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Summary of U.S. House of Representatives Agriculture Committee Farm Bill Provisions
Farm Business Management Update, August 2001
By Jim Pease
On July 27, the Agriculture Committee of the U.S. House of Representatives passed the "Agricultural Act of 2001," H.R. 2646. Key points of the bill are
- Provides a 10-year term for the proposed bill (2002-2011) costing approximately $168 billion.
- Maintains fixed-decoupled payments (renaming AMTA payments) and marketing loans. Fixed-decoupled payments are made like AMTA payments, whether or not the commodity is produced in the current year. Market loan payments are made when prices fall below the market loan rate. Returns to 1995 target prices provide counter-cyclical payments. Payments are made when market price is below target price, so that producers of enrolled program commodities are assured of the target price on 85% of program acres. No set-aside acres.
- Gives producers the one-time opportunity to update total base acreage for all commodities based on actual planting 1998-2001; maintains base yields.
- Established fixed-decoupled payments and target prices/counter-cyclical payments for oilseeds. Payment yields based on realized 1998-2001 yields; payment acres based on acres planted 1998-2001.
- Maintains the dairy program status quo, with price supports at $9.90 per hundredweight through 2011.
- Creates a wool and mohair marketing assistance loan program, providing loan deficiency payments with loan rates of $1/lb graded wool, $0.40/lb nongraded wool, and $4.20/lb for mohair.
- Makes historic changes in the peanut program by eliminating the quota system and treating peanuts like other program commodities. Quota holders receive $0.10/lb for five years as compensation. Creates peanut program base by farm based on 1998-2001 peanut acres. Peanut program yield per farm is realized 1998-2001 yields. Fixed-decoupled payment of $36/ton; target price of $480/ton, and marketing loan rate at $350/ton.
- Sets payment limits at $50,000 for fixed-decoupled payments, $75,000 for target price/counter-cyclical payments, and $150,000 for marketing loan gains and loan deficiency payments.
| Loan Rates, Fixed Decoupled Payment Rates and Target Prices |
| Crop | Unit | Loan Rates ($/unit) | Fixed Rates ($/unit) | Target Prices ($/unit) |
| 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 |
| Soybeans | Bu. | 4.92 | 0.42 | 5.86 |
| Minor Oilseeds | Lb. | 0.087 | .0074 | .1036 |
#Set by formula relative to the feed value of corn
Other key provisions include
- Reauthorization of the Conservation Reserve Program (CRP) through 2011 with a 39.5 million acre limit.
- Reauthorization of the Environmental Quality Incentives Program (EQIP) through 2011 at $1.2 billion annually, with livestock producers receiving 50% of funding.
The Bill is almost certain to pass the House. It is unclear when the Senate will take up a Farm Bill, and how much provisions of the House Bill will be altered. It is still unlikely that a Farm Bill will be on President Bush's desk before New Year's.
Contact the author at peasej@vt.edu
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