Farm Commodity Payment Limits: Comparison of Proposals

Publication Date: April 2002

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Agriculture, forestry and fishing

Type:

Abstract:

Greater public awareness of the size of commodity program payments reaching a comparatively small number of very large farms has focused the attention of Congress on payment limits. Limits on commodity program payments have been imposed since 1970. As part of the emergency economic assistance packages enacted each of the past three years, the payment limits have been doubled. In addition, a mechanism has been developed that allows farms to circumvent the limit on loan deficiency payments, namely commodity certificates.

The House farm bill (H.R. 2646) largely preserves payment limits at the increased levels recently approved, including the exemption of commodity certificates. In contrast, the bill adopted by the Senate (S. 1731), including an amendment sponsored by Senators Dorgan and Grassley, reduces the limits about 50% and eliminates the commodity certificate exemption. Translating the dollar limits into crop acreage levels makes it easier to see how farmers might be impacted. Lower payment limits mostly are felt by rice and cotton farmers.