USDA 2007 Farm Bill Proposals - US Department of Agriculture

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of the expected market value of their crop or lose farm program benefits. Producers now canvoluntarily buy CAT coverage for an administrative fee, with the FCIC paying a 100-percentsubsidy on the CAT premium. CAT covers 50 percent of yield and 55 percent of the marketprice, which is equivalent to 27.5 percent of the producer’s expected value of production. Underthis proposal, a producer would have to purchase at least 50 percent coverage on yield and 100percent coverage on market price, which would be equivalent to covering 50 percent of theexpected market value of the crop. Requiring participation at additional levels of coverage, incombination with the Supplemental Deductible Coverage option also being proposed on page 6-7under this title, would greatly mitigate any need for ad hoc disaster assistance.Premium subsidies currently vary from 67 percent at lower levels of coverage to 38 percent athigher levels. Reducing the subsidy level by 5 percentage points on lower coverage levels and 2percentage points on higher coverage levels, as proposed, would still leave government subsidylevels quite high. In addition, a producer choosing to reduce coverage levels could still achieveprotection from the higher deductible by purchasing the new Supplemental Deductive Coverageoption.Program costs under CAT coverage have been low, so reducing the imputed premium wouldbring the premium in line with actual losses. Charging 25 percent of the imputed premium forCAT coverage would only affect nonprogram crop producers who choose CAT coverage, sinceprogram crop producers would be required to buy higher levels of coverage. Since some verylarge producers have been purchasing CAT at the current low-level fee of $100 per crop percounty, charging a premium-based fee reflects a more appropriate sharing of risk between theproducer and the government.Reducing the administrative and operating expense reimbursement to the companies and raisingthe net book quota share would reduce the expected gains received by reinsured companies,which have been substantial in recent years. The current reimbursement rate is 7 percent ofpremiums for CAT policies, 24.5 percent for higher levels of coverage, and 20.8 percent forrevenue policies with coverage levels of 75 percent or less. Each of these levels, except for CATpolicies, would be reduced by 2 percentage points. Expense reimbursement would also bereduced 2 percentage points for revenue policies with coverage above 75 percent and for grouprisk and other policies as well. The increase in net book quota share effectively means reinsuredcompanies would have to reinsure 22 percent of their retained premium with FCIC rather thanwith private companies. This would enable FCIC to attain any underwriting gains or losses onthis business that otherwise would have accrued to the companies. In return, FCIC would pay thecompanies a commission, similar to what companies receive when they reinsure their risk inprivate reinsurance markets.USDA 2007 Farm Bill Proposals Page 164 of 183
ENSURING FAIRNESS OF DAIRY RESEARCH ANDPROMOTION ASSESSMENTSRecommendation In BriefEnable the collection of research and promotion assessments on imported dairy products, ascalled for in the 2002 farm bill, by requiring these assessments on a consistent basisdomestically.ProblemThe 2002 farm bill amends the National Dairy Promotion and Research Program to collectassessments on all imported dairy products similar to the current assessments levied on domesticdairy products. This provision also requires USDA to consult with the United States TradeRepresentative (USTR) to ensure that this requirement is consistent with the international tradeobligations of the Federal government.During this consultation, an issue was identified that requires statutory changes to address.Current law allows domestic dairy assessments to be levied only in the 48 contiguous states,exempting Alaska and Hawaii, as well as Puerto Rico. U.S. trading partners have claimed thislimitation treats domestic industries more favorably than importers, thereby violating U.S. tradeobligations. This unanticipated issue has prevented the implementation of dairy importassessments, as suggested in the 2002 farm bill.As Larry at the Virginia Farm Bill Forum contended, policy-makers “should implement thecollection of Dairy Promotion and Research check-off dollars on imported dairy products. Theproduction of Alaska and Hawaii make up 0.00014 of the total U.S. production.” Greg fromUtah called for, “…the total enforcement of the dairy check-off dollars for imported dairyproducts…Right now we've got an uneven playing field in that area.”Recommended SolutionThe Administration proposes amending Subtitles B and C of the Dairy Production StabilizationAct of 1983 to ensure that dairy promotion and research assessments apply to Puerto Rico,Hawaii, and Alaska. This proposal would change the definition of United States in this Act to beconsistent with the definition used by USTR and our trading partners, which includes all 50States, the District of Columbia, and Puerto Rico. This policy change will allow dairy researchand promotion assessments on imports, as envisioned in the 2002 farm bill, without concern ofpotential World Trade Organization disputes.BackgroundSection 1505 of the Farm Security and Rural Investment Act of 2002 amends the National DairyPromotion and Research Program, authorized by the Dairy Production Stabilization Act of 1983,to provide for an assessment to be collected on all imported dairy products to fund research andgeneric advertising and promotion activities. The level of assessment would be equivalent to 15cents per 100 pounds of farm milk, the rate currently paid by dairy farmers located in the 48contiguous states. Section 1505 also requires the consultation with USTR.USDA 2007 Farm Bill Proposals Page 165 of 183
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United States Department of Agricul
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Title IV - Nutrition Programs Tab 4
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TITLE ICOMMODITYPROGRAMSUSDA 2007 F
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prices…Let free market principles
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REVISE MARKETING ASSISTANCE LOANSRe
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panel has been established to rule
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BackgroundProducers may receive a n
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Additionally, to avoid jeopardizing
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BackgroundThe Direct Payment Progra
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If a payment is triggered, the nati
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STRENGTHEN PAYMENT AND ELIGIBILITY
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BackgroundA limitation on the total
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Recommended SolutionTo help rectify
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MILC payments would be based on 85
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program. On January 1, 2008, full i
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Europe (USNE). The decision concern
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market signals and what was in thei
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yield. Therefore, the amount of dir
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continue to receive the direct paym
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2. Successor Agreements. -- For pur
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SUMMARY OF CONSERVATION TITLE REFOR
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ENVIRONMENTAL QUALITY INCENTIVESPRO
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development of innovative practices
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existing resource concerns to the s
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PRIVATE LANDS PROTECTION PROGRAMRec
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CONSERVATION RESERVE PROGRAMRecomme
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WETLANDS RESERVE PROGRAMRecommendat
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IMPLEMENT “SOD SAVER” TO DISCOU
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CONSERVATION ACCESS FOR BEGINNING A
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MARKET-BASED APPROACH TO CONSERVATI
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MERIT-BASED FUNDING ALLOCATIONRecom
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farmland, which may include debris
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SUMMARY OF TRADE TITLE REFORMRecomm
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EXPAND TECHNICAL ASSISTANCE FOR SPE
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ENHANCE THE MARKET ACCESS PROGRAMRe
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GRANT PROGRAM TO ADDRESS SANITARY A
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TECHNICAL ASSISTANCE TO RESOLVE TRA
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TRADE CAPACITY BUILDING AND AGRICUL
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ecent years, and repeal of the spec
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REPEAL THE EXPORT ENHANCEMENT PROGR
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PROVIDE CASH AUTHORITY FOR PORTION
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TITLE IVNUTRITIONUSDA 2007 Farm Bil
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accountable for these errors. (For
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FOOD STAMP PROGRAM:Working Poor and
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a statistically valid sample of Sta
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have driven implementation of syste
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problem, and there are few opportun
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FOOD STAMP PROGRAM:IMPROVING HEALTH
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THE EMERGENCY FOOD ASSISTANCE PROGR
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FOOD DISTRIBUTION PROGRAM ON INDIAN
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SENIOR FARMERS’ MARKET NUTRITION
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PROMOTING HEALTHFUL DIETS IN SCHOOL
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TITLE VCREDITUSDA 2007 Farm Bill Pr
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Eliminate the $250,000 cap on the v
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3. Unmet SDA or beginning farmer ne
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downpayment loan amount of $200,000
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Page 115 and 116: SUMMARY OF RURAL DEVELOPMENT TITLER
Page 117 and 118: ADDRESS BACKLOG OF RURAL CRITICAL A
Page 119 and 120: ENHANCING RURAL INFRASTRUCTURERecom
Page 121 and 122: USDA’s community facilities progr
Page 123 and 124: program; and consolidate the Sectio
Page 125 and 126: SUMMARY OF RESEARCH TITLE REFORMRec
Page 127 and 128: RESEARCH, EDUCATION AND ECONOMICS (
Page 129 and 130: AGRICULTURAL BIOENERGY AND BIOBASED
Page 131 and 132: SPECIALTY CROP RESEARCH INITIATIVER
Page 133 and 134: FOREIGN ANIMAL DISEASE RESEARCHReco
Page 135 and 136: SUMMARY OF FORESTRY TITLE REFORMRec
Page 137 and 138: COMPREHENSIVE STATEWIDE FOREST PLAN
Page 139 and 140: FOREST WOOD TO ENERGYRecommendation
Page 141 and 142: COMMUNITY FORESTS WORKING LANDSPROG
Page 143 and 144: SUMMARY OF SUPPORT OF RENEWABLEENER
Page 145 and 146: CELLULOSIC BIOENERGY PROGRAMRecomme
Page 147 and 148: EXPANSION OF BIOBASED PRODUCTS MARK
Page 149 and 150: SUMMARY OF MISCELLANEOUS TITLE REFO
Page 151 and 152: CROP INSURANCESUPPLEMENTAL DEDUCTIB
Page 153 and 154: payment. If the county yield is 80
Page 155 and 156: ACCESS TO CROP INSURANCEDATA MINING
Page 157 and 158: STRENGTHEN CROP INSURANCEPROGRAM CO
Page 159 and 160: CROP INSURANCERESEARCH AND DEVELOPM
Page 161 and 162: CROP INSURANCESTANDARD REINSURANCE
Page 163: INCREASE CROP INSURANCE PARTICIPATI
Page 167 and 168: plan crop plantings and make market
Page 169 and 170: USDA would also consider offering v
Page 171 and 172: SUMMARY OF SPECIALTY CROP SUPPORTRe
Page 173 and 174: Reauthorize the Emergency Food Assi
Page 175 and 176: SUMMARY OF SUPPORT OF BEGINNING FAR
Page 177 and 178: SUMMARY XIIISOCIALLYDISADVANTAGEDPR
Page 179 and 180: eginning farmers buying power by in
Page 181 and 182: ADMINISTRATION'S FARM BILL PROPOSAL
Page 183: ADMINISTRATION'S FARM BILL PROPOSAL
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USDA 2007 Farm Bill Proposals - US Department of Agriculture

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