Farm Disaster Bills in the 108th Congress: A Comparison

Publication Date: January 2003

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Agriculture, forestry and fishing

Type:

Abstract:

Much of the United States has been affected by drought the past two years which has had an adverse impact on crop and livestock production. At issue in Congress is whether proposed disaster assistance should be provided, and if so, whether there should be equivalent reductions in spending on other federal programs. Proponents of additional assistance claim that the currently available farm disaster programs do not adequately address farmers’ needs. The President and other advocates of fiscal restraint insist that any new spending have budgetary offsets.

On January 23, 2003, the Senate adopted an omnibus appropriations bill for FY2003 (H.J.Res. 2) which contains a Cochran amendment (S.Amdt. 204) providing $3.1 billion in economic and disaster assistance for agricultural producers. An estimated $2.04 billion of the assistance is supplemental direct payments to producers of various crops. If a county received a disaster declaration in either 2001 or 2002, eligible growers can receive a supplemental payment, with no distinction of whether the producer has been affected by a natural disaster. S.Amdt. 204 revises an earlier adopted amendment (S.Amdt. 1), which provided similar assistance without a disaster designation requirement. The adopted amendment also contains $350 million in livestock assistance and $375 million for other specified crops. The total cost of the amendment was offset as part of a 1.6% across-the-board reduction in all nondefense discretionary spending in the resolution. H.J.Res. 2 currently is in conference, with no comparable provisions in the House version.

In contrast, several other measures have been introduced to provide emergency funding with no offsets. S.Amdt. 79 (Daschle) provides an estimated $6 billion in crop and livestock disaster payments for 2001 and 2002 losses. It was defeated on the Senate floor by a vote of 39-56. A comparable Pomeroy bill (H.R. 160) is pending in the House. S. 125 (Roberts) offers similar crop and livestock assistance, but requires farmers to choose to receive payments for either 2001 or 2002 (estimated cost of $4 billion). H.R. 92 (Graves) provides crop payments only for 2001 or 2002 losses, at an estimated cost of $2.9 billion. It also allows producers with crop losses of 20 to 35%, who traditionally have been ineligible for disaster payments, to receive a payment. H.R. 257 (Burns) makes payments for the 2002 crop year only and provides livestock assistance to those producers who have not already received a payment under USDA’s Livestock Compensation Program (LCP), at a total estimated cost of $2.8 billion. H.R. 307 (Moran, KS) requires producers to choose either 2001 or 2002 for crop and livestock assistance and reduces livestock payments by any payments received under the LCP, at an estimated cost of $3.4 billion.

Some Members justify making disaster payments without any budget offsets, because USDA currently expects lower spending on FY2003 farm programs than earlier estimates. CBO recently estimated that farm commodity support spending in FY2003 likely will be $5.6 billion below earlier projections. However, current budget rules do not allow the re-estimate to be scored as savings.

(This report will be updated.)