HTML _ IB95058 - Farm Bill Issues: Overview
6-Jun-1996; Food and Agriculture Section; 15 p.

Abstract: Faced with Spring planting decisions and the prospect of having to operate farm programs under 1938 and 1949 agriculture statutes because of expiring provisions in the 1990 farm law, the House and Senate passed omnibus farm legislation in the early months of 1996. Following quick resolution of House-Senate bill differences, the President signed H.R. 2854, the Federal Agriculture Improvement and Reform Act, also called the 1996 farm bill, on April 4, 1996 (P.L.104-127). At the core of U.S. farm policy are federal programs that support farm income and some commodity prices. The 1996 law makes substantial policy changes to many of these programs. It replaces the earlier target price deficiency payment system for grains and cotton with predetermined and capped annual contract payments to participating producers through 2002. Payments are tied to overall crop history, rather than individual crops, and no longer are linked to market prices. Earlier nonrecourse commodity loan and marketing loan repayment provisions are largely maintained; however, the new law ends annual federal acreage reduction and strict planting requirements. With respect to the other federally supported farm commodities, the new law: 1) reauthorizes the dairy price support program, but phases it out by the end of 1999, and requires a consolidation of federal milk marketing orders; and 2) extends the sugar and peanut programs for 7 years, with some modifications, but keeps largely intact their broad program structures. The trade title of the new law extends through FY2002 authority for the Export Enhancement Program (EEP) and Market Access Program (MAP, formerly the Market Promotion Program, or MPP), the dairy ex-port incentive program (DEIP), export credit guarantees, and P.L.480 food aid programs. Maximum funding levels for EEP are lower in the early years than those allowed by the GATT agreement, and MAP funding authority is lowered. The conservation title of the new law builds on conservation initiatives enacted in 1985 and 1990, somewhat alters current constraints placed on producers, and converts the majority of conservation spending to entitlements by financing them with Commodity Credit Corporation funds. The new law also contains a rural development title that, among other things, establishes a Fund for Rural America, a new community facilities grant program, and a new rural community advancement program. Extensions of funding authority and revisions to agricultural research, education and extension programs, credit, and crop insurance also are in the new law. The food assistance title of the 1996 farm law extends the food stamp program (through FY1998) and commodity donation programs (through FY2002), without change. It also authorizes funding for new community-based food security projects. Changes to these programs are expected to be part of welfare reform proposals pending in the 104th Congress. Finally, the new law retains the permanent 1949 statutory authority for most price-supported commodities. Much of the longstanding permanent authority contains program operating provisions that are considered by most to be outdated and unacceptable, but it does allow for the continued operation of farm programs by USDA if agreement cannot be reached on new legislation before the expiration of preceding farm bill provisions. [read report]

Topics: Agriculture

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