A New Farm Bill: Comparing the 2002 Law with Previous Law and House and Senate Bills (CRS Report for Congress)
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Release Date |
Jan. 21, 2003 |
Report Number |
RL31704 |
Report Type |
Report |
Authors |
Jean Yavis Jones, Resources, Science, and Industry Division |
Source Agency |
Congressional Research Service |
Summary:
On May 13, 2002, President Bush signed a new farm bill -- The Farm Security and Rural
Investment
Act of 2002 ( P.L.107-171 ). This comprehensive new law contains ten titles covering commodity
support, conservation, nutrition, trade, research, credit, rural development and other related
programs. It makes significant changes to commodity, conservation and nutrition programs, and is
intended to guide most federal farm and food policies through FY2007. The Congressional Budget
Office (CBO) estimates (using the March 2002 baseline) place the total cost of the new bill (i.e.,
baseline plus new funding) at just under $274 billion over its six-year life-span. The total reflects an
increase of $51.6 billion in federal spending, $37.6 billion of which is projected to be used to
increase farm commodity program spending.
Of the $274 billion in total 6-year budget authority for programs under the new law, it is
estimated that some $99 billion will go for direct subsidies to about 600,000 farmers. Just under
$150 billion will support the cost of food stamps and commodity assistance for some 17 million
low-income Americans. The remaining $25 billion is expected to be spent on conservation ($21
billion), trade ($2.1 billion), rural development ($1 billion), and research, forestry and energy ($2.5
billion) programs.
The new farm bill has been hailed by supporters as a corrective to previous policy that was
criticized for not providing a "safety net" for farmers, and that prompted some $35 billion in ad hoc
emergency farm spending laws between fiscal years 1999 and 2002. Critics of the new farm law
expressed concern about its cost and its resurrection of old policy mechanisms that they contend
encourage overproduction that will further depress farm prices. There also is concern that the
generous farm subsidies in the new law conflict with U.S. trade agreements and/or impede U.S.
efforts to get other countries to cut their farm subsidies.
The House approved its original farm bill ( H.R. 2646 , the Farm Security Act of
2001) on October 5, 2001. The Senate version of this legislation (The Agriculture, Conservation,
and Rural Enhancement Act, or ACRE) was approved on February 13, 2002, and was nearly three
times the size of the House bill. Despite this, the commodity policy changes in both bills reflected
a similar policy direction. Both chambers' bills maintained marketing loan assistance and fixed,
decoupled annual farm payments, although at different levels. They both also added target prices
and counter-cyclical income support (or deficiency payments) for major field crops. Conservation
and nutrition programs were enhanced by both bills, although more so in the Senate bill. Other
differences between the House and Senate included: the pace of new spending; the amount of new
funding for commodity programs versus other USDA activities (e.g., conservation, food assistance,
etc.); how much to fund each of the commodity support programs; and the federal caps on farm
payments. The final law adopted the more evenly paced annual spending of the House bill; spent
most (73%) new money on farm commodity programs; split the differences over funding for each
of the three major commodity programs; and set new farm payment caps that lowered base limits
but maintained rules allowing payments for up to three entities, spouses, and unlimited commodity
certificates. This report will not be updated.