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1 1 (May 31, 2023)

handle is hein.crs/govelup0001 and id is 1 raw text is: Con gressionaI Research Se informing Ihe leiltve d bae si01914 S May 31, 2023 U.S. Farm Commodity Support: Base Acres and Payment Yields The Agriculture Improvement Act of 2018 (2018 farm bill; P.L. 115-334) reauthorized the Price Loss Coverage (PLC) and the Agriculture Risk Coverage (ARC) programs for crop years 2019-2023. These programs provide income support to producers of certain eligible commodities. The amount of support varies by commodity and from year-to- year based on program enrollments and market conditions. The U.S. Department of Agriculture (USDA) administers PLC and ARC. For additional information about these programs, see CRS Report R45730, Farm Commodity Provisions in the 2018 Farm Bill (P.L. 115-334). USDA calculates payments from the PLC and ARC programs based on a farm's enrolled base acres and payment yields. Base acres and payment yields are units of production that Congress authorized USDA to give to eligible producers at specific points in time and in proportion to the farm's historical production of certain commodities. Providing PLC and ARC payments per base acre and payment yield-as opposed to per planted acre or per harvested quantity-decouples payments from annual production. Prior to the 1990s, commodity support programs provided payments based on annual production, which incentivized farmers to plant crops based on program payments instead of market conditions. Decoupling commodity support from planting decisions has been a goal of agricultural policy since the 1990s and helps fulfill U.S. commitments under the World Trade Organization (WTO) Agreement on Agriculture. As it considers the next farm bill, Congress may consider changes to the PLC and ARC programs and base acre and payment yield allotments. Base Acres Base acres and payment yields are associated with specific tracts of farmland. USDA allocated these units to eligible farmers in proportion with historical production in accordance with 7 U.S.C. §9011. Base acre allocations may transfer to the new owner when the associated land is sold. Landowners can reallocate base acres between tracts of land owned by the same farm under certain conditions. Landowners may permanently reduce their base acres voluntarily at any time and are required to reduce base acres associated with land that is permanently removed from agricultural production (e.g., land sold for redevelopment). Statute requires USDA to ensure that a farm's total base acres do not exceed the farm's actual cropland acreage, with limited exceptions. USDA originally allocated base acres to farmers for specific commodities (i.e., covered commodities) (Table 1). In the Federal Agriculture Improvement and Reform Act of 1996 (1996 farm bill; P.L. 104-127), Congress granted base acres-then called contract acres-for wheat, corn, grain sorghum, barley, oats, cotton, and rice. At the time, peanuts were eligible for support through a different mechanism. Farmers received base acre allocations in proportion to their 1981-1985 plantings. The Farm Security and Rural Investment Act (2002 farm bill; P.L. 107-171), the Food, Conservation, and Energy Act of 2008 (2008 farm bill; P.L. 110-234), and the Agricultural Act of 2014 (2014 farm bill; P.L. 113-79) changed the list of eligible commodities, added new base acres for oilseed and pulse crops, and allowed for producers to make voluntary changes to their base acre commodity allocations. Table 1. Millions of Total Base Acres, Enrolled Base Acres, and Planted Acres, by Commodity Total Enrolled Total Covered Base Base Planted Commodity Acres Acres Acres Barley 6.23 5.39 2.79 Corn 100.74 94.81 90.56 Cotton (Seed) 13.86 11.38 12.70 Oats 2.67 2.09 2.74 Minor Oilseeds 3.55 3.46 4.18 Peanuts 2.60 2.46 1.53 Pulses 0.85 0.82 1.95 Rice 5.01 4.65 2.59 Sorghum (Grain) 9.83 8.65 6.19 Soybeans 55.84 53.55 83.52 Wheat 69.72 63.28 45.60 Total 270.90 250.55 254.36 Source: CRS calculations using USDA Farms Service Agency (FSA) program records and USDA National Agricultural Statistics Service (NASS) Quick Stats database. Notes: Total base acres are values for the 2021 crop year and exclude acres without a commodity allocation. Enrolled base acres and total planted acres are averages for the 2019-2022 crop years. Enrolled base acres participate in the Agricultural Risk Coverage Program or the Price Loss Coverage Program. Minor oilseeds include canola, crambe, flaxseed, mustard seed, rapeseed, safflower, sesame, and sunflower seed. Pulses include large and small chickpeas, dry peas, and lentils. Rice includes long, medium, and japonica varieties. The 2014 farm bill excluded cotton as a covered commodity in response to a WTO dispute settlement case with Brazil. Cotton base acres were renamed generic base acres, and farms with generic base acres were potentially eligible for PLC and ARC payments if they planted eligible crops on land associated with generic base acres. The

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