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Consumers and Food Price Inflation [April 14, 2011]

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"The heightened commodity price volatility of 2008 and 2010 and the subsequent acceleration in U.S. food price inflation associated with those market shifts raised concerns and generated many questions about farm and food price movements by Members of Congress and their constituents. This report responds to those concerns by addressing the nature and measurement of retail food price inflation. For a discussion of the relationship between farm and retail prices, and the major factors influencing retail food prices, see CRS Report R40621, Farm-to-Food Price Dynamics. During the 1991 to 2006 period, U.S. food prices were fairly stable--annual food price inflation, as measured by the U.S. Bureau of Labor Statistics (BLS) Consumer Price Index (CPI) for all food (excluding alcoholic beverages), averaged a relatively low 2.5%. However, several economic factors emerged in late 2005 that began to gradually push market prices higher for both raw agricultural commodities and energy costs, and ultimately retail food prices. U.S. food price inflation increased at a rate of 4% in 2007 and at 5.5% in 2008--the highest since 1990 and well above the general inflation rate of 3.8%."

Library of Congress. Congressional Research Service

Richardson, Joe; Schnepf, Randall Dean, 1954-

2011-04-14
Asian Soybean Rust: Background and Issues [January 12, 2005]

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"On November 9, 2004, Asian soybean rust (ASR) was discovered in the United States in an experimental field in Louisiana. In the following three weeks, it was discovered in eight additional southern states -- Alabama, Arkansas, Florida, Georgia, Mississippi, Missouri, South Carolina, and Tennessee. Because ASR's arrival in the United States came late in the crop year, it is not thought to have had any measurable effect on 2004 soybean production. Furthermore, its detection has provided an early warning and has given the U.S. soybean sector time to prepare strategies to guard against possible ASR damage to the 2005 soybean crop. ASR is a harmful fungal disease that affects the growth of several commercial plants, most notably soybeans. The rust spores, once windborne, can spread rapidly and have been known to infect an entire region the same year the disease is first detected. ASR has reduced soybean yields by 10% to 80% in infected areas. The disease's rapid transmission rate coupled with an abundance of host species suggests that eradication would be unlikely once the fungus is established in the United States. As a result, the most effective treatment is thought to be the development and use of resistant plant varieties. However, no commercial U.S. soybean cultivar is resistant to or tolerant of ASR. In the short term, the only effective responses are costly fungicides and the use of early-maturing soybean cultivars."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-

2005-01-12
Cellulosic Ethanol: Feedstocks, Conversion Technologies, Economics, and Policy Options [October 22, 2010]

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"In the Energy Independence and Security Act of 2007 (P.L. 110-140), Congress mandated the use of a large and rapidly increasing volume of biofuels as part of the U.S. national transportation fuel base. In particular, the share of cellulosic biofuels is mandated to grow to 16 billion gallons by 2022--a daunting challenge considering that no commercial production existed as of mid-2010. Cellulosic biofuels can be produced from almost any sort of biomass. As a result, a variety of biomass types that can be produced or collected under a range of geographic settings are potential feedstock sources. However, part of the mandate's challenge will be encouraging farmers to produce or collect non-traditional biomass materials that require multiple growing seasons to become established, and for which markets currently do not exist. Participation represents a substantial risk for producers, and even under the most optimistic conditions, U.S. agriculture will be challenged to produce the enormous volume of biomass needed to meet the biofuels mandate. Potential biomass feedstocks are numerous and widespread throughout the United States, and include woody biomass, perennial grasses, and agricultural and forest residues. Each type of biomass faces tradeoffs in terms of production, storage, and transportation. Dedicated energy and tree crops have large up-front establishment costs and will likely take several years to produce a commercial harvest, but can produce high yields with relatively low maintenance costs thereafter. Residues are nearly costless to produce, but confront difficult collection strategies and do not always produce uniform biomass for processing. Agricultural residues face complicated trade-offs between soil nutrient loss and biomass yield, as well as questions about the optimal timing strategy for harvesting the main crop and residue (either jointly or separately). Logging residues confront a tradeoff with energy production at the plant (via burning)."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-

2010-10-22
Cellulosic Biofuels: Analysis of Policy Issues for Congress [January 13, 2011]

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"Cellulosic biofuels are produced from cellulose (fibrous material) derived from renewable biomass. They are thought by many to hold the key to increased benefits from renewable biofuels because they are made from potentially low-cost, diverse, non-food feedstocks. Cellulosic biofuels could also potentially decrease the fossil energy required to produce ethanol, resulting in lower greenhouse gas emissions. Cellulosic biofuels are produced on a very small scale at this time--significant hurdles must be overcome before commercial-scale production can occur. The renewable fuels standard (RFS), a major federal incentive, mandates a dramatic increase in the use of renewable fuels in transportation, including the use of cellulosic biofuels--100 million and 250 million gallons per year (mgpy) for 2010 and 2011, respectively. After 2015, most of the increase in the RFS is intended to come from cellulosic biofuels, and by 2022, the mandate for cellulosic biofuels will be 16 billion gallons. Whether these targets can be met is uncertain. In March 2010, the Environmental Protection Agency issued a final rule that lowered the 2010 cellulosic biofuel mandate to 6.5 million gallons. In December 2010, EPA lowered the 2011 mandate to 6.6 million gallons. Research is ongoing, and the cellulosic biofuels industry may be on the verge of rapid expansion and technical breakthroughs. There are no large-scale commercial cellulosic biofuel plants in operation in the United States. A few small-scale plants came online in 2010. The federal government, recognizing the risk inherent in commercializing this new technology, has provided loan guarantees, grants, and tax credits in an effort to make the industry competitive by 2012. In particular, the Food, Conservation, and Energy Act of 2008 (the 2008 farm bill, P.L. 110-246) supports the nascent cellulosic industry through authorized research programs, grants, and loans exceeding $1 billion. The enacted farm bill also contains a production tax credit of up to $1.01 per gallon for fuels produced from cellulosic feedstocks. Private investment, in many cases by oil companies, also plays a major role in cellulosic biofuels research and development."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-; Bracmort, Kelsi; Stubbs, Megan

2011-01-13
Agriculture-Based Biofuels: Overview and Emerging Issues [October 14, 2010]

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"Since the late 1970s, U.S. policymakers at both the federal and state levels have enacted a variety of incentives, regulations, and programs to encourage the production and use of agriculture-based biofuels. Initially, federal biofuels policies were developed to help kick-start the biofuels industry during its early development, when neither production capacity nor a market for the finished product was widely available. Federal policy has played a key role in helping to close the price gap between biofuels and cheaper petroleum fuels. Now, as the industry has evolved, other policy goals (e.g., national energy security, climate change concerns, support for rural economies) are cited by proponents as justification for continuing policy support. The U.S. biofuels sector has responded to these government incentives by expanding output every year since 1996, with important implications for the domestic and international food and fuel sectors. The production of ethanol (the primary biofuel produced in the United States) has risen from about 175 million gallons in 1980 to 10.7 billion gallons per year in 2009. U.S. biodiesel production is much smaller than its ethanol counterpart, but has also shown strong growth, rising from 0.5 million gallons in 1999 to an estimated 776 million gallons in 2008 before being impeded by the nationwide financial crisis."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-

2010-10-14
Brazil's WTO Case against the U.S. Cotton Program [June 30, 2010]

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"U.S. and Brazilian trade negotiators reached agreement on June 17, 2010, on a 'Framework agreement' regarding a World Trade Organization (WTO) dispute settlement case over U.S. cotton subsidies and GSM-102 [Export Credit Guarantee Program] agricultural export credit guarantees. The Framework agreement--which lays out a number of 'steps and discussions'--represents a path forward toward the ultimate goal of reaching a negotiated solution to the dispute, while avoiding WTO-sanctioned trade retaliation by Brazil against U.S. goods and services. The Framework includes quarterly discussion on potential limits of trade-distorting U.S. cotton subsidies (recognizing that actual changes will not occur prior to the 2012 farm bill) and provides benchmarks for further changes to the GSM-102 program. The so-called Brazil cotton case is a long-running WTO dispute settlement case (DS267) initiated by Brazil--a major cotton export competitor--in 2002 against specific provisions of the U.S. cotton program. In September 2004, a WTO dispute settlement panel found that certain U.S. agricultural support payments and guarantees--including (1) payments to cotton producers under the marketing loan and counter-cyclical programs, and (2) export credit guarantees under the GSM-102 program--were inconsistent with WTO commitments. In 2005, the United States made several changes to both its cotton and GSM-102 programs in an attempt to bring them into compliance with WTO recommendations. However, Brazil argued that the U.S. response was inadequate. A WTO compliance panel ruled against the United States in December 2007, and the ruling was upheld on appeal in June 2008."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-

2010-06-30
Consumers and Food Price Inflation [November 4, 2009]

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"The heightened commodity price volatility of 2008 and the subsequent acceleration in U.S. food price inflation raised concerns and generated many questions about farm and food price movements by Members of Congress and their constituents. This report responds to those concerns by addressing the nature and measurement of retail food price inflation. For a discussion of the relationship between farm and retail prices, and the major factors influencing retail food prices, see CRS Report R40621, Farm-to-Food Price Dynamics."

Library of Congress. Congressional Research Service

Richardson, Joe; Schnepf, Randall Dean, 1954-

2009-11-04
Midwest Floods of 2008: Potential Impact on Agriculture [Updated August 18, 2008]

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This Congressional Research Service (CRS) report discusses the impact on agriculture brought about by the Midwest floods of 2008. "Unusually cool, wet spring weather followed by widespread June flooding across much of the Corn Belt cast considerable uncertainty over 2008 U.S. corn and soybean production prospects. As much as 5 million acres of crop production were initially thought to be either lost entirely or subject to significant yield reductions. Estimates of flood-related crop damage varied widely due, in part, to a lack of reliable information about the extent of plant recovery or replanting in the flooded areas. These circumstances generated considerable market angst and U.S. agricultural prices for corn and soybeans, as reported on the major commodity exchanges, hit record highs in late June and early July. Since then, most of the Corn Belt has experienced nearly ideal growing conditions suggesting the potential for substantial crop recovery, and market prices have weakened accordingly.[…] In light of current market uncertainties surrounding the 2008/09 supply and demand balance for corn and soybeans, and the outlook for extremely tight supplies by late summer, commodity market prices are likely to remain volatile through the remainder of the growing season. If crop production ultimately proves less than forecast (to be determined at harvest time), it will likely contribute to higher commodity prices, thereby adding to pressure on policymakers over concerns about consumer food price inflation, international food aid availability, and the soundness of policy that dedicates commercial agricultural crops to biofuels production, particularly corn used for ethanol."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-

2008-08-18
Iraq Agriculture and Food Supply: Background and Issues [Updated June 7, 2004]

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"This report is an extension of CRS Report RS21516, 'Iraq's Agriculture: Background and Status.' It provides a brief description of Iraq's agro-climatic setting and the history of agricultural policy, production, and trade leading up to the period just prior to the 2003 Gulf War; it reviews issues likely to affect the long-term outlook for Iraq's agricultural production and trade; and it provides several tables of historical data relevant to understanding the evolution of Iraq's agricultural production and trade. This report will be updated as events warrant. For detailed discussion on the status of humanitarian aid efforts, see CRS Report RL31833, 'Iraq: Recent Developments in Humanitarian and Reconstruction Assistance."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-

2004-06-07
European Union Biofuels Policy and Agriculture: An Overview [March 16, 2006]

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From the Document: "Several different economic and environmental forces have converged in recent years to generate growing interest in alternate sources of energy, including biofuels, within the European Union (EU). The European Commission (EC) is using both legislation and formal directives to promote biofuel production and use within the EU. However, EU biofuel production is impeded by its high production costs relative to fossil fuels. To date, the most important biofuel produced in the EU has been biodiesel with an 80% share of biofuel production in 2004. Bioethanol has accounted for the remainder. The major feedstock for EU biodiesel production is rapeseed oil, while bioethanol is generally produced using a combination of sugar beets and wheat. U.S. policymakers are closely watching EU biofuel developments, particularly for any successful policy choices that might work in the United States. In addition, both the production and use of biofuels have important long-run implications for EU agricultural production and trade. This report briefly introduces some of the more salient agricultural policies and issues related to EU biofuel production and use."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-

2006-03-16
Renewable Energy Programs and the Farm Bill: Status and Issues [November 22, 2011]

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"U.S. Department of Agriculture (USDA) renewable energy programs have been used to incentivize adoption of renewable energy projects including solar, wind, and anaerobic digesters. However, the primary focus of USDA renewable energy programs has been to promote U.S. biofuels production and use--including corn starch-based ethanol, cellulosic ethanol, and soybean-based biodiesel. The 2008 farm bill (Food, Conservation, and Energy Act of 2008, P.L. 110-246) built on the 2002 farm bill (Farm Security and Rural Investment Act of 2002, P.L. 107-171) as well as previous renewable energy legislation (especially the Energy Policy Act of 2005, P.L. 109-58; and the Energy Independence and Security Act of 2007, P.L. 110-140), but refocused biofuels policy initiatives in favor of non-corn feedstocks, especially cellulosic-based feedstocks, in response to growing concerns about the emerging spillover effects of increasing corn use for ethanol production. Like the 2002 farm bill, the 2008 farm bill contained a distinct energy title (Title IX) that significantly expanded the number and types of programs available to support renewable energy production and use. In addition, new renewable-energy provisions were included in the rural development (Title VI), research (Title VII), livestock (Title XI), and tax (Title XV) titles of the 2008 farm bill. […] Implementation of the farm bill's energy provisions is ongoing. President Obama, in May 2009, directed USDA and the Department of Energy (DOE) to accelerate implementation of renewable energy programs. Notices, proposed rules, and final rules have appeared in the 'Federal Register' soliciting applications for those programs with available funding. The primary energy-related issue for the next farm bill is the expiration at the end of FY2012 and lack of baseline funding going forward for all major energy-related provisions of Title IX. In addition, the appearance of substantial redundancy across renewable energy programs at USDA and DOE, the slow development of the U.S. cellulosic biofuels sector, and concerns about the emerging spillover effects of increasing corn use for ethanol production are issues that are likely to emerge during the next farm bill debate."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-

2011-11-22
Farm Safety Net Proposals for the 2012 Farm Bill [November 10, 2011]

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"Ongoing budget deliberations by the Joint Select Committee on Deficit Reduction have generated concerns that a farm bill to reauthorize farm programs expiring in 2012 may be written by budget negotiators rather than by the House and Senate Agriculture Committees. Various proposals have emerged that recommend lower federal spending, including cuts to agriculture programs ranging from $10 billion to more than $80 billion over 10 years. In response, Members of Congress, the Administration, and a number of farm groups have put forward proposals to reduce government expenditures on farm subsidies and revise farm programs. Many of these farm program proposals were unveiled in September 2011 as the Joint Select Committee on Deficit Reduction began its deliberations on government-wide budget cuts. Other ideas have also been proposed but are not discussed here because of duplication or insufficient information at time of publication. Many proposed cuts and policy changes have been directed at commodity programs and crop insurance because these programs account for the bulk of agricultural funding (excluding conservation and nutrition programs, which are also considered part of the agricultural budget). Commodity programs, crop insurance, and the recently expired farm disaster programs comprise the so-called 'farm safety net'--the federal government's suite of programs designed to support farm income and help farmers manage risks associated with variability in crop yields and prices. To generate budget savings and provide funding for proposed changes to the farm safety net, nearly all of the proposals either reduce or eliminate direct and counter-cyclical payments. Most proposals either leave the marketing loan program unchanged or retain it with modest modifications; however, it would be eliminated under two proposals."

Library of Congress. Congressional Research Service

Shields, Dennis A.; Schnepf, Randall Dean, 1954-

2011-11-10
High Agricultural Commodity Prices: What Are the Issues? [Updated May 29, 2008]

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This CRS "report examines the causes, consequences, and outlook for prices of the major U.S. program crops, and provides references for more detailed information...Prices for nearly all major U.S. agricultural program crops - corn, barley, sorghum, oats, wheat, rice, and soybeans - have exhibited extreme price volatility since mid-2007, while rising to record or near-record levels in early 2008. Several international organizations have announced that the sharply rising commodity prices are likely to have dire consequences for the world's vulnerable populations, particularly in import-dependent, less developed nations. In the United States, high commodity prices have pushed farm income to successive annual records and have sharply lowered government farm program costs, but they have also stoked the flames of food price inflation and have raised costs for livestock producers and food processors."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-

2008-05-29
Brazil's WTO Case Against the U.S. Cotton Program [June 21, 2011]

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"The so-called 'Brazil cotton case' is a long-running World Trade Organization (WTO) dispute settlement case (DS267) initiated by Brazil--a major cotton export competitor--in 2002 against specific provisions of the U.S. cotton program. In September 2004, a WTO dispute settlement panel found that certain U.S. agricultural support payments and guarantees--including (1) payments to cotton producers under the marketing loan and counter-cyclical programs, and (2) export credit guarantees under the GSM-102 program--were inconsistent with WTO commitments. In 2005, the United States made several changes to both its cotton and GSM-102 programs in an attempt to bring them into compliance with WTO recommendations. However, Brazil argued that the U.S. response was inadequate. A WTO compliance panel ruled in favor of Brazil's non-compliance charge against the United States in December 2007, and the ruling was upheld on appeal in June 2008. […] A further U.S. commitment, made under the April MOU, includes modification of the animal disease status of the Brazilian state of Santa Catarina to allow products such as pork and live swine exports into the United States. These U.S. commitments are intended to delay any trade retaliation until after the 2012 farm bill, when potential changes to U.S. domestic cotton subsidies will be evaluated."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-

2011-06-21
Farm Safety Net Proposals in the 112th Congress [April 18, 2012]

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"In advance of the expiration of the 2008 farm bill (P.L. 110-246), numerous proposals have been offered to revise the 'farm safety net' for producers of crops covered by farm commodity support programs. Farm safety net proposals by Members of Congress, the Administration, and a number of farm and interest groups surfaced mostly during fall 2011, when budget deliberations by the Joint Select Committee on Deficit Reduction generated concerns that a new farm bill might be 'written' or severely constrained from a budgetary perspective by budget negotiators, rather than by the House and Senate Agriculture Committees. Ultimately, the joint committee failed to reach a bipartisan consensus on deficit reduction. Nevertheless, the joint committee process generated substantial movement toward reshaping the policy framework underlying the farm safety net and other major farm bill issue areas, such as conservation and nutrition. In early 2012, legislation for the next farm bill appears to be following a more traditional process, starting with committee hearings prior to expiration of the 2008 farm bill (generally September 2012, but for commodity program crops, prior to the 2013 harvest). Many proposals with policy changes and proposed cuts have been directed at commodity programs and crop insurance, because these programs account for the bulk of agricultural funding (excluding conservation and nutrition programs, which are also considered part of the agricultural budget). Commodity programs, crop insurance, and the recently expired farm disaster programs comprise the so-called 'farm safety net'--the federal government's suite of programs designed to support farm income and help farmers manage risks associated with variability in crop yields and prices."

Library of Congress. Congressional Research Service

Shields, Dennis A.; Schnepf, Randall Dean, 1954-

2012-04-18
Brazil's WTO Case Against the U.S. Cotton Program [October 4, 2011]

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"The so-called 'Brazil cotton case' is a long-running World Trade Organization (WTO) dispute settlement case (DS267) initiated by Brazil--a major cotton export competitor--in 2002 against specific provisions of the U.S. cotton program. In September 2004, a WTO dispute settlement panel found that certain U.S. agricultural support payments and guarantees--including (1) payments to cotton producers under the marketing loan and counter-cyclical programs, and (2) export credit guarantees under the GSM-102 program--were inconsistent with WTO commitments. In 2005, the United States made several changes to both its cotton and GSM-102 programs in an attempt to bring them into compliance with WTO recommendations. […] As a result, Brazil has suspended trade retaliation pending U.S. compliance with the framework agreement measures. Key aspects of the framework agreement include (1) payment by the United States of a $147.3 million annual fund to a newly created 'Brazilian Cotton Institute' to provide technical assistance and capacitybuilding for Brazil's cotton sector, (2) quarterly discussions on potential limits of trade-distorting U.S. cotton subsidies (recognizing that actual changes will not occur prior to the 2012 farm bill), and (3) near-term modifications to the operation of the GSM-102 program coupled with a semiannual review of whether U.S. GSM-102 program implementation satisfies certain performance benchmarks. A further U.S. commitment, made under the April MOU [memorandum of understanding], includes modification of the animal disease status of the Brazilian state of Santa Catarina to allow products such as pork and live swine exports into the United States. These U.S. commitments are intended to delay any trade retaliation until after the 2012 farm bill, when potential changes to U.S. domestic cotton subsidies will be evaluated."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-

2011-10-04
Brazil's WTO Case Against the U.S. Cotton Program [November 22, 2011]

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"The so-called 'Brazil cotton case' is a long-running World Trade Organization (WTO) dispute settlement case (DS267) initiated by Brazil--a major cotton export competitor--in 2002 against specific provisions of the U.S. cotton program. In September 2004, a WTO dispute settlement panel found that certain U.S. agricultural support payments and guarantees--including (1) payments to cotton producers under the marketing loan and counter-cyclical programs, and (2) export credit guarantees under the GSM-102 program--were inconsistent with WTO commitments. In 2005, the United States made several changes to both its cotton and GSM-102 programs in an attempt to bring […] The framework agreement--which lays out a number of 'steps and discussions'--represents a path forward toward the ultimate goal of reaching a negotiated solution to the dispute, while avoiding WTO-sanctioned trade retaliation by Brazil against U.S. goods and services. As a result, Brazil has suspended trade retaliation pending U.S. compliance with the framework agreement measures. Key aspects of the framework agreement include (1) payment by the United States of a $147.3 million annual fund to a newly created 'Brazilian Cotton Institute' to provide technical assistance and capacity-building for Brazil's cotton sector, (2) quarterly discussions on potential limits of trade-distorting U.S. cotton subsidies (recognizing that actual changes will not occur prior to the 2012 farm bill), and (3) near-term modifications to the operation of the GSM-102 program coupled with a semi-annual review of whether U.S. GSM-102 program implementation satisfies certain performance benchmarks. These U.S. commitments are intended to delay any trade retaliation until after the 2012 farm bill, when potential changes to U.S. cotton programs will be evaluated. However, in the interim, several failed legislative attempts have been made to ban U.S. payments to the Brazil Cotton Institute."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-

2011-11-22
Background on the U.S.-Brazil WTO Cotton Subsidy Dispute [July 11, 2005]

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"In late 2002, Brazil initiated a World Trade Organization (WTO) dispute settlement case (DS267) against specific provisions of the U.S. cotton program. On September 8, 2004, a WTO dispute settlement (DS) panel ruled against the United States on several key issues in case DS267. On October 18, 2004, the United States appealed the case to the WTO's Appellate Body (AB) which, on March 3, 2005, confirmed the earlier DS panel findings against U.S. cotton programs. Key findings include the following: (1) U.S. domestic cotton subsidies have exceeded WTO commitments of the 1992 benchmark year, thereby losing the protection afforded by the 'Peace Clause,' which shielded them from substantive challenges; (2) the two major types of direct payments made under U.S. farm programs -- Production Flexibility Contract payments of the 1996 Farm Act and the Direct Payments of the 2002 Farm Act -- do not qualify for WTO exemptions from reduction commitments as fully decoupled income support and should therefore count against the 'Peace Clause' limits; (3) Step-2 program payments are prohibited subsidies; (4) U.S. export credit guarantees are effectively export subsidies, making them subject to previously notified export subsidy commitments; and (5) U.S. domestic support measures that are 'contingent on market prices' have resulted in excess cotton production and exports that, in turn, have caused low international prices and have resulted in 'serious prejudice' to Brazil."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-

2005-07-11
Dairy Policy Proposals in the 2012 Farm Bill [September 18, 2012]

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From the Introduction: "This report describes proposed changes to existing dairy programs and the new margin-based support and stabilization programs. The report first briefly describes existing U.S. dairy programs. Then it focuses on the dairy programs proposed under both the Senate-passed and House Agriculture Committee-reported farm bills. In addition to describing the major features of the proposed new programs, this report also covers differences between the two bills, as well as cost estimates of historical program outlays compared with recent Congressional Budget Office (CBO) projections of the proposed new dairy programs. In addition, several examples of how these proposed dairy programs might operate for an individual dairy operation are provided in the text."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-

2012-09-18
Farm Safety Net Provisions in a 2012 Farm Bill: S. 3240 and H.R. 6083 [September 28, 2012]

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"The farm commodity provisions of the Food, Conservation, and Energy Act of 2008 (P.L. 110- 246, the 2008 farm bill) expire with the 2012 crop year. Consequently, the 112th Congress has been considering an omnibus farm bill that would establish the direction of agricultural policy for the next five years. The Senate passed its version of the new farm bill (S. 3240) on June 21, 2012, by a vote of 64-35. The House Committee on Agriculture passed its version (H.R. 6083) on July 11, 2012, by a vote of 35-11. This report compares the so-called 'farm safety net' provisions in the two bills. The broader farming community uses the term farm safety net to refer to the combination of (1) farm commodity price and income support programs in the 2008 farm bill, (2) federal crop insurance (permanently authorized) under the Federal Crop Insurance Act of 1980, and (3) five disaster assistance programs in the 2008 farm bill, which expired on September 30, 2011. Title I of both versions of the farm bill contains commodity and disaster program provisions, and Title XI modifies the current crop insurance program. Both bills would reshape the structure of farm commodity support, reauthorize several disaster programs, and expand crop insurance coverage. Additional background on proposals and issues that shaped the two bills appears in CRS [Congressional Research Report] Report R42040, 'Farm Safety Net Proposals in the 112th Congress.' That report also describes current farm safety net programs authorized under the 2008 farm bill."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-; Shields, Dennis A.

2012-09-28
Renewable Fuel Standard (RFS): Overview and Issues [March 14, 2013]

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"Increasing dependence on foreign sources of crude oil, concerns over global climate change, and the desire to promote domestic rural economies have raised interest in renewable biofuels as an alternative to petroleum in the U.S. transportation sector. In response to this interest, U.S. policymakers have enacted an increasing variety of policies, at both the state and federal levels, to directly support U.S. biofuels production and use (although some of these policies have expired). Policy measures have included blending and production tax credits to lower the cost of biofuels to end users, an import tariff to protect domestic ethanol from cheaper foreign-produced ethanol, research grants to stimulate the development of new biofuels technologies, loans and loan guarantees to facilitate the development of biofuels production and distribution infrastructure, and, perhaps most important, minimum usage requirements to guarantee a market for biofuels irrespective of their cost. As a result of expanding policy support, biofuels (primarily corn-based ethanol and biodiesel) production has grown significantly (up over 600%) since the early 2000s. However, despite the rapid growth, U.S. biofuels consumption remains small as a component of U.S. motor fuels, comprising about 5.7% of total transportation fuel consumption (on a gasolineequivalent basis) in 2012. Initially, the most significant federal programs for supporting biofuels were tax credits for the production or blending of ethanol and biodiesel into the nation's fuel supply. However, under the Renewable Fuel Standard (RFS)--first established in 2005, then greatly expanded in 2007 (as described below)--Congress mandated biofuels use. In the long term, the expanded RFS usage mandate is likely to prove more significant than tax incentives in promoting the use of these fuels. This report focuses specifically on the RFS. It describes the general nature of the biofuels RFS and its implementation, and outlines some of the emerging issues related to the sustainability of the continued growth in U.S. biofuels production needed to fulfill the expanding RFS mandate, as well as the emergence of potential unintended consequences of this rapid expansion. This report does not address the broader public policy issue of how best to support U.S. energy policy."

Library of Congress. Congressional Research Service

Yacobucci, Brent D.; Schnepf, Randall Dean, 1954-

2013-03-14
Agriculture in the WTO: Member Spending on Domestic Support [Updated June 17, 2005]

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"Under the World Trade Organization's (WTO's) Agreement on Agriculture (AA), member countries agreed to general rules regarding disciplines on domestic subsidies (as well as on export subsidies and market access). The AA's goal was to provide a framework for the leading members of the WTO to make changes in their domestic farm policies to facilitate more open trade. Under the AA, domestic spending is disaggregated according to those outlays that have the greatest potential to distort agricultural markets (i.e., amber box) and therefore are subject to spending limits, and more benign outlays (i.e., which cause less market distortion) that are exempted from spending limits under green box, blue box, 'de minimis,' or special and differential treatment exemptions."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-

2005-06-17
Agriculture in the WTO: Limits on Domestic Support [January 27, 2014]

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"Omnibus U.S. farm legislation--referred to as the farm bill--is renewed about every five years. Farm income and commodity price support programs have been a part of U.S. farm bills since the 1930s. Each successive farm bill usually involves some modification or replacement of existing farm programs. A key question likely to be asked of every new farm proposal or program is how it will affect U.S. commitments under the World Trade Organization's (WTO's) Agreement on Agriculture (AoA) and its Agreement on Subsidies and Countervailing Measures (SCM). The United States currently is committed, under the AoA, to spend no more than $19.1 billion annually on those domestic farm support programs most likely to distort trade--referred to as amber box programs and measured by the aggregate measure of support (AMS). The AoA spells out the rules for countries to determine whether their policies--for any given year--are potentially trade-distorting, and how to calculate the costs."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-

2014-01-27
Biomass Crop Assistance Program (BCAP): Status and Issues [January 29, 2013]

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"The Biomass Crop Assistance Program (BCAP) is intended to assist with some of the feedstock supply challenges facing the cellulosic biofuels industry. One ongoing hurdle for cellulosic biofuels development and manufacturing is the need for a constant supply of available biomass. However, the cellulosic biofuels industry has struggled with the quintessential 'chicken and egg' problem--investors are reluctant to invest in processing plants based on an as-yet unproven technology (i.e., the conversion of cellulosic biomass to biofuels on a commercial scale), while producers are unwilling to devote land and resources to planting a dedicated biomass crop without nearby biofuels plants to buy it. In other words, the development of a cellulosic biofuels industry hinges simultaneously on the effective availability and use of new biomass feedstocks. This report provides a description of BCAP's main components--annual & establishment payments, matching payments, and project areas--as outlined in USDA's final rule, along with a discussion of program funding and implementation issues. In addition, a brief discussion of BCAP's potential future in the next farm bill is included at the end of the report."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-

2013-01-29
Farm Safety Net Proposals and the Joint Select Committee on Deficit Reduction [November 28, 2011]

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"Budget deliberations by the Joint Select Committee on Deficit Reduction in fall 2011 generated concerns that a farm bill to reauthorize farm programs expiring in 2012 might be written by budget negotiators rather than by the House and Senate Agriculture Committees. Various proposals emerged that recommend lower federal spending, including cuts to agriculture programs ranging from $10 billion to more than $80 billion over 10 years. [...] Many proposed cuts and policy changes have been directed at commodity programs and crop insurance because these programs account for the bulk of agricultural funding (excluding conservation and nutrition programs, which are also considered part of the agricultural budget). Commodity programs, crop insurance, and the recently expired farm disaster programs comprise the so-called 'farm safety net'--the federal government's suite of programs designed to support farm income and help farmers manage risks associated with variability in crop yields and prices. To generate budget savings and provide funding for proposed changes to the farm safety net, nearly all of the proposals either reduce or eliminate direct and counter-cyclical payments. Most proposals either leave the marketing loan program unchanged or retain it with modest modifications; however, it would be eliminated under two proposals. To facilitate comparisons, the various proposals are loosely grouped into five categories: (1) minor policy changes, (2) revised revenue programs, (3) enhanced crop insurance, (4) whole-farm insurance, and (5) other. The major policy features of each proposal are highlighted and briefly discussed. These proposals and the work of Congress related to the joint committee might serve as a starting point for the farm policy debate that is expected in 2012, prior to expiration of the 2008 farm bill."

Library of Congress. Congressional Research Service

Shields, Dennis A.; Schnepf, Randall Dean, 1954-

2011-11-28
Potential Challenges to U.S. Farm Subsidies in the WTO [Updated April 26, 2007]

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"Prior to its expiration on January 1, 2004, the World Trade Organization's (WTO's) Peace Clause provided protection from trade remedy consideration and WTO dispute settlement for domestic farm subsidies provided they met certain compliance conditions. Absent the Peace Clause, challenges to U.S. farm subsidies now appear to confront a lower threshold for success, that of establishing 'serious prejudice' under Articles 5(c) and 6.3 of the Agreement on Subsidies and Countervailing Measures (SCM). In particular, the criteria for establishing serious prejudice claims include demonstrating the magnitude of a commodity's subsidies either as a share of returns or as an important determinant in covering production costs, the relevance of the subsidized commodity to world markets as a share of either world production or world trade, and a causal relationship between the subsidy and the adverse effect in the relevant market. Evidence of these criteria favors a successful challenge ruling by a WTO panel, as demonstrated by Brazil's successful WTO challenge of the U.S. cotton program. A review of current U.S. farm programs measured against these criteria suggests that all major U.S. program crops are potentially vulnerable to WTO challenges. […] This report provides background regarding the vulnerability of U.S. agricultural support programs to potential WTO dispute settlement challenges. It does not predict which WTO members might challenge U.S. commodity subsidies, nor the likelihood that such challenges will be brought. Instead, this report reviews the general criteria for successfully challenging a farm subsidy program, and then uses available data and published economic analyses to weigh U.S. farm programs against these criteria."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-; Womach, Jasper

2007-04-26
High Agricultural Commodity Prices: What Are the Issues? [May 6, 2008]

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"Prices for nearly all major U.S. agricultural program crops--corn, barley, sorghum, oats, wheat, rice, and soybeans--have exhibited extreme price volatility since mid-2007, while rising to record or near-record levels in early 2008. Several international organizations have announced that the sharply rising commodity prices are likely to have dire consequences for the world's vulnerable populations, particularly in import-dependent, less developed nations. In the United States, high commodity prices have pushed farm income to successive annual records and have sharply lowered government farm program costs, but they have also stoked the flames of food price inflation and have raised costs for livestock producers and food processors. In addition, high, unexpectedly volatile prices have increased the risk and costs associated with grain merchandising. In particular, they have dramatically increased the cost of routine hedging activities (i.e., pricing commodities for purchase, delivery, or use at some future date) at commodity futures exchanges and, as a result, have diminished 'forward contracting' opportunities for grain and oilseed producers who are eager to take advantage of record high market prices. […].This report examines the causes, consequences, and outlook for prices of the major U.S. program crops, and provides references for more detailed information."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-

2008-05-06
Midwest Floods of 2008: Potential Impact on Agriculture [July 16, 2008]

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This Congressional Research Service (CRS) report discusses the impact on agriculture brought about by the Midwest floods of 2008. "Unusually cool, wet spring weather followed by widespread June flooding across much of the Corn Belt has cast considerable uncertainty over 2008 U.S. corn and soybean production prospects. As much as 5 million acres of crop production may be either lost entirely or subject to significant yield reductions. Estimates of crop damage vary widely, and could change based on the extent of plant recovery or replanting. The likely impacts, however, cannot be estimated until August 12, when USDA survey data becomes available. Significant damage also was incurred by agricultural processing facilities, livestock operations, grain elevators and storage facilities, and transportation infrastructure. [...] Congress has appropriated nearly $480 million in emergency funding, primarily for conservation activities in flood-affected regions, as part of the FY2008 Supplemental Appropriations Act (P.L. 110-252). USDA is also committing resources to the flood-affected areas including rescue and clean up, food assistance, housing, community assistance, business assistance, and farmer and rancher assistance. In addition, USDA announced permission, on July 7, 2008, to use CRP land for grazing only in disaster and contiguous counties. In light of recent record high market prices for corn and soybeans, and the outlook for extremely tight supplies by late summer, commodity market prices are likely to remain volatile through the remainder of the growing season. If flood-related crop losses ultimately prove sufficiently large (to be determined at harvest time), they will likely contribute to higher commodity prices, thereby adding to pressure on policymakers over concerns about consumer food price inflation, international food aid availability, and the soundness of policy that dedicates commercial agricultural crops to biofuels production, particularly corn used for ethanol."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-

2008-07-16
U.S. Agriculture after Hurricanes Katrina and Rita: Status and Issues [Updated October 5, 2005]

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"On August 29, 2005, Hurricane Katrina struck the Gulf Coast region coming ashore just east of New Orleans. On September 24, 2005, Hurricane Rita hit the Gulf Coast region making land fall near the border of Texas and Louisiana. Both hurricanes left behind widespread devastation. Rita appears to have done most of its damage to energy infrastructure off-shore in contrast to Katrina which devastated large swaths of Louisiana, Mississippi, and Alabama. This report examines the impact of these hurricanes on three important factors affecting the U.S. agricultural sector: marketing infrastructure based on the Mississippi River waterway and Gulf ports; production losses for major crop and livestock producers in the affected region; and potential consequences for agricultural production as a result of high energy costs. It also discusses the federal government response to agricultural concerns. Agricultural producers from the states directly impacted by Katrina have suffered economic losses, although this varies greatly by crop and locality. Preliminary estimate by USDA is that Hurricane Katrina contributed to $882 million in total crop, livestock, and aquaculture losses. Those activities most affected were aquaculture ($151 million), sugar cane ($50 million), and cotton ($40 million). The damage estimate does not include losses in timber and nursery and greenhouse products. No preliminary estimate has been released by USDA concerning agricultural damage from Hurricane Rita."

Library of Congress. Congressional Research Service

Chite, Ralph M.; Schnepf, Randall Dean, 1954-

2005-10-05
Agriculture-Based Renewable Energy Production [Updated March 7, 2007]

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"Since the late 1970s, U.S. policy makers at both the federal and state levels have enacted a variety of incentives, regulations, and programs to encourage the production and use of agriculture-based renewable energy. Motivations cited for these legislative initiatives include energy security concerns, reduction in greenhouse gas emissions, and raising domestic demand for U.S.-produced farm products. Agricultural households and rural communities have responded to these government incentives and have expanded their production of renewable energy, primarily in the form of biofuels and wind power, every year since 1996. The production of ethanol (the primary biofuel produced by the agricultural sector) has risen from about 175 million gallons in 1980 to nearly 4.9 billion gallons per year in 2006. The U.S. ethanol production capacity has also been expanding rapidly, particularly since mid-2006, with important implications for the food and fuel sectors. Current ethanol production capacity is 5.6 billion gallons per year (February 28, 2007), with another 6.2 billion gallons of capacity under construction and potentially online by late 2008. Biodiesel production is at a much smaller level, but has also shown growth rising from 0.5 million gallons in 1999 to an estimated 200 million gallons in 2006. Wind energy systems production capacity has also grown rapidly, rising from 1,706 megawatts in 1997 to an estimated 11,603 megawatts by December 31, 2006. Despite this rapid growth, agriculture- and rural-based energy production accounted for only about 0.7% of total U.S. energy consumption in 2006."

Library of Congress. Congressional Research Service

Schnepf, Randall Dean, 1954-

2007-03-07

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