What is the "Farm Bill"?

What Is the “Farm Bill”?
Renée Johnson
Specialist in Agricultural Policy
Resources, Science, and Industry Division
Summary
The 2008 farm bill (P.L. 110-246, Food, Conservation, and Energy Act of 2008)
was enacted into law on June 18, 2008. It contains 15 titles covering support for
commodity crops, horticulture and livestock, conservation, nutrition, trade and food aid,
agricultural research, farm credit, rural development, energy, forestry, and other related
programs. It also includes tax-related provisions to offset some new spending initiatives
in the rest of the bill. The bill succeeds the most recent 2002 farm bill (P.L. 107-171)
and is to guide most federal farm and food policies through FY2012.
What Is the “Farm Bill”?
Federal farm support, food assistance, agricultural trade, marketing, and rural
development policies are governed by a variety of separate laws. Although many of these
policies can be and sometimes are modified through freestanding authorizing legislation,
or as part of other laws, the omnibus, multi-year farm bill provides an opportunity for
policymakers to address agricultural and food issues more comprehensively. The
omnibus farm bill is renewed about every five years.¹ The omnibus nature of the farm bill
can create a broader coalition of support among sometimes conflicting interests for
policies that, individually, might not survive the legislative process. This same climate
can also stir fierce competition for available funds.
The Food, Conservation, and Energy Act of 2008 (P.L. 110-246, “2008 farm bill”)
is the most recent omnibus farm bill. It was enacted into law on June 18, 2008, and²
succeeded the 2002 farm bill. The farm bill governs federal farm and food policy,
covering a wide range of programs and provisions, and, as noted above, undergoes review
and renewal roughly every five years. The 2008 farm bill contains 15 titles encompassing
commodity price and income supports, farm credit, trade, agricultural conservation,
research, rural development, energy, and foreign and domestic food programs such as

¹ There have been seven omnibus farm bills since the 1970s (2008, 2002, 1996, 1990, 1985, 1981,

1977). Prior farm legislation was in 1973, 1970, 1965, 1956, 1954, 1949, 1948, 1938, and 1933.

² Farm Security and Rural Investment Act of 2002 (P.L. 107-171).

food stamps and other nutrition programs, among other programs. More information on
individual titles and programs in the 2008 farm bill is in CRS Report RL33934, The 2008
Farm Bill: A Summary of Major Provisions and Legislative Action.
What Is the Cost?
The Congressional Budget Office (CBO) estimates the total cost of the 2008 bill (i.e.,
baseline plus new funding, using the March 2007 baseline) at $284 billion over FY2008-
FY2012 and $604 billion over FY2008-FY2017 (Table 1). These costs are mandatory
outlays that do not require appropriations actions. The farm bill also authorizes
discretionary programs that require appropriators to allocate funds not accounted for here.
Table 1. CBO Estimated Costs for the

2008 Conference Agreement on the Farm Bill (FY2008-FY2012)

(outlays in million $)
F Y 2008-F Y 2012 F Y 2008-F Y 2017
BaselineCBO ScoreTotalBaselineCBO ScoreTotal
( c hange) ( c hange)
Commodities (Title I)43,354(1,726)41,62887,179(1,658)85,521
Conservation (Title II)21,3922,72024,11250,6994,00054,699
Trade/Food Aid (Title III)1,823301,8533,715(78)3,637
Nutrition (Title IV)^a186,0052,897188,902397,1319,218406,349
Credit (Title V)(1,046)(378)(1,424)(2,321)(306)(2,627)
Rural Development (Title VI)7212219472149221
Research (Title VII)290313211,290(907)383
Forestry (Title VIII)0383804545
Energy (Title IX)4160264343836879
Horticulture/Organic (Title X) — 402402 — 938938
Livestock (Title XI) — 11 — 11
Crop Insurance (Title XII)25,718(3,860)21,85852,743(5,591)47,152
Commodity Futures (Title XIII) — 00 — 00
Miscellaneous (Title XIV)^b6,338446,38213,668(138)13,530
Disaster Assistance (Title XV) — 3,8073,807 — 3,8073,807
Tax/Other (Title XV) — (4,798)(4,798) — (10,429)(10,429)
283,987 (66) 283,921 604,218 (107) 604,111
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Of the $284 billion in projected total five-year net outlays for programs under
the farm bill — including revenue and cost-offset provisions in the bill — about $42
(14%) in projected spending will support commodity crops, $189 billion (67%) will
support the cost of domestic nutrition programs, $24 billion (9%) will support
conservation programs, and $22 billion (8%) will support crop insurance. For
FY2008-FY2012, the enacted bill also includes nearly $4 billion in new spending for
supplemental disaster assistance (included under Title XV). Another $10 billion is

expected to be spent on trade, horticulture and livestock production, rural
development, research, forestry and energy, and other programs. Tax-related
provisions and cost savings from some farm bill programs are expected to generate
additional funding to offset any new spending. CBO estimates that offsets in the bill
total more than $10 billion over five years (FY2008-FY2012).
What Are the Key Farm Bill Provisions by Title?
Below is a summary of the types of provisions and programs of individual titles
in the 2008 farm bill. More information is in CRS Report RL33934, The 2008 Farm
Bill: A Summary of Major Provisions and Legislative Action, and other CRS reports.
Title I: Commodity Programs. For the major commodity crops — grains,
oilseeds, and cotton — the 2008 farm bill generally continues the farm commodity
price and income support framework of the 2002 farm bill. It revises payment
limitations by tightening some annual limits and relaxing others, and adjusts target
prices and loan rates for some commodities. It continues the direct payment, counter-
cyclical payment, and marketing loan programs for the 2008-2012 crop years. The
bill creates a pilot revenue-based counter-cyclical program — the Average Crop
Revenue Election (ACRE) program — beginning with the 2009 crop year. It also has
a pilot program for planting flexibility, restricts base acres developed for residential
use, and eliminates benefits to farms with less than 10 acres.
For dairy, the 2008 farm bill extends, with modifications, two federal programs
that support milk prices and dairy farm income — the dairy price support program
(DPSP) and the Milk Income Loss Contract (MILC) program. It also authorizes
farmers to voluntarily enter into forward price contracts as part of the federal milk
marketing order program, among other dairy-related provisions. The bill also
continues the sugar program that supports prices for domestic producers and
processors. To address the possibility of increased sugar imports from Mexico under
the North American Free Trade Agreement, the enacted bill mandates an 85% market
share for U.S. sugar producers and creates a sugar-for-ethanol program to sell surplus
sugar to ethanol producers. Across all commodities, CBO data show estimated total
five-year outlays for the title at $41.6 billion (FY2008-FY2012, Table 1).
For more detailed information, see CRS Report RL34594, Farm Commodity
Programs in the 2008 Farm Bill, CRS Report RL34036, Dairy Policy and the 2008
Farm Bill, and CRS Report RL34103, Sugar Policy and the 2008 Farm Bill.
Title II: Conservation. The 2008 farm bill reauthorizes almost all 2002 farm
bill conservation programs, modifies several programs, and creates several new
conservation programs. The bill makes changes to and/or expands both working
lands programs, such as the Environmental Quality Incentives Program and the
(renamed) Conservation Stewardship Program, and land retirement programs, such
as the Conservation Reserve Program and the Farmland Protection Program.
Program changes address eligibility requirements, program definitions, enrollment
and payment limits, contract terms, evaluation and ranking criteria, and other
administrative issues, among other program conditions. Producer coverage across
most programs is also expanded to include beginning, limited-resource, and socially
disadvantaged producers; specialty crop producers; and producers transitioning to

organic production. The enacted bill also creates new conservation programs to
address emerging issues and priority resource areas, and also new subprograms under
existing programs. CBO data show estimated total outlays at $24.1 billion (FY2008-
FY2012). See CRS Report RL34060, Conservation and the 2008 Farm Bill.
Title III: Trade. The 2008 farm bill reauthorizes and amends USDA’s food
aid, export market development, and export credit guarantee programs. The bill
reauthorizes the largest U.S. food aid program, the P.L. 480 food aid program, along
with other smaller programs that provide food aid to countries that are promoting the
development of market-oriented agricultural sectors (Food for Progress) or school
feeding and nutrition programs (the McGovern-Dole International School Feeding
and Child Nutrition Program). It also establishes a pilot program for local and
regional purchase of commodities for famine prevention. The farm bill also
terminates some export programs, while selected others receive increased funding.
CBO data show estimated total five-year outlays for this title at nearly $1.9 billion
(FY2008-FY2012). See also CRS Report RL33553, Agricultural Export and Food
Aid Programs, CRS Report RL34145, International Food Aid and the 2008 Farm
Bill, and CRS Report RL34227, Agricultural Exports and the 2008 Farm Bill.
Title IV: Nutrition. The 2008 farm bill’s nutrition title accounts for well over
half of all spending covered by the bill, with the overwhelming majority financing
the Food Stamp program. The most significant issues in this title deal with
administration of, eligibility for, and benefits under the Food Stamp program,
funding for The Emergency Food Assistance Program (TEFAP), and support for a
program making free fresh fruits and vegetables available in schools. The enacted
2008 farm bill includes provisions that extend expiring authorities in covered
programs (generally through FY2012) and increase spending for most programs
above what would have been expected under prior law (above the “baseline”). CBO
data show estimated total five-year outlays for nutrition programs at $188.9 billion
(FY2008-FY2012). See CRS Report RL33829, Domestic Food Assistance: The
Farm Bill and Other Legislation in the 110^th Congress.
Title V: Credit. The farm bill enacted relatively minor changes to the
permanent statutes for two government-related farm lenders: the USDA Farm Service
Agency (FSA) and the Farm Credit System (FCS). CBO estimates these changes will
result in total cost savings of about $1.4 billion over the next five years. See CRS
Report RS21977, Agricultural Credit: Institutions and Issues.
Title VI: Rural Development. The 2008 farm bill reauthorizes and/or
amends rural development loan and grant programs and authorizes several new
provisions, including rural infrastructure, economic development, and broadband and
telecommunications development, among other programs. The bill creates several
new programs intended to assist with regional development strategies and to provide
technical and financial assistance for rural businesses. CBO data show estimated
total five-year outlays for this title at $0.2 billion (FY2008-FY2012). See CRS
Report RL34126, Rural Development Provisions of the 2008 Farm Bill.
Title VII: Research. The 2008 farm bill reorganizes the administration of
USDA’s research, extension, and economic agencies to coordinate the mission area’s
intramural and extramural activities across the department through a new Research,

Extension, and Economics Office (REEO). Intramural research is carried out by the
Agricultural Research Service, Economic Research Service, and National
Agricultural Statistics Service. Extramural research, both formula-funded and
competitively awarded, has been administered through the Cooperative State
Research, Education, and Extension Service. As of October 2009, this agency
becomes the new National Institute of Food and Agriculture. The bill establishes
new and expands existing research initiatives, providing more support with
mandatory funds for this mission area. CBO data show estimated five-year outlays
for this title at $0.3 billion (FY2008-FY2012). For more information see CRS Report
RL34352, Agricultural Research, Extension, and Education: Farm Bill Issues.
Title VIII: Forestry. The enacted farm bill makes changes to existing forestry
programs, allows one to expire, and creates some new programs to assist local
entities to protect forests threatened with conversion to non-forest uses, and to restore
forests damaged by natural disaster, among other programs. The bill also establishes
priorities for forestry assistance funding, requires statewide forest resource
assessments and plans and creates a new coordinating committee to oversee state
assistance funding. The bill also amends existing law to restrict imports of illegally
logged wood and modifies income tax deductions for qualified timber gains. CBO
data show estimated total five-year outlays for this title at less than $40 million
(FY2008-FY2012). See also CRS Report RL33917, Forestry in the 2008 Farm Bill.
Title IX: Energy. The 2008 farm bill reauthorizes, expands, and/or modifies
existing programs, and creates new programs and initiatives to promote biofuels and
cellulosic ethanol production. The bill supports farm and community renewable
energy systems; promotes production, marketing, and processing of biofuel
feedstocks other than corn starch; and expands research, education, and
demonstration programs for advanced biofuels. It also expands programs for federal
procurement of biofuels and bio-refinery repowering projects and establishes USDA
coordination of federal biobased energy efforts. CBO data show estimated total five-
year outlays at $0.6 billion (FY2008-FY2012). For more information, see CRS
Report RL34130, Renewable Energy Policy in the 2008 Farm Bill.
Title X: Horticulture and Organic Agriculture. The 2008 farm bill
includes new provisions for horticulture and organic production under a new bill title,
providing nearly $1 billion in funding over the next ten years. About half of this
spending will be used to expand the Specialty Crop Block Grant Program, which
provides funds to state agriculture departments for U.S. specialty crop marketing,
promotion, research, and other activities. The bill also provides new mandatory
funding for growth of farmers’ markets and for transitioning producers to organic
production, authorizes funding for a new federal-state cooperative pest and disease
early detection program, and provides for price reporting and organic data collection,
among other provisions. CBO data show estimated total five-year outlays for this
title at $0.4 billion (FY2008-FY2012). See also CRS Report RL33520, Specialty
Crops: 2008 Farm Bill Issues.
Title XI: Livestock. The 2008 farm bill includes new livestock-related
provisions under a new bill title. The bill makes changes to existing laws governing
livestock and poultry marketing and competition, including specifying that producers
may not be forced into mandatory arbitration in livestock or poultry contracts,

allowing producers to decline arbitration prior to entering into the contract, enabling
producers to litigate a contract dispute where the principal part of their production
occurs, and requiring additional reporting and tracking of enforcement action under
the Packers and Stockyards Act. The bill also modifies country-of-origin labeling
(COOL) requirements for retailers, opens the way for state-inspected meat and
poultry to enter interstate commerce, and extends mandatory safety inspection to
catfish. CBO data show total five-year outlays at $1 million (FY2008-FY2012). See
CRS Report RL33958, Animal Agriculture: 2008 Farm Bill Issues.
Title XII: Crop Insurance and Disaster Assistance Programs. The
2008 farm bill provides for changes to the crop insurance program, along with other
disaster assistance provisions, under a new bill title. The enacted bill contains
several revisions to the crop insurance program, many of which are designed to
reduce program costs. CBO estimates net savings of $3.9 billion over five years
(FY2008-FY2012), mostly through changes in the timing of premium receipts from
farmers, and payments to the companies. The title also includes other disaster
assistance provisions, including the addition of the Small Business Disaster Response
and Loan Improvements Act of 2008, which makes significant changes to the Small
Business Administration’s (SBA’s) response to disaster. CBO data show estimated
total five-year outlays for this title at $21.9 billion (FY2008-FY2012). See CRS
Report RL34207, Crop Insurance and Disaster Assistance: 2008 Farm Bill Issues.
Title XIII: Commodity Futures. The enacted 2008 farm bill has a new title
that reauthorizes appropriations for the Commodity Futures Trading Commission
(CFTC) through FY2013, and makes amendments to the Commodity Exchange Act.
Title XIV: Miscellaneous. The miscellaneous title in the 2008 farm bill
covers various provisions affecting research, energy, and rural development titles, as
well as provisions covering socially disadvantaged and limited-resource producers
and agricultural security, among other miscellaneous provisions. CBO data show
estimated total outlays for provisions in this title at $6.4 billion (FY2008-FY2012).
Title XV: Trade and Tax Provisions. The enacted bill contains a new farm
bill title that provides for a new permanent Supplemental Agricultural Disaster
Assistance program, as well as various trade and tax provisions. The supplemental
revenue assistance payment program for crop producers is designed to compensate
eligible producers for a portion of crop losses that are not eligible for an indemnity
payment under the crop insurance program (i.e., the portion of losses that is part of
the deductible on the policy). CBO data show estimated total five-year outlays for
the permanent disaster program at $3.8 billion (FY2008-FY2012). See CRS Report
RL34207, Crop Insurance and Disaster Assistance in the 2008 Farm Bill.
The enacted bill’s tax provisions consist of six groups, respectively containing
provisions for revenue, an agriculture disaster reserve fund, conservation, energy,
agriculture, and other provisions. The single largest revenue-raising provision
involves a change in the estimated tax payment of corporations. The single largest
revenue-losing provision in the enacted bill pertains to the agriculture disaster reserve
fund, described above. CBO data show these provisions will generate a $10 billion
offset over the next ten years.