The 2002 Farm Bill: Overview and Status

Publication Date: September 2002

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Agriculture, forestry and fishing

Type:

Abstract:

Federal farm support, nutrition, agricultural trade and food aid, conservation, credit, marketing, rural development, agricultural research, and related policies are governed by a variety of separate laws. Although these laws may be considered and amended as free-standing legislation, many of them are evaluated periodically, revised, and renewed through an omnibus, multi-year farm bill.

On May 2, 2002, the House voted, 280 to 141, to approve the conference report on a new, 6-year omnibus farm bill (H.R. 2646; H.Rept. 107-424). The Senate approved the conference report on May 8, and the President signed the bill, the Farm Security and Rural Investment Act (FSRIA) of 2002, into law (P.L. 107-171) on May 13, 2002. The new law generally supersedes the previous omnibus farm bill, the Federal Agriculture Improvement and Reform (FAIR) Act of 1996 (P.L. 104-127), much of it due to expire in 2002.

FSRIA 2002 continues marketing loans and fixed payments, and creates new counter-cyclical assistance tied to target prices (similar in some ways to a guaranteed per-bushel pricing system eliminated in 1996) for grains, cotton, and oilseeds. The new law extends, with modifications, dairy and sugar support (the bill creates new counter-cyclical payments for dairy), and it overhauls the peanut program by replacing quotas with a support program like that for other major crops. The final bill also contains titles to expand conservation programs; reauthorize agricultural export and food aid programs; and amend and extend research, nutrition (food stamps), credit, and rural development activities, among others.

Total direct (mandatory budget authority) spending in the bill is $273.9 billion over 6 years (FY2002-2007), according to Congressional Budget Office (CBO) estimates (March 2002 baseline). Of this total, $51.7 billion is new spending (above the March 2002 baseline). Of the new spending, $37.6 billion is for commodity programs; $9.2 billion is for conservation. About 55% ($149.6 billion) of the bill's $273.9 billion in total direct spending is for food stamps and other nutrition-title programs. The nutrition programs received $2.8 billion in new spending (above baseline).

The new farm law has attracted widespread criticism from those here and abroad who argue that it is extremely expensive; will reverse the market-oriented course Congress had charted for long-term farm policy in 1996; stimulate overproduction, thus depressing farm prices and distorting trade worldwide; and undermine the U.S. objective of further reforming global agricultural trade. Proponents counter that the law is needed to aid farmers hit by several years of low prices; fully complies with congressional spending limits and current U.S. trade obligations; maintains market orientation by providing farmers with the flexibility to plant most crops, unbound by government supply controls; and places the United States in a stronger position to negotiate future trade reforms by ensuring that U.S. farmers will not be unilaterally shorn of their support before other countries commit to reducing their own subsidies and trade barriers.