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0,50/85-92 provisions--Refers to the so-called
50/85 and 50/92 provisions for rice and cotton and the 0/85 and
0/92 provisions for wheat and feed grains that were in effect in
various forms from 1986 through 1995. Under these provisions,
farmers could idle all or part of their permitted acreage, putting
the idled land in a conserving use, and still receive deficiency
payments for part of the acreage. A minimum planting of 50 percent
of maximum payment acreage was required to receive these payments
in the case of rice and cotton.
1614 data--Data that tracks the benefits
provided, directly or indirectly, to individuals and entities under
titles I and II and the amendments made by those titles. 1614
refers to the section in the 2002 Farm Act that required USDA to
1862 colleges/universities--The original land
grant colleges and universities established by the Land Grant
College Act of 1862 (see Land-Grant
colleges/universities--These institutions resulted from
provisions of the second Morrill Act, which prohibited racial
discrimination in Land-Grant Colleges and Universities. States had
the option of creating separate institutions to serve
African-American students. The Southern States elected to have
separate educational institutions, sometimes referred to as
"historically black colleges and universities." While not a
land-grant college, Tuskegee University traditionally has been
associated with the African-American land-grant institutions. It
was granted 25,000 acres of land by the U.S. Congress in 1899 and
has espoused the land-grant philosophy throughout its history.
1938 Farm Act--See Agricultural Adjustment Act (AAA)
1949 Farm Act--See Agricultural Act of 1949.
1985 Farm Act--See Food Security Act of 1985.
1990 Farm Act--See Food,
Agriculture, Conservation and Trade Act of 1990.
Institutions--Land-Grant Institutions that traditionally
served Native Americans. The Equity in Educational Land-Grant
Status Act of 1994 conferred land-grant status for 29 tribal
colleges that address agriculture and mechanical arts.
1996 Farm Act--See Federal Agriculture
Improvement and Reform Act of 1996.
2002 Farm Act--See Farm Security and
Rural Investment Act of 2002.
Acreage reduction program
(ARP)--An annual land retirement system for wheat, feed
grains, cotton, or rice in which farmers participating in Federal
commodity programs idled a crop-specific, nationally set portion of
their crop acreage base in order to be eligible for benefits such
as Commodity Credit Corporation (CCC) crop loans and deficiency
payments. No deficiency payments were made on the idled ARP land.
The 1996 and 2002 Farm Acts did not reauthorize ARPs.
ACRE actual farm revenue--The actual commodity
farm yield X the ACRE national average
ACRE actual State revenue--The ACRE actual State yield X the ACRE national
average market price.
ACRE actual State yield--The crop year
commodity production (quantity) produced in the State per planted
ACRE benchmark farm revenue--The 5-yr Olympic
average farm crop yields X [ACRE program
guarantee price ï¿½ crop insurance premiums per acre]
ACRE benchmark State yield--The 5-year Olympic
average commodity yield per planted acre in the State.
ACRE farm-specific productivity ratio--A ratio
of the 5-year
Olympic average farm crop yield divided by the
ACRE benchmark State yield.
ACRE national average market price--The greater
of (A) the national average commodity market price received by
producers during the 12-month marketing year; or (B) the reduced
marketing assistance commodity loan rate.
ACRE program guarantee--The optional
ACRE program guarantee of 90 percent of the [5-year ACRE
benchmark State yield X 2-year ACRE program guarantee price] for
the crop year and respective commodity.
ACRE program guarantee price--The
commodity-specific 2-year national average market price received by
Additional or buy-up coverage--Any coverage
level greater than catastrophic coverage.
Additional peanuts--See Peanuts, additional.
Adjusted gross revenue (AGR)--A plan of
insurance that bases coverage on adjusted gross revenue calculated
from Schedule F income tax data.
Adjusted world price, cotton
(AWP)--As part of the upland cotton marketing assistance
loan program, a loan repayment rate that USDA calculates and
publishes weekly. The AWP is the prevailing world price for upland
cotton, adjusted to account for U.S. quality and location.
Producers who have taken out USDA marketing assistance loans may
choose to repay them at either the lesser of the established
commodity loan rate for upland cotton, plus interest, or the
announced AWP for that week. The AWP for cotton also was used for
determining Step 2 cotton program payments prior to suspension of
Step 2 in 2006.
Adjusted world price, rice
(AWP)--As part of the rice marketing assistance loan
program, a loan repayment rate,
for each class of milled rice (long grain, medium grain, and short
grain), that USDA calculates and publishes based on the prevailing
world market price for each of the classes, modified to reflect
U.S. quality and the U.S. cost of exporting milled rice. USDA sets
this prevailing market price after reviewing milled rice prices in
major world markets, and taking into account the effects of
supply-demand changes, government-assisted sales, and other
relevant price indicators. The steps for calculating and announcing
the world prices are prescribed in more detail in Federal
Measurement of Support (AMS)--See aggregate
measurement of support in ERS WTO Briefing Room Glossary.
Agreement on Agriculture--See Agreement
on Agriculture in ERS WTO Briefing Room Glossary.
Agricultural Act of 1949--P.L.
89-439 (October 31, 1949), along with the Agricultural Adjustment
Act of 1938, makes up the major part of permanent law that mandates
commodity price and farm income support. The original 1949 Act
designated mandatory support for basic commodities and the
following nonbasic commodities: wool and mohair, tung nuts, honey,
Irish potatoes (excluded in the Agricultural Act of 1954), as well
as milk, butterfat, and their products. Provisions of this law are
generally superseded by more current legislation. If the current
legislation expires and new legislation is not enacted, the law
reverts back to the permanent provisions of the 1938 and 1949 Acts,
unless Congress enacts an extension of current legislation.
Agricultural Adjustment Act (AAA) of
1938--P.L. 75-430 (February 16, 1938) was enacted to
replace farm subsidy policies found unworkable in the AAA
legislation of 1933. The 1938 Act was the first to make price
support mandatory for corn, cotton, and wheat to help maintain a
sufficient supply in low production periods, along with marketing
quotas to keep supply in line with market demand. It established
permissive supports for butter, dates, figs, hops, turpentine,
rosin, pecans, prunes, raisins, barley, rye, grain sorghum, wool,
winter cover-crop seeds, mohair, peanuts, and tobacco for the
1938-40 period. Title V of the Act established the Federal Crop
Insurance Corporation. The 1938 Act is considered part of permanent
legislation for commodity programs and farm income support (along
with the Commodity Credit Corporation Charter Act and the
Agricultural Act of 1949). Provisions of the law are generally
superseded by more current legislation.
Agricultural and food science--Defined by
Congress as basic, applied and developmental research, extension,
and teaching activities in food and fiber, agricultural, renewable
natural resources, forestry, and physical and social sciences.
Agricultural Management Assistance (AMA)
program--Established under the Agricultural Risk
Protection Act of 2000 and amended under the 2002 Farm Act, the
Agricultural Management Assistance program provides financial
assistance for conserving practices under 3- to 10-year contracts.
The program focuses on producers in 15 States where participation
in the Federal Crop Insurance Program has historically been low.
The 2008 Farm Act added Hawaii to the list of designated
Transition Act (AMTA)--Title I of the 1996 Act allowed
farmers who participated in the wheat, feed grain, cotton, and rice
programs in any one of the previous 5 years to enter into 7-year
production flexibility contracts for 1996-2002 and receive payments
based on the enrolled acreage. Total production flexibility
contract payment levels for each fiscal year were fixed. The AMTA
allowed farmers to plant 100 percent of their total contract
acreage to any crop, except for limitations on fruits and
vegetables, and receive a full payment. Land had to be maintained
in agricultural uses, including idling or conserving uses.
Unlimited haying and grazing were allowed, as was the planting and
harvesting of alfalfa and other forage corps--with no reduction in
flexibility contract payments, also referred to as AMTA
payments, were replaced with
direct payments in the 2002
Farm Act and the payment rates were fixed.
Agricultural Risk Protection Act of 2000
(ARPA)--Federal crop insurance legislation amended to
strengthen the safety net for agricultural producers. It included a
provision recognizing organic farming as a "good farming practices"
that would be covered by Federal crop insurance.
Agricultural use--Refers to cropland planted to
an agricultural crop, used for haying or grazing, idled for
weather-related reasons or natural disasters, or diverted from crop
production to an approved cultural practice that prevents erosion
or other degradation.
Amber box policies--See amber
box policies in ERS WTO Briefing Room Glossary.
Appropriations--An appropriations act of
Congress permits USDA or other federal agencies to incur financial
obligations to be drawn from the Federal Treasury. Appropriations
do not represent cash actually set aside in the Treasury for the
purposes specified in the appropriations act; they represent
limitations of amounts that agencies may obligate for the purposes
and during the time periods specified in the appropriations act.
Appropriations may be annual (one year in duration), multiple-year
(a definite period in excess of one fiscal year), or no-year
(available indefinitely). Appropriations are definite (for a
specific amount of money) or indefinite (for an unspecified amount
of money), and either current (for the immediate fiscal year in
question) or permanent (always available).
Area plan of insurance--Crop yield or revenue
insurance coverage based on county-level yield or revenue.
Authorization--Legislation that establishes or
continues the legal operation of a Federal program or agency,
either indefinitely or for a specific period of time, or that
sanctions a particular type of expenditure. An authorization
normally is a prerequisite for an appropriation or other kind of
budget authority. An authorization also may limit the amount of
budget authority to be provided, or may authorize the appropriation
of "such sums as may be necessary."
Average crop revenue
election (ACRE)--An optional revenue-based program
provision introduced in the 2008 farm legislation that replaces
counter-cyclical payments for those producers who elect to
participate in ACRE. Once producers elect to participate,
participation continues until 2012. Producers continue to receive
reduced direct payments and are eligible for reduced loan
Base Acreage or Crop
Acreage Base--A farm's crop-specific acreage of wheat,
feed grains, upland cotton, rice, oilseeds, pulse crops, or peanuts
eligible to participate in commodity programs. Base acreage
includes land that would have been eligible to receive production
flexibility contract payments in 2002 and acreage (specified in
legislation) planted to other covered commodities (oilseed and
peanut producers). Base acreage refers to cropland on a farm, not
to specific parcels of land. For a description of rules for
determining base see Crop Acreage Bases and Program Payment Yields, 1981
Through 2002 Farm Acts.
Beginning farmer or rancher--These are farmers
and ranchers (or all members of the entity) who (a) have not
operated a farm or ranch for more than 10 consecutive years, and
(b) will materially or substantially participate in the operation
of the farm or ranch.
Beginning farmer or rancher loans--To qualify
as a beginning farmer or rancher under USDA's Farm Service Agency
guidelines, the loan applicant must be an individual or entity who
(1) has not operated a farm or ranch for more than 10 years; (2)
meets the loan eligibility requirements of the program to which
he/she is applying; and (3) substantially participates in the
operation. For farm ownership (FO) loan purposes, the applicant
cannot own a farm greater than 30 percent of the average size farm
in the county. For direct FO loans, applicant must have
participated in business operation of a farm for at least 3 years.
If the applicant is an entity, all members must be related by blood
or marriage, and all stockholders in a corporation must be eligible
Beneficial interest--When a producer controls
the commodity and retains the ability to make all decisions
affecting the commodity, including movement, sale and the request
for and repayment of a loan or LDP.
Bill Emerson Humanitarian Trust--See Emerson Humanitarian Trust.
Broadband--A descriptive term for communication
technologies that can provide consumers integrated access to voice,
high-speed data service, video-demand services, and interactive
Capacity and Infrastructure
Programs--Programs that improve overall effectiveness and
ability. Some important Capacity and Infrastructure Programs
include Hatch funds for State Agricultural Experiment Stations,
McIntire-Stennis funds for forestry research, and Smith-Lever funds
for cooperative extension.
Capped entitlement--Under an entitlement
program, eligible individuals must be allowed to participate,
regardless of the cost. Agricultural examples include loan
deficiency payments and marketing loan gains. Capped entitlements
are entitlement programs with spending ceilings ("capped
spending"). However, because they are still entitlements, and
anyone who is eligible can participate, stringent eligibility
requirements are used to limit participation to the number of
individuals or farms for which funds are available. For example,
the Conservation Security Program is open to all farms that are
located in a watershed there the program is offered in a given year
and meet all other eligibility criteria. Once available funds are
expended, however, enrollment is suspended.
Catastrophic coverage (CAT)--Minimum coverage
level available under the Federal crop insurance program. CAT
coverage is 50 percent of expected yield, indemnified at 55 percent
of the price election.
Commodity certificates (Certs)--Commodity
certificates, issued by the Commodity Credit Corporation (CCC), can
be purchased at the posted county price for wheat, feed grains, and
oilseeds or at the effective adjusted world price for rice or
upland cotton. The certificates are available for producers to use
immediately in acquiring crop collateral they pledged to the CCC
for a commodity loan. When the posted county price or effective
adjusted world price is below the loan rate, producers who are
facing payment limits can benefit from the lower loan repayment
rates. The use of commodity certificates to repay loans ends after
the 2009 crop year. Certificates were also used during the
mid-1980s in lieu of cash to compensate program beneficiaries and
to reduce the large, costly, and price-depressing commodity
surpluses held by the CCC.
Commodity Credit Corporation (CCC)--A federally
owned and operated corporation within the U.S. Department of
Agriculture created to stabilize, support, and protect farm income
and prices through loans, purchases, payments, and other
operations. All money transactions for agricultural price and
income support and related programs are handled through the CCC.
Programs that are mandated to be funded through the CCC do not
require separate appropriations from Congress. CCC transactions
with farmers include (1) direct payments made to producers under
various programs, (2) direct purchases of dairy products under the
dairy price support program, and (3) the commodity loans provided
under the marketing assistance loans for wheat, feed grains,
cotton, rice, sugar, soybeans, minor oilseeds, wool, mohair, small
and large chickpeas, lentils, dry peas, and peanuts.
Commodity Exchange Act--The Commodity Exchange
Act, 7 USC 1, et seq., provides for the Federal regulation of
commodity futures and options trading. See Commodity Futures
Commodity Futures Modernization Act--The
Commodity Futures Modernization Act of 2000 (CFMA), Pub. L. No.
106-554, 114 Stat. 2763, reauthorized the Commodity Futures Trading
Commission for 5 years and overhauled the Commodity Exchange Act to
create a flexible structure for the regulation of futures and
options trading. Significantly, the CFMA codified an agreement
between the CFTC and the Securities and Exchange Commission to
repeal the 18-year-old ban on the trading of single stock
Commodity Futures Trading Commission--The
Federal regulatory agency established by the Commodity Futures
Trading Act of 1974 to administer the Commodity Exchange Act.
Commodity loan rate--The price
per unit (pound, bushel, bale, or hundredweight) at which the
Commodity Credit Corporation provides commodity-secured loans to
farmers for a specified period of time.
Commodity Supplemental Food Program--Program
providing food to supplement the diets of low-income pregnant and
breastfeeding women, other new mothers up to 1 year postpartum,
infants, children up to age 6, and the elderly. Predecessor to the
WIC Program. Funded under the authority of the Agriculture and
Consumer Protection Act of 1973.
Community Food Projects Competitive Grant
Program--Established in 1996 to encourage development of
community food projects that help promote the self-sufficiency of
low-income communities. Grants provided to support projects that
seek to increase food security in communities by establishing
linkages among local groups to develop and support the local food
Competitive grants--Funds that are allocated by
panels of relevant professional peers after consideration of
research proposals submitted to the review panel.
Congressional Hunger Fellows--An anti-hunger
leadership program of the Congressional Hunger Center. Initially
funded with a challenge grant from VISTA and through private
donations. In 1999, Congress provided supporting funds through USDA
to establish the Mickey Leland International and Bill Emerson
National Hunger Fellowships.
Conservation activities--Conservation systems,
practices, or management measures designed to address a resource
concern. Structural, vegetative, and land management measures
(including agricultural drainage management systems), and planning
needed to address a resource concern are included.
Compliance--Requires producers who cropped highly erodible
land (HEL) before December 23, 1985 to implement a soil
conservation plan or risk losing their Federal farm program
benefits, including most commodity, conservation, and disaster
payments. Conservation compliance requirements are similar to those
of the Sodbuster requirements, (compliance on newly planted land)
but tend to be less stringent.
Conservation measurement tool--Procedure to
estimate the level of environmental gain achieved by a producer in
implementing conservation activities, including indices or other
measures developed by the Secretary.
Conservation of Private Grazing Land
Initiative--The 1996 Farm Act authorized a coordinated
technical, educational, and related assistance program for owners
and managers of private grazing lands, including rangeland, pasture
land, grazed forest land, and hay land. The purpose of the program
is to promote improved management of grazing land resources for
enhanced economic uses and environmental services.
Conservation plan--A combination of land uses
and farming practices to protect and improve soil productivity and
water quality and prevent deterioration of natural resources on all
or part of a farm. Conservation plans must be both technically and
Conservation practice--Any technique or measure
used to protect or improve natural resources and environmental
quality, for which standards and specifications for installation,
operation, or maintenance have been developed. Practices approved
by the Natural Resources Conservation Service are compiled at each
conservation district in its field office technical guide.
Conservation Reserve Enhancement Program
(CREP)-Initiated following the 1996 Farm Act, CREP is a
State-Federal conservation partnership program targeted to address
specific State and nationally significant water quality, soil
erosion, and wildlife habitat issues related to agriculture. The
program offers additional financial incentives beyond the
Conservation Reserve Program to encourage farmers and ranchers to
enroll in 10-15 year contracts to retire land from production. CREP
is funded through the Commodity Credit Corporation.
Conservation Reserve Program
(CRP)--Established in 1985 and administered by USDA's Farm
Service Agency, CRP is the latest version of long-term land
retirement programs used in the 1930s and 1960s. CRP provides farm
owners or operators with an annual per-acre rental payment and half
the cost of establishing a permanent land cover, in exchange for
retiring environmentally sensitive cropland from production for
10-15 years. In 1996, Congress limited enrollment to 36.4 million
acres at any time. The 2002 Farm Act increased the enrollment limit
to 39.2 million acres. Beginning in 2010, the 2008 Farm Act will
limit enrollment to 32 million acres. Producers can offer land for
competitive bidding based on an Environmental Benefits Index during
periodic signups or automatically enroll more limited acreages in
such practices as riparian buffers, field windbreaks, and grass
strips on a continuous basis. CRP is funded through the Commodity
Conservation Reserve Program (CRP) Continuous
Sign-up--Initiated following the 1996 Farm Act, continuous
sign-up allows enrollment of land in riparian buffers, filter
strips, grass waterways, and other high priority practices at any
time and without competition. Eligible land is automatically
accepted into the program. Continuous sign-up acreage is under the
overall CRP acreage cap.
Conservation Security Program
(CSP)--Established in the 2002 Farm Act, CSP provides
payments to producers for maintaining or adopting structural and/or
land management practices that address a wide range of local and/or
national resource concerns. As with the Environmental Quality
Incentives Program, a wide range of practices can be subsidized.
But CSP will focus on land-based practices and specifically
excludes livestock waste handling facilities. Producers can
participate at one of three tiers; higher tiers require greater
conservation effort and offer higher payments. Participants must
use the lowest cost practices that meet conservation standards.
After September 30, 2008, new enrollment will be prohibited, but
existing contracts will continue until they expire. CSP is replaced
by a new, but similar program, The Conservation Stewardship
Conservation Stewardship Program
(CSP)--Established in the 2008 Farm Act, CSP provides
payments to producers for adopting or maintaining wide range of
conservation management and land-based structural practices that
address 1 or more resources of concern, such as soil, water, and
Conservation Technical Assistance (CTA)--Since
1936, CTA, administered by USDA's Natural Resources Conservation
Service (NRCS) and local conservation districts, has provided
technical assistance to farmers for planning and implementing
Conserving use acreage--Farmland diverted from
crop production to an approved cultural practice that prevents
erosion or other degradation. Though crops are not produced,
conserving use is considered an agricultural use of the land.
idled for weather-related reasons or natural disasters, acreage
devoted to conservation purposes or planted to certain other
allowed commodities, and acreage USDA determined as necessary to
include for fair and equitable treatment. A provision of the
Agricultural Act of 1949 used to implement the base acreage and
yield system for 1991-95 crops and used to determine acreage
planted within the 2008 ACRE program.
Contract acreage--Land voluntarily enrolled in
a production flexibility contract (PFC) under the 1996 Farm Act.
Land was eligible for the PFC enrollment the landowner had at least
one crop acreage base for a contract crop that would have been in
effect for 1996 under previous farm law. A farmer could voluntarily
choose to reduce contract acreage in subsequent years. Base acreage
under previous farm law could, upon leaving the Conservation
Reserve Program, be entered into a PFC. Otherwise, the maximum
amount of contract acreage was established during the one-time
signup for the PFC in 1996. Landowners could convert contract
acreage to base acreage under the 2002 Farm Act.
Contract crops--The term that referred to crops
eligible for production flexibility contract payments under Title I
of the 1996 Act: wheat, corn, sorghum, barley, oats, rice, and
Cost-sharing--Payments to producers to cover a
specified portion of the cost of installing, implementing, or
maintaining a conservation (structural or land management)
payments--Counter-cyclical payments are available to
producers with historic program payment acres and yields of wheat,
corn, barley, grain sorghum, oats, upland cotton, long-grain and
medium-grain rice, soybeans, other oilseeds, peanuts, and pulse
crops (dry peas, lentils, small and large chickpeas). Payments are
made whenever the current effective commodity price is less than
the target price. The effective price is calculated by adding: 1)
the national average farm price for the marketing year, or the
commodity national loan rate, whichever is higher and 2) the direct payment rate for the
Covered commodity (aka program
commodity)--Commodities for which Federal support programs
are available to producers, including wheat, corn, barley, grain
sorghum, oats, upland cotton, medium and long grain rice, oilseeds,
and pulse crops (small and large chickpeas, dry beans and lentils).
Programs for peanuts are separate in the 2002 and 2008 Farm Acts
but are similar to those for covered commodities.
insurance--Insurance that protects farmers from crop
losses due to natural hazards. A subsidized multiperil Federal
insurance program, administered by the USDA's Risk Management
Agency, is available to most farmers. Federal crop insurance is
sold and serviced through private insurance companies. The Federal
Government subsidizes a portion of the premium, as well as some
administrative and operating expenses of the private companies. The
Federal Crop Insurance Corporation reinsures the companies by
absorbing the losses of the program when indemnities exceed total
premiums. Various types of yield and revenue insurance products are
available for major crops. Hail and fire insurance are offered
through private companies without Federal subsidy.
Cropland--Land used primarily for production of
row crops, close-growing crops, and fruit and nut crops. It
includes cultivated and noncultivated acreage, but not land
enrolled in the Conservation Reserve
Program. For details on land use of U.S. non-Federal lands, see
USDA National Resources Conservation Services' National Resources Inventory.
Crop year (marketing
year)--The 12-month period starting with the month when
the harvest of a specific crop typically begins. The 2008 wheat
crop year, for example, is June 1, 2008, through May 30, 2009. The
amount harvested during this time is then considered the "2008
Dairy Export Incentive
Program--A program that offers subsidies to exporters of
U.S. dairy products based on the volume of exports. The intent is
to make U.S. products more competitive in world markets, thereby
increasing U.S. exports. The Commodity Credit Corporation receives
export-price bids from exporters and makes the payments either in
cash or through certificates redeemable for commodities. The
program was originally authorized by the 1985 Farm Act, and
reauthorized by subsequent Acts.
decoupled payments in ERS WTO Briefing Room Glossary.
payments--Direct government payments made prior to 1996 to
farmers who participated in an annual commodity program for wheat,
feed grains, rice, or cotton. The crop-specific payment rate for a
particular crop year was based on the difference between an
established target price and the higher of the commodity loan rate
or the national average market price for the commodity during a
specified time period. Deficiency payments are not the same as loan deficiency payments.
De minimis rule--See
de minimis rule in ERS WTO Briefing Room Glossary.
Department of Defense Fresh Fruit and Vegetable
Program--USDA, in collaboration with the Department of
Defense, procures fresh fruits and vegetables from the Defense
Supply Center Philadelphia (DSCP) for use in USDA school meals
programs. DSCP operates a nationwide system to purchase and
distribute a wide variety of high-quality fresh produce to military
installations, Federal prisons, and veterans' hospitals. States
and/or schools place orders directly with DSCP's field offices for
a variety of available, U.S.-grown fresh products.
Direct loan--"Direct" farm loans are made by
USDA's Farm Service Agency (FSA) to family-size farmers and
ranchers who cannot obtain commercial credit from conventional
lenders. The FSA also services these loans and provides supervision
and credit counseling, so borrowers have a better chance for
success. Farm Ownership, Operating, Emergency, and Youth loans are
the main types of loans available under the Direct farm loan
programs. Direct loan funds are also set aside each year for loans
to minority applicants and beginning farmers. Direct loan
applications are made at the local FSA office.
Direct payments--Fixed payments
for eligible historic production of wheat, corn, barley, grain
sorghum, oats, upland cotton, long and medium grain rice, soybeans,
other oilseeds, and peanuts. Producers enroll annually in the
program to receive payments based on payment rates specified in the
Farm Act and their historic program payment acres and yields.
Program--Program administered by USDA's Agricultural
Marketing Service to improve direct market access for operators of
small and medium-size farms, enabling them to compete outside the
supermarket system and other large wholesale market channels.
Program includes farmers' markets, farm stands, roadside stands,
community-supported agriculture, pick-your-own farms, Internet
marketing, and niche markets.
Disaster payments--Payments made to producers
through existing or special legislation due to crop and livestock
losses because of natural disasters such as floods, drought, hail,
excessive moisture, or related conditions.
Diversion payment--See paid land diversion.
Earmarks--Congressional designations of funding
for specific projects. When using this practice, Congress, in
report language or law, directs that appropriated funds go to a
specific performer or designates awards for certain types of
performers or geographic locations.
Easement--Voluntary sale or donation of
specific use rights to land. Examples of rights that could be sold
include the rights to use land for cropping purposes (in Wetlands
Reserve Program and Grassland Reserve Program) or the rights to
develop land for urban uses (Farmland Preservation Program).
Landowners who sell or donate an easement retain all other
ownership rights to the land, including the right to sell the land.
Future owners of land subject to an easement are legally required
to abide by easement terms. Easements are perpetual or are
long-term, 25 years or more.
Ecosystem service--Those components of nature
that are directly valued by people, or combined with other factors
to produce valued goods and services.
Electronic Benefit Transfer (EBT)--Debit card
technology used for issuing food stamp benefits.
Emergency farm loan--The USDA's Farm Service
Agency provides emergency loans to help farmers and ranchers
recover from production and physical losses due to drought,
flooding, other natural disasters, or quarantine. The farmers or
ranchers must own or operate land in a county declared a disaster
area by the President or designated by the Secretary of Agriculture
as a disaster or quarantine area. The FSA administrator may
authorize emergency loan assistance for physical losses only. The
farmer or rancher must have suffered at least a 30-percent loss in
crop production or a physical loss to livestock, livestock
products, real estate, or chattel property.
Emerson Humanitarian Trust--A
special wheat, corn, grain sorghum, and rice reserve to be used for
humanitarian food aid purposes. The Trust was formerly the Food
Security Commodity Reserve and the Food Security Wheat Reserve.
Created by the Agriculture Act of 1980 (P.L. 96-494), the reserve
is generally used to provide famine and other emergency relief when
commodities are not available under P.L. 480 (Food for Peace
Program). The 1996 Farm Act expanded the reserve to include corn,
grain sorghum, and rice in addition to wheat, and made other
administrative changes. Commodity Credit Corporation also is
authorized to hold money, as well as commodities in the
Environmental Benefits Index--The Environmental
Benefits Index (EBI) is used to rank contract proposals for
acceptance in the Conservation Reserve Program general sign-up.
Environmental scores are based on potential to create wildlife
habitat, reduce soil erosion, improve water quality, improve air
quality, or sequester carbon. Contract cost is also an important
Environmental Quality Incentives Program
(EQIP)--EQIP was established by the 1996 Farm Act to
consolidate and better target the functions of the Agricultural
Conservation Program, Water Quality Incentives Program, Great
Plains Conservation Program, and Colorado River Basin Salinity
Program. The objective of EQIP is to encourage farmers and ranchers
to adopt practices that reduce environmental and resource problems
through 1- to 10-year contracts. The program provides education and
technical assistance, as well as financial assistance through
cost-share payments for structural and vegetative practices and
incentive payments for management practices. EQIP is run by the
Natural Resources Conservation Service and is funded through
Commodity Credit Corporation.
(EI)--A measure of the potential for soil productivity to
be damaged by soil erosion. The higher the index, the higher the
likelihood of soil damage in the absence of soil conservation
measures. EI scores above 8 are equated to highly erodible
Exempt commercial market--An electronic trading
facility that trades exempt commodities on a principal-to-principal
basis solely between persons that are eligible commercial
Export Enhancement Program (EEP)--Program
started in May 1985 under the Commodity Credit Corporation Charter
Act to help U.S. exporters meet competitors' prices in subsidized
markets. Under the EEP, exporters received subsidies based on the
volume of exports to specifically targeted countries. The program
was reauthorized by the 1985 Farm Act and subsequent farm acts,
until it was repealed by the 2008 Farm Bill.
Farm Credit System
(FCS)--A network of cooperatively owned lending
institutions and related service organizations serving all 50
States and the Commonwealth of Puerto Rico. The FCS specializes in
providing farm real estate and rural homeowner loans, operating
credit, and related services to farmers, ranchers, and producers or
harvesters of aquatic products.
Farm Credit System Insurance Corporation
(FCSIC)--An entity of the Farm Credit System (FCS),
established by law in 1987, to ensure the timely repayment of
principal and interest on FCS debt securities.
Farmland Protection Program (FPP)--Established
in the 1996 Farm Act, FPP provides funding to State, local, and
tribal entities and nongovernmental organizations with existing
farmland protection programs to purchase conservation easements or
other interests in land that limit nonagricultural uses of the
land. The Natural Resources Conservation Service purchases
conservation easements by partnering with eligible entities that
have pending offers for the acquisition of conservation
Farm ownership loan (FO)--Farm Ownership (FO)
loans may be made by the Farm Service Agency (FSA) to purchase
farmland, construct or repair buildings and other fixtures, develop
farmland to promote soil and water conservation, or to refinance
debt. FO loans are made under both guaranteed and direct loan
programs, and are made to producers unable to obtain credit from
Farm Security and Rural
Investment Act of 2002 (2002 Farm Act) (P.L. 107-171)--The
omnibus food and agriculture legislation (2002 Farm Act) that
provided a framework for the Secretary of Agriculture to administer
various agricultural and food programs from 2002 to 2007. The
legislation was signed into law on May 13, 2002. This farm act
replaced production flexibility contract payments of the 1996 Farm
Act with direct payments, and introduced counter-cyclical payments
and the Conservation Security Program. The 2002 Act was the first
farm act to include a separate energy title.
Farmed wetland--A wetland that has been
partially drained or are naturally dry enough to allow crop
production in some years, but otherwise meets the soil,
hydrological, and vegetative criteria defining a wetland.
Farmers' Markets Promotion Program--See Direct-to-Consumers Marketing
Improvement and Reform Act of 1996 (1996 Farm Act) (P.L.
104-127)--The omnibus food and agriculture legislation
(Farm Act) signed into law on April 4, 1996, provided a 7-year
framework (1996-2002) for the Secretary of Agriculture to
administer various agricultural and food programs. The 1996 Act
redesigned income support and supply management programs for
producers of wheat, corn, grain sorghum, barley, oats, rice, and
upland cotton. Production flexibility contract payments were made
available under Title I of the 1996 Act (see
Agricultural Market Transition Act). The
legislation also suspended acreage reduction programs; revised and
consolidated Federal milk marketing orders; made program changes
for sugar and peanuts; and consolidated and extended environmental
Federal Agricultural Mortgage Corporation--An
organization more commonly referred to as Farmer Mac,
which is a secondary (resale) market for agricultural mortgages.
Farmer Mac was authorized by the Agricultural Credit Act of
Federal Crop Insurance Act--Legislation that
provides a framework for the operation of the Federal crop
insurance program. Enacted in 1938, with major amendments in 1980,
1994, and 2000. The 2000 amendment is referred to as the
Agricultural Risk Protection Act of 2000.
Insurance Corporation (FCIC)--Federally owned and operated
corporation within USDA that promotes the economic stability of
agriculture through a sound system of crop insurance and provides
the means for the research and experience necessary to devise and
establish such insurance.
Federal Crop Insurance Program--See crop insurance.
Federal milk marketing
orders--Regulations issued by the Secretary of Agriculture
specifying minimum prices that regulated handlers must pay for milk
and other conditions under which milk can be bought and sold within
a specified area. The orders establish minimum class prices
according to the products for which milk is used that are then
"blended" as a weighted average. The 1996 Farm Act required
consolidation of the Federal milk marketing orders into 10-14
regional orders, down from 33. In 2008, there were 10 Federal milk
Flex acreage--See normal flex acreage and optional flex acreage.
Agriculture, Conservation and Trade Act of 1990 (1990 Farm Act)
(P.L. 101-624)--Omnibus food and agriculture legislation
(Farm Act) signed into law on November 28, 1990, provided a 5-year
framework (1991-95) for the Secretary of Agriculture to administer
various agricultural and food programs. Commodity programs were
continued, with modifications, such as creation of optional flex
acreage, making the programs more market oriented.
Food Distribution Program on Indian Reservations
(FDPIR)--A program created in 1977 as an alternative to
the FSP because many Native Americans live in remote areas where
food costs are high and access to food stamp offices and grocery
stores is limited. FDPIR provides monthly food packages to
low-income individuals and families living on reservations, and to
American Indian households living in approved areas near
reservations and in approved service areas in Oklahoma. In fiscal
year 2003, 5 States and 98 tribal authorities administered the
program on 243 reservations.
Security Act of 1985 (1985 Farm Act) (P.L.
99-198)--Omnibus food and agriculture legislation (Farm
Act) signed into law on December 23, 1985, provided a 5-year
framework (1986-90) for the Secretary of Agriculture to administer
various agricultural and food programs. The law provided for lower
price and income supports and a dairy herd buy-out program, and
established marketing loans, loan deficiency payments, and the
Conservation Reserve Program.
Food Security Commodity Reserve--See the Bill
Food Stamp Employment and Training
(FSE&T)--See the Supplemental
Nutrition Assistance Program Employment and Training.
Food Stamp Nutrition Education (FSNE)
Program--See Supplemental Nutrition
Assistance Program Nutrition Education (SNAP-Ed).
Food Stamp Program (FSP)--See Supplemental Nutrition Assistance Program
Forex--Over-the-counter market for foreign
exchange transactions. Also called the foreign exchange market.
Formula funds--The amount of funds provided for
agricultural research and extension to land-grant institutions
(1862, 1890 and 1994 institutions), schools of forestry, and
schools of veterinary medicine through several formula program
authorities. The funds to each institution are determined by
formula, often statutorily defined, that may include variables such
as the rural population or farm population. Local or regional
university leaders decide which specific projects will be supported
by an institution's formula fund allotment. These decisions are
informed, in part, by stakeholders who both conduct and use
agricultural research and extension.
Fruit and vegetable planting
restrictions--Planting for harvest of fruits, vegetables
(other than lentils, mung beans, and dry peas), and wild rice is
prohibited on base acres of commodity program participants, except
in certain situations specified in farm legislation (e.g., if the
farm has a history of planting a specific crop in these
categories). These restrictions were initiated in 1990 and extended
in the 1996, 2002 and 2008 Farm Acts.
FSP administration--FSP benefits are federally
funded, but the program is administered jointly with State and
local welfare agencies. Interactions with clients are handled by
State and local agencies that determine eligibility and calculate
and issue benefits. USDA, FNS authorizes and monitors retail stores
that redeem food stamp benefits. Federal and State authorities
cooperate in developing and implementing nutrition education and
outreach plans and in administering a nationwide quality control
system that monitors accuracy of benefit determination.
FSP benefit formula--An individual household's
food stamp allotment equal to the maximum benefit for that
household's size, less 30 percent of the household's net income.
Households with no countable income receive the maximum allotment.
Allotment levels are higher for Alaska, Hawaii, Guam, and the
Virgin Islands, reflecting higher food prices in those areas.
FSP countable resources--Assets applied to the
resource limit, including cash on hand, checking and savings
accounts, saving certificates, stocks and bonds, individual
retirement accounts (IRAs) and Keogh plans, as well as some less
liquid assets, such as vehicles and property not producing income.
Not included are residential equity, business assets, personal
property, lump-sum earned income tax credit payments and other
nonrecurring payments, burial plots, the cash value of life
insurance policies, and pension plans (other than Keogh plans and
FSP dependent care deduction--Deduction for
dependent care that was needed to allow work, training, or
education activities. Capped at $200 per month per child 2 and
under and $175 for others.
FSP Maximum Benefit--The maximum monthly
benefit depends on the number of people in the household and the
cost of the Thrifty Food Plan (which is annually indexed for
inflation). For FY 2008 the maximum benefit is $162 for a 1 person
household-- $298 for 2, $426 for 3, $542 for 4, $643 for 5, $772
for 6, $853 for 7, $975 for 8, and $122 for each additional person.
Maximum benefits are higher for Alaska, Hawaii, Guam, and the
Virgin Islands, reflecting higher food prices in those areas.
FSP minimum benefit--Minimum benefit ($10) for
eligible households with 1 or 2 members.
Fundamental or basic research--Research
conducted primarily to increase scientific understanding, not
necessarily for direct application or new commercial products or
processes. Also known as "basic research."
General Agreement on
Tariffs and Trade (GATT)--See General
Agreement on Tariffs and Trade (GATT) in ERS WTO Briefing Room
Grassland Reserve Program (GRP)--Program
established in the 2002 Farm Act to assist owners, through
long-term contracts or easements, in restoring grassland and
conserving virgin grassland. Restored, improved, or natural
grassland, rangeland, and pasture, including prairie, can be
enrolled. Eligible grassland can be enrolled under long term
contracts or easements. The program is administered jointly by the
Natural Resources Conservation Service, Farm Service Agency, and
Green Box Policies--See
green box policies in ERS WTO Briefing Room Glossary.
Guaranteed loan--Farm Service Agency (FSA)
guarantees loans lenders (e.g., banks, Farm Credit System
institutions, credit unions) up to 95 percent of any loss of
principal and interest on a loan. The guarantee permits lenders to
extend agricultural credit to farmers who do not meet the lenders'
normal underwriting criteria. FSA guaranteed loans are made for
both farm ownership (FO) and operating (OL) purposes. FSA can
guarantee OL or FO loans up to $949,000 (amount adjusted annually
based on inflation).
High-tier tariff rate--See
over-quota tariff in ERS WTO Briefing Room Glossary.
Highly erodible land
(HEL)--Soils with an erodibility index
(EI) equal to or greater than eight are defined as HEL. An EI of 8
indicates that without any cover or conservation practices, the
soil will erode at a rate eight times the soil tolerance level.
Fields containing at least one-third or 50 acres (whichever is
less) of HEL are designated as highly erodible for the purpose of
HEL conservation provisions.
Highly Erodible Land Conservation--Includes conservation compliance and
Homestead property--A family's principle
property, composed of a house and a lot, which can be filed as a
homestead by State law. The homestead status--which protects USDA
farm loan borrowers who lack the financial means to make timely
payments--is ineligible for a restructured loan and renders loan
borrowers unable to buy out the loan at the net recovery value of
the collateral property, allowing them instead to convey the
property to USDA in lieu of loan payments.
Horticulture crops--See specialty crops.
payments--Payments to producers in an amount or at a rate
necessary to encourage producers to adopt one or more land
Indirect costs--Portion of a grant that its
recipient can use to cover general, administrative, and other costs
not specifically related to the purposes of the grant.
Indirect (grant) costs--The portion of a grant
that covers general operating expenses and administrative
activities not directly related to activities sponsored by the
Initiative for Future Agriculture and Food Systems
(IFAFS)--Authorized in the Agricultural Research,
Extension and Education Reform Act of 1998. Implements research,
extension, and education grants to address critical emerging
agricultural issues related to 1) future food production, 2)
environmental quality and natural resource management, or 3) farm
income; and activities authorized by the Alternative Agricultural
Research and Commercialization Act of 1990.
in-quota tariff in ERS WTO Briefing Room Glossary.
Insular Areas of the United States--The
Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam,
American Samoa, the Commonwealth of the Northern Mariana Islands,
the Federated States of Micronesia, the Republic of the Marshall
Islands, and the Republic of Palau.
Act--Cargo preference legislation that requires shipping
of most government cargo, including foreign food aid, on
U.S.-built, owned, crewed, and operated vessels.
land-grant college or university is an institution designated by
its State legislature or Congress to receive benefits of the
Morrill Acts of 1862 and 1890. A principal mission of these
institutions, set forth in the first Morrill Act (Land-Grant Act),
was to teach agriculture and the mechanical arts. This law gave
each State a grant of Federal land to be sold to provide an
endowment for at least one land-grant institution. Additional
colleges and universities have been established with land-grant
status and certain existing institutions have received land-grant
status (see 1890s colleges/universities and 1994 institutions).
Land management practice--See management practice.
Limited-resource farmer or rancher--Farmers and
ranchers with (a) direct or indirect gross farm sales of $116,800
or less (adjusted for inflation starting in 2005) in each of the
previous 2 years and (b) total household income at or below the
national poverty level for a family of four OR less than 50 percent
of county median household income in each of the previous 2
Loan commodity--Wheat, corn, grain sorghum,
barley, oats, upland cotton, extra long staple cotton, long grain
rice, medium grain rice, soybeans, other oilseeds, graded wool,
nongraded wool, mohair, honey, dry peas, lentils, small chickpeas,
and large chickpeas.
deficiency payments (LDP)--A provision initiated in the
Food Security Act of 1985 that gives the Secretary of Agriculture
discretion to provide direct payments for loan commodities to
producers who agree not to obtain a commodity loan on their
production for a particular crop year. LDPs continue to be
available for all loan commodities except extra-long staple cotton.
LDPs are also available for unshorn pelts or hay and silage derived
from a loan commodity. The LDP provision is applicable only if a
marketing loan repayment provision has been implemented (i.e., if
the market price of a commodity is below the commodity loan rate).
The intent of the LDP provision (as well as the
marketing loan repayment
provision) is to minimize accumulation and storage of stocks by
the government and allow U.S. commodities to be marketed freely and
competitively. The LDP payment amount is determined by multiplying
the local marketing loan repayment rate by the amount of the
commodity eligible for a loan. Loan deficiency payments are not the
same as deficiency payments.
commodity loan rate.
repayment rate--See marketing loan repayment
allowance (or milk manufacturing marketing
adjustment)--Used by USDA in its calculation of Commodity
Credit Corporation purchase prices for butter, nonfat dry milk, and
cheese. It is intended to reflect manufacturing cost for the
products purchased. This margin is administratively set so that
manufacturers who receive the purchase price for their outputs
should be able to pay dairy farmers the equivalent of the support
price. The USDA make allowance is not a guaranteed margin to
Marketing loan gain--The difference between the
announced commodity loan rate and the marketing loan repayment
rate. This represents a program benefit to producers and is aimed
at reducing government costs of stock accumulation.
Marketing loan repayment
rate--Rate at which farmers are allowed to repay their
loans when market prices are below the commodity loan rate. This
lower repayment rate is based on the local,
prices (PCPs) for wheat, feed grains, or oilseeds; on the adjusted world price for
cotton; and on the national
posted price for peanuts. Any accrued interest on the loan is
practices--Changes in the management of agricultural
production in the context of environmental programs--e.g., nutrient
or manure management, integrated pest management, irrigation
management, tillage or residue management, and grazing
Market Access Program (MAP)--Formerly the
Market Promotion Program, designed to encourage development,
maintenance, and expansion of commercial commodity exports to
specific export markets. Participating organizations include
nonprofit trade associations, State and regional trade groups, and
private companies. Activities financed include consumer promotions,
market research, technical assistance, and trade servicing.
Market loss assistance payments--Direct
payments to producers to partially offset financial losses due to
severe weather and other natural disasters or stressful economic
conditions, such as low commodity prices or pest and animal disease
Marketing allotments--When in effect, these
provide each processor or producer of a specified commodity a
specific limit on sales for the year, above which penalties would
apply. Sugar allotments, for example, were authorized during
1991-95, suspended by the 1996 Farm Act, and reauthorized under the
2002 and 2008 Farm Acts.
Marketing assessments--A fee paid by
producers, processors, or handlers to help cover costs of commodity
program--Provisions that allow producers to repay
nonrecourse commodity loans at less than the announced loan rate
whenever the world price or loan repayment rate for the commodity
is less than the loan rate. Marketing loan provisions are aimed at
reducing government costs of stock accumulation. Marketing loan
provisions were originally mandated only for rice and upland
cotton. Marketing loan provisions are implemented for feed grains,
wheat, rice, upland cotton, all oilseeds, peanuts, small and large
chickpeas, lentils, dry beans, wool, mohair, and honey.
Marketing orders--Federal marketing orders
authorize agricultural producers in a designated region to take
various actions to promote orderly marketing, such as influencing
supply and quality and pooling funds for promotion and research.
Marketing orders are initiated by the industry, but must be
approved by the Secretary of Agriculture and by a vote among
affected producers. Once approved, a marketing order is mandatory
for all producers in the marketing order area. There are marketing
orders for a number of fruits, nuts, and vegetables, and for milk.
(See also Federal milk marketing
Marketing year--See crop
Market News--A program administered by USDA's
Agricultural Marketing Service to provide current, unbiased price
and sales data to assist in the orderly marketing and distribution
of farm commodities. Reports include prices, volume, quality,
condition, and other market data on agricultural commodities in
specific markets and marketing areas, domestically and in
Matching funds--Funds that a grant recipient
must provide personally or from another source as a condition for
receiving grant funds.
Milk marketing orders--See
Federal milk marketing orders.
Minor oilseeds--See other oilseeds.
Institute for Food and Agriculture.
National Organic Program--USDA organic
regulatory program for organic agriculture established under the
Organic Foods Production Act of 1990.
National posted price--Weekly
price announced by the CCC for peanuts used to determine the
loan repayment rate.
Research Initiatives for Food, Agriculture and Environment of
1990--The 1990 Farm Act extended the role of competitive
grants within USDA by formalizing the competitive process via the
National Research Initiatives for Food, Agriculture and
National School Lunch Program--Federally
assisted meal program operating in public and nonprofit private
schools and residential child care institutions. Established under
the National School Lunch Act in 1946. It provides nutritionally
balanced, low-cost lunches that are free to children in households
with incomes at or below 130 percent of poverty and reduced price
for those in households with incomes between 130 and 185 percent of
No net cost--A requirement that a price support
program be operated at no cost to the Federal Government. The
No-Net-Cost Act of 1982 required participants in the 1982 and
subsequent tobacco programs to pay an assessment to cover potential
losses in operating the tobacco price support program. A
no-net-cost provision for sugar was initiated under the Food
Security Act of 1985, suspended under the 1996 Farm Act, and
reimplemented under the 2002 Farm Act and is continued in the 2008
Noninsured Crop Disaster Assistance Program
(NAP)--Program that provides coverage similar to CAT
insurance to producers of noninsurable crops. Administered by
USDA's Farm Service Agency.
program--Program providing commodity-secured loan funds to
producers for a specified period of time (typically 9 months),
after which producers may either repay the loan and accrued
interest or transfer ownership of the commodity amount pledged as
collateral to the Commodity Credit Corporation (CCC) as full
settlement of the loan, without penalty. These loans, also referred
to as "commodity loans," are available on a crop year basis for
wheat, feed grains, cotton, peanuts, rice, oilseeds, pulse crops,
wool, mohair and honey. Sugar processors are also eligible for
nonrecourse loans. Participants in commodity loan programs receive
loan funds based on the commodity-specific, per-unit loan rate
specified in legislation. The loans are called nonrecourse because,
at the producer's option, the CCC has no recourse but to accept the
commodity as full settlement of the loan. Under the Marketing Loan Program, producers of
eligible commodities may repay the loan at the world price (rice
and upland cotton), posted county price (wheat, feed grains, and
oilseeds) or national posted price (peanuts) when these prices are
below the year's set commodity loan rate, thus providing a
disincentive to crop forfeiture. Some commodity loans are recourse loans, meaning
producers must pay back the loans in cash.
Nontariff barriers (NTB)--See
nontariff barriers in ERS WTO
Briefing Room Glossary.
flex acreage--A term given to the 15 percent of a farmer's
acreage base that was not eligible for deficiency payments during
1991-95 but could receives nonrecourse loans and marketing loans
for the commodity produced. Producers were allowed to plant any
crop on this normal flex acreage, except fruits, vegetables, and
some other prohibited crops, without a reduction in their crop
National Research Initiatives for Food, Agriculture, and
Environment of 1990.
Oilseeds--Soybeans, sunflower seed,
canola, rapeseed, safflower, mustard seed, and flaxseed.
Olympic average--An average
during a 5-year period, dropping the highest and lowest values.
The Omnibus Budget Reconciliation Act of 1990 (P.L.
101-508)--A law covering a range of government budget
issues that amended the 1990 Farm Act to address budgetary concerns
for 1991-95. It mandated a reduction in payment acreage equal to 15
percent of base acreage and established assessments for certain
crop loans and incentive payments.
Operating loan (OL)--Farm Service Agency (FSA)
operating loans (OL) may be used to purchase livestock, farm
equipment, feed, seed, fuel, farm chemicals, insurance, and other
operating expenses. OLs can also be used to pay for minor
improvements to buildings, costs associated with land and water
development, and family living expenses, and to refinance debts
under certain conditions. OLs are made under both direct and
guaranteed programs, to producers who cannot obtain funding from
Optional flex acreage--Under
the planting flexibility provision of the 1990 Farm Act, producers
of specific crops could choose to plant up to 25 percent of their
base acreage for a specific crop to other CCC-specified crops
(except fruits and vegetables) without a reduction in their base
acreage. Optional flex acreage is a term given to the 10 percent of
a farmer's acreage base in 1991-95 beyond the 15-percent
normal flex acreage that
farmers could choose to plant to crops other than the base program
crop. Optional flex acreage was eligible for deficiency payments
when planted to the original program crop. However, no deficiency
payments would be received on optional flex acreage if planted to
another crop. The optional flex acreage planting provision was
eliminated in the 1996 Farm Act.
Organic certification--Agricultural products
grown and processed according to USDA's national organic standards
and certified by a USDA-accredited State or private certification
organization. Certifying agents review applications from farmers
and processors for certification eligibility, and qualified
inspectors conduct annual onsite inspections of organic operations.
Certifying agents determine whether operators are in compliance
with organic production standards.
Organic production--Production system managed
in accordance with the Organic Foods Production Act of 1990 and
subsequent Federal regulations. Organic production systems respond
to site-specific conditions by integrating cultural, biological,
and mechanical practices that foster cycling of resources, promote
ecological balance, and conserve biodiversity.
oilseed--Term referring to oilseed crops other than
soybeans: sunflower seed, canola, rapeseed, safflower, mustard
seed, flaxseed, crambe, and sesame seed. Also referred to as minor
oilseeds. Additional oilseeds may be designated by the
over-quota tariff in ERS WTO topic Glossary.
(OTC)--Trading of commodities, contracts, or other
instruments not listed on any exchange. OTC transactions can occur
electronically or over the telephone. Also referred to as
diversion--Programs that offered payments to producers to
reduce planted acreage of program crops, if the Secretary
determined that crop-specific planted acreage should be reduced
more than under the acreage reduction
program. Farmers were given a specific payment per acre idled
in a given year that exceeded acreage reduction program
Parity-based support prices--Commodity-specific
support prices (such as loan rates or commodity program purchase
prices) whose level in a given year is mandated to be calculated in
a way that will maintain the commodity's purchasing power at the
level of the 1910-14 base period. Under "
permanent legislation" (whose provisions would automatically
apply in the absence of current farm acts), the prices of some
commodities would be supported at 50-90 percent of parity through
direct government purchases or
Payment acres--Equal to 85 percent of the base
acres for calculating direct and counter-cyclical payments. The
2008 Farm Act set payment acres at 83.3 percent of base acres for
crop years 2009-11.
Payment limitation--The maximum annual amount
of commodity program benefits a person can receive by law. The
total amount of payments must be attributed (linked) to a person,
by taking into account direct and indirect ownership interests of
the person in a legal entity, such as limited partnerships,
corporations, associations, trusts, and estates, that are actively
engaged in farming. Payment limits are set at $40,000 per person
per crop year for
direct payments and $65,000
payments. The 2008 Farm Act eliminated payment limits for
marketing loan benefits. For producers who elect the
Average Crop Revenue Election (ACRE) program, the limit on
direct payments is reduced by 20 percent. The limit on ACRE
payments is $65,000 plus the 20 percent reduction in direct
payments. The 2008 Farm Act established separate limits on the farm
and nonfarm components of adjusted gross income based on the type
of payment. These new limits include two applicable to nonfarm
income and one applicable to farm income.
(also called program yield)--Farm's yield of record (per
acre) for a specific commodity, determined by a procedure outlined
in farm legislation and used in calculating direct payments and
the peanut program prior to 2002, these were peanuts sold from a
farm in any marketing year in excess of the farm's peanut poundage
quota. The higher of two price-support loan rate levels applied
only to the quantity of peanuts within the annually determined
poundage quota. "Additional peanuts" were eligible only for the
lower price-support loan rate, the level of which was determined by
the Secretary of Agriculture, taking into consideration the demand
for peanut oil and meal, expected prices of other vegetable oils
and protein meals, and the demand for peanuts in foreign
Peanut poundage quota--The maximum quantity of
peanuts eligible for the higher of two price support loan rates
under the peanut program ended by the 2002 Farm Act. The 1977 Farm
Act initiated the two-tier price support program for peanuts. Each
producer received a share of a national poundage quota. Producers
could market more than their quota, but only the quota amount was
eligible for domestic edible use. Over-quota marketings or
"additional peanuts" could be sold only for export or processing
(crush). Quota peanuts were eligible for a higher commodity loan
rate than additionals. The 1996 Farm Act permitted the sale, lease,
and transfer of a quota across county lines within a State up to
specified amounts of quota annually.
legislation--This term refers to those laws that would be
in force to authorize various agricultural programs in the absence
of all temporary amendments (farm acts). The Agricultural
Adjustment Act of 1938 and the Agricultural Act of 1949, as
subsequently amended, serve as the basic laws authorizing the major
Personal Responsibility and Work Opportunity
Reconciliation Act of 1996--Legislation enacted in 1996
that reformed the Nation's public assistance programs, replacing
the cash welfare entitlement under the Aid to
Families with Dependent Children program with State-designed
Temporary Assistance for Need Families programs (TANF) that
encouraged parents to work.
Planted yield--Crop year commodity production
(quantity) per planted acre.
Posted county price
(PCP)--Calculated for wheat, feed grains, and oilseeds for
each county by USDA's Farm Service Agency, the PCP reflects price
changes in major terminal grain markets (of which there are 18 in
the United States) corrected for the cost of transporting grain
from county to terminal. Under the
repayment provisions and loan deficiency payment provisions of
the commodity programs, PCP is used as the loan repayment rate,
allowing wheat, feed grain, and oilseed producers to repay
commodity loans at less than the original loan rate.
Precision agriculture--An integrated
information and production-based farming system designed to
increase long-term, site-specific, and whole-farm production
efficiencies, productivity, and profitability while minimizing
unintended impacts on wildlife and the environment.
planting acreage--Land on which a farmer intended to plant
a program crop or insurable crop but was unable to do so because of
drought, flood, or other natural disaster or condition. Used in the
calculation of disaster payments and crop insurance indemnity
Price election--Crop price at which indemnities
are paid. When enrolling in crop insurance, producers choose a
percentage of the price election at which to insure.
Price support loans--See nonrecourse loan program.
Producer--An owner, operator, landlord, tenant,
or sharecropper who shares in the risk of producing a crop and is
entitled to share in the crop available for marketing from the
farm, or would have shared had the crop been produced.
Production flexibility contract
(AMTA) payments--Payments during 1996-2002 to farmers who
enrolled "contract acreage," under Title I, Subtitle B of the 1996
Farm Act in a one-time sign-up in 1996. The annual total amount,
specified in legislation, was allocated to specific crops (wheat,
rice, feed grains, and upland cotton) based on percentage
allocation factors established in the 1996 Act. Each participating
producer of a contract crop received payments determined by
multiplying their production flexibility contract payment quantity
by the national average production flexibility contract payment
rate (see below). Farmers could plant 100 percent of their total
contract acreage to any crop, except for limitations on fruits and
vegetables, Production Flexibility contract payments were replaced
direct payments under the 2002
Production flexibility contract payment
quantity--The quantity of a farm's production eligible for
production flexibility contract payments under the 1996 Farm Act.
Payment quantity was calculated as the farm's
payment yield (per acre) multiplied
by 85 percent of the farm's contract acreage.
Production flexibility contract payment
rate--The amount paid to farmers per unit of participating
production under the 1996 Farm Act. A farm's contract acreage and
farm program payment yield was established in 1996 during the
one-time sign-up period. The national average per-unit payment rate
for each crop was calculated annually based on the total amount to
be paid out for the crop (largely predetermined by the 1996 Act),
divided by the total contract payment quantity of the commodity for
the fiscal year.
Program crops--Crops for which Federal support
programs are available to producers, including wheat, corn, barley,
grain sorghum, oats, extra long staple and upland cotton, rice,
oilseeds, peanuts, and sugar.
Public Law 480 (P.L. 480)--Common name for the
Agricultural Trade Development and Assistance Act of 1954, which
seeks to expand foreign markets for U.S. agricultural products,
combat hunger, and encourage economic progress in developing
countries. Title I of P.L. 480, also called the Food for Peace
Program, makes U.S. agricultural commodities available through
long-term dollar credit sales at low interest rates for up to 30
years. Government donations for humanitarian food needs are
provided under Title II. Title III authorizes
government-to-government "food for development" grants, with
donated commodities sold in the developing countries and the
revenue used for economic development programs.
Pulse crops--Term used in North American
agriculture that commonly refers to dry (mature) peas, lentils and
small and large chickpeas (garbanzo beans) used as food or feed
crops (with "food" referring to human use and "feed" to animal
Recourse loan program--A
provision allowing farmers or processors participating in
Government commodity programs to pledge a quantity of a commodity
as collateral and obtain a loan from the Commodity Credit
Corporation (CCC), which the borrower must repay with interest
within a specified period. This provision is unlike nonrecourse
loans, which allow producers to settle their loans by delivering
the collateral to the CCC.
REEO--Research Extension and Education
Regional Equity--Provision enacted in the 2002
Farm Act that requires that each State be allocated an amount of
conservation funding through specific conservation programs, that
collectively exceeds a predetermined minimum amount. The programs
that are subject to this provision include the Environmental
Quality Incentives Program, the Farmland Protection Program, the
Wildlife Habitat Incentives Program, and the Grassland Reserve
Reinsurance year--Year used to administer risk
sharing and other terms of the Standard Reinsurance Agreement. The
reinsurance year is from July 1 to June 30; the number of the year
is the year containing June. For example, reinsurance year 2012 is
July 1, 2011 to June 30, 2012.
Revenue insurance--An insurance policy offered
to farmers that pays indemnities based on revenue shortfalls. These
programs are subsidized and reinsured by USDA's Risk Management
RFP--Request for proposals to provide specific
Risk Management Agency (RMA)--USDA agency that
administers programs of the Federal Crop Insurance Corporation.
SAES- State Agricultural
Safety net--A policy that ensures a minimum
income, consumption, or wage level for everyone in a society or
subgroup. It may also provide persons (including businesses) with
protection against risks, such as lost income, limited access to
credit, or devastation from natural disasters.
School Breakfast Program--Provides nutritional
meals to students at participating schools (and to children in a
few residential child care institutions). Certified low-income
students receive free or reduced-price breakfasts.
Section 32--Section 32 of Agricultural
Adjustment Act Amendment of 1935 was enacted to widen market
outlets for surplus agricultural commodities as one means of
strengthening farm prices. Section 32 programs are financed by a
permanent appropriation equal to 30 percent of the import duties
collected on all items entering the United States under the customs
laws, plus any unused balances up to $300 million. Most funds are
annually transferred by appropriators to pay for child nutrition
Section 416--Section 416 of the Agricultural
Act of 1949 provides for the disposition of agricultural
commodities held by the Commodity Credit Corporation to prevent
waste. Disposal is usually carried out by donation of commodities
to charitable groups and foreign governments.
Senior Farmers' Market Nutrition
Program--Program providing low-income seniors with coupons
that can be exchanged for eligible foods at farmers' markets,
roadside stands, and community-supported agriculture programs
through grants awarded to States, U.S. territories, and federally
recognized Indian tribal organizations. Participants receive
nutrition education and a Federal food benefit of $20-$50 per
Simplified reporting--A State food stamp option
that allows States to minimize the information that food stamp
recipients must provide to the food stamp office during the food
stamp certification period. Households report only those changes in
circumstances that result in income exceeding the food stamp
eligibility limit of 130 percent of the Federal poverty level. At 6
months, a State must recertify the household or, if it uses a
12-month certification period, require the household to submit a
semiannual report that will be used to update its eligibility and
Smith-Lever 3(b) and 3(c) extension
funds--Federal funds for USDA cooperative extension
Smith-Lever 3(d) special emphasis extension
funds--Smith-Lever 3(d) funds provide support to State and
territory programs in Integrated Pest Management (IPM); Sustainable
Agriculture Research and Education Farm Safety funds, which support
health and safety efforts in the agricultural sector; and National
Children, Youth, and Families at Risk, Federally Recognized Tribes
Extension Program and Expanded Food and Nutrition Education
Program, which support the nutritional education needs of the
underserved, targeting citizens with limited incomes.
Socially disadvantaged farmer or rancher
(SDA)--A farmer or rancher who is a member of a group
whose members have been subjected to racial or ethnic or (in some
cases) gender prejudice because of his or her identity as a member
of the group. The definition of SDA farmers varies by Title.
Sodbuster--Requires producers who
began cropping highly erodible land (HEL) after December 23, 1985
to implement a soil conservation plan or risk losing their Federal
farm program benefits, including most commodity, conservation, and
disaster payments. Sodbuster requirements are similar to those of
conservation compliance, but tend to be less stringent.
grants--The Special Research Grants Act of 1965 created a
mechanism outside the competitive grants process for the
distribution of funds to State Agricultural Experiment Stations,
public institutions, and individuals to study specific problems of
concern to USDA, as defined by Congress. (See also definition for
vegetables, tree nuts, dried fruits, nursery crops, and
floriculture. Also referred to as horticulture crops.
Standard Reinsurance Agreement--A cooperative
financial assistance agreement between Federal Crop Insurance
Corporation and approved insurance providers to deliver eligible
crop insurance contracts.
State Agricultural Experiment
Stations (SAES)--SAES work with land-grant universities to
carry out a joint research-teaching-extension mission. The Hatch
Act of 1887 offered States the option of establishing stations to
perform science-based research and acquire and disseminate
information of use to the agricultural sector. Each State (as well
as some territories) now has an SAES, and some States have
additional substations. The experiment stations cooperate closely
Step 2 payments for upland cotton--These
payments ae issued weekly to exporters and domestic mill users of
U.S. upland cotton, subject to price conditions in the United
States and Northern Europe. Payments were made in cash or
certificates to domestic users on documented raw cotton
consumption, and to exporters on documented export shipments. The
program terminated on August 1, 2006.
Stewardship threshold--The level of natural
resource conservation and environmental management required, as
determined by the Secretary using conservation measurement tools,
to improve and conserve the quality and condition of a
Structural practice--A practice that involves a
constructed facility, land shaping, or permanent vegetative cover
designed to preserve soil; reduce runoff of nutrient, sediment, and
pesticides; enhance wildlife habitat; or other purposes. Examples
include animal waste-management facilities, terraces, grassed
waterways, contour grass strips, filter strips, tailwater pits,
permanent wildlife habitats, and constructed wetlands.
Supplemental Agricultural Disaster
Assistance--Disaster assistance payments provided to
producers of eligible commodities (crops, farm-raised fish, honey,
and livestock) in counties declared by the Secretary to be
Assistance Program (SNAP)--New name for the former Food
Stamp Program (FSP). SNAP provides monthly benefits to eligible
low-income households and is designed to alleviate hunger and
malnutrition by enabling participants to obtain a more nutritious
diet. Benefits can be used to purchase food at authorized food
stores. The 2008 Farm Act changed the name of the Food Stamp
Program to the Supplemental Nutrition Assistance Program (SNAP),
effective on October 1, 2008.
Nutrition Assistance Program Employment and Training (SNAP
E&T)--Program requirement that certain members of
participating households must register for work, accept suitable
job offers, and fulfill work or training requirements (such as
looking or training for a job) established by State welfare
agencies. The Food Security Act of 1985 required all States to
implement a Food Stamp Employment Training (FSE&T) Program to
improve work opportunities for program participants. Funds for
E&T were made available to States by Federal grants, with
additional funding available on a 50-percent matching basis.
Legislation in 1997 and 1998 targeted E&T funding to nonworking
adults without dependents.
Assistance Program Nutrition Education (SNAP-Ed)--A
component of SNAP supporting nutrition education activities.
SNAP-Ed focuses on improving the likelihood that SNAP participants
and other low-income Americans will make healthy food choices
within a limited budget and choose active lifestyles consistent
with the Dietary Guidelines for Americans and ChooseMyPlate food guidance system. State
agencies have the option of participating in SNAP-Ed if they are
willing to match Federal funding. USDA's Food and Nutrition Service
approves State plans annually and then reimburses States for 50
percent of allowable expenditures.
Supplemental Revenue Assistance
Payments--Payments made to eligible producers on farms in
disaster counties that incurred crop production or crop quality
losses or both during the crop year.
Swampbuster--Term for wetland
conservation compliance provisions first established in 1985 farm
legislation. Producers who drain a wetland to make it ready for
crop production can lose Federal farm program benefits, including
most commodity, conservation, and disaster payments. Natural
Resources Conservation Service certifies technical compliance, and
USDA's Farm Services Agency administers changes in farm program
price--Unit price level (e.g., for bushel, pound, or ton)
established in the 2002 Farm Act used for calculating
counter-cyclical payments for covered (program) commodities. Prior
to 1996, target prices were used to calculate deficiency
tariff in ERS WTO topic Glossary.
(TRQ) in ERS WTO topic Glossary.
Temporary Assistance for Needy Families
(TANF)--A Federal-State, block-grant program that replaced
AFDC program in 1996. TANF provides cash benefits to low-income
families with children. Under TANF, States have flexibility to
determine eligibility requirements and benefit levels, but benefits
are subject to a 5-year Federal time limit and work
The Emergency Food Assistance Program
(TEFAP)--Provides commodities for distribution through the
private emergency food system. Provides mandatory multiyear funding
and commodity donations from excess CCC inventories of foodstuffs
for food distribution by emergency feeding organizations serving
the needy and homeless. TEFAP buys and donates commodities and
provides grants for State and local costs of transporting, storing,
and distributing them to emergency feeding organizations, soup
kitchens, and food banks serving low-income persons.
Three-entity rule--Limits the
number of farms from which a person can receive program payments.
Under the rule, an individual can receive a full payment directly
and up to a half payment from two additional entities.
Thrifty Food Plan (TFP)--One of four
USDA-designed food plans specifying foods and amounts of foods to
provide adequate nutrition. Used as the basis for designing Food
Stamp Program (FSP) benefits, it is the lowest cost food plan that
can be priced monthly using the price data collected for the
consumer price index. The monthly cost of the TFP used for the FSP
represents a national average of prices (4-person household
consisting of an adult couple and 2 school-age children) adjusted
for other household sizes through the use of a formula reflecting
economies of scale. For food stamp purposes, the TFP as priced each
June sets maximum benefit levels for the fiscal year beginning the
Transitional benefits--Up to 5 months of
transitional food stamp benefits provided by States to families
that leave welfare without requiring the family to reapply or
submit any additional paperwork or other information. During
the transitional period, the household's benefit level is frozen at
the amount it received prior to its TANF case closure, adjusted for
the loss of TANF income.
Uruguay Round (UR)--See
Uruguay Round (UR) in ERS WTO topic Glossary.
Wetlands Reserve Program (WRP)--Established in
1985 Farm Act and administered by the Natural Resources
Conservation Service in consultation with USDA's Farm Service
Agency and other Federal agencies. WRP is funded through Commodity
Credit Corporation and has an acreage enrollment cap. All
landowners who choose to participate in WRP must implement an
approved wetlands restoration and protection plan. They may sell a
permanent or 30-year conservation easement to USDA and receive
payments, or enter into a 10-year cost-share restoration agreement
to restore and protect wetlands. The landowner voluntarily limits
future use of the land yet retains private ownership.
Wildlife Habitat Incentives Program (WHIP)-The
1996 Farm Act created WHIP to provide cost-sharing and technical
assistance to landowners for developing habitat for upland
wildlife, wetland wildlife, threatened and endangered species,
fish, and other types of wildlife. Participating landowners, with
the assistance of the Natural Resources Conservation Service
district office, develop plans for wildlife habitat restoration and
development. Standard contracts are generally 5-10 years in length.
Cost-share payments may be used to establish and maintain
practices. Cooperating State wildlife agencies and nonprofit or
private organizations may provide additional expertise and funding.
WHIP funds are distributed to States based on State, regional, and
national priorities, which may involve wildlife habitat areas,
targeted species and their habitats, or specific practices.
world price, cotton.
World price (rice)--See
World Trade Organization (WTO)--An
international organization established by the Uruguay Round trade
agreement to replace the institution created by the General
Agreement on Tariffs and Trade, known as the GATT. The Uruguay
Round trade agreement modified the code and the framework and
established the WTO on January 1, 1995. The WTO provides a code of
conduct for international commerce and a framework for periodic
multilateral negotiations on trade liberalization and
loan--The Farm Service Agency (FSA) makes loans to
individual rural youths to establish and operate income-producing
projects of modest size in connection with their participation in
4-H clubs, Future Farmers of America, and similar organizations.
Each project must be part of an organized and supervised program of
work. The project must be planned and operated with the help of the
organization adviser, produce sufficient income to repay the loan,
and provide the youth with practical business and educational
experience. The project adviser must recommend the project and the
loan, and agree to provide adequate supervision. The applicant
cannot be younger than 10-years-old or older than 20-years-old and
must live in a town of fewer than 10,000 people. The maximum amount
for FSA youth loans is $5,000.