House Agriculture Committee Completes 2001 Farm Bill

Jul 27, 2001

Measure's predictable, market-responsive support includes significant boost for conservation

Washington, D.C. - With strong bi-partisan support in passage, the House Agriculture Committee on Friday completed the next farm bill designed to bring predictability back to the federal government's farm support programs while enlarging participation in soil and water conservation.By allowing producers the voluntary choice to update their base acres, and adding counter-cyclical support based on target prices to the already-established 2002 level of transition payments, The Agricultural Act of 2001, H.R. 2646, provides both the flexibility and predictability that most producers, commodity and farm groups have called for in the next farm bill. Enlarging participation for soil and water conservation programs by 80 percent above current budget trends, the House Agriculture Committee 2001 Farm Bill provides producers with more options to implement progressive conserving practices on their land, with the backing of increased technical assistance to producers using any government or private contractors.

House Ag Committee Members made good use of their farming and ranching experience to deliver flexibility and predictability for producers and budget responsibility for taxpayers, as a departure from the uncertainty of the recent year-to-year patchwork of additional financial assistance. "The best agricultural practices begin with good field preparation, so first we listened to producers in rural hearings we began nearly two years ago, and now today our result is a productive harvest of those ideas in the 2001 Farm Bill," said House Agriculture Chairman Larry Combest (R-Texas).

The bill reported today is a good deal for agriculture and a good deal for taxpayers." Emergency spending by Congress to respond to agriculture's income crisis was proof that our programs need reworking. Today, the Committee took a bold first step toward meeting that need," said Ranking Minority Member Charlie Stenholm (D-Texas). "As a long time advocate of counter-cyclical assistance, I am pleased that this legislation addresses this need, in addition to maintaining the flexibility that is so popular with the nation's producers. This legislation brings together a coalition of interests that will be needed to pass it in the full House and see it signed into law by the end of the year."

Commodity Programs

Maintains maximum planting flexibility while providing counter-cyclical protection to help farmers weather adverse market conditions.
Retains fixed-decoupled payments, as well as the marketing loan program. Marketing loan rates are maintained for all commodities except oilseeds, which are reduced to a level equivalent to other commodities, and grain sorghum which is raised to a level equivalent to corn.
Provides producers with the option to update base acreage. Current base yields are maintained. Both fixed-decoupled, and counter-cyclical payments are made on the producer's base. 
For oilseeds and farms without current AMTA payment base and yields, the Secretary is directed to develop payment yields that are comparable to current AMTA yields in the area.
Counter-cyclical payments are triggered when a crop's price, adjusted for the fixed decoupled payment, is below the target price. The payment rate for a crop would be calculated as the difference between its target price and the sum of the following components:
(a)    The higher of the national twelve-month season average price received by producers, or the national average loan.

(b) The fixed decoupled payment rate.

Payment limits are set at $50,000 for fixed decoupled payments, $75,000 for counter-cyclical payments and $150,000 for marketing loan gains and loan deficiency payments.  
 

Loan Rates, Fixed Decoupled Payment Rates and Target Prices
Crop
 $ / Unit
 Loan Rates
 Fixed Rate
 Target Prices
 
Wheat
 Bu.
 2.58
 0.53
 4.04
 
Corn
 1.89
 0.30
 2.78
 
Sorghum
 1.89
 0.36
 2.64
 
Barley
 1.65#
 0.25
 2.39
 
Oats
 1.21#
 0.025
 1.47
 
Upland Cotton
 Lb.
 0.5192
 .0667
 .736
 
Rice
 Cwt.
 6.50
 2.35
 10.82
 
Soybeans
 Bu.
 4.92
 0.42
 5.86
 
Minor Oilseeds
 Lb.
 0.087
 .0074
 .1036
 

# Set by formula taking into account the feed value relative to corn.

Other Crops
Sugar. Eliminate marketing assessment on sugar, reduce the CCC interest rate on price support loans, authorize a Payment-in-Kind program, reestablishes the no-net-cost concept feature of the program and provides the Secretary authority to implement allotments for sugar producer.

Dairy. Extend the milk price support program at $9.90 per cwt. Through 2011.

Wool and Mohair. Creates a marketing assistance loan program similar to other program commodities. Provides producers price support loans or loan deficiency payments. Loan rate of $1.00 per pound for graded wool, $0.40 per pound for nongraded wool and $4.20 per pound for mohair.

Honey. Creates a marketing assistance loan program similar to other program commodities.? Provides producers price support loans or loan deficiency payments.? Loan rate of $0.60 per pound.

 Peanuts. Makes historic reform to peanut program to make peanuts similar to other traditional program crops. Provides a fixed decoupled payment at $0.018 per pound, counter cyclical program with a target price of $480 per ton, marketing loan at $350 per ton. Terminates marketing quota program and compensates the quota holders for the loss of the quota asset value at $0.10 per pound per year for five years.

Fruits and Vegetables. Give the Secretary sole decision authority to combat outbreaks of plant and animal diseases with emergency funds, retain planting restriction of fruits and vegetables on base acres, provides additional $200 million in spending authority for surplus commodity purchases under Section 32, increases the Market Access Program (MAP) by $110 million per year, creates a Technical Assistance Specialty Crop (TASC) fund to assist with trade barriers, provides $15 million per year through 2011 for the Senior's Farmers Market Program?a program administered through States that provides vouchers, or coupons to seniors to purchase fresh fruits and vegetables at farmers markets and significantly increases EQIP funding with targeted spending for water conservation assistance.

Conservation
The conservation section devotes over $16 billion over 10 years to soil, water and wildlife programs. This represents over a 75% increase in baseline spending. Program changes include:

Reauthorize the Conservation Reserve Program (CRP) through 2011 with a 39.5 million-acre enrollment cap. Secretary may permit harvesting of biomass for energy on CRP acreage with a reduction in rental rate.
Reauthorize the Environmental Quality Incentives Program (EQIP) through 2011 at $1.2 billion annual program level, with livestock producers receiving 50% of annual funding. In addition, a $675 million fund is created in EQIP to address ground water conservation issues, including cost share for more efficient irrigation systems. In addition, there is explicit authority for the Secretary to implement an incentives payment program for producers of annual and perennial crops, such as tree nuts or fruits. This program places a high priority on residue, nutrient, pest, invasive species, and air quality management. 
Reauthorize the Wetlands Reserve Program (WRP) through 2011 and provide for an additional 150,000 acres to be enrolled per year. 
Reauthorize the Wildlife Habitat Incentives Program (WHIP) to provide cost share for landowners to enhance wildlife habitat at a program level of? $25 million annually. 
Reauthorize the Farmland Protection Program (FPP) at a program level of $50 million annually. Makes agricultural land that contains historic or archeological resources eligible.
Authorizes 2 million acres in a Grassland Reserve Program to be enrolled in 10, 15 and 20 year contracts. 1 million acres to native grass and 1 million acres devoted to restored grasslands.
Provide up to $100 million per year (not more than $850 million may be spent in the 10-year period) to provide conservation technical assistance to producers using any governmental, or private contractors. 
$150 million to fund the Small Watershed Dam Restoration.
Provides producers participating in conservation programs with protection against the release of confidential information by the agency.
Creates an advisory council for the Upper Mississippi River Stewardship Initiative. Also creates a federal interagency working group to coordinate nutrient and sediment reduction efforts in the Upper Mississippi River Basin under the Initiative.
Trade

Reauthorize the Market Access Program (MAP) through 2011. Increase funding by $110 million per year (from $90 million to $200 million).? Allows tobacco to be eligible for MAP funds.
Reauthorize Food for Progress (FFP) through 2011. Increase transportation and administrative funds to allow additional food aid.?
Reauthorize Foreign Market Development and increase funding to $35 million a year through 2011.  
Reauthorize Export Enhancement Program (EEP) through 2011.  
Reauthorize Dairy Export Incentive Program (DEIP) through 2011.
Reauthorize the Food for Peace program through 2011.  
Research
Continue the Research Initiative for Future Agricultural Systems at a program level of $145 million per year for fiscal years 2004 through 2011.
Reauthorizes existing research programs.
Improves on programs to include priority research items such as pest detection and exclusion, energy efficiency, value-added agricultural production and marketing.
Nutrition

Provide $40 million annually in additional funds for the Emergency Food Assistance Program (EFAP).  
Simplify application process for Food Stamp program; improve quality control; increase standard deduction; provides a 6-month transition benefit for those leaving welfare and simplify State level program operations.
Rural Development
Emergency Drinking Water Grants.
Strategic Planning Initiative. Provide for regionally planned rural development pilot programs.
Provides $2 billion in program level funding for loan guarantees to implement the Launching Our Communities Access to Local Television Act of 2000.  
Provides $50 million in funding for the Value Added Grants Program to provide grants for start-up farmer-owned value added processing facilities.
Forestry
Creates a new Forest Land Enhancement Program by combining the existing Forestry Incentives Program and Stewardship Incentives Program. Funded at $15 million per year.
Reauthorizes the Renewable Resources Extension Act through 2011 at $30 million annually. Also creates a Sustainable Forestry Outreach Initiative within the RREA to provide education to landowners about sustainable forestry practices.
Reauthorizes the International Forestry Program through 2011.
Gives the Secretary the authority to enter into stewardship end result contracts to implement the National Fire Plan on Federal lands.
Reaffirms the importance of the McIntire-Stennis Cooperative Forestry Act.
 Provides enhanced community fire protection by directing the Secretary to coordinate with local communities in implementing rural fire protection and control strategies. Also creates a Community and Private Land Fire Assistance Program which enables the Secretary to undertake a variety of activities aimed at preventing fires on both federal and non-federal lands.

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