A New Farm Bill: Comparing the House and Senate Proposals with Current Law

Congressional research reportMar 12, 2002

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Order Code RL31272

CRS Report for Congress

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A New Farm Bill: Comparing the House and

Senate Proposals with Current Law

Updated March 12, 2002

Agriculture and Food Section

Coordinated by Jean Yavis Jones

Resources, Science, and Industry Division

Congressional Research Service ˜ The Library of Congress

A New Farm Bill: Comparing the House and Senate

Proposals with Current Law

Summary

The House and Senate have approved different versions of a new farm bill

(H.R.2646) that will set agriculture and food policy for the next several years (5 years

under the Senate bill; 10 years under the House bill). Meetings between the House and

Senate to discuss differences between the chambers' bills began in early March 2002.

The House passed its bill, entitled the Farm Security Act of 2001 (H.R. 2646), on

October 5, 2001. The Senate farm bill debate continued into the second session of the

107th Congress when a substitute version of S.1731 (the so-called Daschle Substitute)

was approved along with numerous other amendments (including a 397- page

Managers’ Amendment) on February 13, 2002. The much-revised Senate measure was

renumbered H.R.2646, although it retained its title (The Agriculture, Conservation, and

Rural Enhancement Act).

The size of the Senate version -- almost 1400 pages compared to the 379 page

House bill -- is not necessarily a measure of the policy differences between the

chambers. The commodity titles in the two bills retain marketing loan assistance and

fixed, decoupled annual farm payments. They both also add target prices and countercyclical income support (or deficiency payments) for major field crops. Conservation

activities and nutrition programs are enhanced under both bills, although more so in the

Senate bill. Both bills also increase spending above current law baselines. The FY2002

budget resolution allowed for $73.5 billion above the 10-year baseline. The

Congressional Budget Office (CBO) estimates the costs of the House bill at $73.5

billion over baseline. The same amount originally was estimated for the Senate bill until

CBO discovered a $6.1 billion underestimate in its calculations. The revised amount

($79.6 billion) is not the only spending difference from the House bill. The Senate bill

spends its new money more quickly than does the House and also adds another $2.4

billion in “emergency” farm aid for FY2002. The cost and speed of spending are

expected to be major issues in House-Senate Conference committee deliberations.

The Administration has indicated that it prefers the more evenly measured pace of

new spending in the House bill, which spends under half of its new money in the first

5 years. By contrast, the Senate bill would spend well over 60% of its total new money

in the first 5 years (not counting the $6.1 billion underestimate or the $2.4 billion in

emergency farm aid for FY2002). The Administration has not taken a public position

on other differences between the chambers’ bills. Among the most controversial are

Senate provisions that significantly lower the limit on commodity payments to farmers;

restraints on packer ownership of livestock going to slaughter; potential increased

federal control of certain water rights; and a new dairy counter-cyclical-income support

program.

Lawmakers in both chambers are pressing for quick resolution so that farmers can

make their spring planting decisions for 2002 and the Congress can make use of the new

spending for the farm bill allowed by last year’s congressional budget resolution.

Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Legislation in the 107th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Summary Comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Spending and Time-frame. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Administration Views . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Selected Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Commodity program provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Farm Payment Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Federal Budget and Trade Agreement Issues . . . . . . . . . . . . . . . . . . . . 9

Dairy Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Conservation Programs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Concentration in the livestock sector . . . . . . . . . . . . . . . . . . . . . . . . . 10

Comparison Caveats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

COMPARISON OF SELECTED PROVISIONS: CURRENT LAW AND

HOUSE AND SENATE FARM BILLS

(H.R. 2646 AND THE SENATE AMENDMENT) . . . . . . . . . . . . . . . . 12

I. COMMODITY PROGRAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Title: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Definitions: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

A. GRAINS et. al. (Wheat, Corn, Grain Sorghum, Barley, Oats, Upland Cotton, Rice,

Soybeans and Minor Oilseeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

1. Fixed, Decoupled Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

2. Counter-Cyclical Deficiency Payments and Target Prices . . . . . . . . . . . 19

3. Marketing Assistance Loans and LDPs . . . . . . . . . . . . . . . . . . . . . . . . . 20

B. OTHER COMMODITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

a. Dry Peas, Lentils and Chickpeas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

b. Grazed Wheat, Barley, and Oats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c. High Moisture Corn and Sorghum . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

d. ELS and Seed Cotton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

e. Hard White Wheat Incentive Payments . . . . . . . . . . . . . . . . . . . . . . . . . .

f. Cotton Competitiveness Provisions for Processors and Exporters . . . . . .

g. Sugar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

h. Peanuts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

i. Wool and Mohair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

j Honey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

k. Dairy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

l. Tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

m. Specialty Crops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23

23

24

24

25

25

25

26

29

31

31

32

37

37

C. PAYMENT LIMITS (Fixed, marketing loan, countercyclical) . . . . . . . . . . . . 38

D. COUNTER-CYCLICAL FARM SAVINGS ACCOUNTS . . . . . . . . . . . . . 39

E. WTO LIMITS ON ALLOWABLE DOMESTIC SUPPORT . . . . . . . . . . . . 40

II. CONSERVATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A. Environmental Conservation Acreage Program (ECARP) . . . . . . . . . . .

B. Conservation Reserve Program (CRP) . . . . . . . . . . . . . . . . . . . . . . . . .

C. Wetlands Reserve Program (WRP . . . . . . . . . . . . . . . . . . . . . . . . . . . .

D. Environmental Quality Incentives Program . . . . . . . . . . . . . . . . . . . . . .

E. Wildlife Habitat Incentives Program (WHIP . . . . . . . . . . . . . . . . . . . . .

F. Farmland Protection Program (FPP) . . . . . . . . . . . . . . . . . . . . . . . . . . .

G. Other Programs (Including Technical Assistance) . . . . . . . . . . . . . . . .

H. New Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

41

41

42

45

47

50

51

52

54

III. AGRICULTURAL TRADE AND AID . . . . . . . . . . . . . . . . . . . . . . . . . .

A. Agricultural Export Assistance Programs . . . . . . . . . . . . . . . . . . . . . . .

B. Food Aid Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C. Other Trade Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

64

64

68

74

IV. NUTRITION PROGRAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

A. Food Stamp Program, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

B. Commodity Assistance Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

C. Child Nutrition Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

D. Special Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

E. Effective Dates and Cost Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

V. FARM CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

A. Farm Ownership/Real Estate Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

B. Operating Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

C. Emergency Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

D. Administrative Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

E. Department of Agriculture Reorganization Act of 1994 . . . . . . . . . . . . . 110

F. Farm Credit System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

G. Miscellaneous Credit and Finance Provisions . . . . . . . . . . . . . . . . . . . . . 111

VI. RURAL DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113

A. Rural Community Advancement Program . . . . . . . . . . . . . . . . . . . . . . . 113

B. Fund for Rural America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113

C. Telecommunications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

D. Value-added Agriculture Development . . . . . . . . . . . . . . . . . . . . . . . . . 115

E. Water and Waste Treatment Programs . . . . . . . . . . . . . . . . . . . . . . . . . 116

F. Rural Entrepreneur and Business Investment Programs . . . . . . . . . . . . . 117

G. Strategic Rural and Regional Planning Programs . . . . . . . . . . . . . . . . . . 118

H. Rural America Infrastructure Account . . . . . . . . . . . . . . . . . . . . . . . . . . 119

I. Other Rural Development Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120

VII. RESEARCH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

A. Funding Authorities: USDA In-House Research and Cooperative Extension

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

B. The Initiative for Future Agriculture and Food Systems . . . . . . . . . . . . 123

C. Land Grant Institutions in Insular Areas . . . . . . . . . . . . . . . . . . . . . . . . 124

D. 1890 Land Grant Universities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

E. 1994 Institutions (Tribally Controlled Land Grant Institutions . . . . . . . . 126

F. Priority Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

G. International Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

H. Biotechnology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

I. Research Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

J. Competitive Research Grants Administration . . . . . . . . . . . . . . . . . . . . 129

K. Biosecurity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129

L. Research related to Rural and Beginning Farmers . . . . . . . . . . . . . . . . . 130

M. Miscellaneous Research Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

VIII. FORESTRY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134

A. Forest Landowner Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134

B. Suburban and Community Forestry . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

C. Watershed Forestry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

D. Fire Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

E. Forest Health Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136

F. Forestry Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137

G. Renewable Resources (RREA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137

H. International Forestry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137

I. Tribal Forestry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138

J. National Forest Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138

IX. MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139

A. Federal Crop Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139

B. Noninsured Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142

C. Emergency Crop Disaster and Income Loss Assistance . . . . . . . . . . . . . 143

D. Livestock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143

E. Migrant and Seasonal Farmworker Assistance . . . . . . . . . . . . . . . . . . . . 144

F. Tree Assistance and Caneberries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145

G. Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146

H. Anti-trust and Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153

I. Animal Transport, Inspection and Health . . . . . . . . . . . . . . . . . . . . . . . . 154

H. Plant Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160

J. Pseudorabies Eradication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161

K. Preclearance Quarantine Inspections for Hawaii . . . . . . . . . . . . . . . . . . 161

L. Non-Ambulatory Farm Animals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162

M. Animal Welfare Act (nonfarm animals) . . . . . . . . . . . . . . . . . . . . . . . . 162

N. Genetically Engineered Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165

O. Pesticides and School Pesticide Management Plans . . . . . . . . . . . . . . . 166

P. Socially Disadvantaged Farmers and Ranchers . . . . . . . . . . . . . . . . . . . . 167

Q. Outreach and Assistance to Geographically Disadvantaged Farmers and

Ranchers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168

R. Farm Marketing Programs

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169

S. Studies, Reports and Task Forces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169

This report reflects the contributions of the following CRS Analysts:

Farm Bill Provisions

CRS Analyst

Summary and Introduction

Jean Yavis Jones

Commodity Programs

Jasper Womach, Ralph Chite, Remy

Jurenas, Brenda Branaman, Carol

Canada

Conservation

Jeffrey Zinn

Agricultural Trade and Aid

Geoffrey Becker

Nutrition Programs

Joe Richardson

Farm Credit

Jerry Heykoop

Rural Development

Tadlock Cowan

Research

Jean Rawson

Forestry

Ross Gorte

Federal Crop Insurance

Ralph Chite

Energy

Brent Yacobucci

Animal Welfare

Genetically Engineered Food

Alex Segarra

Pesticides

Linda Schierow

For more information, see: CRS Electronic Briefing Book, Agriculture Policy

and the Farm Bill. [http://www.congress.gov/brbk/html/ebagr1.shtml]), and CRS

Report RL31195, The 2002 Farm Bill: Overview and Status..

Individual topic comparisons include the following CRS Reports:

RL31251, Commodity Support Provisions: Comparison of Current Law with

House and Senate Farm Bills by Jasper Womach;.

RL31255, Resource Conservation Title: Comparison of Current Law with

House and Senate Farm Bills by Jeffrey Zinn; and

RL31271, Energy Provisions the Farm Bill: Comparison of Current Law

with House and Senate Farm Bills. by Brent Yacobucci.

A New Farm Bill: Comparing the House and

Senate Proposals with Current Law

Introduction

Consideration of new farm policy began more than a year before the major

provisions of the 1996 farm bill expired. This was due, in large part, to persisting low

prices for many major field commodities and several recent years of multi-billion dollar

farm aid packages approved by the Congress to help offset declining farm income. The

current economic environment is quite different from that existing in 1995-96 when the

last farm bill was considered. Prices for many major commodities are stagnant or

declining, supplies are high, and demand (particularly in previous growth markets

overseas) is not growing at the rates existing in the mid-1990s. Moreover, when the

House and Senate began examining new farm policy options early in 2001, a projected

budget surplus negated the kinds of budget deficit pressures placed on farm program

spending in 1995. The recent recession and costs of the U.S. war against terrorism

could alter this situation. The cost differences between the House and Senate-passed

farm bills (some $6.1 billion over ten years) and the quicker pace of spending in the

Senate farm bill are key issues in the current debate. There is pressure to reach an

agreement in time to assist farmers in making their spring planting decisions, and

concern that failure to enact a new farm bill before the next congressional budget

resolution could put the new money allowed by last year’s budget resolution (+$73.5

billion) in jeopardy.

Background

When the current farm bill was being formulated in 1995 and 1996, the farm

economy was enjoying a boom. Prices for most commodities were at record highs, as

was farm income. Moreover, foreign demand for U.S. agricultural goods was

expanding, particularly in Asia and Latin America. At the same time, in the Congress,

legislators were facing increasing demands for changes in farm policy that would better

control farm program spending and adapt U.S. policies to trade agreements.

The Federal Agricultural Improvement and Reform (FAIR) Act of 1996 (or 1996

Farm bill, was enacted in August 1996, after nearly two years of deliberations, and the

extension of previous law provisions beyond their original 1995 expiration date.1 The

1

Many of the provisions of the 1990 Farm law (P.L. 104-624) were scheduled to expire at the

end of 1995. The transition in 1994 from Democratic to Republican control of the House and

Senate and a new congressional agenda and leaders, delayed completion of a new farm. The

Congress extended the expiring provisions of the 1990 law for an additional year until another

farm law could be enacted in 1996. Many of the key policy changes made by the 1996 law

(continued...)

CRS-2

Agricultural Market Transition Act (AMTA), Title I of the FAIR Act, contained

provisions that capped federal spending, ended land set-asides and target prices for most

commodities, and created a new farm income support system replacing target price

supports. Wheat, feedgrain, cotton, and rice farmers choosing to participate in this new

program were to receive gradually declining fixed, decoupled annual payments (socalled production flexibility contract (PFC) payments, sometimes called AMTA

payments).2 These were provided each year in lump sums, irrespective of market prices

or farmers’ planting decisions.

Opponents of this gradual phase-out of federal assistance worried about what

would happen if prices and markets declined, as began to happen late in 1997. But bill

proponents pointed out that counter-cyclical income relief would remain under the

marketing loan assistance program. Moreover, they contended that farmers getting

Production Flexibility Contract (PFC) payments in good economic times would be able

to put them away for a rainy day to soften the impact of losses during low price periods.

This point also was made in response to those who objected to giving farmers payments

when economic conditions were good.

By 1998 conditions in the farm economy had changed. Prices for many major

commodities began to decline as a financial crisis hit Asia and Latin America (two of

the fastest growth markets for U.S. goods). Moreover, several years of good

worldwide growing conditions had increased supplies and the value of the American

dollar was high relative to other countries, making U.S. goods expensive compared to

competitors. Farm income began to decline, and the Congress stepped in. Seven

emergency farm aid bills approved in 1999, 2000, and 2001 provided nearly $33 billion

in additional federal funds to agriculture (primarily to wheat, feedgrain, oilseed, cotton

and rice farmers). This helped to stabilize farm income and to keep average farm family

income higher than the national average for all U.S. households. However, as the

proportion of net farm income drawn from federal aid approached 50%, many in

Congress and elsewhere began to push for longer term changes to underlying farm

policy that would provide more certainty to farmers than reliance on ad hoc annual

financial aid packages.

Thus, the 107th Congress began to examine agriculture policy and solicit proposals

from the various producer groups shortly after coming into session. Hearings were held

by the House and Senate, and testimony was presented both in Washington and in field

hearings throughout much of 2001. The House passed a bill (H.R. 2646) in October,

2001; the Senate began debate on its farm bill (S.1731) in early December, but was

unable to reach resolution before the adjournment of the first session on December 19,

2001. A much revised Senate bill was passed on February 13, 2002.

1

(...continued)

were authorized through 2002.

2

Payment levels were “decoupled” from target prices, which, in the past, were used to make

payments to farmers when market prices fell below specified targets.

CRS-3

Legislation in the 107th Congress

History

The House Agriculture Committee farm bill (H.R. 2646) was introduced on July

26, 2001. The Committee marked up this bill on July 27 and amended and reported it

on August 2. It was sequentially referred to the House International Relations

Committee, which reported it with amendments on September 10. Floor debate on

H.R.2646 began on October 2 and continued through October 5 when the bill was

passed by a vote of 291-120. The bill was engrossed and sent to the Senate on October

9, 2001

On November 15, 2001, the Senate Agriculture, Nutrition and Forestry Committee

ordered to be reported an original bill (S.1731) in lieu of S.1628, a farm bill introduced

on November 2 by Committee Chairman Harkin. S.1731 was adopted by the

Committee and reported to the Senate on November 27, and placed on the legislative

calendar.3 On November 30, the Senate began debate on a motion to proceed to the

consideration of S.1731. Efforts to speed up consideration and obtain a vote for final

passage on this measure prior to the end of the first session were unsuccessful.4

Several substitute amendments or alternatives to the Committee bill were offered during

debate in the last session. Among these was the Daschle Amendment (#2471),

substituting for the Committee-reported bill. Offered on December 11, it was the

pending vehicle at the end of the first session.

Several substitutes to the Daschle substitute were offered and tabled (i.e.,

effectively rejected) in the first session. The rejected alternatives included:

! An amendment offered by Senator Lugar (# 2473) that would have replaced and

completely revised the commodity provisions of the Daschle substitute and

substantially increased spending for nutrition programs5;

! A substitute amendment offered by Senators Roberts and Cochran (# 2671) that

would have modified the Daschle substitute to reflect some of the concerns

expressed by the Administration (discussed below, and,

! A substitute amendment (# 2678) by Senator Hutchinson (Ark.) offering the

House-passed farm bill (H.R. 2646) as a substitute.

3

The Committee filed a written report on S.1731 on December 7, 2001 (No. 107-117)

4

There were several efforts to invoke cloture in order to cut off debate on this legislation; all

failed. The first (a test vote on the motion to proceed to consideration) failed by a vote of 7326. Subsequent cloture votes failed by lesser votes - 53-45 and 54-43.

5

The Lugar proposal would have established, in lieu of the Senate bill’s target price and

income support provisions, a “whole-farm” income insurance program, available to all crop

and livestock farmers (i.e. livestock and fruit and vegetable growers not now receiving direct

payments). It would have provided for a federal payment equaling 6% of a farm’s receipts

that could be used to pay insurance premiums for guarantees of 80% of average income for

farmers. A pilot project testing this approach in a limited number of states was authorized in

the finally-approved Senate bill.

CRS-4

Early in the second session of the 107th Congress, debate was renewed over the

Senate farm bill (Daschle Substitute Amendment # 2471). On February13, 2002, a

substantially revised bill was approved by the Senate. This version, renumbered as the

Senate amendment to H. R. 2646, reflected some 31 amendments, one of which, the

so-called Managers’ Amendment (#2859), was 397 pages (longer than the entire House

bill of 379 pages). Among the more controversial of the many floor amendments agreed

to was one that lowered limits on farm payments, with savings used to increase

spending for nutrition programs in ways similar to those proposed by the previously

rejected Lugar amendment. Less controversial amendments added livestock feed

assistance, another $2.4 billion in additional emergency farm assistance for FY2002, and

a myriad of new conservation, rural development, research, and animal health and

welfare provisions.

Policy analysts assert that a final bill will have to be agreed upon by late March if

new farm policies are to apply to crop year 2002 production. If there is no new farm

law by that time, another multi-billion dollar farm aid package is possible.

Summary Comparison

Although the House and Senate farm bills described in this report vary from one

another in many respects, there are common features to both. First, although farm

commodity support is the main focus of the two bills and generally has gotten the most

attention, both bills contain much more than farm commodity provisions. Other titles

in the bills cover conservation, trade, nutrition programs, credit, rural development,

research, and forestry. Moreover, both bills seek to reverse some commodity policies

established in the last farm bill that, among other things, eliminated federal target prices

for commodities, and discontinued (in the case of wool, mohair, honey) or gradually

eliminated (in the case of dairy) federal support for some commodities.6 They both

substantially increase funding for farm commodity programs, although in different

amounts. Initial estimates for the Senate farm bill showed it raising commodity program

spending (Title I) by $26.8 billion over five years and by $41.1 billion over ten years.

The addition of $6.1 billion underestimated by CBO brings the revised totals to $30.5

billion and just under $46 billion, respectively, over the 5 and 10 year periods. (This

does not include the additional $2.4 billion in “emergency” assistance the Senate also

added for FY2002 commodity programs.) The House bill adds $25.1 billion to

commodity programs over 5 years, and $48.8 billion over 10 years.

The bills also continue a trend toward increasing federal support for a broader

array of conservation efforts and expanding payments to farmers who engage in

environmentally sensitive farming practices, although the Senate provisions are more

generous in this regard. Both bills also make changes to the food stamp program to

assist states in conforming program rules to those of other welfare programs, to

increase commodity donations to domestic food programs, and in the Senate bill,

restore eligibility to certain legal aliens.

6

The Federal Agriculture Improvement and Reform (FAIR) Act of 1996, P.L. 104-127, was

amended several times to extend the planned expiration date for the dairy price support

program. Congress also restored federal aid for the honey, wool and mohair programs as part

of several “emergency” funding packages enacted to shore up farm income.

CRS-5

Finally, both bills make changes that utilize the $73.5 billion in increased funding

allowed by the budget resolution, although the Senate bill now is estimated to spend

$6.1 billion more than that amount. It also uses up its 10-year funding total more

quickly than does the House, and adds another $2.45 billion in “emergency” farm aid

for FY2002. Some of more significant differences between the bills that are expected

to be the subject of debate in the conference deliberations are described below.

Spending and Time-frame.

The House-passed farm bill has a 10-year life span; the Senate bill authorizes the

programs for 5 years. The time span in the House bill is related to provisions in the

FY2002 Congressional Budget Resolution (H.Con.Res.83) that provided room for

some $73.5 billion in additional spending over the period 2002-2011 for a new farm bill.

The Senate 5-year authorization reflects the more traditional time-frame for multi-year

farm bills, although the new spending is projected over a 10-year period.

The FY2002 Congressional Budget Resolution (H.Con.Res.83) adopted in 2001

made room for additional agriculture spending of $5.5 billion for FY2001, $7.35 billion

in FY2002, and $66.15 billion over the following nine years for food and farm

programs. This provided for a total of $73.5 billion in new budget authority for

FY2002-2011above baseline spending. The expectation was that this new money

would be used to finance a new farm bill and that most of it would go for farm

commodity programs, although this was not required. FY2001 money was spent for

emergency assistance. The allowable spending for FY2002 and beyond was intended

either for emergency farm assistance or a new farm bill.7

Both the House and Senate bills originally were estimated by CBO to cost $73.5

billion over the 10-year period, FY2002-2011. This included funding for farm

commodity programs as well as nutrition programs, trade, research, conservation, and

rural development, among other things. It does not reflect the additional $2.45 billion

in farm “emergency” assistance for FY2002 that the Senate added to its bill.8 It also

does not reflect some $6.1 billion in higher costs that the CBO now says was left out

of earlier projections of the Senate bill commodity provision costs because of an error.

This would bring the new spending in the Senate bill to a total of $79.6 billion.

The Senate bill also spends its new money faster than the House bill -- well over

60% in the first 5 years (FY2002-2006) compared to the House bill which would spend

about half of its new money during that period. Under both bills, well over half of the

new spending goes for commodity programs – $48.8 billion under the House bill and

7

As noted above, the Senate approved a floor amendment to its farm bill that adds $2.4 billion

in “emergency” farm assistance. A waiver to the budget rules requiring offsets of additional

spending for “emergency” reasons was approved by a voice vote so that this additional

spending is not counted against the Senate farm bill for FY2002.

8

A voice vote to waive this additional funding as “emergency” assistance was approved by

the Senate as part of Amendment # 2839); this designation means that the additional funding

does not require offsets in spending elsewhere to conform to budget rules.

CRS-6

$46 billion under the Senate bill.9 Other major spending differences between the two

bills include new budget authority for nutrition and conservation programs. The Senate

raises spending for nutrition programs by $9.3 billion over 10 years, compared to an

increase of $3.7 billion for these program in the House bill. For conservation programs,

the Senate adds $17.4 billion, while the House adds $15.8 billion in new funding over

the next 10 years. Some of the additional funding in the Senate bill for nutrition

program expansion comes from savings in commodity program spending that lowers

the farm payment limit for commodity programs. According to CBO estimates, the

payment limit reduction will lower commodity program spending by $695 million over

10 years. (See later section on payment limit issue.)

Current law estimates project that baseline spending for farm commodity programs

for the next 10 years (that is, the amount of federal spending expected with no changes

in law) will be approximately $97 billion. Using current CBO estimates, the additional

funding provided by commodity program changes in the proposed bills would bring

total spending on farm programs to $145.8 billion under the House bill, and $145.4

billion (including the $2.45 billion in emergency farm assistance added for FY2002)

under the Senate bill.

Administration Views

Like its predecessor, the Bush Administration did not put forward a new farm bill.

In fact, in its first year, the Bush Administration took the position that Congress should

give careful consideration to major farm policy changes before rushing through new

legislation. In other words, it contended that a new farm bill could wait until 2002. A

report issued by the Administration on September 19, 2001, laid out a set of

“principles” for farm policy.10 These principles focused on: (1) the wide differences

among farms and farming practices and the need for better tailored policy to reflect

these differences; (2) the tilt in existing policy toward highly efficient commercial farms

with no direct relationship between federal benefits and a farm’s financial need; and (3)

the need to rely on market rather than government forces over the long term, with short

term aid for “unexpected events” beyond a farmer’s control.

In early October 2001, as the House began floor debate on its farm bill, the Office

of Management and Budget (OMB) issued a Statement of Administration Policy (SAP)

that opposed this legislation. It contended that the House bill encourages

overproduction of commodities, does not target benefits to farmers most in need,

jeopardized global markets, and increases federal spending at a time of economic

uncertainty.

The Administration also objected to the Senate Agriculture Committee farm bill

(S.1731) reported in late November, renewing its concerns about stimulating

overproduction and poor targeting of farm payments. It also reiterated concern about

the bill’s potential to undermine U.S. efforts to phase out foreign countries’ export

9

This amount assumes the $38.9 billion originally estimated by CBO plus the $6.1 billion

CBO has indicated it underestimated for the cost of the commodity provisions in that bill.

10

Food and Agriculture Policy: Taking Stock for the New Century.

CRS-7

subsidies and U.S. ability to meet current trade obligations. Finally, the Administration

took the position that the Senate-reported bill would authorize costly and ineffective

conservation programs, weaken accountability in domestic nutrition programs, and

result in unknown budget costs.

In early January 2002, USDA officials indicated that they expect Congress and the

Bush Administration to agree on a farm bill by early March, 2002. OMB officials

informed the Congress that the President supports the $73.5 billion in additional farm

spending over ten years that was permitted by last year’s congressional budget

resolution. This appears to have removed some of the concerns that failure to enact a

new farm bill before the next budget resolution could risk loss of the new funding for

farm bill programs.

In late February, following passage of the Senate farm bill, the Administration

indicated that it preferred the more gradual approach to new spending in the Housepassed farm bill, to the more rapid use of the new money provided by the Senate

amendment. Administration officials fear the potential for the Senate approach to

exhaust federal farm support in the early years and force substantial amounts of new

spending in later years. On the other hand, USDA officials have expressed concern

about the large amount of new funding in the House bill for farm commodity programs,

and the Administration appears to favor some of the nutrition program provisions in the

Senate bill.

Selected Issues

Commodity program provisions. Both bills maintain a system of fixed annual

payments to wheat, feedgrain and cotton and rice farmers, although the House appears

to provide more assistance in this form than does the Senate.11 Both bills add soybean

growers to those eligible for these fixed payments. Both bills also maintain marketing

loan assistance, but the House bill sets loan rates at, or slightly below, those set under

current law while the Senate substantially raises these rates. On the other hand, while

both bills provide new counter-cyclical income support, the House bill appears to

provide substantially more funding for this supplemental assistance than does the

Senate. In sum, the House approach tends to rely more heavily on fixed annual

payments and greater levels of counter-cyclical income support than the Senate, which

puts more emphasis on higher levels of marketing loan assistance. Both bills maintain

the 1996 policy changes that provided broad planting flexibility to farmers receiving

federal program payments and eliminated annual cropland set-aside tools formerly used

to reduce production to avoid price-depressing surpluses or control federal farm

spending.

11

Official CBO estimates are not available at the time of this report because of the recently

discovered error that underestimated the cost of Senate commodity program provisions by

some $6.1 billion over 10 years. If the full amount of that error is added to the earlier CBO

estimates of the costs of the Senate commodity provisions, the total would be $45.9 billion,

compared to $48.8 billion in the commodity programs cost estimates for the House farm bill.

CRS-8

Farm Payment Limits. Current law limits on payments to farmers are revised

and applied to new programs under both the House and Senate farm bills. The Senate

limitations, which are more stringent than those in the House bill are opposed by most

farm groups.

In general, the farm payment limits first imposed in 1970 have been high enough

so that they rarely resulted in any cut-off of farm payments. Moreover, mechanisms for

getting around the caps have been available. In the late 1990s, however, when it

appeared that loan deficiency payments to some farmers might exceed the limits then

in place, Congress doubled the limit on these payments. 12 The doubled levels have

been operable for the past several years.

A list of farmer payments released by the Environmental Working Group (EWG)

rejuvenated interest in the farm payment limit issue. The EWG data show a large

proportion of federal farm payments, sometimes in quite large amounts, going to small

numbers of large farms and also to some wealthy absentee landlords. This study was

widely reported by the media and reportedly influenced the more stringent payment

limits that were added to the Senate farm bill during floor debate.13

The House bill raises the current law limit on contract payments from $40,000 per

year per person to $50,000. It also sets a maximum of $75,000 in payments for grains,

cotton, and oilseeds, and separately another maximum of $75,000 for peanuts under

the new counter-cyclical income support program it creates. By contrast, the Senate

bill sets a combined maximum per person payment of $75,000 for both fixed payments

and counter-cyclical payments, and applies this limit to all eligible crops, including the

newly eligible peanuts (which are treated separately by the House bill).

Under the marketing loan assistance program, the House bill would raise the

previous farm law limit from $75,000 to $150,000 for wheat, feedgrains, oilseed,

cotton, and rice payments, and would establish separate payment limits of $150,000 for

each of the peanut, honey, wool, and mohair programs.14 The Senate bill establishes

one limit of $150,000 in marketing loan assistance for all of the eligible commodities

(wheat, feedgrains, oilseeds, cotton, rice, honey, wool, lentils, dry peas, and chick peas

15

). It also applies this limit to the value of marketing certificates and loan forfeitures

which, under current law and the House bill, are not counted toward the payment limits.

Additionally, the Senate bill contains language that would prohibit those with adjusted

gross incomes above $2.5 million annually from receiving any farm payments.16 The

12

This followed substantial increases in farm spending enacted under several multi-billion

farm “emergency” aid packages.

13

New York Times, May 18, 2001, Farm Subsidies: Who Gets Fed? Washington Post,

January 24, 2002, More Subsidy Money Going to Fewer Farms. See also, the Environmental

Working Group Farm Subsidy Database at www.ewg.org

14

The farm bill set $75,000 as payment limit for LDPs, but this was doubled by subsequent

legislation when the cap would have cut some farmers off at that level.

15

The Senate bill does not contain assistance for mohair.

16

The lower payment limits were added during Senate floor debate under an amendment

(continued...)

CRS-9

10-year saving from the Senate payment limit provision, as estimated by the CBO, is

$695 million ($405 million over 5 years), most of which is used by the Senate bill to

help fund a food stamp program expansion. Most analysts expect the impact of the

Senate payment limit to be the greatest for large rice and cotton farmers whose federal

payments tend to be larger than those producing other field crops.17

Proponents of limits contend that farm programs benefit most (in terms of federal

dollars) those who need aid the least (i.e., larger, wealthier farmers), while smaller,

high-risk farmers or those ineligible for direct payments (such as fruit, vegetable, and

livestock producers) get little or nothing. They charge that this system encourages the

growth of large corporate farms and helps to drive small and mid-sized farms out of

business. Opponents of payment limits (which include nearly all of the farm and

commodity groups) contend that farm policy should be based on productivity and

efficiency and that payment limits discourage both. They suggest that basing farm

payments on income or need would mean rewarding many farmers who are inefficient

or unwise in their farm management, and would discourage farmers from profitable

efficiencies. Moreover, they point out that many of the farms receiving large payments

also have similarly large costs of production and might not be able to operate as

efficiently or productively if federal support was not tied in some way to output.

Federal Budget and Trade Agreement Issues. The possible return of deficit

spending, or at least substantially depleted budget surpluses because of the War on

Terrorism and an economic slowdown, raises questions about how much funding will

be available for changes in farm policy. There is some concern about whether the

additional money agreed to in the past budget resolution will be honored if a farm bill

is not passed before the next budget resolution. Both the Administration and

congressional leaders, have indicated their intention to honor the additional money

provided for farm policy changes that was allowed by last year’s congressional budget

resolution – some $73.5 billion in additional funding over ten years.

As mentioned earlier, the Administration and the Senate differ over whether the

next farm bill should spend most of additional funding in the early years (and possibly

exhaust this money sooner rather than later) or provide for a more gradual release of

the funds. There is some dispute about how much money should go to commodity

programs versus conservation and nutrition programs. There also is concern that the

new commodity program spending in both bills could exceed the $19 billion cap on

spending for market-distorting domestic support that the U.S. agreed to abide by under

the Uruguay Round Agreement. In response to this concern, both bills contain differing

provisions that provide for some kind of adjustments if the spending cap is breached.

One issue between the chambers is the approach for making determinations that an

adjustment is needed and how the adjustments should work. Some policy analysts

question the mechanics of these adjustment provisions and have expressed doubt about

their practical implementation.

16

(...continued)

(#2826) offered by Senators Dorgan and Grassley

17

Among the reasons are the historically high farm subsidy levels set by Congress for cotton

and rice relative to other field crops, and high input costs for these crops.

CRS-10

Dairy Policy. Disagreement about the extension, or reauthorization of the

Northeast Dairy Compact and its possible extension to other regions of the country

splits along regional lines. The House farm bill does not extend the NE Dairy Compact

(which expired September 30, 2001). Efforts to include an extension of this compact

in S. 1731 threatened to delay or stop deliberations in the Senate and a compromise

proposal was included in the finally approved Senate bill that would replace the NE

Dairy Compact. This alternative would create a new counter-cyclical payment program

for dairy farmers in all states, with one quarter of the $2 billion allotted for the program

going to Northeast states. The earmark of funds for the Northeast is intended to offset

the loss of the higher farm milk prices permitted by the now defunct Compact.

Providing direct federal assistance to dairy farmers (rather than setting prices that pass

along higher costs to processors and consumers) concerns some who worry about

further expansions in farm assistance and the federal budget deficit. Others wonder

how this will be viewed by European and other trading competitors that the U.S. is

putting pressure on to reduce their domestic support programs.

Conservation Programs. Major points of contention include questions about

how much funding should be provided for these programs versus farm commodity

programs, what portion, if any, of the funding should be mandatory, and who should

retain control of water rights when farmers put land into conservation programs

(especially wetland programs).

The Senate bill provides more money for conservation programs ($17.4 billion)

than the House bill ($15.8 billion) over the next ten years. This difference is expected

to be an issue in the Conference Committee, as are some of the new programs in the

Senate bill. Another issue related to conservation is a Senate provision that would

allow USDA to purchase water rights from farmers. This provision evoked considerable

debate about the potential loss of state and local control of water rights to the federal

government through farmer participation in wetlands and other conservation programs.

Moreover, some farm groups have indicated that they would rather have no farm bill

than one that permits greater federal control of water rights. Conversely, some

environmentalists, although supportive of many of the new initiatives in the Senate bill,

worry that the efforts of some to use conservation programs to increase farm payments

may weaken the environmental and conservation standards for participating in these

programs. There also are some concerns that increased payments for various farm

conservation activities may subject U.S. trade negotiators to complaints that the U.S.

is using environmental concerns to circumvent trade agreements that limit domestic

farm support.

Concentration in the livestock sector. A livestock packers amendment offered

by Senator Tim Johnson and others was accepted during Senate floor debate. It would

prohibit meat packers from owning or controlling livestock within 14 days of slaughter.

Designed to help protect livestock producers from price manipulation by large meat

packing companies, this amendment drew fire from some. Opposition centered on the

fact that the amendment did not apply to poultry (a growing competitor to beef and

pork), and that it might endanger the use of marketing contracts. Some believe that

these contracts help producers and processors plan and market their goods to the

benefit of both. However, there are others who see contracts (especially the

confidentiality clauses in them), as a way for processors to unfairly manipulate the

prices they pay for livestock, and keep producer prices low. The restriction is supported

CRS-11

by the American Farm Bureau and Iowa Pork Producers Association, two major farm

interest groups. It is opposed by most meat processors and some livestock producers.

An amendment modifying the meatpacker restrictions to clarify that they do not affect

livestock under marketing contracts was adopted during Senate deliberations. Another

amendment calling for a study of this prohibition also was adopted. The restrictions on

packer ownership are expected to be a sticking point in conference deliberations.

Comparison Caveats

The following table compares current law or policy with selected provisions in the

House-passed farm bill (H.R. 2646) and the Senate Amendment to H.R. 2646 approved

by the Senate. It updates an earlier version that presented the Daschle substitute to S.

1731 (S. Amdt. 2471) for comparison with the House bill. It is intended to assist those

interested in the major issues before the Conference Committee that will be deliberating

on the next farm bill, and to identify the major differences from current law, and

between the House and Senate bills. It is not a comprehensive comparison of all of the

provisions in each of the bills and current law. Covering all of the provisions in these

bills and comparing them to current law and each other is not feasible given the size of

the bills (especially the Senate bill) and the time constraints on its usefulness. Thus, this

report narrows its scope to compare significant changes being proposed and areas of

major difference between each of the chambers’ bills. Judgments about which

provisions to include were made by each of the CRS specialists covering the relevant

titles, with some modifications by the coordinator and additions by the coordinator.

The report presents the comparison under topics, using the Titles of the farm bills

as the organizing theme (although this does not work in all cases because of the

differences in the bills’ configurations). It is presented as much as possible in the same

order as the House and Senate bills, but the sections are not necessarily in the same

order as the bills. Rather, they are grouped by topic. Funding information in this

report is based on CBO estimates, unless otherwise noted. In several instances changes

to one title of a bill impact on other titles. For instance, the commodity payment limit

in the Senate bill (under Title I) allows additional funding for nutrition programs (Title

IV). This is noted in most cases where it occurs, and explains why budget estimates

displayed by title may differ from those displayed by program. Analysts have tried to

cross-reference provisions presented under the outlines categories. The report tries to

follow the order and organization of the House and Senate bill presentations but is not

able to do so in all instances.

CRS-12

Comparison of Selected Provisions: Current Law and House and Senate Farm Bills

(H.R. 2646 and the Senate Amendment)

I. COMMODITY PROGRAMS

COMMODITY PROGRAMS CURRENT LAW/POLICY

Title:

Federal Agriculture Improvement and

Reform (FAIR) Act of 1996 (P.L. 104127) [ Section 101]

HOUSE BILL

Farm Security Act of 2001. [Section 1]

SENATE BILL

Agriculture Conservation and Rural

Enhancement (ACRE) Act of 2001. [Section

1]

Definitions:

1. “Considered Planted” is defined under 1. No provision

the FAIR Act to mean “acreage considered

planted” under Title 5 of the Agricultural

Act of 1949, and other acreage the

Secretary considers fair and equitable.

This includes: (a) any reduced or diverted

acreage; (b) acreage that could not be

planted because of drought, flood or other

natural disaster or condition beyond farmer

control; (c) acreage equal to the difference

between permitted acreage for a crop and

the planted crop if it is devoted to

conservation uses or the production of

commodities permitted under programs for

crop years 1991-1997; (d) any acreage the

Secretary determines is necessary to

establish a fair crop acreage base; (e)

acreage up to 20 percent of crop acreage

base for feed grains or wheat if planted to

dry peas and lentils; and (f) the crop

acreage base if producers forego farm

1. The definition of “Considered Planted”

is revised to mean any acreage planted that

producers were prevented from planting

because of a drought, flood, or other natural

disaster or condition beyond control of the

owner or producer, as determined by the

Secretary, and any acreage not planted to

another contract commodity (except for a

contract commodity produced under an

established practice of double cropping).

[Section 102]

CRS-13

COMMODITY PROGRAMS CURRENT LAW/POLICY

HOUSE BILL

SENATE BILL

payments and do not plant to the crop or

any fruit or vegetable not designated as

industrial or experimental. [Sec. 102(2)of

FAIR Act and Section 503(c) of the

Agricultural Act of 1949 (which is one of

several permanent laws whose provisions

often are suspended or temporarily or

permanently revised or amended by farm

bills)]

2. “Contract” and “Production 2. No Provision

Flexibility Contract” defined to mean a

contract entered into under the terms of

Section 111 of the FAIR Act of 1996,

which establishes fixed , annual, lump sum

payments to farmers. [Section 102(3) of

the FAIR Act]]

2. Defines “Contract” as a contract entered

into under subtitle B, Nonrecourse Marketing

Assistance Loans and Loan Deficiency

Payments. [Section 102]

3 . “Contract Acreage” is defined to mean 3. No Provision

one or more crop acreage bases established

for contract commodities under Title V of

the Agriculture Act of 1949 that would

have been in effect for the 1996 crop but

for the suspension of existing target price

support programs under Section 171 (b)(1)

of the Fair Act of 1996.[Section 102]

3. Redefines “contract acreage” to mean the

acreage determined under section 111(f) of

the bill, which refers to “direct and countercyclical payments.”

(Section 102(4)]

4. “Contract Commodity” is defined to

mean wheat, corn, grain sorghum, barley,

oats, upland cotton, and rice. [Section

102]

5. “Contract Payment” is defined to

mean production flexibility contract

4. “Covered Commodity” replaces 4. “Contract Commodity” is redefined to

“covered” for “contract” and adds soybeans, add oilseeds to current law. [Section 102]

and other oilseeds to current law . [Section

100]

CRS-14

COMMODITY PROGRAMS CURRENT LAW/POLICY

HOUSE BILL

payments to wheat, corn, grain, barley, 5. No provision

oats, upland cotton and rice farmers

[Section 102]

SENATE BILL

5. “ Contract Payment” is a payment made

to wheat, corn, grain sorghum, barley, oats,

upland cotton, rice and oilseed farmers under

Subtitle B, Nonrecourse marketing assistance

loans and loan deficiency payments. [Section

102]

6. “Counter-cyclical Payment”

No provision

6. “Counter-cyclical Payment” means a 6. No definition

payment made to producers under section

105, Availability of Counter-cyclical

Payments. [Section 100]

7. “Fixed Decoupled Payment”

7. “Fixed Decoupled Payment” means a 7. No definition.

payment made to producers under section 104

Availability of Fixed Decoupled Payments.

[Section 100]

8. “Farm Program Payment Yield” 8. “Payment Yield” is the yield established 8. “Payment Yield” means the payment yield

means the farm program payment yield under section 102 for a covered commodity. determined under Section 111(g) [Section

established for the 1995 crop of a contract [Section 100]

102]

commodity under section 505 of the

Agriculture Act of 1949 [Section 101]

9.“Target price

No provision

NOTE: Eliminated for most field commodities

by the AMTA of 1996.

9. “Target Price”means the price per bushel 9. No provision

(or other appropriate unit) of a covered

commodity used to determine the payment

rate for counter-cyclical payments.[Section

100]

CRS-15

COMMODITY PROGRAMS

CURRENT LAW/POLICY

Agricultural Market Transition Act

(AMTA), Title I of the Federal

Agriculture Improvement and Reform

Act of 1996, Subtitles B, C, D, and E,

and miscellaneous agriculture laws.

HOUSE BILL

SENATE BILL

Farm Security Act (FSA) of 2001, Title I,

Subtitles A, B, and D.

Agriculture, Conservation and Rural

Enhancement (ACRE) Act of 2001, Title 1,

Subtitles A and B.

A. GRAINS et. al. (Wheat, Corn, Grain Sorghum, Barley, Oats, Upland Cotton, Rice, Soybeans and Minor Oilseeds)

1. Fixed, Decoupled Payments

a. Eligibility

Eligibility for PFC contracts is extended

to producers previously enrolled in a

grain or cotton program in at least 1 of

the 1991-95 crop years. Conservation

Reserve Program cropland expiring or

terminated after Jan. 1, 1995 is eligible.

Soybeans and minor oilseeds are not

eligible PFC commodities. [Section 111]

[NOTE: Payment limits are covered

under section N]

Farms with existing PFC contracts, and

other producers with a history of contract

crop or oilseed production from 1998-01

are eligible to sign up for fixed, decoupled

payments. Soybeans and minor oilseeds

also are made eligible for what will be

known as “agreement” crops. Provision is

made for expiring CRP acres to be added to

the agreements. [Section 101(a) and

103(a)]

Same as House bill. [Section 111]

Establishes a sign-up period, lasting not

more than 180 days after enactment, during

which producers sign “agreements”

covering crop years 2002 thru 2011 (10

years). [Section 110]

Establishes a sign-up period, that begins not

less 45 days after enactment and lasts for 180

days, during which producers sign “contracts”

covering crop years 2002 thru 2006 (5 years).

[Section 111]

b. Sign-Up Period

The sign-up period is required to begin

not later than 45 days after enactment

and end August 1, 1996. Production

flexibility contracts (PFCs) cover 7 years,

1996 thru 2002 crops. [Section 112]

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d. Conservation and Wetlands

Compliance

Same as current law. [Section 106]

Same as current law. [Section 111 as it

amends Section 111 of FAIR Act]

Farmers are allowed to plant any crop

except fruits and vegetables (other than

lentils, mung beans, and dry peas) on

contract acreage and there are no

planting restrictions on non-contract

acreage. Cropland not planted has to be

devoted to a conserving use to prevent

erosion and can not be converted to nonagricultural uses. [Section 118]

Same planting flexibility allowance as

current law, but wild rice is added to

exceptions. [Section 107]

Same planting flexibility allowance as current

law, but wild rice is added to exceptions

beginning in 2003. [Section 113]

Violations of planting flexibility

limitations generally result in termination

of the contract on each farm in which the

producer has an interest. [Section 116]

No provisions for violations.

For first time, unintentional violations of

planting flexibility limitations, the penalty shall

be a refund or reduction of future payments

amounting to twice the payment amount on

the involved acres. [Section 112]

Producers are required to comply with

already existing conservation

requirements on highly erodible land and

with already existing prohibitions on

draining wetlands for purposes of crop

production. These compliance

requirements did not impose any new

obligations on producers. [Section 111]

e. Planting Flexibility and Limitations

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f. Program Base Acres and Payment

Yields

Each farm’s base acres and payment

yields are used to calculate the program

benefits to the producer. The base acres

and yields for eligible crops are those that

would have applied in 1996 under the

then expiring program. Under the

expiring program, the “acreage base” for

each program crop is the average acres

planted/considered planted the prior 5

years for wheat, feed grains and the prior

3 years for upland cotton, rice. [Section

102]

Program payment yields for each crop

are frozen at 1986 program levels.

[Section 102]

[Note: Soybeans and minor oilseeds are

ineligible under current law and there are

no provisions for establishing base acres

and yields for oilseeds.]

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Base acres for each crop are either the acres

specified in existing contracts, or average

acres planted to eligible crops from 1998

thru 2001. Accommodation is made for

double cropping, peanut acres, and CRP

acres. Base acres cannot exceed total

cropland on a farm. [Section 103]

Same as House bill. [Section 111]

The program payment yield for each crop is

the: payment yield in effect for 2002 under

an existing production flexibility contract; or

a similarly appropriate yield for farms

without past contracts. Oilseed yield is the

average yield from 1998-01, adjusted back

to a 1981-85 equivalent. [Section 102]

Payment acres equal 85% of base acres in

calculating payment amounts. [Section

100(9) and 103(f)]

The program payment yield is either: the yield

specified in existing contracts, or average

yield from 1998 thru 2001. There is no

requirement to adjust yields back to an 198185 equivalent. In calculating payment

amounts, payment acres are 100% of base

acres. [Section 111]

Same as current law. [Section 106(c)]

Same as current law. [Section 111]

g. Change in Farm Ownership or

Operator

Contract obligations can be assumed by

new owners. Otherwise the contract is

terminated. Changing operators does not

affect program acres or yields. [Section

117]

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Farmers who sign production flexibility

contracts (PFC) in 1996 receive fixed

annual payments for 7 years, unrelated to

crops or acreage actually planted. The

payment quantity for each commodity is

85% of the contract acreage times the

payment yield times the payment rate.

[Section 114]

Similar framework to current law.

Farmers who sign “agreements” receive

fixed, decoupled annual payments for 10

years, unrelated to crops or acreage actually

planted. The payment quantity for each

commodity is 85% of payment acres times

the payment yield times the payment rate.

[Section 104]

Similar framework to current law.

Farmers who sign contracts receive fixed,

decoupled annual payments for 5 years,

unrelated to crops or acreage actually planted.

The payment quantity for each commodity is

100% of payment acres times the payment

yield times the payment rate.[Section 111]

Estimated 2002 contract payment rates:

Payment rates are specified for all years as

follows:

Wheat, $0.53/bu

Corn, $0.30/bu

Sorghum, $0.36/bu

Barley, $0.25/bu

Oats, $0.025/bu

Cotton, $0.0667/lb

Rice, $2.35/cwt

Soybeans, $0.42/bu

Minor Oilseeds, $0.0074

Payments rates are specified for 2002/03,

2004/05, 2006 as follows:

Wheat, $0.45, $0.225, $0.113/bu

Corn, $0.27, $0.135, $0.068/bu

Sorghum, $0.31/$0.27, $0.135, $0.068/bu

Barley, $0.20, $0.10, $0.05/bu

Oats, $0.05, 0.$025, $0.013/bu

Cotton, $0.13, $0.065, $0.0325/lb

Rice, $2.45, $2.40, $2.40/cwt

Soybeans, $0.55, $0.275, $0.138/bu

Minor Oilseeds, $0.01, $0.005, $0.0025/bu

Total payments are to be reduced by $100

million on a pro rata basis (about 2% based

on CBO estimates) and these funds are to be

devoted to specified rural development

programs. [Section 943]

No comparable provision.

h. Payment Rates (see also Payment

limits under subsection N of this section)

Wheat, $0.46/bu

Corn, $0.26/bu

Sorghum, $0.31/bu

Barley, $0.20/bu

Oats, $0.021/bu

Cotton, $0.0556/lb

Rice, $2.04/cwt

Soybeans, not a contract crop

Minor Oilseeds, not contract crops

The law does not specify actual payment

rates, but states the total funds available

each year and the allocation share for

each commodity. [Section 113]

No provision

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Not relevant

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FY2002 PFC payments under current law

are to be discontinued after enactment, and

any amount already paid is to be deducted

from the amount due under this Act.

[Section 108]

No explicit reference is made to discontinuing

payments under PFC contracts, or to

payments already made under to old law.

The producer can choose to receive 50% of

the payment on or after December 1 and the

rest will be payed not later than September

30 of each fiscal year. [Section 104(d)]

Same as House bill. [Section 111]

i. Time of Payment

The producer can choose to receive 50%

of the payment on December 15 or

January 15 and the remainder not later

than September 30 of each fiscal year.

[Section 112(d)(1 and 2)]

Alternatively, for FY1999-02, the

producer can choose to receive the full

amount or portions at times during the

fiscal year chosen by the producer.

[Section 112(d)(3) as added by PL 105228, Section 2]

2. Counter-Cyclical Deficiency Payments and Target Prices

a. Eligibility

Eliminates counter-cyclical target price

deficiency payments that were enacted in

1973 and functioned through 1995.

When effective, farmers were paid the

difference between the target price and a

lower season average farm price on a

Restores counter-cyclical target price

deficiency payments that ended in 1995.

Farms that have signed agreements are

eligible to receive counter-cyclical payments

each year that average market prices are less

than target prices. [Section 101]

Same as House bill. [Section 111]

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The payment amount for each commodity is

85% of payment acres times the payment

yield times the payment rate. The payment

rate is the difference between a) the loan

rate (or average market price if it is higher

than the loan rate) plus the fixed decoupled

payment and b) the “target price.”[Section

105]

Same as House bill, except that the payment

amount for each commodity is 100% of

payment acres times the payment yield times

the payment rate. [Section 171]

Target prices are for all years are specified

as follows:

Wheat, $4.04/bu

Corn, $2.78/bu

Sorghum, $2.64/bu

Barley, $2.39/bu

Oats, $1.47/bu

Upland Cotton, $0.736/lb

Rice, $10.82/cwt

Soybeans, $5.86/bu

Minor Oilseeds, $0.1036/lb

Target prices are for all years are specified as

follows:

Wheat, $3.446/bu

Corn, $2.3472/bu

Sorghum, $2.3472/bu

Barley, $2.1973/bu

Oats, $1.5480/bu

Upland Cotton, $0.6793/lb

Rice, $9.2914/cwt

Soybeans, $5.7431/bu

Minor Oilseeds, $0.1049/lb

specified proportion of the a farm’s crop

base acres.

NOTE: Payment limits are discussed

under subsection N of this section.]

b. Target Prices and Payment Rates

Not applicable.

3. Marketing Assistance Loans and LDPs

a. Eligibility

Any wheat, feed grains, upland cotton,

and rice produced on PFC farms is

Marketing assistance loans and loan

deficiency payments (LDPs) are available

Same as House bill. [Section 121, 122]

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eligible for marketing assistance loans or

LDPs, whether or not it is produced on

contract acres. These commodities are

not eligible for loan or LDPs if produced

on farms without contracts. Any oilseed

is eligible for marketing assistance loans

or LDPs, whether or not the farm has a

contract. [Section 131]

[See Payment limits under subsection N.]

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for agreement crops (grains, upland cotton,

oilseeds) on all farms where they are

produced, whether or not they have signed

agreements). [Section 121]

b. Term of Loans

Loans on grains and oilseeds are for 9

months beginning on the first of the

month after the loan date. Loans on

upland cotton are for 10 months

beginning on the first of the month before

the loan date.

Same as current law. [Section 123]

Same as current law. [Section 124]

Same as current law. [Section 124]

Same as current law. [Section 125]

c. Loan Repayment

For grains and oilseeds, marketing

assistance loans can be repaid at the

lesser of the loan rate plus interest, or the

rate determined by USDA that minimize

forfeitures, minimize the accumulation of

CCC-owned stocks, minimize the cost of

storage, and allow for free and

competitive domestic and international

marketing. [Section 134]

For upland cotton, loans can be repaid at

the lesser of the loan rate plus interest, or

the prevailing world market price

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adjusted to U.S. quality and location.

Additional adjustments to the world price

are made when the world price declines

to near the loan rate , and when the price

of U.S. cotton exceeds the price of

competing cotton in the world market.

[Section 134]

In the event of a default on a loan at the

maturity date, the commodity pledged as

collateral reverts to CCC ownership. No

further action is taken against the

borrower because marketing assistance

loans are nonrecourse. [Section 131]

d. Loan Deficiency Payments (LDPs)

Producers with grain, upland cotton, or

oilseeds eligible for marketing assistance

loans instead can choose to receive loan

deficiency payments. The LDP is the

difference between the loan rate and the

loan repayment rate established by the

USDA. [Section 135]

Same as current law. [Section 125]

Same as current law. [Section 126]

Loan rates generally are to be not less than

85% of the moving 5-year Olympic average

of prices received by producers, or more

than:

Fixed, specific loan rates are as follows:

e. Loan Rates

Marketing assistance loans and loan

deficiency payments (LDPs) continue at

1995 rates. Authority is provided for

USDA to lower the loan rates when

stocks accumulate. Loan rates generally

are to be not less than 85% of the moving

5-year Olympic average of prices

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received by producers, or more than:

Wheat, $2.58/bu

Corn, $1.89/bu

Sorghum, $1.69/bu

Barley, $1.71/bu

Oats, $1.14/bu

Cotton, $0.5192/lb

Rice, $6.50/cwt

Soybeans, $5.26

Minor Oilseeds, $0.093/lb

Rice can not be below $6.50, soybeans

can not be below $4.92, minor oilseeds

can not be below $0.87

[Section 132]

P.L. 106-224, Section 206(a)(2) and (3),

made loans and LDPs available on nonPFC farms only for crop year 2000.

Wheat, $2.58/bu

Corn, $1.89/bu

Sorghum, $1.89/bu

Feed Barley, $1.70/bu

Malting Barley, $1.65/bu

Oats, $1.21/bu

Cotton, max $0.5192-min $0.50/lb

Rice, must equal $6.50/cwt

Soybeans, $4.92/bu

Minor Oilseeds, $0.087/lb

[Section 122]

Wheat, $2.9960/bu

Corn, $2.0772/bu

Sorghum, $2.0772/bu

Barley, $1.9973/bu

Retroactively, for the 2001 crops, as was

the case for 2000, LDPs are available on

non-PFC farms that produced contract

crops and oilseeds. [Section 125(f)]

Same as House bill [Section 169]

Same as current law.

Marketing loans and LDPs are available on all

production at the following rates:

Dry Peas, $6.78/cwt

Lentils, $12.79/cwt

Large Chickpeas, $17.44/cwt

Oats, $1.4980/bu

Cotton, $0.5493/lb

Rice, $6.4914/cwt

Soybeans, $5.1931/bu

Minor Oilseeds, $0.0949/lb

[Section 171]

[See Payment limits under Subsection N]

B. OTHER COMMODITIES

a. Dry Peas, Lentils and Chickpeas

1. Marketing Loans and LDPs

No support is authorized for dry peas,

lentils, large chickpeas, small chickpeas.

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Small Chickpeas, $8.10/cwt

The term of each loan is 9 months, beginning

the first day of the month after the loan is

obtained. [Section 171 as it amends Section

111]

b. Grazed Wheat, Barley, and Oats

1. Payments in Lieu of LDPs

P.L. 104-127 made no provision for

LDPs on grazed wheat, barley and oat

acreage. P.L. 106-224, Section 205,

provided for LDPs on grazed acres only

for 2001 crops.

Wheat, barley, and oats that are grazed and

not harvested, but would be eligible for

LDPs if harvested, will receive LDPs under

similar rules to those that apply to harvested

crops. Federal crop insurance is not

allowed on grazed land agreements.

[Section 126]

Similar to House bill, but includes grain

sorghum along with wheat, barley and oats as

eligible crops. [Section 127]

For farms that normally harvest corn or

sorghum in a high moisture condition,

recourse loans are available at rates set by

the USDA. Farms need not have signed

“agreements.” [Section 129(a)]

No provision is made to support high

moisture corn or sorghum.

c. High Moisture Corn and Sorghum

1. Recourse Loans

Recourse loans are available on high

moisture corn and grain sorghum. Loan

rates are determined by the USDA. Only

producers with PFC contracts are

eligible. [Section 137(a)]

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Recourse loans are available for all upland

and ELS seed cotton, at rates set by the

USDA. Farms need not have signed

“agreements.”[Section 129(b)]

No provision is made to support seed cotton.

Same as current law. [Section 122]

Marketing assistance loans for ELS Cotton

are equal to $0.7965/lb.[Section 171]

d. ELS and Seed Cotton

1. Recourse Loans

Recourse loans are available on upland

seed cotton for farms with PFC

contracts, and on any farm producing

ELS seed cotton. [Section 137(b)]

2. Marketing Assistance Loans

Marketing assistance loans for ELS

Cotton are to be not less than 85% of the

moving 5-year Olympic average of prices

received by producers, or more than

$0.7965/lb.[Section 132]

e. Hard White Wheat Incentive Payments

1. Incentive Payments

No special support provision is added for

hard white wheat. However, hard white

wheat, like all other wheat, does qualify

for contract payments and marketing loan

program benefits.

Same as current law, no added support

provision is made for hard white wheat.

For crop year 2003 through 2005, an

additional $40 million is to be paid to

producers to ensure that hard white wheat on

not more than 2 million acres meets minimum

quality standards. [Section 164]

f. Cotton Competitiveness Provisions for Processors and Exporters

1. Marketing Certificates

Marketing certificates or cash payments

are made to domestic users and exporters

of upland cotton whenever the 4-week

Some changes from current law.

Marketing certificates or cash payments are

made to domestic users and exporters of

Same as current law. [Section 121(b)]

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price of U.S. cotton gets too high

compared to world cotton price (i.e.,

1.25¢/lb higher), or is not high enough

compared to the U.S. cotton loan rate

(i.e., less than 130% higher). [Section

136(a)]

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upland cotton whenever the 4-week price of

U.S. cotton gets too high compared to

world cotton (i.e., 1.25¢/lb higher), or is not

high enough compared to the U.S. cotton

loan rate (i.e., less than 134% higher).

[Section 127(a)]

2. Import Quotas

A special import quota is imposed on

upland cotton when U.S. prices exceed

world prices by 1.25¢ for 10 weeks.

[Section 136(b)]

A special import quota is imposed on

upland cotton when U.S. prices exceed

world prices by 1.25¢ for 4 weeks. [Section

127(b)]

Same as current law. [Section 121(b)]

A limited global import quota is imposed

on upland cotton when U.S. prices

average 130% of the previous 3-year

average of U.S. prices. [Section 136(c) ]

Same as current law. [Section 127(b)]

Same as current law. [Section 121(b)]

Retains same nonrecourse loan rates as

current law, 18¢/lb. raw cane, and 22.9¢/lb.

refined beet by preserving Section 156(a) &

(b) of the FAIR Act. [Section 151(a)]

In-process sugar is newly eligible for loan at

80% of full loan rates. [Section 151(e)]

Loan rates may be reduced if competing

Same loan rates as current law.

Same in-process sugar loans as House bill.

[Section 141(e)]

Same authority to reduce loan rates as House

bill. [Section 141(a)]

g. Sugar

1. Price Support Loans

Raw cane sugar and refined beet sugar is

supported with nonrecourse loans at 18¢

and 22.9¢/lb respectively. [Section

156(a) and (b)] The loan rates may be

reduced if negotiated reductions in

support are achieved for other sugar

countries. [Section ]156(c)] A recourse

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loan program when the tariff rate quota

on imports is less than 1.5 million short

tons was eliminated by P.L. 106-387,

Section 836.

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nations sufficiently reduce support. [Section

151(c)]

2. No Net Cost Mandate

No provision mandating no net cost.

Loan programs to be operated at no net cost

by avoiding forfeitures. [Section 151(f)]

Same no cost policy as House bill. [Section

141(f)]

Forfeiture penalty is retained by preserving

Section 156(g) of the FAIR Act.

The loan forfeiture penalty is eliminated.

[Section 141(d)]

No change from current law.

Same as House bill, except authorizes the

USTR in consultation with the USDA to

reallocate any shortfall of sugar not shipped

against a country’s share of its sugar import

quota to other quota-holding countries

[Section 144]

3. Loan Forfeiture Penalty

A forfeiture penalty of 1¢ per pound on

raw cane sugar (an equivalent amount for

beet sugar) is assessed on loan

forfeitures. This effectively reduces the

level of support. [Section 156(g)]

4. Import Quotas

A global import quota of not less than

1.256 million short tons is set each year

by USDA under authority of the

Harmonized Tariff Schedule of the

United States. The quota is allocated

among countries by U.S. Trade

Representative. [HTSUS, chapter 17,

additional U.S. note5. USTR announces

a separate allocation for additional sugar

entering from Mexico as agreed in the

sugar side letter to NAFTA.]

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Sugar marketing allotments are restored and

are to be shared between beet sugar and raw

cane at 54.35% and 45.65%. Allotments

are suspended when imports exceed 1.532

million short tons. [Section 152]

Similar to House bill, but provision is made

for new cane processor entrants (including

mainland states not previously producing

cane). [Section 143]

CCC is authorized to make in-kind

commodity payments from stored

inventories to processors in exchange for

reduced sugar production. [Section 151(f)]

Same authority to make in-kind payments for

reduced production as House bill. [Section

141(f)]

The assessment on all sugar marketings is

eliminated. [Section 151(b)]

Same as House bill. [Section 141(c)]

Interest rate on loans is equal to CCC cost

of funds. This is 1% less than the interest

rate for other commodities. [Section

151(h)]

Same interest rate on loans as House bill.

[Section 141(j)]

5. Marketing Allotments

The authority to impose mandatory

marketing allotments on domestic sugar

production is suspended. [Section

171(a)(1)(E)]

6. In-Kind Payments

No provision.

7. Marketing Assessment

Processors must pay an assessment on all

marketings of sugar to CCC equal to a

specified percentage of the loan rate.

[Section 156(f)] P.L. 106-78, Section

803(b), suspended the assessment for

FY2000 and FY2001. P.L. 107-76,

Section 749, delays remittance of 2002

assessments until September 2, 2002.

8. Interest Rate on Loans

The interest rate on loans is 1% above

the CCC cost of borrowing money.

[Section 163]

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9. Storage Facility Loans

No provisions for storage facility loans.

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Storage facility construction and

improvement loans are to be made available

to processors. [Section 153]

Same as House bill. [Section 142]

Peanut quotas are terminated and farmers

are compensated $1,000/ton (50¢/lb)

($200/ton/year for 5 years). [Section 170]

Similar to House bill, except quota

compensation is $1,100 (55¢/lb)

($220/ton/year for 5 years). [Section 152]

Nonrecourse loans are replaced by

marketing assistance loans. Marketing

assistance loans set at $350/ton (17.5¢/lb)

available for all peanut production without

distinction of end use. [Section 167]

Marketing assistance loan rate set at $400/ton

(20¢/lb) available for all peanut production

without distinction of end use. [Section 151 ]

Support for peanuts designed like that for

grains, cotton, and oilseeds. Rules

Similar to House bill. [Section 151

h. Peanuts

1. Poundage Quotas and Nonrecourse

Loans

National poundage quota is set to reflect

the projected domestic demand for edible

peanuts. [Section 155]

2. Non-recourse Marketing Assistance

Loans

The price of peanuts sold for domestic

edible consumption (quota peanuts) is

supported through nonrecourse loans at

$610/ton (30.5¢/lb). The price of

additional peanuts (nonquota peanuts,

those exported or crushed for oil and

meal) is supported at a competitive level

(set by USDA at $132/ton, 6.6¢/lb, in

2001). [Section 155]

3. Fixed Payments, Counter-Cyclical

Payments

No provisions for fixed payments or for

counter-cyclical payments for peanuts.

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regarding eligibility, sign-up, conservation

and wetlands compliance, planting

flexibility, base acres, payment yields, etc.,

are similar to those that apply to grains,

cotton, and oilseeds.

The assignment of each farm’s acres and

yield to cropland selected by the producer is

done on a one-time basis. [Section 162(b)]

Similar to House bill. [Section 151]

Fixed, decoupled annual payments at the

rate of $36/ton (1.8¢/lb) are made on 85%

of each farm’s history of peanut production.

[Section 163]

Fixed, decoupled contract payments at the

same rate as the House bill. [Section 151]

Counter-cyclical deficiency payments

against a $480/ton (24¢/lb) target price are

made on 85% of each farm’s history of

peanut production. [Section 164]

Counter-cyclical deficiency payments against a

$520/ton (26¢/lb) target price are made on

85% of each farm’s history of peanut

production. [Section 151]

Payments limits for peanuts are treated

separately from those set for other

commodities. Fixed, decoupled payments

for peanuts are subject to a limit of $50,000

per person, per year. The limit on countercyclical target price deficiency payments is

$75,000, and the limit on marketing loan

benefits is $150,000. [Sections 169 and

183]

Payments received for support of peanuts are

subject to the same limits as other crops, and

are included in the payment totals set for other

crops, rather than treated separately as in the

House bill. For all crops, the combination of

fixed, decoupled payments and countercyclical payments is limited to $75,000 per

individual, per year. Marketing loan benefits

are limited to $150,000. Raised limit by and

additional $50,000 for a qualifying married

couple. [Section 169]

3. Peanut Payment Limits

Payment limits are not applicable to

peanuts under current law.

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Marketing loans and LDPs are available to

all producers at the following rates:

Similar to House bill, except no support for

mohair.

Marketing loans and LDPs are available to all

producers at the following rates:

Graded Wool, $1.00/lb

Nongraded Wool and Unshorn Pelts, 40¢/lb

Mohair, (see note below)

[ Sections 123 and 171]

i. Wool and Mohair

1. Marketing Loans and LDPs

Wool and mohair support was phased out

and ended in 1996 by P.L. 103-130,

Section 1, which repealed the National

Wool Act of 1954. However, support

was authorized in several subsequent

years. P.L. 106-78 Section 801(h),

authorized recourse loans on 1999 crop

mohair. P.L. 106-224, Section 204(d),

mandated payments on 1999 crop wool

of $0.20, and on mohair of $0.40/lb. P.L.

106-387, Section 814, authorized

payments of $0.20/lb for wool and $0.40

mohair for crop year 2000, up to $20

million. Again for crop year 2001, P.L.

107-25, Section 5, authorized $16.9

million in direct payments for wool and

mohair at rates determined by

USDA.[Section 132 of the FAIR Act of

1996]

Graded Wool, $1.00/lb

Nongraded Wool, 40¢/lb

Mohair, $4.20/lb

[Section 130]

[Note: Section 123 of the Senate-passed bill

does not include mohair among the list of loan

rates for marketing assistance. However,

section 171 of the same bill includes a loan

rate of $2.00 for mohair. This section

amended the loan rates set under section 123,

and was added to fund improvements in

nutrition assistance. The originally introduced

version of S. 1731 contained a mohair loan

rate, but it was dropped in the Daschle

substitute and a conforming change reflecting

this was not contained in section 171.]

j Honey

1. Marketing Assistance Loans and

LDPs

Honey support is repealed. [Section 171]

Note: This action followed several years

Marketing loans and LDPs at $0.60/lb. The

term of a loan is 12 months, beginning the

first day of the month after the loan is

Marketing loans and LDPs at $0.60/lb. The

term of the loan is 9 months, beginning the

first day of the month after the loan is

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of agriculture appropriations bill language obtained. [Section 131]

preventing USDA from carrying out the

mandatory honey marketing loan

program.

Recourse loans were authorized for the

1998, 1999, and 2000 crops by

respectively P.L. 105-227, Section 1122;

P.L. 106-78, Section 801; and P.L. 106224, Section 204. P.L. 106-387, Section

812, made marketing assistance loans and

LDPs available on 2000 crop honey at

$0.65/lb and outstanding recourse loans

were converted to nonrecourse marketing

loans.

SENATE BILL

obtained.[Section 171]

k. Dairy

1. Dairy Price Support Program

(DPSP)

The 1996 farm bill (P.L. 104-127), as

amended, reauthorizes the DPSP at the

current level of support ($9.90 per

hundredweight (cwt.) of milk). [Section

141]

The DPSP indirectly supports the farm

price of milk through USDA purchases of

surplus cheese, butter and nonfat dry milk

(powder). The law allows the Secretary

of Agriculture to adjust government

purchase prices of butter and powder

twice annually in order to minimize

government expenditures. The FY2002

agriculture appropriations act (P.L. 107-

Extends the DPSP through December 31,

2011 at the current level of support ($9.90

per cwt.). The Secretary would be

permitted to adjust purchase prices of butter

and nonfat dry milk twice annually to

minimize government expenditures on the

program. [Section 141]

Extends the DPSP through December 31,

2006 at the current level of support ($9.90 per

cwt.). The Secretary would be required to

adjust purchase prices of butter and nonfat dry

milk twice annually to minimize government

expenditures on the program. [Section 131]

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76) extended the DPSP through May 31,

2002 [Section 772(a)]

2. The Northeast Dairy Compact and

Counter-Cyclical Payments for Dairy

Farmers

The 1996 farm bill (P.L. 104-127) gave

contingent authority for the six New

England states to create an interstate

dairy compact. [Section 147] The

compact required fluid milk processors in

New England to pay a minimum price

for farm milk used for fluid consumption

that is higher than the minimum price

established under federal regulation.

Compact was established in 1997 at a

minimum price of $16.94 per

hundredweight (cwt.). Legislative

authority expired on September 30, 2001.

No provisions.

Replaces the Northeast Dairy Compact with a

new counter-cyclical payment program for

dairy farmers through September 30, 2005.

Whenever the minimum price for fluid farm

milk falls below a target price of $16.94 per

hundredweight (cwt.) in 12 Northeast states

(ME, NH, VT, CT, RI, MA, NY, NJ, PA,

MD, DE, WV), farmers in these states receive

a direct government payment to compensate

for 45% of the difference between the target

price and the monthly minimum market price

for fluid farm milk. Farmers in all other states

receive a federal payment when the average

market price for farm milk in any quarter falls

short of a 5-year average market price for that

quarter. Each producer receives a payment

equal to 40% of the market price shortfall

from the 5-year average. Total funding over

the life of the program is $500 million for the

Northeast states, and $1.5 billion for all other

states. Payments can be received by a farmer

on up to 8 million lbs. of annual milk

production. [Section 132]

Repeals authority for a recourse loan

program. [Section 142]

No provision.

Separately, emergency authority included

in the agriculture appropriations acts of

FY1999 (P.L. 105-277), FY2000 (P.L.

106-78) and FY2001 (P.L. 106-387)

provided ad-hoc direct government

payments to all dairy farmers in response

to volatile farm milk prices.

3. Recourse Loan Program

P.L. 104-127 permanently authorized a

new recourse loan program to help dairy

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processors balance their inventories, to

be implemented once the dairy price

support program (DPSP) expires.

[Section 142]

P.L. 104-127 originally required the

elimination of the DPSP on January 1,

2000. However, subsequent legislation

extended price support authority.

Recourse loan program was never

implemented, and its authority was

repealed by P.L. 107-76.

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(Subsequent to House passage of H.R.

2646, P.L. 107-76 was enacted which

repealed authority for the recourse loan

program. [Section 772(b)])

4. Dairy Export Incentive Program

The 1985 farm bill (P.L. 99-198) first

authorized the dairy export incentive

program, which helps U.S. exporters

counter subsidized sales by foreign

competitors through cash or commodity

bonuses. [Section 153]

Program has been reauthorized

periodically in subsequent farm bills.

Most recently, the 1996 farm bill (P.L.

104-127) reauthorized the program

through 2002. [Section 148]

Extends program authority through 2011.

[Section 143(a)]

Extends program authority through 2006.

[Section 133(a)]

Reauthorizes the program through

September 30, 2011. [Section 143(b)]

Reauthorizes the program through September

30, 2006. [Section 133(b)]

5. Dairy Indemnity Program

Authorized in 1964, the dairy indemnity

program indemnifies dairy farmers and

processors who, through no fault of their

own, suffer income losses due to

contamination of milk or dairy products

caused by pesticides and certain other

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1) Gives permanent authority to the fluid

milk promotion program; 2) strikes the

statutory definition of a fluid milk product

and use the definition promulgated in USDA

regulations; and 3) changes the definition of

a fluid milk processor for the purpose of the

required assessment, to exclude any fluid

processor that handles less than 3 million

pounds of fluid milk products each month.

[Section 144]

Same as House bill, except that fluid milk

delivered directly to consumer residences does

not count toward the 3 million pound

minimum requirement for the processor

assessment. [Section 134]

Extends the 15-cent assessment to imported

dairy products. The 15-cent assessment is to

be paid to U.S. Customs by the importer on

the equivalent of milk that went into the

manufacturing of the imported product.

Dairy importers are allowed up to 2 seats on

the national Dairy Board. None of the

importer-collected funds can be used for

foreign market promotion. [Section 146]

Same as the House bill. [Section 136]

toxic substances. Legislative authority

expired September 30, 1995. However,

annual appropriations have been made

subsequent to program expiration.

6. Fluid Milk Processor Promotion

Program

The Fluid Milk Promotion Act of 1990

(contained within the 1990 farm bill (P.L.

101-624)), as amended, authorized a

research and promotion program for fluid

milk products. [Sections 1999A-1999R]

The program is funded through an

assessment on fluid milk processors who

handle more than 500,000 lbs. of fluid

milk products each month. The 1996

farm bill (P.L. 101-624) extended

program authority through December 31,

2002. [Section 146]

7. Dairy Promotion and Research

Program

The Dairy Producer Stabilization Act of

1983 authorized a national dairy

producer program for generic dairy

product promotion, research, and

nutrition education. The program is

funded through a mandatory 15-cent per

hundredweight assessment on all milk

produced and marketed in the contiguous

48 states. Dairy farmers administer the

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program through the National Dairy

Promotion and Research Board.

8. Dairy Product Mandatory

Reporting

The Dairy Market Enhancement Act of

2000 (P.L. 106-532) established a

mandatory reporting system for dairy

product inventories and prices. It requires

USDA’s National Agricultural Statistics

Service to regularly collect data on the

prices and inventories of cheese, butter

and nonfat dry milk sold by dairy

manufacturers.

9. Dairy Studies

No provision in current law.

Makes a technical correction to the 2000 act

to include “substantially identical products

designated by the Secretary (of

Agriculture)” as part of the mandatory

reporting system. [Section 145]

Similar to the House bill. [Section 135]

Requires the Secretary of Agriculture to

submit to Congress a comprehensive

economic evaluation of national dairy

policies (i.e., the price support program,

federal milk marketing order, over-order

premiums and state pricing programs, dairy

compacts and export programs) and their

effect on the farm and rural economy,

domestic food and nutrition programs, and

consumer costs. [Section 147]

Requires the Secretary of Agriculture to

conduct studies to be reported to the House

and Senate Agriculture Committees on: 1) the

market effects of terminating all federal dairy

programs relating to price support and supply

management; and 2) the effects of changing

the standard of identity for fluid milk so that

the required minimum protein content of fluid

milk is commensurate with the average nonfat

solids contents of farm milk directly from the

cow. [Section 137]

[Note: California has a standard of identity for

fluid milk that requires a nonfat solids content

higher than the national requirement and

higher than the average content of raw milk

from the cow.]

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l. Tobacco

1. Flue-cured Quota

No provisions.

Same as current law.

Reduces the reserve stock level for flue-cured

in the quota determination formula from the

greater of 100,000 pounds or 10% of the

national marketing quota, to the greater of

75,000 pounds or 10%. [Section 162]

2. Flue-cured Farm Reconstitutions

No provisions

Same as current law.

Allows, for the 2002 crop only, for special

farm reconstitutions that otherwise would

violate the prohibition on flue-cured lease and

transfer of quota. Requires a study of the

prohibition of flue-cured quota lease and

transfer. [Section 163]

m. Specialty Crops

1. Mandatory CCC Purchases

No provisions of P.L. 104-127

specifically authorize or mandate support

for specialty crops. Subsequently,

emergency ad hoc assistance was

mandated for specialty crops. P.L. 106224, Section 203(d), mandated the CCC

spend $200 million for purchases fruits

and vegetables with low prices in 1998

and 1999, including apples, black-eyed

peas, cherries, citrus, caneberries, onions,

melons, peaches, and potatoes. P.L. 106387, Section 811 and Section 816

mandated respectively $100 million in

No Provision

Mandated specialty crop purchases using CCC

funds: $100 million in each of FY2002 and

FY2003, $120 million in FY2004, $140

million in FY2005, and $170 million in

FY2006. Mandated purchases of unspecified

commodities, at $30 million each year.

[Section 163]

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payments to apple growers and $20

million to cranberry growers to

compensate for low prices. P.L. 107-25,

Section 7(b), mandated the CCC to

distribute $133.4 million to states for

support of specialty crops.

C. PAYMENT LIMITS (Fixed, marketing loan, countercyclical)

1. Fixed Payments, and CounterCyclical Payments

a. Fixed contract payments are subject to

a $40,000 per person, per year limit for

grains, cotton, and rice.[Section 115]

(Note: Peanuts and oilseeds not eligible

for contract payments, so no payment

limit for these commodity growers)

a. Combined fixed, decoupled payments for

grains, cotton, and oilseeds are limited to

$50,000 per year per person. [Section 109]

Separate payment limit for peanuts set at

$50,000. [Section 169]

a. Fixed, decoupled commodity payments

combined with counter-cyclical target price

deficiency payments for grains, cotton, rice

oilseeds, and peanuts are subject to a $75,000

per person, per year limit. [Section 169]

b. No countercyclical payments in current

law.

b. Counter-cyclical payments for grains,

cotton, rice and oilseeds are subject to a

$75,000 per person, per year limit. [Section

109] Separately, counter-cyclical payments

for peanuts are limited to $75,000 per

person per year. [Section 169]

b. See above - for both fixed and

countercyclical payments there is a combined

limit of $75,000 per person per year for

payments made to producers of all eligible

crops. No separate limit for peanuts. [Section

169]

Marketing loan benefits for grains, cotton,

and oilseeds combined are subject to a

$150,000 per person, per year limit.

[Section 183] Separately, marketing loan

benefits for peanuts are limited to $150,000.

[Section 169] Separately, marketing loan

benefits for wool and mohair are limited to

Sets a payment limit of $150,000 per person

per year for marketing loan benefits paid for

all commodities (grains, cotton, rice oilseeds,

peanuts, dry peas, lentils, and chickpeas,

wool, and honey). Included in this limit are

marketing loan gains, LDPs, loan forfeiture

gains, and commodity certificate gains.

2. Marketing Loan Benefits

Marketing loan benefits (marketing loan

gains and LDPs) for all crops combined

are subject to a $75,000 per person, per

year limit. [Section 115] The limit was

raised to $150,000 for crop years 1999,

2000, and 2001 by respectively P.L. 10678, sec. 813; P.L. 106-387, sec. 837; and

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P.L. 107-25, sec. 10). Exempt from

payment limits are marketing certificates

sold to farmers at the posted county price

and used to pay off marketing assistance

loans (authorized by P.L. 106-78, sec.

812).

HOUSE BILL

$150,000. [Section 130(f)] Separately,

marketing loan benefits for honey are limited

to $150,000. [Section 131(f)]

SENATE BILL

[Section 169]

3. Spouse Benefit and 3 Entity Rule

No change is made to existing policy that Same as current law.

allows a spouse to be considered a

separate person or allows one person to

receive payments from 2 additional farms.

Either allowance doubles the limit on

payments.

A spouse allowance of an additional $50,000

is created. The 3-entity rule is replaced by

applying the limits to payments from all

sources (the so-called direct attribution rule.)

[Section NA]

4. Adjusted Gross Income Limit

No provision.

No provision

A person with adjusted gross income in excess

of $2.5 million is ineligible for payments.

[Section NA]

Same as current law.

Creates a 1-year Commission on the

Application of Payment Limitations for

Agriculture to analyze and make

recommendations on payment limits. [Section

NA]

5. Payment Limitation Commission

No provision.

D. COUNTER-CYCLICAL FARM SAVINGS ACCOUNTS

No provision.

Same as current law.

Farm counter-cyclical savings accounts are

authorized as a pilot program in 3 states.

Farms with adjusted gross revenue from

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CURRENT LAW/POLICY

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commodities of at least $50,000 would be able

to contribute an unlimited amount into a

savings account with limited matching federal

contributions (up to $5,000 per fiscal year).

Withdrawals are permitted when adjusted

gross revenue is less than 90% of the previous

5-year average.[Section 114]

(Note: Lugar Amendment 2859)

E. WTO LIMITS ON ALLOWABLE DOMESTIC SUPPORT

There is no upper limit in the law for

spending on commodity support

programs.

If USDA determines that total spending for

commodity support will exceed the limits

accepted by the United States in the

Uruguay Round Agreements, adjustments

may be made to reduce spending to the

limits but not below the allowable limits.

[Section 181(e)]

If USDA notifies Congress that support

program spending will exceed the allowed

limits and that adjustments will be made, all

spending on the designated programs will be

suspended after 18 months unless Congress

disallows the adjustments. [Section 164]

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II. CONSERVATION

CONSERVATION

CURRENT LAW/POLICY

HOUSE BILL

SENATE BILL

A. Environmental Conservation Acreage Program (ECARP)

Title VII of Food Security Act (FSA) of

1985 as amended by Title III of the

Federal Agriculture Improvement and

Reform (FAIR) Act of 1996.

Title II, Farm Security Act of 2001.

Title II of the Agriculture, Conservation,

and Rural Enhancement Act of 2001.

1. Purpose and Programs. Authorizes

program through long term contacts and

acquisition of easements, to be

implemented through the Conservation

Reserve Program (CRP), Wetlands

Reserve Program (WRP), and

Environmental Quality Incentive Program

(EQIP). [Section 1230(a) of the 1985

FSA as amended by Section 331 of the

1996 FAIR]

No provisions.

Renames ECARP the Comprehensive

Conservation Enhancement Program

(CCEP)and places new name throughout

Section 1230. [Section 207(a)]

Amends Section 1230(a) to reflect changed

placement of conservation programs in 1985

FSA. [Section 211(a)]

Repeals Section 1230A. [Section 207(c)]

[Note: Section 1230A is replaced with new

good faith provisions, discussed below in H

(13) (a).]

Good Faith protection provisions added

as Section 755 of the FY2001

Agriculture Appropriations. [Section

1230A of 1985 FSA, as amended by

Section 331 of 1996 FAIR]

[Note: ECARP is an umbrella under

which the CRP,WRP, and EQIP are

placed.]

2. Priority Areas. Permits the Section

to designate watershed, multistate areas,

or areas of special environmental

sensitivity for enhanced conservation

Repeals section 1230(c). [Section 201(2)]

Adds a new subsection giving priority to

areas where projects could be completed

most rapidly. [Section 211(b)]

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assistance through the CRP, WRP, and

EQIP. [Section 1230(c) of the 1985 FSA

as amended by Section 331 of the 1996

FAIR]

B. Conservation Reserve Program (CRP)

1. Period of Authorization and

Purposes. Authorizes program through

FY2002, and states the purposes are to

conserve and improve soil and water

resources. [Section1231 (a) of the 1985

FSA as amended by Section322(a)(1) of

the 1996 FAIR]

Reauthorizes CRP through FY2011. [Section

211(a)]

Adds wildlife resources to the purposes of the

program. [Section 211(b)]

Reauthorizes CRP through FY2006

[Section 212(a)]

2. Eligibility. Makes certain highly

erodible land, marginal pastureland, and

other cropland eligible. [Section 1231(b)

of the 1985 FSA]

Repeals the limit on enrolling marginal

pastureland to less than 10% of the total

enrolled acres, expands the definition of other

eligible cropland to include threats to soil and

air quality, and makes eligible land in

production for at least 4 years that would

contribute to conservation of ground and

surface water. [Section 212(a)] Adds a new

Section1231(i) that requires balance between

soil erosion, water quality, and wildlife habitat

when reviewing bids, with implementing

regulations to be issued within 180 days of

enactment. [Section 212(d)]

Makes eligible land that has a cropping

history for 3 of the 6 years preceding

enactment (and land enrolled in the CRP on

that date), and adds a new subsection that

makes land enrolled under the continuous

signup and the buffer initiative eligible for

the regular program. [Section 212(b)]

3. Enrollment Ceiling Authorizes

enrollment ceiling at 36.4 million acres.

[Section 1231(d) of the 1985 FSA as

amended by Section 332(b) of the 1996

FAIR.]

Raises ceiling to 39.2 million acres. [Section

212(b)]

Raises ceiling to 41.1 million acres. [Section

212(c)]

[Note: Section 215(a), in the water

conservation provisions, lowers the CRP

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enrollment ceiling to 40.0 million acres, and

Section 215(b) than allows an additional

500,000 acres to be enrolled in the state

Conservation Reserve Enhancement

Program, bringing total enrollment to 40.5

million acres.]

4. Duration of Contract. Allows CRP

contracts for some land devoted to

hardwood trees, shelter belts, wind

breaks, or wildlife corridors to be longer

than the 10 to 15 years allowed for other

contracts. [Section 1231(e)(2) of the

1985 FSA]

No provisions.

Amends Section 1231(e)(2) to allow the

Secretary to extend contracts on hardwood

forests for up to 15 years and limits annual

payments to 50% of the original contract

amount, and allow new contracts of 10 to

30 years. [Section 212(d)]

5. Conservation Priority Areas.

Requires the Section to establish, at the

request of a state, priority watersheds in

specified and other areas where

enrollment would “maximize water

quality and habitat benefits.” [Section

1231(f) of the 1985 FSA]

Allows land enrolled under this subchapter to

be eligible to reenroll in the CRP. [Section

212(c)]

Gives priority to areas where designation

would lead to the most rapid completion of

projects. [Section 212(b)]

6. Enrollment Subcategories.

Authorizes a 500,000 acre pilot

program, with enrollment limited to

150,000 acres in any state for small

wetlands(less than 5 acres) and buffers in

6 specified upper Midwestern states. [A

new Section1231(h), enacted in Title XI

of the FY2001 Agriculture

Appropriations (P.L. 106-387]

Expands the pilot program to all states and

limits enrollment in any state to 150,000

acres. [Section 215]

Deletes “pilot”, reauthorizes the program

through FY2006, and increases the

maximum size of eligible sites from 5 acres

to 10 acres (but only up to 5 acres are

eligible for payments). [Section 212(e)]

7. Duties of Owners and Operators.

Sets limits on commercial uses of lands in

Allows certain economic uses of enrolled

lands if consistent with soil, water, and

Adds a new subsection that allows irrigated

land to be enrolled through the buffer

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the CRP, but allows the Section to permit

harvesting or grazing under very limited

circumstances. [Section 1232(a)(7)]

Sets a goal of planting 1/8 of the land

enrolled each year to trees or habitat.

[Section 1232(c)]

Allows alley-cropping. [Section 1232(d)]

[Section1232(a) (7) of the 1985 FAIR as

amended by the 1990 FACTA, Section

1232(c) of the 1985 FSA, and Section

1232(d) of the 1985 FSA, respectively]

wildlife conservation. These uses include

managed grazing and haying (with reduced

payments), siting of wind turbines, and

harvesting biomass to produce energy (with

reduced payments). Deletes subsections (c)

and (d). [Section 213]

initiative or the CREP at the irrigated land

rate. [Section 212(f)]

Allows participants to plant native prairie

grasses on enrolled marginal pastureland, to

permit harvesting or grazing for

maintenance purposes on lands enrolled

through the buffer initiative or the CREP,

and adds a new subsection that makes crop

production on other highly erodible land a

violation of a CRP contract unless it has a

cropping history or was a building site when

it was purchased. [Section 212(g)]

Adds a new subsection that permits wind

turbines on CRP land (except land enrolled

in the continuous enrollment), with

payments reduced based on the diminished

value for CRP. [Section 212(h)]

8. Payments. Lays out the terms and

conditions for CRP payments.

[Section1234 of the 1985 FSA as

amended by Section1434(a) of the 1990

FACTA)

Payments for easements limited to

$50,000 per year. [Section 1239C(f)]

No provisions.

Adds a new subsection to provide

enrollment and cost sharing payments to

producers who enroll land in the buffer

initiative or through a CREP. [Section

212(i)]

Exempts payments for land enrolled in the

buffer initiative or through a CREP from the

payment limit for easements. [Section

212(j)]

9. County Enrollment Limits. Limits

enrollment in the CRP and WRP to 25%

of county cropland, and limits easements

to 10%; limits may be exceeded if it

would not adversely affect the local

economy or if operators are having

Repeals the provision allowing the Secretary

to exceed the county enrollment limit if

operators are having difficulty meeting

compliance requirements. [Section 244(a)]

Exempts land enrolled under the continuous

signup from county enrollment limit.

[Section 212(k)]

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difficulty meeting compliance

requirements. [Section1243(b) of the

1985 FSA as amended by Section 341 of

the 1996 FAIR.]

10. Funding and Administration.

Provides mandatory funding through the

CCC. [Section1241(a) of the 1985 FSA

as amended by Section341 of the 1996

FACT]

Reauthorizes mandatory funding through

FY2011. [Section241]

Reauthorizes funding from the CCC through

FY2006, and includes funding for technical

assistance in support this program. [Section

211(c)]

11. Study of Economic Effects. No

provisions.

No provisions.

Requires the Secretary to report to the

House and Senate Agriculture Committees

on the economic and social effects of the

CRP on rural communities within 270 days

of enactment. Specifies 3 components of

the analysis. [Section 212(l)]

1. Enrollment. The 1990 FACTA adds

a new Section1237 to the 1985 FSA

establishing the WRP and capping

enrollment at 975,000 acres. [Section

1438] Enrollment allowed through

calendar year 2002. [Section 333(b)(1) of

the 1996FAIR]

Enrollment ceiling increased from

975,000 acres to 1,075,000 acres.)

[Section 808 of the FY2001 Agriculture

Appropriations (P.L. 106-387)]

Allows enrollment of up to 150,000 acres per

calendar year starting in 2002, with any acres

up to the annual limit that is not enrolled can

be enrolled in succeeding years, through

FY2011. [Section 221(a)]

Authorizes enrollment through FY2011.

[Section 221(c)}

Authorizes WRP enrollment through

calendar year 2006. [Section 214(c)] Sets a

maximum enrollment ceiling of 2,225,000

acres, and an annual enrollment ceiling of

250,000 acres, of which up to 25,000 acres

can be enrolled in the new Wetland Reserve

Enhancement Program. [Section 214(b)]

2. Enrollment Options. Requires 1/3

enrollment each using permanent

easements, 30 year easements, and long-

Deletes the 1/3 requirement, and the

distinction between permanent and temporary

easements. [Section 221(b]

Creates a new Wetland Reserve

Enhancement Program that allows

agreements with state and local government,

C. Wetlands Reserve Program (WRP)

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term agreements. [Section1237(b) of the

1985 FSA as amended by Section333(a)

of the 1996 FAIR]

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and non-governmental organizations to

restore wetlands on land in or eligible to be

enrolled in the WRP. [Section 214(d)]

3. Easements and Agreements.

Describes the general terms of easements

and agreements. Prohibits altering

habitat, spraying chemicals and mowing,

any activity that degrades the land, and

any other activity that counters the

purpose of the easement, unless

permitted in the plan. [Section 1237A of

the 1985 FSA as amended by

Section333(d)(1) of the 1996 FAIR]

Replaces the 4 specific prohibitions with a

general statement to allow only changes

permitted in the plan. Deletes subsection (e),

which distinguishes 3 lengths of easements,

and subsection (h), which can require

wetlands to be restored if there is no

easement. [Section 222]

No provisions.

4. Secretarial Duties, including

Technical Assistance. Describes how

cost sharing and technical assistance will

be provided; and how priorities will be

set for determining which bids to accept.

[Section1237C of the 1985 FSA]

Deletes subsection (d), which requires the

Secretary to give priority to using permanent

easements. [Section 223]

Amends Section 1237C(a) to provide funds

from the CCC for technical assistance in

support of the WRP. [Section 214(a)]

Amends Section1237C(a)(2) to add

monitoring and maintenance to the types of

technical assistance provided to participants.

[Section 214(e)]

5. Changes in Ownership. Limits

program entry if ownership changes

occurred during the previous year, and

specifies terms under which easements

can be modified or terminated.

[Section1237E of the 1985 FSA]

Replaces 1990 acquisition date in

Section1237E(a)(2) with provision to make

eligible at any time land acquired through

foreclosure where the previous owner

exercised a right of redemption. [Section 224]

No provisions.

6. Funding. Funding from the CCC is

authorized to implement the WRP.

[Section 1241(a) of the 1985 FSA]

Reauthorizes mandatory funding through

FY2011. [Section 241]

Reauthorizes funding from the CCC through

FY2006, and includes funding for technical

assistance in support of this program.

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[Section 211(c)]

D. Environmental Quality Incentives Program (EQIP)

1. Program Purposes. Identifies 4

programs that EQIP replaces. Specifies

that EQIP maximize environmental

benefits per dollar spent while meeting 4

purposes. [Section 334 of the 1996 FAIR

adds Section1240 to the 1985 FSA]

Deletes reference to the programs that were

replaced; replaces the purpose of responding

to environmental threats with the purpose of

providing environmental benefits; and expands

the benefits to include air quality. [Section

231]

Specifies that EQIP is to promote

production and environmental quality while

maximizing environmental benefits per

dollar spent by assisting producers to meet 6

specified purposes. [Section 213(a)]

2. Definitions. Defines “eligible land”,

“land management practice”, “livestock”,

“producer”, and “structural practice”.

[Section 1240A of the 1985 FSA]

Adds non-industrial private forest land to

“eligible land”, and replaces the notion of

posing an environmental threat with the

notion of providing environmental benefits in

that definition; and “producer” is expanded to

include non-industrial private forestry.

[Section 232]

Adds definitions of “beginning farmer or

rancher”, “comprehensive nutrient

management”, “innovative technology”,

“managed grazing”, “maximum

environmental benefits per dollar

expended”, “practice”, and “program”.

[Section 213(a)]

3. Program Administration.

Authorizes EQIP through 2002; eligible

practices include structural and land

management practices; authorizes

contracts of 5 to 10 years; provides costshare of not more than 75% for structural

practices; prohibits cost sharing to large

livestock operations to construct animal

waste management facilities; provides

incentive payments for land management

practices; provides funding (not to

exceed projected costs) for technical

assistance; and lists types of private

sources to provide technical assistance.

[Section 1240B of the 1985 FSA]

Reauthorizes EQIP through FY2011;

authorizes contracts of 1 to 10 years; repeals

requirement that structural practices be

selected to maximize environmental benefits

per dollar spent; deletes limitation on

payments to large livestock operations to

construct animal waste management facilities;

and adds a new provision to make incentive

payments at an amount and rate to encourage

multiple land management practices, with

emphasis on payments for practices that

address “residue, nutrient, pest, invasive

species, and air quality management.”

[Section 233]

Reauthorizes EQIP through FY2006; adds

comprehensive nutrient management

planning to the list of eligible practices;

allows the Secretary to provide conservation

education to producers; authorizes contracts

of 3 to 10 years; limits producers to 1

contract for structural practices to manage

livestock nutrients through FY2006; limits

large livestock operators to 1 contract for a

waste storage or treatment facility;

authorizes application and evaluation

procedures for selecting applicants;

prohibits bidding down; limits cost sharing

payments to 75% (up to 90% for limited

resource and beginning farmers, or to

address a natural disaster); prohibits

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duplicate cost sharing payments for the

same practice; eliminates (by not including)

the limitation on cost-sharing with large

confined livestock operations for waste

management facilities; permits incentive

payments for technical assistance to certified

individuals to develop comprehensive

nutrient management plans; and specifies

circumstances for terminating contracts.

[Section 213(a)]

4. Evaluation of Offers. Requires the

Secretary to give higher priority to

assistance in priority areas, or to

watersheds, regions, or conservation

priority areas where states or localities

are active partners, and maximize

environmental benefits per dollar spent.

[Section1240C of the 1985 FSA]

Replaces these provisions with general

language about aiding farmers to comply with

environmental laws and encourage

conservation, maximizing the benefits of using

manure and other soil amendments, and

encouraging sustainable grazing systems.

[Section 234]

Adds higher priority also to be given for

special projects initiated by a new

partnership program to address

environmental issues placed in Section

1243(f), and to innovative technologies for

structural or land management practices.

[Section 213(a)]

5. Duties of Producers. Lists 5 duties;

one is a prohibition against practices that

counter the purposes of EQIP.

[Section1240D of the 1985 FSA]

No provisions.

Almost identical to current law, except gives

the Section greater latitude in determining

the appropriate penalty for violations.

[Section 213(a)]

6. Program Plan. Lists the general

contents of plans producers are required

to submit to the Section to participate.

[Section1240E of the 1985 FSA]

Replaces mention of management and

structural practices with providing greater

environmental benefits. [Section 235]

Almost identical to current law. [Section

213(a)]

7. Secretarial Duties. Assigns 5 duties

to the Sec; one is to provide technical

assistance and cost-share or incentive

payments for structural and land

management practices; another is to

Deletes incentive payments from

implementing structural and land management

practices. [Section 236]

Almost identical to current law, except that

it deletes (by not including) the duty of

providing an eligibility assessment. [Section

213(a)]

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8. Payment Limits and Timing. Limits

payments to $10,000 annually and

$50,000 per contract; specifies the annual

limit can be exceeded to maximize the

environmental benefits per dollar spent;

and delays federal expenditures until the

year after the contract has been signed.

[Section 1240G of the 1985 FSA]

Limits payments to $50,000 annually and

$200,000 per contract; deletes language

allowing annual limits to be exceeded to

provide maximum environmental benefit per

dollar spent, and repeals provisions to delay

federal expenditures until the year after the

contract has been signed. [Section 237]

Limits total payments under all contracts to

$30,000 annually. It is also limited to

$90,000 for a 3 year contract, $120,000 for

a 4 year contract, and $150,000 for a

contract that is 4 years or longer. The

Secretary can exceed the $30,000 payment

limit under certain circumstances. [Section

213(a)]

9. Other Provisions. Lays out

temporary transition provisions as EQIP

replaces 4 repealed programs. [Section

1240H of the 1985 FSA]

Replaces current language in Section 1240H,

with provisions that provide $30 million, in

FY2002, $45 million in FY2003, and $60

million annually in FY2004-11 from the CCC

for cost share payments and low interest loans

to encourage ground and surface water

conservation. [Section 238]

Replaces current language in Section1240H

with provisions that provide $100 million

annually from EQIP funds, starting in

FY2003, for competitive innovative

matching grants and specifies examples to

include market systems for pollution

reduction, promoting carbon sequestration

in soil and other Best Management

Practices, and protecting drinking water

quality; permits funds from other sources;

limits funding to 50% of cost; funds

unobligated by April 1 each year can be

spent on other EQIP purposes. Adds new

program as Section 1240I for groundwater

conservation in the southern high plains to

improve irrigation efficiency and reduce

water use using EQIP funds. ($15 million in

FY2003, $25 million in FY2004-5, $35

million in FY2006, and $0 in FY2007) Adds

new pilot programs as Section 1240J for

drinking water supplies, and for nutrient

reduction in the Chesapeake Bay watershed

prepare an eligibility assessment. [Section

1240F of the 1985 FSA]

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using EQIP funds. ($10 million in FY2003,

$15 million in FY2004, $20 million in

FY2005, $25 million in FY2006, and $0 in

FY2007) [Section 213(a)]

10. Funding and Administration.

Provides $200 million annually through

FY2002 from the CCC for EQIP, with

50% of the total going to practices

related to livestock production. [Section

1241 of the 1985 FSA as amended by

several annual agricultural

appropriations laws]

Authorizes mandatory spending through the

CCC through FY2011. [Section 241]

Provides $.2 billion for FY2001, $1.025

billion for FY2002-3, $1.2 billion for FY20046, $1.4 billion for FY2007-9, and $1.5 billion

for FY2010-11. [Section 242]

Reauthorizes the livestock provision through

FY2011. [Section 243]

Provides $.5 billion in FY2002, $1.3 billion

in FY2003, $1.45 billion in FY2004-5, $1.5

billion in FY2006, and $.85 billion in

FY2007; provides funding for technical

assistance from the CCC. [Section 241(b)]

Reauthorizes funding from the CCC through

FY2006, and includes funding for technical

assistance in support of this program.

[Section 211(c)]

E. Wildlife Habitat Incentives Program (WHIP)

1. Period of Authorization. Provides a

total of $50 million from the CCC (from

CRP funding) by the end of FY2002.

[Section387(c) of the 1996 FAIR]

Reauthorizes funding from the CCC at $25

million in FY2002, $30 million in FY2003-4,

$35 million in FY2005-6, $40 million in

FY2007, $45 million in FY2008-9, and $50

million in FY2010-11. [Section 252]

Moves WHIP to Section1240M of the 1985

FSA, reauthorizes funding from the CCC at:

$50 million in FY2002; $225 million in

FY2003; $275 million in FY2004; $325

million in FY2005; $355 million in FY2006;

and $50 million in FY2007; all funding to

remain available until spent. Provides

funding for technical assistance from the

CCC. [Section 217(g)]

2. Establishing WHIP No provisions.

No provisions.

Requires consultation with STCs to

establish WHIP. [Section 217(b)]

3. Cost-sharing Payments. Authorizes

cost sharing payments for several

approved purposes. [Section 387(b)]

No provisions.

Requires the Secretary to use at least 15%

of the cost-sharing funds on endangered and

threatened species. [Section 217(c)]

4. Participation Related to Public

No provisions.

Makes individuals and organizations leasing

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Lands. No provisions.

5. Pilot Program. No provisions.

SENATE BILL

public lands eligible for grants. [Section

217(e)]

Allows funds to be used on public lands if

they will benefit private lands. [Section

217(f)]

No provisions.

Allows the Secretary to use up to 15% of

the funds to enroll land for at least 15 years

to protect “essential plant and animal

habitat.” [Section 217(d)]

1. Funding Level. Provides up to a

total of $35 million from the CCC by

FY2002. [Section388(c) of the 1996

FAIR]

Provides up to $50 million annually through

FY2011 from the CCC. [Section 253(b)]

Moves the FPP to Section 1238H-J of the

1985 FSA[Section 218(a)], and repeals

Section 388 of the 1996 FAIR. [Section

218(c)]

Provides from the CCC: $150 million in

FY2002; $250 million in FY2003; $400

million in FY2004; $450 million in FY2005;

$500 million in FY2006; and $100 million in

FY2007; provides funding for technical

assistance from the CCC; limits the federal

share to 50%, limits the portion of the non

federal share provided by the landowner or

in inkind goods and services to 25%, and

prohibits bidding down. [Section 218(b)]

2. Eligible Land. Makes between

170,000 acres and 340,000 acres eligible

if the soil is prime, unique or productive,

and an offer is pending from a state or

local government to limit non agricultural

uses. [Section 388(a) of the 1996 FAIR]

Deletes the maximum and minimum acreage

limits, and makes historic and archaeological

sites eligible. [Section 253(a)]

Same as Section 253(a); and also defines

eligible land to include cropland, rangeland,

grassland, pasture land and forest land that

is part of an agricultural operation. [Section

218]

F. Farmland Protection Program (FPP)

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3. Conservation Planning. Requires a

conservation plan if the land is highly

erodible; the Section can require

conversion of land to a less intensive use

in the plan. [Section388(b) of the 1996

FAIR]

No provisions.

Identical to current law. [Section 218]

4. Eligible Participants. Makes eligible

any state or local agency that has made

an offer to purchase a conservation

easement. [Section 388(a) of the 1996

FAIR]

Expands eligibility to also include federally

recognized Indian tribes, and non profit

organizations that meet specified

qualifications. [Section 253(c)]

Identical to Section 253(c). [Section 218(a)]

5. New Program Options. No

provisions.

No provisions.

Allows up to $10 million to be spent

annually to provide matching grants for

market development, and technical

assistance to participants. [Section 218(a)]

G. Other Programs (Including Technical Assistance)

1. Resource Conservation and

Development Program (RC&D).

Provides assistance to encourage and

improve the capacity of state and local

governments and non profits in rural

areas to develop and implement

conservation programs. Authorized

through FY2002. [Title III of the

Bankhead-Jones Farm Tenant Act as

amended by §1528-1538 of the 1981

AFA]

Permanently reauthorizes program, and makes

numerous other, mostly minor or technical

amendments. [Section 254]

[Note: Many of the changes in the two bills

are different from each other, but they do not

change the basic intent or operation of the

program.]

Permanently reauthorizes program, and

makes numerous other, mostly minor or

technical amendments. [Section 216]

[Note: Many of the changes in the two bills

are different from each other, but they do

not change the basic intent or operation of

the program.]

2. Small Watershed Rehabilitation

Program. Provides financial and

technical assistance to rehabilitate water

Authorizes $15 million annually in “FY2002

and each succeeding year” to fund the Small

Watershed Rehabilitation Program. [Section

No provisions.

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structures that are nearing or past the end

of their design life. Authorizes

appropriations of $5 million in FY2001,

$10 million in FY2002, $15 million in

FY2003, $25 million in FY2004, and $35

million in FY2005. [Authorized in

Section 313 of the Grain Standards and

Warehouse Improvement Act of 2000]

257]

3. Conservation of Private Grazing

Lands. Provide coordinated technical,

educational, related assistance to

preserve and enhance privately-owned

grazing lands; authorizes 2 demonstration

districts, and authorizes $20 million in

FY1996, $40 million in FY1997, and $60

million in FY1998 and each subsequent

year. [Section 386 of the 1996 FAIR]

Adds encouraging the use of sustainable

grazing systems to the list of activities for

which assistance can be provided. [Section

251]

Moves the program to a new Section 1240P

of the 1985 FSA and, makes numerous

other, mostly minor, changes, and

authorizes $60 million annually through

FY2006. [Section 217(a)]

Repeals provisions establishing program in

Section 386 of the 1996 FAIR. [Section

217(b)]

4. Technical Assistance. Allows

persons who need and apply a

conservation compliance plan to obtain

technical assistance from approved

sources other than NRCS; the Section

must document a rejection of assistance

from those sources [Section 1243(d) of

the 1985 FSA]

Allows producers to seek assistance from

third parties, who have the specified expertise,

and requires the Secretary to develop a system

for approving qualified third parties who

provide technical assistance to EQIP

participants within 6 months of enactment.

[Section 244(b)]

Adds a new Section 1244(f) to the 1985

FSA f) requiring the Secretary to create a

certification program for third parties to

provide technical assistance, specifies

standards for certification, permits the

Section to repay landowners who use third

parties, and establishes an advisory

committee for the certification program.

[Section 204]

5. State Technical Committees (STC)

Creates STCs , lists the composition,

outlines responsibilities to include

providing “information, analysis, and

recommendations” on implementing

conservation provisions (including

No provisions.

Expands membership in STCs to include

expertise in forestry, restates its

responsibilities to mesh with other changes

this legislation makes to conservation

programs, and makes subcommittees and

local working groups working on STC

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several specified topics) to the state

conservationist, and exempts the STC

from FACA meeting requirements.

[Section 1261 of the 1985 FSA]

7. Repeals of Authorized Programs

and Activities. No provisions.

SENATE BILL

business exempt from FACA. [Section 221]

Repeals provisions: creating the Wetlands

Mitigation Banking Program [Section 1222(k)

of the 1985 FSA]; exempting CRP payments

from any limits under the 1985 FSA, the 1990

FACTA, and the 1949 AA [Section

1234(f)(3)]; protecting the base history of

land enrolled in the CRP [Section 1236 of the

1985 FSA]; exempting WRP payments from

any limits under the 1985 FSA, the 1990

FACTA, and the 1949 AA [Section

1237D(c)(3)] and ; creating the

Environmental Easement Program

[Section1239 of the 1985 FSA], the

Conservation Farm Option [Section 1240M of

the 1985 FSA], and the Tree Planting

Initiative [Section1256 of the 1985 FSA]

[Section 261] Repeals the National Natural

Resources Conservation Foundation [Section

351-360 of the 1996 FAIR] [Section 262]

Repeals numerous conservation programs in

current law and reauthorizes them in other

sections of farm law, as noted in the entries

above.

a .Places GRP in Section 1238 of the 1985

FSA creating a 2 million acre grasslands

reserve, split evenly between restored

grasslands and virgin (never cultivated)

grasslands. Section 1238(b)(1) sets minimum

size for enrolled parcels at 50 contiguous

acres east of the 90th meridian and 100

contiguous acres west of the 90th meridian.

a. Places GRP in Section 1238N-P of the

1985 FSA, creating a 2 million acre

grasslands reserve, of which up to 500,000

acres will be native grasslands in tracts of 40

acres or less. Section 1238N sets minimum

size at 40 contiguous acres east of the 98th

meridian and 100 contiguous acres west of

the 98th meridian [Section 219(a)]

H. New Programs

1. Grasslands Reserve Program

(GRP).

a. Reserve Size. No provisions.

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[Section 255(a)]

b. Eligible Lands. No provisions.

b. Defines eligible land to include natural grass

and shrub land that has a potential to serve as

important plant or animal habitat, or has been

historically dominated by natural grass or

shrubland. [Section 255(a)]

b. Same definition of eligible land as in H.R.

2646, except that it also enrolls incidental

additional land that is necessary for the

administrative efficiency of an

easement.[Section 219(a)]

c. Enrollment Options. No provisions.

c. Spends at least 2/3 of funds on contracts of

10 to 20 years, and the remainder on 30 year

or permanent easements. [Section 255(a)]

c. Allows permanent easements, 30 year

easements, the longest easements allowed

by state law, and 30 year rental agreements.

Allows the Secretary to delegate easements

to private conservation organizations, land

trusts, and state agencies. [Section 219(a)]

d. Permitted and Prohibited Uses of

Enrolled Lands. No provisions.

d. Permits contract holders to use common

grazing practices, and permits haying and

mowing outside the bird nesting season, but

prohibits all agricultural production (except

hay) and almost all practices that require

disturbing the land surface in section

1238(A)(b). [Section 255(a)]

d. Similar to H.R. 2646 for permitted and

prohibited uses of enrolled lands. [Section

219(a)]

e. Ranking Criteria for Bids. No

provisions.

e. Requires the Secretary to develop ranking

criteria for reviewing applications, with

emphasis on support for native vegetation,

grazing operations, and plant and animal

diversity, and to set the terms for restoration.

[Section 255(a)]

e. Requires the Secretary to work with

STCs in developing ranking criteria, and to

give priority to grazing operations,

maintaining or restoring biodiversity, and

land under the greatest threat of conversion.

[Section 219(a)]

f. Payment Levels. No provisions.

f. Describes how payment levels are to be set

for each form of participation, sets cost

sharing payments for restoration at 90% for

f. Describes how payment levels are to be

set for each form of participation, provides

that rental agreements be reviewed and

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virgin grasslands and 75% for restored

grasslands, and provides technical assistance.

[Section 255(a)]

adjusted at least once every 5 years, limits

cost-sharing payments to 75% for

restoration, and provides technical

assistance. [Section 219(a)]

g. Penalties for Violation. No

provisions.

g. No provisions.

g. Describes the roles of the Secretary and

the landowner in implementing restoration

agreements, and lists the penalties for

violations, and allows periodic site

inspections. [Section 219(a)]

h. Funding. No provisions.

h. Amends Section 1241 of the 1985 FSA to

provide a total of up to $254 million through

the CCC through FY2011to implement this

program. [Section 255(b)]

h. Amends Section 1241 of the 1985 FSA to

provide such CCC sums as necessary to

implement this program. [Section 219(b)]

2. Farmland Stewardship Program.

No provisions.

Adds this program as a new Section 1239 to

the 1985 FSA. It is to be administered by

NRCS “to more precisely tailor and target”

current conservation programs, using program

funding on a watershed basis, where possible.

Participation requires matching funds, and

can involve other agencies. Participants

submit a management plan and are

encouraged to use easements to implement

conservation management. [Section 256]

[Note: No appropriations are authorized for

this program, so all funding would come from

existing programs]

No provisions.

3. Conservation Security Program

(CSP). No provisions.

No provisions.

Conservation Security Program (CSP).

Authorizes a CSP in Section 1238– 1238B

of the 1985 FSA. It defines 22 terms and

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lists 13 program purposes. To participate,

producers must have an approved plan for

eligible lands (land in the CRP and WRP, or

that has not been in production at least 3 of

the preceding 10 years, is ineligible).

Producers can receive an advance payment

when they enroll, base payments, and bonus

payments for certain practices. Practices

required for each of 3 tiers of participation

are specified, and minimum requirements for

each will be determined at the state level and

approved by the Secretary. Land in an

approved plan will be enrolled in a contract

between FY2003 and FY2006; Tier 1

contracts will be 5 years; Tier II and III

contracts will be 5 to 10 years, and

contracts can be renewed. Total annual

payments are limited to $20,000 for Tier I,

$35,000 for Tier II, and $50,000 for Tier

III. Specified practices are ineligible. State

pilot programs are authorized. [Section 201]

Amends Section 1241 of the 1985 FSA by

adding a new subsection (c) to provide

“such funds as are necessary” from the CCC

through FY2006. [Section 202]

Allows implementation to start on the date

of enactment. [Section 206]

4. Partnerships and Cooperation. No

provisions.

No provisions.

Adds a new Section 1242(f) to the 1985

FSA to allow special projects as

recommended by a state conservationist,

which can respond to meeting the

requirements of specified federal laws or

addressing watersheds or other areas with

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significant environmental problems.

Participants agree to a plan to adjust

implementation of conservation programs to

increase environmental benefits. Funding

uses 5% of EQIP funds annually, with any

unused funds to go to other EQIP activities

that year. [Section 203]

5. Watershed Risk Reduction

Program. No provisions.

No provisions.

Authorizes $15 million annually through

FY2006 to implement a new program to

purchase floodplain easements at

Section1240N of the 1985 FSA. [Section

217(a)]

6. Great Lakes Basin Soil Erosion and

Sediment Control Program. No

provisions.

No provisions.

Authorizes $5 million annually through

FY2006 to implement a new soil erosion

and sediment control program for the Great

Lakes basin at Section 1240O of the 1985

FSA. [Section 217(a)]

7. Water Conservation Program. No

provisions.

No provisions.

Reduces CRP enrollment ceiling from 41.1

million acres to 40.0 million acres. [Section

215(a)]

Authorizes two programs. One will allow

up to 500,000 acres to be enrolled in state

CREPs to contribute to the restoration of a

watercourse or lake, and permit purchasing

or leasing water rights. Priority given to

places where more than 20% of the cost

would be paid from non federal sources, and

promotes any of 4 specified benefits for

wildlife, fish and plants. Protection of state

water laws are specified. Eligible states are

Nevada, California, New Mexico,

Washington, Oregon, New Hampshire, and

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Maine; others can apply to participate.

[Section 215(b)]

Authorizes a new Water Conservation

Program in Section 1240R of the 1985 FSA.

NRCS will provide cost sharing assistance

to increase irrigation efficiency, convert

production to less water-intensive crops,

and acquire water rights. Protection of state

and other water laws required. Nebraska

and South Dakota are ineligible, while the

same 7 states as in the program above are

eligible, and others may apply. Authorizes

funding from the CCC at $25 million in

FY2002, $52 million in FY2003, and $100

million in FY2004-FY2006, with $5 million

allocated each year to monitoring activities.

[Section 215(c)]

8. Grassroots Source Water

Protection Program. No provisions.

No provisions.

Authorizes $5 million annually through

FY2006 in Section 1240Q of the 1985 FSA

for a new program to use technical

assistance capabilities of state rural water

associations that operate wellhead or

groundwater protection programs. [Section

217(a)]

9. Organic Agriculture Research

Trust Fund. No provisions.

No provisions.

Provides $50 million from the CCC in

FY2003, to remain available until spent and

to accrue interest, in FY2003 to establish a

new research fund on organic products.

[Section 231]

10. National Organic Research

Endowment Institute. No provisions.

No provisions.

Establishes a National Organic Research

Endowment Institute to develop and

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implement a plan for research on organic

products using the trust fund (established in

Section 231). [Section 232]

11. Cranberry Acreage Reserve. No

provisions.

No provisions.

Authorizes purchase of permanent

easements on wetlands and buffer strips that

are part of a cranberry operation from

willing sellers. Authorizes $10 million

annually for this activity. [Section 261]

12. Klamath Basin. No provisions.

No provisions.

Authorizes the Secretary to create a federal

task force (membership specified) to

develop a coordinated federal effort to

manage water resources in this basin (6

duties specified). In addition to using

existing programs, the task force will

establish a grant program to carry out its

responsibilities. [Section 262(a) and (b)]

The task force will develop an initial report

within 180 days of enactment, a draft 5-year

plan to implement its duties within 60 days

thereafter, and a final plan within 1 year of

enactment. Eight items to be considered in

the plan are specified. [Section 262(c)]

Consultation with specified non-federal

entities is required. [Section 262(d)]

Authorizes a total of $175 million from the

CCC from FY2003 through FY2006, and

specifies where a small portion of the funds

are to be spent. Funds may not be obligated

after September 30, 2006. [Section 262(e)]

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13. Administrative Requirements for

Conservation Programs

a. Relief for Good Faith Actions. No

provisions.

No provisions.

a. Adds a new Section 1244(a) to the 1985

FSA giving the Secretary the option of

granting relief to conservation program

participants who act in good faith under a

contract, and are subsequently determined

to be in violation. Types of relief and

exceptions are specified. [Section 204]

b. Assistance for Limited Resource

Producers. No provisions.

No provisions.

b. Adds a new Section 1244(b) which

provides necessary funds from the CCC to

assist certain limited resource, socially

disadvantaged, and beginning producers,

and Indian tribes to participate in

conservation programs. The Secretary may

contract with other entities to provide these

services. Adds a new Section 1244(c)

allowing the Secretary to provide incentives

to these producers(except sociallydisadvantaged ones) to participate in

conservation programs. [Section 204]

c. Data Collection and Program

Evaluation.

No provisions.

No provisions.

c. Adds a new Section 1244(d) which

requires the Secretary to collect data that

would permit evaluation of conservation

programs [Section 204]

d. Mediation. No provisions.

No provisions.

d. Adds a new Section 1244(e) which

requires the Secretary to provide mediation

services when an adverse decision is made

about a conservation program. [Section

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204] [Note: Section 1244(f), on technical

assistance, is discussed above in G4.]

e. Adds a new Section 1244(g) to protect

the privacy of personal information about

individuals related to conservation

programs. [Section 204]

e. Privacy of Personal Information. No

provisions.

No provisions.

f. Tribal Lands. No provisions.

No provisions.

f. Adds a new Section 1244(h) which

requires the Secretary to cooperate with a

tribal government when carrying out

conservation programs on tribal lands.

[Section 204]

g. Regional Equity of Conservation

Spending. No provisions.

No provisions.

g. Requires that each state receive a total of

$12 million annually from FY2002 through

FY2006, in conservation funds. Of the

total, $5 million is to be used for EQIP, and

$7 million is to be used for other

conservation programs, with any portion not

obligated by April 1of the fiscal year to be

reobligated to other specified programs.

[Section 241]

14. Assessment of Conservation

Programs. No provisions.

No Provisions.

Assessment of Conservation Programs.

Requires the Secretary to develop a plan to

better coordinate and consolidate the

implementation of conservation programs.

[Section 205(a)]

Requires the Secretary to provide the plan

(and recommendations) to both agriculture

committees within 180 days of enactment.

[Section 205(b)]

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Requires the Secretary to provide a plan

(with a cost estimate) for updating the

national conservation program required by

the Soil and Water Resources Conservation

Act of 1977 to both agriculture committees

within 180 days of enactment, and to report

to both committees of the status of plan

implementation by April 30, 2005. [Section

205(c)]

Requires the Secretary to revise

conservation technical standards within 180

days of enactment , and to update them at

least once every 5 years. [Section 205(d)]

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a. Extends current law, except it increases

required funding to not more than $200

million yearly in CCC funds through

FY2011. [Section 301]

a. Extends current law, except that in

addition to any funds specifically

appropriated for the program, required

funding of not more than $100 million

for FY2002; $120 million for FY2003;

$140 million for FY2004; $180 million

for FY2005; and $200 million for

FY2006 (in CCC funds or equivalent

CCC commodities). [Section 322]

b. No provision.

b. No provision.

b. Priority, for funds in excess of $90

million in any year, for eligible

organizations that have not participated

in the past, and for programs in

emerging markets. [Section 322]

c. No provision.

c. No provision.

c. Mandates new U.S. Quality Export

Initiative (using appropriated MAP,

FMDP funds), to promote U.S. products

with a new “U.S. Quality” seal overseas.

[Section 322]

A. Agricultural Export Assistance Programs

1. Market Access Program (MAP)

a. MAP helps exporters (mainly

nonprofit industry trade associations,

who allocate the funds to others

including agricultural cooperatives and

small businesses) finance promotional

activities overseas (usually for more

consumer-oriented, higher value

products). Required funding of not

more than $90 million yearly in CCC

funds through FY2002. [Agricultural

Trade Act of 1978 as amended by

Section 244 of Federal Agriculture

Improvement and Reform (FAIR) Act

of 1996]

2. Foreign Market Development

Cooperator Program (FMDP)

a.

Extends current law, except sets

a. Extends current law, except sets

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a. FMDP helps U.S. exporters (mainly required funding at $37 million in CCC

through commodity based trade funds yearly through FY2011. [Section

associations) to finance promotional 305]

activities overseas. Statutory authority

(at such sums as necessary) through

FY2002; current funding is $28 million

per year. [Agricultural Trade Act of

1978 as amended by Section 252 of

FAIR Act of 1996]

required funding of $37.5 million for

FY2002; $40 million for FY2003; and

$42.5 million for FY2004 and

subsequent years (in CCC funds or

equivalent CCC commodities). [Section

324]

b. New emphasis on exporting value-added

products to emerging markets. Requires

annual report to Congress on program.

[Section 305]

b. Establishes a priority, for funds above

$35 million in any year, for eligible

organizations that have not participated

in the past, and for programs in

emerging markets. [Section 324]

b. FMDP has focused on promoting

mainly bulk and partially processed

commodities, targeted to foreign

importers/processors rather than highvalue market.

3. Export Enhancement Program

(EEP)

Current law extended through

a. EEP authorizes cash payments or a. Current law extended through FY2011, a.

CCC commodities as bonus subsidies to at current level of up to $478 million per FY2006, at current level of up to $478

million per year. [Section 323]

help exporters sell agricultural products year. [Section 304]

(mainly wheat and other grains) at more

competitive prices in targeted foreign

markets. Authority through FY2002,

with CCC funding at up to $478 million

per year. [Agricultural Trade Act of

1978 as amended by Section 245 of

FAIR Act of 1996]

b. EEP may be used to help mitigate or

offset the effects of unfair trade

practices, now defined as any foreign

b. No expanded definition.

b. Expands the definition of unfair trade

practices to include: (1) pricing practices

by an exporting state trading enterprise

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act or policy that “violates, or is

inconsistent with, the provisions of, or

otherwise denies benefits to the United

States under, any trade agreement...” or

“is unjustifiable, unreasonable, or

discriminatory and burdens or restricts

United States commerce.”

[Agricultural Trade Act of 1978,

Section 102]

4. Dairy Export Incentive Program

(DEIP)

DEIP authorizes cash or CCC Extends current law through 2011. [Title

commodities as bonus subsidies to help I-C, Section 143]

exporters sell specified dairy products

at more competitive prices in targeted

foreign markets. Authority through

FY2002, with CCC funding to provide

commodities to the maximum levels

consistent with U.S. obligations as a

member of the World Trade

Organization. [Food Security Act of

1985 as amended by Section 148 of the

FAIR Act of 1996]

5. Export Credit Guarantees (GSM)

a. Authority through FY2002 with a. Extends current law through 2011.

CCC funding, where USDA guarantees [Section 306]

commercial financing of not less than

$5.5 billion annually of U.S. agricultural

exports. Financing can be used for

short-term credit (GSM-102) for up to

3 years; and for long-term credit

SENATE BILL

that “are not consistent with sound

commercial practices conducted in the

ordinary course of trade,” or (2)

changing U.S. “export terms of trade

through a deliberate change in the dollar

exchange rate of a competing exporter.”

[Section 323]

Extends current law through FY2006.

[Title I-C, Section 133]

a. Extends current law through 2006.

Requires a report to Congress within 1

year on the status of multilateral

negotiations regarding agricultural

export credit programs. [Section 321]

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(GSM-103), for 3-10 years. GSM

programs are used in countries where

needed financing may not be available

without the CCC guarantees. (At least

35% of total credit guarantees must be

to promote processed or high-value

agricultural products.) [Agricultural

Trade Act of 1978 as amended by the

Section 243 of the FAIR Act of 1996]

b. Supplier Credits feature permits b. No change in supplier credit term.

CCC to issue credit guarantees for

repayment of credit made available by a

U.S. exporter to a foreign buyer for up

to 180 days. [Agricultural Trade Act

of 1978 as amended by Section 243 of

the FAIR Act]

b. Permits guarantees of supplier credits

for up to 12 months. [Section 321]

6. Emerging Markets Program

Extends current law through

a. Requires CCC through FY2002 to a. Extends current law through FY2011. a.

FY2006. [Section 332]

offer no less than $1 billion per year in [Section 308]

direct credit, or credit guarantees, for

exports to emerging markets (formerly

emerging democracies). [Food,

Agriculture, Conservation and Trade

Act of 1990 as amended by Section 277

of the FAIR Act of 1996]

b. Requires CCC to provide $10 b. Increases this funding to $13 million b. No increase.

million annually through FY2002 to annually. [Section 308]

send U.S. advisors to emerging

markets. F o o d , A g r i c u l t u r e ,

Conservation and Trade Act of 1990 as

amended by Section 277 of FAIR Act of

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1996]

B. Food Aid Programs

1. P.L. 480 (Food for Peace) General

a. Seeks to combat hunger and a. Extends P.L. 480 (i.e., authority to

encourage development overseas. Title enter into new agreements) through

I makes export credit available on FY2011. [Section 307]

concessional terms (e.g. low interest

rates for up to 30 years); Title II

authorizes donations for emergency

food aid and non-emergency

humanitarian assistance. Authority to

enter into new P.L. 480 agreements

(which are funded mainly through

annual appropriations) is through

FY2002. [Section 408 of P.L. 480

(Agricultural Trade Development and

Assistance Act of 1954) anas amended

by Section 217 of the FAIR Act of

1996]

a. Extends P.L. 480 (i.e., authority to

enter into new agreements) through

FY2006. [Section 312]

b. Congress has stated five specific b. Adds “conflict prevention” as a new b. Adds “conflict prevention” as a new

purpose. [Section 301]

purposes of P.L. 480 (e.g. combat purpose. [Section 307]

hunger, expand international trade,

etc.). [Section 2 of P.L. 480]

c. Food Aid Consultative group

consisting of specified federal officials,

representatives of private voluntary

organizations (PVOs), foreign nongovernment organizations, and

agriculture producer groups, is

authorized through FY2002. [Section

205 of P.L. 480]

c. Extends Food Aid Consultative Group c. Extends Food Aid Consultative

through FY2006; clarifies what the group Group through FY2006. [Section 305]

is to review to include policies and

guidelines. [Section 307]

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2. P.L.480 Assistance Levels and

Funding

Increases the minimum level of

a. Minimum Title II assistance is 2.025 a.

million metric tons (MMT) of assistance to 2.25MMT per year through

agricultural commodities per year FY2011. [Section 307]

through FY2002; AID Administrator

has some authority to waive minimum.

[Section 204 of P.L. 480]

SENATE BILL

a. Increases the minimum level of

assistance to 2.1 MMT in FY2002,

2.2MMT in FY2003, 2.3 MMT in

FY2004, 2.4 MMT in FY2005, and 2.5

MMT in FY2006. [Section 304]

b. Limits CCC Title II costs to $1 b. Removes limit on CCC Title II costs. b. Doubles limit on CCC Title II costs

to $2 billion per year. [Section 306]

billion yearly; some Presidential waiver [Section 307]

authority. [Section 206 of P.L. 480]

c. Provides that at least $10 million but

not more than $28 million of Title II

funding per year shall be use to support

eligible organizations (PVOs,

cooperatives, organizations like the

World Food Program, etc.) in

conducting Title II activities. [Section

202 of P.L. 480]

3.

P.L. 480 Operation &

Administration

a. Permits PVOs to sell Title II

commodities in the recipient country

(or a nearby country) to finance

commodity transportation, storage,

c. Replaces dollar designations by setting

support for eligible organizations at not

less than 5% and not more then 10% of

Title II funding. [Section 307]

c. Replaces dollar designations by

setting support for eligible organizations

at not less than 5% and not more than

10% of Title II funding. [Section 302]

a. Authorizes the use of U.S. dollars and

other currencies for monetization in P.L.

480 – and also Food for Progress and

Section 416 programs; permits PVOs to

a. Similar to House [Sections 303, 310,

& 325]. Also, a food aid commodity

sale is to be “at a reasonable market

price in the economy where the

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etc., and local development projects submit multi-country proposals; and commodity is to be sold.” [Section 310]

(“monetization”). [Section 203 of P.L. permits food aid monetization in more than

one country in the region. [Sections 302;

480]

303; 307]

b. The AID Administrator has 45 days b. Increases the time for decisions from 45

to decide on Title II proposals to 120 days. [Section 307]

submitted by eligible organizations or

U.S. field missions. [Section 207 of

P.L. 480]

b. Also increases the time to 120 days.

Contains other timelines for finalizing

program agreements and announcing

programs each year. Permits USDA to

approve an agreement that provides for

direct delivery of commodities to foreign

milling or processing facilities that are

more than 50% U.S.-owned, with cash

proceeds transferred to eligible

organizations for carrying out projects.

[Section 307]

Extends authorization through

c. Authorizes $2 million in each of c. Extends authorization through FY2011. c.

FY2006. [Section 311]

FY2001 and FY2002 to “preposition” [Section 307]

food aid commodities in the U.S. and

foreign countries. [Section 407 of P.L.

480]

Extends authorization through

d. Authorizes appropriations of up to d. Extends authorization through FY2011. d.

FY2006. [Section 308]

$3 million annually through FY2002 for [Section 307]

grants to PVOs and U.S. non-profits

for stockpiling shelf-stable, prepackaged foods. [Section 208 of P.L.

480]

e. Requires USDA (if feasible) to e. No provision.

establish a “micronutrient fortification”

pilot program; authority expires in

e. Extends the authorization as an

ongoing program through FY2006.

[Section 313]

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FY2002. [Section 415 of P.L. 480]

f. No provision.

f. No provision.

4. Certified Institutional Partners

No provision in current law. Currently No provision.

PVOs and cooperatives generally must

undergo the same application

procedures to participate in various

food aid programs each time they apply.

5. Farmer-to-Farmer Program

Requires that no less than 0.4% of P.L. Extends funding authority at current 0.4%

480 funds be used to provide U.S. through FY2011. [Section 307]

farmers and other agricultural experts

technical assistance in developing,

middle income and emerging market

countries. [Title V of P.L. 480 as

amended by Sections 224 and 277 of

the FAIR Act of 1996]

f. Permits President to establish, under

Title II, a “pilot emergency relief

program to provide live lamb to

Afghanistan.” [Section 309.]

Requires AID or USDA, as applicable,

to establish a process enabling PVOs

and cooperatives that can demonstrate

their capacity to carry out the programs

(under P.L. 480; Section 416; or Food

for Progress) to qualify as “certified

institutional partners,” which would

entitle them to use streamlined

application procedures, including

expedited review and approval to

receive commodities for use in more

than one country. [Sections 302; 325;

334]

Extends funding authority through 2006,

and increases minimum funding to 0.5%

of P.L. 480 funds. [Section 314]

6.

CCC (Section 416) Surplus

Donations

Maintains current law, and requires USDA Maintains current law, and permits

Permanent law authorizes the use of to publish in the Federal Register, by USDA to approve an agreement that

CCC-owned surplus commodities for October 31, an estimate of Section 416 provides for direct delivery of

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overseas donations. [Section 416(b) of

the Agricultural Act of 1949 as

amended]

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commodities to be

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