COMMODITY TITLE
This title will provide broad-based non-distorting farm safety net and environmental enhancement programs for US farmers and ranchers that rely on shared responsibility between producers and government. The programs would begin in 2003. Existing farm commodity programs would be phased out over the three-year 2003-2005 period. The existing crop insurance program would be retained with some changes.
APPROXIMATE COST ESTIMATE (2002-06): $4.4 billion
Voucher Redeemable in Connection with Farm Financial Protection: Make available to eligible participating farmers and ranchers a voucher redeemable each year in connection with the purchase or use of one or more of the following financial protection strategies for the participant's farm business:
* See note on page 3 for more details on these farm financial protection strategies.
Voucher Value based on a Producer's 5-Year Average Gross Farm Revenue: The value of a producer's annual voucher will be based on his farm's recent average gross farm revenue - the sum of market receipts from crop and livestock sales and government payments. The average gross farm revenue is formed from the immediately preceding 5 consecutive years based on federal tax returns for the farm business. Annual voucher value will be equal to 6 percent of average gross farm revenue up to $250,000; 4 percent of revenue between $250,000 and $500,000; and 1 percent of revenue between $500,000 and $1 million.
Eligible Producers: To be eligible for the safety net voucher program, a producer must:
1. Be actively involved in farming or ranching and be organized as a sole proprietorship, partnership, Subchapter S (closely-held) corporation, or selected other family farm business entities, as determined by the Secretary.
2. Have filed Schedule F or a comparable federal tax return related to his farm business during the immediately preceding 5 years or be a beginning producer, as determined by the Secretary.
3. Have $20,000 in annual gross farm revenue, except for limited resource farmers, as determined by the Secretary.
Eligible Commodities: All agricultural crop and livestock commodities are eligible with the exception of tobacco.
Conservation Requirement: A producer participating in this program will be required to comply with conservation compliance and swampbuster requirements.
Decoupled AMTA Contract Payments: Existing AMTA contracts would not be extended after they expire with the 2002 crop year (fiscal year 2002).
Planting Flexibility: Producers would be free to plant any crop beginning in 2003.
Marketing Assistance Loans: This program would be continued for the 2003, 2004, and 2005 crops at reduced loan rate levels and be terminated effective with the 2006 crops. For 2003, loan rates for loan eligible commodities would be set equal to 90 percent of the Olympic average of season average farm prices for the immediately preceding five crop years, 85 percent for 2004, and 80 percent for 2005.
Other Price Support Programs: With the exception of tobacco, phase-down commodity specific support programs over the 2003-2005 crop year period and terminate effective with the 2006 crop.
Crop Insurance: Maintain existing program with the 80/100 whole farm revenue coverage (as described under (1)) added as an option available to all US farmers and ranchers and all commodities.
Note: Details of Farm Financial Protection Strategies:
80/100 Whole Farm Revenue Insurance: USDA's Risk Management Agency would offer US farmers and ranchers, through participating private insurers, whole farm revenue insurance at the 80 percent coverage level with eligible losses payable at 100 percent. RMA would establish and maintain actuarially sound risk-based premiums for 80/100 whole farm revenue insurance and provide a 48 percent premium subsidy as with existing plans of crop or revenue insurance at the 80/100 level. A producer could use all or a portion of his risk management voucher to offset the producer premium. This whole farm revenue insurance policy would be similar to RMA's Adjusted Gross Revenue (AGR) pilot except that AGR's limitation with respect to livestock revenue and its linkage to the purchase of traditional crop insurance would be dropped.
Whole Farm Stabilization Account: A producer who chooses to deposit his own funds into a whole farm stabilization account would receive a matching deposit from his unused risk management voucher. Stabilization accounts would be held on the producer's behalf with a participating private sector financial institution in conjunction with a USDA administrator. Total deposits would earn a money market rate of interest. A producer would be permitted, but not required, to withdraw funds when his farm's net income for the year falls below its 5-year average, up to the amount of the shortfall. A producer who retires from farming can receive any remaining account balance. Maximum total account balance may not exceed 150 percent of the producer's average gross farm revenue.
Cash Payment in Exchange for Guaranteeing at least 80 Percent of Average Farm Market Revenue Through Other Approaches: A corn and soybean producer could redeem his farm safety net voucher for a cash payment equal to his out-of-pocket costs if, for example, he purchases commodity specific revenue insurance on his corn and soybeans at a level necessary to guarantee 80 percent of his farm's 5-year average gross market revenue. Alternatively, such a grain producer could combine the purchase of multi-peril crop insurance with forward contracting market prices for corn and soybeans at levels sufficient to match the necessary revenue guarantee. A beef, hog or milk producer could qualify by guaranteeing sufficient revenue through forward pricing, futures, options, or approved marketing contracts, as determined by the Secretary.
The programs in this title are intended to assist farmers in meeting short-term environmental challenges (water and air quality concerns, regulation of livestock operations, etc.) and to enhance the long-term sustainability of the land.
APPROXIMATE COST ESTIMATE (2002-06): $9.4 billion
Environmental Quality Incentives Program. Reauthorizes, reforms and funds EQIP at $2 billion a year through 2006 (funding is ramped up over a 3-year period).
Changes the focus of the program by establishing national priorities to make it proactive in assisting producers with conservation work in order to meet, or avoid the need for, regulatory requirements under the Clean Water Act, Safe Drinking Water Act, Clean Air Act, and other Federal, State and local environmental laws.
Establishes the Working Lands Environmental Improvement Option to provide incentives (bonus payments) to producers who implement comprehensive conservation systems that go beyond their current level of conservation. This Option is open to all lands and gives priority to producers who have previously applied conservation practices.
Offers incentives to foster partnerships and joint efforts among producers, government, and private organizations. The incentives are intended to increase cooperation among farmers and ranchers to address common environmental concerns such as water quality within a watershed.
Establishes a flexibility provision allowing the Secretary to enter into cooperative agreements to solve environmental problems with State and local governments and private organizations. The section further allows the Secretary to use the Wetlands Reserve and Conservation Reserve programs in conjunction with EQIP in these critical areas.
Establishes a $100 million a year grant program, with a maximum 50 percent federal match, for private entities to encourage innovative conservation solutions. Goals are to ensure safe and clean drinking water supplies by reducing nitrogen, hypoxia, and eutrophication.
Eliminates bidding down on contracts.
Eliminates prohibition against making payments in the first year of a contract.
Removes animal unit cap with the following conditions: no contract stacking (one animal waste contract for life of farm bill), no reorganizing operations (one animal waste contract per producer), and nutrient management plan required for animal waste contract.
Increases assistance limitation to deal with higher costs associated with water conservation and animal waste systems. Encourages use of innovative conservation practices such as constructed wetlands.
Provides up to 90 percent cost-share for limited resource farmers, beginning farmers, and for natural disasters.
Increases technical assistance for Comprehensive Nutrient Management Plans by funding third party assistance though incentive payments.
Allows contracts to be 3 to 10 years in duration.
Conservation Technical Assistance. Establishes a fee-based certification program for all USDA conservation programs to increase the number of technical assistance providers.
Funds technical assistance by certified private providers through incentive payments (targeted at EQIP comprehensive nutrient management plans).
Eliminates §11 cap as applied to Conservation Reserve Program technical assistance.
Provides funding from the Commodity Credit Corporation for Wetland Reserve Program technical assistance.
Conservation Reserve Program. Increases current benefits of program by raising acreage cap to 40 million acres.
Mandates 4 million acres be reserved for water quality purposes through the Conservation Reserve Enhancement Program (CREP) and the continuous sign-up.
Allows haying and grazing on continuous sign-up acreage (buffer strips) and land in the Conservation Reserve Enhancement Program in order to maintain buffer functions.
Provides for a 15-year contract extension (with a 50 percent rate reduction) for land planted to hardwood trees and increases maintenance provision from 4 to 5 years.
For small fields enrolled under the continuous sign-up or CREP, provides that the entire field may be enrolled if more than half the field goes into buffers and the remaining portion is not feasible to farm.
Wetlands Reserve Program. Provides for 250,000 acres annual enrollment through 2006.
Targets 50,000 acres annually to cooperative agreements with States for high priority environmental needs such as hypoxia, eutrophication, wildlife habitat, flooding, and groundwater recharge.
Farmland and Grassland Protection Program. Renames program and adds protection of grasslands.
Expands program to allow participation of non-profit organizations.
Increases funding to $65 million per year through 2006.
Wildlife Habitat Incentives Program. Reauthorizes and increases funding to $50 million per year through 2006.
Protects Producer Confidentiality. Statutorily protects confidentiality of producer information. Allows disclosure of statistical information generated by the Department that is not proprietary. Includes opt-out language and does not affect current Freedom of Information Act procedures.
Reform and Consolidation of Conservation Programs. Requires the Secretary to review all conservation programs and report to Congress with a proposal to: consolidate and reform current conservation programs; develop a universal classification system and a conservation plan format that can be applied across conservation programs and shared with other USDA agencies; and reduce and consolidate paperwork requirements applicable to conservation programs.
Requires the Secretary to report to Congress with a plan and budget estimate for implementing the National Conservation Program as the nation's primary vehicle for directing conservation on nonfederal agricultural land.
Environmental Conservation Acreage Reserve Program. Requires the Secretary to conduct an independent study to develop and evaluate a comprehensive environmental benefits index.
TRADE TITLE
APPROXIMATE COST ESTIMATE (2002-06): $1.7 billion
EXPORT CREDIT PROGRAMS
The GSM-102 and -103 programs would be reauthorized. Export financing prohibitions on agricultural trade with Cuba (FY01 Ag Appropriations bill (Sect. 908)) would be relaxed by striking restrictions on private financing of agricultural sales to Cuba.
The Supplier Credit Guarantee Program would be reauthorized.
USDA will examine the financing situation in China to determine whether the Supplier Credit Guarantee program as currently structured may facilitate commercial sales into China.
EXPORT ENHANCEMENT PROGRAM
EEP would be reauthorized at the existing WTO ceiling of $478 million through the life of the new farm bill.
TRADE PROMOTION PROGRAMS
The Market Access Program would be reauthorized and program funding increased gradually through the life of the farm bill.
The Foreign Market Development program would be reauthorized and program funding increased gradually through the life of the farm bill. Fifty percent of the additional funds will be reserved for use by groups which have never participated previously in the program and/or for use in major emerging markets. All funds unused by new participants or for new markets will be rolled back into the program for general use.
US Quality Export Initiative. There is a concern that some US products tend to compete better in international markets on price rather than on quality. Current market promotion programs do little to emphasize a product's "high quality." To complement value-added product promotion, a USA Quality seal is authorized to provide US products with opportunities to better compete in higher-margin international markets on the basis of quality.
The Secretary is required to develop an annual competition in which, using practical and objective criteria, several US products are selected to carry the USA Quality seal. Products selected under this program will be promoted using the seal at trade fairs in key markets through electronic and print media.
FOOD AID
Several administrative changes are proposed to the existing food aid programs. They include:
· Encourage the Secretary to finalize program agreements and resource requests for their respective programs prior to the beginning of the fiscal year
· Require program allocations be reported to the House and Senate Agriculture Committees within 90 days of the beginning of the fiscal year
· Require uniform rules for monetization, including allowing proceeds from monetization sales to be denominated in dollars.
PL-480. Authorization for Titles I, II and Food for Peace would be extended. Minimum tonnages for Title II would be increased from current levels of 2.025 million tons to the following:
2.1 million in FY2003
2.15 million in FY2004
2.2 million in FY2005
2.25 million in FY2006 and subsequent years
The amounts available for use to transport and handle food for non-emergency programs would be increased to between 5% and 10% of total program funding.
Greater program diversity is encouraged in terms of program objectives.
The Farmer to Farmer Program is funded through a percentage of all funding for PL-480, including Titles I and II. The share of funding available to Farmer to Farmer would be increased from 0.4% to 0.5%.
The Bill Emerson Humanitarian Trust would be reauthorized through the life of the farm bill.
The Food for Progress Program would be reauthorized and funding increased significantly through the life of the farm bill. In addition, the Secretary is required to establish the International Education and Nutrition Program as an initiative within the Food for Progress program. In this program, the Secretary would provide agricultural commodities and technical and nutritional assistance to eligible organizations in connection with education programs. The Secretary would have full discretion to use the additional Food for Progress funding provided in this bill to be allocated to either Food for Progress projects or the International Education and Nutrition Program or some funding combination thereof.
Funding increases for transportation and administrative and other project monitoring costs also are included as part of the overall budget. Finally, proceeds from monetization must be used for projects and activities related to education, food security, nutrition, and/or for further developments in a country's food system infrastructure.
NEW INITIATIVES
Exporter Assistance Initiative. Information under the jurisdiction of agencies of Government other than the Department of Agriculture that is necessary for the export of agricultural commodities and products is only available from several disparate sources. Because exporters often need quick access to information, they lack the time to search multiple sources for the necessary information and often are unaware of where the information can be located.
In order to create a single source of information for exports of agricultural products, the Secretary is required to develop a web site on the internet that collates all information from all agencies of Government that is relevant to exporting ag products. Adequate funds will be authorized to establish and maintain this initiative.
Biotech Education and Outreach Initiative. To enhance foreign acceptance of agricultural biotechnology and US agricultural biotech products, a Biotech Education and Outreach Initiative would be developed to address continuing and increasing market access, regulatory and marketing issues facing US agriculture overseas.
Education and outreach would be conducted with producers, buyers, consumers, and media in foreign markets as well as government officials, scientists, and trade officials from foreign countries through exchange programs. Priority would be given to working with representatives from developing countries and emerging markets. Funding for these activities would be mandatory and may be used through the Emerging Markets Program, the Cochran Fellowship Program or applied directly to foreign market development cooperators through the Foreign Market Development Program.
Additional funding also is authorized to assist US agricultural exporters in situations where they face unwarranted and/or arbitrary barriers to trade due to biotech marketing, food safety, disease and other sanitary and phytosanitary concerns. A portion of these funds will be reserved for emergency grants to ag exporters to deal with such situations.
NUTRITION TITLE
APPROXIMATE COST ESTIMATE (2002-06): $3.4 billion
Simplify Food Stamp Program Rules for States and Recipients
Give States the option to use a semi-annual schedule for all household reporting between eligibility re-determinations.
Give States the option to calculate household income deductions for utility, dependent care, and medical expenses with simple standards in lieu of the actual expenses incurred by each household.
Exclude the full value of all vehicles from the calculation of household assets.
Target categorical eligibility for food stamp benefits to households receiving cash assistance or Supplemental Security Insurance.
Align Food Stamp Rules with Other Programs
Give States the option to conform with rules on the types of assets an eligible household may have with the rules from their cash assistance or Medicaid programs.
Give States the option to offer a joint food stamp application to individuals applying for
Supplemental Security Income in place of a separate food stamp application.
Give States the option to use the same definition as cash assistance or Medicaid on what types of income to include in the calculation of a household's gross income.
Replace the current certification period for food stamp eligibility with the more flexible and more frequently used eligibility determination period.
Improve the Program's Capacity to Support Personal Responsibility and Work
Provide a six month transitional benefit of food stamps for families leaving cash assistance.
Exclude retirement savings from a household's countable assets.
Change the time limits for food stamp participation for able-bodied adults without dependents to six months out of twelve.
Provide States with Additional Flexibility
Modify the current quality control system for state error rate calculation and sanctions similar to the proposal in H.R. 2646.
Create a demonstration program to test further policy simplifications.
Introduce bonuses for States that demonstrate high performance levels.
Eliminate the current targeting of employment and training funds to able-bodied adults without dependents.
Reduce Dependency on Emergency Food Assistance
Establish a reasonable work requirement of four years for legal aliens.
Align the standard deduction to the poverty line.
Increase funding for the Emergency Feeding Assistance Program.
APPROXIMATE COST ESTIMATE (2002-06): $0.04 billion
Re-authorization of Direct and Guaranteed Loan Programs. The credit title re-authorizes and increases the funding levels for the direct and guaranteed loan programs while maintaining the proportionate preference in current law for the guaranteed loan program.
Credit for Beginning Farmers and Ranchers. The credit title provides for several changes in the law that provide preferential treatment to beginning farmers attempting to gain access to credit, including improving the terms for the Beginning Farmer Down-Payment Program, the Interest Rate Reduction Program and the Participation Loan Program, providing for bridge loans to beginning farmers when federal funds have temporarily been expended, reserving a portion of funding authorizations for beginning farmers, and granting the Secretary the tools to dispose of inventory lands to beginning farmers.
Improve Safety and Soundness of USDA Loan Portfolio. The credit title prohibits the use of USDA direct operating loans for the refinancing of commercial debts that are delinquent. This mirrors a provision contained in the 1996 Farm Bill that prohibited the use of USDA direct ownership loans for refinancing commercial debt.
Simplifying and Streamlining Credit Programs. The credit title improves the efficiency of the federal credit programs, including increasing the loan levels for the low documentation loan program from $50,000 to $100,000 and streamlining several administrative duties of the Farm Service Agency in servicing loans.
RURAL DEVELOPMENT TITLE
APPROXIMATE COST ESTIMATE (2002-06): $0.7 billion
Provide mandatory funding for a one-time removal of the backlog of pending rural development loan and grant applications for the water and waste direct loan and grant program, the community facility direct loan and grant program, and the business and industry guaranteed loan program after exhaustion of available appropriations for fiscal year 2002.
Authorize under the Rural Electrification Act a loan and grant program to expand broadband access for rural America.
Authorize a White House Conference on Rural America to establish a national dialogue designed to assist the federal government in developing a rural policy agenda.
Authorize $50,000,000 per year in funding for value-added agricultural product market development grants under Section 231 of the Agricultural Risk Protection Act.
Transfer authority for the National Rural Development Information Clearinghouse from the National Agricultural Library and place it within USDA's Rural Development mission area to enable communities to access the Clearinghouse through rural development agencies with which they are more familiar.
Authorize the National Rural Development Partnership (S. 1111) and its principal components (the National Rural Development Council and State rural development councils) which will encourage collaboration among Federal agencies and States, nonprofit organizations, the private sector, tribal governments, and other entities committed to rural advancement.
Increase authorization level for water and waste disposal grants to $1.5 billion.
Authorize the Rural Water and Wastewater Circuit Rider Program that provides for circuit riders and technicians to assist in compliance, maintenance, management, and training for small communities within the rural water and wastewater program.
Authorize grants for rural development assistance organizations composed of academic, community development, and non-profit experts, and others, certified by the Secretary to provide technical assistance to rural economic development entities.
Authorize grants to States (SEARCH grants, S.1466) for special environment assistance grants to assist small rural communities in meeting environmental goals such as community water or wastewater projects; projects could be for initial feasibility or environmental studies.
Provide an express authorization within USDA for the current Intermediary Relending Program.
Establish dollar threshold for low documentation business and industry loan applications at $500,000 for two years, after which the Secretary may increase the threshold up to $750,000 if she determines there is no increased risk of defaults.
Authorize the Secretary to allow a borrower to use property acquired with a rural development grant or loan, or proceeds from sale of such property, for another rural development activity so long as the other activity satisfies the criteria for the loan or grant program.
Authorize State Rural Development Directors to transfer up to 25% of one RCAP account into another RCAP account, ramping that amount up to 35% as an incentive to State Rural Development Directors to include local community and tribal development directors in the State strategic plan, provided that the amount transferred into the benefitting account may not exceed 25% of the amount in the benefitting account.
Authorize new source of funding for the Rural Economic Development Loans and Grants program (RED L&G) through fees on guarantees of bonds and notes issued by cooperative lenders for electricity and telecommunications purposes.
Provide a water and waste facilities RCAP authorization specifically for Indian tribes.
Elderly Issues:
Reserve 10% community facilities funds for rural children's day care facilities with a release of unobligated reserve funds on April 1 of each fiscal year.
Repeal the requirement for Senate advice and consent for the Rural Utilities Service Administrator.
Mandate that the Secretary provide a preference for bioenergy and biochemical projects in rural development and rural electric loan, loan guarantee, and grants programs.
Authorize the Secretary to provide grants to rural communities for the purposes of advancing and improving coverage of the NOAA Weather Radio.
Authorize use of RUS telecommunications loans for local communities to expand 911 emergency systems for rural America.
Extend the authorizations for Rural Business Opportunity grants, Emergency Community Water Assistance grants, Rural Cooperative Development grants, the Delta Regional Authority, Telemedicine and Distance Learning Services grants, and water systems for rural and native villages in Alaska program.
RESEARCH TITLE
APPROXIMATE COST ESTIMATE (2002-06): $1.3 billion
Increase and extend the Initiative for Future Agriculture and Food Systems for the duration of the Farm Bill at a level of $360 million annually in mandatory funds.
Authorize funding for rural policy research on topics such as: rural sociology; effects of demographic change; needs of groups of rural citizens; rural community development; rural infrastructure; rural business development; rural education and extension programs; and rural health.
Authorize a new discretionary food and agricultural sciences research equipment grant program at $10 million per fiscal year and increase indirect cost cap to 35% which is closer to the average for federal grants.
Authorize transfers between USDA appropriations to address critical research needs.
Expressly provide USDA with authority, and encourage USDA, to issue joint RFPs with other agencies (such as NSF, EPA, NASA, and USAID) to eliminate duplication of research, review, and evaluation resources.
Allow the Secretary to utilize the best available sources for meeting the research needs of USDA agencies.
Require an independent, comprehensive review of ARS as was intended by the 1998 research act.
Authorize the Secretary to establish a Beginning Farmer and Rancher Development Program to foster training, education, outreach, and technical assistance initiatives for beginning farmers and ranchers in a variety of subject areas related to business and farm management approach.
Require ARS to cooperate with RBS in establishing a program to enhance ARS use of Cooperative Research and Development Agreements (CRADAs) in conjunction with economic development efforts in rural areas, and require land grant institutions to report on their technology transfer activities with respect to federally funded agricultural research.
Extend authorizations for agricultural research, extension and education programs and projects that have been in existence before the 1998 ag research bill and funded since 1998.
FORESTRY TITLE
APPROXIMATE COST ESTIMATE (2002-06): $0.4 billion
The Forestry Title would establish a new Forest Stewardship Incentives Program that allows states to address multiple resource needs for better forest management on private, non-industrial forest lands. The program would be administered at the national level by the Secretary, acting through the U.S. Forest Service and at the state level by the state forester or equivalent state official.
$70 million per year would be dedicated to this purpose, using funds drawn by the Secretary from the Commodity Credit Corporation. This program would give states the ability to focus state and private forestry assistance to nonindustrial forest landowners in a manner which meets the state's priority needs and the landowner's objectives.
The title extends the Forestry Incentives Program until 2006. This program provides financial assistance to private landowners for afforestation, reforestation and timber stand improvement activities.
The title extends the Renewable Resources Extension Act until 2006. This Act authorizes forestry extension activities designed to assist private forest landowners in practicing sustainable forest management.
The title extends the authorization for the International Forestry Programs of the U.S. Forest Service until 2006. These programs provide technical assistance to other nations, mostly tropical, to address issues of sustainable forestry, forest health and disease and other forest conservation objectives.
ENERGY TITLE
APPROXIMATE COST ESTIMATE (2002-06): $0.0 billion
Carbon Sequestration Research and Development and Trading Program. The bill would establish a competitive research and development grant program to test the methodologies by which private parties might pay farmers and foresters a market-based fee to store carbon and to otherwise reduce net emissions of greenhouse gases. Under this program, the USDA would share in the costs of monitoring, verifying and auditing such trades on a demonstration basis and would also make grants to researchers to establish the best methodologies for measuring additional carbon sequestration in soils, plants and forests.
Biobased Products Purchasing Requirement. The bill would authorize the Secretary to work with other federal agencies to establish a biobased products purchasing requirement, providing that biobased products meet certain price, performance and availability criteria and are environmentally preferable to the non-biobased alternative.
The bill would authorize the Secretary to establish a USDA grant program to help finance the costs of data collection and life cycle analysis for testing and assessing the performance and environmental preferability of a biobased product.
MISCELLANEOUS
APPROXIMATE COST ESTIMATE (2002-06): $0.4 billion
Establish the Agriculture Infrastructure Security Fund, an investment fund for ensuring the security and research capability of USDA labs. This fund could be tapped for modernizing research facilities, equipment, and technology to safeguard against animal and plant diseases and pests and to protect food safety. The fund could also receive donations and contributions, and proceeds of sales or disposal of facilities would also go into this fund. A Commission would also be formed to advise the Secretary about modernization and closures of USDA labs. The fund would be capitalized with $400 million in mandatory spending the first year. Funding for the following years would be subject to appropriations.
Reauthorize outreach program for socially disadvantaged farmers.