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/NLE/CRSreports/05Aug/RL33037.pdf

Abstract: Federal farm support, food assistance, agricultural trade, marketing, and rural development policies are governed by a variety of separate laws. However, many of these laws periodically are evaluated, revised, and renewed through an omnibus, multi-year farm bill. The Farm Security and Rural Investment Act of 2002 (P.L. 107- 171) was the most recent omnibus farm bill, and many of its provisions expire in 2007, so reauthorization is expected to be enacted in the 110th Congress.

The heart of every omnibus farm bill is farm income and commodity price support policy — namely, the methods and levels of support that the federal government provides to agricultural producers. However, farm bills typically include titles on agricultural trade and foreign food aid, conservation and environment, forestry, domestic food assistance (primarily food stamps), agricultural credit, rural development, agricultural research and education, and marketing-related programs. Often, such “miscellaneous” provisions as energy, food safety, marketing orders, and animal health and welfare are added. This omnibus nature of the farm bill creates a broad coalition of support among sometimes conflicting interests for policies that, individually, might not survive the legislative process.

The scope and direction of a new farm bill likely will be determined by a number of contributing factors, including financial conditions in the agricultural economy, competition among various interests for federal spending, and international trade negotiations, among others.

Among the thorniest issues will be future farm income and commodity price support. Title I of the 2002 farm bill was designed to provide fixed direct payments to producers of major crops (grains and cotton), while maintaining the flexibility to plant in response to market signals, among other provisions. However, to offset unanticipated low commodity prices, counter-cyclical payments were adopted to preclude the need for emergency farm payments. Questions of equity (e.g., who should get aid and how much), program cost, conformance with WTO trade obligations, effects on U.S. competitiveness in the global marketplace, and the unintended impacts of agricultural activities on the environment are among the considerations in the upcoming farm bill debate.

The economic prosperity of the U.S. farm sector is heavily dependent upon exports, so the provisions of a new bill reauthorizing farm export and foreign food aid programs also will be of keen interest. However, the future of commodity support programs, and trade promotion and food aid programs, could change with the outcome of the ongoing Doha round of multilateral trade negotiations. Moreover, the agricultural credit, research, conservation, domestic nutrition assistance, and rural development titles will bring an array of interests into the debate, and their issues and concerns could prove equally contentious. This report will be updated as related developments transpire.

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Topics: Agriculture, Legislative