Key Provisions in Farm Bill Conference Report

January 28, 2014 06:48 AM

Measure covers more than 900 pages.

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The conference report on the farm bill is approved, moving the legislation even closer to the finish line. Leaders of the House and Senate Ag Committees late Monday released a conference report on the Agricultural Act of 2014 – the farm bill. The measure covers 2014-2018 crops and makes several changes to US commodity programs among other provisions.

Following are highlights of key portions of the bill: 

Budget savings: The bill would save $23 billion over 10 years, with nutrition program spending reduced about $9 billion, commodity and crop insurance programs would be trimmed by a net $13 billion and conservation program spending would be reduced $6 billion over 10 years.

Direct payments are eliminated in the package.

A transition payment would be made to cotton producers participating in the Stacked Income Protection Program (STAX) for 2014 and one would be made in 2015 in counties where STAX is not available.  The payment would be based on multiplying the June 12, 2013, midpoint estimate for the marketing year average price of upland cotton (83 cents) minus the Dec. 10, 2013, midpoint marketing year price estimate (74 cents for a total of 9 cents) by the national average upland cotton yield of 597 pounds per acre. That result is then multiplied by a percentage of the cotton base acres for 2013 – 60 percent for 2014 and 36.5 percent for 2015. The payment is to be made on Oct. 1 or as soon as practicable.

Base acres: A reallocation of base acres is allowed but not required based on the four-year average acreage planted for harvest or use (or prevented from planting due to drought, flood, natural disasters, or other condition beyond the control of producers) during the 2009-2012 crop years.

If acreage prevented from planting was planted to another covered commodity in the same year (except  established double-cropping), the producer can elect to use that crop in determining the four-year average but cannot include both the initial and subsequent crop.

The reallocated base acres cannot total more than the base acres in effect on the farm as of Sept. 30, 2013.

Generic base: New name for cotton base acres. Cotton producers would given the chance to plant other crops on their generic/cotton base acres, but they would receive a reduction for that year in their generic/cotton base.  

Ag Risk Coverage (ARC): Available on an individual (farm) or County basis.

If in the farm ARC, all crops on that farm number are in the individual ARC.

If in Price Loss Coverage (PLC) or County ARC: Producers can mix and match their choices – they can go PLC on one crop on that farm number and go the Country ARC on another crop on that farm number.

There is a one-time election by the producer for ARC and PLC.

Adjusted gross income limitations would now be a single limit of $900,000. There is no longer any differentiation between on farm and off farm AGI.

Payment limit: $125,000 per person ($250,000 for a couple) for PLC, ARC or marketing loan gains/LDPs.

Actively engaged: No change to the definition of what is considered actively engaged for farm program payment eligibility. USDA is directed to come up with a regulation if they determine a change should be made.

Disaster programs: Livestock disaster programs are restarted but the Supplemental Revenue Payment (SURE) program is not. Livestock programs are retroactively activated back to 2012.

Dairy policy would not include voluntary supply management and would direct USDA to buy dairy products when the difference between milk prices and production costs falls below $4 per cwt., and it would reinstate the Milk Income Loss Coverage (MILC) program.

No change in COOL is contained in the bill, but a study is ordered to be done by the Office of the Chief Economist on the cost of impact of implementing the USDA May 24, 2013, final rule.

Included in the package: $881 million in mandatory energy funds.

Conservation compliance linkage is included for crop insurance but only for years after which there is a final determination of a violation and it does not apply in the year in which the determination was made nor any prior years.

Time​line for the conference report consideration by Congress. The House is expected to consider the measure prior to departing for policy retreats Wednesday, with the Senate signaling they would take up the measure during the current three-week work period.


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