Agriculture Policy & Farm Bill Briefing Book
Congressional Research Service

Redistributed as a service of the National Library for the Environment

Farm Income and Commodity Price Support Programs

Jasper Womach

Federal farm income and commodity price support program operations currently are authorized by the Agricultural Market Transition Act (AMTA) (Title I of the 1996 farm bill, P.L. 104-127, the Federal Agriculture Improvement and Reform (FAIR) Act of 1996). This law applies through the 2002 crop year. Its expiration at the end of the 107th Congress puts new commodity support legislation high on the legislative agenda.

For traditional producers of wheat, feed grains, cotton, and rice, AMTA provides for fixed annual income support payments and allows for planting flexibility among commodities. These so-called contract commodities, along with soybeans and minor oilseeds, and ELS cotton are eligible for marketing assistance loans or loan deficiency payments. Also, market prices are supported for peanuts, sugar, milk, and tobacco.

Persistently low commodity prices stimulated three years of multi-billion dollar ad hoc emergency farm aid packages that substantially boosted farm incomes in 1998, 1999, and 2000. With prices for the major crops remaining low, farmers have requested and the Congress appears prepared to again provide supplemental or emergency income support payments in 2001.

Most policymakers and farm groups would prefer a more reliable method for supporting farm income than ad hoc emergency "market loss payments," and are pushing for policy changes that will automatically release funding when commodity prices and/or farm income are low. Allocating resources for such changes, and resolving ideological differences over the best method of assisting farmers are likely to be difficult. Among the many unresolved questions are:

In Congress

Both the House and Senate Agriculture Committees formally resumed work on farm income and commodity price support policy by holding hearings. The Commission on 21st Century Production Agriculture, a blue-ribbon panel of experts established by the 1996 farm bill, as well as the various farm and commodity organizations have developed policy recommendations.

The House Agriculture Committee Chairman has indicated a desire to pass at least the commodity support titles of a farm bill this year. This effort may be facilitated by a provision in the pending House budget resolution (H.Con.Res. 83, Sec. 6) that allows for additional funding if the Agriculture Committee reports out legislation by July 11, 2001. However, several other Members, as well as leaders of the Senate Agriculture Committee, have indicated that omnibus legislation, including the agricultural section, is not likely to pass Congress until 2002.

CRS Products

CRS Report 98-744, Agricultural Marketing Assistance Loans and Loan Deficiency Payments.
CRS Issue Brief IB97011, Dairy Policy Issues.
CRS Report RS20269, Emergency Funding for Agriculture: A Brief History of Congressional Action, FY1989-FY2001.
CRS Report 96-900, Farm Commodity Legislation: Chronology, 1933-2000.
CRS Report RS20848(pdf), Farm Commodity Programs: A Short Primer.
CRS Report RL30794(pdf), Farm Economic Relief and Policy Issues in the 106th Congress: A Retrospective.
CRS Report RL30739, Federal Crop Insurance and the Agricultural Risk Protection Act of 2000 (P.L.106-224).
CRS Report RS20271, Grains, Cotton, and Oilseeds: Federal Commodity Support.
CRS Issue Brief IB95118, Peanuts: Policy Issues.
CRS Issue Brief IB95117, Sugar Policy Issues.
CRS Report 95-129, Tobacco Price Support: An Overview of the Program.

Page last updated May 2, 2001.

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