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Wheat, Feed Grains, Cotton, Rice, and Oilseeds Provisions of the Enacted 1996 Farm Bill

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Abstract:

The "Agricultural Market Transition Act" (Title I of the 1996 farm law) ushers in a new system of price and income supports for producers of wheat, feed grains, cotton, rice, and oilseeds. The new system offers a 7-year "production flexibility contract" to producers with cropland enrolled in the old grains or cotton programs in one of the past 5 years. Each contract will provide fixed, but declining, annual payments that no longer are tied to market prices, to the planting of a specific crop, or to annual land set-aside requirements. The new law earmarks about $37 billion through 2002, effectively creating, for the first time, an annual limitation on such direct payments. In addition, marketing assistance loans are offered for most producers of wheat, feed grains, rice, cotton, and oilseeds.