What’s New in the
2002 Farm Bill?
Extension Outlook Conference
Tunica, Mississippi
September, 2002
J. Novak
Auburn University
What’s New in the 2002 Farm Bill?
Commodity Title
Loan Rate Announcements
Livestock Disaster Assistance
Appropriations Process
Loosening Requirements for Updating
Power of Attorney
What’s New in the 2002 Farm Bill?
Sec Venneman said (9/17) implementation
on schedule and farmers will receive DCP
payments on time.
Sign-up commodity program will begin
Oct. 1 with payments soon after.
What’s New in the 2002 Farm Bill?
MILC program sign up started 8/13
payments will begin next month.
Peanut program sign-up started 9/3 and
ends 11/22. Payments will begin as soon
as rule is issued.
What’s New in the 2002 Farm Bill?
Final rules on sugar published - 2002 marketing
allotments for beet and cane sugar.
Final rules for WRP and WHIP published in July.
Loan rates announced with some adjustments to
those established by Congress, causing
consternation.
What’s New in the 2002 Farm Bill?
Info Needed For Yield Update
• Actual Verifiable Records
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Weight Tickets
LDP’s on File
Crop Insurance Appraisals
Sales Records
• If no records for on farm use of crop, grazed,
silage..FSA County Committee may assign yield
based on 3 similar farms in the county.
• Sign-up for update will start in a couple of
weeks.
• Actual documentation not necessary but must
be available for spot-check.
What’s New in the 2002 Farm Bill?
– Powers of Attorney now being signed.
• POA Forms must be witnessed and notarized.
• Copy in the back of room.
– April 1, 2003 end date for base and yield
update.
– June 2, 2003 end of sign-up for DCP.
What’s New in the 2002 Farm Bill?
• Issues
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Regulations?
What’s going to be funded and what isn’t?
Disaster Relief?
Crop Insurance use revisited.
Lawsuits.
Complaints.
What’s New in the 2002 Farm Bill?
• Regulations?
– Bits and pieces are coming out.
– Those that have come out are being shot at.
– Complaints are emerging over loan
rates/interpretations of the FSRIA.
– Appropriations process is holding up the
show.
– Lawsuit has been filed over the MILC
transition payment provisions.
What’s New in the 2002 Farm Bill?
• Issues
– Oilseed, pulse crop and wheat loan rates are
being questioned by commodity groups and
Congress.
• Oilseeds $.096 set in FSRIA but USDA set at
$.0915 cents.
• Sunflowers (all) $.096/lb but USDA set different
rate for oil-type and confectionary sunflowers.
• Flax set at $.0698
• No loan for Crambe.
• Loan for Dry Peas ($6.33/cwt), Lentils
($11.94/cwt) and Small Chickpeas ($7.56/cwt) will
apply only to #1 grade. Others grades to be
deeply discounted.
FSRIA Marketing Loan Rates
1996 Farm Bill
Commodity
2002 Farm Bill
2001 Rate
2002-2003
2004-2007
Corn (bu)
$1.89
$1.98
$1.95
Sorghum (bu)
$1.71
$1.98
$1.95
Barley (bu)
$1.65
$1.88
$1.85
Oats (bu)
$1.21
$1.35
$1.33
Wheat (bu)
$2.58
$2.80
$2.75
Soybeans (bu)
$5.26
$5.00
$5.00
Minor oilseeds (cwt)
$9.30
$9.60
$9.30
$0.5192
$0.52
$0.52
$6.50
$355
$6.50
$355
$6.50
$355
Upland cotton (lb)
Rice (cwt)
Peanuts (ton)
FSRIA Marketing Loan Rates
Commodity
2002-2003
Small Chickpeas (cwt.) $ 7.56
2004-2006
$7.43
Lentils (cwt.)
$11.94
$11.72
Dry Peas (cwt.)
$ 6.33
$ 6.22
Honey (lb.)
$ 0.60
$ 0.60
Graded Wool (lb.)
$ 1.00
$ 1.00
Nongraded Wool (lb.)
$ 0.40
$ 0.40
Mohair (lb.)
$ 4.20
$ 4.20
Unshorn Pelts (lb.)
$ 0.40
$ 0.40
Announced FSA Loan Rates
Type of Oilseed
Oil-type Sunflower
Other-type Sunflower
Flaxseed
Canola
Rapeseed
Safflower Seed
Mustard Seed
Loan Rate
$0.0915
$0.1210
$0.0698
$0.0949
$0.0947
$0.1253
$0.0988
Announced FSA Loan Rates
• Grades and quality adjustments made in
the loan rates as in the past.
– Peanuts
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Runner Peanuts
Spanish Peanuts
Valencia Peanuts
Virginia Peanuts
$355.72
$337.20
$353.66
$353.66
FSA Announced Loan Program
– Wheat loan rates differentiated by class:
• hard red spring (HRS)
• hard red winter (HRW)
• soft red winter (SRW)
• soft white wheat (SWW)
• durum (DUM)
– The hard white wheat (HWW) loan rate is equal to
the HRW loan rate
– The DUM wheat loan rate is applicable for all
subclasses of durum.
What’s New in the 2002 Farm Bill?
• Issues
– Oilseed, pulse crop and wheat loan rates are
being questioned by commodity groups and
Congress.
– USA Dry Pea and Lentil Council accuses
FSA of being misinformed on prices.
– “They’ve unilaterally taken money out of the
farm bill that was intended to go to
farmers.” – Sen. Conrad (D- N.D.)
What’s New in the 2002 Farm Bill?
• Issues
– MILC payments
• Criticism for not allowing producers to pick
when to begin receiving retroactive payments.
FSA says start either Sept 2002 or Dec 1, 2002.
• 16 Large dairy producer suit (Ohio, Michigan,
New Mexico, Texas, Indiana, Tennessee) over 2.4
million cap applying on both transition and
annual payments in a year.
What’s New in the 2002 Farm Bill?
• Issues – What’s Funded?
– Status of FY 03 Appropriations Bills
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None as yet passed
Ag. Appropriations Bills HR5263 and S2801.
Voted out of House and Senate Ag Committees
House Ag. Report H.Rpt.107-623 on 7/11/02.
Senate Ag. Report S.Rpt. 107-223 on 7/25/02.
So…FSA left to find money from other sources for disaster
relief.
• “Interior bill is still being debated in the Senate and action
on a final bill could be delayed until this winter…” – Rep.
Thune (R-S.D.)
What’s New in the 2002 Farm Bill?
• Issues – Ag. Disaster
– Secretary Ag. declared 22 states ag disaster areas.
– Senate put disaster relief on the front burner, passed
$5.9 billion aid package for farmers hit by drought,
flood, and other.
– Funding in the Interior Appropriations bill (CBO
estimated $5.9 billion). Sen Craig (R-Idaho)
predicts ultimate outcome $3 billion.
– Ag Disaster relief tied up with the new farm bill.
Administration wants funding for disaster relief to
come from funding for the new farm bill, holding up
consideration in House.
What’s New in the 2002 Farm Bill?
• Administration initiated agricultural
disaster relief for selected counties in 22
states in form of low interest loans,
emergency haying and grazing on CRP
nationally.
– (40% loss criteria no longer applies, CRP
payment rate reduced 25%, state FSA
committees have some discretion on
allowing).
What’s New in the 2002 Farm Bill?
• FSA left to find money from other sources for disaster
relief.
• Found $752 Million for Livestock Compensation
Program.
• Section 32 (customs fees) tapped for this program.
• Assistance on county, not statewide, basis and focused on
cattle. Some sheep but mostly cattle. Western and Central
plains most impacted.
• OMB says money for ag disaster programs should
come out of FSRIA which would affect south.
What’s New in the 2002 Farm Bill?
•
Section 32 (customs fees) tapped…
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Sec 32 permanent approp. since 1935 uses
30% of customs receipts to support US ag
sector ($6 billion available in FY 2002)
1. Purchases farm commodities
2. School lunch program and child nutrition
reimbursements
3. Smaller amounts dedicated to disaster assistance,
emergency commodity purchases, and other
contingencies.
What’s New in the 2002 Farm Bill?
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Livestock Compensation Program 9/19/02
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Direct payment to cattle, sheep, bufallo,
beefalo producers for losses in 01-02 due to
drought.
Counties must have received primary
disaster designation due to drought in 01 and
/or 2002.
Sign-up October 1 with payments soon after.
Cash assistance.
What’s New in the 2002 Farm Bill?
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Livestock Compensation Program 9/19/02
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S. Carolina statewide
Specific Counties
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Georgia
North Carolina
Texas
Kentucky
Oklahoma
Virginia
Assistance
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Beef Cows
Stockers
Dairy Cows
Buffalo and Beefalo
Sheep
$18/Hd
$13.50/Hd
$31.50/Hd
$18/Hd
$4.50/Hd
Louisiana
Tennessee
What’s New in the 2002 Farm Bill?
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Livestock Compensation Program 9/19/02
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Producers will certify number of animals
owned as of June 1, 2002.
Animals must have been owned for 90 days
or more before and/or after June 1.
Animals Owned x Payment Rate = Amt Paid
Subject to $2.5 Million AGI limit.
Limited to $40,000 per person.
What’s New in the 2002 Farm Bill?
Commodity Disaster Payments?
• OMB says money should come out of FSRIA.
• Administration already initiated disaster relief for
selected counties in 22 states.
• Allows low interest loans, emergency haying and
grazing on CRP nationally
– (40% loss criteria no longer applies, CRP rate reduced 25%,
state FSA committees have some discretion on allowing).
• Administration says Congress should fund additional
emergency assistance through budget offsets.
• But in any case…some assistance likely.
What’s New in the 2002 Farm Bill?
Political Football
• Administration says Congress should
fund additional emergency assistance
through budget offsets.
– Counter Argument: Farm bill will likely cost
$5 billion less than expected due to rising
prices. So, should use that to fund disaster
assistance. – Sen. Harkin (D-Iowa)
What’s New in the 2002 Farm Bill?
Other
• Emergency Feed Assistance Program for
livestock producers using surplus nonfat dry
milk.
• Crop Insurance now covers (estimated) 80% of
cropland according to USDA.
• EQIP additional $10 million released - directed
to states “severely impacted by drought.”
– Only southern states listed are Oklahoma $409,000
and Texas $234,000.
What’s New in the 2002 Farm Bill?
Other
• Crop Insurance now covers (estimated)
80% of cropland according to USDA.
– 2001 %Acres planted which are insured.
• Corn 80.3%
• Upland Cotton 94.6% • Soybeans 76.9% -
66.9% coverage
61.7% coverage
75.9% coverage
What’s New in the 2002 Farm Bill?
Other
• Issue of crop insurance and disaster
assistance being brought up.
• Question of insurance along with disaster
assistance might increase benefits beyond
100% of losses?
What’s New in the 2002 Farm Bill?
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Other
Recent IMF Report – Industrialized countries support
for ag. unfair to non-industrialized countries.
Support levels for industrial countries averaged 31% of
farm income in 2001.
Swiss – 69%
New Zeland - 1%
Smallest in countries that are efficient, export-oriented.
Largest in countries that are inefficient and import
substituting (like Japan, Korea, Norway and
Switzerland)
What’s New in the 2002 Farm Bill?
Other
• IMF Report – Subsidies
– Canada and U.S. about 20%.
– EU about 35%.
– Trade liberalization would raise GDP overall
most favoring Canada, Australia and New
Zeland.
What’s New in the 2002 Farm Bill?
Conservation Title
CRP- Expanded to 39.2 m. acres
WRP – Expanded to 2.275 m. acres.
GRP – (Grasslands Reserve new)
Farmland Protection – Authorized $985m. For
length of the bill.
EQIP – Increased to $1.3b in 2007
CSP – (Conservation Security new)
What’s New in the 2002 Farm Bill?
Conservation Title
GRP – (Grasslands Reserve new)
• 2 m acres enrollment to retain improve grasslands. Total
authorized 03-07 $254m.
Farmland Protection
• Authorized $985m. For length of the bill.
EQIP
• Increased funding cost share to $1.3b in 2007
• Split 60/40 livestock/crops.
CSP – (Conservation Security new)
• Incentive programs for stewardship on cropland,
pastureland, rangeland and incidental forestland.
What’s New in the 2002 Farm Bill?
Miscellaneous
• 2002 Farm Bill Train the Trainer Meetings held
in conjunction with FSA.
• Report available on the back table.
• Training materials available on the Farm
Foundation Website
www.farmfoundation.org/farmbill