistance Program (SNAP) and

related programs, given joint jurisdiction between the House and Senate Agriculture committees. Child

nutrition programs, while in the jurisdiction of the Senate Agriculture Committee, are not in the jurisdiction

of the House Agriculture Committee. Child nutrition programs, if included, would have added $246 billion

of baseline over 10 years (http://cbo.gov/publication/44186).

The credit title had negative outlays that reflected receipts into the Farm Credit System Insurance Fund.

Figure 5.Ten-Year Mandatory Baseline for Agricultural Programs (May 2013)

(expected outlays over FY2013-FY2022 in billions of dollars for programs in a subset of farm bill titles)

Source: CRS, using the May 2013 CBO baseline.

Notes: MILC = Milk Income Loss Contract Program; CRP=Conservation Reserve Program; CSP =

Conservation Security/Stewardship Program; EQIP = Environmental Quality Incentives Program; FPP = Farmland

Protection Program; WHIP = Wildlife Habitat Incentive Program; WRP = Wetlands Reserve Program; AWEP =

Congressional Research Service

Budget Issues That Shaped the 2014 Farm Bill

Agricultural Water Enhancement Program; MAP=Market Access Program; NAP = Noninsured Crop Assistance

Program. Includes baseline for expiring programs (*) that do not have baseline to continue, as noted in Table 2.

Total estimated costs of the conservation programs were about as large as estimated farm

commodity spending. The largest three conservation programs had 93% of total conservation

baseline (the Conservation Reserve Program, the Conservation Security Program, and the

Environmental Quality Incentives Program).

Two other farm bill titles had more than $1 billion in 10-year baseline. The trade title had $3.4

billion, mostly in the Market Access Program (MAP). The horticulture and organic agriculture

title had $1.1 billion of 10-year baseline, with half in specialty crop block grants, and half for pest

and disease prevention. The miscellaneous title had $1.4 billion of continuing 10-year baseline

for the Noninsured Assistance Program (NAP). The energy title had $0.2 billion of 10-year

baseline for continuing programs, specifically the Feedstock Flexibility program to convert sugar

to ethanol. The forestry, research, and rural development titles were combined under “Other” in

the figure and did not have programs with continuing baseline. The credit title is not shown

because it had a negative baseline, reflecting receipts into a Farm Credit System insurance fund.

Budget Sequestration

Sequestration is a process of automatic, largely across-the-board spending reductions under which

budgetary resources are permanently canceled to enforce statutory budget goals. The current

requirement for sequestration was included in the Budget Control Act of 2011 (BCA; P.L. 11225).16 Many of these rules are based on the Balanced Budget and Emergency Deficit Control Act

of 1985, as amended (Title II of P.L. 99-177, also known as the Gramm-Rudman-Hollings Act).

Some farm bill programs are exempt from sequestration.17 The nutrition programs and the

Conservation Reserve Program are exempt from sequestration.18 Other programs, including prior

legal obligations in crop insurance and some of the farm commodity programs,19 may be exempt,

as determined by the Office of Management and Budget (OMB). However, many agricultural

programs are subject to budget sequestration, if it is imposed, as illustrated below.

Sequestration in FY2013

Given the failure of the Joint Select Committee on Deficit Reduction to propose budget

reductions by January 2012 and in the absence of a “grand bargain” for deficit reduction,20 OMB

See CRS Report R41965, The Budget Control Act of 2011.

See CRS Report R42050, Budget “Sequestration” and Selected Program Exemptions and Special Rules.

2 U.S.C. 905 (g)(1)(A).

2 U.S.C. 906 (j).

See CRS Report R42972, Sequestration as a Budget Enforcement Process: Frequently Asked Questions, and CRS

Report R42884, The “Fiscal Cliff” and the American Taxpayer Relief Act of 2012.

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Budget Issues That Shaped the 2014 Farm Bill

ordered budget sequestration on March 1, 2013.21 The sequestration rate for FY2013 was 5.0%

from non-defense discretionary spending and 5.1% from non-defense mandatory programs.22

The March 1, 2013, OMB report indicated that about $1.9 billion was sequestered in FY2013

from accounts in Agriculture and related agencies appropriations—$1.2 billion from discretionary

accounts and $700 million from mandatory accounts. Nearly all of the $23 billion of discretionary

agriculture budget authority was subject to sequestration. About $14 billion of the mandatory

budget was sequesterable. This latter amount was a fraction of the $100 billion total mandatory

amount since most of SNAP and child nutrition were exempt, and OMB exempted most of crop

insurance. User-fee funded accounts and trust funds were subject to sequestration.

Sequestration in the FY2014-FY2023 Baseline

The May 2013 CBO baseline for farm bill programs incorporates a sequestration effect beyond

FY2013 (Table 3). As discussed before, the rules for constructing a baseline allow for

continuation of program funding in the baseline at the funding level in the last year of

authorization.23 Because sequestration reduced the budget authority for several farm bill

programs, and that reduction happened to be during the last year of their authorization, the

sequestration reduction had the consequence, via budget rules, of a multiple year effect on the

baseline.24

Table 3. Impact of Sequestration on the May 2013 CBO Baseline for FY2014-FY2023

(millions of dollars)

5- and 10-year totals

Fiscal year

2014

2015

2016

2017

2018

2014-18

2014-23

Title I - Commodity Programs

Direct Payments

-408

-2,040

-4,080

Conservation Stewardship Program

-84

-73

-420

-750

Environmental Quality Incentives Program

-46

-65

-81

-95

-108

-412

-1,046

Wetlands Reserve Program

-19

-9

-2

-42

Farm and Ranchland Protection Program

-5

-10

-12

-13

-15

-55

-130

Title II - Conservation

White House, “Sequestration Order for Fiscal Year 2013,” March 1, 2013, at http://www.whitehouse.gov/sites/

default/files/2013sequestration-order-rel.pdf. The trigger and timing for sequestration was based on Section 302 of the

BCA (P.L. 112-25) and a two-month extension in the American Taxpayer Relief Act of 2012 (P.L. 112-240).

OMB, Report to the Congress on the Joint Committee Sequestration for Fiscal Year 2013, March 1, 2013, at

http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/fy13ombjcsequestrationreport.pdf.

The Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 907(b)(2)(D)), as amended, specifies

that expiring mandatory spending programs are assumed to continue as in effect immediately before expiration.

This multi-year effect from a one-year reduction is the same reason that the FY2012 appropriations act extended the

program authority for several conservation programs when it reduced their program authority (by CHIMPS, i.e.,

changes in mandatory program spending) in what was then the last year of the 2008 farm bill. In that case, however, the

appropriations action to extend the authorization avoided the multi-year effect on the baseline because the FY2012

CHIMP was not in the last year of the program’s authorization. See CRS Report R41964, Agriculture and Related

Agencies: FY2012 Appropriations.

Congressional Research Service

Budget Issues That Shaped the 2014 Farm Bill

5- and 10-year totals

Fiscal year

2014

2015

2016

2017

2018

2014-18

2014-23

Grassland Reserve Program

-1

-4

Agricultural Water Enhancement Program

-3

-4

-19

-39

Cheasapeake Bay Watershed Program

-2

-3

-2

-3

-13

-28

Agricultural Management Assistance

-1

Wildlife Habitat Incentives Program

-2

-3

-4

-6

-18

-48

-163

-166

-179

-191

-209

-984

-2,088

Market Access Program

-10

-60

-110

Foreign Market Development Program

-2

-12

-22

Food for Progress Act

-2

-12

-22

Emerging Markets Program

-1

-6

-11

Technical Assistance for Specialty Crops

-2

-4

-15

-92

-169

Specialty Crop Block Grants

-3

-16

-31

Total Changes in Direct Spending

-589

-592

-605

-617

-635

-3,130

-6,364

Subtotal, Title II

Title III - Trade

Subtotal, Title III

Title X - Horticulture

Source: CBO baseline estimate, reported with the scores of the 2013 farm bill for the Senate bill (http://cbo.

gov/publication/44175, May 13, 2013) and the House bill (http://cbo.gov/publication/44177, May 13, 2013).

The May 2013 baseline (Table 2) is $6.4 billion less over FY2014-FY2023 than it would have

been without sequestration.25 Table 3 shows how the sequestration reduction was allocated across

years, titles, and programs in determining the farm bill baseline.

The agriculture committees had less mandatory baseline available to write the 2014 farm bill

because sequestration had already taken effect. This multi-year reduction to the farm bill baseline

did occur and would have remained in effect even if no 2014 farm bill were enacted.

Observers who assert that the deficit reduction achieved by the enacted 2014 farm bill was greater

than the official CBO scores (as discussed in the next section) essentially are trying to use a

different baseline—a baseline that did not exist. Therefore, the official scores of the 2014 farm

bill are the CBO scores as discussed below.

The 2014 Farm Bill, and House and Senate Bills

The 2014 farm bill was in development for over two years and was debated in both the 112th and

113th Congresses. In 2012, the Senate and House Agriculture Committees each reported a bill.

The effect of sequestration on the baseline is explained in the initial CBO estimates of the farm bill drafts prior to

markup for the Senate farm bill (p. 2 and Table 4, at http://cbo.gov/publication/44175, May 13, 2013) and the House

bill (p. 2 and Table 4, at http://cbo.gov/publication/44177, May 13, 2013).

Congressional Research Service

Budget Issues That Shaped the 2014 Farm Bill

The Senate passed S. 3240 and the House Agriculture Committee reported H.R. 6083, but House

floor action never occurred, resulting in a one-year extension of the 2008 farm bill (P.L. 112-240).

In 2013, new Agriculture committee bills were introduced in the House (H.R. 1947) and passed in

the Senate (S. 954). But the House rejected the initial committee bill and—for the first time in 40

years—separated food stamps from the farm bill. Two separate bills were passed in the House:

one for farm programs (H.R. 2642) and the other for the Supplemental Nutrition Assistance

Program (SNAP, formerly food stamps; H.R. 3102). The two House bills were recombined for

conference with the Senate and final enactment (H.R. 2642, H.Rept. 113-333).26

Because of the focus on deficit reduction and the connection to budget enforcement, the most

commonly cited budgetary amounts during the farm bill debate were the 10-year totals for the

baseline and scores. These 10-year amounts are highlighted throughout this section, but 5-year

amounts for the FY2014-FY2018 authorization period are discussed in Figure 1 and Table 1.

Baseline

As discussed earlier, the budgetary impact of the 2014 farm bill is measured relative to what the

2008 farm bill would have spent—that is, the CBO baseline. The May 2013 CBO baseline

projected that the mandatory programs of the 2008 farm bill, if it were continued, would have

spent $973 billion over the next 10 years (FY2014-FY2023). This consisted of $764 billion for

nutrition programs, primarily the Supplemental Nutrition Assistance Program (SNAP), and $208

billion for non-nutrition agriculture-related programs. This “baseline” already had been reduced

by $6.4 billion to reflect the effects of sequestration over the 10-year baseline, all of which has

come from the agriculture-related portion since SNAP is generally exempt from sequestration.

Score (Change to Baseline)

Compared to the $973 billion post-sequestration baseline, the 2014 farm bill—at enactment—

reduced projected spending and the deficit by $16.6 billion (-1.7%) over the 10 year period

FY2014-FY2023.27 Over the 5-year period through FY2018, the enacted farm bill reduced

projected spending by $5.3 billion (-1.1%).

The enacted 2014 farm bill saves less than either the House-passed or Senate-passed proposals.

The House-passed combination of H.R. 2642 and H.R. 3102 together would have reduced

spending by $51.9 billion (-5.3%) over 10 years.28 The Senate-passed farm bill proposal (S. 954)

would have reduced spending by $17.9 billion (-1.8%) over 10 years.29

For more on policy issues, see CRS Report R43076, The 2014 Farm Bill (P.L. 113-79): Summary and Side-by-Side.

CBO cost estimate of the conference agreement on H.R. 2642 (http://www.cbo.gov/publication/45049, Jan. 28,

2014).

CBO cost estimates of H.R. 2642 as introduced (http://cbo.gov/publication/44414, July 11, 2013), and H.R. 3102 as

introduced (http://cbo.gov/publication/44583, Sept. 16, 2013). The earlier House Agriculture committee-reported bill,

H.R. 1947, which failed on the House floor, would have reduced spending by $33.4 billion over 10 years, with $20.5

billion from nutrition (CBO cost estimate of H.R. 1947 as reported, http://cbo.gov/publication/44271, May 23, 2013).

CBO cost estimate of S. 954 as reported (http://cbo.gov/publication/44248, May 17, 2013).

Congressional Research Service

Budget Issues That Shaped the 2014 Farm Bill

If the baseline had not already been reduced by sequestration, the enacted 2014 farm bill could

have been credited for reducing spending by $23 billion over 10 years. Similarly, the savings

from each of the House and Senate proposals could have been $6.4 billion greater. But

sequestration had already been factored into the baseline, so the official score of P.L. 113-79

remains that it reduced the deficit by $16.6 billion over 10 years.

The net reduction is composed of some titles receiving more funding than in the past, while

others receive less. The latter provide budgetary offsets to pay for titles with increased spending,

and the rest of the savings go to deficit reduction. Budgetary savings are scored in the nutrition,

farm commodity subsidies, and conservation titles. Additional funding is provided for the crop

insurance, research, bioenergy, horticulture, rural development, trade, and forestry titles.

Figure 6 illustrates the 10-year budgetary impacts of changes to each title in the House and

Senate bills, and in the enacted law.

•

Under the combined House bills, seven titles would have received a combined

$10.7 billion increase, and three titles would have offered a combined budgetary

reduction of $62.5 billion. The net reduction would have been $51.8 billion over

10-years.

•

Under the Senate bill, seven titles would have received a combined $7.4 billion

increase, and four titles would have offered a combined budgetary reduction of

$25.2 billion. The net reduction would have been $17.8 billion over the 10-year

period.

•

Under the enacted law, the 2014 farm bill increases outlays for eight titles by a

combined $9.8 billion relative to their baselines, and three titles offer a combined

budgetary reduction of $26.3 billion. The net reduction is $16.5 billion over 10

years.

Table 4 contains the same data in tabular form and includes an estimate of the proposed outlays

(baseline plus score). Table 5 presents the more-detailed year-by-year scores of each provision in

the enacted law. The corresponding detailed scores for the proposed bill are available in

Appendix A (House) and Appendix B (Senate).

Congressional Research Service

Budget Issues That Shaped the 2014 Farm Bill

Figure 6.Ten-Year Scores of the 2014 Farm Bill, and House and Senate Bills

(change in outlays over FY2014-FY2023 in billions of dollars by farm bill title, relative to baseline)

Source: CRS, using CBO cost estimates available at http://www.cbo.gov/publication/45049.

Table 4. Budget for the 2014 Farm Bill: Baseline, Scores, and Projected Outlays

(outlays in millions of dollars, 10-year total FY2014-FY2023)

Projected Outlays (Baseline + Score)

CBO Score (change to baseline)

CBO

baseline

(May 2013)

House bill

H.R. 2642

Senate bill

S. 954

Conference

agreement

House bill

H.R. 2642

Senate bill

S. 954

Conference

agreement

Commodities

58,765

-18,701

-17,442

-14,307

40,064

41,323

44,458

Conservation

61,567

-4,827

-3,511

-3,967

56,740

58,056

57,600

Trade

3,435

+150

+139

3,585

3,574

Nutrition

764,432

-38,999

-3,944

-8,000

725,433

760,488

756,432

Credit

-2,240

Rural Development

+96

+228

109

241

Research

111

+760

+781

+1,145

871

892

1,256

Forestry

+10

Energy

243

+880

+879

243

1,123

1,122

Horticulture

1,061

+619

+304

+694

1,680

1,365

1,755

Crop Insurance

84,105

+8,914

+4,999

+5,722

93,019

89,104

89,827

Miscellaneous (incl. NAP)

1,410

+161

-294

+953

1,571

1,116

2,363

Total, Direct Spending

972,905

-51,822

-17,840

-16,504

921,083

955,066

956,401

+64

+54

+104

-51,886

-17,894

-16,608

2014 Farm Bill Titles

Change in Revenue

Net Impact on the Deficit

Source: CRS, using the CBO baseline and cost estimates (http://www.cbo.gov/publication/45049).

Congressional Research Service

Table 5. Score of Mandatory Programs in the Agricultural Act of 2014

(change in annual outlays in millions of dollars, relative to May 2013 CBO baseline)

5- and 10-year total

Fiscal year

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2014-18

2014-23

Title I - Commodity Programs

Repeal Direct Payments

-4,538

-18,153

-40,845

Repeal Countercyclical Payments

-117

-182

-190

-215

-217

-207

-197

-194

-489

-1,519

Repeal Average Crop Revenue Election

-1,336

-696

-462

-424

-413

-454

-429

-505

-2,494

-4,718

Price Loss Coverage

1,652

1,755

1,708

1,633

1,622

1,585

1,589

1,580

5,115

13,124

Agriculture Risk Coverage

2,115

2,327

2,086

1,628

1,396

1,557

1,416

1,583

6,528

14,108

Transition Payments for Upland Cotton

556

558

Nonrecourse Marketing Loans

Sugar Program

Dairy Program

-51

130

175

143

142

130

241

912

Supplemental Ag. Disaster Assistance

897

364

314

296

295

297

300

302

303

306

2,166

3,674

Implementation

120

Loan Implementation

230

1,073

-3,644

-1,826

-997

-939

-1,502

-1,636

-1,570

-1,671

-1,596

-6,332

-14,307

Conservation Reserve Program

-187

-350

-392

-462

-451

-468

-502

-565

-873

-3,321

Conservation Stewardship Program

-8

-58

-100

-149

-197

-253

-303

-352

-401

-451

-512

-2,272

Environmental Quality Incentives Program

-5

107

117

497

Agricultural Conservation Easement Program

131

229

270

202

117

852

1,231

Regional Conservation Partnership Program

-1

-3

-13

-28

Other Conservation Programs

199

102

449

454

Subtotal, Title I

Title II - Conservation

CRS-18

5- and 10-year total

Fiscal year

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2014-18

2014-23

Funding and Administration

Repeal of Wildlife Habitat Incentives Program

-17

-35

-44

-53

-61

-70

-79

-210

-596

Subtotal, Title II

227

178

-6

-218

-389

-603

-676

-741

-818

-921

-208

-3,967

139

Retail Food Stores

-5

-8

-37

-77

Food Dist. Program on Indian Reservations

Standard Utility Allowances

-90

-800

-940

-950

-960

-970

-990

-3,730

-8,550

Improved Wage Verification

-2

-8

-18

Pilot to Reduce Dependency/Increase Work

220

250

Review Cash Assistance in Puerto Rico

Assistance for Community Food Projects

Emergency Food Assistance

125

205

Retail Food Store and Recipient Trafficking

Commonwealth N. Mariana Islands Pilot

Food Insecurity Nutrition Incentive

100

Pilot Canned, Frozen, Dried Fruits & Veg.

-84

-678

-811

-828

-879

-916

-930

-945

-955

-974

-3,280

-8,000

Rural Microenterprise Program

Value-Added Marketing Grants

Rural Water and Waste Disposal

130

150

Title III - Trade

Title IV - Nutrition

Subtotal, Title IV

Title V - Credit

Title VI - Rural Development

CRS-19

5- and 10-year total

Fiscal year

2014

Subtotal, Title VI

2015

2016

2017

2018

2019

2020

2021

2022

2023

2014-18

2014-23

205

228

Organic Agriculture Research and Extension

100

Specialty Crop Research Initiative

332

745

Beginning Farmer and Rancher Development

100

Foundation for Food & Agriculture Research

200

Subtotal, Title VII

248

116

120

113

689

1,145

Biorefinery/Biobased Product Manufacturing

165

200

Repowering Assistance

Bioenergy Program for Advanced Biofuels

Rural Energy for America

185

435

Biomass Crop Assistance Program

125

Other

Subtotal, Title IX

134

145

137

102

541

879

Farmers Market and Local Food Promotion

150

Organic Agriculture and Technology Upgrade

Organic Product Promotion Order

Plant Pest and Disease Management

193

Specialty Crop Block Grants

101

270

Christmas Tree Promotion Order

Title VII - Research, Extension, and Related Matters

Title VIII - Forestry

Title IX - Energy

Title X - Horticulture

CRS-20

5- and 10-year total

Fiscal year

2014

Subtotal, Title X

2015

2016

2017

2018

2019

2020

2021

2022

2023

2014-18

2014-23

338

694

Supplemental Coverage Option

133

184

214

221

232

243

244

544

1,716

Crop Margin Coverage

Premium for Catastrophic Crop Insurance

-5

-44

-52

-53

-54

-55

-56

-153

-426

Enterprise Units Irrigated and Nonirrigated

188

533

Adjustment in Actual Producer History Yields

120

357

Crop Production Native Sod/Prairie Potholes

-1

-7

-11

-15

-16

-34

-114

Coverage Level by Practice

168

Beginning Farmer and Rancher Provisions

261

Stacked Income Protection for Cotton

325

308

386

409

439

451

468

466

1,054

3,288

Peanut Revenue Crop Insurance

119

Implementation

Crop Insurance Fraud

Research and Development Priorities

Crop Insurance for Organic Crops

Index-Based Weather Insurance

Participation Effects of Commodity Programs

-7

-72

-85

-76

-52

-42

-46

-42

-240

-464

Subtotal, Title XI

516

558

678

734

767

774

809

1,828

5,722

Sheep Production and Marketing Grant

Outreach Socially Disadvantaged Producers

108

159

226

Title XI - Crop Insurance

Title XII - Miscellaneous

Noninsured Crop Assistance Program

CRS-21

5- and 10-year total

Fiscal year

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2014-18

2014-23

Payments In Lieu of Taxes

410

Pima Cotton Trust Fund

Wool Apparel Manufacturers Trust Fund

100

125

Wool Research and Promotion

Oilheat Efficiency, Research and Jobs Training

570

839

953

Total Changes in Direct Spending

2,124

-3,697

-1,659

-1,005

-1,072

-1,925

-2,187

-2,238

-2,399

-2,446

-5,310

-16,504

Nutrition programs (Title IV)

-84

-678

-811

-828

-879

-916

-930

-945

-955

-974

-3,280

-8,000

2,208

-3,019

-848

-177

-193

-1,009

-1,257

-1,293

-1,444

-1,472

-2,030

-8,504

Title X—Organic Product Promotion Order

Title X—Christmas Tree Promotion Order

Title XII—Oilheat Efficiency, Research, Jobs

Total Changes in Revenues

104

2,119

-3,706

-1,671

-1,017

-1,085

-1,938

-2,195

-2,246

-2,411

-2,458

-5,361

-16,608

Subtotal, Title XII

Non-nutrition programs (Other titles except IV)

Changes in Revenue

Net Impact on the Deficit

Source: CRS, using the CBO baseline and cost estimates (http://www.cbo.gov/publication/45049).

CRS-22

Budget Issues That Shaped the 2014 Farm Bill

Observations About the 10-year Score Totals

Nutrition

One of the most noticeable budget differences between House and Senate bills was the reduction

proposed for the nutrition title, with the House bill proposing to reduce it by $39.0 billion (-5.1%)

over 10 years, and the Senate bill proposing to reduce it by $3.9 billion (-0.5%). This $35 billion

difference between the House and Senate bills emerged as one of the most important political

issues for the farm bill in 2013.30

The enacted bill settled on an $8.0 billion reduction in the nutrition title (-1.0%). Nearly all of the

budgetary reductions came from adjusting standard utility allowances based on receipt of energy

assistance payments, and did not include any changes to categorical eligibility that further

reduced the baseline in the House proposal.

Agriculture-Related Portion

For the agriculture-related (non-nutrition) portion of the bill, the House bill’s proposed reduction

was $12.8 billion (-6.2%) over 10 years, and the Senate bill’s proposed reduction was $13.9

billion (-6.7%) over 10 years.

The enacted bill settled on an $8.5 billion reduction (-4.1%) in the agriculture-related subset of

the bill, smaller than either the House or Senate proposal. Reductions in the farm safety net were

not as large as in the House or Senate proposals, as discussed below. Moreover, increases in other

titles of the bill—primarily in the research and horticulture titles—were larger than in either the

House or Senate proposals, the scope of the miscellaneous title was larger and more costly, and

other titles such as rural development and energy adopted the larger of increases proposed by

either chamber.

Farm Safety Net

For crop insurance and the farm commodity programs—together considered by many the farm

“safety net”31—the combined reduction would have been larger in the Senate proposal than in the

House bill: a combined reduction of $12.4 billion in the Senate bill and $9.8 billion in the House

bill. Although the House bill would have made a bigger net reduction to the farm commodity

programs than the Senate bill, it would have increased crop insurance by more than the

difference. For commodity programs, both bills recognized nearly $47 billion of savings by

repealing direct payments, counter-cyclical payments, and the average crop revenue election. But

both created new counter cyclical-type payment programs in their place and reauthorized certain

disaster assistance programs that together cost relatively more in the Senate bill than in the House

bill. For crop insurance, the House bill would have increased benefits more than the Senate bill,

providing $3.9 billion more in new funding than the Senate bill. The net result for the combined

safety net is that the House bill would have spent $2.7 billion more than the Senate bill. That is,

proposed 10-year safety net outlays in the combined farm commodities and crop insurance titles

See CRS Report R42505, Supplemental Nutrition Assistance Program (SNAP): A Primer on Eligibility and Benefits.

See CRS Report R42759, Farm Safety Net Provisions in a 2013 Farm Bill: S. 954 and H.R. 2642.

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Budget Issues That Shaped the 2014 Farm Bill

would have been about $133.1 billion under the House bill, and $130.4 billion under the Senate

bill.

The enacted 2014 farm bill reduces the farm safety net baseline by $8.6 billion over 10 years,

comprised of a $14.3 billion net reduction in Title I, offset by a $5.7 billion increase for crop

insurance. This is a smaller net reduction than in either the House or Senate proposals. Although

the increase for crop insurance was closer to the smaller increase in the Senate bill, the net

reduction in Title I was less than proposed in either bill, since the projected costs from blending

the components of the House’s and Senate’s counter-cyclical approaches in the conference

agreement, and the compromise for the dairy program, were higher than in either proposal. The

combined farm safety net (farm commodity programs plus crop insurance) was projected at

enactment to cost $134.3 billion over 10 years.

Conservation and the Rest of the Farm Bill

One possible “big picture” view of the enacted law’s budget effects is that the $8 billion reduction

in nutrition plus the $8.6 billion net reduction in the farm safety net together approximately equal

the $16.5 billion deficit reduction that was scored the new law. Subsequently, following this view,

the amount of reduction in the conservation title ($3.967 billion) approximately equals—or

offsets—the increases in spending for the other titles such as trade, rural development, research,

forestry, horticulture and the miscellaneous title ($4.048 billion, combined).

Changes to conservation programs are similar in many regards between the two bills, though the

House bill would have saved $1.3 billion more than the Senate bill in Title II (reductions of $4.8

billion and $3.5 billion, respectively). The enacted 2014 farm bill reduces the conservation

baseline by $4.0 billion over 10 years (-6.4%).

For the rest of the titles in the enacted farm bill, research programs receive $1.145 billion more

than their baseline over 10 years, the miscellaneous title costs an additional $0.953 billion, the

energy title $0.879 billion, horticulture $0.694 billion, rural development $0.228 billion, trade

$0.139 billion, and forestry $0.010 billion.

Observations of the Year-by-Year Scores

Figure 7 shows the score of the farm bill for each of the 10 years individually. The format is titleby-title like Figure 6, but shows when outlays or savings occur during the budget window.

Net budgetary savings do not begin until the second year of the farm bill in FY2015. Savings

from the commodity title do not begin until FY2015 because agricultural disaster payments begin

in FY2014, and the repeal of direct payments is not felt until FY2015. Direct payments for the

2013 crop year (authorized under the extension of the 2008 farm bill and paid according to statute

after October 1, 2013) were paid in FY2014. Moreover, most payments for the new farm

commodity program do not occur until FY2016 because they are paid after the end of the

marketing year, which occurs a year after harvest (e.g., for crops harvested in the fall of 2014—

the first year of the 2014 farm bill—payments would be after October 1, 2015, which is FY2016).

This makes the budgetary effect for Title I in FY2015 particularly large because it is primarily the

repeal of direct payments. Changes to both crop insurance and conservation grow gradually over

time, with more of the effect in the second five years. In fact, conservation has additional

spending in the first two years, relative to the baseline, before savings occur.

Congressional Research Service

Budget Issues That Shaped the 2014 Farm Bill

Figure 7. Score of the 2014 Farm Bill, by Title and Fiscal Year

(change in outlays in billions of dollars by farm bill title, relative to baseline)

Source: CRS, using CBO cost estimates of the Agricultural Act of 2014 (January 28, 2014).

Figure A-1 and Figure B-1 show the corresponding multi-year graphs for the House and Senate

bills, respectively. These year-by-year figures reveal additional differences that are peculiar to the

House and Senate bills. For example, a cumulative limit on new farm program payments in the

House bill is scored so that it reduces outlays in FY2020 (revealing more of the repeal of direct

payments) and defers those payments until FY2021 (balancing the program over those two years).

Net Projected Outlays (Baseline + Score)

As mentioned at the beginning of this report, the Congressional Budget Office (CBO) estimated

that, at enactment, the total cost of the farm bill would be $489 billion over the next five years

(FY2014-FY2018), which is -1.1% less than the May 2013 baseline. Of this amount, $391 billion

was for nutrition, $65 billion for the farm safety net (farm commodity support and crop

insurance), $28 billion for conservation, and nearly $5 billion for other titles (Figure 1, Table 1).

In terms of the 10-year score at enactment discussed throughout this section, the 2014 farm bill is

expected to spend $956 billion over 10 years (-1.7% compared to the baseline).32 Of this amount,

$756 billion is for nutrition and $200 billion is for the agriculture-related portion.

The net spending by the farm bill over the next 10 years would be the same whether one quotes pre- or postsequestration estimates. Both the baseline and the score would increase by the same amount if sequestration were

repealed, leaving the net spending the same.

Congressional Research Service

Budget Issues That Shaped the 2014 Farm Bill

Figure 8 illustrates the 10-year amount relative to the May 2013 baseline that was used to

develop the bill and the House and Senate proposals. The first stacked bar is the same $973

billion distribution of the baseline from Figure 3. The House bill’s combined $51.9 billion

reduction over 10 years (-5.3%) would have reduced expected outlays to $921 billion over the

FY2014-FY2023 period (the second bar). The Senate bill’s $17.9 billion reduction (-1.8%) would

have reduced expected outlays to $955 billion (the third bar). The enacted Agricultural Act of

2014 reduces outlays by $16.6 billion (-1.7%) to $956 billion (the fourth bar). This last bar

corresponds to the distribution of the pie graph in Figure 1, although on a 10-year basis.

Figure 8. Projected Outlays under the Baseline, Proposals, and 2014 Farm Bill

(10-year outlays over FY2014-FY2023 in billions of dollars by farm bill title)

Source: CRS, using CBO cost estimates of the Agricultural Act of 2014 (January 28, 2014).

Additional Observations

Shares of the Farm Bill Baseline

The allocation of baseline among titles, and the size of each amount, is not a zero-sum game

when CBO updates the baseline projection over time. Every year, CBO re-estimates the

baseline—separately and independently for each program—to determine expected costs. It uses

the formulas that exist in law at that time. Baseline projections rise and fall based on changes in

economic conditions, even without any action by Congress.

Congressional Research Service

Budget Issues That Shaped the 2014 Farm Bill

Each farm bill title with mandatory spending represents a share or proportion of the farm bill

budget. One share of the farm bill that has attracted attention is the nutrition baseline, but other

shares of the baseline have similar stories.

The proportion and size of the farm bill budget contained in the nutrition title has increased over

time. When the 2008 farm bill was enacted, the nutrition title was 67% of the 10-year total ($406

billion out of a $604 billion 10-year projected total).33 When the 2014 farm bill was enacted six

years later, the share in the nutrition title was 79% of the total ($756 billion out of a $956 billion

10-year projected total).

This growth in size and proportion does not mean, however, that the nutrition has grown at the

expense of agricultural programs. During this period, legislative changes in the farm bill account

for only a fraction of the change. For example, the 2014 farm bill scored $16 billion in 10-year

savings from the most recent baseline, while 10-year expected costs increased $352 billion from

one farm bill to the next. By title, the farm bill scored $8 billion in 10-year savings from nutrition,

while 10-year nutrition outlays increased by $350 million. Similarly, legislative changes to crop

insurance and the farm commodity program do not equal the changes in outlays for those titles.

Table 6 highlights changes in budgetary expectations for SNAP and farm safety net supports

from enactment of the 2008 farm bill to enactment of the 2014 farm bill. This is a separate way of

analyzing costs than the official scoring analysis discussed earlier in this report.

•

In recent years, due to the recession, projected nutrition program outlays rose

because food assistance needs increased as the automatic safety net triggered

greater payments to more beneficiaries according to formulas in the law. The

projected 10-year SNAP outlay rose by 10.9% per year from enactment of the

2008 farm bill to enactment of the 2014 farm bill. This $350 billion increase in

expected 10-year outlays is entirely from changing economic expectations that

require more outlays, since the legislative changes in the farm bill scored an $8

billion reduction.

•

Over the same period, expected crop insurance outlays increased as agricultural

market prices rose and caused the insured value of crops (and thus premium

subsidies) to grow. The expectation of 10-year crop insurance outlays rose by

11.3% per year from enactment of the 2008 farm bill to enactment of the 2014

farm bill—a higher annualized rate of increase than for SNAP, though the dollar

magnitude is less. The $43 billion increase in expected 10-year outlays for crop

insurance is mostly from changing economic expectations rather than the $5.7

billion increase that was legislated in Title XI by the 2014 farm bill.

•

Conversely, expected farm commodity program outlays fell as market prices rose

and less counter-cyclical price support was expected under the law. In addition,

the 2014 farm bill eliminated direct payments, the largest relevant component of

2008 farm bill spending. The expectation of 10-year farm commodity program

outlays fell by 10.3% per year from enactment of the 2008 farm bill to enactment

of the 2014 farm bill. In total, the $41 billion reduction in expected 10-year

outlays from enactment of the 2008 farm bill to enactment of the 2014 farm bill

See CRS Report R41195, Actual Farm Bill Spending and Cost Estimates.

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Budget Issues That Shaped the 2014 Farm Bill

is from both changing economic conditions and the $14 billion net reduction

legislated in Title I.

•

The “farm safety net” subtotal of crop insurance and the farm commodity

programs is nearly constant from the 2008 farm bill to the 2014 farm bill.

Expected 10-year outlays were $133 billion in 2008 and are $134 billion in the

2014 farm bill. Despite the $14.3 billion reduction in Title I scored in the 2014

farm bill and the offsetting $5.7 billion increase in crop insurance—which scored

as net reduction in the safety net—expected 10-year outlays for the farm safety

net increased slightly (by +0.2% per year) from the enactment of the 2008 farm

bill to enactment of the 2014 farm bill.

•

Other titles are expected to spend more in the 2014 farm bill than in the 2008

farm bill, primarily because of policy changes. The amount for the research title,

in particular, has grown at the greatest pace despite its comparatively small

magnitude.

Table 6. Shares of Projected Farm Bill Outlays, and Growth From 2008 to 2014

10-year projected cost of the farm bill at enactment

$ billion

Percent

$ billion

Percent

Change in

10-year

projection

from 2008

to 2014

Nutrition (Title IV)

406

67%

756

79%

+350

+10.9%

Rest of the farm bill, agriculture share

198

33%

200

21%

+0.2%

Crop insurance (Title XI)

+42.7

+11.3%

Farm commodities (Title I)

14%

-41.1

-10.3%

133

22%

134

14%

+1.6

+0.2%

Conservation (Title II)

+2.9

+0.9%

Trade (Title III)

3.6

0.6%

3.6

0.4%

-0.1

-0.3%

Research (Title VII)

0.4

0.1%

1.3

0.1%

+0.9

+21.9%

Energy (Title IX)

0.9

0.1%

1.1

0.1%

+0.2

+4.2%

Horticulture (Title X)

0.9

0.2%

1.1

0.1%

+0.2

+3.0%

Other titles (Titles V, VI, VIII, XII)

4.6

0.8%

1.0

0.1%

-3.5

-22.2%

2008 farm bill

Farm bill titles

2014 farm bill

Annual

change

2008-2014

Primary divisions

Selected agriculture-related titles

Subtotal: “Farm safety net"

Total: All farm bill programs

604

Inflation (GDP price index)

98.8

100%

956

100%

+352

+8.0%

107.8

+1.5%

Source: CRS.

Farm Bill Programs Without Baseline

While some programs (like most farm commodity programs and nutrition assistance) have

assumed future funding, other programs (mostly newer ones) do not. Thirty-seven programs that

received mandatory funding throughout nearly all titles of the 2008 farm bill did not continue to

Congressional Research Service

Budget Issues That Shaped the 2014 Farm Bill

have assured funding for the 2014 farm bill. Continuing all of these programs would have

required an estimated $9 billion to $14 billion of offsets from other programs.34

The one-year extension of the 2008 farm bill in P.L. 112-240 did not provide any additional

mandatory funding for any of the 37 programs without baseline. In lieu of mandatory funding, the

extension of the farm bill made numerous “authorizations of appropriations” to allow

discretionary funding for FY2013, but this did not provide funding. Discretionary funding,

subject to availability in a tight budget environment, conceptually could have been provided (but

was not) by the appropriations committees in the FY2013 Agriculture appropriation (P.L. 113-6).

The enacted 2014 farm bill provides 29 of these 37 programs with new mandatory funding that

totals $6.2 billion over the five-year period FY2014-FY2018.35 A few of these programs even

received permanent baseline for the second five years, including the Specialty Crop Research

Initiative and the Rural Energy for America Program, or were incorporated into other programs.

The enacted law provides more mandatory funding to more of these 37 programs than either

proposal. The combination of House-passed farm bills would have provided about $4.9 billion of

mandatory funding (over five years) to 14 of the programs. The Senate-passed farm bill would

have provided more than $4.5 billion of mandatory funding for 25 of the programs.

Table 5 indicates which programs in the 2014 farm bill might become future concerns because of

this issue. The scores for the second five-year period of the budget horizon (FY2019-FY2023)

reveal which programs would receive baseline funding beyond the expiration of the 2014 farm

bill in FY2018, and which would receive baseline only for the initial five-year window of the bill.

For example, three other research programs would receive baseline only through FY2018.

Similarly, all of the mandatory-funded program in the rural development title, the farmers market

promotion program, and outreach for socially disadvantaged farmers, among other programs, also

do not have a baseline beyond FY2018. This also is an issue for all of the energy title programs,

except for the Rural Energy for America program, which received a permanent baseline.

Possible Expiration and Reversion to Permanent Law

The farm commodity programs could have become more expensive if left to expire and outdated

“permanent law” provisions were resurrected. A set of non-expiring provisions from the 1938 and

1949 farm bills, as amended, remain in statute, but have been suspended by modern farm bills.

No official estimates exist for the budgetary effect of reverting to permanent law. But the support

levels under permanent law were above even some of the high market prices for commodities in

2013. This could have resulted in greater subsidy outlays than under the May 2013 baseline.36

For more background, see CRS Report R41433, Expiring Farm Bill Programs Without a Budget Baseline.

Ibid, in Table 1.

For more information, see CRS Report R42442, Expiration and Extension of the 2008 Farm Bill.

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Budget Issues That Shaped the 2014 Farm Bill

Perspective on Scores and Broad Deficit Reduction Proposals

Several government-wide deficit reduction proposals from 2010 to 2013 included agricultural

programs (see Appendix C). These proposals sometimes may have been seen to have affect—or

correspond to—the level of savings in the farm bill proposals, in either amount or components.

The $24 billion in savings in S. 954—if sequestration reductions were restored—is consistent

with the score of the 2012 Senate farm bill proposal ($23.1 billion) and the savings proposed by

the House and Senate Agriculture committees for the Joint Select Committee on Deficit

Reduction (a.k.a. the Super Committee) in the fall of 2011. The reduction in S. 954 from the

nutrition title (which is not affected by sequestration) is nearly the same as in the Super

Committee proposal. And the $13 billion reduction from commodity programs in the Super

Committee proposal was roughly the same as the $12.4 billion of net savings in S. 954 from the

farm commodity program and crop insurance.

For the House bill, the evolution of scores begins with the July 2012 score of $35.1 billion of

savings for H.R. 6083 being consistent with the $33.2 billion of reconciliation instructions in the

FY2013 House budget resolution (H.Con.Res. 112) and the $35.8 billion of savings identified by

the Agriculture Committee for budget reconciliation. A primary difference, though, was that all of

the reconciliation savings were from nutrition programs, while more than half of the savings in

the subsequent farm bill proposals have been from nutrition programs.

In 2013, H.R. 1947 proposed to make $33.4 billion of reductions, about the same as the 2012

proposals on first blush. But the bill’s effective reduction before the adjustment for sequestration

implied a greater reduction than 2012, sometimes stated as high as $39 billion. Compared to the

2012 House proposal, H.R. 1947 raised the proposed nutrition reduction from $16.1 billion to

$20.5 billion. When H.R. 1947 failed to pass the House, H.R. 3102 increased the proposed

nutrition reduction to $39 billion, and the combined reduction in H.R. 3102 and H.R. 2642 to $52

billion. Thus, each iteration of the House proposal took the House bill further away from the

Senate proposal’s budget effect.

Effect on Discretionary Spending

Separate from the mandatory spending figures above, the CBO cost estimates of the farm bill

proposals include a projection of discretionary appropriations that would be needed to carry out

the authorized farm bill programs. For S. 954 and H.R. 1947, CBO estimated that $37.6 billion

and $32.9 billion of discretionary appropriations (budget authority), respectively, would be

needed over the five-year period FY2014-FY2018.37 (A corresponding estimate was not made for

H.R. 2642, but it would be similar to that for H.R. 1947 given the similarity in provisions

between H.R. 1947 and H.R. 2642.) No estimate was provided for the conference agreement.

However, not all of these amounts represent new programs or spending, since much of the totals

are for reauthorizing programs that already are appropriated in the annual Agriculture

appropriations bill (e.g., agricultural research). Moreover, these amounts would be subject to

annual decisions by the budget committees and the appropriations committees.

CBO cost estimate of S. 954 as reported (Table 3; http://cbo.gov/publication/44248, May 17, 2013), and CBO cost

estimate of H.R. 1947 as reported (Table 3; http://cbo.gov/publication/44271, May 23, 2013).

Congressional Research Service

Budget Issues That Shaped the 2014 Farm Bill

Appendix A. Score of the House Farm Bill (H.R.

2642, as combined with H.R. 3102)

Table A-1 presents the detailed year-by-year scores of each provision in the House-passed farm

bill (H.R. 2642, as combined with H.R. 3102). The score at the title level is slightly different as

presented in the summary in the conference report score, but section-by-section details were not

available. Therefore, the more detailed section-by-section score from the earlier but consistent

CBO score of the bill, as reported, is provided here.

Figure A-1 shows the title-by-title totals of the House-passed farm bill for each individual year in

the budget window. The format and scale are consistent with Figure 7 that shows the amounts for

the enacted 2014 farm bill. In addition to the larger scale of reductions apparent in the House bill,

a cumulative limit on new farm program payments in the House bill was scored so that it reduced

outlays in FY2020 (revealing more of the repeal of direct payments) and deferred those payments

until FY2021 (balancing the program over those two years). This provision was not in the enacted

farm bill, which consequently does not have the range of scores in the commodity title for

FY2020-FY2021.

Figure A-1. Score of the 2013 House Farm Bill H.R. 2642, by Title and Fiscal Year

(change in outlays in billions of dollars by farm bill title, relative to baseline)

Source: CRS, using CBO cost estimates of H.R. 2642 (July 11, 2013), H.R. 3102 (September 16, 2013), and a

supplemental CBO score of Title I of H.R. 2642, as passed (unpublished).

Congressional Research Service

Table A-1. Score of Mandatory Programs in the House-Passed 2013 Farm Bill (H.R. 2642, as combined with H.R. 3102)

(change in annual outlays in millions of dollars, relative to baseline)

5- and 10-year totals

Fiscal year

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2014-18

2014-23

Title I - Commodity Programs

Repeal Direct Payments

-4,095

-4,158

-4,538

-17,329

-40,019

Repeal Countercyclical Payments

-117

-182

-190

-215

-217

-207

-197

-194

-489

-1,519

Repeal Average Crop Revenue Election Payments

-1,336

-696

-462

-424

-413

-454

-429

-505

-2,494

-4,719

Farm Risk Management Election

3,368

3,467

3,244

2,733

293

5,010

2,563

2,693

10,079

23,371

Nonrecourse Marketing Assistance Loans

Sugar Program

Dairy Program a

-40

-1

418 a

Supplemental Agriculture Disaster Assistance b

897

364

314

296

295

297

300

302

303

306

2,166

3,674 b

Administration c

-8

-9

-8

-7

-6

-7

41c

Subtotal, Title I

926

-3,691

-1,910

-1,647

-1,622

-2,070

-4,479

166

-2,215

-2,159

-7,944

-18,701

Conservation Reserve Program

-191

-354

-396

-462

-451

-468

-502

-565

-891

-3,339

Conservation Stewardship Program

-11

-85

-147

-219

-290

-372

-446

-518

-591

-663

-752

-3,342

Environmental Quality Incentives Program

101

114

128

348

974

Agricultural Conservation Easement Program

149

252

285

191

905

1,087

Regional Conservation Partnership Program

-1

-3

-13

-28

Other Conservation Programs

100

297

317

Funding

100

Repeal of Wildlife Habitat Incentives Program

-17

-35

-44

-53

-61

-70

-79

-210

-596

Subtotal, Title II

106

224

-199

-431

-696

-797

-899

-1,017

-1,152

-266

-4,827

Title II - Conservation

CRS-32

5- and 10-year totals

Fiscal year

2014

Title III - Trade

2015

2016

2017

2018

2019

2020

2021

2022

2023

2014-18

2014-23

150

Title IV – Nutrition (originally H.R. 3102, “Nutrition Reform and Work Opportunity Act of 2013”)

Retailers

-7

-8

-39

-79

Updating Program Eligibility

-535

-1,295

-1,270

-1,240

-1,220

-1,200

-1,175

-1,165

-1,160

-5,635

-11,555

Standard Utility Allowances

-190

-840

-940

-950

-960

-970

-990

-3,870

-8,690

Repeal of state work program waiver authority

-600

-3,300

-2,900

-2,500

-2,100

-1,700

-1,600

-1,500

-1,400

-11,400

-19,000

Repeal Bonus Program

-48

-240

-480

Pilot Projects to Reduce Dependency

Assistance for Community Food Projects

100

Emergency Food Assistance

209

333

Nutrition Education

-29

-28

-29

-30

-31

-32

-33

-34

-146

-308

Retailer Trafficking

Northern Mariana Islands Pilot Program

Testing applicants for controlled substances

-5

-10

-35

Disqualifications for certain convicted felons

-1

-2

-3

-4

-5

-4

-21

Expungement of unused SNAP benefits

-5

-10

-45

-95

Pilots to promote work, increase accountability

-2

-9

-16

-23

-31

Interactions

105

100

395

715

-1,282

-5,309

-5,056

-4,657

-4,261

-3,865

-3,756

-3,,657

-3,566

-3,590

-20,565

-38,999

Subtotal, Title IV

Title V - Credit

CRS-33

5- and 10-year totals

Fiscal year

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2014-18

2014-23

Title VI - Rural Development

Rural Econ. Development Loans and Grants

Value-Added Marketing Grants

Subtotal, Title VI

Organic Agriculture Research and Extension

100

Specialty Crop Research

232

555

Beginning Farmer and Rancher Development

100

Acceptance of Facility for Agric. Research

Subtotal, Title VII

101

394

760

Title VIII - Forestry

Title IX - Energy

Farmers Market and Local Food Promotion

150

Specialty Crop Block Grants

232

Plant Pest and Disease Management

161

Organic Product Marketing Order

Subtotal, Title X outlays

298

619

Supplemental Coverage Option

254

335

366

433

454

484

502

511

1,414

3,850

Catastrophic Crop Insurance Rerating

-4

-38

-50

-52

-53

-54

-55

-56

-196

-469

Enterprise Units Irrigated and Nonirrigated

241

586

Adjustment in Avg. Producer History Yields

102

129

137

139

141

143

248

936

Title VII - Research, Extension, and Related Matters

Title X - Horticulture

Title XI - Crop Insurance

CRS-34

5- and 10-year totals

Fiscal year

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2014-18

2014-23

Equitable Relief for Specialty Crop Producers

127

205

Crop Production Native Sod Prairie Pothole

-4

-8

-11

-15

-16

-38

-118

Coverage Level by Practice

168

Beginning Farmer and Rancher Provisions

106

283

Stacked Income Protection for Cotton

350

378

308

386

409

439

451

468

466

1,459

3,693

Peanut Revenue Crop Insurance

119

269

Implementation

Participation Effects of Commodity Programs

-9

-87

-104

-92

-63

-52

-60

-54

-53

-291

-574

199

725

805

744

923

1,024

1,093

1,101

1,145

1,155

3,396

8,914

Outreach to Socially Disadvantaged

Noninsured Crop Assistance Program

111

Subtotal, Title XII

161

-7,874

-5,917

-5,541

-5,168

-5,424

-7,764

-3,123

-5,487

-5,577

-24,446

-51,822

Nutrition programs (Title IV)

-1,282

-5,309

-5,056

-4,657

-4,261

-3,865

-3,756

-3,657

-3,566

-3,590

-20,565

-38,999

Non-nutrition programs (Other titles except IV)

1,336

-2,565

-861

-884

-907

-1,559

-4,008

-534

-1,921

-1,987

-3,881

-12,823

Organic Product Promotion Orders

Christmas Tree Promotion Orders

Subtotal, Change in Revenue

-7,876

-5,922

-5,546

-5,174

-5,430

-7,772

-3,131

-5,499

-5,589

-24,464

-51,886

Subtotal, Title XI

Title XII - Miscellaneous

Total Changes in Direct Spending

Change in Revenue

Net Impact on the Deficit

Source: CRS, using the CBO cost estimates of H.R. 2642 (http://cbo.gov/publication/44414, July 11, 2013), H.R. 3102 (http://cbo.gov/publication/44583, September 16,

2013), H.R. 1947 (http://cbo.gov/publication/44271, May 23, 2013), and a supplemental CBO score of Title I of H.R. 2642, as passed (unpublished).

CRS-35

Note: * = savings of less than $500,000. Since CBO did not release a section-by-section score of H.R. 2642, the section-by-section details in this table were compiled

from the CBO score of H.R. 1947, and a supplemental CBO score of Title I and Title X, as passed (unpublished). H.R. 1947 and H.R. 2642 were very similar except for

the absence of the nutrition title; the CBO scores of the titles for the two bills were the same except for the farm commodity and horticulture titles.

CRS-36

The “dairy program” entry for Title I combines repeal of product price support and MILC (-$212 million over 10 years), repeal of the dairy export incentives

program (-$50 million over 10 years), basic margin protection (+$463 million over 10 years), and supplemental margin protection (+217 million over 10 years).

The “supplemental agriculture disaster assistance” entry for Title I combines amounts for the Livestock Forage Program (+$2,920 million over10 years), Livestock

Indemnity Program (+$421 million over 10 year), Emergency Assistance for Livestock, Bees, and Farm Fish (+$233 million over 10 years), Tree Assistance Program

(+$103 million over 10 years), and payment limitations on these payments (-$3 million over 10 years).

The “administration” entry for Title I combines savings from a payment limitations provision (-$59 million over 10 years) and a provision for the cost of

implementation (+$100 million over the first two years). The net cost is $41 million over 10 years.

Budget Issues That Shaped the 2014 Farm Bill

Appendix B. Score of the Senate Farm Bill (S. 954)

Table B-1 presents the detailed year-by-year scores of each provision in the Senate-passed farm

bill (S. 954).

Figure B-1 shows the title-by-title scores of the Senate-passed farm bill for each individual year

in the budget window. The format and scale are consistent with Figure 7 that shows the amounts

for the enacted 2014 farm bill.

Figure B-1. Score of the 2013 Senate Farm Bill S. 954, by Title and Fiscal Year

(change in outlays in billions of dollars by farm bill title, relative to baseline)

Source: CRS, using CBO cost estimates of S. 954, May 17, 2013.

Congressional Research Service

Table B-1. Score of Mandatory Programs in the Senate-Passed 2013 Farm Bill (S. 954)

(change in annual outlays in millions of dollars, relative to baseline)

5- and 10-year total

Fiscal year

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2014-18

2014-23

Title I - Commodity Programs

Repeal Direct Payments

-4,538

-18,152

-40,842

Repeal Countercyclical Payments

-117

-182

-190

-215

-217

-207

-197

-194

-489

-1,519

Repeal Average Crop Revenue Election

Payments

-1,336

-696

-462

-424

-413

-454

-429

-505

-2,494

-4,719

Popcorn as a Covered Commodity

Adverse Market Payments

399

433

419

369

360

362

357

361

1,251

3,060

Agricultural Risk Coverage

3,632

3,875

3,483

2,704

2,385

2,617

2,408

2,646

10,990

23,749

Nonrecourse Marketing Assistance Loans

Sugar Program

Dairy Program

-34

-20

-9

302

Supplemental Agriculture Disaster Assistance

424

364

201

197

199

200

201

202

1,383

2,382

Administration a

-11

-10

-11

Subtotal, Title I

472

-4,173

-1,761

-871

-1,029

-1,889

-2,126

-1,957

-2,133

-1,974

-7,362

-17,442

Conservation Reserve Program

-31

-217

-324

-446

-364

-434

-458

-519

-510

-2,731

Conservation Stewardship Program

-7

-50

-87

-130

-173

-221

-265

-308

-351

-394

-447

-1,986

Environmental Quality Incentives Program

-39

-31

-8

-4

-81

Agricultural Conservation Easement Program

191

289

319

214

112

1,070

1,438

Regional Conservation Partnership Program

Other Conservation Programs

158

190

Funding

100

Title II - Conservation

CRS-38

5- and 10-year total

Fiscal year

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2014-18

2014-23

Repeal of Wildlife Habitat Incentives Program

-17

-35

-44

-53

-61

-70

-79

-210

-596

Subtotal, Title II

190

135

143

-62

-318

-604

-608

-711

-786

-890

-3,511

150

Standard Utility Allowances

-90

-400

-440

-450

-460

-470

-1,830

-4,110

Retail Food Stores

-7

-8

-39

-79

Funding of Employment and Training Programs

Emergency Food Assistance

Retailer Trafficking

Hunger-Free Communities

100

-55

-363

-408

-424

-429

-437

-446

-451

-461

-470

-1,679

-3,944

Value-Added Marketing Grants

Rural Microenterprise Program

Rural Water and Waste Disposal

131

150

Subtotal, Title VI

181

228

Organic Agriculture Research and Extension

Specialty Crop Research

163

416

Beginning Farmer and Rancher Development

Title III - Trade

Title IV - Nutrition

Food Distribution on Indian Reservations

Subtotal, Title IV

Title V - Credit

Title VI - Rural Development

Title VII - Research, Extension, and Related Matters

CRS-39

5- and 10-year total

Fiscal year

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2014-18

2014-23

Foundation for Food and Agriculture Research

200

Subtotal, Title VII

141

123

492

781

Biorefinery Assistance

176

216

Rural Energy for America Program

252

340

Biomass Research and Development

130

Biomass Crop Assistance Program

174

Other Energy Programs

Subtotal, Title IX

147

179

173

135

615

880

Farmers Market and Local Food Promotion

100

Coordinated Plant Management Program

108

Specialty Crop Block Grants

141

Other Horticulture Programs

-2

-3

-5

-7

-10

-5

-44

Subtotal, Title X outlays

197

304

Supplemental Coverage Option

141

187

208

256

266

287

286

300

303

806

2,247

Catastrophic Crop Insurance Rerating

-4

-38

-50

-52

-53

-54

-55

-56

-196

-469

Enterprise Units Irrigated/Nonirrigated Crops

241

586

Adjustment in Average Producer History Yields

108

406

Stacked Income Protection for Cotton

350

378

308

386

409

439

451

468

466

1,459

3,693

Peanut Revenue Crop Insurance

119

269

Title VIII - Forestry

Title IX - Energy

Title X - Horticulture

Title XI - Crop Insurance

CRS-40

5- and 10-year total

Fiscal year

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2014-18

2014-23

Implementation

Beginning Farmer Provisions

106

283

Crop Production on Native Sod

-5

-12

-18

-23

-24

-58

-178

Conservation Compliance for Crop Insurance

-2

-3

-5

-8

-5

-42

Participation Effects of Commodity Programs

-28

-277

-331

-301

-241

-213

-224

-212

-210

-938

-2,038

Other

110

156

Subtotal, Title XI

563

409

311

477

579

629

626

669

673

1,821

4,999

Outreach for Socially Disadvantaged Farmers

Sheep Production and Marketing Grant Program

Noninsured Crop Disaster Assistance Program

-36

-52

-86

-346

Subtotal, Title XII

-26

-42

-47

-50

-52

-41

-294

Total Changes in Direct Spending

806

-3,512

-1,288

-665

-949

-2,122

-2,405

-2,415

-2,667

-2,623

-5,607

-17,840

Nutrition programs (Title IV)

-55

-363

-408

-424

-429

-437

-446

-451

-461

-470

-1,679

-3,944

Non-nutrition programs (Other titles except IV)

861

-3,149

-880

-241

-520

-1,685

-1,959

-1,964

-2,206

-2,153

-3,928

-13,896

806

-3,514

-1,292

-669

-954

-2,127

-2,412

-2,422

-2,677

-2,633

-5,622

-17,894

Title XII - Miscellaneous

Change in Revenue

Organic Product Promotion Orders

Net Impact on the Deficit

Source: CBO cost estimate of S. 954 as reported by the Senate Agriculture committee (http://cbo.gov/publication/44248, May 17, 2013),

CRS-41

The “administration” entry for Title I combines savings from a payment limitations provision (-$94 million over 10 years) and a provision for the cost of

implementation (+$97 million over the first two years). The net cost is $3 million over 10 years.

Budget Issues That Shaped the 2014 Farm Bill

Appendix C. Broad Deficit Reduction Proposals

In February 2010, President Obama created the National Commission on Fiscal Responsibility

and Reform to identify changes to balance the budget. From 2010-2013, several other

government-wide proposals were made and most included reductions to agriculture or farm bill

spending (Table C-1).

In these government-wide deficit reduction proposals, cuts from the agriculture committees’

baseline ranged from $10 billion in the President’s Fiscal Commission, $30 billion in the

Bipartisan Policy Center plan, and $179 billion in the House-passed FY2013 budget resolution.

These proposals often are compared to the $23 billion reduction offered by the leadership of the

House and Senate Agriculture Committees to the Joint Select Committee of Deficit Reduction.

Each of these proposals specifically recommended some reduction to the farm commodity

programs or crop insurance, and sometimes to export promotion and conservation. Only a subset

recommended reductions to nutrition programs. Together, they represent a range of common ideas

and the visibility of the agriculture and nutrition spending for deficit reduction.

Table C-1. Broad Deficit Reduction Proposals That Affect Farm Bill Programs

Proposal

1. Bipartisan Policy Center

(Domenici-Rivlin Task Force,

Nov. 2010)

Total

Farm Bill

Reduction

$30 billion

[2012-2020]

2. President’s Fiscal

Commission (Simpson-Bowles,

Dec. 2010)

$10 billion

[2012-2020]

3. House Budget Resolution

for FY2012 (H.Con.Res. 34,

Apr. 2011)

$178 billion

[2012-2021]

4. Gang of Six (July 2011)

5. President’s Deficit

Reduction Plan (Sept. 2011;

amounts updated in Feb. 2012

for FY2013 budget request)

Detailed Provisions

Individual

Savings (-) or

Costs (+)

Reduce farm program spending by eliminating farm payments to

producers with adjusted gross income greater than $250,000

and setting a lower maximum payment for direct payments.

Reduce subsidies to private crop insurance companies. Reduce

premium subsidy for farmers from 60% to 50%.

-$15 billion

Consolidate and cap certain agriculture conservation programs.

-$6 billion

Reduce mandatory agricultural programs, including reductions in

direct payments, limits on conservation programs (CSP and

EQIP), and reductions for the Market Access Program.

Extend disaster assistance programs in the 2008 farm bill.

-$15 billion

+$5 billion

-$9 billion

Reduce direct payments, crop insurance subsidies, and export

assistance programs.

-$30 billion

Convert SNAP into an allotment tailored for each state.

-$127 billion

Unspecified remainder, much of which is likely conservation.

-$21 billion

$11 billion

[10 years]

Require agriculture committees to reduce mandatory spending,

and encourage them to protect SNAP (food stamps).

-$11 billion

$32 billion

[2013-2022]

Eliminate direct payments. (Ten-year baseline is $49 billion, but

CBO assumes interaction effect from increased enrollment in

ACRE. Net effect is shown.)

-$30 billion

Reduce crop insurance outlays by (1) reducing administrative

and overhead reimbursements to crop insurance companies and

(2) reducing premium subsidies to farmers.

-$7.7 billion

Extend disaster assistance programs in 2008 farm bill for five

years, through 2017.

+$8 billion

Reduce conservation payments by better targeting cost-effective

programs. Reduce CRP by $1 billion and EQIP by $1 billion.

-$2 billion

Congressional Research Service

Budget Issues That Shaped the 2014 Farm Bill

Total

Farm Bill

Reduction

Proposal

6. House and Senate

Agriculture Committees, for

Joint Select Committee on

Deficit Reduction (Oct. 2011)

$23 billion

[10 years]

Detailed Provisions

Specific proposal not released, but a draft indicates a plan could

eliminate direct payments, develop a new farm safety net with

crop insurance, and make changes to conservation, nutrition,

and other farm bill programs. Reported savings included:

Farm commodity programs (net)

Conservation programs

Nutrition programs

7. House Budget Resolution

for FY2013 (H.Con.Res. 112,

Mar. 2012)

$179 billion

[2013-2022]

$33.2 billion

[2013-2022]

Individual

Savings (-) or

Costs (+)

-$13 billion

-$6 billion

-$4 billion

Budget resolution (recommendations):

Reduce direct payments, crop insurance subsidies, and

export assistance programs.

-$29 billion

Convert SNAP into an allotment tailored for each state.

-$134 billion

Unspecified remainder, likely in conservation programs

-$16 billion

Reconciliation instructions, by April 27, 2012:

By April 27, 2012, the Agriculture committee must

recommend to the Budget committee specific cuts for a

$33.2 billion reduction over FY2012-2022; $8.2 billion over

FY2012-2013; and $19.7 billion over FY2012-2017.

-$33.2 billion

Sources: CRS, compiled from the following documents:

(1) Bipartisan Policy Center, “Restoring America’s Future,” Nov. 2010, pp. 106-110, at http://www.bipartisan

policy.org/sites/default/files/BPC%20FINAL%20REPORT%20FOR%20PRINTER%2002%2028%2011.pdf;

(2) National Commission on Fiscal Responsibility and Reform, “The Moment of Truth,” Dec. 2010, p. 45, at

http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/TheMomentofTruth12_1_2010.pdf;

(3) H.Rept. 112-58 (for H.Con.Res. 34, the FY2012 Budget Resolution), Apr. 2011, pp. 76, 108, and 152;

(4) Gang of Six, “A Bipartisan Plan to Reduce Our Nation’s Deficits,” July 2011, p. 3, at http://warner.senate.gov/

public//index.cfm?p=gang-of-six http://assets.nationaljournal.com/pdf/071911ConradBudgetExecutiveSummary.pdf;

(5) The White House, “Living Within Our Means and Investing in the Future: The President’s Plan for Economic

Growth and Deficit Reduction,” Sept. 2011, available at http://www.whitehouse.gov/sites/default/files/omb/

budget/fy2012/assets/jointcommitteereport.pdf; and USDA FY2013 Budget Summary, Feb. 2012, pp. 124-126, at

http://www.obpa.usda.gov/budsum/FY13budsum.pdf;

(6) House and Senate Agriculture Committees, letter to Joint Select Committee on Deficit Reduction, Oct.

2011, at http://agriculture.house.gov/pdf/letters/jointletter111017.pdf; and press coverage of draft at http://www.

iatp.org/files/Ag%20Committees%20Bicameral%20Agreement%20Draft%202011%20Super%20Committee.pdf;

and Hagstrom Report, “Conrad: Farm Bill Content Now Moving Target,” Nov. 8, 2011, at http://www.hagstrom

report.com/news_files/110811_farmbill.html;

(7) H.Rept. 112-421(for H.Con.Res. 112, the FY2013 Budget Resolution), Mar. 2012, pp. 67-68, 100, 135, 159;

and House Committee on Agriculture (minority), “FY2013 Budget-Implications for Agriculture,” March 28, 2012,

at http://democrats.agriculture.house.gov/inside/Pubs/

FY2013%20Republican%20Budget%20Implications%20for%20Agriculture.pdf.

Author Contact Information

(name redacted)

Specialist in Agricultural Policy

/redacted/@crs.loc.gov, 7-....

Congressional Research Service

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