Schnepf, Randall D.

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Research Papers in Economics

Slide 1
Overview of the 
2008 Farm Bill:
Comparisons and Contrasts
USDA Ag Outlook Forum 2008
February 21, 2008
Randy Schnepf 
Specialist in Agricultural Policy
Library of Congress, Congressional Research Service
rschnepf@crs.loc.gov
202-707-4277
Where is the 2008 Farm Bill 
and How Did It Get There?Slide 2
Presentation Outline
• Overview U.S. Farm Legislation
Legal Standing
Spending: How much by Title
CBO Baseline Projections
• Set the Stage for Farm Policy Debate
Forces brought to bear upon Congress
• New Farm Bill
Budget projections
Proposed changes
The ProcessSlide 3
U.S. Farm Legislation Overview
• Standing authority for USDA “CCC” programs
Agricultural Adjustment Act 1938
Commodity Credit Corp. (CCC) Charter Act of 1948
Agricultural Act of 1949
• Every 5 or 6 years, Congress enacts new 
legislation governing farm-related programs
Amends existing laws to alter how commodity programs are 
implemented:  Eligibility; Payment parameters; New features
• Omnibus in nature:  10 to 12 Titles
Other laws relate to nutrition, conservation, credit, rural 
development, crop insurance, and other farm-relevant issues.
*The CCC is USDA’s “bank” for commodity/conservation funding.Slide 4
2002 Farm Act vs. 2008 Farm Bill
1. Commodity Progs
2. Conservation Progs
3. Trade
4. Nutrition Progs
5. Credit
6. Rural Development
7. Research
8. Forestry
9. Energy
10. Miscellaneous
1. Commodity Progs
2. Conservation Progs
3. Trade
4. Nutrition Progs
5. Credit
6. Rural Development
7. Research
8. Forestry
9. Energy
10. Hort & Org Ag (H)- Livestock (S)
11. Miscellaneous
12. Tax & Revenue OffsetsSlide 5
USDA Outlays ~$88 Billion/Yr in FY03-07*
55%
3%
5%
3% 3%
3%
4%
6%
18%
Commodity 
Programs
Nutrition 
Programs
Research
Rural Development
Forestry
*~$120 Billion was budgeted on average.   Source: CRS using USDA data.
Trade & Food Aid
Crop Insurance
Other
Conservation Slide 6
0
5
10
15
20
25
30
35
1980 1984 1988 1992 1996 2000 2004 2008 2012
Actual outlays
CBO March 2007
CBO Jan 2008
CBO Projections For CCC Under 2002 
Farm Law versus History (1980-2007)
$ billion
1980-2007: $13.8 B 2008-17: 
$11.8 B
$11.1 B
Source: CBO. FY data; includes only CCC spending-- largely commodity and conservation programs.Slide 7
U.S. Farm Policy Environment 
• Fragile coalition of diverse regional interests
• Congressional Budget Rules: Pay-Go
• New Interest Groups Raise Profile
• Strong Commodity Price Outlook
Driven in large part by federal energy policy
Strong International demand
• Record Agr Exports & Farm Income 
• Bleak Federal Budget Outlook
• WTO Commitments & Trade Disputes
Pressures Within Congress
Pressures From Outside of CongressSlide 8
What has already been 
passed by Congress? 
• House-passed H.R. 2419 (July 2007)
~ $6 Billion over CBO’s 5-year baseline, FY08-12
• Senate-passed H.R. 2419 (Dec. 2007)
~ $5 Billion over CBO’s 5-year baseline, FY08-12
Let’s compare these two bills with the 
CBO March 2007 baselineSlide 9
5-Year USDA Budget Comparisons
0
100
200
300
2008-12 CBO Mar07 House 2008 FB Senate 2008 FB
Other
Crop
Insurance
Conservation
Commodity
Programs
Nutrition
Programs
$ Billions Major 
Outlay
+$5 B
-$4 B
+$4 B
-$4 B
+$3 B
$280 B $286 B $285 B
+$4 B
-$1 B
+$3 B
-$4 B
+$4 B
$192 B
$37 B
$22 B
$26 BSlide 10
Key changes to Nutrition Title
• House (+$4.2B) & Senate (+$5.4B) 
expand programs, but with differences: 
Increase food stamp benefits 
Expand eligibility standards
Increase funding for fresh fruits & vegetables in 
school lunch programs
• ~ $1.0 Billion in Senate
• ~ $0.3 Billion in House
Increase funding for The Emergency Food 
Assistance Program (TEFAP)Slide 11
Key Changes to Commodity Progs
• Raise some loan rates and target prices
• Revise Payment Limits 
Eliminate the “3-entity” rule and track payment to individual
AGI limits for farm (2/3 of inc) and non-farm recipients
Specific program limits: DP and CCP 
Eliminate Certificates; remove limit on MLG/LDP
• Add Revenue-Based Program choices
State-based Average Crop Revenue plus $15/acre DP in 
Senate, to replace several DP, CCP, MLG/LDP programs
National-based Revenue Counter-Cyclical Program (RCCP) in 
House to replace CCP
• Continued minimal planting restrictions 
Retain planting restriction on base acresSlide 12
↑ Specialty Crops Inclusion
• Expand Specialty crop block grants
$270 million (5-yr) Title I in Senate bill 
$365 million (5-yr) Title X Horticulture & Organic Agr in House
• Provisions supporting: 
organic agriculture
Farmer’s marketsSlide 13
Key Changes to Conservation Progs
• House (+$3.0 B) & Senate (+$4.7 B) 
expand programs, but with differences 
• Senate:
Creates new Conservation Stewardship Incentives 
Program that coordinates CSP and EQIP, and targets 13 
mln new acres and $1.3 B in new funding
• House:
Halts funding for new CSP signups until 2012
Expands funding for EQIP, WRP, FRPP, GRP.
Includes FY payment limit of $60,000 for any one; $125,000 
for all conservation programs
No new funding for CRP, kept at 39.2 million acresSlide 14
Key Changes to Crop Insurance
• House (-$4.0 B) & Senate (-$3.7 B) 
reduce support
Require farmers and insurance companies to share 
more of program costs and risks.
$2.5 to $2.7 billion in savings from changes to 
timing of premium receipts from farmers, and 
payments to companiesSlide 15
Key Changes to Other Programs
• Both House and Senate bills 
Energy Programs: expand/extend 2002 farm bill provisions, 
but focus on developing cellulosic ethanol production 
Reorganize the administration of USDA’s research, 
extension, and economic agencies
Extend borrowing opportunities under FSA loan program
• The Senate bill 
Adds authority for a 5-year, $5.1 billion permanent disaster 
payment program.
Adds new Livestock Title with provisions on packer 
ownership and other competition issues
• The House bill 
Adds new Horticulture & Organic Agr TitleSlide 16
Where is the Farm Bill Today? 
• Administration Threatens VETO if includes: 
More than $6 Billion over CBO 10-yr baseline
Tax increases or “timing gimmicks”
Insufficient reform: commodity programs & payment limits
• House Pre-Conference offer
~ $6 Billion over 10-year CBO baseline
• Senate Pre-Conference offer
~ $12.3 Billion over 10-year CBO baseline
• Includes $5 Billion permanent disaster asst.Slide 17
So What is Next? 
• Must decide on total spending amount
$6 to $12 Billion over 10-year CBO baseline
• Must decide on allocation of $$
Who are the winners and losers? 
Jurisdictional issues?
• Deadlines & Options
March 15, 2008 extension of 2002 Farm Act expires
• Extend 2002 Farm Act by couple of months
• Extend 2002 Farm Act by couple of years
• Finish a new farm bill
• Revert to Permanent LawSlide 18
Questions?
Randy Schnepf 
Specialist in Agricultural Policy
Library of Congress
Congressional Research Service
rschnepf@crs.loc.gov
202-707-4277

Where is the 2008 Farm Bill and How Did It Get There?

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