Overview
The 2002
Farm Act (1.13 MB) builds on previous policy and institutionalizes
an improved income stabilization policies for farmers
through a new countercyclical income stabilization program. Government payments provide
an important source of income to the farm sector, but
U.S. farm policy has undergone significant changes over
the last 15 to 20 years. Beginning with the 1985 Farm
Act and continuing with farm legislation in 1990 and 1996,
a series of fundamental changes in commodity and other
agricultural policies moved the sector toward market-oriented
decisions. Against a background of low commodity prices
that spurred enactment of five supplemental emergency
assistance packages, the new farm bill adds income stabilization
provisions, among other new programs, to already existing
policies.
ERS analysts evaluate the economic effects on producers,
consumers, taxpayers, and rural communities of current
farm legislation and alternative policy instruments and
programs. This briefing room provides a background on
farm policy and an explanation of the various programs.
Also included is access to ERS analyses of the impacts
of farm policy, commodity-specific farm programs, and
commodity trade policy, highlighting the impacts of the
2002 farm act.
Features
The Effects of Failure to Enact a New Farm Bill: Permanent Law Support For Commodities and Lapse of Other USDA Programs (March 2008) describes what would happen to commodity programs authorized by the Farm Security and Rural Investment Act of 2002 if new farm legislation bill is not enacted before the 2002 Act expires, a so called reversion to "permanent law."
Effects of Reducing the Income Cap on Eligibility for Farm Program Payments (September 2007) evaluates the effects of changing the current $2.5-million income cap on eligibility for farm program payments to $200,000. This change would increase the number of farm households subject to the cap, but the share of recipients affected would still be small. Based on IRS tax data for 2004, about 1.2 percent of all farm sole proprietors and about 2 percent of crop share landlords would potentially be subject to the proposed lower cap.
Recommended Readings
Relaxing
Fruit and Vegetable Planting Restrictions (May 2007)
finds that market effects would likely be limited and
confined to specific regions and commodities. Eliminating
these planting restrictions for commodity program participants
might enable some producers to switch from program crops
to fruit and vegetables in such areas as California, the
upper Midwest and the coastal plain in the Southeastern
States. For the full report, see Eliminating
Fruit and Vegetable Planting Restrictions: How Would Markets
be Affected? (November 2006).
The 2002 Farm Act: Provisions
and Implications for Commodity Markets (November 2002)
provides an initial assessment of the legislation's effects
on agricultural production, commodity markets, and net
farm income over the next 10 years. Results indicate that
commodity market impacts are fairly small. Net farm income
is projected higher than under a continuation of the 1996
Farm Act, largely reflecting an increase in government
payments.
 The 2002 Farm
Bill: Provisions and Economic Implications (May 2002)
presents an overview of the Act and a side-by-side comparison
of 1996-2001 farm legislation and the 2002 Act. For selected
programs, links are provided to additional analyses of
key changes, program overview, and economic implications.
See all recommended readings...
Recommended Data Products
Farm Program Acres allows
downloading and mapping of county-level farm program and
planted acreage data for nine major program crops (corn,
grain sorghum, barley, oats, wheat, rice, cotton, peanuts,
and oilseeds).
Farm Programs, Price Supports,
Participation, and Payment Rates contains program
parameters for individual commodities.
CCC
Net Outlays by Commodity and Function provides total
Commodity Credit Corporation expenditures by commodity.
U.S. and State farm income data includes calendar-year
data on direct government payments.
Price
Support Loan and LDP Activity Reports includes data
on year-to-date and the previous 4 years of marketing
loan and loan deficiency payment expenditures.
National
and County Commodity Loan Rates provides county and
national marketing loan rates.
Season-Average Price Forecasts
provides three Excel spreadsheet models that use futures
prices to forecast the U.S. season-average price and counter-cyclical
payment rate for corn, soybeans, and wheat. Users can
view the model forecasts or create their own forecast
by inserting different values for futures prices, basis
values, or marketing weights.
WTO Agricultural Trade Policy Commitments
Database is a queriable database on implementation
of World Trade Organization (WTO) commitments organized
for comparison across countries.
U.S. WTO Domestic Support Reduction Commitments and Notifications
summarizes U.S. domestic support notifications to
the WTO.
Recent Research Developments
ERS is evaluating the impacts of farm commodity programs
on farm income and production decisions. The research
focuses on incentives created by counter-cyclical revenue
payments and the interactions of these payments with
other elements
of agricultural programs, such as direct payments, marketing
loan benefits, and crop insurance. This project extends
research on assessment of the Farm Act and on decoupled
payments. Contact: Edwin
Young.
Glossary
Agricultural
policy terms and definitions...
Questions and Answers
Frequent questions
and answers about current and future programs...
Related Links
U.S. House of
Representatives Committee on Agriculture. Farm legislation
and legislative proposals.
U.S. Senate
Committee on Agriculture, Nutrition, and Forestry.
Farm legislation and legislative proposals.
University of Arkansas, National Agricultural Law Center. The Center's Farm Bills page provides full text and resources for all U.S. farm bills from 1933 to the present.
Maps and Images
Geographical Distribution of Farm
Program Characteristics provides county-level maps
on the distribution of base acres, Conservation Reserve
Program acres, and commodity program payments.
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