The 1996 Farm Bill:Comparison
of Selected Provisions with Previous Law
Food and Agriculture
Section
Environment and Natural Resources Policy Division
April 4, 1996
96-304 ENR
SUMMARY
Final congressional approval was given to H.R. 2854, the
Federal Agricultural Improvement and Reform (FAIR) Act, otherwise
known as the "1996 farm bill," on March 28, 1996.
President Clinton signed the bill into law on April 4, 1996 (P.L.
104-127). In tabular format, this report lays out in descriptive,
rather than legislative language, the major provisions of the new
farm bill in contrast to preceding law. In general, the 1996 farm
bill establishes commodity, conservation, trade, aid, credit,
research, other agriculture and food related policies, and
authorizes federal spending for numerous U.S. Department of
Agriculture (USDA) programs through the year 2002.
Agricultural commodity support programs are extended and
significantly modified by this legislation. In a major change
from past policy, the bill replaces the traditional crop-specific
income supports, known as target price deficiency payments, with
7-year "production flexibility contracts" under a new
"Agricultural Market Transition Program." Capped
payments are made to farms, but unlike previous law, there is
considerable planting flexibility (including the ability to put
land into conserving uses). Nonrecourse commodity loans and
marketing loan repayment provisions are continued at
approximately 1995 levels into the future. Milk marketing orders
are to be consolidated in 3 years, and the dairy price support
program is phased out by the end of 1999. In contrast to the
other commodity programs, modest changes are made to the peanut
and sugar programs.
Conservation provisions in the farm bill build on initiatives
enacted in 1985 and 1990, altering some of the constraints placed
on producers and converting the majority of conservation spending
to entitlements. The trade provisions authorize funding for P.L.
480 Food for Peace, export credit guarantees, the Export
Enhancement Program, and the Market Promotion Program. Funding
authority is extended for public agricultural research,
education, and extension programs. A new single research and
extension policy advisory board replaces a collection of advisory
panels, and a task force is directed to develop a 10-year
strategic plan for research facilities. With respect to credit,
the bill addresses eligibility for USDA farm loans and the
servicing of delinquent accounts. A new 3-year Fund for Rural
America will provide $100 million annually, with at least
one-third of the money going to specified rural development
activities and at least one-third to specified research
activities. While debate continues on broader welfare reform
provisions, the farm bill extends the food stamp program for 2
years and other commodity donation programs for 7 years.
A list of CRS products that provide additional information on
farm bill and related issues appears at the end of this report.
Contributing Authors
Environment and Natural
Resources Policy Division
Geoffrey S. Becker
Ralph M. Chite
Jean Yavis Jones
Remy Jurenas
Jean M. Rawson
Lenore Sek
Jasper Womach
Jeffrey Zinn
Government Division
Sandra Osbourn
Senior Specialist
Charles E. Hanrahan
Coordination and
Production
David M. Bearden
CONTENTS
WHEAT, FEED GRAINS, COTTON, RICE, AND OILSEEDS
SUGAR
PEANUTS
DAIRY
OTHER COMMODITY PROGRAM PROVISIONS
CONSERVATION AND ENVIRONMENT
FOOD AID AND AGRICULTURAL TRADE
AGRICULTURAL CREDIT
CROP INSURANCE, RISK MANAGEMENT, AND DISASTER ASSISTANCE
RESEARCH, EDUCATION AND EXTENSION
RURAL DEVELOPMENT
MISCELLANEOUS PROVISIONS
RELATED CRS PRODUCTS
WHEAT, FEED GRAINS, COTTON, RICE, AND OILSEEDS
| |
Provision
|
Relevant Part of Current or
Expiring Law
|
1996 Farm Bill
|
| Program Eligibility |
Owners and operators of farms with a
commodity "acreage base" (past plantings of
wheat, corn, sorghum, barley, oats, upland cotton, or
rice) that meet program requirements are eligible to
participate in the commodity support programs mandated
upon the USDA. |
Eligibility is extended to owners and/or
operators of eligible cropland that was previously
enrolled in a commodity program in at least 1 of the
1991-95 crop years, or Conservation Reserve Program
cropland expiring or terminated after Jan. 1, 1995. The
sign-up deadline is August 1, 1996; expiring CRP acreage
may be included as it becomes available. |
| Acreage Bases and Payment Yields |
The "acreage base" for each
program crop is the average acres planted/considered
planted: prior 5 years for wheat, feed grains; prior 3
years for upland cotton, rice. Program yields for each
crop are frozen at 1986 levels. |
Bases and yields that would apply in
1996 under expiring program authority are used to
calculate contract payments for each farm; however,
previous crop-specific bases no longer constrain
plantings. |
| Acreage Reduction Program (ARP) |
USDA is authorized to impose an annual
ARP--requiring that up to 20% of wheat/feed grains base;
25% of upland cotton base; 35% of rice base be taken out
of production-- if specified stocks/use ratios are
reached. |
Acreage Reduction Program (ARP) and
other annual cropland set-aside authority is eliminated. |
| Planting Flexibility (Flex Acres)
|
15% of each crop base, designated as
"normal flex acres" (NFA), is ineligible for
deficiency payments; in exchange, producers are allowed
to plant any program crop, oilseed,
industrial/experimental crop, year-round
haying/grazing--but not fruits, vegetables, peanuts,
tobacco, tree crops--on NFA. Producers can apply another
10% of base acres as "optional flex acres."
Crops on flex acres are eligible for nonrecourse loans. |
All crop-specific acreage bases are
combined into one contract acreage base for each farm. On
contract acres, cropping choices include any combination
of crops except most fruits and vegetables. Mung beans,
lentils, and dry peas are permitted on contract acres.
Other fruits and vegetables are permitted on contract
acreage only if the farm has a history of double
cropping, or if the farm has a history for specific
fruits or vegetables and forgoes the contract payment
acre for acre. Unlimited haying and grazing are permitted
on contract acreage. No planting restrictions apply to a
farm's noncontract acres. All contract acres must be
devoted to agricultural uses, which could include
conserving uses. Conservation compliance and wetland
protection rules must be followed. |
| Annual Federal Spending Levels |
There is no limit on total annual CCC
expenditures, which rise and fall depending upon market
prices (subject to program rules and participation
levels). |
$35.626 billion is specified for
contract payments over 7 years; annual levels begin at
about $5.6 billion in FY1996 and decline to about $4
billion by FY2002. The fund allocation among former crop
bases is: corn, 46.22%; sorghum, 5.11%; barley, 2.16%;
oats, 0.15%; wheat, 26.26%; upland cotton, 11.63%; rice,
8.47%. Also, rice is allocated an additional $51 million.
Roughly $1.5 billion in additional funds will be added do
to anticipated recoveries and payments associated with
past deficiency payment operations. Although contract
payments are capped, some other CCC operations, like
nonrecourse loans and marketing loan payments, are not
capped.
|
| Income Support Payments (Deficiency
Payments) |
Deficiency payments are made when market
prices are low; rates are based on the difference between
established target prices and market prices, (or USDA
loan rates, if higher than market prices). The subsidy is
the payment rate times eligible base acres times official
yield. Target prices are frozen at: corn, $2.75/bu.;
sorghum, $2.61/bu.; barley, $2.36/bu.; oats, $1.45/bu.;
wheat, $4.00/bu.; upland cotton, $0.792/lb.; rice,
$10.71/cwt. |
Target prices and deficiency payments
are eliminated. Producers instead are eligible for 7-year
"production flexibility contracts" providing
fixed annual payments, based on 85% of past program yield
and eligible acres, regardless of current market
conditions or crops planted. Estimated average payment
rates (annual rates generally decline over 7 years):
corn, 36 cts./bu.; sorghum, 40 cts./bu; barley, 28
cts./bu; oats, 3.7 cts./bu; wheat, 63 cts./bu.; upland
cotton, 7.3 cts./lb.; rice, $2.57/cwt. |
| 0/85 and 50/85 Conserving Use Payments |
Deficiency payments may be received on
up to 85% of eligible production for land diverted to
conserving uses. Wheat and feed grain producers do not
have to plant any base to receive payments, while upland
cotton and rice producers must plant at least 50% of the
crop base to receive payments. |
0/85 and 50/85 authority is eliminated
and replaced by production flexibility contracts. |
| Nonrecourse Commodity Loans |
Nonrecourse commodity loans are
available to crop program participants for all
production, with loan rates for each program crop set at
85% of a moving average of past market prices. USDA can
reduce basic wheat and feed grain loan rates by up to 20%
under certain conditions. Upland cotton and rice loan
rates cannot be reduced more than 5% per year nor to
lower than $0.50/lb. and $6.50 cwt., respectively. |
Total actual production of contract
holders (not limited to contract acres) is eligible for
nonrecourse marketing assistance loans. Generally, annual
loan rates are set at 85% of a moving average of past
market prices. However, there are caps and floors on loan
rates. The caps on loan rates are: corn, $1.89/bu.;
wheat, $2.58/bu.; upland cotton, $0.5192/lb.; ELS cotton,
$0.7965/lb.; rice, $6.50/cwt.
The floors are: corn and wheat my be reduced by 5% or
10% depending upon specific stocks-to-use ratios; upland
cotton, $0.50/lb.; rice, $6.50/cwt.
|
| Nonrecourse Loan Repayment Provisions
(Marketing Loans) |
Marketing loan repayment rules allow
producers to repay crop loans at less than the original
rates when market prices are lower than the loan rates,
retaining the difference as a payment. Producers can then
reclaim the pledged commodities and sell them at market
prices. Repayment rates are set by formula weekly by
USDA, at domestic "posted county prices" for
wheat and feed grains, and at "adjusted world
prices" for upland cotton and rice. Loan deficiency
payments (equal to marketing loan gains) also are made to
producers choosing not to take out loans. |
The past marketing loan repayment
provisions are generally extended for feed grains, wheat,
upland cotton, rice, and oilseeds. (ELS cotton loans must
be fully repaid with interest; there is no marketing loan
repayment option.) |
| Recourse Loans for High Moisture Feed
Grains, and Seed Cotton |
No CCC commodity loans (recourse or
nonrecourse) are available to producers for high moisture
feed grains or seed cotton. |
Newly available are interest bearing
recourse loans for high moisture corn and grain sorghum,
and seed cotton, on farms with production flexibility
contracts (and any farm with ELS cotton). The loan rates
are to be determined by the USDA. |
| Farmer-Owned Reserve (FOR) |
The FOR under certain surplus/low price
conditions permits wheat and feed grain producers to
extend the term of their loans for an additional 27
months or more. |
Farmer Owned Reserve program authority
for wheat and feed grains is eliminated. |
| Cotton and Rice
"Competitiveness" Provisions |
Under upland cotton "three-step
competitiveness" provisions: (1) USDA has authority,
when U.S. prices are high relative to world prices, to
further lower the effective marketing loan repayment
rate; (2) if U.S. prices remain high for 4 consecutive
weeks, marketing certificates or cash payments must be
issued to domestic users and exporters (cotton user
certificates); (3) if U.S. prices continue high for 10
straight weeks, a special global tariff-rate quota is
required. Rice "competitiveness" provisions
generally are limited to producer marketing
certificates/payments when world prices are lower than
loan repayment rates. |
Upland cotton and rice program
competitiveness provisions generally are continued.
However, total 7-year spending for upland cotton
"Step 2" payments cannot exceed $701 million. |
| Oilseeds |
Soybeans and other oilseeds (sunflower
seed, rapeseed, canola, flaxseed, mustard seed) are not
considered program commodities; base / yield / target
prices / deficiency payments / ARP provisions do not
apply. Producers are eligible only for nonrecourse crop
loans (1995 rates: $4.92/bu. for soybeans and $0.087/lb.
for other oilseeds) with marketing loan repayment
provisions (see "Loan Repayment Provisions"). |
As previously, nonrecourse marketing
assistance loans are available for all oilseeds. However,
rates are to be set at 85% of a moving average of past
market prices (as for other loan crops), within the
following ranges: $4.92 to $5.26/bu. for soybeans; and
$0.087 to $0.093/lb. for other oilseeds. Marketing loan
repayment provisions (or alternatively, loan deficiency
payment provisions) are extended. |
| Payment Limitations |
Regular target price payments are
limited to $50,000 per person annually; the sum of
marketing loan gains, and any additional
"Findley" target price payments (made if USDA
lowers wheat and corn loan rates below basic levels), are
limited to another $75,000--for a total of $125,000 per
person per farm. The "three entity rule"
permits a person to receive half-payments on two more
farms, bringing the absolute per-person cap to $250,000. |
Annual production flexibility contract
payments are limited to $40,000 per person actively
engaged in farming; other annual payment limitation rules
are maintained, including the separate $75,000 limit for
marketing loan gains and the "three entity
rule." The effective annual total combined payment
is $230,000 per person. |
SUGAR
| |
Provision
|
Relevant Part of Current or
Expiring Law
|
1996 Farm Bill
|
| "No-Cost" Objective |
Program must operate at "no
cost" to the CCC. Import quotas and domestic
marketing restrictions (allotments) are used to limit
sugar supplies relative to demand and thus help keep
domestic prices above a "target price" level.
Achieving this objective removes incentive for processors
to "forfeit" on their loans, which could result
in program "costs." |
The "no-cost" program
requirement for 1996-2000 crops is retained. |
| Price Support: Type of Loans
Loan Terms
|
Minimum mandatory support price for raw
cane sugar is set at 18 cts./lb. Refined beet sugar
support (set at 22.9 cts./lb. for 1995 crop) is linked by
formula to loan rate for raw sugar. Support is achieved
with 9-month "nonrecourse" loans made to cane
and beet processors. Processors must repay loans within 9
months, or by end of current fiscal year; in some beet
growing regions, supplemental loans are available.
Processors have option under "nonrecourse"
feature to hand over ("forfeit") sugar earlier
pledged as collateral to get a price support loan if
unable to find a buyer willing to pay at the
"target" price. No provisions exist for
penalties on loan forfeitures.
|
Price support is frozen at 1995 levels:
18 cts/ lb. for raw cane sugar, and 22.9 cts/lb. for
refined beet sugar. Reductions in U.S. support levels are
required if other major producing nations reduce export
and domestic subsidies beyond present World Trade
Organization commitments. Nonrecourse loans are available
if the import level under the tariff-rate quota is set at
1.5 million short tons or more. If the quota is below 1.5
million, only "recourse" loans are available. The
9-month, fiscal year, and supplemental loan term
provisions are continued.
A penalty of 1 cent/lb. for raw cane sugar, or a 1.07
cent/lb. for beet sugar, is imposed on processors and
refiners who forfeit sugar to CCC.
|
| Limits on Marketing Domestic Sugar |
Limits on how much sugar cane processors
and beet refiners can sell domestically ("marketing
allotments") are triggered only if USDA projects
annual imports will fall below 1.25 million short tons.
This authority is used, together with the import quota,
to support domestic sugar prices and ensure that the
program operates at "no-cost." |
Domestic marketing allotment authority
is repealed. |
| Marketing Assessment for Deficit
Reduction |
Marketing assessment applies only to
sugar produced from domestic cane and beet crops.
Assessment rate levied on cane and beet processors is
1.1% and 1.1794%, respectively, of the raw cane sugar
loan rate. |
Increases assessment (effective in
FY1997) by a fourth (to 1.375% on raw cane sugar and to
1.47425% on refined beet sugar, set relative to the 18
cent loan rate for raw cane). |
PEANUTS
| |
Provision
|
Relevant Part of Current or
Expiring Law
|
1996 Farm Bill
|
| Price Support: Loan Rates;
Cost Escalator
Eligibility for
Quota Loans
Disaster Transfer
Payments
|
The 1996 crop is eligible for quota
(amount marketed domestically for food) price support
loans at $679.85/ton. Future quota support levels can be
raised up to 5% to reflect any increase (but no decrease)
in average production costs (the "cost
escalator"). The loan rate for non-quota
("additionals") is $132/ton. Additionals must
be exported, or crushed for oil and meal. Disaster
transfer payments are available for non-quota production
placed in an area quota pool if farm quotas are not fully
utilized due to adverse growing conditions.
|
The quota loan rate is lowered to
$610/ton, effective for the 1996-2002 crops (a 10%
decrease from current level). The cost escalator
adjustment provision is eliminated. The loan rate
authority for "additionals" is unchanged.
Producers are made ineligible for program benefits for a
year if they refuse written buyer offers of $610/ton or
more and forfeit quota peanuts for 2 years. Disaster
transfer payments are reduced to 70% of the quota support
level on a maximum 25% of a farm's quota, subject to
limits.
|
| Poundage Quotas |
The national poundage quota is set equal
to estimated domestic edible, seed, and related uses, but
not less than 1.35 million short tons. When "under
marketings" are caused by weather problems,
producers may carry forward to future years the unused
farm quota.
No restrictions are placed on ownership of quotas.
|
Annual national quotas are set at
projected "domestic edible" and related uses.
The minimum national poundage quota is eliminated. A
separate temporary quota for seed is allocated to all
producers. Carryover of "undermarketings" to
future years is eliminated.
Most public entities and out-of-state non-producing
quota owners are made ineligible to hold quotas after the
1997 crop.
|
| Farm Poundage Quota Transfers (Sale and
Lease) |
Generally, allows farm quotas to be sold
or leased in the spring and fall only within the same
county. Subjects leasing of quota in the fall or after
normal planting season to certain conditions. Allows
unlimited transfers across county lines only in states
with a poundage quota less than 20 million lbs.
|
There is greater allowance for quota
leases and sales across county lines. However, cumulative
spring transfers by and after the fifth year (2000)
cannot exceed 40% of the 1995 county base quota level; up
to 15% of county quota can be transferred in 1996, an
additional 10% in 1997, and an additional 5% in each of
1998, 1999, and 2000. Fall transfers may be made within
the state. In counties with less than 100,000 lbs. of
quota, it can be transferred without limit in the state. |
| Marketing Assessment for Deficit
Reduction |
A marketing assessment for budget
deficit reduction purposes is imposed on domestic growers
and first purchasers (i.e., handlers) equal to 1.1% of
the loan rate in 1995, 1.15% in 1996, and 1.2% in 1997.
Assessment is shared equally in 1995; grower share
increases in 1996 and again in 1997. |
Effective with the 1997 crop,
assessments are applied on growers and first purchasers
at the 1.2% rate. Growers pay a 54.2% share of the
assessment; first purchasers pay a 45.8% share. The use
of assessment funds may be used to cover program losses
(see below). |
| Sharing Losses
("Cross-Compliance") |
A loss-sharing formula uses profits from
non-quota marketings to cover losses of quota operations
if necessary. Funds are shifted from profitable
associations to those realizing losses ("area cross
compliance"). |
The formula for covering losses within
and between associations puts more burden on those
generating the losses. The importance of "cross
compliance" transfers drop in the ranking of how
quota pool losses are to be covered. |
DAIRY
| |
Provision
|
Relevant Part of Current or
Expiring Law
|
1996 Farm Bill
|
| Dairy Price Support Program |
USDA is required to purchase surplus
butter, cheese, and nonfat dry milk from processors at
prices designed to support the farm price of milk at no
lower than $10.10 per cwt. (current rate is $10.35);
Allows additional steps to ensure USDA does not pay for
surplus purchases exceeding 7 billion pounds, milk
equivalent. Milk producers are assessed 10 cents per cwt.
of milk marketed for purposes of budget deficit
reduction. Program authority expires December 31, 1996. |
Price support purchase authority for
cheese, butter, and nonfat dry milk is extended through
December 31, 1999. The farm support price is set at
$10.35 per cwt. in 1996 and declines to $9.90 by 2000.
Beginning Jan. 1, 2000, commodity recourse loans are to
be available to processors. Deficit reduction marketing
assessments are eliminated immediately. |
| Federal Milk Marketing Orders |
Milk receipts are pooled in federal
order areas, and minimum prices handlers must pay
producers for fluid-grade milk are prescribed in those
areas. Milk marketing orders have permanent legislative
authority. |
The USDA is required to reduce, within 3
years, the current 34 federal milk orders to at least 10
but no more than 14 orders. |
| Northeast Dairy Compact |
The legislatures of the six New England
states have agreed to enter into a dairy compact that
would create an interstate commission with the power to
set a minimum price for farm milk in the six states, at a
level above the federal minimum price. However, any
proposed interstate compact must first be approved by
Congress, as required by the U.S. Constitution. |
The USDA is given the power to grant the
New England states the authority to enter into a regional
dairy compact, but only until the time when marketing
orders are consolidated, approximately 3 years after
enactment. |
| Dairy Export Incentive Program (DEIP) |
The USDA pays cash bonuses to U.S. dairy
exporters, allowing them to sell certain dairy products
in targeted countries at prices below U.S. market prices.
DEIP authority expires Sept. 30, 2001. |
DEIP is authorized through Sept. 30,
2002. The program is to be funded to the maximum extent
allowable under World Trade Organization commitments. |
| Nonfat Solids Standards |
Current Food and Drug Administration
rules require all milk sold for fluid consumption to
contain a minimum of 8.25% nonfat solids (protein,
lactose, vitamins, and minerals.) |
Does not change national standards.
Explicitly permits California to use its own minimum
nonfat solids standards, now at 8.7% for whole milk, 10%
for 2% milk, 11% for 1% milk, and 9% for skim milk. |
OTHER COMMODITY PROGRAM PROVISIONS
| |
Provision
|
Relevant Part of Current or
Expiring Law
|
1996 Farm Bill
|
| Permanent Price Support Authority |
The Agricultural Act of 1949 and the
Agricultural Adjustment Act of 1938 provide permanent
authority for mandatory support of specified commodities.
These statutes tie support to parity prices and establish
acreage allotments and marketing quotas. The result is
support prices significantly higher than what has been
approved in recent farm bills. The intervening farm bills
serve to suspend the permanent law for a limited time
frame, typically 4 or 5 years. |
The 1996 farm bill commodity provisions
generally suspend rather than eliminate permanent law.
The 1996 farm bill commodity provisions are effective
through crop year 2002. Suspensions also affect the
Farmer-Owned-Reserve and the emergency livestock feed
program. Newly added to permanent law is mandatory
support for rice (at 50%-90% of parity) to take effect
after 2002 in the absence of intervening law. |
| Tobacco Program |
Subject to approval by producers,
permanent law mandates tobacco support through a
combination of marketing quotas and no-net-cost
nonrecourse loans. A no-net-cost assessment and a deficit
reduction assessment is collected on each pound of
tobacco marketed. |
No changes are made to the tobacco
provisions of permanent law. |
| Honey Program |
Nonrecourse marketing loans are
authorized to support honey prices, but in recent years
funding has been suspended through annual appropriations
acts. |
The statutory authority mandating
support for honey is repealed. |
| Use of CCC Funds for Salaries and
Expenses |
There generally is no prohibition
against the use of CCC funds to cover costs of salaries
and other expenses, such as computer purchases,
reimbursable agreements with other federal and state
agencies (e.g., state inspection of grain elevators),
etc. |
The farm bill specifies that the CCC no
longer has authority to purchase personal property; that
CCC funds for computers and other equipment be capped at
$170 in FY1996 and at $275 million annually thereafter;
and, that reimbursable agreements with federal or state
agencies be limited to an aggregate amount not to exceed
the total of such agreements in FY1995. Also, CCC must
begin submitting to Congress quarterly itemized reports
on all expenditures over $10,000. |
| Commodity Credit Corporation (CCC)
Interest Rates |
Under its Charter Act, the CCC is
authorized to set the interest rate charged commodity
loans. By policy, the CCC has charged a rate equal to its
cost of borrowing from the U.S. Treasury at the start of
each month. The loan interest rate becomes fixed until
the end of the calendar year, when all CCC outstanding
loans are refinanced at the prevailing Jan. 1 cost of
borrowing from the Treasury. |
The monthly CCC interest rate on
commodity loans must be 100 basis points (1 percentage
point) higher than the rate established by the formula in
effect on October 1, 1995. Thus, a formula-set CCC loan
rate of 5%, for example, will become 6% under the new
law. |
| Commission on 21st Century Production
Agriculture |
No provision. |
An 11-member "Commission on 21st
Century Production Agriculture" is required to
conduct a comprehensive review of U.S. agricultural
conditions, the effects of the new production flexibility
contracts, and related issues, and make recommendations
for future farm policy. The initial and final reports
must be submitted by June 1, 1998, and January 1, 2001,
respectively. |
CONSERVATION AND ENVIRONMENT
| |
Provision
|
Relevant Part of Current or
Expiring Law
|
1996 Farm Bill
|
| Highly Erodible Land Conservation
(Conservation Compliance) |
Highly erodible land provisions, enacted
in the 1985 farm bill and amended in the 1990 farm bill,
require producers cropping highly erodible land and
receiving farm program benefits to follow an approved
conservation plan, or risk losing most federal farm
program benefits. |
The highly erodible lands provisions are
amended in numerous ways that provide greater producer
flexibility and are likely to decrease their impact on
farm operations. Among the changes are provisions:
requiring that highly erodible lands exiting the CRP are
not held to a higher conservation compliance standard
than similar nearby cropland; providing violators with up
to one year to meet compliance requirements; developing
procedures to expedite variances for weather, pest, or
disease problems; requiring an erosion measurement before
the conservation system is implemented; allowing third
parties to measure residue, and requiring that residue
measurements take into account the top two inches of
soil; allowing producers to modify plans so long as the
same level of treatment is maintained; allowing local
county committees to permit relief if a conservation
system causes a producer undue economic hardship; and
establishing a wind erosion estimation pilot study to
review and modify as necessary wind erosion factors used
to administer conservation compliance. |
| Wetland Conservation (Swampbuster) |
Wetland conservation provisions, enacted
in the 1985 farm bill and amended in the 1990 farm bill,
require producers who alter wetlands to restore them, or
risk losing most federal farm program benefits. The
program distinguishes several types of wetlands, each
allowing a different combinations of uses, maintenance
activities, and additional drainage. Until the 1990
amendments, the program applied to producers who plant a
crop. Since 1990, it has applied to any change that makes
agricultural production possible. |
Swampbuster is amended in numerous ways
that provide greater program flexibility. Among these
changes are: the exemption of swampbuster penalties when
wetland benefits and functions are voluntarily restored
following a specified procedure; provision that wetlands
will not be considered "abandoned " as long as
the land is used only for agriculture; discretion for the
USDA to determine which program benefits violators are
ineligible for and to provide good-faith exemptions;
maintenance of wetland delineations until a review is
requested by the producer; assurance that "prior
converted wetlands" will not be redesignated as
wetlands so long as they remain used for agricultural
purposes; establishment of a pilot mitigation banking
program (using the CRP); and, repeal of the requirement
for consultation with the U.S. Fish and Wildlife Service
(FWS). |
| Conservation Reserve Program (CRP) |
The 1985 farm bill authorized 10-year
contracts to enable producers to retire highly erodible
and environmentally sensitive lands from production. The
1990 farm bill extended sign-up authority through 1995
and elevated the priority for enrolling environmentally
sensitive lands. The program is currently authorized at
38 million acres, and 36.4 million acres are enrolled.
Congress has not appropriated funds for new enrollments
since FY1992. The first contracts expired at the end of
FY1995, and the USDA offered those producers the option
of extending for one year while the farm bill was being
debated. The USDA is using existing authority in 1995 and
1996 to allow producers early outs and to enroll
replacement lands. |
CRP is made an entitlement program, and
is extended through 2002. Maximum enrollment at any time
will be 36.4 million acres. Producers with participating
lands enrolled at least 5 years before this law, and
which do not have high environmental values or high
erosion potential, can terminate their contracts early.
The USDA can use the money saved to enroll additional
lands. A prohibition against enrollments in calendar year
1997, enacted in the FY1996 agricultural appropriations,
is repealed. Conservation requirements on land returning
to production can not exceed those placed on similar
nearby lands. Implementing regulations are to be issued
within 90 days of enactment. |
| Wetlands Reserve Program (WRP) |
The 1990 farm bill authorized permanent
and long-term easements to protect wetlands. The Wetland
Reserve is authorized for at least 975,000 acres;
reportedly about 300,000 acres are now enrolled. Every
year since 1992, the Administration (both Bush and
Clinton) has sought far more funding to enroll more acres
than Congress has been willing to provide, given
continuing budget constraints. All enrollments have been
in permanent easements. The Fish and Wildlife Service
assists in implementing this program. |
WRP is made an entitlement program, and
extended through 2002. Eligibility is expanded to include
land that maximizes wildlife benefits and wetlands
benefits. Enrollment is limited to 975,000 acres. After
October 1, 1996, enrolled land is to be 1/3 in permanent
easements, 1/3 in 30-year easements, and 1/3 in
restoration cost-share agreements; and, 75,000 acres are
to be enrolled in temporary easements before permanent
easements can again be used. The maximum and minimum
percentages the federal government will cost share to
restore wetlands are specified, and are larger for
permanent easements. The specific role of FWS is replaced
by consultation with the state technical committee.
Implementing regulations are to be issued within 90 days. |
| Conservation Farm Option |
No relevant provisions. |
A 10 year conservation contract option
is offered, as a pilot program, to producers in the
7-year market transition program who have land enrolled
in the CRP. Payments are based on estimated benefits from
conservation programs and marketing loans. Funding begins
in FY1997 at $7.5 million and increases each year, with a
total limit of $197.5 million over 7 years. |
| Environmental Conservation Acreage
Reserve Program (ECARP) |
ECARP is a shell that encompasses CRP
and WRP, as well as an unimplemented environmental
easement program. Total acreage currently authorized for
ECARP was set in the 1993 Omnibus Budget Reconciliation
Act, and is not to exceed 38 million acres in the CRP and
to be at least 975,000 acres in the WRP. |
ECARP is extended through 2002. A new
program is created within the ECARP shell--the
Environmental Quality Incentive Program (EQIP, discussed
below). The USDA may designate priority areas for
concentrated assistance to meet environmental laws and
conservation needs. |
| Environmental Quality Incentive Program
(EQIP) and Cost-Sharing Programs |
The law authorizes several cost sharing
programs, many of which are currently funded through
annual appropriations. None of these programs are
entitlements. All of these programs are for crop
agriculture; there are no explicit provisions for
livestock producers. Some, like the Agriculture
Conservation Program, are national in scope, while
others, such as the Great Plains Conservation Program,
address problems in specific regions. |
The Environmental Quality Incentive
Program (EQIP) is newly created by combining the
functions of four terminated cost-sharing programs. This
new entitlement is to be funded at $200 million per year
starting in FY1997 ($130 million in FY1996). The
terminated cost-sharing programs are Great Plains
Conservation Program, Agricultural Conservation Program,
Colorado River Basin Salinity Control Program, and Water
Quality Incentives Program. Combined, they received
appropriations totaling $70 million in FY1996. EQIP
promotes structural and land management practices through
technical assistance, cost-sharing and incentive
payments, and education. Half the funding is directed at
problems associated with livestock production. Priorities
for participation are based on three specified criteria.
Participants must adopt a plan. Annual payments are
limited to $10,000 per contract, and total payments to
$50,000 over the life of the contract (5 to 10 years);
exceptions to the annual limit are permitted. Large
livestock operations, as defined by the USDA, can not
receive cost-sharing payments to construct animal waste
management facilities. |
| Grazing on Private Lands |
Current law authorizes funds to operate
the Great Plains Conservation Program, which had some
funds going to grazing activities, but no appropriation
was made to this program in FY1996. However, the FY1996
appropriation for USDA's Natural Resources Conservation
Service provided $5 million for a grazing lands
initiative. |
A new voluntary technical and
educational assistance program is created to maintain and
improve resource conditions on private grazing lands.
Funding is authorized at $20 million in FY1996, $40
million in FY1997, and $60 million annually thereafter.
The USDA is allowed to establish two grazing management
demonstration districts. |
| Risk Reduction on Flood-Prone Cropland |
No relevant provisions. |
CCC funding is approved to retire
frequently flooded cropland on farms with market
transition contracts. Participants receive not more than
95% of their projected program payments, and must agree
to comply with swampbuster and conservation compliance,
as well as to forego future disaster payments. |
| Farmland Protection Program |
No relevant provisions. |
Up to $35 million in CCC funds may be
used to purchase easements on between 170,000 and 340,000
acres of prime or unique farmland to protect soil
resources. Eligible lands must be subject to a pending
offer from a state or local government. |
| State Technical Committees |
Section 1261 of the 1990 farm bill
authorized creation of state technical committees,
consisting of representatives from federal, state, and
other technical and resource management agencies, to
assist USDA officials in implementing conservation
programs. USDA implemented this section in 1995. |
Technical committee membership
eligibility is expanded to include agricultural
producers, representatives from agribusiness and
non-profit groups, and individuals with demonstrated
expertise. Committees are required to give notice and
hold meetings that are open to the public, to establish
procedures for evaluating petitions on new conservation
practices, and to establish priorities for state
initiatives under EQIP. |
| Forestry Provisions |
Authorizations for the Forestry
Incentives, Forestry Stewardship, and Stewardship
Incentives Programs expired in 1995. International
Forestry is operated at a branch level. The Forest Legacy
Program provides cost-sharing and compensation. The
National Forest System is not authorized to work
cooperatively. |
Appropriations authority is extended to
2002 for the Office of International Forestry and the
Forestry Incentives Program. The USDA may make grants
under the Forest Legacy Program, and carry out
cooperative work on units of the National Forest System. |
| Bypass Water Flows across Forest Service
Lands |
No relevant provisions. This provision
responds to concerns, in connection with approving
renewal of rights-of-way for conveying water across
federal lands that the Forest Service has retained water
for purposes related to managing those lands, especially
environmental considerations, that have changed since
rights-of-way were granted, as conditions for approval.
This is an issue in Colorado. |
An 18 month moratorium is imposed on
Forest Service permit renewal conditions that would
require retention of bypass flows on federal lands, while
a task force studies the issue. The task force is to
report to Congress within 1 year. |
| Everglades |
No relevant provisions. |
The Treasury is authorized to provide
$200 million through the USDA to Interior on July 1,
1996, to acquire lands as part of federal efforts to
restore the Everglades ecosystem. Funds must be spent by
December 31, 1999. Also, the federal government is
authorized to sell excess or surplus property (excluding
lands protected for conservation purposes) in Florida to
raise up to an additional $100 million to be used in this
restoration effort. These additional funds can only be
spent to acquire property if Florida provides funds equal
to half the appraised value. Interior must report to
Congress on the feasibility of applying this approach for
resource protection nationwide within one year of
enactment. |
| Wildlife Habitat |
Wildlife is given limited recognition in
current agricultural resource conservation law, under
provisions of the CRP and WRP. |
The Natural Resources Conservation
Service may receive a total of $50 million from the CRP
to cost-share in developing and implementing wildlife
habitat improvement management plans. More broadly,
wildlife is given greater recognition in other
conservation programs under ECARP. |
| Resource Conservation and Development
(RC&D) |
Authority for appropriations for the
RC&D program expired at the end of FY1995. |
RC&D is reauthorized through 2002. |
| Natural Resource Conservation Foundation
(NRCF) |
No relevant programs for soil and water
resources; similar foundations have been created for
other natural resources. |
A NRCF is established as a non-profit
corporation to promote and assist conservation efforts,
especially the activities of the Natural Resources
Conservation Service. It can accept gifts and raise money
to sustain its efforts. Congress may appropriate up to $1
million per year for 3 years to serve as "seed
money." |
FOOD AID AND AGRICULTURAL TRADE
| |
Provision
|
Relevant Part of Current or
Expiring Law
|
1996 Farm Bill
|
| P.L. 480 Food Aid |
Authority terminates at the end of
FY1995 to enter into agreements for concessional
financing of U.S. farm exports, commodity donations for
humanitarian relief, or for development projects. |
Authority for P.L. 480 agreements is
extended through FY2002. |
| P.L. 480 Title I, Trade and Development
Assistance |
Title I authorizes concessional sales of
U.S. agricultural commodities to developing countries for
dollars on credit terms or for local currencies. Loans
must be paid back within 10 to 30 years, with a maximum
grace period of 7 years. |
Private entities, in addition to
developing countries, are made eligible for Title I
agreements. The maximum grace period before repayment
begins is reduced from 7 to 5 years. The total repayment
period can be fewer than 10 but no more than 30 years,
depending upon ability to repay. Priority goes to
countries with demonstrated potential to become
commercial customers. |
| P.L. 480 Title II, Humanitarian and
Private Assistance |
Title II provides for food donations for
humanitarian purposes. Up to $13.5 million is made
available to assist private voluntary organizations
(PVOs) and cooperatives to conduct programs. The minimum
volume of commodities is set at 2.025 million metric tons
(mmt.) in FY1995, with 1.55 mmt. for nonemergency
programs. |
Eligible organizations (private
voluntary organizations, cooperatives, intergovernmental
organizations) may implement programs in countries where
the Agency for International Development (AID) does not
maintain missions. Funds to pay transport, distribution,
and other costs of eligible organizations increase from
$13.5 million to $28 million. Minimum amount of
commodities to be sold for local currencies increases
from 10 to 15%. Local currencies can be used in countries
other than where commodities were sold in the same
region. |
| P.L. 480 Title III, Food for Development |
Title III authorizes multiyear
government-to-government food grants to least developed
countries to promote economic development and food
security. |
The requirement that Title III funds be
at least 40% of combined funding for Titles I & III
is eliminated. Transfers of up to 50% of Title III to II
are allowed in any fiscal year. |
| Food for Progress (FFP) |
FFP provides commodities to support
countries that have made commitments to expand free
enterprise in their agricultural economies. |
FFP is extended through 2002.
Agricultural trade organizations and intergovernmental
organizations become eligible to carry out FFP programs.
The CCC may make sales on credit terms under this program
to countries other than the former Soviet Union. |
| Food Security Commodity Reserve |
The Food Security Wheat Reserve (Food
Security Wheat Reserve Act of 1980) authorizes a reserve
of up to 4 mmt. of wheat to meet extraordinary
humanitarian needs in developing countries. Up to 300,000
metric tons may be released in any fiscal year,
regardless of the domestic supply situation, to meet
emergency relief needs whenever wheat cannot be supplied
quickly enough under normal P.L. 480 Title II procedures.
Authority to replenish the reserve expires at the end of
FY1995. |
A Food Security Commodity Reserve is
established. Replenishment authority expires in 2002.
Corn, sorghum, and rice, in addition to wheat, become
eligible for the 4 mmt. reserve. The USDA may release up
to 500,000 metric tons of commodities, plus up to 500,000
tons of commodities that could have been but were not
released in prior fiscal years, to meet unanticipated
needs for emergency assistance. |
| Farmer-to-Farmer Program |
The Farmer-to-Farmer Program provides
short-term technical assistance on a people-to-people
basis. Funding is authorized at 0.2% of total P.L. 480
funding, with 0.1% of that reserved for developing
countries. |
The Farmer-to-Farmer Program is extended
through FY2002. Emerging markets become eligible for the
program. Funding is increased to 0.4% of P.L. 480, with
0.2% of that allocated to developing countries. Program
funds can be used to finance the travel of foreign
farmers and other professionals to the United States.
Local currencies from P.L. 480, Section 416(b), and Food
for Progress can be used to meet costs of the program. |
| Export Credit Guarantees: Short-Term
Credit Guarantees (GSM-102) and Intermediate-Term
Guarantees (GSM-103) |
The CCC can guarantee repayment of
short-term financing (6 months to 3 years under GSM-102)
or intermediate financing (3 to 10 years under GSM-103)
extended to eligible countries that purchase U.S. farm
products from private U.S. sellers. The 1990 farm bill
authorized annual funding levels of $5 billion for
GSM-102 and $500 million for GSM-103. Commodities in the
programs must be 100% American-produced.
|
Short- and intermediate-term guarantees
are reauthorized at current levels of funding, but CCC is
given flexibility to determine the program allocations.
GSM-102 guarantees are available for up to 180 days as
supplier credit. Facilities financing guarantees are also
provided. Minimum credit guarantees are available for
high-value products. Credit guarantees for high-value
products with at least 90% U.S. content by weight are
permitted, allowing for some components of foreign
origin. |
| Dairy Export Incentive Program (DEIP) |
DEIP is authorized through the year
2001. |
DEIP authorization is extended through
FY2002. The USDA is directed to maximize the volume of
dairy exports under DEIP consistent with Uruguay Round
obligations. DEIP exports are authorized anywhere in the
world. |
| Export Enhancement Program (EEP) |
The CCC is required to make available
not less than $500 million annually through FY2001,
except where the Uruguay Round (UR) trade agreement sets
a lower ceiling on EEP outlays. Ceilings set by UR
agreement are: $959 million (FY1996); $861 million
(FY1997); $764 million (FY1998); $666 million (FY1999);
$569 million (FY2000); and $471 million (FY2001). |
The CCC is required to make EEP funding
available at not more than the following: $350 million
(FY1996); $250 million (FY1997); $500 million (FY1998);
$550 million (FY1999); $579 million (FY2000); and $478
million (FY2001, FY2002). No more than $100 million
annually is made available for the sale of intermediate
products. |
| Market Promotion Program (MPP) |
The CCC or the USDA is required to make
available not less than $110 million annually through
FY1997 for MPP. Grants in FY1996 are limited to small
businesses and cooperatives. |
MPP is authorized through FY2002, and
spending is capped at $90 million annually. Funding is
prohibited for non-U.S. for-profit corporations, and for
foreign-produced products. Funding is limited to small
businesses, non-profit trade associations, and
cooperatives. The program is changed to the "Market
Access Program." |
| Foreign Market Development Program
(FMDP) |
FMDP is funded as part of the Foreign
Agricultural Service (FAS) foreign marketing function. |
Statutory authority is provided for the
first time to FMDP, and it is authorized through FY2002. |
| Agricultural Export Promotion Strategy |
The USDA is directed to develop an
agricultural trade strategy that sets forth qualitative
goals the strategy should achieve. |
The USDA is required to develop an
agricultural export promotion strategy with quantitative
goals for growth of U.S. exports, including high-value
products; to report on progress toward meeting the goals;
and to monitor foreign commitments under the Uruguay
Round agreement. |
| Emerging Markets |
Technical assistance and not less than
$1 billion of export credit guarantees is to be made
available to emerging democracies from FY1991 to FY1995. |
The newly named "Emerging
Markets" program (formerly Emerging Democracies),
which provides technical assistance and export credit
guarantees, is reauthorized through FY2002. Country
coverage is expanded to those moving to a market economy. |
AGRICULTURAL CREDIT
| |
Provision
|
Relevant Part of Current or
Expiring Law
|
1996 Farm Bill
|
| Restrictions on Eligible Purposes for
New Loans |
The Consolidated Farm and Rural
Development Act of 1961 (Con Act, P.L. 187-128) provides
permanent authority for all USDA farm loan programs. The
Act authorizes Farm Ownership (FO), Farm Operating (OL),
and Emergency Disaster (EM) loans for specific purposes. |
Farm loans no longer will be allowed
for: recreational uses and facilities; funding
enterprises to supplement farm income; solar energy
systems; rural small business enterprises; or pollution
abatement and control projects. |
| Targeting Farm Loans |
An eligible borrower must be a family
farmer who has been denied credit from a commercial
lender. A 1992 Amendment to the Con Act earmarks a
specific percentage of available loan funds for beginning
farmers. |
Eligibility for new, direct FO loans is
restricted to borrowers with less than 10 years farming
experience, or a current FO borrower who has been a USDA
customer for less than 10 years. Direct OL funds are
restricted to those with less than 5 years of farming
experience or those who have been direct borrowers for
less than 7 years. A specific percentage of loans
continue to be earmarked for beginning farmers. |
| Total Authorized Loan Levels |
USDA farm loan levels are discretionary,
subject to annual appropriations. FY1996 Appropriations:
Direct Farm Ownership Loans = $60 million; Guaranteed
Farm Ownership = $550 million; Direct Operating Loans =
$550 million; Guaranteed Operating Loans = $1.9 billion;
Emergency Disaster Loans = $100 million. |
The shift in USDA lending resources from
direct to guaranteed loans is reinforced. Annual direct
loan funding is frozen at $500 million for OL and $85
million for FO through FY2002. Annual guaranteed funding
is allowed to increase gradually to $2.1 billion for OL
and $750 million for FO by FY2000, and maintained at that
level through FY2002. |
| Continuation Policy |
USDA must provide operating loans to
certain farm borrowers delinquent on previous loans. |
The continuation policy is repealed from
the law. |
| Loan Forgiveness and Future Loan
Eligibility |
USDA is required to restructure (i.e,
write down or write off) a delinquent farm loan if the
cost of restructuring is less than the cost of
foreclosure. There are no provisions on future
eligibility of borrowers who have been forgiven a portion
of a delinquent loan. There are no provision on the
number of times a borrower can have debt forgiven. |
A USDA farm borrower who has had a loan
restructured is allowed to continue as a borrower, but
any borrower who had a previous loan that resulted in
debt forgiveness will no longer be eligible for a direct
or guaranteed Government farm loan, unless the new loan
funds are used to pay farm operating expenses. The USDA
is prohibited from providing more than one loan
forgiveness per borrower for direct loans. |
| Delinquent Loan Buyouts |
A delinquent borrower who is ineligible
for loan restructuring is allowed to buy out the loan at
the net recovery value (the current market value of the
collateral property less liquidation costs). If the
borrower later sells the collateral property at a gain,
the borrower must share a portion of the gain with USDA,
an arrangement which is commonly called a recapture
agreement. |
Borrowers are allowed to buy out
indebtedness at the current market value of the
collateral, rather than at net recovery value. (This will
allow USDA to receive a higher portion of the debt at the
time of loan settlement. USDA's administrative costs will
be lower, recapture agreements will no longer be
necessary, and borrower collateral will no longer be
monitored.) |
| Trigger Mechanism for Loan Servicing
Action |
The USDA is required to notify a
delinquent borrower of loan servicing options when the
borrower becomes 180 days delinquent. |
The notification time period is reduced
to 90 days after the borrower becomes delinquent. |
| Disposition of Inventory Property |
When USDA disposes of inventoried
property, it must give preference to potential purchasers
or lessees of that property in the following order: the
immediate previous borrower-owner, his or her family
members, previous family-sized owners, qualified
beginning farmers, and other qualified family-sized
farmers. USDA must make the property available to the
most recent owner for 180 days after acquiring the
property. |
The order of preference for property
disposal is eliminated, and instead USDA is required to
offer the property for sale to any qualified beginning
farmer for 75 days. After that period, USDA will provide
public notice and sell the property through competitive
methods to the highest bidder. New leases will be
prohibited, and once existing leases expire, USDA will be
required to sell the property, subject to the proposed
75-day condition. |
CROP INSURANCE, RISK MANAGEMENT, AND DISASTER ASSISTANCE
| |
Provision
|
Relevant Part of Current or
Expiring Law
|
1996 Farm Bill
|
| Crop Insurance Purchase Requirement |
Crop producers are required to purchase
catastrophic (CAT) crop insurance (when available) to
qualify for most USDA farm programs. The producer cost is
$50 per crop per county, which indemnifies producers for
60% of the market price of the crop for losses in excess
of 50% of normal yield. CAT is required for any crop that
contributes 10% or more of the total expected value of
all crops grown by a producer. |
For spring-planted crops in 1996 and
subsequent years, a producer is no longer required to
purchase federal catastrophic crop insurance coverage, as
long as the producer provides a written waiver to the
USDA waiving any eligibility for future disaster
payments. At the discretion of the USDA, this provision
also can apply to fall-planted crops in 1996 and
subsequent years. |
| Crop Insurance Delivery |
A "dual delivery" system
allows both private insurance companies and USDA local
offices to offer CAT coverage. USDA delivery is optional,
based on considerations of need. Producers may "buy
up" additional levels of coverage, but only private
insurance companies are authorized to sell buy-up
coverage. |
In full consultation with private
insurance companies, the USDA may continue to offer CAT
coverage in states or regions that have an insufficient
number of approved private insurance providers. In states
with adequate private coverage, all current policies
written by USDA must be transferred to approved private
companies for sales, service, and loss adjustment
functions. |
| Crops Eligible for Noninsured Assistance
Program |
The USDA offers a noninsured assistance
program (NAP) that makes direct payments to producers of
crops not insurable under the crop insurance program.
NAP-eligible crops include any commercial crop that is
produced for food or fiber, with some exceptions. |
Seed crops and aquaculture (including
ornamental fish) are specifically identified as being
eligible under the noninsured assistance program (NAP). |
| Risk Management |
The federal crop insurance program is
administered by USDA's Farm Service Agency, which is
responsible for the general supervision of the Federal
Crop Insurance Corporation (FCIC). |
The USDA is directed to create a fully
independent Office of Risk Management, with an
administrator who will manage the crop insurance program
and other risk management responsibilities. The
Administrator of the new office also will serve as
manager of FCIC. The lawmakers intend that NAP will
continue to reside in USDA's Farm Service Agency. |
| Revenue Insurance |
The federal crop insurance program
protects producers from low production and commodity
programs protect producers from low market prices. There
is no provision in the law for revenue insurance, which
would protect farmers from deviations in total revenue,
regardless of whether it is due to low prices or reduced
crop yields. |
By the end of 1996, the USDA must carry
out a pilot revenue insurance program for the 1997-2000
crop years, in a limited number of counties, for wheat,
feed grains, soybeans, or other commodities as determined
by the USDA. |
| Options Pilot Program |
The USDA is required to operate an
options pilot program (through the 1995 crop year on
specific crops) to determine whether trading in the
futures and options market can be used by producers to
reduce the risks of market price fluctuations. |
The USDA is authorized to conduct
options pilot programs for one or more program crops in
up to 100 counties per crop, through 2002. |
| Emergency Livestock Feed Assistance |
When the USDA determines that a
livestock emergency exists due to a natural disaster, an
array of emergency feed assistance programs can be
offered to eligible producers. |
All emergency feed assistance programs
authorized by Title VI of the Agricultural Act of 1949
are suspended through crop year 2002. |
RESEARCH, EDUCATION AND EXTENSION
| |
Provision
|
Relevant Part of Current or
Expiring Law
|
1996 Farm Bill
|
| Funding and Program Authorities for
Agricultural Research and Extension Education |
Funding level authority and program
policies are set for the Agricultural Research Service
(ARS), Cooperative State Research Service (CSRS), the
Extension Service (ES), and numerous other research,
education, and extension program areas through FY1995. |
USDA research, education, and extension
programs, as modified by this act (H.R. 2854), are
authorized through FY1997. Funding authority is extended
through FY1997 at FY1995 levels for ARS ($850 million)
and for the Cooperative State Research, Education, and
Extension Service ($770 million). (CSREES was formed by
the merger of CSRS and ES in the 1994 USDA
reorganization). |
| Generic Funding Authority for Research
and Extension in FY1998-2002 |
No provision. |
After FY1997 the Secretary may conduct
research, education, and extension activities consistent
with appropriation acts, under generic funding authority.
If new legislation reforming and reauthorizing research,
education, and extension programs and policies is enacted
prior to the end of FY1997, it would replace the generic
funding authority. |
| Advisory Councils |
Authority is granted for the creation of
the Joint Council on Food and Agricultural Sciences; the
National Agricultural Research, Extension, Education, and
Economics Users Advisory Board, and six other advisory
panels. |
Authorities are repealed for the Joint
Council on Food and Agricultural Sciences; the National
Agricultural Research, Extension, Education, and
Economics Advisory Board, and six other advisory panels.
Through FY1997, these boards and panels are replaced by a
30-member National Agricultural Research, Extension,
Education, and Economics Advisory Board. |
| Federal Advisory Committee Act (FACA)
Exemption |
No provision. |
Meetings of federal and state research
personnel, for the purpose of cooperative efforts in
agricultural research, extension or teaching, are
exempted from Federal Advisory Committee Act (FACA)
through FY1997. Freedom to meet without prior notice in
the Federal Register should facilitate joint
collaboration. This exemption also applies to peer review
panels for competitive research, extension, or education
programs. |
| Research Tracking System |
The USDA is responsible for keeping
abreast of research, teaching, and extension
developments, and for coordinating all USDA activities
with other federal agencies and with cooperative research
and extension programs in the states. Research project
review is to assure timeliness and lack of duplication. |
The USDA is required to develop a
monitoring system for research and extension projects
that permits measurement of each project's outcome
against established goals and priorities. The system must
use electronic information technologies that optimize
public access to research information. Development of the
system must be consistent with the requirements of the
Government Performance and Results Act. |
| Agricultural Education |
Grants and fellowships are authorized to
land grant Colleges of Agriculture to improve the
agriculture curriculum by strengthening the research
capacity that underlies it. |
The law makes clear that capacity
building grants can be made to the 1890 institutions for
both teaching and research. Higher education grant funds
can be provided to university research foundations. The
USDA is allowed to make grants to secondary schools and
community and junior colleges for specified purposes. |
| Policy Research Centers |
No provision. |
Grants are authorized to analytical
institutes for economic analyses of agricultural policy
options. Eligible institutes do not need to be affiliated
with universities. |
| Human Nutrition and Health |
A federal grant is authorized
specifically to a food science and nutrition research
center in the Southeast. Funds were actually granted in
FY1992-1995 under the Research Facilities Act, not under
this now expired authority. |
The USDA is given authority to award
grants for a multi-year, multidisciplinary research
initiative on identifying and enhancing food plant
compounds to provide greater prevention of diet-related
diseases. |
| Animal Health and Disease Research |
Appropriations for animal health and
disease research programs are permanently authorized. |
The original purposes of the research
authority are expanded to include meat animal food safety
and livestock well-being. The formula is changed for
allocating animal health research funds among the states
to include the value of and income from aquaculture. |
| Grants to 1890 Colleges of Agriculture |
Funding is authorized to support
teaching programs at the 1890 Colleges of Agriculture and
to make competitive grants to five national research and
training centers (Centennial Centers) at 1890 Colleges. |
Funding authority is increased from $8
million to $15 million annually for grants to upgrade
1890 research facilities. Grant authority is given for
Centennial Centers and Hispanic-serving educational
institutions. |
| Funding for Extension at the 1890
Colleges of Agriculture |
Current authority does not explicitly
provide that payment of Smith-Lever 3(d) funds for
Cooperative Extension programs at the 1890 colleges be
made directly to those institutions. |
Explicit language provides that,
beginning in FY1996, any increased or new Smith-Lever
3(d) funds for Cooperative Extension programs at the 1890
Colleges may be provided directly to those institutions. |
| Meat Safety |
Authority is provided for a turkey
research center (never funded). |
Authority is repealed for a turkey
research center, but given for the establishment of a red
meat safety research center at a public research
facility. |
| Agricultural Research Facilities |
Authority is provided for federal
funding of new agricultural research facilities at
universities, colleges, and nonprofit institutions. |
Research facility grants are to be
awarded on the basis of matching funds, nonduplication of
facilities, national research priorities, availability of
long term support, and relationship to a strategic plan
(see below). |
| Strategic Plan for Federal Research
Facilities |
No provision. |
A task force, (derived in part from the
new National Agricultural Research, Extension, Education,
and Economics Advisory Board) must be formed to develop,
within 2 years, a 10-year strategic plan for the
development, construction, modernization, consolidation,
and closure of existing and proposed federally supported
research facilities. |
| National Competitive Research Initiative |
Authority is provided for competitive
agricultural research grants through FY1995. |
Competitive grant funding authority is
extended through FY1997 at the FY1995 level. The granting
cycle is changed from 1 to 2 years. Forty percent of the
grant funds are to be awarded for applied research. |
| Competitive Grants for Specific Purposes |
No provision. |
$3 million in FY1997 is authorized for
research to eradicate and control brown citrus aphid and
citrus tristeza virus. |
| Repeal of Various Research Authorities |
Authority is provided in 1990 farm bill
for various research programs. |
Authority is repealed for research on
animal lean content, immunoassay, niche market
development, scrapie, new commercial products from
natural plant materials, composting, stored agricultural
products, and other areas. |
RURAL DEVELOPMENT
| |
Provision
|
Relevant Part of Current or
Expiring Law
|
1996 Farm Bill
|
| Fund for Rural America |
No provision. |
The USDA is authorized to make available
to a new Fund for Rural America, from any monies in the
Treasury not otherwise appropriated, $100 million each
year from FY1997 through FY1999. One-third of the funds
are to be used for rural development, one-third for rural
research, and the remaining third for rural development
or research at the discretion of the Secretary. |
| Rural Investment Partnerships |
A 5-year pilot program is authorized in
five states. $4.7 million was appropriated for FY1996. |
Rural Investment Partnership program
authority is repealed. |
| Telemedicine and Distant Learning
Services |
The Rural Electrification Administration
(REA) is authorized to develop grant and loan programs
for applying telecommunications and other technology to
rural health and education. The law grants appropriations
authority of $245 million for grants from FY1991-FY1995. |
The USDA is authorized to provide grants
and cost of money (Treasury rate) loans for the
construction or development of facilities, systems, and
equipment to provide telemedicine and distance learning
services in rural areas. Borrowers are given the right to
appeal funding decisions. Funding is authorizes for up to
$100 million annually for FY1996-2002. |
| Alternative Agricultural Research and
Commercialization |
The establishment of an Alternative
Agricultural Research and Commercialization Center is
authorized within USDA to make grants and loans to assist
in agricultural research, development, and
commercialization. A Revolving Fund is to be capitalized
with $550 million between FY1991 and FY2000. |
The Center for Alternative Agricultural
Research and Commercialization is changed to a
wholly-owned government corporation authorized to make
grants and loans and engage in other activities to
expedite the development and marketing of nontraditional
farm and forest products, and to transfer research
results into commercial use. The Revolving Fund is
capitalized with $75 million annually from FY1996 to
FY2002. |
| State Rural Economic Review Panels |
State Rural Economic Development Review
Panels and a 5-year pilot program are authorized to
operate in five states. The panels are to review local
rural development plans and rank applications for rural
development grants and loans. |
State Rural Economic Development Review
Panel authority is repealed. |
| Rural Community Advancement Program
(RCAP) |
No provision. |
A newly created Rural Community
Advancement Program (RCAP) is authorized to provide
grants, loans, loan guarantees and other assistance to
rural communities of 50,000 or less (except that water
and waste-water funds would still be limited to
communities of 10,000 or less). USDA's state Offices of
Rural Economic and Community Development are directed to
prepare, with input from state and local governments and
others, a strategic plan for delivery of RCAP assistance
within the state. Certain existing grants and loans are
consolidated into three accounts: community development,
utilities, and business and cooperative development. The
USDA may transfer, within each state, up to 25% of the
state's share of each account to any other account or to
certain other programs. No more than 10% of the total
national amount of the three accounts may be transferred
in any fiscal year. |
| Community Facilities Grants |
No provision. |
A new Community Facilities Grant Program
authorizes the USDA to make grants up to $10 million
annually. The federal contribution can amount to 75% of
the facility cost and priority is given small and low
income communities. |
| Rural Business Incubator Fund |
The REA is authorized to make grants and
reduced interest rate loans to local electric and
telephone borrowers to promote, create, or operate rural
business incubators, where start-up businesses can share
certain expenses. Annual appropriations are authorized
for up to $10 million. |
Rural Business Incubator Fund authority
is repealed. |
MISCELLANEOUS PROVISIONS
| |
Provision
|
Relevant Part of Current or
Expiring Law
|
1996 Farm Bill
|
| Domestic Food Assistance |
USDA's food stamp program (which
provides coupons to low-income persons to purchase food
from retail outlets at an estimated cost of more than $26
billion in FY1996), the Puerto Rico nutrition assistance
program (costing about $1 billion), and several smaller
programs providing commodity donations to institutions
and families, typically are reauthorized as part of
omnibus farm laws. |
The general authorization for food
stamps is extended through FY1997. Extended through
FY2002 are the Puerto Rico nutrition assistance (with
gradually increasing annual funding levels specified),
the Commodity Supplemental Food Program, the Emergency
Food Assistance Program, and the soup kitchen and food
bank program. The USDA is newly authorized to provide
50% matching grants for community-based food security
projects to address the needs of low-income people and to
foster local food self-reliance. Total annual funding
authorizations are up to $1 million in FY1996 and $2.5
million thereafter.
|
| Generic Commodity Promotion Programs |
National generic promotion
("check-off") programs have been separately
authorized by Congress for 17 specified farm commodities;
13 are in operation. Once approved by a majority or
super-majority vote of industry participants and endorsed
by USDA, the programs require participants, under risk of
federal penalties, to pay assessments that fund
promotion, research, advertising, and related activities. |
The USDA is given broad-based authority
to establish new check-off programs for virtually any
agricultural or related commodity, either at its own
initiative or at the request of an industry group.
Standardized procedures for designing and implementing
such programs, conducting referenda among industry
participants, levying assessments, and funding promotion
and research activities, among other things, are
delineated. (The effect is that future proposals by
individual commodity groups no longer will have to be
pre-authorized by Congress.) Also new promotion programs
for kiwi fruit, canola and rapeseed, and popcorn, with
similar start-up and operational guidelines, are
specifically authorized. All promotion programs must
undergo an independent evaluation at least every 5 years. |
| Humane Horse Transportation |
No provision. However, the so-called
Twenty-Eight Hour Law (1906) generally spells out care
requirements for livestock transported across state lines
by rail or water, but not by aircraft or motor vehicle,
which were not in use at the time. Most movements today
are by truck. |
Subject to the availability of
appropriations, the USDA is permitted to issue guidelines
that regulate transportation of horses to slaughter
facilities by commercial carriers. Carriers of livestock
other than horses and of poultry are specifically
exempted from such regulation. |
| Meat and Poultry Inspection |
Federal law establishes a National
Advisory Committee on Meat and Poultry Inspection that
the USDA is required to consult with on inspection
issues. (USDA did not convene any meetings of this
committee in FY1995.) A separate National Advisory
Committee on Microbiological Criteria for Foods,
co-sponsored by several other non-USDA agencies with food
safety responsibilities, provides advice on efforts to
protect foods from microbiological hazards. State-inspected
meat and poultry products must meet requirements that are
"at least equal to" (but need not be identical
to) federal requirements. However, such products may not
be sold across state lines without federal inspection.
|
A new seven-member "Safe Meat and
Poultry Inspection Panel" is established to review
and evaluate the adequacy, necessity, safety,
cost-effectiveness, and scientific merit of inspection
procedures, worker rules, formal changes in regulations,
and other related matters. At least five members must be
from the food, meat, or poultry science professions.
Unlike the previous committees, the new panel is exempt
from the Federal Advisory Committee Act. The USDA must
submit recommendations on steps needed to achieve
interstate shipment of state-inspected meat and poultry
products.
|
| Sheep Industry Center |
No provision. Authority for the
longstanding wool and mohair price support program, which
provided incentive payments to producers, expired on
December 31, 1995. |
The USDA is directed to establish a
National Sheep Industry Improvement Center to carry out
activities to strengthen and enhance U.S. production and
marketing of lamb and wool, with activities funded
through a new revolving fund. U.S. Treasury contributions
to the fund are capped at $50 million, of which $20
million are mandatory. |
| USDA Graduate School |
The school has operated under USDA
administrative authority since 1921 as a nonprofit,
nonappropriated (self-supporting) institution for adult
continuing education and training. |
The USDA Graduate School is explicitly
authorized to operate as a nonappropriated, non-federal
entity within USDA. |
| Agriculture Quarantine & Inspection
Fees |
The 1990 farm bill authorized USDA's
Animal and Plant Health Inspection Service (APHIS) to
collect user fees for quarantine inspection of animals
and plants arriving in the U.S., although any expenditure
of funds was made subject to the appropriations process
to meet congressional budgeting requirements. |
Among other things, APHIS is authorized,
through 2002, to access fees collected above annually
appropriated amounts; after 2002, funds in the user fee
account are available without fiscal year limitation and
no longer subject to the appropriations process. |
RELATED CRS PRODUCTS
Farm Bill Issues: Overview. by the Food and Agriculture
Section. CRS Issue Brief 95058. Updated regularly.
The House-Passed Farm Bill (H.R. 2854). by Geoffrey S.
Becker and Jasper Womach. CRS Report 96-197 ENR. March 4, 1996. 6
p.
The Agricultural Market Transition Act (H.R. 2854). by
Jasper Womach and Geoffrey S. Becker. CRS Report 96-99 ENR.
January 31, 1996. 6 p.
The Senate Farm Bill (S. 1541). by Jasper Womach and
Geoffrey S. Becker. CRS Report 96-134 ENR. February 13, 1996. 6
p.
What If There's No Farm Bill? by Geoffrey S. Becker.
CRS Report 96-44 ENR. Updated February 2, 1996. 5 p.
Agriculture and the Budget. by Ralph M. Chite. CRS
Issue Brief 95031. Updated regularly.
Conservation Provisions in S. 1541: The Senate-Passed Farm
Bill. by Jeffrey Zinn. CRS Report 96-165 ENR. February 22,
1996. 6 p.
Farm Bill Issues: Agricultural Credit. by Ralph M.
Chite. CRS Issue Brief 95096. Updated regularly.
Farm Bill Issues: Agricultural Exports and Food Aid. by
Lenore Sek and Charles E. Hanrahan. CRS Issue Brief 95088.
Updated regularly.
Farm Bill Issues: Dairy. by Ralph M. Chite. CRS Issue
Brief 95103. Updated regularly.
Farm Bill Issues: Peanuts. by Remy Jurenas. CRS Issue
Brief 95118. Updated regularly.
Farm Bill Issues: Research, Education, and Extension.
by Jean M. Rawson. CRS Issue Brief 95101. Updated regularly.
Farm Bill Issues: Soil and Water Conservation Issues.
by Jeffrey Zinn. CRS Issue Brief 95027. Updated regularly.
Farm Bill Issues: Sugar. by Remy Jurenas. CRS Issue
Brief 95117. Updated regularly.
Farm Bill Issues: Wheat, Feed Grains, Cotton, Rice, and
Oilseeds. by Geoffrey S. Becker and Jasper Womach. CRS Issue
Brief 95082. Updated regularly.
The Senate Farm Bill (S. 1541): Food Aid and Foreign Trade
Provisions. by
Charles E. Hanrahan and Lenore Sek. CRS Report 96-153 ENR.
February 21, 1996. 6 p.
|
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