THE 2002 FARM BILL: A STEP FORWARD OR A STEP BACKWARD?

The 1996 Fair Act authorized two types of income support payments for the major commodities, fixed decoupled payments, and marketing assistance loans. These provided a lower safety net for commodity programs than was political acceptable, and Congress passed emergency legislation providing supplemental market loss assistance annually beginning in 1998. By 2001, many in Congress and members of farm commodity groups argued new legislation was needed that provides a higher safety net for farm income. The outcome of this discussion was passage of the 2002 Farm Act, which provides three types of payments. They are fixed payments (extended to include oilseeds), a marketing assistance loan program, and a new counter-cyclical payments program to replace the emergency market loss assistance. The estimated payments under the 2002 Act exceed the level of expenditures authorized by the FAIR Act, but they do not exceed the combined expenditures of the FAIR Act and the supplemental programs the U.S. funded in recent years. However, the authorization of the new counter-cyclical payments as a substitute for the supplemental market loss assistance payments may create problems for U.S. ability to meet its WTO obligations. The conservation and rural development titles received a great deal of discussion during the debate on the legislation in the Senate, but the authorization, while increased significantly for the conservation title, is disappointing for both titles. The additional concern is that the 2002 Farm Act is just the authorizing legislation. The amounts appropriated for titles II and III may be less than the authorization.