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Thursday, October 25, 2012

Conservation Reserve Program (CRP): Status and Issues



Megan Stubbs
Specialist in Agricultural Conservation and Natural Resources Policy

The Conservation Reserve Program (CRP) provides payments to agricultural producers to take highly erodible and environmentally sensitive land out of production and install resource conserving practices for 10 or more years. CRP was first authorized in the Food Security Act of 1985 (P.L. 99-198, 1985 farm bill) and is administered by the U.S. Department of Agriculture’s (USDA) Farm Service Agency (FSA) with technical support from other USDA agencies. Participants offer land for enrollment through two types of sign-up: general and continuous. General sign-ups are competitive and only open during select times. Continuous sign-ups are not competitive, always open for enrollment, and offer additional financial incentives to those who qualify. Continuous sign-ups are targeted to specific environmental and resource concerns and operate through a number of initiatives. The largest and most well known is the Conservation Reserve Enhancement Program (CREP), which partners with states to address agricultural-related environmental concerns in specific geographic regions. While the majority of current acres enrolled were under general sign-ups (24.3 million acres), an increasing number are enrolled under continuous sign-ups (5.3 million acres).

Program and funding authority for CRP expired on September 30, 2012. Without reauthorization or an extension of authority the agency cannot approve any contracts or process any offers for enrollment. Congress continues to debate the reauthorization or extension of the 2008 farm bill, which authorized CRP to enroll up to 32 million acres. Both the House Agriculture Committeereported (H.R. 6083) and the Senate-passed (S. 3240) farm bill would reduce the authorized number of acres to 25 million and reauthorize the program through FY2017.

A number of factors have impacted CRP enrollment recently, mainly high commodity crop prices. These high crop prices have increased demand to put CRP acres back into production, even marginal acres. This pressure could potentially reduce the number of CRP acres offered for reenrollment once they have expired or cause existing current CRP participants to seek an early release from their CRP contract. Some participants also have cited a potentially low CRP rental rate compared to the market rental rate as a reason for decreased enrollment interest. Despite these factors, enrollment has increased under continuous sign-ups and demand for the program, in general, still exceeds the enrollment cap.

CRP has contributed to a number of environmental benefits including reduced soil erosion, improved water quality through wetlands and field buffers, reduced fertilizer use, and increased wildlife habitat. The recent expiration of a number of acres from the program, and a reduced reenrollment, has some concerned that a number of the environmental benefits gained under CRP could be lost or reduced if land is returned to production.



Date of Report: October 18, 2012
Number of Pages: 19
Order Number: R42783
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Tuesday, October 23, 2012

Agricultural Conservation: A Guide to Programs



Megan Stubbs
Specialist in Agricultural Conservation and Natural Resources Policy

The Natural Resources Conservation Service (NRCS) and the Farm Service Agency (FSA) in the U.S. Department of Agriculture (USDA) currently administer over 20 programs and subprograms that are directly or indirectly available to assist producers and landowners who wish to practice conservation on agricultural lands. The number, scope, and overall funding of these programs has grown in recent years. This growth can cause some confusion over which problems and conditions each program addresses, and specific program characteristics and performance. The programs are as follows:


  • Agricultural Management Assistance (AMA) Program 
  • Chesapeake Bay Watershed Program 
  • Cooperative Conservation Partnership Initiative (CCPI) 
  • Conservation Operations (CO); Conservation Technical Assistance (CTA) 
  • Conservation Reserve Program (CRP) 
  • CRP—Conservation Reserve Enhancement Program (CREP) 
  • CRP—Farmable Wetlands Program 
  • Conservation Stewardship Program (CSP) 
  • Emergency Conservation Program (ECP) 
  • Emergency Watershed Protection (EWP) Program 
  • Environmental Quality Incentives Program (EQIP) 
  • EQIP—Agricultural Water Enhancement Program (AWEP) 
  • EQIP—Conservation Innovation Grants (CIG) 
  • Farmland Protection Program (FPP) 
  • Grassland Reserve Program (GRP) 
  • Healthy Forest Reserve Program (HFRP) 
  • Resource Conservation and Development (RC&D) Program 
  • Voluntary Public Access and Habitat Incentive Program 
  • Watershed and Flood Prevention Operations 
  • Watershed Rehabilitation Program 
  • Wetland Reserve Program (WRP) 
  • Wildlife Habitat Incentive Program (WHIP) 

This tabular presentation provides basic information introducing each of the programs. In each case, a brief program description is followed by information on major amendments in the 2008 farm bill (P.L. 110-246); national scope and availability; states with the greatest participation; the backlog of applications or other measures of continuing interest; program funding authority; FY2012 funding; FY2013 Administration budget request; FY2013 funding where available; statutory authority; the authorization expiration date; and a link to the program’s website.


Date of Report: October 15, 2012
Number of Pages: 30
Order Number: R40763
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Tuesday, October 16, 2012

What Is the Farm Bill?



Renée Johnson
Specialist in Agricultural Policy

Jim Monke
Specialist in Agricultural Policy


The farm bill is an omnibus, multi-year piece of authorizing legislation that governs an array of agricultural and food programs. Although agricultural policies sometimes are created and changed by freestanding legislation or as part of other major laws, the farm bill provides a predictable opportunity for policymakers to comprehensively and periodically address agricultural and food issues. The farm bill is renewed about every five years.

The Food, Conservation, and Energy Act of 2008 (P.L. 110-246, “2008 farm bill”) is the most recent omnibus farm bill, and was enacted into law in June 2008. The farm bill is due for reauthorization, as portions of the 2008 farm bill expired beginning September 30, 2012. Some programs expire at the end of a farm bill and would cease to operate altogether unless reauthorized; in other cases new activities might not be initiated—either for lack of program authority or available funding.

The 112th Congress has considered several options to address reauthorization of the farm bill. The Senate approved its version of a farm bill (S. 3240) in June 2012. A House farm bill (H.R. 6083) was approved by the House Agriculture Committee in July 2012 and awaits consideration by the full House of Representatives. Congress also considered various options for extending the current farm bill, among other options.

The most recent Congressional Budget Office (CBO) “baseline” budget (Mach 2012) estimates that about $993 billion of mandatory outlays are available for farm bill programs over the next decade (FY2013-FY2022). Within this total, an estimated $772 billion (78%) would be available for the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) as part of the bill’s nutrition title. Another $154 billion (16%) would be available for farm commodity support and crop insurance, and $64 billion (6%) for agricultural conservation.



Date of Report: October 3, 2012
Number of Pages: 10
Order Number: RS22131
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Monday, October 15, 2012

Consumers and Food Price Inflation



Randy Schnepf
Specialist in Agricultural Policy

Record Midwest heat in June and July (2012) sparked the worst U.S. drought since 1956, causing damage to major field crops. This situation has contributed to record U.S. prices for corn and soybeans in both cash and futures markets in 2012, and has fanned the fears of food price inflation reminiscent of 2008. The heightened commodity price volatility of 2008 and the subsequent acceleration in U.S. food price inflation associated with commodity market shifts raised concerns and generated many questions about farm and food price movements by Members of Congress and their constituents. However, historical evidence suggests that retail prices for processed food products are driven more by consumer demand (strongly linked to general economic conditions), than by price changes in raw commodity markets, although this linkage varies with the degree of raw commodity content in the retail product. For a discussion of the relationship between farm and retail prices, and the major factors influencing retail food prices, see CRS Report R40621, Farm-to-Food Price Dynamics, by Randy Schnepf. This report focuses instead on the nature and measurement of retail food price inflation and its relationship to consumers.

During the 1991 to 2006 period, U.S. food prices were fairly stable—annual food price inflation, as measured by the Consumer Price Index (CPI) for all food (excluding alcoholic beverages), averaged a relatively low 2.5%. However, several economic factors emerged in late 2005 that began to gradually push market prices higher for both raw agricultural commodities and energy costs, and ultimately retail food prices. U.S. food price inflation increased at a rate of 4% in 2007 and at 5.5% in 2008—the highest since 1990 and well above the general inflation rate of 3.8%. The situation of sharply rising prices came to a sudden halt in late 2008 when the financial crisis hit U.S. markets leading to a severe economic recession. Annual food price inflation dropped to 1.8% in 2009 and 0.8% in 2010, before rising to 3.7% in 2011 driven by improving U.S. and global economic conditions. USDA projects that annual food price inflation will range from 2.5% to 3.5% in 2012 and rise to 3%-4% in 2013.

The All-Food CPI has two components—food-at-home and food-away-from-home. The food-athome CPI is most representative of retail food prices and is significantly more volatile than the food-away-from-home index. The food-at-home CPI is projected in a range of 3% to 4% for 2013, compared with a 2.5% to 3.5% annual inflation rate for food-away-from home prices. This difference is partially explained by the larger share of farm products in the final price of retail foods than in food-away-from home. Farm product prices are, in general, substantially more volatile than the other marketing and processing costs that enter into retail or ready-to-eat foods.

Many wages and salaries, as well as federal programs (including several domestic food assistance programs), are linked to price inflation through escalation clauses in order to retain consumer purchasing power. For households where income and federal benefits do not keep up with price inflation, declines in purchasing power are real and immediate. However, even for households with escalation clauses, a time lag usually occurs between the time the price inflation is measured and the time when the wage or program benefit is adjusted upward to compensate. The 2008- 2009 global economic crisis—which involved higher retail prices and unemployment, income loss, and lower effective household purchasing power—resulted in higher participation rates in the federal food and nutrition programs since then. As a result, USDA’s food and nutrition assistance programs have seen a tremendous expansion in use—federal expenditures totaled $103.3 billion in FY2011 and marked the 11th consecutive year in which food and nutrition assistance expenditures exceeded the previous historical record. Since FY2000, expenditures for food and nutrition assistance have more than tripled.



Date of Report: October 4, 2012
Number of Pages: 36
Order Number: R40545
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Thursday, October 11, 2012

Fruits, Vegetables, and Other Specialty Crops: Selected Federal Programs



Renée Johnson
Specialist in Agricultural Policy

U.S. farmers grow more than 350 types of fruit, vegetable, tree nut, flower, nursery, and other horticultural crops in addition to the major bulk commodity crops. Specialty crop producers are ineligible for the federal commodity price and income support programs that benefit commodity crop producers (e.g., grains and cotton); however, they are eligible for other types of U.S. Department of Agriculture (USDA) support. Unlike federal support for commodity crops, support for specialty crops spans a wide range of existing USDA programs, many of which also provide support to other agricultural commodities. These include marketing and promotion programs, crop insurance and disaster assistance, plant pest and disease protections, trade assistance, and research and extension services, among other types of miscellaneous support. The industry also benefits from fruit and vegetable purchases under various domestic nutrition assistance programs. Despite this wide range of program support, overall program spending on all specialty crops remains a small fraction of that spent on all commodity crops, even when considering both mandatory and discretionary funding.

Some of the programs supporting specialty crops are longstanding farm support programs that benefit all agricultural producers and are regularly contained within omnibus farm legislation. However, several programs addressing specialty crops specifically were established following the enactment of the Specialty Crops Competitiveness Act of 2004 (P.L. 108-465), which was enacted outside a farm bill year. Many of the programs in the 2004 act were further expanded and reauthorized in the 2008 farm bill (Food, Conservation, and Energy Act of 2008, P.L. 110-246). Other programs were established in the 2002 farm bill (Farm Security and Rural Investment Act of 2002, P.L. 107-171), often as pilot initiatives that have since become established programs. Other laws, such as the Perishable Agricultural Commodities Act of 1930 (PACA) and the Agricultural Marketing Agreement Act of 1937, were enacted long ago to exclusively serve the produce industry to protect sellers in the marketplace.

Other federal agencies also play important roles in the specialty crop industry. The Food and Drug Administration (FDA, in the U.S. Department of Health and Human Services) is responsible for assuring that fresh, frozen, canned, and imported fruits, vegetables, and nuts are safe for human consumption. Recently enacted food safety reforms (FDA Food Safety Modernization Act, FSMA) placed additional regulatory requirements on certain specialty crop growers and processors to comply with safety requirements for foods that are regulated by FDA, which includes specialty crops. Under FSMA, FDA is developing mandatory food safety regulations and traceability requirements affecting farmers, packers, and processors of both domestically produced and imported foods under FDA’s jurisdiction. At the farm production level, these requirements will mostly affect produce growers.

Among other agencies, the Environmental Protection Agency sets the safe limits for pesticide residues on produce, which FDA enforces. The Department of Commerce and the International Trade Commission are responsible for investigating instances of suspected “dumping” of foreign goods on the U.S. market and levying antidumping taxes. The Department of Labor, the Department of Homeland Security, and the Department of State jointly administer a system for temporarily admitting foreign workers to provide seasonal labor, provided that U.S. workers are not available.



Date of Report: October 3, 2012
Number of Pages: 52
Order Number: R42771
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