Farm Commodity Programs: Base Acreage and Planting Flexibility

Publication Date: September 2005

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Agriculture, forestry and fishing

Type:

Abstract:

Under the 2002 farm bill, farmers were given a one-time opportunity to update their farms' base acreages and program yields, which are used to determine direct and counter-cyclical payments. Previously, yields had been frozen since 1985, and bases since the mid-1990s. USDA data indicate that 78% of farms benefitted from the opportunity, with 37% of farms updating base acreage for all crops, and 41% adding oilseed acreage to their 1996 base acreage. Regional differences were apparent, particularly between western regions, which tended to make fewer changes, and midwestern and eastern regions, which more frequently added oilseeds or updated bases.

Two policy issues have arisen regarding planting flexibility on base acres, particularly restrictions on growing fruits and vegetables as an alternative crop. First, some Midwestern producers felt penalized because their history of growing fruits and vegetables reduced their soybean bases under the 2002 farm bill. H.R. 2045 and S. 1038 would allow certain fruits and vegetables to be grown without penalizing any future recalculation of base, while reducing a farm's subsidy payments for one year. S. 194 would allow chicory to be grown on base acres. Second, a World Trade Organization (WTO) dispute settlement panel found that the restriction on planting fruits and vegetables made direct and counter-cyclical payments ineligible to be a nondistorting payment (green box) for international trade purposes. This report will be updated.