Farm Commodity Programs: Direct Payments, Counter-Cyclical Payments, and Marketing Loans

Publication Date: December 2004

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Agriculture, forestry and fishing

Type:

Abstract:

Federal law has authorized farm income and commodity price support programs for over 70 years. The 2002 farm bill (P.L. 107-171) authorizes the current programs for the 2002-2007 crop years. The payment framework combines direct payments of the 1996 farm bill (P.L. 104-127) with counter-cyclical payments of prior laws. Subsidies continue for wheat, feed grains, upland cotton, and rice, and soybeans and peanuts are added to the list of major crops. Dry peas, lentils, and chickpeas were added to the loan program, and wool, mohair, and honey were reinstated. The law continues to allow planting flexibility and does not require acreage reduction. Payments for each crop year can be spread out for up to 23 months. The Congressional Budget Office projects FY2005 outlays of $13.5 billion for farm commodity, conservation, and export programs, $8.4 billion of which are for the covered commodities and peanuts. This report will be updated as events warrant.