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Tuesday, July 31, 2012

Farm Bill: CRS Experts


Ralph M. Chite
Section Research Manager

The following table provides names and contact information for CRS experts on policy issues related to the 2012 farm bill, currently being debated in the 112th Congress. Numerous agricultural and food issues are addressed in the 12 titles of the farm bill, as passed by the Senate (S. 3240) and under consideration in the House (H.R. 6083), including farm commodity support, conservation, international food aid and agricultural trade, nutrition assistance, farm credit, rural development, agricultural research, forestry, bioenergy, horticulture and organic agriculture, crop insurance and disaster assistance, and livestock issues. For a complete list of CRS products on the farm bill, see the CRS Issues in Focus webpage on “Farm Bill and Agricultural Policy.”


Date of Report: July 12, 2012
Number of Pages: 3
Order Number: R42598
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Friday, July 27, 2012

Agricultural Disaster Assistance


Dennis A. Shields
Specialist in Agricultural Policy

In summer 2012, drought has spread across nearly two-thirds of the United States and has adversely affected agricultural producers. As of mid-July 2012, more than 1,000 counties have been designated as disaster counties by the Secretary of Agriculture. The designation makes qualified farmers and ranchers eligible for low-interest emergency loans. The drought is also fueling congressional interest in what programs are currently available and what more can be done to assist producers.

The U.S. Department of Agriculture (USDA) offers several permanently authorized programs to help farmers recover financially from a natural disaster, including federal crop insurance, the Noninsured Crop Disaster Assistance Program (NAP), and emergency disaster loans. The federal crop insurance program is designed to protect crop producers from unavoidable risks associated with adverse weather, and weather-related plant diseases and insect infestations. Producers who grow a crop that is currently ineligible for crop insurance may be eligible for a payment under NAP. Under the emergency disaster (EM) loan program, when a county has been declared a disaster area by either the President or the Secretary of Agriculture, agricultural producers in that county may become eligible for low-interest loans.

In order to provide a regular supplement to crop insurance and NAP payments, the Food, Conservation, and Energy Act of 2008 (P.L. 110-246, the 2008 farm bill) included authorization and funding for five new disaster programs to cover losses from weather events, beginning with 2008 crops and ending September 30, 2011. The 2008 farm bill programs were designed to address the ad hoc nature of disaster assistance provided to producers during the last two decades. The largest of the now-expired programs under the 2008 farm bill is the Supplemental Revenue Assistance Payments Program (SURE), which is designed to compensate eligible producers for a portion of crop losses that are not eligible for an indemnity payment under the crop insurance program. The 2008 farm bill also authorized three new livestock assistance programs and a tree assistance program. Cumulative payments for losses under these programs through FY2011 total more than $4 billion.

The 112th Congress is currently considering omnibus farm legislation, including extension of certain agricultural disaster programs that expired in September 2011. The legislation would reauthorize several livestock disaster programs, thereby potentially covering losses associated with the drought currently affecting a large portion of the country. Meanwhile, in response to the drought, USDA has reduced the interest rate for emergency loans from 3.75% to 2.25%. Also, USDA is authorizing emergency haying and grazing use of Conservation Reserve Program (CRP) acres for 2012 due to drought conditions. USDA announced a smaller reduction (10% instead of 25%) on rental payments made to producers on CRP lands used for emergency haying and grazing in 2012.



Date of Report: July 18, 2012
Number of Pages: 13
Order Number: RS21212
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Wednesday, July 25, 2012

Conservation Compliance and U.S. Farm Policy


Megan Stubbs
Specialist in Agricultural Conservation and Natural Resources Policy

The Food Security Act of 1985 (P.L. 99-198, 1985 farm bill) included a number of significant conservation provisions designed to reduce production and conserve soil and water resources. Many of the provisions remain in effect today, including the two compliance provisions—highly erodible land conservation (sodbuster) and wetland conservation (swampbuster). The two provisions, collectively referred to as conservation compliance, require that in exchange for certain U.S. Department of Agriculture (USDA) program benefits, a producer agrees to maintain a minimum level of conservation on highly erodible land and not to convert wetlands to crop production.

Conservation compliance affects most USDA benefits administered by the Farm Service Agency (FSA) and the Natural Resources Conservation Service (NRCS). These benefits can include commodity support payments, disaster payments, farm loans, and conservation program payments, to name a few. If a producer is found to be in violation of conservation compliance, then a number of penalties could be enforced. These penalties range from temporary exemptions that allow the producer time to correct the violation, to a determination that the producer is ineligible for any USDA farm payment and must pay back current and prior years’ benefits.

As Congress considers the reauthorization of farm policy through the next farm bill, issues related to conservation compliance have emerged. The reduction in soil erosion from highly erodible land conservation continues, but at a slower pace than following enactment of the 1985 farm bill. The leveling off of erosion reductions leaves broad policy questions related to conservation compliance, including whether an acceptable level of soil erosion on cropland has been achieved; whether additional reductions could be achieved, and if so, at what cost; and how federal farm policy should encourage additional reductions in erosion. These broad policy questions, in addition to general concerns of program oversight and implementation, continue to influence the farm bill debate.

One of the most controversial issues has been the idea that crop insurance subsidies should be added to the list of benefits that could be lost if a producer is found to be out of compliance. Federal crop insurance subsidies were originally included as a benefit that could be denied under the compliance provisions. However, they were removed in the Federal Agricultural Improvement and Reform Act of 1996 (1996 farm bill) to increase producer flexibility, while at the same time direct payments were added. Presently, high commodity prices have resulted in few or no counter-cyclical payments, leaving conservation program participation and direct payments as the remaining major benefits that might motivate producer compliance with conservation requirements. The Senate-passed version of the 2012 farm bill (S. 3240, Agriculture Reform, Food, and Jobs Act of 2012) would eliminate counter-cyclical and direct payments, and retie federal crop insurance subsidies to compliance requirements. Many environmental and conservation groups support the re-tying of crop insurance subsidies to compliance requirements, while some farm organizations and the crop insurance industry continue to oppose the measure; suggesting that such a prerequisite might reduce farmer participation in the federal crop insurance program. The Senate-passed bill also establishes a national “sodsaver” provision for new crop production on native sod. The provision reduces crop insurance premium subsidies and prohibits benefits under the Noninsured Crop Disaster or general commodity programs on land that has never been tilled.


Date of Report: July 3, 2012
Number of Pages: 22
Order Number: R42459
Price: $29.95

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Monday, July 16, 2012

Farm Bill: CRS Experts


Ralph M. Chite
Section Research Manager

The following table provides names and contact information for CRS experts on policy issues related to the 2012 farm bill, currently being debated in the 112th Congress. Numerous agricultural and food issues are addressed in the 12 titles of the farm bill, as passed by the Senate (S. 3240) and under consideration in the House (H.R. 6083), including farm commodity support, conservation, international food aid and agricultural trade, nutrition assistance, farm credit. rural development, agricultural research, forestry, bioenergy, horticulture and organic agriculture, crop insurance and disaster assistance, and livestock issues.


Date of Report: July 11, 2012
Number of Pages: 3
Order Number: R42598
Price: $29.95

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Agriculture and Related Agencies: FY2013 Appropriations


Jim Monke
Specialist in Agricultural Policy

The Agriculture appropriations bill provides funding for all of the U.S. Department of Agriculture (USDA) except the Forest Service, plus the Food and Drug Administration (FDA) and, in alternating years, the Commodity Futures Trading Commission (CFTC).

For FY2013, both the House and Senate have committee-reported bills for Agriculture appropriations, though neither bill has reached the floor in its chamber. The Senate Appropriations committee reported S. 2375 (S.Rept. 112-163) on April 26, 2012. The House subcommittee marked up its bill on June 6, 2012, followed by full committee action on H.R. 5973 (H.Rept. 112-542) on June 19, 2012.

The Senate-reported bill would increase discretionary Agriculture appropriations to $20.8 billion, an increase of $1.2 billion (+6.2%) above FY2012 levels, after adjusting for the inclusion of disaster provisions and CFTC appropriations in FY2012 (Table 2). Without these adjustments, the Senate-reported discretionary amount is about $700 million (+3.5%) above FY2012.

The House-reported bill would reduce discretionary Agriculture appropriations to $19.4 billion, a cut of $365 million below FY2012 levels, after adjusting for the inclusion of disaster provisions in FY2012 (Table 2). Without this adjustment, the House-reported discretionary amount is about $675 million (-3.3%) below FY2012.

The Senate bill differs from FY2012 primarily by increasing discretionary domestic nutrition programs (+$438 million), agricultural research (+$64 million), rural development (+$50 million), the FDA (+$24 million), and the Farm Service Agency (+$14 million), and reducing the use of rescissions and limits on mandatory programs (-$672 million).

The House bill differs from FY2012 and from the Senate bill primarily by decreasing rural development (-$153 million from FY2012, -$204 million from the Senate), international food aid (-$324 million from FY2012 and the Senate bill), agricultural research (-$35 million from FY2012, -$99 million from the Senate bill), the Farm Service Agency (-$35 million from FY2012, -$50 million from the Senate bill), animal and plant health programs (-$30 million from FY2012 and the Senate bill), the CFTC (-$25 million from FY2012, -$128 million from the Senate bill), the FDA (-$25 million from FY2012, -$50 million from the Senate bill), and discretionary conservation programs (-$16 million from FY2012, -$2 million from the Senate bill); and by increasing discretionary domestic nutrition programs (+$295 million from FY2012, - $143 million from the Senate bill) and reducing the use of limits on mandatory programs (-$154 million from FY2012, +$403 million over the Senate bill). The House bill also has policy-related provisions that would remove a 2011 livestock and poultry marketing rule, tighten farm commodity program payment limits, and require USDA to allow white potatoes for the Women, Infants, and Children (WIC) feeding program. The Administration opposes many of the reductions and policy provisions proposed in the House bill.


Date of Report: July 10, 2012
Number of Pages: 40
Order Number: R42596
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2012 Farm Bill: Changing the Treatment of LIHEAP Receipt in the Calculation of SNAP Benefits


Randy Alison Aussenberg
Analyst in Nutrition Assistance Policy

Libby Perl
Specialist in Housing Policy

As Congress formulates the 2012 farm bill—an omnibus bill that reauthorizes a range of agriculture and nutrition programs—program integrity and deficit reduction have been leading themes. One of the cost-saving measures in the farm bill would address the way in which Supplemental Nutrition Assistance Program (SNAP) benefits are calculated. The SNAP statute allows for certain deductions from income when calculating a household’s benefit level, including a deduction for excess shelter expenses, which includes utility costs. If a family receives benefits through another federal program, the Low Income Home Energy Assistance Program (LIHEAP), this deduction from income can be higher, allowing for a higher SNAP benefit for the household. Both the Senate-passed 2012 farm bill (S. 3240) and the House Agriculture Committee Chairman’s mark limit the deduction associated with LIHEAP, seeking to end a practice that has been referred to as “Heat and Eat.”

Under current law, a SNAP household can use a LIHEAP payment (regardless of the amount of that payment) to document that the household has incurred heating and cooling costs. This documentation triggers a standard utility allowance (SUA), a figure that enters into the SNAP benefit calculation equation. Unless the household is getting the maximum SNAP benefit already, a household’s monthly benefit can increase if the SUA calculation results in an excess shelter deduction.

In addition to current law, current practice also affects the interaction between these benefit programs. While virtually all SNAP states consider LIHEAP in their calculation, approximately 16 states have implemented the so-called “Heat and Eat” policy. “Heat and Eat” is a phrase that the low-income and anti-hunger advocacy community has used to describe state and program policies that leverage nominal (as little as $1) LIHEAP payments into an increase in households’ SNAP benefits that is larger than the initial LIHEAP payment.

As of the date of the report, two policies have been voted on in Congress that would change current law to limit or eliminate this practice:

  • Under Section 4002 of the Senate-passed 2012 farm bill, S. 3240, only LIHEAP payments above $10 would confer this potential advantage. Payments of $10 and below would no longer entitle a household to earn an SUA during the benefit calculation process. If a household received less than $10 in energy assistance, households would have to present alternate documentation of utility costs in order to have utilities factored into calculating their excess shelter deduction. 
  • Under Section 104 of the Sequester Replacement Reconciliation Act, H.R. 5652, no amount of LIHEAP benefits would garner additional SNAP benefits. Households would have to present alternative documentation of utility costs. 
The July 5, 2012, release of the House Agriculture Committee Chairs’ farm bill, scheduled to be marked up on July 11, 2012, also contains the S. 3240 version of this policy.

This report discusses the policy background, details, and context associated with these bills’ changes to the current law of LIHEAP and SNAP SUAs, focusing primarily on S. 3240’s language. The report will be revised to reflect congressional action in this area.


Date of Report: July 10, 2012
Number of Pages: 14
Order Number: R42591
Price: $29.95

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Wednesday, July 11, 2012

The Senate-Passed 2012 Farm Bill (S. 3240): A Comparison with Current Law


Ralph M. Chite, Coordinator
Section Research Manager

Congress periodically establishes agricultural and food policy in an omnibus farm bill. The 112th
Congress faces reauthorization of the current five-year farm bill (the Food, Conservation, and
Energy Act of 2008, P.L. 110-246) because many of its provisions expire in 2012. The 2008 farm
bill contained 15 titles covering farm commodity support, horticulture, livestock, conservation,
nutrition assistance, international trade and food aid, agricultural research, farm credit, rural
development, bioenergy, and forestry, among others.


The Senate approved its version of the 2012 omnibus farm bill (S. 3240, the Agriculture Reform,
Food, and Jobs Act of 2012) by a vote of 64-35. Within its 12 titles, the five-year Senate bill
would reshape the structure of farm commodity support, expand crop insurance coverage,
consolidate conservation programs, revise the Supplemental Nutrition Assistance Program
(formerly food stamps), and extend authority to appropriate funds for many U.S. Department of
Agriculture (USDA) discretionary programs through FY2017. House Agriculture Committee
consideration of its version of a 2012 farm bill is scheduled for July 11, 2012.


Date of Report: June 29, 2012
Number of Pages: 83
Order Number: R42552
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Tuesday, July 3, 2012

Sugar Program Proposals for the 2012 Farm Bill


Remy Jurenas
Specialist in Agricultural Policy

The sugar program is structured to operate at no cost to the federal government—an objective that has been achieved over the last decade primarily using two tools: marketing allotments that limit the amount that sugar processors can sell, and import quotas that restrict the quantity of foreign sugar allowed to enter the U.S. market. Since the program records no outlays, its future did not receive attention among the proposals submitted to the House and Senate Agriculture Committees for revising the farm safety net and reducing farm program spending.

Producers of sugar beets and sugarcane, and the processors of these crops into sugar, favor retaining the current program without change. They highlight the jobs and economic activity created by the domestic sugar sector. Two general farm organizations and a coalition of some developing countries that benefit from selling against their shares of the U.S. sugar import quota also support continuing the current sugar program.

Food manufacturing firms that use sugar in their products advocate program elimination or a transition toward a free market in sugar in the United States. In support of these changes, they point to the higher wholesale refined sugar prices paid since the 2008 farm bill provisions took effect (twice the level compared to the previous 2002 farm bill period). Consumer, trade advocacy groups, and general business organizations that favor freer trade support their position.

The Senate Agriculture Committee’s reported farm bill (S. 3240) would reauthorize the current sugar and sugar-to-ethanol programs without any changes through crop year 2017. The American Sugar Alliance, representing sugar producers and processors, applauded the committee’s decision to continue the “no-cost” U.S. sugar policy. The Coalition for Sugar Reform, representing sugarusing food manufacturing firms and their allies, expressed disappointment that the committee extended what they call an “outdated and anticompetitive” program. The House Agriculture Committee plans to consider its version of a farm bill in late June.

Congressional opponents of current U.S. sugar policy have stated their intent to seek changes to the program in Senate floor action and House committee markup. Introduced bills and other proposals form the basis for amendments expected to be offered. S. 25 would phase out sugar loan rates in stages through the 2014 crops, and eliminate all price support beginning in 2015. The text of this bill was offered as an amendment during Senate floor debate on June 13, and tabled (i.e., rejected) on a 50-46 vote. Other pending bills, S. 685/H.R. 1739; Title I, Subtitle C, of identical bills S. 1658/H.R. 3111; H.R. 1385; and Section 521(a) of identical bills H.R. 408/S. 178, would repeal all sugar price support provisions immediately or starting with the 2013 crops.

All eight introduced bills would repeal all statutory authorities pertaining to sugar marketing quotas and allotments, payments made to processors to store sugar forfeited to the U.S. Department of Agriculture (USDA), storage facility loans, and the feedstock flexibility program for bioenergy producers (i.e., the sugar-to-ethanol) program. However, they differ in changes proposed to the sugar import quota. Some bills would require that each year’s import quotas for raw cane sugar and refined sugars be set to ensure “an adequate supply of sugar at reasonable prices in the United States.” By contrast, the other measures would go further and completely eliminate all U.S. tariffs on sugar imports as well as the quota-setting authority administered by USDA and the U.S. Trade Representative. Pending S.Amdt. 2433 to S. 3240 would return price support loan rates to 2008 levels, and require USDA to administer the sugar import quota and marketing allotments to provide “adequate supplies of sugar at reasonable prices.”


Date of Report: June 19, 2012
Number of Pages: 8
Order Number: R42551
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