WASHINGTON, May 10, 2013 - The House Agriculture Committee released a new farm bill draft today, with a preliminary score of $39.7 billion in savings over ten years. The language in the Federal Agriculture Reform and Risk Management Act (FARRM) is largely similar to the bill passed through committee last year, with larger cuts in the nutrition title and minor changes in farm safety net programs.
In 2012, the House Agriculture Committee passed a farm bill with $35 billion in savings, which the Congressional Budget Office later scored about $10 billion lower. The areas of most significant savings in the draft bill released today include $20.5 billion from the Nutrition Title, $6.9 billion from the Conservation Title and $13.8 billion from the Commodity Title and Crop Insurance Title combined.
The Commodity Title retains the same optional coverage plan, with a choice for producers between Price Loss Coverage (PLC) to address deep losses and Revenue Loss Coverage (RLC) based on county-wide losses. Both PLC and RLC apply to planted acres up to total base acres on a farm.
The House Agriculture Committee draft also adjusts the group-risk crop insurance policy for cotton, known as STAX, by removing reference prices to appease the World Trade Organization (WTO) ruling in the Brazilian cotton case. STAX will now become the only federal safety net available to cotton producers, in addition to crop insurance. Spending on STAX is estimated at $3.8 billion.
Cotton producers are ineligible for PLC or RLC, but may purchase coverage under STAX, which requires a county-wide 10 percent loss trigger.
Additionally, the House legislation implements a two-year transitional payment for cotton growers in 2014 and 2015 to allow the Risk Management Agency to gather data on county level yield information required to operate STAX. The transitional payments are also meant to allow cotton producers to adjust to a new program and will equal 70 percent of the direct payment for cotton in 2014 and 60 percent of the payment in 2015. The current payment factor of direct payments is 85 percent.
Under the Conservation Title, the cap to the Conservation Reserve Program (CRP) is lowered one million acres from 25 to 24 million acres, while the Conservation Stewardship Program (CSP) acreage is also capped at a slightly lower level of 8.695 million acres per year.
The Nutrition Title saves $20 billion, compared to $16.5 billion in last year’s bill. These savings are mostly accomplished through Low Income Home Energy Assistance Program (LIHEAP) loophole elimination and the elimination of categorical eligibility.
To avoid LIHEAP scams, states must send a check of at least $20 LIHEAP payments in order to trigger Supplemental Nutrition Assistance Program (SNAP) benefits. The requirement is increased from a requirement of $10 in last year’s committee bill.
Adjustments made to the Crop Insurance Title are similar to the Senate’s changes for the Supplemental Coverage Option (SCO), where the premium subsidy for SCO coverage will be reduced to 65 percent from 70 percent.
The Actual Production History (APH) yield plug is increased by 10 percent, moving from the current 60 percent level to 70 percent.
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