/2008FarmBillSummary

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Farm Bill Roundup

Title I: Commodity Target Price: Increases target prices for wheat, sorghum, barley, oats, and soybeans.

Loan Rates: Rebalances loan rates on wheat, barley, oats, oilseeds, graded wool and honey.

Loan Rates, Direct Payments, and Target Prices for the Covered Commodities Loan Rate Direct Target Price 2008 2009 201020082008 2009 2012 2012 Wheat (bu) $ 2.75 $ 2.75 $ 2.94 $ 0.52 $ 3.92 $ 3.92 Corn (bu) $ 1.95 $ 1.95 $ 1.95 $ 0.28 $ 2.63 $ 2.63 Grain sorghum (bu) $ 1.95 $ 1.95 $ 1.95 $ 0.35 $ 2.57 $ 2.57 Barley (bu) $ 1.85 $ 1.85 $ 1.95 $ 0.24 $ 2.24 $ 2.24 Oats (bu) $ 1.33 $ 1.33 $ 1.39 $ 0.024 $ 1.44 $ 1.44 Upland cotton (lb) $ 0.5200 $ 0.5200 $ 0.5200 $ 0.0667 $ 0.7125 $ 0.7125 Long grain rice (cwt) $ 6.50 $ 6.50 $ 6.50 $ 2.35 $ 10.50 $ 10.50 Med. grain rice (cwt) $ 6.50 $ 6.50 $ 6.50 $ 2.35 $ 10.50 $ 10.50 Soybeans (bu) $ 5.00 $ 5.00 $ 5.00 $ 0.44 $ 5.80 $ 5.80 Other oilseeds (cwt) $ 9.30 $ 9.30 $ 10.09 $ 0.80 $ 10.10 $ 10.10 Dry peas (cwt) $ 6.22 $ 5.40 $ 5.40 n/a n/a $ 8.32 Lentils (cwt) $ 11.72 $ 11.28 $ 11.28 n/a n/a $ 12.81 Small Chickpeas (cwt) $ 7.43 $ 7.43 $ 7.43 n/a n/a $ 10.36 Large Chickpeas (cwt) n/a $ 11.28 $ 11.28 n/a n/a $ 12.81

20102012 $ 4.17 $ 2.63 $ 2.63 $ 2.63 $ 1.79 $ 0.7125 $ 10.50 $ 10.50 $ 6.00 $ 12.68 $ 8.32 $ 12.81 $ 10.36 $ 12.81

BASE ACRES: Generally, base acres are retained with adjustments. A producer with 10 base acres or fewer is not eligible for direct, counter-cyclical, or average crop revenue election payments.

PAYMENT ACRES: Payment acres are 85 percent of base acres for direct and counter- cyclical payments with the exception of 2009, 2010, and 2011, when direct payments will be made on 83.3 percent of base acres.

PAYMENT YIELDS: Producers will retain current payment yields for direct and counter-cyclical payments, with provisions in the bill to establish counter-cyclical payment yields for pulse crops.

TIMING OF PAYMENTS: Direct Payment — A producer can elect to receive an advance direct payment equal to 22 percent of the direct payment following signup for the 2008 crop year, and as early as December 1 of the year prior to the year the crop is harvested for the 2009 through 2011 crop years. The balance of the direct payment will be made in October of the year the crop is harvested. Beginning with the 2012 crop year, advance direct payments will not be available.

Counter-Cyclical Payments — A producer can receive a partial payment of up to 40 percent of the projected counter-cyclical payment for the covered commodity after the first 180 days of the marketing year. The balance of the counter-cyclical payment, if any, will be paid beginning October 1, after the end of the marketing year for the crop.

Beginning with the 2011 crop year, partial counter-cyclical payments will not be available.

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AVERAGE CROP REVENUE ELECTION (ACRE) PROGRAM: Beginning with the 2009 crop year, a producer will have a one time option to participate in a state-level revenue protection program instead of the traditional countercyclical program. By choosing this option, producers must agree to a 20 percent reduction in direct payments and a 30 percent reduction in loan rates on enrolled farms. In return, they are eligible for a state-based revenue guarantee by commodity equal to 90 percent of the product of a state average yield per acre for the previous five years (after dropping the highest and lowest years) times the national average price for the previous two years for the commodity. If actual state per-acre revenue is less than the guarantee and if a producer suffers an actual revenue loss for the crop on the farm, then the producer will receive an ACRE payment equal to the difference between the state peracre revenue guarantee and the state actual revenue calculation paid on 83.3 percent (85 percent for 2012) of the acres planted to the covered commodity on the farm.

DAIRY SUPPORT: The current milk price support of $9.90 per hundredweight is replaced with separate support prices for cheddar cheese, butter, and nonfat dry milk. If the price for one of these dairy commodities is lower than the support price, then USDA will purchase the product at the support level. The Milk Income Loss Contract (MILC) program is restored to cover 45 percent of the shortfall between $16.94 per hundredweight and the Boston Class I milk price. In addition, the $16.94 price will be adjusted for any month when the national average monthly cost of dairy rations exceeds $7.35 per hundredweight. The quantity of milk production that is eligible for a MILC payment to a dairy producer is limited to 2,985,000 pounds for each fiscal year. The increases outlined above are generally effective until August 31, 2012.

DAIRY FORWARD CONTRACTING: The bill authorizes milk producers voluntarily to enter into forward price contracts with milk handlers for sale of milk that is used for manufactured dairy products.

HONEY: Marketing loans or loan deficiency payments are provided based on a loan rate of $.60 per pound in 20082009 and of $.69 in 2010-2012.

PAYMENT LIMITATIONS: The bill continues the current limit on direct payments of $40,000 and on counter-cyclical payments of $65,000.

Average Crop Revenue Election program limits on direct payments will be $32,000 and on counter-cyclical payments of $73,000.

Loan deficiency payments and marketing loan gains are not limited.

DIRECT ATTRIBUTION OF PAYMENTS: Beginning with the 2009 crop year, all payments will be directly attributed to the person who directly or indirectly is eligible for the farm program payments. Spouses are automatically eligible to participate in farm programs.

ADJUSTED GROSS INCOME ELIGIBILITY TEST: Persons or entities with average adjusted gross of $500,000 or greater of non-farm income will be ineligible for direct payments, counter-cyclical payments, ACRE payments, marketing loan gains, loan deficiency payments, MILC payments, and the noninsured assistance program. Persons or entities with average adjusted gross of $750,000 or greater of farm income will not be eligible to receive direct payments.

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Farm Bill Roundup

Title II: Conservation Increases total spending on conservation programs by $7.9 billion.

CONSERVATION STEWARDSHIP PROGRAM: The former Conservation Security Program is improved into a nationwide stewardship system. To enroll, a producer has to already be addressing at least one resource concern to a threshold standard, and has to address at least one priority resource concern by the end of the contract. Contracts are ranked to prioritize producers whose overall conservation activities have the greatest environmental benefit.

Contract duration is five years. Producers have to agree to adopt new practices and maintain and improve existing conservation activities, to address priority resource concerns identified for the producer’s area or watershed. Payments are based on the cost of practices, income foregone, and the environmental benefits of the practices. The program will enroll some 12.77 million acres nationwide every year through 2012. The bill adds $1.1 billion to existing funding, and will allow enrollment of nearly 115 million acres over the next 10 years.

ENVIRONMENTAL QUALITY INCENTIVES PROGRAM: Increased funding by 27.2 percent with a total of $3.393 billion — The bill adopts a new process for determining payment levels for conservation practices based on the costs associated with adopting a practice and revenue foregone by the producer. Socially disadvantaged farmers or ranchers and beginning farmers or ranchers are eligible to receive an increased cost share rate that is 25 percent above the otherwise available rate, to a maximum of 90 percent. These producers may also receive up to 30 percent of their total contract in advance to provide funds for materials and contracting. Priority for contracts concerning water conservation or irrigation practices goes to producers who agree not to bring new land into irrigated production with any associated water savings. Conservation associated with organic production is authorized for payments.

The program also adds additional forestry practices including forest management and fuels management. Producers could receive grants under the program of up to $300,000 over any six year period, with the Secretary authorized to exceed the cap up to $450,000 for projects of special environmental significance.

WETLANDS RESERVE PROGRAM: Increased over 3 million acres — A revised procedure for valuing property and a streamlined review process for the Wetlands Reserve Program (WRP) will facilitate enrollment of fragile wetland acres. Land eligible for enrollment is expanded, and the holding period for land prior to enrollment is extended to seven years. A schedule for payment over time is provided for easements: easements valued at $500,000 or less may be paid as a lump sum or in up to 30 annual payments, while easements over $500,000 would have to be paid in no fewer than five or as many as 30 payments. The Secretary is authorized to waive this requirement and pay for larger WRP easements in a lump sum if necessary to fulfill objectives of the program. The Secretary is authorized to enter into agreements with states, tribes and nongovernmental organizations to carry out a special Wetlands Reserve Enhancement Program, including a pilot program using reserved grazing rights easements. The bill provides $1.3 billion for this program through 2012, enough to enroll 746,200 acres of wetlands over the next five years, for a total (including existing wetlands) of over 3 million acres.

ADJUSTED GROSS INCOME LIMIT: Participants in conservation programs are allowed to have no more than $1 million in average adjusted gross nonfarm income unless 2/3 of the participants’ income was from farming, ranching, or related activities.

PAYMENT LIMITS: Payment limitations for the Conservation Reserve Program, Agricultural Management Assistance, the Grassland Reserve Program (short term contracts and restoration agreements), Wildlife Habitat Incentives Program, and Wetlands Reserve Program (restoration agreements) is set at $50,000 annually. Payments under the Conservation Stewardship Program are set at $200,000 over any five year period. There is no maximum level that can be paid under the easement purchase provisions of WIRP, GRP, and Farmland Protection.

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Title VI: Rural Development EXPANDS OPPORTUNITIES FOR LOCALLY PRODUCED AGRICULTURAL PRODUCTS: The Business and Industry Loan Guarantee Program and the Value Added Product Market Development Grant Program will focus on locally grown produce.

REDUCES BACKLOG OF UNFUNDED PENDING RURAL DEVELOPMENT WATER AND WASTEWATER LOAN AND GRANT APPLICATIONS: The bill provides $120 million in mandatory funding for pending qualified applications already processed by USDA for water and waste disposal grants and loans. Lower interest rates for many water and waste water loans are made permanent.

EXPANDS BROADBAND SERVICE IN RURAL AREAS: The bill shifts assistance toward areas with no or very limited service and simplifies application requirements for the program, reducing the cost of applying for a loan.

REFORMS THE DEFINITION OF RURAL: The bill clarifies the definition of areas that are not eligible for USDA rural programs in the vicinity cities of more than 50,000. The Secretary may broaden the category of area considered urban to cover areas that have become urban based on housing units per square mile through a rule making process.

STRENGTHENS SUCCESSFUL REGIONAL PARTNERSHIPS: Extends the Delta Regional Authority to October 1, 2012.

Title VII: Research and Related Matters SPECIALTY CROP RESEARCH: The Specialty crop Research Initiative is formed and provides $230 million in mandatory funding, which will focus on the needs of producers and processors.

CREATES A NEW NATIONAL INSTITUTE OF FOOD AND AGRICULTURE (NIFA): This will be used to coordinate the research agencies within USDA. Cooperative State Research, Education and Extension Service (CSREES) will be transferred under NIFA. INCREASES RESEARCH FOR RENEWABLE FUELS, FEEDSTOCKS, AND ENERGY EFFICIENCY: Creates the Energy Research Program to focus on biofuels and their feedstocks.

Title VIII: Forestry Sets new national private forest conservation priorities.

ASSISTS EMERGENCY FOREST RESTORATION: This will help restore private forest after natural disasters.

HEALTHY FOREST RESERVE PROGRAM: Mandatory funding of $9.75 milliion is provided annually from 2009 to 2012.

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Farm Bill Roundup

Title IX: Energy Provides a total of $1 billion to fund programs which will enhance renewable energy.

BIOREFINERY ASSISTANCE: Provides $320 million in mandatory funding for loan guarantees for commercial and pre-commercial biorefineries.

BIOMASS RESEARCH AND DEVELOPMENT: Provides $118 million mandatory funding.

FOREST BIOMASS FOR ENERGY: Authorizes research on the use of low-value forest biomass for energy.

DIRECTS THE SECRETARY TO CONDUCT STUDIES: The bill directs the Secretary of Agriculture to conduct a study of biofules infrastructure and fertilizer produced from renewable energy sources.

CONTINUES THE BIODIESEL FUEL EDUCATION PROGRAM: Provides $1 million annually of mandatory funding from 2008 through 2012.

Title X: Horticulture and Organic Agriculture INCREASED THE SUPPORT FOR GROWTH IN FARMERS’ MARKETS: Provides $33 million in mandatory funding for the development and expansion to farmers markets through a grant process.

SUPPORT FARMERS TRANSITIONING TO ORGANIC PRODUCTION: Provides $22 million in mandatory funding over the next five years.

INCREASED THE SPECIALTY CROP BLOCK GRANTS: Providing approximately $500 million to assist states with programs for specialty crop producers.

PRIORITIZES RESEARCH ON COLONY COLLAPSE DISORDER (CCD): Authorizes $10 million annually on research related to CCD and pollinator issues.

Title XI: Livestock IMPLEMENTS MANDATORY COUNTRY OF ORGIN LABELING (COOL) FOR MEAT AND PRODUCE: Requires COOL for beef, lamb, pork, chicken, and goat meat, fruits and vegetables, macadamia nuts and peanuts by September 30, 2008.

INCREASES CONTRACTING FAIRNESS: Enables a contract producer the ability to decline arbitration before entering into contracts and requires the contracts with an arbitration clause disclose a producer’s right to decline.

Title XII: Crop Insurance and Disaster Assistance DECREASES REIMBURSEMENTS TO CROP INSURANCE COMPANIES: Decrease A&O reimbursements by 2.3 percent.

IMPROVES NAP COVERAGE FOR AQUACULTURE: Requires FSA to pay losses on aquaculture operations due to drought if covered by an NAP policy.

ESTABLISHES A NEW DISASTER ASSISTANCE PROGRAM: The program complements the existing crop insurance program by providing additional assistance to farmers based on loss of crop revenue for their whole farm operation. w w w. a r f b . c o m

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Title XIII: Commodity Futures REAUTHORIZES THE COMMODITY FUTURES TRADING COMMISSION (CFTC): Continue the CFTC through 2013.

EXPANDS PENALTIES FOR UNLAWFUL MANIPULATION OF MARKETS: Expands the civil and criminal penalties for manipulation or attempting to manipulate futures markets.

Title XIV: Miscellaneous OFFICE CLOSURES: Prohibits the closure or relocation of county or field offices of FSA for 2 years.

ANIMAL WELFARE: Strengthens fines for violations of the Animal Welfare Act. Directs USDA to review findings of studies related to use of dogs and cats in federal research.

AGRICULTURE SECURITY: Establishes an Office of Homeland Security within USDA and focuses on biosecurity by creating a grant program to develop and expand state programs.

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