HTML _ RS20271 - Support Programs for Major Crops: Description and Experience
20-Jul-1999; Jasper Womach; 5 p.

Abstract: The Agricultural Market Transition Act (AMTA, Title I of the 1996 farm bill) established a substantially changed support program for producers of wheat, feed grains, upland cotton, and rice. This new program offered 7-year ¨production flexibility contracts¨ to producers with cropland previously enrolled in a target price deficiency payments program. The law earmarked $35.68 billion for contract payments to be paid over seven years in fixed but declining annual amounts and was expected to stabilize and constrain commodity program entitlement spending. No longer would payments be tied to market prices, to the planting of a specific crop, or to annual cropland diversion requirements. The new law did continue nonrecourse marketing assistance loans for most producers of grains, upland cotton, and oilseeds. In 1998 the drop and persistence of low grain and oilseed prices led to several emergency assistance actions, raising questions about the future of AMTA. First, Congress modified the law to accelerate FY1999 contract payments. Subsequently, Congress authorized $2.857 billion in emergency market loss payments, distributed to contract holders in the Fall of 1998. Additional relief proposals have been debated in the 106th Congress, where another aid bill is believed likely to pass. Some have suggested that assistance be incorporated into AMTA by raising marketing loan rates, extending the term of loans, or reestablishing the farmer-owned reserve. This report will be updated and revised as legislative events transpire. [read report]

Topics: Agriculture, Economics & Trade, Federal Agencies

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