Farm Policy Reform Act

  • Nov 21, 2008
  • ILSR
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  • Federal Policy
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    During the 1980’s farm crisis the idea of a supply management system for agriculture was proposed by Senator Tom Harkin (D-IA) and Rep. Bill Alexander (D-AK). In 1985 they introduced the Farm Policy Reform Act(S.1083). Title I of the Act required the Secretary of Agriculture to conduct referendums (in 1985, 1989, 1993, and 1997) to determine by majority vote if a mandatory supply management program should be in effect for the succeeding four-year program period. If the referendum failed, the Secretary would determine the farm program for the succeeding four-year period.

    Under the bill’s supply management provision, the USDA would establish national marketing quota(for each commodity) for each of the 1986 through 1999 crops based on domestic and export demands, food aid and carryover requirements. A national acreage allotment for each of the 1986 through 1999 crop years would be established, and producers earning more than 50 percent of their gross income from nonfarm sources would be required to set aside an additional ten percent of eligible crop acreage. As acreage allotments are made, marketing certificates (quotas) for each commodity were to be assigned locally. Such certificates are made on the higher of county average yield, or farm yield. Excess production beyond the quota amount would be allowed to be (1) used for on-farm use; (2)stored and marketed in the subsequent year; (3) donated for specified foreign food assistance programs; or (4) sold to the Commodity Credit Corporation (CCC).

    Senator Harkin and Rep. Geghardt reintroduced similar legislation in the Save the Family Farm bill(S.658)/(H.R.1425) in 1987, though this bill failed as well. The Congressional Budget Office concluded that passage of the referendum would lead to projected savings of $12.5 billion, primarily through the elimination of costly direct federal subsidies. The program was expected to raise farm income by 52 percent.

    The sections of the Farm Policy Reform Act relating to supply management are included below.

    99th CONGRESS 1st Session

    S.1083

    Toprovide price and income protection to family farmers through the management of the supply of the 1986 through 1999 crops of certain agricultural commodities, and for other purposes.

    IN THE SENATE OF THE UNITED STATES

    MAY 7 (legislative day, APRIL 15), 1985

    Mr.HARKIN (for himself, Mr.. ZORINSKY, and Mr. EXON, and Mr. SASSER)introduced the following bill; which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry

    A BILL

    Toprovide price and income protection to family farmers through the management of the supply of the 1986 through 1999 crops of certain agricultural commodities, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act, with the following table of contents, may be cited as the "Farm Policy Reform Act of 1985".

    TITLE I–AGRICULTURAL COMMODITY SUPPLY MANAGEMENT

    SEC. 101. Effective only for the 1986 through 1999 crops, title V of the Agricultural Act of 1949 (7 U.S.C. 1461 et seq.) is amended to read as follows:

    TITLE V-AGRICULTURAL COMMODITY SUPPLY MANAGEMENT

    DEFINITIONS

    SEC. 501. As used in this title:

    (1)The term ‘acreage allotment percentage’ means a percentage obtained by dividing $200,000 by the projected annual income of a producer during a calendar year in which a commodity will be harvested, except that such percentage may not exceed 100 per centum.

    (2) The term ‘commodity’ means wheat, corn, grain sorghums, barley, oats, rye, upland cotton, rice, and soybe ans.

    (3)The term ‘eligible crop acres’ means the number of acres a producer may cultivate for the production of a commodity during a crop year determined under section 506(b)(2).

    (4) The term ‘normal crop acres’ means the number of acres cultivated for the production of a commodity, or reduced, set-aside, or diverted under a program administered by the Secretary, during any of the four preceding crop years.

    (5) The term ‘program period’ means the

    (A) 1986 through 1989 crop years;

    "(B) 1990 through 1993 crop years;

    "(C) 1994 through 1997 crop years; and

    "(D) 1998 and 1999 crop years.

    (6) The term ‘reserve’ means the farmers disaster reserve established under section 510.

    REFERENDUM

    SEC. 502.

    (a)No later than August 1, 1985 (or as soon as practicable after the date of enactment of the Farm Policy Reform Act of 1985), August 1, 1989, August 1, 1993, and August 1, 1997, in order to determine whether the program established by this title shall be implemented during the succeeding program period, the Secretary shall conduct a referendum among producers who, during a representative period (as determined by the Secretary), have been engaged in the production of a commodity for commercial use.

    (b) If the program established by this title is approved by at least one-half of the eligible producers voting in a referendum, the Secretary shall implement such program during the succeeding program period.

    (c) If such program is not approved by at least one-half of the eligible producers voting in a referendum, during the succeeding program period, in lieu of such program, the Secretary shall provide such loans, purchases, payments, and other assistance to producers of commodities as the Secretary considers appropriate.

    LOAN RATES

    SEC. 503.

    (a)The Secretary shall make available to producers loans and purchases for each crop of a commodity produced during a program period at such level, not less than the minimum support level for a commodity established under subsection (b), as the Secretary determines taking into consideration the actual cost of production of the commodity throughout the United States.

    (b) The minimum support level for a, commodity during a crop year established under this subsection shall equal a specified per centum of the parity price of the commodity as provided in the following table:

    (c) The term of a loan made under this section shall be thirty-six months.

    NATIONAL MARKETlNG QUOTAS

    SEC. 504.

    (a)The Secretary shall proclaim a national marketing quota for each commodity for each marketing year of the 1986 through 1999 crops of commodities. The proclamation shall be made as soon as practicable during each calendar year preceding the year in which the marketing year for the crop begins.

    (b) The amount of the national marketing quota for a commodity for a marketing year shall bean amount of the commodity (less imports) that the Secretary estimates will be utilized during the marketing year to meet (1) domestic demand,(2) export demand, (3) food aid requirements, and (4) carryover re9uirements.

    (c) The Secretary my revise the national marketing quota first proclaimed for any marketing year for the purpose of determining national acreage allotments under section 505 if the Secretary determines it necessary based on the latest information. The Secretary shall proclaim such revised national production requirement as soon as it is made.

    (d) If the Secretary determines that domestic carryover stocks of a commodity are excessive or an increase in stocks is needed to assure desirable carryover, the Secretary may adjust the national marketing quota by the amount the Secretary determines will accomplish the desired increase or decrease in carryover stocks.

    NATIONAL ACREAGE ALLOTMENTS

    SEC. 505.

    (a) The Secretary shall proclaim a national acreage allotment for each commodity for each of the 1986 through 1999 crop years.

    (b)(1)The amount of the national acreage allotment for any crop of a commodity shall be the number of acres which the Secretary determines on the basis of the projected national yield and expected underplantings (acreage other than acreage not harvested because of program incentives) of farm acreage allotments will produce an amount of the commodity equal to the national marketing quota, for the commodity for the marketing year for such crop.

    FARM ACREACE ALLOTMENTS

    SEC. 506.

    (a)The national acreage allotment for a commodity shall be apportioned by the Secretary among farms, through local committees, in accordance with this section.

    (b)

      (l) To be eligible to receive a farm acreage allotment for a commodity for any crop year, a producer must complete and submit to the Secretary an application which contains

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        (A) the eligible crop acres of the producer, as determined under paragraph (2);

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        (B) the projected annual income of the producer during the calendar year in which such commodity will be harvested, as determined under paragraph (3); and

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        (C) the number of any bonus acres the producer requests to be awarded under subsection (f) for the production of each commodity during the crop year.

      (2)

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        (A) Except as provided in subparagraphs (B), (C), and (D), the eligible crop acres of a producer shall equal the number of acres a producer requests to cultivate for the production of commodities during a crop year.

      (B) The total number of eligible crop acres of a producer during a crop year may not exceed the product obtained by multiplying-"(i) the normal crop acres of the producer; by………..(ii) 85 per centum.

      (C) If a producer earns less than 50 per centum of the taxable income of the producer from farming operations, the total number of eligible crop acres of the producer during a crop year shall, after application of subparagraph (B), be reduced by an additional 10 per centum of the total number of acres determined under subparagraph (B).

      (D) For purposes of subparagraph (B)(i), if a producer places acreage in the conservation reserve program established under section 16B of the Soil Conservation and Domestic Allotment Act, such acreage shall be added to the normal crop acres of the producer.

      (3) For purposes of this title, income shall –

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        (A) include all farm and non-farm income from whatever source;

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        (B) be determined jointly for married couples;

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        (C) be determined separately for unmarried individuals living on a farm who-

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          (i) are related by blood or marriage;

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          (ii) are actively involved in the farming operation; and

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          (iii) earn more than 50 per centum of their taxable income from farming operations.

    (c)The total farm acreage allotment of a producer for all commodities produced during a crop year under this section should consist of the sum of-

    (1) the base acreage allotment for each commodity determined under subsection (d);

    (2) any supplemental acreage allotment for each commodity determined under subsection (e); and

    (3) any bonus acres for each commodity awarded under subsection (f).

    (d)The base acreage allotment of a producer for a commodity for a crop year shall equal the number of acres obtained by multiplying-

    (1) eligible crop acres of the producer; by

    (2) acreage allotment percentage of the producer.

    (e)

      (l) The Secretary shall determine the amount of any national supplemental acreage allotment for each commodity for each of the 1986 through 1999 crop years.

      (2) The amount of the national supplemental acreage allotment for a, commodity for each crop year shall equal the difference between–

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        (A) the amount of the national acreage allotment for such commodity for the crop year determined under section 505; less

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        (B) the sum of the base acreage allotments of all producers for such commodity determined under subsection (d).

      (3) The supplemental acreage allotment of a producer for a commodity produced during a crop year shall equal the number of acres obtained by multiplying-

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        (A) the difference between the eligible crop acres of the producer for such commodity and the base acreage allotment of the producer for such commodity; and

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        (B) the percentage obtained by dividing-

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          (i) the amount of the national supplemental acreage allotment for such commodity determined under paragraph (2k by

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          (ii) the total of all supplemental acreage requests for such commodity determined under clause (A).

    (f)If the Secretary determines that the total amount of base and supplemental acreage allotments for a commodity for a crop year determined under subsections (d) and (e) would not produce an amount of the commodity equal to the national marketing quota for the commodity for the crop year determined under section 505, the Secretary shall award to each producer who requested bonus acres under subsection(b)(l)(C), in equal amounts, bonus acres for the production of such commodity which, in the aggregate and in conjunction with such allotments, would result in the production of an amount of such commodity equal to such national marketing quota.

    (g)

      (l) Except as provided in paragraph (2), a producer may plant one or more commodities (in the producer’s discretion) on acreage permitted to be cultivated under a farm acreage allotment issued under this section for a crop year.

      (2) A producer may not increase the amount of acreage used for the production of a commodity during a crop year by more than 20 per centum over the amount of acreage used for the production of such commodity during the preceding crop year.

      (3) In order to permit the Secretary to issue marketing certificates under section 507, a producer shall inform the Secretary of the number of acres the producer will use for the production of each commodity during each crop year. "(h) If the normal crop acres of a producer becomes available for any reason, such normal crop acres shall revert to the Secretary and be reapportioned by the Secretary to the next operator of the farm.

    MARKETING CERTIFICATES

    SEC. 507.

    (a)At the time a producer is assigned a farm acreage allotment under section 506 for any crop year, Secretary shall issue marketing certificates to such producer for each commodity to be produced during such crop year.

    (b) Except as provided in subsections(c) and (d), a. marketing certificate issued to a producer for any commodity for any crop year shall authorize such producer to market, barter, or donate an amount of such commodity determined by multiplying-

    (1)the number of acres the producer informed the Secretary the producer will use for the production of such commodity during such crop year under section 506(g)(3); by

    (2) the higher of:

    (A) the county average yield per acre for such commodity; or

    "(B) the farm program yield of the producer for such commodity (as provided in section 508).

    (c)The Secretary must adjust the amount of a commodity which may be marketed, bartered, or donated under a marketing certificate to reflect the amount of such commodity which may be used for feed, human consumption, or other purposes on the farm of the producer.

    (d)If the amount of a commodity produced in a crop year exceeds the amount of the commodity which may be marketed, bartered, or donated under a marketing certificate, the surplus amount of such commodity may be

    (1) used for feed, human consumption, or other purposes on the farm of the producer;

    (2)stored during the current marketing year and marketed under a marketing certificate issued for the subsequent marketing year;

    (3)donated to the Commodity Credit Corporation in order to be made available to provide famine relief and assistance to other foreign countries under title II of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1721 et seq.); or

    (4)sold to the Commodity Credit Corporation, at no more than 50 per centum of the loan level for such commodity determined under section 503, in order to be made available to provide such famine relief and assistance.

    (e)A person may not purchase or otherwise acquire an amount of a commodity from a producer in excess of the amount of the commodity which may be marketed, bartered, or donated by such producer under a marketing certificate.

    FARM PROGRAM YIELDS

    SEC. 508.

    (a)

      (l) The farm program yield for each crop of a, commodity shall be equal to the sum of-

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        (A) the average yield established for the farm for the five most recent crop years, excluding the year in which the yield was the highest and the year in which the yield was the lowest, adjusted by the Secretary to provide a fair and equitable yield; and

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        (B) the average amount of such commodity received from the farmers disaster reserve established under section 510 during the three crop years used to determine the average yield for the farm under clause (A).

      (2) If no payment yield for such commodity was established for the farm in the five most recent crop years, the Secretary may determine such yield as the Secretary determines fair and reasonable.

    (b) Notwithstanding subsection (a):

    (1)In the determination of yields, the Secretary shall take into account the actual yields demonstrated by the producer to the satisfaction of the Secretary.

    (2) Neither such yields established for a commodity nor the farm program yield established on the basis of such yields shall be reduced under other provisions of this section.

    (c)If the Secretary determines it necessary, the Secretary may establish national, State, or county program payment yields on the basis of-

    (A) historical yields, as adjusted by the Secretary to correct for abnormal factors affecting such yields in the base period, or

    (B) if such data are not available, the Secretary’s estimate of actual yields for the crop year concerned.

    (d)If national, State, or county program payment yields are established, the total farm program yields shall balance to the national, State or county program payment yields, respectively.

    CONSERVATION OF SET-ASIDE ACREAGE

    SEC. 509.

    (a)A producer of a commodity shall devote to approved conservation uses all acreage of the producer which the producer is required to set-aside under section 506.

    (b) The Secretary may make such adjustments in the amount of acreage the producer is required to set-aside under section 506 as the Secretary determines necessary to correct for abnormal factors affecting production and to give due consideration to tillable acreage, crop-rotation practices, types of soil, soil and water conservation measures, topography, and such other factors as the Secretary determines appropriate.

    (c)

      (l) Regulations issued by the Secretary under this section with respect to acreage required to be devoted to conservation uses shall require appropriate measures to protect such acreage against noxious weeds and wind and water erosion.

      (2) The Secretary may permit, subject to such terms and conditions as the Secretary may prescribe, all or any part of such acreage to be devoted to hay and grazing if the Secretary determines that such production is needed to provide an adequate supply of such commodities, is not likely to increase the cost of the price support program, and will not affect farm income adversely.

    (d)

      (l) Any set-aside acreage may be devoted to wildlife food plots or wildlife habitats in conformity with standards established by the Secretary in consultation with wildlife agencies.

      (2) The Secretary may pay such amount as the Secretary considers appropriate of the cost of practices designed to carry out the purposes of paragraph (~).

      (3) The Secretary may provide for an additional payment on such acreage in an amount determined by the Secretary to be appropriate in relation to the benefit to the general public if the producer agrees to permit, without other compensation, access to all or such portion of the farm, as the Secretary may prescribe, by the general public, for hunting, trapping, fishing, and hiking, subject to applicable State and Federal regulations.

    (e)

      (l) A producer of a commodity shall execute an agreement with the Secretary which describes the means the producer will use to comply with this section not later than such date as the Secretary may prescribe.

      (2) The Secretary may, by mutual agreement with such producer, terminate or modify any such agreement if the Secretary determines such action necessary because of an emergency created by drought or other disaster or to prevent or alleviate a shortage in the supply of agricultural commodities.

    FARMERS DISASTER RESERVE

    SEC. 510.

    (a) The Secretary shall establish a farmers disaster reserve for each commodity for the 1986 through 1999 crop years.

    (b)

      (l) Each producer of a commodity shall contribute to the reserve each crop year a portion of the total amount of each commodity produced in the United States during the crop year.

      (2) The portion of commodities required to be contributed by a producer under paragraph (1) shall be determined by the Secretary on an actuarially sound basis at a level which will enable the Secretary to compensate producers with commodities from the reserve in accordance with this section in the event producers suffer crop losses as the result of natural disasters or other conditions beyond the control of producers.

      (3) To the extent practicable, the Secretary shall store commodities received from a producer under paragraph (1) in warehouses located in the area in which the producer is located.

    (c) The Secretary shall compensate a producer with commodities from the reserve if the Secretary determines that as a result of drought, flood, or other natural disaster, or other condition beyond the control of the producer, the total quantity of a commodity the producer is able to harvest on any farm is less than the quantity determined by multiplying 90 per centum of the quantity of the commodity the producer is authorized to market, barter, or donate under a marketing certificate issued under section 507.

    (d)

      (1) Except as provided in paragraph (2), the quantity of a commodity at producer is entitled to receive as compensation for a loss sustained during a crop year under subsection (c) shall equal the difference between–

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        (A) 90 per centum of the quantity of the commodity the producer is authorized to market, barter, or donate under a, marketing certificate issued under section 507; and

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        (B) the actual amount of such commodity produced during such crop year.

      (2) The total value of commodities a producer may receive as compensation for any loss under subsection (c) may not exceed $360,000.

    (e)If the quantity of commodities contained in the reserve is not sufficient to compensate producers with commodities in accordance with this section, the Secretary may use stocks of commodities owned by the Commodity Credit Corporation to maintain the reserve at a level which is sufficient 20 to compensate producers with such commodities in accordance with this section.

    SOIL CONSERVATION

    SEC. 511.

    (a)Notwithstanding any other provision of law, the Secretary shall require that producers on a farm in any area follow the conservation practices prescribed by the appropriate local soil conservation district for the area.

    (b) In areas in which no soil conservation district exists, the county committee established under section 8(b) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)shall determine appropriate conservation practices.

    PENALTIES

    SEC. 512.

    (a)

      (l) Except as provided in subsection (b), if a producer fails to comply with any term or condition of the program conducted under this title, the producer shall be ineligible for any form acreage allotment, loan, purchase, or payment authorized under this title.

      (2) Except as provided in subsection (c), if a producer markets, barters, or donates a commodity without a marketing certificate required under section 507 or markets, barters, or donates an amount of a commodity for commercial use in excess of the amount of the commodity the producer is permitted to market, barter, or donate under such certificate, the Secretary shall–

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        (A) assess a fine against such producer in an amount equal to three times the value of the commodities so marketed; or

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        (B) increase the number of acres such producer is required to set-aside under section 506 during the succeeding crop year by a number of acres which, if planted, would result in the production of a quantity sufficient to satisfy the fine referred to in clause (A).

      (3) If a person purchases or otherwise acquires an amount of a, commodity from a producer in excess of the amount of the commodity which may be marketed, bartered, or donated by such producer under a marketing certificate issued under section 507, the Secretary shall assess a fine against such person in an amount equal to three times the value of the commodities so purchased or acquired.

    (b)

      (l) If a producer fails to comply fully with the terms and conditions of the program conducted under this section and the Secretary believes the failure should not preclude the making of a farm acreage allotment, or loans, purchases, or payments to the producer, the Secretary may make an allotment or loans, purchases, and payments in such amounts as the Secretary determines to be equitable in relation to the seriousness of the failure of the producer.

      (2) The Secretary may authorize the county and State committees established under section 8(b) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)) to waive or modify deadlines and other program requirements in cases in which lateness or failure to meet such other requirements does not affect adversely the operation of the program.

    REGULATIONS

    SEC. 513.

    The Secretary may issue such regulations as the Secretary determines necessary to carry out this title.

    COMMODITY CREDIT CORPORATION

    SEC. 514.

    The Secretary shall carry out the program authorized by this title through the Commodity Credit Corporation.

    PAYMENTS

    SEC. 515.

    (a)The provisions of section 8(g) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(g)) (relating to assignment of payments)shall apply to payments under this title.

    (b) The Secretary shall provide for the sharing of payments made under this title for any farm among the producers on the farm on a fair and equitable basis.

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