Agricultural Disaster Assistance

Dennis A. Shields
Specialist in Agricultural Policy

Ralph M. Chite
Section Research Manager

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 direct 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 through FY2011. The largest of the new programs 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. The Livestock Indemnity Program (LIP) compensates ranchers at a rate of 75% of market value for livestock mortality caused by a disaster. The Livestock Forage Disaster Program (LFP) assists ranchers who graze livestock on drought-affected pastureland or grazing land. The Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP) compensates producers for disaster losses not covered under other disaster programs. Finally, the Tree Assistance Program (TAP) provides payments to eligible orchardists and nursery tree growers to cover 70% of the cost of replanting trees or nursery stock following a natural disaster. For individual producers, combined payments under SURE, LIP, LFP, and ELAP may not exceed $100,000. For TAP, a separate limit of $100,000 per year per producer applies. 

The new programs are designed to address the ad hoc nature of disaster assistance provided to producers during the last two decades. Since 1988, Congress has regularly made emergency financial assistance available to farmers and ranchers, primarily in the form of crop disaster payments and livestock assistance. 

Following widespread crop losses in 2009 due to excessive rain, legislation was introduced in late 2009 in both chambers (S. 2810 and H.R. 4177) to make emergency payments to producers for losses in calendar year 2009. Agricultural disaster provisions were eventually included in a "tax extenders" package both chambers passed but failed to reconcile. The legislation would have provided a supplemental "direct payment" to producers in designated disaster counties who receive direct payments for crops under the 2008 farm bill (e.g., wheat, corn, upland cotton, and rice). The threshold for loss due to a natural disaster was 5%, much lower than historical norms (35%), and the payment would have been 90% of a farm's direct payment in 2009. 

Subsequent efforts to include disaster provisions in other legislation were unsuccessful. In early August 2010, the Administration wrote Senator Lincoln—who had led efforts to secure additional disaster assistance—committing to administratively provide emergency payments to producers consistent with proposed legislation. Opponents have questioned whether USDA has authority to make such payments and say it could result in a windfall to some producers.


Date of Report: August 30, 2010
Number of Pages: 12
Order Number: RS21212
Price: $29.95

Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports

Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.

Deregulating Genetically Engineered Alfalfa and Sugar Beets: Legal and Administrative Responses

Tadlock Cowan
Analyst in Natural Resources and Rural Development

Kristina Alexander
Legislative Attorney

Monsanto Corporation, the developer of herbicide-tolerant varieties of genetically engineered (GE) alfalfa and sugar beet (marketed under the name of Roundup Ready alfalfa and Roundup Ready sugar beet), petitioned USDA's Animal and Plant Health Inspection Service (APHIS) for deregulation of the items. Deregulation of GE plants is the final step in the commercialization process. Monsanto filed a petition for deregulation of its GE alfalfa in 2004, and for sugar beet in 2005. 

As part of the deregulation process, APHIS conducts an environmental review under the National Environmental Policy Act (NEPA) to determine whether any significant environmental impacts will result from deregulating the item. APHIS conducted a limited review, known as an environmental assessment (EA), of the GE plants to assess the impacts of growing them on a commercial scale. For both GE alfalfa and sugar beets, APHIS issued a "finding of no significant impacts" (FONSI), in June 2005 and March 2005, respectively. 

Lawsuits subsequently challenged the adequacy of the EAs as the basis of the FONSI. The courts agreed that APHIS should have prepared an environmental impact statement (EIS) for both deregulation decisions. An EIS is a more comprehensive review than the EA completed by APHIS. APHIS was directed by the court to complete an EIS on the effects of deregulating both of the GE varieties. 

The court in the GE alfalfa case halted planting of the genetically modified seed after May 3, 2007, and nullified the deregulation. The injunction was appealed to the U.S. Supreme Court, which held that the injunction was too broad and that the court should have considered partial deregulation. The Supreme Court did not discuss the appropriateness of the environmental review. 

The court in the GE sugar beet case did not formally prohibit planting sugar beet, but it voided APHIS's deregulation decision in August 2010. This holding prevents GE sugar beet from being planted except under the narrow exceptions allowed by regulation. This decision undoes the fiveyear- old approval of GE sugar beet, from which nearly half of U.S. sugar is derived. Sugar beet growers are concerned that the planting of the 2011 crop could be in jeopardy. APHIS announced in September 2010 that the agency is currently evaluating a request to partially deregulate GE sugar beets, which would permit planting and harvesting sugar beets under certain restrictions. 

APHIS anticipates that the draft EIS for sugar beet will be publicly available May 2011, and the final EIS in May 2012. A draft EIS for alfalfa was released to the public on December 14, 2009. The final EIS is scheduled for publication in fall 2010, when APHIS also will announce its decision on deregulating the GE alfalfa. 

The cases of GE alfalfa and sugar beet highlight continuing policy questions about the adequacy of APHIS's deregulation protocol, particularly regarding the environmental review process. In their suits against APHIS, plaintiff lawyers cited, among other analytical inadequacies, the EAs' failure to assess the impact on non-GE alfalfa growers (particularly those who export to Japan, Korea, and Taiwan) and on producers of commercial table beet and chard seeds (species that can cross-pollinate with GE sugar beet). APHIS currently is in the process of issuing a final rule on its revision of regulations regarding the importation, interstate movement, and environmental release of GE organisms.


Date of Report: September 3, 2010
Number of Pages: 16
Order Number: R41395
Price: $29.95

Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports

Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.

Agricultural Biotechnology: Background and Recent Issues

Tadlock Cowan  Analyst in Natural Resources and Rural Development

U.S. soybean, cotton, and corn farmers have rapidly adopted genetically engineered (GE) varieties of these crops since their commercialization in the mid-1990s. Over the last decade, GE varieties in the United States have increased from 3.6 million acres to 143 million acres. Worldwide, 25 countries planted GE crops on approximately 309 million acres in 2008. GE varieties now dominate soybean, cotton, and corn production in the United States, and they continue to expand rapidly in other countries. As adoption has spread, policy debates have continued over the costs and benefits of GE products. 

Ongoing concerns include the impacts of GE crops on the environment and food safety, and whether GE foods should be specially labeled. Underlying these issues is the question of whether U.S. regulation and oversight of biotechnology—with responsibilities spread primarily among the U.S. Department of Agriculture (USDA), the Food and Drug Administration (FDA), and the Environmental Protection Agency (EPA)—are adequate, particularly as newer applications, for example, biopharmaceuticals (drugs manufactured with the use of GE crops or animals) or stacked GE traits in single organisms, emerge that did not exist when the current regulatory regime was established. 

Regulatory noncompliance incidents most pointedly raise concerns about the adequacy of existing U.S. regulatory structures. About 16 major events have occurred since 1995, according to USDA's Animal and Plant Health Inspection Service (APHIS). Another recurring concern has been the adequacy of APHIS's environmental assessments (EAs) for deregulating GE plants. In 2006, a U.S. district court held that USDA's EA for a variety of GE alfalfa was inadequate for issuing a finding of no significant impact (FONSI); the court vacated APHIS's decision to deregulate GE alfalfa and ordered APHIS to complete an environmental impact statement (EIS). The federal court subsequently enjoined further planting until the EIS was completed. In July 2010, the Supreme Court overturned the federal court's decision to enjoin planting. The final EIS is expected by the end of the year, but APHIS has not indicated an intent to allow planting under a "partial deregulation" in the interim. A similar case involves APHIS's decision in 2005 to deregulate GE sugar beets on the basis of its EA. That decision was also challenged, and the federal court vacated the deregulation of the GE sugar beets and ordered APHIS to complete an EIS. In July 2010, the federal court declined to enjoin GE sugar beet planting, but in vacating APHIS's decision to deregulate the GE beets, the court has effectively halted planting, except under regulated conditions. APHIS is currently evaluating a request to partially deregulate GE sugar beets for 2011. 

In October 2008, APHIS announced the first revision of its biotechnology regulations since their promulgation in 1987. Proposed changes include a multi-tiered permitting system, new risk categorizations for assessing environmental releases of GE organisms, regulation of GE plants that produce pharmaceutical and industrial compounds, and new standards for low-level presence of regulated GE products. A final rule on the proposed changes has not yet been published. Other recent issuances include FDA's January 2009 final guidance on regulation of GE animals and products. APHIS is now seeking public comment and data concerning ongoing and future research on GE animals. In a ruling in January 2008, APHIS published its final guidance on the safety of meat and milk from cloned animals. 

Legislative activity in the 111th Congress was modest. Two bills (H.R. 5578 and H.R. 5579) were introduced by Representative Kucinich, who had introduced similar bills in previous years.


Date of Report: September 2, 2010
Number of Pages: 39
Order Number: RL32809
Price: $29.95

Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports

Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.

Previewing Dairy Policy Options for the Next Farm Bill

Dennis A. Shields
Specialist in Agricultural Policy

Financial stress in the dairy industry in 2009, brought on largely by sharply lower milk prices, activated standing federal programs to support dairy farmers. In calendar year 2009, the federal government spent more than $1 billion to support the industry through the Milk Income Loss Contract (MILC) Program, the Dairy Product Price Support Program (DPPSP), and the Dairy Export Incentive Program (DEIP). Following appeals from dairy farmers for more financial assistance, Congress granted another $350 million in October 2009 in the form of supplemental payments to dairy farmers and government purchases of dairy products. 

While farm milk prices have increased since summer 2009, the financial stress seen throughout the year and similar previous episodes have led the industry and Congress to reconsider how to deal with fluctuations in milk prices and financial prospects for dairy farmers. Some Members have voiced interest in developing alternatives to current polices and incorporating them as part of the next omnibus farm bill in 2011-2012. 

The dairy industry is currently developing or advocating a variety of policy changes in response to the difficult financial situation affecting dairy farmers beginning in late 2008. All of the proposals discussed in this report—loosely categorized as either supply management, marketbased, or tiered-pricing—have implications for U.S. dairy farmers, competitiveness of the U.S. dairy industry, and international trade. 

Under supply management, H.R. 5288 and S. 3531 are designed to prevent depressed farm milk prices while reducing price volatility through supply management. The National Milk Producers Federation (NMPF) has also proposed a market stabilization component as part of its comprehensive package of suggested reforms to dairy policy. Supporters of price stabilization and supply management say that inherent incentives to overproduce need to be offset by a program to manage supplies in a measured way. Critics of supply management, including dairy processors, contend that such measures could reduce the competitiveness of the U.S. dairy industry, limit its incentive to innovate, and raise consumer prices, because, they argue, a pricing system based on supply control and/or cost of production potentially rewards inefficiency. 

The market-based approach, including a separate element of the NMPF package, represents an opposing view on how the federal government should address the problem of farm milk price volatility and periodic financial stress for dairy farmers. This approach contends that, because it is difficult to manage milk supplies and prices administratively, the best approach is to provide a government program that helps farmers manage risk associated with volatile prices of milk and feed. Specifically, a new "safety net" would be established to protect a dairy farmer's "margin"— that is, the farm price of milk minus feed costs—regardless of current price levels. Critics expect that incentives to overproduce will aggravate the financial woes of the dairy industry indefinitely, and thus argue that controlling potential price variability and combating depressed farm prices with supply management is necessary for the long-term financial health of producers. 

The third area of potential policy change is to alter the current pricing approach used in federal milk marketing orders (FMMOs) to directly increase dairy farm revenue. For example, one proposed change to base milk pricing in FMMOs on the cost of milk production (S. 1645) would imply higher prices received by dairy farmers. However, some are concerned that the long-run competitiveness and stability of the U.S. dairy industry could be at risk because of the unknown effectiveness of provisions to discourage overproduction.


Date of Report: September 2, 2010
Number of Pages: 22
Order Number: R41141
Price: $29.95

Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports

Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.

The Federal Food Safety System: A Primer

Renée Johnson
Specialist in Agricultural Policy

Numerous federal, state, and local agencies share responsibilities for regulating the safety of the U.S. food supply, which many experts say is among the safest in the world. Nevertheless, critics view this system as lacking the organization, regulatory tools, and resources to adequately combat foodborne illness—as evidenced by a series of widely publicized food safety problems, including concerns about adulterated food and food ingredient imports, and illnesses linked to various types of fresh produce, to peanut products, and to some meat and poultry products. 

A number of comprehensive food safety proposals aimed at addressing perceived shortcomings in the U.S. food safety system were introduced but not enacted by the 110th Congress. These included measures to reform the Food and Drug Administration's (FDA's) oversight of food and other imports, to create a new independent food safety agency, and to impose a variety of new requirements on food manufacturers, handlers, and producers (including farms), such as mandated risk-based safety plans, recordkeeping for product tracing purposes, more rigorous registration requirements, and performance standards. The adequacy of inspection resources also has been at issue, and appropriators have been ramping up funding for the major agencies, particularly FDA. 

Bills with similarly broad goals (such as H.R. 759, which was revised and reintroduced in June 2009 as H.R. 2749; H.R. 875; H.R. 1332; and S. 510) re-emerged in the 111th Congress. On the one hand, food safety reform is a relatively complex, controversial matter competing for attention with a long list of domestic priorities. On the other hand, there has been a growing consensus that changes are needed. 

Lawmakers took the first step toward new legislation on June 10, 2009, when the House Energy and Commerce Subcommittee on Health approved an amended version of H.R. 2749. The full committee approved the bill, with additional changes, on June 17, 2009, and the full House passed a further-modified H.R. 2749 on July 30, 2009. Senate work on a comprehensive, but differing, food safety bill (S. 510 by Senator Durbin) commenced with a November 18, 2009, markup by the Health, Education, Labor, and Pensions Committee. This was followed by additional changes agreed to by Senate leaders in a "Manager's Package" that was released on August 12, 2010. Senate floor action remains pending, but is widely anticipated by stakeholders. (For more details see CRS Report R40443, Food Safety: Selected Issues and Bills in the 111th Congress.)


Date of Report: August 18, 2010
Number of Pages: 14
Order Number: RS22600
Price: $29.95

Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports

Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.