NCC Backgrounder on Farm Security and Rural Investment Act
A NCC analysis confirms that the Farm Security and Rural Investment Act is vital to the structure and stability of U.S. agriculture; provides an important financial safety net in times of low prices; and substantially increases the funding for conservation programs.
The Farm Security and Rural Investment Act is vital to the structure and stability of U.S. agriculture.
The Act provides an important financial safety net in times of low prices and substantially increases the funding for conservation programs.
- The ‘02 Act retained the marketing loan program.
- Direct payments, not tied to either production or price, are continued under the legislation.
- Counter-cyclical payments were instituted as part of the '02 Act. The payments move opposite of price, but are not tied to the production decision. The payments help protect against low prices.
- The '02 Act authorized a 77% increase in spending on conservation programs.
Spending under the ’02 farm bill is well below expectations.
- As commodity prices have strengthened, farm program outlays have fallen short of the level projected during the farm bill debate. For the FY02-04 period, the total spending is $17 billion less than originally projected.
- For FY02, actual outlays are $3.2 billion below the projected spending. The shortfall in spending was $5.4 billion in FY03.
- For the current FY04, CBO estimates that farm program payments will be $13.7 billion, $8 billion below the $22.1 billion projected during the debate.