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Congress Passes 2002 Farm Bill

Congress Passes 2002 Farm Bill
June 5, 2002 |

After months of debate, Congress last month passed a six-year farm bill that will provide farmers with a safety net when prices are low while increasing conservation funding by 80 percent.Both Alabama senators and the state’s entire congressional delegation voted in favor of the bill. President Bush said he would sign the farm bill as soon as possible. The U.S. Department of Agriculture has asked for $110 million to implement the new bill, and has said its target date for implementation is November. However, some checks could be mailed to producers sooner, as yield and base data are updated.Alabama Farmers Federation President Jerry Newby said the farm bill will protect both U.S. farmers and consumers.”Farmers in Alabama are delighted that we finally have a new farm bill that will provide a safety net for producers,” Newby said. “We want to thank our senators and congressmen for their help in this long, hard ordeal. They’ve been true friends to us and true advocates for American agriculture.”We also appreciate the leaders in our organization and the efforts they made to communicate our message to our leaders in Washington,” he added.Federation National Affairs Director Keith Gray said the Farm Security and Rural Investment Act of 2002 restores the safety net to producers by providing crop supports through a combination of loan rates and counter-cyclical payments.”It ensures producers a stable income by providing support only when prices are low,” Gray said. “In addition, provisions that allow producers to update their production bases and yields mean farmers will be assured a safety net that is representative of their actual production.”The farm bill, which received support from conservation groups and farmers alike, includes an 80 percent increase in conservation funding–the largest in history. This will provide significant opportunities for farmers to get cost-share assistance through programs like the Environmental Quality Incentives Program. Other programs that received additional funding include the Farmland Protection Program (a 20 percent increase); the Wildlife Habitat Incentives Program (a tenfold increase); and $275 million for the Small Watershed Rehabilitation Program–a program vital to rural Alabama. It also increases the acreage cap for the Conservation Reserve Program (CRP) from 36.4 million to 39.2 million acres, and it provides $2 billion for the new Conservation Security Program, which encourages the maintenance and enhancement of farm stewardship practices.The bill also provides increased funding for nutrition, trade and research. And, it ensures adequate funding for important programs in Alabama such as the WIC Farmers Market Nutrition Program and the Seniors Farmers Market Nutrition Program. It also provides for additional use of commodities in the school lunch program, and includes a pilot program which provides fresh fruits and vegetables to schools.The farm bill, through the leadership of Subcommittee Chairman Rep. Terry Everett (R-Ala.), provides for historic reform of the decades-old quota system for peanuts. It provides a more market-oriented approach through the implementation of a peanut marketing loan. The bill also provides for fair treatment of quota owners by compensating them at a cost of over $1 billion.This new peanut program is absolutely essential to the continued viability of the peanut industry in the Southeast, Everett said.House Agriculture Committee Chairman Larry Combest (R-Texas) said all the objectives in the farm bill were accomplished within the limits of the budget. In fact, he said the the bill’s $5 billion in additional farm spending per year actually is less than the average of $7 billion a year spent on emergency programs in recent years.”The counter-cyclical payments it provides to program crop producers will mean that Congress will not need to provide additional ad hoc income support when prices are in decline,” added Rep. Charles Stenholm (D-Texas).Meanwhile, new payment limitations in the bill will reduce the benefits available to larger enterprises, while retaining the three-entity rule and marketing loan certificates. The compromise will ensure commercial-size farms in Alabama will continue to be able to market their commodities rather than forfeiting their crops to the Commodity Credit Corporation.The energy and rural development titles of the bill provide over $1 billion in rural development funding for expanding television and broad-band Internet access into rural areas. The bill also allocated more than $240 million for value-added agricultural market development grants. And, the energy title provides more than $400 million for bioenergy research, education and bioenergy purchases through the Commodity Credit Corporation.A summary of specific farm bill provisions follows:BASE ACRES: Allows producers to retain their current AMTA base acres and add oilseed acres, or to update base acres using 1998-2001 acres.PAYMENT YIELDS: Allows producers who update base acreage to update yields for counter-cyclical payments.LOAN DEFICIENCY PAYMENTS: Includes authority for LDPs on grazed wheat, oats, barley and triticale. Provides for LDPs for the 2001 crop on non-AMTA farms, and waives beneficial interest requirements for the 2001 crop.PAYMENT LIMITATIONS: Sets payment limits as follows: direct payments, $40,000; counter-cyclical payments, $65,000; and LDPs, $75,000. It contains a separate payment limitation for the peanut program. The bill retains the current three-entity rule, and it adopts a $2.5 million adjusted gross income cap on eligibility for participation.DAIRY: Maintains a permanent $9.90 Milk Price Support Program and establishes a 3 1/2-year National Dairy Program to provide assistance to all U.S. producers. The program will provide a federal payment each month equal to 45 percent of the difference between $16.94 and the Boston Class I price.PEANUTS: Provides a quota buyout of 11 cents a pound per year over five years (55 cents total); provides a target price of $495/ton; and provides $355/ton loan rate and a $36/ton fixed payment rate.HONEY: Establishes a loan rate of $.60 per pound.LABELING: Requires the Secretary to provide guidelines for voluntary labeling of meat, fruits and vegetables, fish and peanuts by Sept. 30. The program would become mandatory in two years. To be labeled a USA product, a commodity must be born, raised and processed in the United States.

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