{ "id": "R45730", "type": "CRS Report", "typeId": "REPORTS", "number": "R45730", "active": true, "source": "EveryCRSReport.com", "versions": [ { "source": "EveryCRSReport.com", "id": 598529, "date": "2019-05-21", "retrieved": "2019-05-21T22:15:08.705859", "title": "Farm Commodity Provisions in the 2018 Farm Bill (P.L. 115-334)", "summary": "The farm commodity program provisions in Title I of the Agricultural Improvement Act of 2018 (P.L. 115-334; the 2018 farm bill) include revenue support programs for major program crops and permanent agricultural disaster assistance programs for producers of most tree crops and livestock. Aside from dairy and sugar, which have their own specific programs, most grain and oilseed crops produced in the United States are eligible for two tiers of revenue support under Title I of the 2018 farm bill\u2014specialty crops such as fruits, vegetables, and tree nuts are not covered. The first tier of support is provided by the Marketing Assistance Loan (MAL) program, which offers interim financing for production of \u201cloan\u201d commodities in the form of a nine-month nonrecourse loan at statutorily set prices. A producer must have a harvested crop to offer as collateral for the MAL loan. Nonrecourse means that, if forfeited, USDA must accept the crop pledged as collateral as full payment of an outstanding loan. Thus, the statutory loan rates serve as minimum price guarantees for eligible commodities.\nThe MAL program may be supplemented by a higher, second tier of revenue support comprised of (1) the Price Loss Coverage (PLC) program, which provides price protection at the national level via statutory fixed \u201creference\u201d prices for eligible crops, or (2) the Agricultural Risk Coverage (ARC) program, which provides revenue protection via historical moving average revenue guarantees based on the five most recent years of national crop prices and county or farm average yields. Participation is free for both ARC and PLC. However, a producer must own or rent historical \u201cbase\u201d acres of \u201ccovered\u201d commodities. In addition, producers must sign up and elect either PLC or a county-coverage ARC program (ARC-CO) on a crop-by-crop basis or enroll all covered commodities together in a whole-farm revenue guarantee under an individual-coverage ARC program (ARC-IC).\nThe dairy and sugar sectors are supported by separate federal farm programs that are tailored more specifically to the physical differences associated with each of their products\u2014liquid fresh milk and refined sugar\u2014and their respective markets. For dairy, the Dairy Margin Coverage (DMC) program offers producers milk margin protection for a range of margin thresholds\u2014the milk margin equals the difference between the all-milk farm price and the price of a formula-based feed ration\u2014and for a producer-selected portion (ranging from 5% to 95%) of historical milk production. Milk producers must sign up, select both margin and milk production coverage levels, and pay a premium that varies with coverage levels. The U.S. dairy sector also benefits from tariff-rate quotas (TRQs) on selected dairy products. The sugar program provides revenue support through a combination of limits on domestic output sales (marketing allotments), nonrecourse MAL loans for domestic sugar production (but at the processor level), a sugar-to-ethanol backstop program (Feedstock Flexibility Program), and quotas that limit imports. The import quotas for dairy and sugar are authorized outside of the omnibus farm bill.\nDisaster assistance is available for producers of most tree crops and livestock. The Noninsured Crop Assistance Program (NAP) is available for all agricultural production that is not covered by a federal crop insurance policy. All of these programs have permanent authority. However, the 2018 farm bill amends most of them.\nThe enacted 2018 farm bill continues a $125,000 per-person cap on combined PLC and ARC payments but excludes MAL program benefits from the limit. The limit applies to the total from all covered commodities except peanuts, which has a separate $125,000 limit. To be eligible for payments, persons must be actively engaged in farming (AEF). Payment limits are doubled if the farm operator has a spouse. On family farming operations, all family members 18 years or older are deemed AEF and eligible for payments, including cousins, nephews, and nieces. The 2018 farm bill retains the adjusted gross income (AGI) limit for payment eligibility of $900,000. \nThe Congressional Budget Office (CBO) projects outlays for Title I provisions of the 2018 farm bill for the five-year period (FY2019-FY2023) to average $6.3 billion compared with an estimated $7.2 billion in annual outlays under the 2014 farm bill. Based on projected market-price-to-PLC-reference price ratios, producers are expected to shift their preference toward PLC over ARC under the 2018 farm bill, resulting in a shift in program outlays concentrated more on PLC than ARC.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/R45730", "sha1": "8f80c4b4ca3a5d553b759921aa9db34552331b2b", "filename": "files/20190521_R45730_8f80c4b4ca3a5d553b759921aa9db34552331b2b.html", "images": { "/products/Getimages/?directory=R/html/R45730_files&id=/0.png": "files/20190521_R45730_images_fbaff3e4407921282b40533c25526928cd2439ce.png", "/products/Getimages/?directory=R/html/R45730_files&id=/6.png": "files/20190521_R45730_images_27638fb9b896dfa58178c21a5810a254286ba5e0.png", "/products/Getimages/?directory=R/html/R45730_files&id=/4.png": "files/20190521_R45730_images_cc5036fa1956458a9041480bddae3fcc5a14e25a.png", "/products/Getimages/?directory=R/html/R45730_files&id=/2.png": "files/20190521_R45730_images_5225ffc498ed4ca2a9a040043def53321c80180c.png", "/products/Getimages/?directory=R/html/R45730_files&id=/5.png": "files/20190521_R45730_images_8f431869be97e254a0c42930189bbae9458e4477.png", "/products/Getimages/?directory=R/html/R45730_files&id=/7.png": "files/20190521_R45730_images_458541cb9e5326162260d9cd63f5e9aac730d846.png", "/products/Getimages/?directory=R/html/R45730_files&id=/3.png": "files/20190521_R45730_images_093750a1e4067baacdc0e3148e015dd7a61b2a36.png", "/products/Getimages/?directory=R/html/R45730_files&id=/1.png": "files/20190521_R45730_images_dc5a4804ce4911794f440d6979609b90ba8e9026.png" } }, { "format": "PDF", "encoding": null, "url": "https://www.crs.gov/Reports/pdf/R45730", "sha1": "24831706457d3ed90c82fa471d93b778b7d33676", "filename": "files/20190521_R45730_24831706457d3ed90c82fa471d93b778b7d33676.pdf", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4919, "name": "Farm Support" } ] } ], "topics": [ "Agricultural Policy" ] }