[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1227 Introduced in Senate (IS)]







104th CONGRESS
  1st Session
                                S. 1227

 To extend and revise agricultural price support and related programs 
       for cotton, peanuts, and oilseeds, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

            September 8 (legislative day, September 5), 1995

  Mr. Heflin introduced the following bill; which was read twice and 
   referred to the Committee on Agriculture, Nutrition, and Forestry

_______________________________________________________________________

                                 A BILL


 
 To extend and revise agricultural price support and related programs 
       for cotton, peanuts, and oilseeds, and for other purposes.
    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Southern 
Agricultural Act of 1995''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                            TITLE I--COTTON

Sec. 101. Loans, payments, and acreage reduction programs for the 1996 
                            through 2002 crops of upland cotton.
Sec. 102. Extra long staple cotton program.
Sec. 103. Suspension of base acreage allotments, marketing quotas, and 
                            related provisions.
Sec. 104. Miscellaneous cotton provisions.
Sec. 105. Skiprow practices.
Sec. 106. Preliminary allotments for 2003 crop of upland cotton.
Sec. 107. Cottonseed and cottonseed oil.
Sec. 108. Cotton classification services.
                           TITLE II--PEANUTS

Sec. 201. Suspension of marketing quotas and acreage allotments.
Sec. 202. National poundage quotas and acreage allotments.
Sec. 203. Sale, lease, or transfer of farm poundage quota.
Sec. 204. Marketing penalties; disposition of additional peanuts.
Sec. 205. Experimental and research programs for peanuts.
Sec. 206. Price support program.
Sec. 207. Reports and records.
Sec. 208. Suspension of certain price support provisions.
Sec. 209. Regulations.
                          TITLE III--OILSEEDS

Sec. 301. Loans and payments for oilseeds for 1996 through 2002 
                            marketing years.
                 TITLE IV--GENERAL COMMODITY PROVISIONS

           Subtitle A--Amendments to Agricultural Act of 1949

Sec. 401. Supplemental set-aside and acreage limitation authority.
Sec. 402. Deficiency and land diversion payments.
Sec. 403. Adjustment of established prices.
Sec. 404. Adjustment of support prices.
Sec. 405. Program option for future crops.
Sec. 406. Application of terms in the Agricultural Act of 1949.
Sec. 407. Acreage base and yield system.
             Subtitle B--Miscellaneous Commodity Provisions

Sec. 411. Payment limitations.
Sec. 412. Normally planted acreage.
Sec. 413. Normal supply.
Sec. 414. Determinations of the Secretary.
Sec. 415. Options pilot program.
Sec. 416. National Agricultural Cost of Production Standards Review 
                            Board.
                        Subtitle C--Application

Sec. 421. Application.
                            TITLE I--COTTON

SEC. 101. LOANS, PAYMENTS, AND ACREAGE REDUCTION PROGRAMS FOR THE 1996 
              THROUGH 2002 CROPS OF UPLAND COTTON.

    Section 103B of the Agricultural Act of 1949 (7 U.S.C. 1444-2) is 
amended to read as follows:

``SEC. 103B. LOANS, PAYMENTS, AND ACREAGE REDUCTION PROGRAMS FOR THE 
              1996 THROUGH 2002 CROPS OF UPLAND COTTON.

    ``(a) Loans.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the Secretary shall, on presentation of warehouse 
        receipts or other acceptable evidence of title, as determined 
        by the Secretary, reflecting accrued storage charges of not 
        more than 60 days, make available for each of the 1996 through 
        2002 crops of upland cotton to producers on a farm nonrecourse 
        loans for upland cotton produced on the farm for a term of 10 
        months from the first day of the month in which the loan is 
        made at such loan level, per pound, as will reflect for the 
        base quality of upland cotton, as determined by the Secretary, 
        at an average location in the United States a level that is not 
        less than the lesser of--
                    ``(A) 85 percent of the average price (weighted by 
                market and month) of the base quality of cotton as 
                quoted in the designated United States spot markets 
                during 3 years of the 5-year period ending July 31 of 
                the year in which the loan level is announced, 
                excluding the year in which the average price was the 
                highest and the year in which the average price was the 
                lowest in the period; or
                    ``(B) 90 percent of the average price, for the 15-
                week period beginning July 1 of the year in which the 
                loan level is announced, of the 5 lowest-priced growths 
                of the growths quoted for Middling 1\3/32\-inch cotton 
                C.I.F. Northern Europe (adjusted downward by the 
                average difference during the period April 15 through 
                October 15 of the year in which the loan is announced 
                between the average Northern European price quotation 
                of the quality of cotton and the market quotations in 
                the designated United States spot markets for the base 
                quality of upland cotton), as determined by the 
                Secretary.
            ``(2) Adjustments to loan level.--
                    ``(A) Limitation on decrease in loan level.--The 
                loan level for any crop determined under paragraph (1) 
                may not be reduced by more than 5 percent from the 
                level determined for the preceding crop, and may not be 
                reduced below 50 cents per pound.
                    ``(B) Limitation on increase in loan level.--If for 
                any crop the average Northern European price determined 
                under paragraph (1)(B) is less than the average United 
                States spot market price determined under paragraph 
                (1)(A), the Secretary may increase the loan level to 
                such level as the Secretary may consider appropriate, 
                not in excess of the average United States spot market 
                price determined under paragraph (1)(A).
            ``(3) Announcement of loan level.--The loan level for any 
        crop of upland cotton shall be determined and announced by the 
        Secretary not later than November 1 of the calendar year 
        preceding the marketing year for which the loan is to be 
        effective or, in the case of the 1996 crop, as soon as is 
        practicable after the date of enactment of the Southern 
        Agricultural Act of 1995. The loan level for a crop shall not 
        be changed after announcement.
            ``(4) Extension of loan period.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), nonrecourse loans provided for in 
                this section shall, on request of the producers on a 
                farm during the 10th month of the loan period for the 
                cotton, be made available for an additional term of 8 
                months.
                    ``(B) Limitation.--A request to extend the loan 
                period shall not be approved in any month in which the 
                average price of the base quality of upland cotton, as 
                determined by the Secretary, in the designated spot 
                markets for the preceding month exceeds 130 percent of 
                the average price of the base quality of cotton in the 
                designated United States spot markets for the preceding 
                36-month period.
            ``(5) Marketing loans.--
                    ``(A) In general.--If the Secretary determines that 
                the prevailing world market price for upland cotton 
                (adjusted to United States quality and location) is 
                below the loan level determined under paragraphs (1) 
                through (4), to make United States upland cotton 
                competitive in world markets, the Secretary shall 
                permit the producers on a farm to repay a loan made for 
                any crop at--
                            ``(i) a level that is the lesser of--
                                    ``(I) the loan level determined for 
                                the crop; and
                                    ``(II) the greater of--
                                            ``(aa) 70 percent of the 
                                        loan level determined for the 
                                        crop; and
                                            ``(bb) the prevailing world 
                                        market price for upland cotton 
                                        (adjusted to United States 
                                        quality and location), as 
                                        determined by the Secretary; or
                            ``(ii) such other level (not in excess of 
                        the loan level determined for the crop nor less 
                        than 70 percent of the loan level) that the 
                        Secretary determines will--
                                    ``(I) minimize potential loan 
                                forfeitures;
                                    ``(II) minimize the accumulation of 
                                upland cotton stocks by the Federal 
                                Government;
                                    ``(III) minimize the cost incurred 
                                by the Federal Government in storing 
                                upland cotton; and
                                    ``(IV) allow upland cotton produced 
                                in the United States to be marketed 
                                freely and competitively, both 
                                domestically and internationally.
                    ``(B) First handler marketing certificates.--
                            ``(i) In general.--During the period 
                        beginning August 1, 1996, and ending July 31, 
                        2003, if a program carried out under 
                        subparagraph (A) or subsection (b) fails to 
                        make United States upland cotton fully 
                        competitive in world markets and the prevailing 
                        world market price of upland cotton (adjusted 
                        to United States quality and location), as 
                        determined by the Secretary, is below the 
                        current loan repayment rate for upland cotton 
                        determined under subparagraph (A), to make 
                        United States upland cotton competitive in 
                        world markets and to maintain and expand 
                        domestic consumption and exports of upland 
                        cotton produced in the United States, the 
                        Secretary shall provide for the issuance of 
                        marketing certificates or cash payments in 
                        accordance with this subparagraph.
                            ``(ii) Payments.--The Commodity Credit 
                        Corporation, under such regulations as the 
                        Secretary may prescribe, shall make payments, 
                        through the issuance of marketing certificates 
                        or cash payments, to first handlers of cotton 
                        (who shall be persons regularly engaged in 
                        buying or selling upland cotton) who have 
                        entered into an agreement with the Commodity 
                        Credit Corporation to participate in the 
                        program established under this subparagraph. 
                        The payments shall be made in such monetary 
                        amounts and subject to such terms and 
                        conditions as the Secretary determines will 
                        make upland cotton produced in the United 
                        States available at competitive prices, 
                        consistent with the purposes of this 
                        subparagraph.
                            ``(iii) Value.--The value of each 
                        certificate or cash payment issued under clause 
                        (ii) shall be based on the difference between--
                                    ``(I) the loan repayment rate for 
                                upland cotton; and
                                    ``(II) the prevailing world market 
                                price of upland cotton (adjusted to 
                                United States quality and location), as 
                                determined by the Secretary.
                            ``(iv) Redemption, marketing, or 
                        exchange.--The Commodity Credit Corporation, 
                        under regulations prescribed by the Secretary, 
                        may assist any person receiving marketing 
                        certificates under this subparagraph in the 
                        redemption of the certificates for cash, or 
                        marketing or exchange of the certificates for 
                        agricultural commodities or products owned by 
                        the Commodity Credit Corporation, at such 
                        times, in such manner, and at such price levels 
                        as the Secretary determines will best 
                        effectuate the purposes of the program 
                        established under this subparagraph. Any price 
                        restrictions that may otherwise apply to the 
                        disposition of agricultural commodities by the 
                        Commodity Credit Corporation shall not apply to 
                        the redemption of certificates under this 
                        subparagraph.
                            ``(v) Designation of commodities and 
                        products; charges.--Insofar as practicable, the 
                        Secretary shall permit owners of certificates 
                        to designate the commodities and the products 
                        of the commodities, including storage sites of 
                        the commodities and products, that the owners 
                        would prefer to receive in exchange for 
                        certificates. If any certificate is not 
                        presented for redemption, marketing, or 
                        exchange within a reasonable number of days 
                        after the issuance of the certificate (as 
                        determined by the Secretary), the reasonable 
                        costs of storage and other carrying charges, as 
                        determined by the Secretary, shall be deducted 
                        from the value of the certificate for the 
                        period beginning after the reasonable number of 
                        days and ending on the date of the presentation 
                        of the certificate to the Commodity Credit 
                        Corporation.
                            ``(vi) Displacement.--The Secretary shall 
                        take such measures as may be necessary to 
                        prevent the marketing or exchange of 
                        agricultural commodities and products for 
                        certificates under this subsection from 
                        adversely affecting the income
                         of producers of the commodities or products.
                            ``(vii) Transfers.--Under regulations 
                        prescribed by the Secretary, certificates 
                        issued to cotton handlers under this 
                        subparagraph may be transferred to other 
                        handlers and persons approved by the Secretary.
                    ``(C) Prevailing world market price.--
                            ``(i) In general.--The Secretary shall 
                        prescribe by regulation--
                                    ``(I) a formula to determine the 
                                prevailing world market price for 
                                upland cotton (adjusted to United 
                                States quality and location); and
                                    ``(II) a mechanism by which the 
                                Secretary shall announce periodically 
                                the prevailing world market price for 
                                upland cotton (adjusted to United 
                                States quality and location).
                            ``(ii) Use.--The prevailing world market 
                        price for upland cotton (adjusted to United 
                        States quality and location) established under 
                        this subparagraph shall be used under 
                        subparagraphs (A), (B), and (E).
                    ``(D) Adjustment of prevailing world market 
                price.--
                            ``(i) In general.--During the period 
                        beginning August 1, 1996, and ending July 31, 
                        2003, the prevailing world market price for 
                        upland cotton (adjusted to United States 
                        quality and location) established under 
                        subparagraph (C) shall be further adjusted if--
                                    ``(I) the adjusted prevailing world 
                                market price is less than 115 percent 
                                of the current crop year loan level for 
                                the base quality of upland cotton, as 
                                determined by the Secretary; and
                                    ``(II) the Friday through Thursday 
                                average price for the lowest-priced 
                                United States growth as quoted for 
                                Middling 1\3/32\-inch cotton delivered 
                                C.I.F. Northern Europe is greater than 
                                the Friday through Thursday average 
                                price of the 5 lowest-priced growths of 
                                upland cotton, as quoted for Middling 
                                1\3/32\-inch cotton, delivered C.I.F. 
                                Northern Europe (referred to in this 
                                subsection as the `Northern Europe 
                                price').
                            ``(ii) Further adjustment.--Except as 
                        provided in clause (iii), the adjusted 
                        prevailing world market price shall be further 
                        adjusted on the basis of some or all of the 
                        following data, as available:
                                    ``(I) The United States share of 
                                world exports.
                                    ``(II) The current level of cotton 
                                export sales and cotton export 
                                shipments.
                                    ``(III) Other data determined by 
                                the Secretary to be relevant in 
                                establishing an accurate prevailing 
                                world market price for upland cotton 
                                (adjusted to United States quality and 
                                location).
                            ``(iii) Limitation on further adjustment.--
                        The adjustment under clause (ii) may not exceed 
                        the difference between--
                                    ``(I) the Friday through Thursday 
                                average price for the lowest-priced 
                                United States growth as quoted for 
                                Middling 1\3/32\-inch cotton delivered 
                                C.I.F. Northern Europe; and
                                    ``(II) the Northern Europe price.
                    ``(E) Cotton user marketing certificates.--
                            ``(i) Issuance.--Subject to clause (iv), 
                        during the period beginning August 1, 1996, and 
                        ending July 31, 2003, the Secretary shall issue 
                        marketing certificates or cash payments to 
                        domestic users and exporters for documented 
                        purchases by domestic users and sales for 
                        export by exporters made in the week following 
                        a consecutive 4-week period in which--
                                    ``(I) the Friday through Thursday 
                                average price for the lowest-priced 
                                United States growth, as quoted for 
                                Middling 1\3/32\-inch cotton, delivered 
                                C.I.F. Northern Europe exceeds the 
                                Northern Europe price by more than 1.25 
                                cents per pound; and
                                    ``(II) the prevailing world market 
                                price for upland cotton (adjusted to 
                                United States quality and location),
                                 established under subparagraph (C), 
does not exceed 130 percent of the current crop year loan level for the 
base quality of upland cotton, as determined by the Secretary.
                            ``(ii) Value.--The value of the marketing 
                        certificates or cash payments shall be based on 
                        the amount of the difference (reduced by 1.25 
                        cents per pound) in the prices during the 4th 
                        week of the consecutive 4-week period 
                        multiplied by the quantity of upland cotton 
                        included in the documented sales.
                            ``(iii) Administration.--Clauses (iv) 
                        through (vii) of subparagraph (B) shall apply 
                        to marketing certificates issued under this 
                        subparagraph. Any such certificates may be 
                        transferred to other persons in accordance with 
                        regulations issued by the Secretary.
                            ``(iv) Exception.--The Secretary shall not 
                        issue marketing certificates or cash payments 
                        under clause (i) if, for the immediately 
                        preceding consecutive 10-week period, the 
                        Friday through Thursday average price for the 
                        lowest priced United States growth, as quoted 
                        for Middling 1\3/32\-inch cotton, delivered 
                        C.I.F. Northern Europe, adjusted for the value 
                        of any certificate issued under this 
                        subparagraph, exceeds the Northern Europe price 
                        by more than 1.25 cents per pound.
                    ``(F) Special import quota.--
                            ``(i) In general.--The President shall 
                        carry out an import quota program that shall 
                        provide that, during the period beginning 
                        August 1996 and ending July 31, 2003, whenever 
                        the Secretary determines and announces that for 
                        any consecutive 10-week period, the Friday 
                        through Thursday average price for the lowest-
                        priced United States growth, as quoted for 
                        Middling 1\3/32\-inch cotton, delivered C.I.F. 
                        Northern Europe, adjusted for the value of any 
                        certificates issued under subparagraph (E), 
                        exceeds the Northern Europe price by more than 
                        1.25 cents per pound, there shall immediately 
                        be in effect a special import quota.
                            ``(ii) Quantity.--The quota shall be equal 
                        to the consumption of upland cotton for 1 week 
                        by domestic mills at the seasonally adjusted 
                        average rate of the most recent 3 months for 
                        which data are available.
                            ``(iii) Application.--The quota shall apply 
                        to upland cotton purchased not later than 90 
                        days after the date of the announcement of the 
                        Secretary under clause (i) and entered into the 
                        United States not later than 180 days after the 
                        date.
                            ``(iv) Overlap.--A special quota period may 
                        be established that overlaps any existing quota 
                        period if required by clause (i), except that a 
                        special quota period may not be established 
                        under this paragraph if a quota period has been 
                        established under subsection (n).
                            ``(v) Preferential tariff treatment.--The 
                        quantity under a special import quota shall be 
                        considered to be an in-quota quantity for 
                        purposes of--
                                    ``(I) section 213(d) of the 
                                Caribbean Basin Economic Recovery Act 
                                (19 U.S.C. 2703(d));
                                    ``(II) section 204 of the Andean 
                                Trade Preference Act (19 U.S.C. 3203);
                                    ``(III) section 503(d) of the Trade 
                                Act of 1974 (19 U.S.C. 2463(d)); and
                                    ``(IV) General Note 3(a)(iv) to the 
                                Harmonized Tariff Schedule of the 
                                United States (19 U.S.C. 1202 note).
                            ``(vi) Definition.--In this subparagraph, 
                        the term `special import quota' means a 
                        quantity of imports that is not subject to the 
                        over-quota tariff rate of a tariff-rate quota.
            ``(6) Recourse loans for seed cotton.--To encourage and 
        assist producers in the orderly ginning and marketing of 
        production of upland cotton by the producers, the Secretary 
        shall make recourse loans available to the producers on seed 
        cotton in accordance with authority vested in the Secretary 
        under the Commodity Credit Corporation Charter Act (15 U.S.C. 
        714 et seq.).
    ``(b) Loan Deficiency Payments.--
            ``(1) In general.--For each of the 1996 through 2002 crops 
        of upland cotton, the Secretary shall make payments (referred 
        to in this section as `loan deficiency payments') available to 
        producers who, although eligible to obtain a loan under 
        subsection (a), agree to forgo obtaining the loan in return for 
        payments under this subsection.
            ``(2) Computation.--A payment under this subsection shall 
        be computed by multiplying--
                    ``(A) the loan payment rate; and
                    ``(B) the quantity of upland cotton the producers 
                on a farm are eligible to place under loan but for 
                which the producers forgo obtaining the loan in return 
                for payments under this subsection.
            ``(3) Loan payment rate.--For purposes of this subsection, 
        the loan payment rate shall be the amount by which--
                    ``(A) the loan level determined for the crop under 
                subsection (a); exceeds
                    ``(B) the level at which a loan may be repaid under 
                subsection (a).
            ``(4) Marketing certificates.--The Secretary may make up to 
        \1/2\ the amount of a payment under this subsection available 
        in the form of marketing certificates, subject to the terms and 
        conditions provided in subsection (a)(5)(B).
    ``(c) Payments.--
            ``(1) Deficiency payments.--
                    ``(A) In general.--The Secretary shall make 
                available to producers payments (referred to in this 
                section as `deficiency payments') for each of the 1996 
                through 2002 crops of upland cotton in an amount 
                computed by multiplying--
                            ``(i) the payment rate;
                            ``(ii) the payment acres for the crop; and
                            ``(iii) the farm program payment yield 
                        established for the crop for the farm.
                    ``(B) Payment rate.--
                            ``(i) In general.--The payment rate for 
                        upland cotton shall be the amount by which the 
                        established price for the crop of upland cotton 
                        exceeds the greater of--
                                    ``(I) the national average market 
                                price received by producers during the 
                                calendar year that includes the first 5 
                                months of the marketing year for the 
                                crop, as determined by the Secretary; 
                                and
                                    ``(II) the loan level determined 
                                for the crop.
                            ``(ii) Minimum established price.--The 
                        established price for upland cotton shall be 
                        not less than $0.729 per pound for each of the 
                        1996 through 2002 crops.
                    ``(C) Payment acres.--Payment acres for a crop 
                shall be the lesser of--
                            ``(i) the number of acres planted to the 
                        crop for harvest within the permitted acreage 
                        (as defined in subsection (e)(2)(D)(ii)); or
                            ``(ii) 85 percent of the crop acreage base 
                        for the crop for the farm less the quantity of 
                        reduced acreage (as defined in subsection 
                        (e)(2)(D)(ii)).
                    ``(D) 50/85 program.--
                            ``(i) In general.--If an acreage limitation 
                        program under subsection (e)(2) is in effect 
                        for a crop of upland cotton and the producers 
                        on a farm devote a portion of the maximum 
                        payment acres of the farm for upland cotton as 
                        calculated under subparagraph (C)(ii) equal to 
                        more than 15 percent (except as provided in 
                        clause (v)) of the upland cotton acreage of the 
                        farm for the crop to conservation uses (except 
                        as provided in subparagraph (E))--
                                    ``(I) the portion of the maximum 
                                payment acres in excess of 15 percent 
                                (except as provided in clause (v)) of 
                                the acreage devoted to conservation 
                                uses (except as provided in 
                                subparagraph (E)) shall be considered 
                                to be planted to upland cotton for the 
                                purpose of determining the acreage on 
                                the farm required to be devoted to 
                                conservation uses in accordance with 
                                subsection (e)(2)(D); and
                                    ``(II) the producers shall be 
                                eligible for payments under this 
                                paragraph with respect to the acreage, 
                                subject to the compliance of the 
                                producers with clause (ii).
                            ``(ii) Minimum planting requirement.--To be 
                        eligible for payments under clause (i), except 
                        as provided in clauses (iv) and (v), the 
                        producers on a farm must actually plant upland 
                        cotton for harvest on
                         at least 50 percent of the maximum payment 
acres for cotton for the farm.
                            ``(iii) Deficiency payments.--
                        Notwithstanding any other provision of this 
                        section, any producers on a farm who devote a 
                        portion of the maximum payment acres of the 
                        farm for upland cotton to conservation uses (or 
                        other uses as provided in subparagraph (E)) 
                        under this subparagraph shall receive 
                        deficiency payments on the acreage that is 
                        considered to be planted to upland cotton and 
                        eligible for payments under this subparagraph 
                        for the crop at a per-pound rate established by 
                        the Secretary, except that the rate may not be 
                        established at less than the projected 
                        deficiency payment rate for the crop, as 
                        determined by the Secretary. The projected 
                        payment rate for the crop shall be announced by 
                        the Secretary prior to the period during which 
                        upland cotton producers may agree to 
                        participate in the program for the crop.
                            ``(iv) Quarantines.--If a State or local 
                        agency has imposed in an area of a State or 
                        county a quarantine on the planting of upland 
                        cotton for harvest on farms in the area, the 
                        State committee established under section 8(b) 
                        of the Soil Conservation and Domestic Allotment 
                        Act (16 U.S.C. 590h(b)) may recommend to the 
                        Secretary that payments be made under this 
                        paragraph, without regard to the requirement 
                        imposed under clause (ii), to producers in the 
                        area who were required to forgo the planting of 
                        upland cotton for harvest on acreage to 
                        alleviate or eliminate the condition requiring 
                        the quarantine. If the Secretary determines 
                        that the condition exists, the Secretary may 
                        make payments under this paragraph to the 
                        producers. To be eligible for payments under 
                        this clause, the producers must devote the 
                        acreage to conservation uses (except as 
                        provided in subparagraph (E)).
                            ``(v) Prevented planting and reduced 
                        yields.--In the case of each of the 1996 
                        through 2002 crops of upland cotton, producers 
                        on a farm shall be eligible to receive 
                        deficiency payments as provided in clause (iii) 
                        without regard to clause (ii) if an acreage 
                        limitation program under subsection (e) is in 
                        effect for the crop and the producers--
                                    ``(I)(aa) have been determined by 
                                the Secretary (in accordance with 
                                section 503(c)) to be prevented from 
                                planting the crop, or have incurred a 
                                reduced yield for the crop because of a 
                                natural disaster; and
                                    ``(bb) elect to devote a portion of 
                                the maximum payment acres for upland 
                                cotton (as calculated under 
                                subparagraph (C)(ii)) equal to more 
                                than 15 percent of the upland cotton 
                                acreage, to conservation uses; or
                                    ``(II) elect to devote a portion of 
                                the maximum payment acres for upland 
                                cotton (as calculated under 
                                subparagraph (C)(ii)) equal to more 
                                than 15 percent of the upland cotton 
                                acreage, to alternative crops as 
                                provided in subparagraph (E).
                            ``(vi) Crop acreage and payment yield.--The 
                        upland cotton crop acreage base and upland 
                        cotton farm program payment yield of the farm 
                        shall not be reduced because of the fact that a 
                        portion of the permitted acreage for upland 
                        cotton for the farm was devoted to conserving 
                        uses (except as provided in subparagraph (E)) 
                        under this subparagraph.
                            ``(vii) Limitation.--Other than as provided 
                        in clauses (i) through (vi), payments may not 
                        be made under this paragraph for any crop on a 
                        greater acreage than the acreage actually 
                        planted to upland cotton.
                            ``(viii) Conservation use acreage under 
                        other programs.--Any acreage considered to be 
                        planted to upland cotton in accordance with 
                        clauses (i) and (vi) may not also be designated 
                        as conservation use acreage for the purpose of 
                        fulfilling any provisions under any acreage 
                        limitation or land diversion program requiring 
                        that the producers devote a specified quantity 
                        of acreage to conservation uses.
                            ``(ix) Black-eyed peas for donation.--The 
                        Secretary may permit, under such terms and 
                        conditions as will ensure
                         optimum producer participation, all or any 
part of the acreage required to be devoted to conservation uses as a 
condition for qualifying for payments under this subparagraph to be 
devoted to the production of black-eyed peas if--
                                    ``(I) the producers on a farm agree 
                                to donate the harvested peas from the 
                                acreage to a food bank, food pantry, or 
                                soup kitchen (as defined in paragraphs 
                                (3), (4), and (7) of section 110(b) of 
                                the Hunger Prevention Act of 1988 
                                (Public Law 100-435; 7 U.S.C. 612c 
                                note)) that is approved by the 
                                Secretary; and
                                    ``(II) the Secretary finds that the 
                                action will not result in the 
                                disruption of normal channels of trade.
                    ``(E) Alternative crops.--
                            ``(i) Industrial and other crops.--The 
                        Secretary may permit, subject to such terms and 
                        conditions as the Secretary may prescribe, all 
                        or any part of acreage otherwise required to be 
                        devoted to conservation uses as a condition of 
                        qualifying for payments under subparagraph (D) 
                        to be devoted to sweet sorghum, guar, castor 
                        beans, plantago ovato, triticale, rye, millet, 
                        mung beans, commodities for which no 
                        substantial domestic production or market 
                        exists but that could yield industrial raw 
                        material being imported, or likely to be 
                        imported, into the United States, or 
                        commodities grown for experimental purposes 
                        (including kenaf and milkweed), subject to the 
                        following sentence. The Secretary may permit 
                        the acreage to be devoted to the production 
                        only if the Secretary determines that the 
                        production is--
                                    ``(I) not likely to increase the 
                                cost of the price support program; and
                                    ``(II) needed to provide an 
                                adequate supply of the commodity, or, 
                                in the case of a commodity for which no 
                                substantial domestic production or 
                                market exists but that could yield 
                                industrial raw materials, the 
                                production is needed to encourage 
                                domestic manufacture of the raw 
                                material and could lead to increased 
                                industrial use of the raw material to 
                                the long-term benefit of United States 
                                industry.
                            ``(ii) Sesame and crambe.--The Secretary 
                        shall permit, subject to such terms and 
                        conditions as the Secretary may prescribe, all 
                        or any part of acreage otherwise required to be 
                        devoted to conservation uses as a condition of 
                        qualifying for payments under subparagraph (D) 
                        to be devoted to sesame or crambe. In carrying 
                        out this clause, if the Secretary determines 
                        that sesame or crambe are considered oilseeds 
                        under section 205, the Secretary shall provide 
                        that, to receive payments under subparagraph 
                        (D), the producers shall agree to forgo 
                        eligibility to receive a loan under section 205 
                        for the crop of sesame or crambe produced on 
                        the farm.
            ``(2) Crop insurance requirement.--As a condition of 
        eligibility for upland cotton loans, purchases, and payments, 
        the producers on a farm shall obtain catastrophic risk 
        protection insurance coverage in accordance with section 427.
    ``(d) Payment Yields.--The farm program payment yields for farms 
for each crop of upland cotton under this section shall be determined 
under title V.
    ``(e) Acreage Reduction Programs.--
            ``(1) In general.--
                    ``(A) Establishment.--Notwithstanding any other 
                provision of this Act, if the Secretary determines that 
                the total supply of upland cotton, in the absence of an 
                acreage limitation program, will be excessive taking 
                into account the need for an adequate carry-over to 
                maintain reasonable and stable supplies and prices and 
                to meet a national emergency, the Secretary may provide 
                for any crop of upland cotton an acreage limitation 
                program as described in paragraph (2).
                    ``(B) Agricultural resources conservation 
                program.--In making a determination under subparagraph 
                (A), the Secretary shall take into consideration the 
                number of acres placed in the agricultural resources 
                conservation program established under subtitle D of 
                title XII of the Food Security Act of 1985 (16 U.S.C. 
                3830 et seq.).
                    ``(C) Announcements.--
                            ``(i) Preliminary announcement.--If the 
                        Secretary elects to implement an acreage 
                        limitation program for any crop year, the 
                        Secretary shall make a preliminary announcement 
                        of any such program not later than November 1 
                        of the calendar year preceding the year in 
                        which the crop is harvested, except that in the 
                        case of the 1996 crop, the Secretary shall 
                        announce the program as soon as practicable 
                        after the date of enactment of the Southern 
                        Agricultural Act of 1995. The announcement 
                        shall include, among other information 
                        determined necessary by the Secretary, an 
                        announcement of the uniform percentage 
                        reduction in the upland cotton crop acreage 
                        base described in paragraph (2)(A).
                            ``(ii) Final announcement.--Not later than 
                        January 1 of the calendar year in which the 
                        crop is harvested, the Secretary shall make a 
                        final announcement of the program. The 
                        announcement shall include, among other 
                        information determined necessary by the 
                        Secretary, an announcement of the uniform 
                        percentage reduction in the upland cotton crop 
                        described in paragraph (2)(A).
                            ``(iii) Optional programs in early planting 
                        areas.--The Secretary shall allow producers in 
                        early planting areas to elect to participate in 
                        the program on the terms of the acreage 
                        limitation program--
                                    ``(I) first announced for the crop 
                                under clause (i); or
                                    ``(II) as subsequently revised 
                                under clause (ii);
                        if the Secretary determines that the producers 
                        may be unfairly disadvantaged by the revision.
                    ``(D) Desired carry-over.--The Secretary shall 
                carry out an acreage limitation program described in 
                paragraph (2) for a crop of upland cotton in a manner 
                that will result in a ratio of carry-over to total 
                disappearance of 29\1/2\ percent for the 1996 crop and 
                29 percent for each of the 1997 through 2002 crops, 
                based on the most recent projection of the Secretary of 
                carry-over and total disappearance at the time of 
                announcement of the acreage limitation program. In this 
                subparagraph, the term `total disappearance' means all 
                upland cotton utilization, including total domestic, 
                total export, and total residual disappearance.
            ``(2) Acreage limitation program.--
                    ``(A) Uniform percentage reduction.--Except as 
                provided in paragraph (3), if an upland cotton acreage 
                limitation program is announced under paragraph (1), 
                the limitation shall be achieved by applying a uniform 
                percentage reduction (from 0 to 25 percent) to the 
                upland cotton crop acreage base for the crop for each 
                upland cotton-producing farm.
                    ``(B) Compliance.--Except as provided in section 
                504, producers who knowingly produce upland cotton in 
                excess of the permitted acreage for upland cotton for 
                the farm, as established in accordance with 
                subparagraph (A), shall be ineligible for upland cotton 
                loans and payments with respect to the farm.
                    ``(C) Crop acreage bases.--Upland cotton crop 
                acreage bases for each crop of upland cotton shall be 
                determined under title V.
                    ``(D) Acreage devoted to conservation uses.--
                            ``(i) In general.--A number of acres on the 
                        farm shall be devoted to conservation uses, in 
                        accordance with regulations issued by the 
                        Secretary.
                            ``(ii) Number.--The number shall be 
                        determined by multiplying the upland cotton 
                        crop acreage base by the percentage reduction 
                        required by the Secretary. The number of acres 
                        so determined is referred to in this section as 
                        `reduced acreage'. The remaining acreage is 
                        referred to in this section as `permitted 
                        acreage'.
                            ``(iii) Adjustment.--Permitted acreage may 
                        be adjusted by the Secretary as provided in 
                        paragraph (3) and in section 504.
                    ``(E) Individual farm program acreage.--Except as 
                otherwise provided in subsection (c), the individual 
                farm program acreage shall be the acreage planted on 
                the farm to upland cotton for harvest within the 
                permitted acreage for upland cotton for the farm as 
                established under this paragraph.
                    ``(F) Planting designated crops on reduced 
                acreage.--
                            ``(i) Definition of designated crop.--In 
                        this subparagraph, the term `designated crop' 
                        means a crop described in section 504(b)(1), 
                        excluding any program crop as defined in 
                        section 502(3).
                            ``(ii) Planting designated crops.--Subject 
                        to clause (iii), the Secretary may permit 
                        producers on a farm to plant a designated crop 
                        on not more than \1/2\ of the reduced acreage 
                        on the farm.
                            ``(iii) Limitations.--If the producers on a 
                        farm elect to plant a designated crop on 
                        reduced acreage under this subparagraph--
                                    ``(I) the amount of the deficiency 
                                payment that the producers are 
                                otherwise eligible to receive under 
                                subsection (c) shall be reduced, for 
                                each acre (or portion of an acre) that 
                                is planted to the designated crop, by 
                                an amount equal to the deficiency 
                                payment that would be made with respect 
                                to a number of acres of the crop that 
                                the Secretary considers appropriate, 
                                except that if the producers on the 
                                farm are participating in a program 
                                established for more than 1 program 
                                crop, the amount of the reduction shall 
                                be determined by prorating the 
                                reduction based on the acreage planted 
                                or considered planted on the farm to 
                                all of the program crops; and
                                    ``(II) the Secretary shall ensure 
                                that reductions in deficiency payments 
                                under subclause (I) are sufficient to 
                                ensure that this subparagraph will 
                                result in no additional cost to the 
                                Commodity Credit Corporation.
                    ``(G) Black-eyed peas for donation.--The Secretary 
                may permit, under such terms and conditions as will 
                ensure optimum producer participation, producers on a 
                farm to plant black-eyed peas on not more than \1/2\ of 
                the reduced acreage on the farm if--
                            ``(i) the producers agree to donate the 
                        harvested peas from the acreage to a food bank, 
                        food pantry, or soup kitchen (as defined in 
                        paragraphs (3), (4), and (7) of section 110(b) 
                        of the Hunger Prevention Act of 1988 (Public 
                        Law 100-435; 7 U.S.C. 612c note)) that is 
                        approved by the Secretary; and
                            ``(ii) the Secretary finds that the action 
                        will not result in the disruption of normal 
                        channels of trade.
            ``(3) Targeted option payments.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this section, if the Secretary implements 
                an acreage limitation program with respect to any of 
                the 1996 through 2002 crops of upland cotton, the 
                Secretary may make available to producers on a farm who 
                do not receive payments under subsection (c)(1)(D) for 
                the crop on the farm, adjustments in the level of 
                deficiency payments that would otherwise be made 
                available to the producers if the producers exercise 
                the payment options provided in this paragraph.
                    ``(B) Payment options.--If the Secretary elects to 
                carry out this paragraph, the Secretary shall make the 
                payment options specified in subparagraphs (C) and (D) 
                available to producers who agree to make adjustments in 
                the quantity of acreage diverted from the production of 
                upland cotton under an acreage limitation program in 
                accordance with this paragraph.
                    ``(C) Increased acreage limitation option.--
                            ``(i) Increase in established price.--If 
                        the Secretary elects to carry out this 
                        paragraph, the producers on a farm shall be 
                        eligible to receive an increase in the 
                        established price for upland cotton in 
                        accordance with clause (ii) if the producers 
                        agree to an increase in the acreage limitation 
                        percentage to be applied to the upland cotton 
                        acreage base of the producers above the acreage 
                        limitation percentage announced by the 
                        Secretary.
                            ``(ii) Method of calculation.--For the 
                        purposes of calculating deficiency payments to 
                        be made available to producers who participate 
                        in the program under this paragraph, the 
                        Secretary shall increase the established price 
                        for upland cotton by an amount determined by 
                        the Secretary of not less than 0.5 percent, nor 
                        more than 1 percent, for each 1 percentage 
                        point increase in the acreage limitation 
                        percentage applied to the upland cotton acreage 
                        base of the producers.
                            ``(iii) Limitation.--The acreage limitation 
                        percentage to be applied to the upland cotton 
                        acreage base of the producers shall not be 
                        increased by more than 10 percentage points 
                        above the acreage limitation percentage 
                        announced by the Secretary for the crop or 
                        above 25 percent total for the crop.
                            ``(iv) Adjustment for under- plantings.--In 
                        determining the increased acreage limitation 
                        percentage that is applied to the upland cotton 
                        base of the producers on a farm under this 
                        paragraph, the Secretary shall exclude an 
                        amount of acreage equal to the average 
                        difference between the permitted acreage for 
                        upland cotton for the farm of the producers and 
                        the acreage actually planted (including acreage 
                        devoted to conserving uses under subsection 
                        (c)(1)(D)) to upland cotton for harvest during 
                        the previous 2 years.
                    ``(D) Decreased acreage limitation option.--
                            ``(i) Decrease in acreage limitation 
                        requirement.--If the Secretary elects to carry 
                        out this paragraph, the producers on a farm 
                        shall be eligible to decrease the acreage 
                        limitation percentage applicable to the upland 
                        cotton acreage base of the producers (as 
                        announced by the Secretary) if the producers 
                        agree to a decrease in the established price 
                        for upland cotton in accordance with clause 
                        (ii) for the purpose of calculating deficiency 
                        payments to be made available to the producers.
                            ``(ii) Method of calculation.--For the 
                        purposes of calculating deficiency payments to 
                        be made available to producers who choose the 
                        option established under this subparagraph, the 
                        Secretary shall decrease the established price 
                        for upland cotton by an amount to be determined 
                        by the Secretary of not less than 0.5 percent, 
                        nor more than 1 percent, for each 1 percentage 
                        point decrease in the acreage limitation 
                        percentage applied to the upland cotton acreage 
                        base of the producers.
                            ``(iii) Limitation.--The producers on a 
                        farm may not choose to decrease the acreage 
                        limitation percentage applicable to the upland 
                        cotton acreage base of the producers under this 
                        paragraph by more than \1/2\ of the announced 
                        acreage limitation percentage.
                    ``(E) Participation and production effects.--
                Notwithstanding any other provision of this paragraph, 
                the Secretary shall, to the extent practicable, ensure 
                that the program provided for in this paragraph does 
                not have a significant effect on participation in the 
                program established by this section or total production 
                and shall be offered in such a manner that the 
                Secretary determines will result in no additional 
                budget outlays. The Secretary shall provide an analysis 
                of the determination of the Secretary to the Committee 
                on Agriculture of the House of Representatives and the 
                Committee on Agriculture, Nutrition, and Forestry of 
                the Senate.
            ``(4) Administration.--
                    ``(A) Protection from weeds and erosion.--The 
                regulations issued by the Secretary under paragraph (2) 
                with respect to acreage required to be devoted to 
                conservation uses shall ensure protection of the 
                acreage from weeds and wind and water erosion.
                    ``(B) Conserving crops.--The Secretary may permit, 
                subject to such terms and conditions as the Secretary 
                may prescribe, all or any part of the acreage to be 
                devoted to sweet sorghum, guar, sesame, castor beans, 
                crambe, plantago ovato, triticale, rye, mung beans, 
                milkweed, or other commodity, if the Secretary 
                determines that the production is needed to provide an 
                adequate supply of the commodities, is not likely to 
                increase the cost of the price support program, and 
                will not affect farm income adversely.
                    ``(C) Haying and grazing.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), haying and grazing of reduced 
                        acreage, acreage devoted to a conservation use 
                        under subsection (c)(1)(D), and acreage 
                        diverted from production under a land diversion 
                        program established under this subsection shall 
                        be permitted, except during any consecutive 5-
                        month period that is established by the State 
                        committee established under section 8(b) of the 
                        Soil Conservation and Domestic Allotment Act 
                        (16 U.S.C. 590h(b)) for a State. The 5-month 
                        period shall be established during the period 
                        beginning April 1, and ending October 31, of a 
                        year.
                            ``(ii) Natural disasters.--In the case of a 
                        natural disaster, the Secretary may permit 
                        unlimited haying and grazing on the acreage. 
                        The Secretary may not exclude irrigated or 
                        irrigable acreage not planted to alfalfa when 
                        exercising the authority under this clause.
                    ``(D) Water storage uses.--
                            ``(i) In general.--The regulations issued 
                        by the Secretary under paragraph (2) with 
                        respect to acreage required to be devoted to 
                        conservation uses shall provide that land that 
                        has been converted to water storage uses shall 
                        be
                         considered to be devoted to conservation uses 
if the land was devoted to wheat, feed grains, cotton, rice, or 
oilseeds in at least 3 of the immediately preceding 5 crop years. The 
land shall be considered to be devoted to conservation uses for the 
period that the land remains in water storage uses, but not to exceed 5 
crop years subsequent to the conversion of the land to water storage 
uses.
                            ``(ii) Limitations.--Land converted to 
                        water storage uses for the purposes of this 
                        subparagraph may not be devoted to any 
                        commercial use, including commercial fish 
                        production. The water stored on the land may 
                        not be ground water. The farm on which the land 
                        is located must have been irrigated with ground 
                        water during at least 1 of the preceding 5 crop 
                        years.
            ``(5) Land diversion program.--
                    ``(A) Payments.--
                            ``(i) In general.--The Secretary may make 
                        land diversion payments to producers of upland 
                        cotton, whether or not an acreage limitation 
                        program for upland cotton is in effect, if the 
                        Secretary determines that the land diversion 
                        payments are necessary to assist in adjusting 
                        the total national acreage of upland cotton to 
                        desirable goals. The land diversion payments 
                        shall be made to producers who, to the extent 
                        prescribed by the Secretary, devote to approved 
                        conservation uses an acreage of cropland on the 
                        farm in accordance with land diversion 
                        contracts entered into by the Secretary with 
                        the producers.
                            ``(ii) Excess carry-over.--If, at the time 
                        of final announcement of the acreage limitation 
                        program established under this subsection, the 
                        projected carry-over of upland cotton for the 
                        crop year is equal to or greater than 8 million 
                        bales, the Secretary shall offer a paid land 
                        diversion program to producers of upland 
                        cotton. Payments to producers under the program 
                        shall be determined by multiplying--
                                    ``(I) the payment rate, of not less 
                                than 35 cents per pound of cotton, 
                                established by the Secretary;
                                    ``(II) the program payment yield 
                                established for the crop for the farm; 
                                and
                                    ``(III) the number of permitted 
                                acreage for upland cotton for the farm 
                                diverted on the farm.
                    ``(B) Bids for contracts.--The amounts payable to 
                producers under land diversion contracts may be 
                determined through the submission of bids for the 
                contracts by producers in such manner as the Secretary 
                may prescribe or through such other means as the 
                Secretary determines appropriate. In determining the 
                acceptability of contract offers, the Secretary shall 
                take into consideration the extent of the diversion to 
                be undertaken by the producers and the productivity of 
                the acreage diverted.
                    ``(C) Limitations on diverted acreage.--
                            ``(i) Maximum acreage per farm, county, or 
                        community.--The Secretary shall limit the total 
                        acreage to be diverted under this paragraph--
                                    ``(I) to not more than 15 percent 
                                of the upland cotton crop acreage base 
                                for a farm; and
                                    ``(II) under agreements in any 
                                county or local community so as not to 
                                affect adversely the economy of the 
                                county or local community.
                            ``(ii) Lower participation levels.--The 
                        Secretary may allow producers to participate in 
                        a land diversion program under this paragraph 
                        at a level lower than the maximum level 
                        announced by the Secretary, at the option of 
                        the producer, if the Secretary determines that 
                        the lower level will increase participation in 
                        the program.
            ``(6) Conservation practices.--
                    ``(A) Wildlife food plots or habitat.--The reduced 
                acreage and additional diverted acreage may be devoted 
                to wildlife food plots or wildlife habitat in 
                conformity with standards established by the Secretary 
                in consultation with wildlife agencies. The Secretary 
                may pay an appropriate share of the cost of practices 
                designed to carry out this subparagraph.
                    ``(B) Public access.--The Secretary may provide for 
                an additional payment on the acreage in an amount 
                determined by the Secretary to be appropriate in 
                relation to the benefit to the general public if the 
                producers on a farm agree to permit, without other 
                compensation, access to all or such portion of the 
                farm, as the Secretary may prescribe, by the general 
                public, for hunting, trapping, fishing, and hiking, 
                subject to applicable Federal and State regulations.
            ``(7) Participation agreements.--
                    ``(A) In general.--Producers on a farm desiring to 
                participate in the program conducted under this 
                subsection shall execute an agreement with the 
                Secretary providing for the participation not later 
                than such date as the Secretary may prescribe.
                    ``(B) Modification or termination.--The Secretary 
                may, by mutual agreement with producers on a farm, 
                modify or terminate any such agreement if the Secretary 
                determines the action necessary because of an emergency 
                created by drought or other disaster or to prevent or 
                alleviate a shortage in the supply of agricultural 
                commodities. The Secretary may modify the agreement 
                under this subparagraph for the purpose of alleviating 
                a shortage in the supply of agricultural commodities 
                only if there has been a significant change in the 
                estimated stocks of the commodity since the Secretary 
                announced the final terms and conditions of the program 
                for the crop of upland cotton.
    ``(f) Inventory Reduction Payments.--
            ``(1) In general.--For each of the 1996 through 2002 crops 
        of upland cotton, the Secretary may make payments available to 
        producers on a farm who meet the requirements of this 
        subsection.
            ``(2) Form.--The payments may be made in the form of 
        marketing certificates.
            ``(3) Payments.--
                    ``(A) In general.--Payments under this subsection 
                shall be determined in the same manner as provided in 
                subsection (b).
                    ``(B) Quantity of cotton made available.--The 
                quantity of upland cotton to be made available to the 
                producers on a farm under this subsection shall be 
                equal in value to the payments so determined under this 
                subsection.
            ``(4) Eligibility.--The producers on a farm shall be 
        eligible to receive a payment under this subsection for a crop 
        if the producers--
                    ``(A) agree to forgo obtaining a loan under 
                subsection (a);
                    ``(B) agree to forgo receiving payments under 
                subsection (c);
                    ``(C) do not plant upland cotton for harvest in 
                excess of the crop acreage base reduced by \1/2\ of any 
                acreage required to be diverted from production under 
                subsection (e); and
                    ``(D) otherwise comply with this section.
    ``(g) Equitable Relief.--
            ``(1) Loans and payments.--If the failure of a producer to 
        comply fully with the terms and conditions of the program 
        conducted under this section precludes the making of loans and 
        payments, the Secretary may, notwithstanding the failure, make 
        the loans and payments in such amounts as the Secretary 
        determines are equitable in relation to the seriousness of the 
        failure. The Secretary may consider whether the producer made a 
        good faith effort to comply fully with the terms and conditions 
        of the program in determining whether equitable relief is 
        warranted under this paragraph.
            ``(2) Deadlines and program requirements.--The Secretary 
        may authorize the county and State committees established under 
        section 8(b) of the Soil Conservation and Domestic Allotment 
        Act (16 U.S.C. 590h(b)) to waive or modify deadlines and other 
        program requirements in cases in which lateness or failure to 
        meet the other requirements does not affect adversely the 
        operation of the program.
    ``(h) Regulations.--The Secretary may issue such regulations as the 
Secretary determines necessary to carry out this section.
    ``(i) Commodity Credit Corporation.--The Secretary shall carry out 
the program authorized by this section through the Commodity Credit 
Corporation.
    ``(j) Assignment of Payments.--Section 8(g) of the Soil 
Conservation and Domestic Allotment Act (16 U.S.C. 590h(g)) shall apply 
to payments made under this section.
    ``(k) Sharing of Payments.--The Secretary shall provide for the 
sharing of payments made under this section for any farm among the 
producers on the farm on a fair and equitable basis.
    ``(l) Tenants and Sharecroppers.--In carrying out this section, the 
Secretary shall provide adequate safeguards to protect the interests of 
tenants and sharecroppers.
    ``(m) Cross-Compliance.--
            ``(1) In general.--Compliance on a farm with the terms and 
        conditions of any other commodity program, or compliance with 
        crop acreage base requirements for any other commodity, may not 
        be required as a condition of eligibility for loans or payments 
        under this section.
            ``(2) Compliance on other farms.--The Secretary may not 
        require producers on a farm, as a condition of eligibility for 
        loans or payments under this section for the farm, to comply 
        with the terms and conditions of the upland cotton program with 
        respect to any other farm operated by the producers.
    ``(n) Limited Global Import Quota.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Demand.--The term `demand' means--
                            ``(i) the average seasonally adjusted 
                        annual rate of domestic mill consumption in the 
                        most recent 3 months for which data are 
                        available; plus
                            ``(ii) the larger of--
                                    ``(I) average exports of upland 
                                cotton during the preceding 6 marketing 
                                years; or
                                    ``(II) cumulative exports of upland 
                                cotton plus outstanding export sales 
                                for the marketing year in which the 
                                quota is established.
                    ``(B) Limited global import quota.--The term 
                `limited global import quota' means a quantity of 
                imports that is not subject to the over-quota tariff 
                rate of a tariff-rate quota.
                    ``(C) Supply.--The term `supply' means, using the 
                latest official data of the Bureau of the Census, the 
                Department of Agriculture, and the Department of the 
                Treasury--
                            ``(i) the carry-over of upland cotton at 
                        the beginning of the marketing year (adjusted 
                        to 480-pound bales) in which the quota is 
                        established;
                            ``(ii) production of the current crop; and
                            ``(iii) imports to the latest date 
                        available during the marketing year.
            ``(2) Quota.--The President shall carry out an import quota 
        program that shall provide that whenever the Secretary 
        determines and announces that the average price of the base 
        quality of upland cotton, as determined by the Secretary, in 
        the designated spot markets for a month exceeded 130 percent of 
        the average price of the quality of cotton in the markets for 
        the preceding 36 months, notwithstanding any other provision of 
        law, there shall immediately be in effect a limited global 
        import quota subject to the following conditions:
                    ``(A) Quantity.--The quantity of the quota shall be 
                equal to 21 days of domestic mill consumption of upland 
                cotton at the seasonally adjusted average rate of the 
                most recent 3 months for which data are available.
                    ``(B) Quantity if prior quota.--If a quota has been 
                established under this subsection during the preceding 
                12 months, the quantity of the quota next established 
                under this subsection shall be the smaller of 21 days 
                of domestic mill consumption calculated as set forth in 
                subparagraph (A) or the quantity required to increase 
                the supply to 130 percent of the demand.
                    ``(C) Preferential tariff treatment.--The quantity 
                under a limited global import quota shall be considered 
                to be an in-quota quantity for purposes of section 
                213(d) of--
                            ``(i) the Caribbean Basin Economic Recovery 
                        Act (19 U.S.C. 2703(d));
                            ``(ii) section 204 of the Andean Trade 
                        Preference Act (19 U.S.C. 3203);
                            ``(iii) section 503(d) of the Trade Act of 
                        1974 (19 U.S.C. 2463(d)); and
                            ``(iv) General Note 3(a)(iv) to the 
                        Harmonized Tariff Schedule of the United States 
                        (19 U.S.C. 1202 note).
            ``(3) Quota entry period.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), when a quota is established under 
                this subsection, cotton may be entered under the quota 
                during the 90-day period beginning on the date the 
                quota is established by the Secretary.
                    ``(B) No overlap.--Notwithstanding paragraphs (1) 
                and (2), a quota period may not be established that 
                overlaps an existing quota period or a special quota 
                period established under subsection (a)(5)(F).
    ``(o) Crops.--Notwithstanding any other provision of law, this 
section shall be effective only for the 1996 through 2002 crops of 
upland cotton.''.

SEC. 102. EXTRA LONG STAPLE COTTON PROGRAM.

    Section 103(h)(16) of the Agricultural Act of 1949 (7 U.S.C. 
1444(h)(16)) is amended by striking ``1996'' and inserting ``2003''.

SEC. 103. SUSPENSION OF BASE ACREAGE ALLOTMENTS, MARKETING QUOTAS, AND 
              RELATED PROVISIONS.

    Sections 342, 343, 344, 345, 346, and 377 of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1342-1346 and 1377) shall not be 
applicable to any of the 1996 through 2002 crops of upland cotton.

SEC. 104. MISCELLANEOUS COTTON PROVISIONS.

    Section 103(a) of the Agricultural Act of 1949 (7 U.S.C. 1444(a)) 
shall not be applicable to the 1996 through 2002 crops.

SEC. 105. SKIPROW PRACTICES.

    The third sentence of section 374(a) of the Agricultural Adjustment 
Act of 1938 (7 U.S.C. 1374(a)) is amended--
            (1) by striking ``1995'' each place it appears and 
        inserting ``2002''; and
            (2) by striking ``1991'' each place it appears and 
        inserting ``1996''.

SEC. 106. PRELIMINARY ALLOTMENTS FOR 2003 CROP OF UPLAND COTTON.

    Notwithstanding any other provision of law, the permanent State, 
county, and farm base acreage allotments for the 1977 crop of upland 
cotton, adjusted for any underplantings in 1977 and reconstituted as 
provided in section 379 of the Agricultural Adjustment Act of 1938 (7 
U.S.C. 1379), shall be the preliminary allotments for the 2003 crop.

SEC. 107. COTTONSEED AND COTTONSEED OIL.

    Section 203(b) of the Agricultural Act of 1949 (7 U.S.C. 1446d(b)) 
is amended by striking ``1995'' and inserting ``2002''.

SEC. 108. COTTON CLASSIFICATION SERVICES.

    The first sentence of section 3a of the Act of March 3, 1927 
(commonly known as the ``Cotton Statistics and Estimates Act'') 
(chapter 337; 7 U.S.C. 473a), is amended by striking ``1996'' and 
inserting ``2002''.
                           TITLE II--PEANUTS

SEC. 201. SUSPENSION OF MARKETING QUOTAS AND ACREAGE ALLOTMENTS.

    The following provisions of the Agricultural Adjustment Act of 1938 
shall not be applicable to the 1996 through 2002 crops of peanuts:
            (1) Subsections (a) through (j) of section 358 (7 U.S.C. 
        1358).
            (2) Subsections (a) through (h) of section 358a (7 U.S.C. 
        1358a).
            (3) Subsections (a), (b), (d), and (e) of section 358d (7 
        U.S.C. 1359).
            (4) Part I of subtitle C of title III (7 U.S.C. 1361 et 
        seq.).
            (5) Section 371 (7 U.S.C. 1371).

SEC. 202. NATIONAL POUNDAGE QUOTAS AND ACREAGE ALLOTMENTS.

    Section 358-1 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 
1358-1) is amended to read as follows:

``SEC. 358-1. NATIONAL POUNDAGE QUOTAS AND ACREAGE ALLOTMENTS FOR 1996 
              THROUGH 2002 CROPS OF PEANUTS.

    ``(a) National Poundage Quotas.--
            ``(1) Establishment.--The national poundage quota for 
        peanuts for each of the 1996 through 2002 marketing years shall 
        be established by the Secretary at a level that is equal to the 
        quantity of peanuts (in tons) that the Secretary estimates will 
        be devoted in each such marketing year to domestic edible, 
        seed, and related uses. Notwithstanding any other provision of 
        this paragraph, the national poundage quota for a marketing 
        year shall not be less than 1,350,000 tons.
            ``(2) Announcement.--The national poundage quota for a 
        marketing year shall be announced by the Secretary not later 
        than December 15 preceding the marketing year.
            ``(3) Apportionment among states.--The national poundage 
        quota established under paragraph (1) shall be apportioned 
        among the States so that the poundage quota allocated to each 
        State is equal to the percentage of the national poundage quota 
        allocated to farms in the State for 1995.
    ``(b) Farm Poundage Quotas.--
            ``(1) In general.--
                    ``(A) Establishment.--A farm poundage quota for 
                each of the 1996 through 2002 marketing years shall be 
                established--
                            ``(i) for each farm that had a farm 
                        poundage quota for peanuts for the 1995 
                        marketing year;
                            ``(ii) if the poundage quota apportioned to 
                        a State under subsection (a)(3) for any such 
                        marketing year is larger than the quota for the 
                        immediately preceding marketing year, for each 
                        other farm on which peanuts were produced for 
                        marketing in at least 2 of the 3 immediately 
                        preceding crop years, as determined by the 
                        Secretary; and
                            ``(iii) as approved and determined by the 
                        Secretary under section 358c, for each farm on 
                        which peanuts are produced in connection with 
                        experimental and research programs.
                    ``(B) Quantity.--
                            ``(i) In general.--The farm poundage quota 
                        for each of the 1996 through 2002 marketing 
                        years for each farm described in subparagraph 
                        (A)(i) shall be the same as the farm poundage 
                        quota for the farm for the immediately 
                        preceding marketing year, as adjusted under 
                        paragraph (2), but not including any increases 
                        resulting from the allocation of quotas 
                        voluntarily released for 1 year under paragraph 
                        (7).
                            ``(ii) Increased quota.--The farm poundage 
                        quota, if any, for each of the 1996 through 
                        2002 marketing years for each farm described in 
                        subparagraph (A)(ii) shall be equal to the 
                        quantity of peanuts allocated to the farm for 
                        the year under paragraph (2).
                    ``(C) Transfers.--For purposes of this subsection, 
                if the farm poundage quota, or any part of the quota, 
                is permanently transferred in accordance with section 
                358a or 358b, the receiving farm shall be considered as 
                possessing the farm poundage quota (or portion of the 
                quota) of the transferring farm for all subsequent 
                marketing years.
            ``(2) Adjustments.--
                    ``(A) Allocation of increased quota generally.--
                Subject to subparagraph (C), if the poundage quota 
                apportioned to a State under subsection (a)(3) for any 
                of the 1996 through 2002 marketing years is increased 
                over
                 the poundage quota apportioned to farms in the State 
for the immediately preceding marketing year, the increase shall be 
allocated proportionately, based on farm production history for peanuts 
for the 3 immediately preceding years, among--
                            ``(i) all farms in the State for which a 
                        farm poundage quota was established for the 
                        marketing year immediately preceding the 
                        marketing year for which the allocation is 
                        being made; and
                            ``(ii) all other farms in the State on 
                        which peanuts were produced in at least 2 of 
                        the 3 immediately preceding crop years, as 
                        determined by the Secretary.
                    ``(B) Decrease.--If the poundage quota apportioned 
                to a State under subsection (a)(3) for any of the 1996 
                through 2002 marketing years is decreased from the 
                poundage quota apportioned to farms in the State under 
                subsection (a)(3) for the immediately preceding 
                marketing year, the decrease shall be allocated among 
                all the farms in the State for which a farm poundage 
                quota was established for the marketing year 
                immediately preceding the marketing year for which the 
                allocation is being made.
                    ``(C) Special rule on tenant's share of increased 
                quota.--Subject to terms and conditions prescribed by 
                the Secretary, on farms that were leased to a tenant 
                for peanut production, the tenant shall share equally 
                with the owner of the farm in the percentage of the 
                quota made available under subparagraph (A) and 
                otherwise allocated to the farm as the result of the 
                production of the tenant on the farm of additional 
                peanuts. Not later than April 1 of each year or as soon 
                as practicable during the year, the share of the tenant 
                of any such quota shall be allocated to a farm within 
                the county owned by the tenant or sold by the tenant to 
                the owner of any farm within the county and permanently 
                transferred to the farm. Any quota not so disposed of 
                as provided in this subparagraph shall be allocated to 
                other quota farms in the State under paragraph (6) as 
                part of the quota reduced from farms in the State due 
                to the failure to produce the quota.
            ``(3) Quota not produced.--
                    ``(A) In general.--Insofar as practicable and on 
                such fair and equitable basis as the Secretary may by 
                regulation prescribe, the farm poundage quota 
                established for a farm for any of the 1996 through 2002 
                marketing years shall be reduced to the extent that the 
                Secretary determines that the farm poundage quota 
                established for the farm for any 2 of the 3 marketing 
                years preceding the marketing year for which the 
                determination is being made was not produced, or 
                considered produced, on the farm.
                    ``(B) Exclusions.--For the purposes of this 
                paragraph, the farm poundage quota for any such 
                preceding marketing year shall not include any increase 
                resulting from the allocation of quotas voluntarily 
                released for 1 year under paragraph (7).
            ``(4) Quota considered produced.--For purposes of this 
        subsection, the farm poundage quota shall be considered 
        produced on a farm if--
                    ``(A) the farm poundage quota was not produced on 
                the farm because of drought, flood, or any other 
                natural disaster, or any other condition beyond the 
                control of the producer, as determined by the 
                Secretary;
                    ``(B) the farm poundage quota for the farm was 
                released voluntarily under paragraph (7) for only 1 of 
                the 3 marketing years immediately preceding the 
                marketing year for which the determination is being 
                made; or
                    ``(C) the farm poundage quota was leased to another 
                owner or operator of a farm within the same county for 
                transfer to the farm for only 1 of the 3 marketing 
                years immediately preceding the marketing year for 
                which the determination is being made.
            ``(5) Quota permanently released.--Notwithstanding any 
        other provision of law--
                    ``(A) the farm poundage quota established for a 
                farm under this subsection, or any part of the quota, 
                may be permanently released by the owner of the farm, 
                or the operator with the permission of the owner; and
                    ``(B) the poundage quota for the farm for which the 
                quota is released shall be adjusted downward to reflect 
                the quota that is released.
            ``(6) Allocation of quotas reduced or released.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the total quantity of the
                 farm poundage quotas reduced or voluntarily released 
from farms in a State for any marketing year under paragraphs (3) and 
(5) shall be allocated, as the Secretary may by regulation prescribe, 
to other farms in the State on which peanuts were produced in at least 
2 of the 3 crop years immediately preceding the year for which the 
allocation is being made.
                    ``(B) Set-aside for farms with no quota.--Not more 
                than 25 percent of the total amount of farm poundage 
                quota to be allocated in the State under subparagraph 
                (A) shall be allocated to farms in the State for which 
                no farm poundage quota was established for the crop of 
                the immediately preceding year. The allocation to any 
                such farm shall not exceed the average farm production 
                of peanuts for the 3 immediately preceding years during 
                which peanuts were produced on the farm.
            ``(7) Quota temporarily released.--
                    ``(A) In general.--The farm poundage quota, or any 
                portion of the quota, established for a farm for a 
                marketing year may be voluntarily released to the 
                Secretary to the extent that the quota, or any part of 
                the quota, will not be produced on the farm for the 
                marketing year. Any farm poundage quota so released in 
                a State shall be allocated to other farms in the State 
                on such basis as the Secretary may by regulation 
                prescribe.
                    ``(B) Effective period.--Except as otherwise 
                provided in this section, any adjustment in the farm 
                poundage quota for a farm under subparagraph (A) shall 
                be effective only for the marketing year for which the 
                adjustment is made and shall not be taken into 
                consideration in establishing a farm poundage quota for 
                the farm from which the quota was released for any 
                subsequent marketing year.
                    ``(C) Transfer of additional peanuts.--Additional 
                peanuts on a farm from which the quota poundage was not 
                harvested or marketed may be transferred to the quota 
                loan pool for pricing purposes at the quota price on 
                such basis as the Secretary shall by regulation 
                provide, except that the poundage of the peanuts so 
                transferred shall not exceed the difference in the 
                total peanuts meeting quality requirements for domestic 
                edible use, as determined by the Secretary, marketed 
                from the farm and the total farm poundage quota.
    ``(c) Farm Yields.--
            ``(1) In general.--For each farm for which a farm poundage 
        quota is established under subsection (b), and when necessary 
        for purposes of this Act, a farm yield of peanuts shall be 
        determined for each such farm.
            ``(2) Quantity.--The yield shall be equal to the average of 
        the actual yield per acre on the farm for each of the 3 crop 
        years in which yields were highest on the farm during the 5-
        year period consisting of the 1973 through 1977 crop years.
            ``(3) Appraised yields.--If peanuts were not produced on 
        the farm in at least 3 years during the 5-year period or there 
        was a substantial change in the operation of the farm during 
        the period (including a change in operator, lessee who is an 
        operator, or irrigation practices), the Secretary shall have a 
        yield appraised for the farm. The appraised yield shall be that 
        quantity determined to be fair and reasonable on the basis of 
        yields established for similar farms that are located in the 
        area of the farm and on which peanuts were produced, taking 
        into consideration land, labor, and equipment available for the 
        production of peanuts, crop rotation practices, soil and water, 
        and other relevant factors.
    ``(d) Referendum Respecting Poundage Quotas.--
            ``(1) In general.--Not later than December 15 of each 
        calendar year, the Secretary shall conduct a referendum of 
        producers engaged in the production of quota peanuts in the 
        calendar year in which the referendum is held to determine 
        whether the producers are in favor of or opposed to poundage 
        quotas with respect to the crops of peanuts produced in the 5 
        calendar years immediately following the year in which the 
        referendum is held, except that, if at least \2/3\ of the 
        producers voting in any referendum vote in favor of poundage 
        quotas, no referendum shall be held with respect to quotas for 
        the remaining years of the 5-calendar year period.
            ``(2) Proclamation.--The Secretary shall proclaim the 
        result of the referendum within 30 days after the date on which 
        the referendum is held.
            ``(3) Vote against quotas.--If more than \1/3\ of the 
        producers voting in the referendum vote against poundage 
        quotas, the Secretary shall proclaim that poundage quotas will 
        not be in effect with respect to the crop of peanuts produced 
        in the calendar year immediately following the calendar year in 
        which the referendum is held.
    ``(e) Definitions.--In this part and title I of the Agricultural 
Act of 1949 (7 U.S.C. 1441 et seq.):
            ``(1) Additional peanuts.--The term `additional peanuts' 
        means, for any marketing year--
                    ``(A) any peanuts that are marketed from a farm for 
                which a farm poundage quota has been established and 
                that are in excess of the marketings of quota peanuts 
                from the farm for the year; and
                    ``(B) all peanuts marketed from a farm for which no 
                farm poundage quota has been established in accordance 
                with subsection (b).
            ``(2) Crush.--The term `crush' means the processing of 
        peanuts to extract oil for food uses and meal for feed uses, or 
        the processing of peanuts by crushing or otherwise when 
        authorized by the Secretary.
            ``(3) Domestic edible use.--The term `domestic edible use' 
        means use for milling to produce domestic food peanuts (other 
        than a use described in paragraph (2)) and seed and use on a 
        farm, except that the Secretary may exempt from this paragraph 
        seeds of peanuts that are used to produce peanuts excluded 
        under section 358d(c), are unique strains, and are not 
        commercially available.
            ``(4) Quota peanuts.--The term `quota peanuts' means, for 
        any marketing year, any peanuts produced on a farm having a 
        farm poundage quota, as determined under subsection (b), that--
                    ``(A) are eligible for domestic edible use as 
                determined by the Secretary;
                    ``(B) are marketed or considered marketed from a 
                farm; and
                    ``(C) do not exceed the farm poundage quota of the 
                farm for the year.
    ``(f) Crops.--Notwithstanding any other provision of law, this 
section shall be effective only for the 1996 through 2002 crops of 
peanuts.''.

SEC. 203. SALE, LEASE, OR TRANSFER OF FARM POUNDAGE QUOTA.

    Section 358b of the Agricultural Adjustment Act of 1938 (7 U.S.C. 
1358b) is amended to read as follows:

``SEC. 358b. SALE, LEASE, OR TRANSFER OF FARM POUNDAGE QUOTA FOR 1996 
              THROUGH 2002 CROPS OF PEANUTS.

    ``(a) In General.--
            ``(1) Authority.--
                    ``(A) In general.--Subject to such terms, 
                conditions, or limitations as the Secretary may 
                prescribe, the owner, or operator with the permission 
                of the owner, of any farm for which a farm poundage 
                quota has been established under this Act may sell or 
                lease all or any part of the poundage quota to any 
                other owner or operator of a farm within the same 
                county for transfer to the farm, except that any such 
                lease of poundage quota may be entered into in the fall 
                or after the normal planting season--
                            ``(i) if not less than 90 percent of the 
                        basic quota (consisting of the farm quota and 
                        temporary quota transfers), plus any poundage 
                        quota transferred to the farm under this 
                        subsection, has been planted or considered 
                        planted on the farm from which the quota is to 
                        be leased; and
                            ``(ii) under such terms and conditions as 
                        the Secretary may by regulation prescribe.
                    ``(B) Fall transfers.--
                            ``(i) No transfer authorization.--In the 
                        case of a fall transfer or a transfer after the 
                        normal planting season by a cash lessee, the 
                        landowner shall not be required to sign the 
                        transfer authorization.
                            ``(ii) Time limitation.--A fall transfer or 
                        a transfer after the normal planting season may 
                        be made not later than 72 hours after the 
                        peanuts that are the subject of the transfer 
                        are inspected and graded.
            ``(2) Transfers to other self-owned farms.--The owner or 
        operator of a farm may transfer all or any part of the farm 
        poundage quota to any other farm owned or controlled by the 
        owner or operator that is in the same county or in a county 
        contiguous to the county in the same State and that had a farm 
        poundage quota for the crop of the preceding year. Any farm 
        poundage quota transferred under this paragraph shall not 
        result in any reduction in the farm poundage quota for the 
        transferring farm if the transferred quota is produced or 
        considered produced on the receiving farm.
            ``(3) Transfers in states with small quotas.--
        Notwithstanding paragraphs (1) and (2), in the case of any 
        State for which the poundage quota allocated to the State was 
        less than 10,000 tons for the crop of the preceding year, all 
        or any part of a farm poundage quota may be transferred by sale 
        or lease or otherwise from a farm in 1 county to a farm in 
        another county in the same State.
    ``(b) Conditions.--Transfers (including transfer by sale or lease) 
of farm poundage quotas under this section shall be subject to all of 
the following conditions:
            ``(1) Lienholders.--No transfer of the farm poundage quota 
        from a farm subject to a mortgage or other lien shall be 
        permitted unless the transfer is agreed to by the lienholders.
            ``(2) Tillable cropland.--No transfer of the farm poundage 
        quota shall be permitted if the county committee established 
        under section 8(b) of the Soil Conservation and Domestic 
        Allotment Act (16 U.S.C. 590h(b)) determines that the receiving 
        farm does not have adequate tillable cropland to produce the 
        farm poundage quota.
            ``(3) Record.--No transfer of the farm poundage quota shall 
        be effective until a record of the transfer is filed with the 
        county committee of the county to which the transfer is made 
        and the committee determines that the transfer complies with 
        this section.
            ``(4) Other terms.--The Secretary may establish by 
        regulation other terms and conditions.
    ``(c) Crops.--Notwithstanding any other provision of law, this 
section shall be effective only for the 1996 through 2002 crops of 
peanuts.''.

SEC. 204. MARKETING PENALTIES; DISPOSITION OF ADDITIONAL PEANUTS.

    Section 358e of the Agricultural Adjustment Act of 1938 (7 U.S.C. 
1359a) is amended to read as follows:

``SEC. 358e. MARKETING PENALTIES AND DISPOSITION OF ADDITIONAL PEANUTS 
              FOR 1996 THROUGH 2002 CROPS OF PEANUTS.

    ``(a) Marketing Penalties.--
            ``(1) In general.--
                    ``(A) Marketing peanuts in excess of quota.--The 
                marketing of any peanuts for domestic edible use in 
                excess of the farm poundage quota for the farm on which 
                the peanuts are produced shall be subject to a penalty 
                at a rate equal to 140 percent of the support price for 
                quota peanuts for the marketing year in which the 
                marketing occurs. The penalty shall not apply to the 
                marketing of breeder or Foundation seed peanuts grown 
                and marketed by a publicly owned agricultural 
                experiment station (including a State operated seed 
                organization) under such regulations as the Secretary 
                may prescribe.
                    ``(B) Marketing year.--For purposes of this 
                section, the marketing year for peanuts shall be the 
                12-month period beginning August 1 and ending July 31.
                    ``(C) Marketing additional peanuts.--The marketing 
                of any additional peanuts from a farm shall be subject 
                to the same penalty as the penalty prescribed in 
                subparagraph (A) unless the peanuts, in accordance with 
                regulations established by the Secretary, are--
                            ``(i) placed under loan at the additional 
                        loan rate in effect for the peanuts under 
                        section 108B of the Agricultural Act of 1949 (7 
                        U.S.C. 1445c-3) and not redeemed by the 
                        producers;
                            ``(ii) marketed through an area marketing 
                        association designated pursuant to section 
                        108B(c)(1) of the Agricultural Act of 1949; or
                            ``(iii) marketed under contracts between 
                        handlers and producers pursuant to subsection 
                        (f).
            ``(2) Payer.--The penalty shall be paid by the person who 
        buys or otherwise acquires the peanuts from the producer or, if 
        the peanuts are marketed by the producer through an agent, the 
        penalty shall be paid by the agent. The person or agent may 
        deduct an amount equivalent to the penalty from the price paid 
        to the producer.
            ``(3) Failure to collect.--If the person required to 
        collect the penalty fails to collect the penalty, the person 
        and all persons entitled to share in the peanuts marketed from 
        the farm or the proceeds of the marketing shall be jointly and 
        severally liable with the persons who failed to collect the 
        penalty for the amount of the penalty.
            ``(4) Application of quota.--Peanuts produced in a calendar 
        year in which farm poundage quotas are in effect for the 
        marketing year beginning in the calendar year shall be subject 
        to the quotas even though the peanuts are marketed prior to the 
        date on which the marketing year begins.
            ``(5) False information.--If any producer falsely 
        identifies, fails to accurately certify planted acres, or fails 
        to account for the disposition of any peanuts produced on the 
        planted acres, a quantity of peanuts equal to the greater of 
        the average or actual yield of the farm, as determined by the 
        Secretary, multiplied by the number of planted acres, shall be 
        deemed to have been marketed in violation of permissible uses 
        of quota and additional peanuts. Any penalty payable under this 
        paragraph shall be paid and remitted by the producer.
            ``(6) Unintentional violations.--The Secretary shall 
        authorize, under such regulations as the Secretary shall issue, 
        the county committees established under section 8(b) of the 
        Soil Conservation and Domestic Allotment Act (16 U.S.C. 
        590h(b)) to waive or reduce marketing penalties provided for 
        under this subsection in cases with respect to which the 
        committees determine that the violations that were the basis of 
        the penalties were unintentional or without knowledge on the 
        part of the parties concerned.
            ``(7) De minimis violations.--An error in weight that does 
        not exceed \1/10\ of 1 percent in the case of any 1 marketing 
        document shall not be considered to be a marketing violation 
        except in a case of fraud or conspiracy.
    ``(b) Use of Quota and Additional Peanuts.--
            ``(1) Quota peanuts.--Only quota peanuts may be retained 
        for use as seed or for other uses on a farm. When peanuts are 
        so retained, the retention shall be considered as marketings of 
        quota peanuts, except that the Secretary may exempt from 
        consideration as marketings of quota peanuts seeds of peanuts 
        for the quantity involved that are used to produce peanuts 
        excluded under section 358d(c), are unique strains, and are not 
        commercially available.
            ``(2) Additional peanuts.--Additional peanuts shall not be 
        retained for use on a farm and shall not be marketed for 
        domestic edible use, except as provided in subsection (g).
            ``(3) Seed.--Except as provided in paragraph (1), seed for 
        planting of any peanut acreage in the United States shall be 
        obtained solely from quota peanuts marketed or considered 
        marketed for domestic edible use.
    ``(c) Marketing Peanuts With Excess Quantity, Grade, or Quality.--
On a finding by the Secretary that the peanuts marketed from any crop 
for domestic edible use by a handler are larger in quantity or higher 
in grade or quality than the peanuts that could reasonably be produced 
from the quantity of peanuts having the grade, kernel content, and 
quality of the quota peanuts acquired by the handler from the crop for 
the marketing, the handler shall be subject to a penalty equal to 140 
percent of the loan level for quota peanuts on the quantity of peanuts 
that the Secretary determines are in excess of the quantity, grade, or 
quality of the peanuts that could reasonably have been produced from 
the peanuts so acquired.
    ``(d) Handling and Disposal of Additional Peanuts.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        Secretary shall require that the handling and disposal of 
        additional peanuts be supervised by agents of the Secretary or 
        by area marketing associations designated pursuant to section 
        108B(c)(1) of the Agricultural Act of 1949 (7 U.S.C. 1445c-
        3(c)(1)).
            ``(2) Nonsupervision of handlers.--
                    ``(A) In general.--Supervision of the handling and 
                disposal of additional peanuts by a handler shall not 
                be required under paragraph (1) if the handler agrees 
                in writing, prior to any handling or disposal of the 
                peanuts, to comply with regulations that the Secretary 
                shall issue.
                    ``(B) Regulations.--The regulations issued by the 
                Secretary under subparagraph (A) shall include the 
                following provisions:
                            ``(i) Types of exported or crushed 
                        peanuts.--Handlers of shelled or milled peanuts 
                        may export or crush peanuts classified by type 
                        in each of the following quantities:
                                    ``(I) Sound split kernel peanuts.--
                                Sound split kernel peanuts purchased by 
                                the handler as additional peanuts to 
                                which, under price support loan 
                                schedules, a mandated deduction with 
                                respect to the price paid to the 
                                producer of the peanuts would be 
                                applied due to the percentage of the 
                                sound splits.
                                    ``(II) Sound mature kernel 
                                peanuts.--Sound mature kernel peanuts 
                                (which term includes sound split kernel 
                                peanuts and sound whole kernel peanuts) 
                                in an amount equal to the poundage of 
                                the peanuts purchased by the handler as 
                                additional peanuts, less the total 
                                poundage of sound split kernel peanuts 
                                described in subclause (I).
                                    ``(III) Remainder.--The remaining 
                                quantity of total kernel content of 
                                peanuts purchased by the handler as 
                                additional peanuts.
                            ``(ii) Documentation.--Handlers shall 
                        ensure that any additional peanuts exported or 
                        crushed are evidenced by onboard bills of 
                        lading or other appropriate documentation as 
                        may be required by the Secretary, or both.
                            ``(iii) Loss of peanuts.--If a handler 
                        suffers a loss of peanuts as a result of fire, 
                        flood, or any other condition beyond the 
                        control of the handler, the portion of the loss 
                        allocated to contracted additional peanuts 
                        shall not be greater than the portion of the 
                        total peanut purchases of the handler for the 
                        year attributable to contracted additional 
                        peanuts purchased for export or crushing by the 
                        handler during the year.
                            ``(iv) Shrinkage allowance.--
                                    ``(I) In general.--The obligation 
                                of a handler to export or crush peanuts 
                                in quantities described in this 
                                subparagraph shall be reduced by a 
                                shrinkage allowance, to be determined 
                                by the Secretary, to reflect actual 
                                dollar value shrinkage experienced by 
                                handlers in commercial operations, 
                                except that the allowance shall not be 
                                less than 4 percent, except as provided 
                                in subclause (II).
                                    ``(II) Common industry practices.--
                                The Secretary may provide a lower 
                                shrinkage allowance for a handler who 
                                fails to comply with restrictions on 
                                the use of peanuts, as may be specified 
                                by the Commodity Credit Corporation, to 
                                take into account common industry 
                                practices.
            ``(3) Adequate finances and facilities.--A handler shall 
        submit to the Secretary adequate financial guarantees, as well 
        as evidence of adequate facilities and assets, with the 
        facilities under the control and operation of the handler, to 
        ensure the compliance of the handler with the obligation to 
        export peanuts.
            ``(4) Commingling of like peanuts.--Quota and additional 
        peanuts of like type and segregation or quality may, under 
        regulations issued by the Secretary, be commingled and 
        exchanged on a dollar value basis to facilitate warehousing, 
        handling, and marketing.
            ``(5) Penalty.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the failure by a handler to comply 
                with regulations issued by the Secretary governing the 
                disposition and handling of additional peanuts shall 
                subject the handler to a penalty at a rate equal to 140 
                percent of the loan level for quota peanuts on the 
                quantity of peanuts involved in the violation.
                    ``(B) Nondelivery.--A handler shall not be subject 
                to a penalty for failure to export additional peanuts 
                if the peanuts were not delivered to the handler.
            ``(6) Reentry of exported peanuts.--
                    ``(A) Penalty.--If any additional peanuts exported 
                by a handler are reentered into the United States in 
                commercial quantities as determined by the Secretary, 
                the importer of the peanuts shall be subject to a 
                penalty at a rate equal to 140 percent of the loan 
                level for quota peanuts on the quantity of peanuts 
                reentered.
                    ``(B) Records.--Each person, firm, or handler who 
                imports peanuts into the United States shall maintain 
                such records and documents as are required by the 
                Secretary to ensure compliance with this subsection.
    ``(e) Special Export Credits.--
            ``(1) In general.--The Secretary shall, with due regard for 
        the integrity of the peanut program, promulgate regulations 
        that will permit any handler of peanuts who manufactures peanut 
        products from domestic edible peanuts to export the products 
        and receive credit for the fulfillment of export obligations 
        for the peanut content of the products against which export 
        credit the handler may subsequently apply, up to the amount of 
        the credit, equivalent quantities of additional peanuts of the 
        same type acquired by the handler and used in the domestic 
        edible market. The peanuts so acquired for the domestic edible 
        market as provided in this subsection shall be of the same crop 
        year as the peanuts used in the manufacture of the products so 
        exported.
            ``(2) Certification.--Under the regulations, the Secretary 
        shall require all handlers who are peanut product manufacturers 
        to submit annual certifications of peanut product content on a 
        product-by-product basis. Any changes in peanut product 
        formulas as affecting peanut content shall be recorded within 
        90 days after the changes. The Secretary shall conduct an 
        annual review of the certifications. The Secretary shall pursue 
        all available remedies with respect to persons who fail to 
        comply with this paragraph.
            ``(3) Records.--The Secretary shall require handlers who 
        are peanut product manufacturers to maintain and provide such 
        documents as are necessary to ensure compliance with this 
        subsection and to maintain the integrity of the peanut program.
    ``(f) Contracts for Purchase of Additional Peanuts.--
            ``(1) In general.--A handler may, under such regulations as 
        the Secretary may issue, contract with a producer for the 
        purchase of additional peanuts for crushing or export, or both.
            ``(2) Submission to secretary.--
                    ``(A) Contract deadline.--Any such contract shall 
                be completed and submitted to the Secretary (or if 
                designated by the Secretary, the area marketing 
                association) for approval not later than September 15 
                of the year in which the crop is produced.
                    ``(B) Extension of deadline.--The Secretary may 
                extend the deadline under subparagraph (A) by up to 15 
                days in response to damaging weather or related 
                condition (as defined in section 112 of the Disaster 
                Assistance Act of 1989 (Public Law 101-82; 7 U.S.C. 
                1421 note)). The Secretary shall announce the extension 
                not later than September 5 of the year in which the 
                crop is produced.
            ``(3) Form.--The contract shall be executed on a form 
        prescribed by the Secretary. The form shall require such 
        information as the Secretary determines appropriate to ensure 
        the proper handling of the additional peanuts, including the 
        identity of the contracting parties, poundage, and category of 
        the peanuts, the disclosure of any liens, and the intended 
        disposition of the peanuts.
            ``(4) Information for handling and processing additional 
        peanuts.--Notwithstanding any other provision of this section, 
        any person wishing to handle and process additional peanuts as 
        a handler shall submit to the Secretary (or if designated by 
        the Secretary, the area marketing association), such 
        information as may be required under subsection (d) by such 
        date as is prescribed by the Secretary so as to permit final 
        action to be taken on the application by July 1 of each 
        marketing year.
            ``(5) Terms.--Each such contract shall contain the final 
        price to be paid by the handler for the peanuts involved and a 
        specific prohibition against the disposition of the peanuts for 
        domestic edible or seed use.
            ``(6) Suspension of restrictions on imported peanuts.--
        Notwithstanding any other provision of this Act, if the 
        President issues a proclamation under section 404(b) of the 
        Uruguay Round Agreements Act (19 U.S.C. 3601(b)) expanding the 
        quantity of peanuts subject to the in-quota rate of duty under 
        a tariff-rate quota, or under section 22 of the Agricultural 
        Adjustment Act (7 U.S.C. 624), reenacted with amendments by the 
        Agricultural Marketing Agreement Act of 1937, temporarily 
        suspending restrictions on the importation of peanuts, the 
        Secretary shall, subject to such terms and conditions as the 
        Secretary may prescribe, permit a handler, with the written 
        consent of the producer, to purchase additional peanuts from 
        any producer who contracted with the handler and to offer the 
        peanuts for sale for domestic edible use.
    ``(g) Marketing of Peanuts Owned or Controlled by the Commodity 
Credit Corporation.--
            ``(1) In general.--Subject to section 407 of the 
        Agricultural Act of 1949 (7 U.S.C. 1427), any peanuts owned or 
        controlled by the Commodity Credit Corporation may be made 
        available for domestic edible use, in accordance with 
        regulations issued by the Secretary, so long as doing so does 
        not result in substantially increased cost to the Commodity 
        Credit Corporation. Additional peanuts received under loan 
        shall be offered for sale for domestic edible use at prices 
        that are not less than the prices that are required to cover 
        all costs incurred with respect to the peanuts for such items 
        as inspection, warehousing, shrinkage, and other expenses, 
        plus--
                    ``(A) not less than 100 percent of the loan value 
                of quota peanuts if the additional peanuts are sold and 
                paid for during the harvest season on delivery by and 
                with the written consent of the producer;
                    ``(B) not less than 105 percent of the loan value 
                of quota peanuts if the additional peanuts are sold 
                after delivery by the producer but not later than 
                December 31 of the marketing year; or
                    ``(C) not less than 107 percent of the loan value 
                of quota peanuts if the additional peanuts are sold 
                later than December 31 of the marketing year.
            ``(2) Acceptance of bids by area marketing associations.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), for the period from the date 
                additional peanuts are delivered for loan to March 1 of 
                the calendar year following the year in which the 
                additional peanuts were harvested, the area marketing 
                association designated pursuant to section 108B(c)(1) 
                of the Agricultural Act of 1949 (7 U.S.C. 1445c-
                3(c)(1)) shall have sole authority to accept or reject 
                lot list bids when the sales price, as determined under 
                this subsection, equals or exceeds the minimum price at 
                which the Commodity Credit Corporation may sell the 
                stocks of additional peanuts of the Corporation.
                    ``(B) Modification.--The area marketing association 
                and the Commodity Credit Corporation may agree to 
                modify the authority granted by subparagraph (A) to 
                facilitate the orderly marketing of additional peanuts.
            ``(3) Producer marketing and expenses.--Notwithstanding any 
        other provision of this Act, the Secretary shall, in any 
        determination required under subsections (a)(2) and (b)(1) of 
        section 108B of the Agricultural Act of 1949 (7 U.S.C. 1445c-
        3), include any additional marketing expenses required by law, 
        excluding the amount of any assessment required under section 
        108B(g) of the Agricultural Act of 1949 (7 U.S.C. 1445c-3(g)).
    ``(h) Administration.--
            ``(1) Interest.--The person liable for payment or 
        collection of any penalty provided for in this section shall be 
        liable also for interest on the penalty at a rate per annum 
        equal to the rate per annum of interest that was charged the 
        Commodity Credit Corporation by the Treasury of the United 
        States on the date the penalty became due.
            ``(2) De minimis quantity.--This section shall not apply to 
        peanuts produced on any farm on which the acreage harvested for 
        peanuts is 1 acre or less if the producers who share in the 
        peanuts produced on the farm do not share in the peanuts 
        produced on any other farm.
            ``(3) Liens.--Until the amount of the penalty provided by 
        this section is paid, a lien on the crop of peanuts with 
        respect to which the penalty is incurred, and on any subsequent 
        crop of peanuts subject to farm poundage quotas in which the 
        person liable for payment of the penalty has an interest, shall 
        be in effect in favor of the United States.
            ``(4) Penalties.--
                    ``(A) Procedures.--Notwithstanding any other 
                provision of law, the liability for and the amount of 
                any penalty assessed under this section shall be 
                determined in accordance with such procedures as the 
                Secretary may by regulation prescribe. The facts 
                constituting the basis for determining the liability 
                for or amount of any penalty assessed under this 
                section, when officially determined in conformity with 
                the applicable regulations prescribed by the Secretary, 
                shall be final and conclusive and shall not be 
                reviewable by any other officer or agency of the 
                Federal Government.
                    ``(B) Judicial review.--Nothing in this section 
                prohibits any court of competent jurisdiction from 
                reviewing any determination made by the Secretary with 
                respect to whether the determination was made in 
                conformity with applicable law.
                    ``(C) Civil penalties.--All penalties imposed under 
                this section shall for all purposes be considered civil 
                penalties.
            ``(5) Reduction of penalties.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B) and notwithstanding any other 
                provision of law, the Secretary may reduce the amount 
                of any penalty assessed against handlers under this 
                section by any appropriate amount, including, in an 
                appropriate case, eliminating the penalty entirely, if 
                the Secretary finds that the violation on which the 
                penalty is based was minor or inadvertent, and that the 
                reduction of the penalty will not impair the operation 
                of the peanut program.
                    ``(B) Failure to export contracted additional 
                peanuts.--The amount of any penalty imposed on a 
                handler under this section that resulted from the 
                failure to export or crush
                 contracted additional peanuts shall not be reduced by 
the Secretary.
    ``(i) Crops.--Notwithstanding any other provision of law, this 
section shall be effective only for the 1996 through 2002 crops of 
peanuts.''.

SEC. 205. EXPERIMENTAL AND RESEARCH PROGRAMS FOR PEANUTS.

    Section 358c of the Agricultural Adjustment Act of 1938 (7 U.S.C. 
1358c) is amended to read as follows:

``SEC. 358c. EXPERIMENTAL AND RESEARCH PROGRAMS FOR PEANUTS.

    ``(a) In General.--Notwithstanding any other provision of this Act, 
the Secretary may permit a portion of the poundage quota for peanuts 
apportioned to any State to be allocated from the quota reserve of the 
State to land-grant institutions identified in the Act of May 8, 1914 
(38 Stat. 372, chapter 79; 7 U.S.C. 341 et seq.), and colleges eligible 
to receive funds under the Act of August 30, 1890 (26 Stat. 419, 
chapter 841; 7 U.S.C. 321 et seq.), including Tuskegee Institute and, 
as appropriate, the Agricultural Research Service of the Department of 
Agriculture to be used for experimental and research purposes.
    ``(b) Quantity.--The quantity of the quota allocated to an 
institution under this section shall not exceed the quantity of the 
quota held by each such institution during the 1985 crop year, except 
that the total quantity allocated to all institutions in a State shall 
not exceed \1/10\ of 1 percent of the basic quota of the State.
    ``(c) Limitation.--The director of the agricultural experiment 
station for a State shall be required to ensure, to the extent 
practicable, that farm operators in the State do not produce quota 
peanuts under subsection (a) in excess of the quantity needed for 
experimental and research purposes.
    ``(d) Crops.--Notwithstanding any other provision of law, this 
section shall be effective only for the 1996 through 2002 crops of 
peanuts.''.

SEC. 206. PRICE SUPPORT PROGRAM.

    Section 108B of the Agricultural Act of 1949 (7 U.S.C. 1445c-3) is 
amended to read as follows:

``SEC. 108B. PRICE SUPPORT PROGRAM FOR 1996 THROUGH 2002 CROPS OF 
              PEANUTS.

    ``(a) Quota Peanuts.--
            ``(1) In general.--The Secretary shall make price support 
        available to producers through loans, purchases, and other 
        operations on quota peanuts for each of the 1996 through 2002 
        crops.
            ``(2) Support rate.--The national average quota support 
        rate for each of the 1996 through 2002 crops of quota peanuts 
        shall be the national average quota support rate for the 1995 
        crop of quota peanuts.
            ``(3) Inspection, handling, or storage.--The level of 
        support determined under paragraph (2) shall not be reduced by 
        any deduction for inspection, handling, or storage.
            ``(4) Location and other factors.--The Secretary may make 
        adjustments for location of peanuts and such other factors as 
        are authorized by section 403.
            ``(5) Announcement.--The Secretary shall announce the level 
        of support for quota peanuts of each crop not later than 
        February 15 preceding the marketing year for the crop for which 
        the level of support is being determined.
    ``(b) Additional Peanuts.--
            ``(1) In general.--The Secretary shall make price support 
        available to producers through loans, purchases, or other 
        operations on additional peanuts for each of the 1996 through 
        2002 crops at such levels as the Secretary finds appropriate, 
        taking into consideration the demand for peanut oil and peanut 
        meal, expected prices of other vegetable oils and protein 
        meals, and the demand for peanuts in foreign markets, except 
        that the Secretary shall set the support rate on additional 
        peanuts at a level estimated by the Secretary to ensure that 
        there are no losses to the Commodity Credit Corporation on the 
        sale or disposal of the peanuts.
            ``(2) Announcement.--The Secretary shall announce the level 
        of support for additional peanuts of each crop not later than 
        February 15 preceding the marketing year for the crop for which 
        the level of support is being determined.
    ``(c) Area Marketing Associations.--
            ``(1) Warehouse storage loans.--
                    ``(A) In general.--In carrying out subsections (a) 
                and (b), the Secretary shall make warehouse storage 
                loans available in each of the 3 producing areas 
                described in section 1446.95 of title 7, Code of 
                Federal Regulations (January 1, 1989) to a designated 
                area marketing association of peanut producers that is 
                selected and approved by the Secretary and that is 
                operated primarily for the purpose of conducting the 
                loan activities. The Secretary may not make warehouse 
                storage loans available to any cooperative that is 
                engaged in operations or activities concerning peanuts 
                other than those operations and activities specified in 
                this section
                 and sections 358d and 358e of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1359 and 1359a).
                    ``(B) Administrative and supervisory activities.--
                The area marketing associations shall be used in 
                administrative and supervisory activities relating to 
                price support and marketing activities under this 
                section and sections 358d and 358e of the Agricultural 
                Adjustment Act of 1938.
                    ``(C) Association costs.--Loans made to an area 
                marketing association under this paragraph shall 
                include, in addition to the price support value of the 
                peanuts, such costs as the association reasonably may 
                incur in carrying out the responsibilities, operations, 
                and activities of the association under this section 
                and sections 358d and 358e of the Agricultural 
                Adjustment Act of 1938.
            ``(2) Pools for quota and additional peanuts.--
                    ``(A) In general.--The Secretary shall require that 
                each area marketing association establish pools and 
                maintain complete and accurate records by area and 
                segregation for quota peanuts handled under loan and 
                for additional peanuts placed under loan, except that 
                separate pools shall be established for Valencia 
                peanuts produced in New Mexico. Bright hull and dark 
                hull Valencia peanuts shall be considered as separate 
                types for the purpose of establishing the pools.
                    ``(B) Net gains.--Net gains on peanuts in each 
                pool, unless otherwise approved by the Secretary, shall 
                be distributed only to producers who placed peanuts in 
                the pool and shall be distributed in proportion to the 
                value of the peanuts placed in the pool by each 
                producer. Net gains for peanuts in each pool shall 
                consist of the following:
                            ``(i) Quota peanuts.--For quota peanuts, 
                        the net gains over and above the loan 
                        indebtedness and other costs or losses incurred 
                        on peanuts placed in the pool plus an amount 
                        from all additional pool gains equal to any 
                        loss on disposition of all peanuts in the pool 
                        for quota peanuts.
                            ``(ii) Additional peanuts.--For additional 
                        peanuts, the net gains over and above the loan 
                        indebtedness and other costs or losses incurred 
                        on peanuts placed in the pool for additional 
                        peanuts less any amount allocated to offset any 
                        loss on the pool for quota peanuts as provided 
                        in clause (i).
    ``(d) Losses.--Notwithstanding any other provision of this section:
            ``(1) Quota peanuts placed under loan.--Any distribution of 
        net gains on additional peanuts (other than net gains on 
        additional peanuts in separate type pools established under 
        subsection (c)(2)(A) for Valencia peanuts produced in New 
        Mexico) shall be first reduced to the extent of any loss by the 
        Commodity Credit Corporation on quota peanuts placed under 
        loan.
            ``(2) Quota loan pools.--
                    ``(A) Transfers from additional loan pools.--The 
                proceeds due any producer from any pool shall be 
                reduced by the amount of any loss that is incurred with 
                respect to peanuts transferred from an additional loan 
                pool to a quota loan pool by the producer under section 
                358-1(b)(8) of the Agricultural Adjustment Act of 1938 
                (7 U.S.C. 1358-1(b)(8)).
                    ``(B) Other losses.--Losses in area quota pools, 
                other than losses incurred as a result of transfers 
                from additional loan pools to quota loan pools under 
                section 358-1(b)(8) of the Agricultural Adjustment Act 
                of 1938, shall be offset by any gains or profits from 
                pools in other production areas (other than separate 
                type pools established under subsection (c)(2)(A) for 
                Valencia peanuts produced in New Mexico) in such manner 
                as the Secretary shall prescribe by regulation.
    ``(e) Disapproval of Quotas.--Notwithstanding any other provision 
of law, no price support may be made available by the Secretary for any 
crop of peanuts with respect to which poundage quotas have been 
disapproved by producers, as provided for in section 358-1(d) of the 
Agricultural Adjustment Act of 1938.
    ``(f) Quality Improvement.--
            ``(1) Price support peanuts.--With respect to peanuts under 
        price support loan, the Secretary shall--
                    ``(A) promote the crushing of peanuts at a greater 
                risk of deterioration before peanuts at a lesser risk 
                of deterioration;
                    ``(B) ensure that all Commodity Credit Corporation 
                loan stocks of peanuts sold for domestic edible use are 
                shown to have been officially inspected by licensed 
                Department of Agriculture inspectors both as farmer 
                stock and shelled or cleaned in-shell peanuts;
                    ``(C) continue to endeavor to operate the peanut 
                price support program so as to improve the quality of 
                domestic peanuts and ensure the coordination of 
                activities under the Peanut Administrative Committee 
                established under Marketing Agreement No. 146, 
                regulating the quality of domestically produced peanuts 
                (under the Agricultural Adjustment Act (7 U.S.C. 601 et 
                seq.), reenacted with amendments by the Agricultural 
                Marketing Agreement Act of 1937); and
                    ``(D) ensure that any changes made in the price 
                support program as a result of this subsection 
                requiring additional production or handling at the farm 
                level are reflected as an upward adjustment in the 
                Department of Agriculture loan schedule.
            ``(2) Exports and other peanuts.--The Secretary shall 
        require that all peanuts in the domestic market fully comply 
        with all quality standards under Marketing Agreement No. 146. 
        The Secretary shall ensure that peanuts produced for the export 
        market meet quality standards established for the domestic 
        market under Marketing Agreement No. 146.
    ``(g) Marketing Assessment.--
            ``(1) In general.--The Secretary shall provide, by 
        regulation, for a nonrefundable marketing assessment applicable 
        to each of the 1996 through 2002 crops of peanuts. The 
        assessment shall be made in accordance with this subsection and 
        shall be on a per pound basis in an amount equal to 1.15 
        percent for the 1996 crop, and 1.2 percent for each of the 1997 
        through 2002 crops, of the national average quota or additional 
        peanut support rate per pound, as applicable, for the 
        applicable crop. No peanuts shall be assessed more than 1.15 
        percent for the 1996 crop, and 1.2 percent for each of the 1997 
        through 2002 crops, of the applicable support rate under this 
        subsection.
            ``(2) First purchasers.--
                    ``(A) In general.--Except as provided under 
                paragraphs (3) and (4), the first purchaser of peanuts 
                shall--
                            ``(i) collect from the producer a marketing 
                        assessment equal to the quantity of peanuts 
                        acquired multiplied by--
                                    ``(I) in the case of the 1996 crop, 
                                .6 percent of the applicable national 
                                average support rate; and
                                    ``(II) in the case of each of the 
                                1997 through 2002 crops, .65 percent of 
                                the applicable national average support 
                                rate;
                            ``(ii) pay, in addition to the amount 
                        collected under clause (i), a marketing 
                        assessment in an amount equal to the quantity 
                        of peanuts acquired multiplied by .55 percent 
                        of the applicable national average support 
                        rate; and
                            ``(iii) remit the amounts required under 
                        clauses (i) and (ii) to the Commodity Credit 
                        Corporation in a manner specified by the 
                        Secretary.
                    ``(B) Definition.--In this subsection, the term 
                `first purchaser' means a person acquiring peanuts from 
                a producer, except that in the case of peanuts 
                forfeited by a producer to the Commodity Credit 
                Corporation, the term means the person acquiring the 
                peanuts from the Commodity Credit Corporation.
            ``(3) Other private marketings.--In the case of a private 
        marketing by a producer directly to a consumer through a retail 
        or wholesale outlet or in the case of a marketing by the 
        producer outside of the continental United States, the producer 
        shall be responsible for the full amount of the assessment and 
        shall remit the assessment by such time as is specified by the 
        Secretary.
            ``(4) Loan peanuts.--In the case of peanuts that are 
        pledged as collateral for a price support loan made under this 
        section, \1/2\ of the assessment shall be deducted from the 
        proceeds of the loan. The remainder of the assessment shall be 
        paid by the first purchaser of the peanuts. For the purposes of 
        computing net gains on peanuts under this section, the 
        reduction in loan proceeds shall be treated as having been paid 
        to the producer.
            ``(5) Penalties.--If any person fails to collect or remit 
        the reduction required by this subsection or fails to comply 
        with such requirements for recordkeeping or otherwise as are 
        required by the Secretary to carry out this subsection, the 
        person shall be liable to the Secretary for a civil penalty up 
        to an amount determined by multiplying--
                    ``(A) the quantity of peanuts involved in the 
                violation; by
                    ``(B) the national average quota peanut price 
                support level for the applicable crop year.
            ``(6) Enforcement.--The Secretary may enforce this 
        subsection in the courts of the United States.
    ``(h) Crops.--Notwithstanding any other provision of law, this 
section shall be effective only for the 1996 through 2002 crops of 
peanuts.''.

SEC. 207. REPORTS AND RECORDS.

    Effective only for the 1996 through 2002 crops of peanuts, the 
first sentence of section 373(a) of the Agricultural Adjustment Act of 
1938 (7 U.S.C. 1373(a)) is amended by inserting before ``all brokers 
and dealers in peanuts'' the following: ``all producers engaged in the 
production of peanuts,''.

SEC. 208. SUSPENSION OF CERTAIN PRICE SUPPORT PROVISIONS.

    Section 101 of the Agricultural Act of 1949 (7 U.S.C. 1441) shall 
not be applicable to the 1996 through 2002 crops of peanuts.

SEC. 209. REGULATIONS.

    The Secretary of Agriculture shall issue such regulations as are 
necessary to carry out this title and the amendments made by this 
title. In issuing the regulations, the Secretary shall--
            (1) comply with subchapter II of chapter 5 of title 5, 
        United States Code;
            (2) provide public notice through the Federal Register of 
        any such proposed regulations; and
            (3) allow adequate time for written public comment prior to 
        the formulation and issuance of any final regulations.
                          TITLE III--OILSEEDS

SEC. 301. LOANS AND PAYMENTS FOR OILSEEDS FOR 1996 THROUGH 2002 
              MARKETING YEARS.

    Section 205 of the Agricultural Act of 1949 (7 U.S.C. 1446f) is 
amended to read as follows:

``SEC. 205. LOANS AND PAYMENTS FOR OILSEEDS FOR 1996 THROUGH 2002 
              MARKETING YEARS.

    ``(a) Definition of Oilseeds.--In this section, the term `oilseeds' 
means soybeans, sunflower seed, canola, rapeseed, safflower, flaxseed, 
mustard seed, and such other oilseeds as the Secretary may determine.
    ``(b) Nonrecourse Loans.--The Secretary shall support the price of 
oilseeds through nonrecourse loans to producers on a farm for oilseeds 
produced on the farm in each of the 1996 through 2002 marketing years 
as provided in this section.
    ``(c) Loan Level.--
            ``(1) In general.--The loan level for each of the 1996 
        through 2002 crops of--
                    ``(A) soybeans shall not be less than $5.25 per 
                bushel;
                    ``(B) sunflower seed, canola, rapeseed, safflower, 
                mustard seed, and flaxseed, individually, shall not be 
                less than $0.093 per pound; and
                    ``(C) other oilseeds shall be established at such 
                level as the Secretary determines is fair and 
                reasonable in relation to the loan level available for 
                soybeans, except that in no event shall the level for 
                the oilseeds (other than cottonseed) be less than the 
                level established for soybeans on a per-pound basis for 
                the same crop year.
            ``(2) Transportation differentials.--To ensure that 
        producers have an equitable opportunity to produce an 
        alternative crop in areas of limited crop options, the 
        Secretary may limit, insofar as practicable, adjustments in the 
        loan level established under paragraph (1)(B) applicable to a 
        particular region, State, or county for the purpose of 
        reflecting transportation differentials such that the regional, 
        State, or county loan level does not increase or decrease by 
        more than 9 percent from the basic national loan rate.
    ``(d) Marketing Loans.--
            ``(1) In general.--The Secretary shall permit a producer to 
        repay a loan made under this section for a crop--
                    ``(A) at a level that is the lesser of--
                            ``(i) the loan level determined for the 
                        crop; and
                            ``(ii) the prevailing world market price 
                        for the applicable oilseed (adjusted to United 
                        States quality and location), as determined by 
                        the Secretary; or
                    ``(B) such other level (not in excess of the loan 
                level determined for the crop) that the Secretary 
                determines will--
                            ``(i) minimize potential loan forfeitures;
                            ``(ii) minimize the accumulation of oilseed 
                        stocks by the Federal Government;
                            ``(iii) minimize the cost incurred by the 
                        Federal Government in storing oilseeds; and
                            ``(iv) allow oilseeds produced in the 
                        United States to be marketed freely and 
                        competitively, both domestically and 
                        internationally.
            ``(2) Prevailing world market price.--The Secretary shall 
        prescribe by regulation--
                    ``(A) a formula for determining the prevailing 
                world market price for oilseeds (adjusted to United 
                States quality and location); and
                    ``(B) a mechanism by which the Secretary shall 
                announce periodically the prevailing world market price 
                for oilseeds (adjusted to United States quality and 
                location).
    ``(e) Loan Deficiency Payment.--
            ``(1) In general.--For each of the 1996 through 2002 crops 
        of oilseeds, the Secretary shall make payments available to 
        producers who, although eligible to obtain a loan under 
        subsection (b), agree to forgo obtaining the loan in return for 
        payments under this subsection.
            ``(2) Computation.--A payment under this subsection shall 
        be computed by multiplying--
                    ``(A) the loan payment rate; by
                    ``(B) the quantity of oilseeds the producer is 
                eligible to place under loan but for which the producer 
                forgoes obtaining the loan in return for payments under 
                this subsection.
            ``(3) Loan payment rate.--For purposes of this subsection, 
        the loan payment rate shall be the amount by which--
                    ``(A) the loan level determined for the crop under 
                subsection (c); exceeds
                    ``(B) the level at which a loan may be repaid under 
                subsection (d).
            ``(4) Marketing certificates.--
                    ``(A) In general.--The Secretary may make payments 
                under this section available in the form of 
                certificates redeemable for any agricultural commodity 
                owned by the Commodity Credit Corporation.
                    ``(B) Minimal oilseed stocks.--The Secretary shall 
                make certificates available under subparagraph (A) in 
                such a manner as to minimize the accumulation of 
                oilseed stocks.
    ``(f) Marketing Year.--For purposes of this section, the marketing 
year for--
            ``(1) soybeans shall be the 1-year period beginning on 
        September 1 and ending on August 31; and
            ``(2) other oilseeds shall be prescribed by the Secretary 
        by regulation.
    ``(g) Announcements.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        Secretary shall make an announcement of the loan level for the 
        crop not later than November 15 prior to the calendar year in 
        which the crop is harvested.
            ``(2) 1996 crop.--In the case of the 1996 crop, the 
        Secretary shall make an announcement of the loan level for the 
        crop as soon as practicable after the date of enactment of the 
        Southern Agricultural Act of 1995.
    ``(h) Loan Maturity.--A loan made for a crop of oilseeds under this 
section shall mature on the last day of the 9th month following the 
month the application for the loan is made, except that the loan may 
not mature later than the last day of the fiscal year in which the 
application is made.
    ``(i) Other Terms and Conditions.--Notwithstanding any other 
provision of law--
            ``(1) the Secretary shall not require participation in any 
        production adjustment program for oilseeds or any other 
        commodity as a condition of eligibility for price support for 
        oilseeds;
            ``(2) the Secretary may not authorize payments to producers 
        to cover the cost of storing oilseeds; and
            ``(3) oilseeds may not be considered an eligible commodity 
        for any reserve program.
    ``(j) Regulations.--The Secretary may issue such regulations as the 
Secretary determines necessary to carry out this section.
    ``(k) Commodity Credit Corporation.--The Secretary shall carry out 
the program authorized by this section through the Commodity Credit 
Corporation.
    ``(l) Assignment of Payments.--Section 8(g) of the Soil 
Conservation and Domestic Allotment Act (16 U.S.C. 590h(g)) shall apply 
to payments under this section.
    ``(m) Crops.--Notwithstanding any other provision of law, this 
section shall be effective only for the 1996 through 2002 crops of 
oilseeds.''.
                 TITLE IV--GENERAL COMMODITY PROVISIONS

           Subtitle A--Amendments to Agricultural Act of 1949

SEC. 401. SUPPLEMENTAL SET-ASIDE AND ACREAGE LIMITATION AUTHORITY.

    Section 113 of the Agricultural Act of 1949 (7 U.S.C. 1445h) is 
amended by striking ``1995'' and inserting ``2002''.

SEC. 402. DEFICIENCY AND LAND DIVERSION PAYMENTS.

    Section 114 of the Agricultural Act of 1949 (7 U.S.C. 1445j) is 
amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by striking ``1997'' and 
                inserting ``2002''; and
                    (B) in paragraph (2)(F), by striking clause (iii) 
                and inserting the following:
                            ``(iii) 50 percent of the projected payment 
                        rate;'';
            (2) in subsection (b), by striking ``1995'' and inserting 
        ``2002''; and
            (3) in subsection (c), by striking ``1997'' and inserting 
        ``2002''.

SEC. 403. ADJUSTMENT OF ESTABLISHED PRICES.

    Section 402(b) of the Agricultural Act of 1949 (7 U.S.C. 1422(b)) 
is amended by striking ``1995'' and inserting ``2002''.

SEC. 404. ADJUSTMENT OF SUPPORT PRICES.

    Section 403(c) of the Agricultural Act of 1949 (7 U.S.C. 1423(c)) 
is amended by striking ``1995'' and inserting ``2002''.

SEC. 405. PROGRAM OPTION FOR FUTURE CROPS.

    Section 406 of the Agricultural Act of 1949 (7 U.S.C. 1426) is 
amended by striking subsection (b) and inserting the following:
    ``(b) Program Option for 2003 and Subsequent Crops.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, the Secretary may offer an option to producers of each of 
        the 2003 and subsequent crops of wheat, feed grains, upland 
        cotton, extra long staple cotton, rice, sugar, peanuts, and 
        oilseeds to participate in commodity price support, production 
        adjustment, and payment programs as provided in this 
        subsection.
            ``(2) Terms and conditions.--The Secretary may offer the 
        programs based on such terms and conditions as are provided 
        producers of the commodities for the 2002 crop year in 
        accordance with this Act, as determined by the Secretary. Any 
        established price or loan and purchase level made available in 
        accordance with this subsection shall be established at the 
        same level as the level established for the 2002 crop year or 
        using the same terms and conditions as are provided for the 
        commodity for the 2002 crop year.
            ``(3) Final announcements.--The Secretary may offer each of 
        the programs provided for by this subsection if the Secretary 
        has not made final announcement of the terms of the commodity 
        price support, production adjustment, or payment programs for 
        the 2003 crops of the commodities referred to in paragraph (1) 
        on or before November 1, 2002.
            ``(4) Commodity credit corporation.--The Secretary may use 
        the funds, facilities and authorities of the Commodity Credit 
        Corporation to carry out this subsection.''.

SEC. 406. APPLICATION OF TERMS IN THE AGRICULTURAL ACT OF 1949.

    Section 408(k)(3) of the Agricultural Act of 1949 (7 U.S.C. 
1428(k)(3)) is amended by striking ``1995'' and inserting ``2002''.
SEC. 407. ACREAGE BASE AND YIELD SYSTEM.

    (a) Crop Acreage Bases.--Section 503 of the Agricultural Act of 
1949 (7 U.S.C. 1463) is amended--
            (1) in subsection (b), by striking paragraph (2) and 
        inserting the following:
            ``(2) Cotton and rice.--In the case of upland cotton and 
        rice, the crop acreage base for a crop for a crop year shall be 
        equal to the average of the acreage planted and considered 
        planted to the crop for harvest on the farm in each of the 3 
        crop years preceding the crop year.'';
            (2) in subsection (c)(3), by striking ``1997'' and 
        inserting ``2002''; and
            (3) by striking subsection (h) and inserting the following:
    ``(h) Adjustment of Bases.--The county committee, in accordance 
with regulations prescribed by the Secretary, may adjust any crop 
acreage base for any program crop for any farm if the crop acreage base 
for the crop on the farm would otherwise be adversely affected by a 
condition or occurrence beyond the control of the producer.''.
    (b) Farm Program Payment Yields.--Section 505(b) of the Act (7 
U.S.C. 1465(b)) is amended--
            (1) in subsection (b)--
                    (A) in paragraphs (1) and (2), by striking ``1997'' 
                each place it appears and inserting ``2002''; and
                    (B) in paragraph (3), by striking ``1981 through 
                1985 crop years (or, as appropriate, the 1986 through 
                1990 crop years)'' and inserting ``applicable crop 
                years, as determined by the Secretary''; and
            (2) in subsection (c)(2)--
                    (A) by inserting ``(if applicable)'' after the 
                ``1986 crop year''; and
                    (B) by inserting ``(as applicable)'' after 
                ``subsequent crop years''.
    (c) Crops.--Section 509 of the Act (7 U.S.C. 1469) is amended by 
striking ``1997'' and inserting ``2002''.

             Subtitle B--Miscellaneous Commodity Provisions

SEC. 411. PAYMENT LIMITATIONS.

    Title X of the Food Security Act of 1985 (Public Law 99-198; 99 
Stat. 1444) is amended--
            (1) in paragraphs (1)(A), (1)(B), and (2)(A) of section 
        1001 (7 U.S.C. 1308), by striking ``1997'' each place it 
        appears and inserting ``2002''; and
            (2) in section 1001C(a) (7 U.S.C. 1308-3(a)), by striking 
        ``1997'' each place it appears and inserting ``2002''.

SEC. 412. NORMALLY PLANTED ACREAGE.

    Section 1001 of the Food and Agriculture Act of 1977 (7 U.S.C. 
1309) is amended by striking ``1995'' each place it appears in 
subsections (a), (b)(1), and (c) and inserting ``2002''.

SEC. 413. NORMAL SUPPLY.

    Section 1019 of the Food Security Act of 1985 (7 U.S.C. 1310a) is 
amended by striking ``1995'' and inserting ``2002''.

SEC. 414. DETERMINATIONS OF THE SECRETARY.

    Section 1017(b) of the Food Security Act of 1985 (Public Law 99-
198; 7 U.S.C. 1385 note) is amended by striking ``1995'' and inserting 
``2002''.

SEC. 415. OPTIONS PILOT PROGRAM.

    The Options Pilot Program Act of 1990 (subtitle E of title XI of 
Public Law 101-624; 104 Stat. 3518; 7 U.S.C. 1421 note) is amended--
            (1) in subsections (a) and (b) of section 1153, by striking 
        ``1995'' each place it appears and inserting ``2002''; and
            (2) in section 1154(b)(1)(A), by striking ``1995'' each 
        place it appears and inserting ``2002''.

SEC. 416. NATIONAL AGRICULTURAL COST OF PRODUCTION STANDARDS REVIEW 
              BOARD.

    Section 1014 of the Agriculture and Food Act of 1981 (7 U.S.C. 
4110) is amended by striking ``1995'' and inserting ``2002''.

                        Subtitle C--Application

SEC. 421. APPLICATION.

    (a) Crops.--Except as otherwise specifically provided this Act, 
this Act and the amendments made by this Act shall apply beginning with 
the 1996 crop of an agricultural commodity.
    (b) Prior Crops.--Except as otherwise specifically provided and 
notwithstanding any other provision of law, this Act and the amendments 
made by this Act shall not affect the authority of the Secretary of 
Agriculture to carry out a price support, production adjustment, or 
payment program for--
            (1) any of the 1991 through 1995 crops of an agricultural 
        commodity established under a provision of law as in effect 
        immediately before the enactment of this Act; or
            (2) the 1996 crop of an agricultural commodity established 
        under section 406(b) of the Agricultural Act of 1949 (as in 
        effect immediately before the effective date of the amendment 
        made by section 405).
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