Farm Commodity Programs and the 2007 Farm Bill

The farm commodity programs are the most visible part of the farm bill.Five crops (corn, wheat, cotton, rice, and soybeans) account for over 90% of government commodity payments to farmers.A new farm bill is necessary because the 2002 farm bill expires with the 2007 crop year and, without an update, an undesirable reversion to permanent laws would occur.The debate is whether to continue with the current system, or reduce subsidies in response to equity considerations, legal challenges from international trade agreements, federal spending constraints, and economic conditions.The Senate passed its version of the farm bill on December 14, 2007 (Senate amendment to H.R. 2419); the House passed its version, H.R. 2419, on July 27, 2007.Both bills generally continue the current commodity support framework, add an optional revenue counter-cyclical payment (the Senate revenue option goes a step further to supplant direct payments and marketing loans under that option), tighten the AGI limit, eliminate payment limits on marketing loans, and modify some target prices and loan rates.Two amendments to tighten payment limits failed on the Senate floor.