Farm Bill Resources
Errata: On February 13, 2014, the following (italicized) corrections were made to this page:
- Under Commodities (Title I), first paragraph: The second sentence was revised to read “The legislation also reauthorizes Supplemental Disaster Assistance programs for livestock and orchard and nursery crops.
- Under Commodities (Title I): The second bullet was revised to read: “…replaced by the Dairy Margin Protection Program (DMPP) and the Dairy Product Donation Program (DPDP). DMPP makes payments when the difference between milk prices and feed costs falls below a minimum level. Under the DPDP…”
- Under Crop Insurance (Titles XI and XII): The last sentence of the second bullet was revised to read: "Producers who elect to participate in either the Agricultural Risk Coverage program or the STAX program are not eligible to purchase SCO coverage."
The 2014 Farm Act was signed into law on February 7. ERS will publish highlights and some implications of the new programs and provisions soon. Sign up for the ERS Farm Bill e-newsletter to receive an email when this page is updated.
The United States addresses agricultural and food policy through a variety of programs, including commodity support, nutrition assistance, and conservation. The primary legal framework for agricultural policy is set through a legislative process that occurs approximately every 5 years.
A new farm law, the Agricultural Act of 2014 (2014 Farm Act), was signed on February 7, 2014, and will remain in force through 2018. The 2014 Farm Act makes major changes in commodity programs, adds new crop insurance options, streamlines conservation programs, modifies key provisions of the Supplemental Nutrition Assistance Program (SNAP), and expands programs for specialty crops, organic farmers, bioenergy, rural development, and beginning farmers and ranchers.
The Congressional Budget Office (CBO) projects that 80 percent of outlays under the 2014 Farm Act will fund nutrition programs, 8 percent will fund crop insurance programs, 6 percent will fund conservation programs, 5 percent will fund commodity programs, and the remaining 1 percent will fund all other programs, including trade, credit, rural development, research and extension, forestry, energy, horticulture, and miscellaneous programs.
Key Changes to Farm Payments under the 2014 Farm Act
Commodities (Title I)
The 2014 Farm Act makes major changes in commodity programs, ending more than 15 years of crop programs that made payments to producers based on historical production, removing upland cotton from coverage under Title I programs, and introducing a new dairy margin insurance program. The legislation also reauthorizes Supplemental Disaster Assistance programs for livestock and orchard and nursery crops. The Congressional Budget Office projects these changes will reduce outlays by $6 billion (nominal $), or 25 percent, over the projected costs of continuing current programs.
- The Direct Payments, Countercyclical Payments, and Average Crop Revenue Election (ACRE) programs are repealed, replaced by the Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC) programs. Producers of covered commodities (wheat, feed grains, rice, oilseeds, peanuts, and pulses) may choose to participate in either, but not both programs, for the life of the 2014 Farm Act.
- The Dairy Product Price Support Program and Milk Income Loss Contract Program are repealed, replaced by the Dairy Margin Protection Program (DMPP) and the Dairy Product Donation Program (DPDP). DMPP makes payments when the difference between milk prices and feed costs falls below a minimum level. Under the DPDP, the U.S. Department of Agriculture will purchase dairy products for distribution to low-income Americans when milk margins fall below legislated triggers.
- The Livestock Indemnity Program, Livestock Forage Program, Emergency Livestock Assistance Program, and Tree Assistance Program are reauthorized with mandatory funding and made permanent and retroactive to cover losses in fiscal years 2012 and 2013, when many producers were impacted by severe weather.
- The marketing assistance loan program, except for an adjustment in the loan rate for upland cotton, continues unchanged, as does the sugar price support program.
Conservation (Title II)
The 2014 Farm Act maintains strong overall funding for USDA conservation programs. The Congressional Budget Office estimates that between 2014 and 2018, mandatory spending on USDA conservation programs will decline by $200 million-- less than 1 percent of the $28 billion (nominal $) that would have been spent if the 2008 Farm Act had continued through 2018. All major conservation programs, with the exception of Conservation Technical Assistance, have mandatory funding. Among the major changes:
- The Conservation Reserve Program (CRP) acreage cap is reduced to 24 million by 2017. Current enrollment has fallen to 25.6 million acres. Up to 2 million acres of grassland can be enrolled.
- Funding for the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) is increased. The Wildlife Habitat Incentives Program is repealed, although 5 percent of EQIP funds will be set aside for habitat-related practices.
- The new Agricultural Conservation Easement Program (ACEP) consolidates the Wetland Reserve Program, Grassland Reserve Program, and the Farmland Protection Program. Funding is just over half of what was provided for these three programs in the 2008 Farm Act.
- The new Regional Conservation Partnership Program (RCPP) is designed to coordinate conservation effort across states and programs to solve problems that must be addressed on a broader scale. RCPP consolidates functions of the Agricultural Water Enhancement Program, Chesapeake Bay Watershed Program, Cooperative Conservation Partnership Initiative, and the Great Lakes Basin Program.
Crop Insurance (Title XI and XII)
The 2014 Farm Act adds new programs to Federal Crop Insurance and expands programs to better address the needs of underserved commodities, organic producers, and beginning farmers and ranchers. The Congressional Budget Office estimates new programs and adjustments to existing programs will add just under $2 billion (nominal $), or 5 percent, to 2014-2018 outlays for Federal Crop Insurance and related programs over projected costs of current programs.
- The Stacked Income Protection Plan (STAX) provides premium subsidies to upland cotton producers to purchase policies that cover “shallow” revenue losses--those below the level generally covered by standard crop insurance policies. The program is in lieu of coverage for cotton under the new commodity programs, seeking to address the WTO ruling that found U.S. upland cotton subsidies distorted trade.
- The Supplemental Coverage Option (SCO) offers producers of commodities covered by Title I commodity programs the alternative to purchase subsidized revenue insurance coverage for shallow losses—those below the level generally covered by standard crop insurance policies. Producers who elect to participate in either the Agriculture Risk Coverage program or the STAX program are not eligible to purchase SCO coverage.
- A peanut revenue insurance product will be offered by crop year 2015, and at least two new pilot programs are authorized for commodities not well served by existing products. Research and development activities are also authorized to study new insurance products for bioenergy crops, catfish, alfalfa, livestock diseases and business interruptions, whole-farm diversified operations, and food safety for specialty crops.
- The Noninsured Crop Assistance Program (NAP), which provides weather-related loss coverage for commodities that lack available crop insurance, is expanded to allow for coverage above previously allowed catastrophic loss levels.
ERS Policy-Related Research
The core research and data program of the Economic Research Service covers the breadth of USDA programs touched by farm legislation: farming, nutrition, conservation, rural development, research, and energy.
See recent research focusing on these issues.
2008 Farm Bill: Side-by-Side Comparison with Previous Law
2008 Farm Bill: Background Publications
The 2002 Farm Bill: Provisions and Economic Implications
1996 Farm Bill Side by Side
For more information, see these policy-related topics:
ERS will publish highlights and some implications of the new programs and provisions soon.