What Is a Farm Bill?

Publication Date: May 2001

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Agriculture, forestry and fishing

Type:

Abstract:

A farm bill is a collection of new laws and amendments to longstanding laws that sets the overall direction of federal food and farm policy for a specified number of years. Farm bills typically contain not only commodity price and income support provisions, but also provisions on agricultural trade, rural development, domestic food assistance, foreign food aid, conservation, crop insurance, farm credit, forestry, and agricultural research. The many issues covered by farm bills make it possible to form a broad coalition of support among common, and sometimes conflicting interests for policies and programs that individually might not be enacted.

The omnibus nature of farm bills attracts many diverse interests to debates: farmers and their organizations; farm input suppliers; commodity handlers, processors, and retailers; banks, insurers, and lending institutions; exporters and importers; scientists, researchers and educators; domestic and foreign consumers; low-income groups; environmentalists; and rural communities. The heart of most farm bills, however, is farm income and commodity price support policy.

Farm income support programs make payments to farmers to supplement their income without directly supporting commodity market prices. This type of support includes: (1) production flexibility contract (PFC) payments to wheat, feedgrain, cotton, and rice farmers; (2) loan deficiency payments for contract crops and oilseeds when market prices are lower than loan rates; (3) disaster relief payments; and (4) in recent years, ad hoc emergency "market loss payments." Commodity price support programs directly impact the price of commodities by setting minimum prices, restricting production or sales, and/or regulating imports. These include the milk, peanut, sugar, and tobacco programs. Some farmers also receive federal payments for taking environmentally sensitive land out of production, for example, under the conservation reserve program.

Many provisions in the current farm bill, the Federal Agriculture Improvement and Reform (FAIR) Act of 1996, are set to expire in 2002. Without a new farm bill by the end of 2002, many permanent commodity statutes incompatible with current national economic objectives, global trading rules, and Federal budget or regulatory policies would come back into effect. Other farm bill statutes without permanent authority would expire after those dates, and their continuation would be uncertain. The 107th Congress began a review of the 1996 farm law early in 2001. This early review reflects a desire to deal with persisting farm price and income problems by making changes to underlying farm policy, rather than relying on short term, ad hoc emergency farm aid measures, which has been the practice for the past several years. (For more detailed information on the upcoming farm bill and issues, see CRS Report RL30947, Agriculture: Previewing the 2002 Farm Bill and the CRS Electronic Briefing Book Agriculture Policy and the Farm Bill from the CRS Web site at [http://www.crs.gov/home.shtml].)