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1 1 (September 22, 2022)

handle is hein.crs/goveiwr0001 and id is 1 raw text is: Con r s&on I Res arch S inLu irig I L I iw d a r 191 ice September 22, 2022 Farm Bill Primer: Farm Safety Net Programs The so-called federal farm safety net is a collection of programs administered by the U.S. Department of Agriculture (USDA) that provide risk protection and income support to farmers in the United States who experience natural disasters, adverse growing conditions, and/or low market prices. Program payments are triggered automatically based on production, weather, and/or market conditions. Farm safety net programs fall into three categories: the federal crop insurance program (FCIP), standing agricultural disaster programs, and agricultural commodity support programs. The FCIP and standing agricultural disaster programs are permanently authorized under various laws. The commodity support programs are authorized through the 2023 crop year by the Agricultural Improvement Act of 2018 (2018 farm bill; P.L. 115-334). The 2018 farm bill continued the farm safety net programs from the prior farm bill with relatively minor changes. If continued in the next farm bill, the Congressional Budget Office estimates the combined federal cost of farm safety net programs to average about $13.4 billion annually for FY2023-FY2032, not adjusted for inflation In addition to the farm safety net programs, Congress appropriated and the Administration initiated ad hoc farm support between 2018 and 2021, providing additional disaster and income assistance to farmers. Payments from ad hoc programs have at times exceeded payments from farm safety net programs, raising questions about the effectiveness of the farm safety net that Congress may choose to consider in the next farm bill. rarm Safety Net Programs The first category of farm safety net programs includes the FCIP, a program that offers farmers the opportunity to purchase insurance coverage from private sector insurers to help mitigate the financial consequences of certain market and adverse growing conditions. The federal government regulates the policies offered and subsidizes the premiums that farmers pay in order to encourage farmer participation in the program. These subsidies cover on average 62% of the premium for policies sold in 2021. FCIP coverage is available for most field crops, a wide variety of specialty crops, certain types of livestock and animal products, and grazing lands. For more information on the FCIP, see CRS Report R46686, Federal Crop Insurance: A Primer. The second category includes permanent programs that provide financial assistance to help producers recover from certain natural disasters. In this category, the Noninsured Crop Disaster Assistance Program (NAP) offers farmers the opportunity to purchase coverage for losses due to natural disasters in areas where FCIP coverage is unavailable. NAP support is available for a wide variety of crops. Other standing disaster assistance programs include the Tree Assistance Program (TAP) for qualifying tree, bush, and vine crops; the Livestock Indemnity Program (LIP); the Livestock Forage Disaster Program (LFP); and the Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP). ELAP support is available for producers of certain livestock, honey bees, and farm-raised fish. For additional information on disaster assistance programs, see CRS Report RS21212, Agricultural Disaster Assistance. Commodity support programs, the third category, provide price and income support to farmers. Eligible producers of eligible field crops-including corn, soybeans, wheat, cotton, rice, peanuts, and certain other crops-may receive support from the Agriculture Risk Coverage (ARC) and/or Price Loss Coverage (PLC) programs. PLC coverage cannot be combined with ARC coverage for the same commodity. Eligible producers of an expanded list of eligible commodities may receive support from either the Marketing Assistance Loan (MAL) program or the Loan Deficiency Payment (LDP) program. Dairy producers are eligible for income support from the Dairy Margin Coverage (DMC) program. Producers of sugar beets, sugar cane, and refined sugar benefit from the MAL program and marketing allotments. For additional information, see CRS Report R45730, Farm Commodity Provisions in the 2018 Farm Bill (P.L. 115-334). Figure I. Farm Safety Net Program Outlays, FY20 14- FY2021 $25 FY2O±4 'Y2WS FY2OIS FY217 FY2O18 fY2Of9 FY2O2O FY2O21 ma Permn pect Ds Wter c 'mkdtyS ort Source: CRS calculations using audit reports of the Federal Crop Insurance Corporation and USDA Budget Explanatory Notes for the Commodity Credit Corporation, various years. Notes: FCIP = federal crop insurance program. Adjusted for inflation using the U.S. Bureau of Economic Analysis Implicit Price Deflators for Gross Domestic Product where 2021=100, updated July 28, 2022. Commodity support outlays were relatively lower in FY20 15 and relatively higher in FY20 16 due to Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) program implementation requirements. FY2016 commodity support outlays include ARC and PLC payments for the first two years of program operations.

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