Proposals for emergency farm relief are multiplying rapidly, with the price tag of each new proposal higher than the one before. For example, the primary rallying point among Senate Democrats has been an amendment offered by Sen. Tom Harkin (D-IA) to various appropriation measures. That proposal would cost $6.5 billion. However, statements by Harkin and other Senators, including Minority Leader Tom Daschle (D-SD) suggest they may support up to $10 billion in new assistance. Sen. Kent Conrad (D-ND) has offered a $9.4 billion package.

In the same way, farm organizations are calling for increasing sums. The American Farm Bureau Federation made headlines when it supported $9 billion, and the National Farmers Union has now called for $17 billion. Meanwhile, commodity organizations have made proposals that are also ambitious but generally confine their specifics to the individual commodity represented by the group.

This article summarizes several major proposals. A glossary at the article's conclusion identifies terms and abbreviations. In most cases, direct links to the text of these proposals are provided at www.AgricultureLaw.com.  At that site, click on "Farm Income Relief" under "Hot Topics."

Because the debate on farm income relief is so far proceeding on a separate track from crop insurance reform, this article does not summarize crop insurance proposals except to the extent that they appear as discrete portions of the various income assistance plans. However, extensive information on all pending crop insurance proposals is also available at www.AgricultureLaw.com under the "Crop Insurance" section of "Hot Topics." It is worth noting that at least one proposal described there, by Senate Agriculture Committee Chairman Richard Lugar (R-IN), combines elements of both crop insurance and income assistance by offering supplemental AMTA payments contingent on certain risk management activities by producers.
 

AMERICAN FARM BUREAU FEDERATION

• MLA Payments: $4 billion (=an additional 75% of normal AMTA payments)
• Disbursement of AMTA Payments: Make payments October 1 of each year.
• Payment Limitations: No limitations on any farm program payments, including LDPs.
• Export Programs: $2 billion in food aid. Non-program crops, fruits and vegetables and meat products. "Competitive funding" in 2000 budget for export programs.
• Trade Issues: Reform unilateral trade sanctions; normal trade relations with China.
• Risk Management: $2 billion to "improve and expand agriculture's financial safety net."
• Dairy: Continue price supports through 2002. Mandate Option 1A for marketing order reform. Support multi-state dairy compacts. Expand dairy options pilot program.
• Regulatory Costs: $5 billion to "assist ... in complying with existing regulations."
• Disaster Assistance: "Contingency funding."
• Cotton: Fund the Step 2 program.
• CRP: Expand to statutory maximum acreage.

• Payments: Supplemental LDP for crops with loan programs.
• Other Payments: Direct market loss payments for non-program crops and beef, pork, lamb and wool. Authority to make payments to producers affected by import surges.
• Dairy: Dairy price supports at $12.50. Amend market order reform to improve producer income. Allow dairy compacts if price supports are increased.
• Cotton: Fund Step 2 program.

• Disbursement of AMTA Payments: Allow advance payments.

• Disaster Assistance: Authority and funding for loss assistance. "Full funding" of 1998/99 disaster relief programs.

• Three-year emergency conservation reserve with limited acreage eligibility, annual rental payment plus 90% of average annual LDP based on current crop production.
• On-farm storage facility loan program.
• "Incentives for purchase and storage" of commodities for energy production.
• Revive Farmer Owned Reserve. Limit to 10% of each eligible crop.

Federal tax credit for state and local property taxes.

Full deductibility of health insurance premiums.

Mandatory livestock price reporting.

Country-of-origin labeling for food products.

Reform Food Quality Protection Act.

• "Full funding" of direct and guaranteed credit programs, Environmental Quality Incentive Program and CRP.
 

• Multilateral supply control agreements.
• Tariff increases and export program funding increases when competitor currencies fall relative to the U.S. dollar.
• "Credit" for labor and environmental accomplishments.

"Coordinate" food aid.

• Food Aid: $1 billion in concessional sales and donations.
• Commodities: Soybeans, soybean meal, soybean oil, soy flour, isolated soy protein, textured vegetable protein, functional and non-functional soy protein concentrates, textured soy protein concentrates.
• Destinations: Majority to Asia and former Soviet Union nations. Smaller but significant tonnage to Sub-Saharan Africa, Latin America and Caribbean nations.
• Additional Cost: $229 million for ocean freight.

 

• MLA Payments: 60 cents per bushel of wheat. "Consider" continuing such payments in future years.
• Payment Limitations: No limitations on any farm program payments, including LDPs.
• Disbursement of AMTA Payments: Make payments October 1 of each year.
• Disaster Assistance: Provide funding for 1999 crops.
• Taxes: Eliminate inheritance tax. Adopt FARRM account legislation.
• Risk Management: Enact legislation similar to bills by Reps. Larry Combest (R-TX) and Tom Ewing (R-IL) and Sens. Pat Roberts (R-KS) and Bob Kerrey (D-NE).
• Trade Issues: Reform unilateral trade sanctions (including passage of S. 566 by Sen. Richard Lugar (R-IN)); normal trade relations with China.

 

• Disbursement of AMTA Payments: Authorize AMTA payments to be made at beginning of each fiscal year (October 1).
• Administration: October 1 payment election would be at farmer's option.

 

• Disaster Assistance: $430 million to fully compensate past losses. Pay certain citrus losses.
• MLA Payments: $3.9 billion for 1999 crops.
• Dairy: $200 million in direct payments.
• Peanuts: $45 million in direct payments.
• Section 32: $355 million.
• Livestock Feed Assistance: $180 million.
• Oilseeds: $1 billion for concessional sales and donations.
• Cotton: Fund Step 2 payments.
• Farm Service Agency and Other USDA Accounts: $50 million for personnel or direct or guaranteed loans. $2 million for state credit mediation grants. $100 million for rural economic development.

AMENDMENT No. 1244 TO SENATE AGRICULTURE APPROPRIATIONS BILL (CONRAD)

• MLA Payments: $5.6 billion for 1999 crops.
• Dairy: $200 million in direct payments.
• Peanuts: $45 million in direct payments.
• Section 32: $355 million.
• Risk Management: $400 million for 30% crop insurance premium discount.
• Disaster Assistance: $360 million to "fulfill '98 disaster programs."
• Livestock Feed Assistance: $295 million.
• Oilseeds: $750 million for concessional sales and donations.
• Cotton: Fund Step 2 payments.
• Farm Service Agency: $50 million for personnel.
• Other Accounts and Programs: Disaster reserve ($500 million); flooded land reserve ($300 million); citrus losses ($90 million); emergency conservation program ($30 million); "resolve erroneous disaster program denials" ($70 million).

MLA Payments: Market (or Marketing) Loss Assistance Payments. Enacted as part of last year's omnibus appropriation bill to supplement incomes for farms with AMTA contracts. Calculated as a percentage of the AMTA payment (last year, about 50%).

AMTA: The Agricultural Market Transition Act, Title I of the FAIR Act, commonly known as Freedom to Farm.

AMTA Payment: The basic decoupled income support payment that takes the place of deficiency payments. Also known as contract payments, Freedom to Farm payments.

AMTA Contract: The long-term income support contract signed by almost all producers who held acreage bases of wheat, feed grains, upland cotton and rice. Contracts are for seven years (1996-2002) except for expiring CRP contracts, which can be for shorter periods but also expire in 2002.

Marketing Assistance Loan: Price support loans for wheat, feed grains, upland cotton, rice and oilseeds. Also known as marketing loans, non-recourse loans.

LDP: Loan deficiency payment. A cash payment that may be taken as an alternative to eligibility for marketing assistance loans. The LDP on any given day is equal to the marketing loan gain for that day. When an LDP is elected for a quantity of production, that quantity is no longer eligible for placement under loan.

Marketing Loan Gain: The gain realized by a producer who is permitted to repay a marketing assistance loan at the posted county price (PCP), a value intended to reflect local market conditions. The concept is to allow market prices to fluctuate freely while ensuring the producer the full benefit of the loan rate, while avoiding government acquisition of commodities.

Section 32: A statute under which the U.S. Department of Agriculture purchases commodities on the open market for use in school lunches and other feeding programs. USDA operates the program to emphasize of commodities that are in surplus.

FARRM Accounts: Farm and Ranch Risk Management accounts, proposed in pending legislation but not enacted. Would allow farmers to shelter a portion of farm income from taxation for up to five years, place the funds in an interest-bearing account and pay taxes on the funds as ordinary income in the year withdrawn from the account.