The 2008 farm bill originally expired in 2012, but Congress failed to complete action to legislate a new law to begin in 2013.
The 2008 farm bill was instead extended for an additional year through September 2013. Congress now still faces the task of developing a new farm bill that would begin with the 2014 crop year.
The full Senate approved its version of the farm bill (S. 954) on June 10, 2013. The House version (H. 1947) was defeated (failed to pass) on June 20.
On July 11, the House passed an amended bill (H. 2642) which excluded the Nutrition title. These two bills (S. 954 and H. 2642) must now go to Conference Committee where the differences must be compromised to come up with a final farm bill that must then go back to both House and Senate for approval and then must be signed by the President to become law.
Concerns now are whether a Conference bill can pass the Senate without a Nutrition title and/or if the President would support and sign such a bill.
The following is a brief summary and comparison of the House bill and Senate bill:
• Both House and Senate bills eliminate Direct Payments (DP) for all commodities. The exception is for cotton. The House bill would continue transitional Direct Payments for cotton for 2014 (on 70 percent of Base Acres) and 2015 (on 60 percent of Base Acres).
• Both House and Senate bills also eliminate Counter-cyclical Payments (CCP) but establish a new, similar countercyclical-like payment for all commodities except cotton. The Senate bill establishes Adverse Market Payments (AMP) for 2014-2018 crops. The House bill establishes Price Loss Coverage3(PLC) for 2014 and succeeding crop years.
• AMP would be received on 85 percent of Base Acres. PLC would be received on 85 percent of planted acres (not to exceed farm Base Acres) plus 30 percent of prevented planting acres. For AMP, peanut Base Acres and the payment yield may be updated to the 2009-2012 average. For PLC, payment yield for all eligible crops may be updated to 90 percent of the 2008-2012 average.
ACRE program eliminated
• The ACRE program is eliminated in both bills.
• The Senate bill establishes Agriculture Risk Coverage(ARC). This is a revenue-based payment for all crops eligible for AMP. ARC payment is made in addition to AMP. Payment is based on benchmark farm revenue or county revenue. The producer must make a one-time irrevocable election.
• The House bill establishes Revenue Loss Coverage (RLC) as an alternative to Price Loss Coverage (PLC). Producers must make a one-time irrevocable election of PLC or RLC. The election may be on a farm-by-farm and crop by crop basis. RLC payment is based on benchmark county revenue. There is no farm option.
• Both House and Senate bills continue the current Marketing Loan program including Loan Deficiency Payments (LDP’s). Loan Rates remain as in the current law except for cotton. In the Senate bill, the loan rate for cotton will be the average AWP (Adjusted World Price) for the previous 2 crop years with a minimum of 45 cents and maximum of 52 cents. The House bill is the same as the Senate bill except the minimum is set at 47 cents.
• Cotton is not included in AMP, ARC, or PLC/RLC. Instead, both House and Senate bills would establish a new revenue-based insurance program called STAX (Stacked Income Protection Plan) for cotton beginning with the 2014 crop. The STAX policy may be purchased as a stand-alone policy or in addition to other coverage. The STAX premium subsidy is set at 80 percent. A payment (indemnity) is received when actual county revenue falls below 90 percent of benchmark county revenue.
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