[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1629 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                S. 1629

 To provide farmers with better prices and higher profits through the 
                              marketplace.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            November 5, 2001

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

_______________________________________________________________________

                                 A BILL


 
 To provide farmers with better prices and higher profits through the 
                              marketplace.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SEC. 101. DEFINITIONS.

    Section 102 of the Federal Agriculture Improvement and Reform Act 
of 1996 (7 U.S.C. 7202) is amended--
            (1) by striking paragraph (2) and inserting the following:
            ``(2) Considered planted.--The term `considered planted' 
        means--
                    ``(A) any acreage that producers on a farm were 
                prevented from planting to a crop because of drought, 
                flood, or other natural disaster, or other condition 
                beyond the control of the producers on the farm; and
                    ``(B) such other acreage as the Secretary considers 
                as fair and equitable.'';
            (2) by striking paragraph (4) and inserting the following:
            ``(4) Contract acreage; loan acreage.--The terms `contract 
        acreage', and `loan acreage' mean (at the option of eligible 
        owners or producers on a farm)--
                    ``(A) the total crop acreage bases established for 
                all contract commodities and loan commodities under 
                title V of the Agricultural Act of 1949 (7 U.S.C. 1461 
                et seq.) that would have been in effect for the 1996 
                crop (but for suspension under section 171 (b)(1)); or
                    ``(B) the average number of acres planted and 
                considered planted to all contract commodities and loan 
                commodities, respectively, during the 1996 through 2001 
                crop years, excluding any crop year in which such 
                commodities were not planted or considered planted, on 
                the farm.'';
            (3) by striking paragraph (9) and inserting the following:
            ``(9) Farm program payment yield.--The term `farm program 
        payment yield' means the average yield per planted acre for a 
        crop for a farm for the 1996 through 2001 crop years, excluding 
        any crop year during which--
                    ``(A) producers on the farm were prevented from 
                planting the crop because of drought, flood, or other 
                natural disaster, or other condition beyond the control 
                of the producers on the farm; or
                    ``(B) the crop was not planted or considered 
                planted on the farm.''.

SEC. 201. NONRECOURSE MARKETING ASSISTANCE LOANS AND LOAN DEFICIENCY 
              PAYMENTS.

    Amendment to the Agricultural Market Transition Act.--Title I of 
the Agricultural Market Transition Act (7 U.S.C. 7201) is amended by 
inserting after subtitle H the following new subtitle:

``Subtitle I--Counter-Cyclical Economic Assistance for the 2002 Through 
2008 Crops--Nonrecourse Marketing Assistance Loans and Loan Deficiency 
                                Payments

``SEC. 131A. AVAILABILITY OF NONRECOURSE MARKETING ASSISTANCE LOANS.

    ``(a) Nonrecourse Loans Available.--For each of the 2002 through 
2008 crops of each loan commodity, the Secretary shall make available 
to producers on a farm nonrecourse marketing assistance loans for loan 
commodities produced on the farm. The loans shall be made under terms 
and conditions that are prescribed by the Secretary and at the loan 
rate established under section 132A for the loan commodity.
            ``(1) Eligible production.--Any production on a farm of a 
        program participant of a loan commodity shall be eligible for a 
        marketing assistance loan under subsection (a) subject to the 
        limitations established in paragraphs (2), (2)(A), (2)(B), and 
        (3) conditions established in section 202.
            ``(2) Except as provided in section 202, the producers on a 
        farm shall be eligible for a marketing assistance loan for a 
        quantity of a loan commodity for a crop year under subsection 
        (a) obtained by multiplying--
                    ``(A) the number of acres planted to each loan 
                commodity on the farm, by
                    ``(B) the farm program payment yield for the loan 
                commodity on the farm.
            ``(3) Maximum number of acres.--The producers on a farm 
        shall not be eligible for a marketing assistance loan for 
        production on acres planted to loan commodities in excess of 
        the total program crop loan acreage for the farm.
    ``(b) Compliance With Conservation and Wetlands Requirements.--As a 
condition of the receipt of a marketing assistance loan under 
subsection (a), the producer shall comply with the applicable 
conservation requirements under subtitle B of title XII of the Food 
Security Act of 1985 (16 U.S.C. 3811 et seq.) and applicable wetland 
protection requirements under subtitle C of title XII of the Act (16 
U.S.C. 3821 et seq.) during the term of the loan.
    ``(c) Additional Outlays Prohibited.--The Secretary shall carry out 
this subtitle in such a manner that there are no additional outlays as 
a result of the reconstitution of a farm that occurs as a result of the 
combination of another farm that does not contain eligible cropland 
covered by a production flexibility contract for the 1996 through 2002 
crops.
    ``(d) Option To Participate With Respect to 2002 Crop.--Under such 
terms and conditions as may be prescribed by the Secretary, a producer 
may terminate the production flexibility contract in effect for the 
2002 crop, and thus forgo any right to a contract payment for the 2002 
crop, in order to participate in the marketing loan assistance provided 
under this subtitle for the 2002 crop.
    ``(e) Full Planting Flexibility Provided.--Notwithstanding section 
118 of subtitle B, or any other provision of this Act, any commodity or 
crop may be planted on contract acreage or other acreage on a farm.
    ``(f) Use of Commodity Certificates.--Notwithstanding any other 
provision of law, including section 115 of this Act, the Secretary may 
not make use of commodity certificates or the commodity loan redemption 
certificate program for the purposes of this subtitle, or any other 
purpose.

``SEC. 132A. LOAN RATES FOR MARKETING ASSISTANCE LOANS.

    ``(a) Generally.--Loan rates for crops eligible for marketing 
assistance loans under section 131A for any loan commodity, as defined 
in section 102, to mean wheat, corn, grain sorghum, barley, oats, 
upland cotton, rice, extra long staple cotton, and oilseeds, including 
soybeans, sunflower seed, rapeseed, canola, safflower, flaxseed, 
mustard seed, and other oilseeds, if designated by the Secretary, shall 
be established in accordance with this section.
    ``(b) Annual Determination.--The Secretary shall, for each of the 
2002 through 2008 crops, make an annual determination, in accordance 
with subsections (c) and (d), to establish the national and individual 
loan rate for each loan commodity.
    ``(c) National Average Loan Rate.--The national average commodity 
marketing loan rate for each loan commodity shall be established at a 
rate--
            ``(1) after making weighted county loan rate adjustments, 
        that is not less than 80 percent of the three year moving 
        average of the full economic cost of production per unit per 
        planted acre, and annually adjusted for both the percentage 
        change in variable production input expenses, and productivity 
        changes as determined by the Economic Research Service using 
        the best and most recently available data;
            ``(2) for each of the 2002 crops, the national average loan 
        rate is not less than--
                    ``(A) for wheat: $3.88 per bushel;
                    ``(B) for corn: $2.40 per bushel;
                    ``(C) for soybeans: $5.36 per bushel;
                    ``(D) for upland cotton: $60.65 per hundredweight;
                    ``(E) for rice: $8.61 per hundredweight; and
            ``(3) for the 2002-2011 crops of feed grains and other loan 
        commodities closely related to those identified in paragraph 
        (2), the Secretary shall determine the rate at a level that is 
        fair and reasonable in relation to the rate provided for the 
        closely related commodity.
            ``(4) For producers of program commodities who exceed the 
        limitations established in section 202 of this Act, the 
        Secretary shall provide recourse commodity marketing loans 
        subject to the agreement of eligible producers as a condition 
        for receiving such commodity marketing loans that the producer 
        agrees to repay the Commodity Credit Corporation, on or before 
        the maturity of such loans, the full amount of the loan 
        principal plus any accrued interest on those loans.
    ``(d) Individual Marketing Loan Rates.--The national average 
commodity marketing loan rates established under subsection (c) shall 
be adjusted to establish individual marketing loan rates for eligible 
producers in accordance with the provisions of this subsection.
    ``(e) Payments in Lieu of Loans.--For payments under this subtitle 
taken in lieu of loans, including loan deficiency payments made under 
section 135A of this subtitle, the Secretary shall develop a similar 
methodology as described in paragraphs (1) through (3). The methodology 
shall assume for the purpose of establishing the loan deficiency 
payment that the marketing loan was actually taken by the producer.

``SEC. 133A. TERM OF LOANS.

    ``(a) Term of Loans.--In the case of each loan commodity (other 
than upland cotton and extra long staple cotton), a marketing 
assistance loan under section 131A shall have a term of 9 months 
beginning on the first day of the first month after the month in which 
the loan is made.
    ``(b) Special Rule for Cotton.--A marketing assistance loan for 
upland cotton or extra long staple cotton shall have a term of 10 
months beginning on the first day of the month in which the loan is 
made.
    ``(c) Extensions Allowed.--The Secretary may extend the term of a 
marketing assistance loan for any loan commodity for the purpose of 
establishing or maintaining any of the commodity reserves established 
under the Agricultural Act of 1949.

``SEC. 134A. REPAYMENT OF LOANS.

    ``(a) Repayment Rates for Wheat, Feed Grains, and Oilseeds.--The 
Secretary shall permit a producer to repay a non-recourse marketing 
assistance loan under section 131A for wheat, corn, grain sorghum, 
barley, oats, and oilseeds at a rate that is the lesser of--
            ``(1) the loan rate established for the commodity under 
        section 132A, plus interest (as determined by the Secretary); 
        or
            ``(2) a rate that the Secretary determines, consistent with 
        the policies and purposes of section 110A of the Agricultural 
        Act of 1949, will--
                    ``(A) minimize potential loan forfeitures;
                    ``(B) minimize the accumulation of stocks of the 
                commodity by the Federal Government;
                    ``(C) minimize the cost incurred by the Federal 
                Government in storing the commodity; and
                    ``(D) allow the commodity produced in the United 
                States to be marketed freely and competitively, both 
                domestically and internationally.
    ``(b) Repayment Rates for Upland Cotton and Rice.--The Secretary 
shall permit producers to repay a non-recourse marketing assistance 
loan under section 131A for upland cotton and rice at the rate that is 
the lesser of--
            ``(1) the loan rate established for the commodity under 
        section 132A, plus interest (as determined by the Secretary); 
        or
            ``(2) the prevailing world market price for the commodity 
        (adjusted to United States quality and location), as determined 
        by the Secretary.
    ``(c) Repayment Rates for Extra Long Staple Cotton.--Repayment of a 
marketing assistance loan for extra long staple cotton shall be at the 
loan rate established for the commodity under section 132A, plus 
interest (as determined by the Secretary).
    ``(d) Prevailing World Market Price.--For purposes of this section, 
the Secretary shall prescribe by regulation--
            ``(1) a formula to determine the prevailing world market 
        price for each commodity, adjusted to United States quality and 
        location;
            ``(2) a mechanism by which the Secretary shall announce 
        periodically the prevailing world market price for each loan 
        commodity;
            ``(3) further adjustments to the prevailing world market 
        price for upland cotton, as described in subsection (e) of 
        section 134 of this Act.

``SEC. 135A. LOAN DEFICIENCY PAYMENTS.

    ``(a) Availability of Loan Deficiency Payments.--Except as provided 
in subsection (d), the Secretary may make loan deficiency payments 
available to producers who, although eligible to obtain a non-recourse 
marketing assistance loan under section 131A with respect to a loan 
commodity, agree to forgo obtaining the loan for the commodity in 
return for payments under this section.
    ``(b) Computation.--A loan deficiency payment under this section 
shall be computed by multiplying--
            ``(1) the loan payment rate determined under subsection (c) 
        for the loan commodity, by
            ``(2) the quantity of the loan commodity that the producers 
        on a farm are eligible to place under the non-recourse 
        commodity marketing loan but for which the producers forgo 
        obtaining the loan in return for payments under this section.
    ``(c) Loan Payment Rate.--For purposes of this section, the loan 
payment rate shall be the amount by which--
            ``(1) the loan rate established under section 132A for the 
        loan commodity exceeds
            ``(2) the rate at which a loan for the commodity may be 
        repaid under section 134A.
    ``(d) Exception for Extra Long Staple Cotton.--This section shall 
not apply with respect to extra long staple cotton.''.

SEC. 202. PROGRAM TARGETING.

    (a) Applicability of Payment Limitations.--Except as provided in 
subsections (b)-(d), the provisions of sections 1001 through 1001C of 
the Food Security Act of 1985, as amended, shall be applicable to 
contract payments made under this Act for the 2002 crops.
    (b) Single Attribution.--The Food Security Act of 1985 is amended 
by adding after section 1001E, the following section--
    ``(b) Single Entity.--Notwithstanding any other provision of this 
Act, the limitations on payments provided in sections 1001 through 
1001C shall apply to a single farming or ranching entity. Payments to a 
simple farming entity shall not exceed the payment limitations provided 
under this Act, the Agricultural Act of 1949, or any other law.
    ``(c) Use of Tax Identification Number.--The Secretary shall 
promulgate regulations to ensure that the payment limitations of this 
title are enforced through a single attribution rule. Payments to a 
single farming or ranching entity, as described or identified by 
employer tax identification number, shall not exceed the applicable 
payment limitation amount. Notwithstanding any other provision of law, 
such regulations issued by the Secretary shall eliminate the multiple 
or three-entity allowance.
    ``(d) Partnerships and Related Entities.--With respect to 
partnerships and related entities which are not organized as sole-
proprietorships, benefits available under the marketing loan provisions 
of subtitle I of the Agricultural Act of 1949 shall be allocated 
according to the share of production and market risk assumed by each 
member of the entity.''.
    (c) Limitation of Eligibility of Other Entities.--No individual, 
organization or institution with annual gross income in excess of $2 
million shall be eligible for commodity marketing loan program benefits 
if agricultural production does not account for at least 75 percent of 
that entity's annual gross income.
    (d) Limitation on Eligibility for Non-Recourse Commodity Marketing 
Assistance Loans.--Notwithstanding any other provisions of sections 
1001 through 1001C of the Food Security Act of 1985 and subject to the 
provisions contained in section 202, subsections (a) through (d) of 
this Act, the Secretary shall establish a maximum number of commodity 
production units for each program crop per individual producer that are 
eligible for non-recourse commodity marketing assistance loans.
    (e) In fulfilling the requirements of subsection (d), the Secretary 
shall ensure producer flexibility to determine which crops and the 
percentage volume of those crops on which the producer may receive 
program benefits, except that in no instance shall a producer be 
entitled to receive benefits on a volume of production that exceeds 100 
percent of the production for an individual crop or the sum of 
percentages of the maximum eligible volume of production from two or 
more eligible crops.
    (f) The quantity limitations established by the Secretary shall not 
be more than 10 percent greater or 10 percent less than the quantities 
for each crop described as follows:
            (1) Wheat--125,000 bushels,
            (2) Corn--225,000 bushels,
            (3) Sorghum--225,000 bushels,
            (4) Barley--225,000 bushels,
            (5) Oats--250,000 bushels,
            (6) Rice--75,000 hundredweight,
            (7) Upland Cotton--10,500 hundredweight,
            (8) Extra Long Staple Cotton--12,500 hundredweight,
            (9) Soybeans--100,000 bushels, and
            (10) Minor Oilseeds--60,000 hundredweight.

SEC. 203. COMMODITY RESERVES.

    Amendment to the Agricultural Act of 1949.--Title 1 of the 
Agricultural Act of 1949 is amended by adding after section 110 the 
following new section:

``SEC. 110A. COMMODITY RESERVES.

    ``(a) Farmer Owned Production Loss Reserve.--
            ``(1) Purpose.--It is the purpose of this subsection to 
        create a farmer owned reserve to provide--
                    ``(A) stocks to be released to the marketplace when 
                prices rise to appropriate levels; and
                    ``(B) a reserve that may be utilized to provide 
                additional production assurance and economic support to 
                supplement the Federal Crop Insurance Program, and for 
                other purposes.
            ``(2) Establishment.--The Secretary shall establish and 
        administer a farmer-owned and farmer-stored reserve program 
        under which producers of agricultural commodities will be able 
        to--
                    ``(A) store agricultural commodities when those 
                commodities are in abundant supply;
                    ``(B) extend the time period for the orderly 
                marketing of the commodities;
                    ``(C) provide for adequate carry over stocks to 
                ensure a reliable supply of commodities;
                    ``(D) replace lost production or declines in crop 
                yields for agricultural producers that participate in 
                the Federal Crop Insurance Program; and
                    ``(E) such other purposes which will assist farmers 
                bear the economic uncertainty of agricultural 
                production; or provide for the orderly marketing of 
                agricultural commodities.
            ``(3) Name.--The agricultural commodity reserve established 
        under this subsection shall be known as the `Farmer Owned 
        Production Loss Reserve'.
            ``(4) Reserve open.--The reserve shall initially be open to 
        all agricultural producers to enter up to 20 percent of average 
        annual individual production of crops determined eligible by 
        the Secretary. Additional amounts may be accepted up to the 
        maximum allowable national level established under paragraph 
        (9). No individual may enter more than 20 percent of average 
        annual production of the commodity.
            ``(5) Equitable participation.--The Secretary shall ensure 
        that equitable participation opportunities are provided to all 
        eligible producers within the limited scope of the reserve 
        program authorized by this subsection.
            ``(6) Price support loans and direct entry.--In carrying 
        out this section, the Secretary shall provide both--
                    ``(A) for direct entry into the reserve; and
                    ``(B) extended price support loans, and loan 
                discounts, for agricultural commodities. An extended 
                loan shall be made to a producer after the expiration 
                of the original 9-month price support loan, and the 
                loan shall be extended at no less favorable terms than 
                the current rate of support for the commodity.
            ``(7) Production losses.--
                    ``(A) Generally.--The Secretary shall administer a 
                program to utilize the commodity reserve authorized by 
                this subsection to allow agricultural producers that 
                participate in the Federal Crop Insurance Program to--
                            ``(i) under certain conditions, redeem and 
                        market reserve commodities at a discount to the 
                        entry level price; and
                            ``(ii) use stocks in the reserve to offset 
                        a portion of actual insurable production losses 
                        not indemnified through multi-peril or other 
                        buy-up crop insurance policies.
                    ``(B) Loan repayments.--Under the program 
                authorized by this paragraph, the Secretary shall 
                discount the repayment amount of the loan or extended 
                loan if the actual production of the commodity on the 
                farm for any crop year, as provided in paragraph (C), 
                is less than the actual production history established 
                for the farm. The amount of this discount shall be 
                determined by the Secretary after considering 
                anticipated payments from the Federal Crop Insurance 
                program, costs of production, and other factors in 
                order to provide support to the producer for the full 
                value of lost crop or reduced yield.
                    ``(C) Replacement for production.--The Secretary 
                shall utilize the reserve to fully replace lost 
                production for a producer when actual production yields 
                for the commodity for the crop year on the farm is less 
                than 95 percent of the actual production history 
                established for the farm.
                    ``(D) Limitation.--At no time may the reserve be 
                utilized to assist any producer in excess of 20 percent 
                of individual annual production.
            ``(8) Storage payments.--The Secretary shall also provide 
        storage payments to producers of agricultural commodities to 
        maintain the reserve established under this subsection. Storage 
        payments shall--
                    ``(A) be in such amounts and under such conditions 
                as the Secretary determines appropriate to encourage 
                producers to participate in the program;
                    ``(B) reflect local, commercial storage rates 
                subject to appropriate conditions concerning quality 
                management and other factors; and
                    ``(C) not be less than comparable commercial rates, 
                except as provided by paragraph (B).
            ``(9) Quantity of commodities in program.--The Secretary 
        shall establish maximum quantities of commodities that may 
        receive loans and storage payments under this subsection in 
        such reasonable amounts as will enable the purposes of the 
        program to be achieved. In no event may the reserve exceed 20 
        percent of the average annual production of the agricultural 
        commodity.
            ``(10) Discretionary exit.--A producer may repay a loan 
        extended under this section at any time.
    ``(b) Humanitarian Food Assistance Reserve.--
            ``(1) Purposes.--It is the purpose of this subsection to 
        create a food reserve that will--
                    ``(A) ensure the capacity of the United States to 
                fulfill its current and future commitments for 
                humanitarian nutrition assistance programs;
                    ``(B) support the International School Lunch 
                Program which will seek to prevent hunger and 
                malnourishment and improve educational opportunities 
                among the estimated 300 million needy school children 
                around the world; and
                    ``(C) for other purposes to meet domestic and 
                international humanitarian food relief needs, and to 
                establish and maintain a food reserve to enable the 
                United States to meet its emergency food assistance 
                needs.
            ``(2) Establishment.--The Secretary is authorized to 
        establish and administer a government-owned and farmer-stored 
        reserve program under which producers of agricultural 
        commodities will be able to--
                    ``(A) sell agricultural commodities authorized by 
                the Secretary into the reserve; and
                    ``(B) store such agricultural commodities.
            ``(3) Name.--The agricultural commodity reserve established 
        under this subsection shall be known as the `Humanitarian Food 
        Assistance Reserve'.
            ``(4) Purchases.--The Secretary shall purchase agricultural 
        commodities at commercial rates in order to establish, 
        maintain, or enhance the reserve when--
                    ``(A) such commodities are in abundant supply; and
                    ``(B) there is need for adequate carryover stocks 
                to ensure a reliable supply of the commodities to meet 
                the purposes of the reserve; or
                    ``(C) it is otherwise necessary to fulfill the 
                needs and purposes of the domestic and international 
                nutrition assistance programs administered or assisted 
                by the Secretary.
            ``(5) Limitation.--Purchases under this subsection shall be 
        limited to amounts of agricultural commodities needed to fill 
        one-year estimated needs and commitments of the nutrition 
        programs supported by the reserve. Otherwise, the Secretary may 
        establish maximum quantities of commodities in such reasonable 
        amounts as will enable the purposes of the program to be 
        achieved.
            ``(6) Release of stocks.--Stocks shall be released at cost 
        of acquisition, and in amounts determined appropriate by the 
        Secretary, when market prices of the agricultural commodity 
        exceed 100 percent of the full economic cost of production of 
        those commodities. Cost of production for the commodity shall 
        be determined by the Economic Research Service using the best 
        available information, and based on a three year moving 
        average.
            ``(7) Storage payments.--The Secretary shall provide 
        storage payments to producers that wish to store agricultural 
        commodities to maintain the reserve established under this 
        subsection. Storage payments shall--
                    ``(A) be in such amounts and under such conditions 
                as the Secretary determines appropriate to encourage 
                producers to participate in the program;
                    ``(B) reflect local, commercial storage rates 
                subject to appropriate conditions concerning quality 
                management and other factors; and
                    ``(C) not be less than comparable local commercial 
                rates, except as may be provided by paragraph (B).
            ``(8) Quantity of commodities in program.--The Secretary 
        may establish maximum quantities of commodities that may 
        receive loans and storage payments under this subsection in 
        such reasonable amounts as will enable the purposes of the 
        program to be achieved.
            ``(9) Management of commodities.--Whenever fungible 
        commodities are stored under this subsection, the Secretary may 
        buy and sell at an equivalent price, allowing for customary 
        location and grade differentials, substantially equivalent 
        quantities of commodities in different locations or warehouses 
        to the extent needed to handle, rotate, distribute, and locate 
        the commodities that the Commodity Credit Corporation owns or 
        controls. The Secretary shall make purchases to offset such 
        sales within a reasonable time, and shall make public full 
        disclosure of such transactions.
    (c) Renewable Energy Reserve.--
            ``(1) Purposes.--It is the purpose of this subsection to 
        create a reserve of agricultural commodities to--
                    ``(A) provide feedstocks to support and further the 
                production of the renewable energy; and
                    ``(B) support the renewable energy industry in 
                times when production is at risk of decline due to 
                reduced feedstock supplies or significant commodity 
                price increases.
            ``(2) Establishment.--The Secretary is authorized to 
        establish and administer a government-owned and farmer-stored 
        renewable energy reserve program under which producers of 
        agricultural commodities will be able to--
                    ``(A) sell agricultural commodities authorized by 
                the Secretary into the reserve; and
                    ``(B) store such agricultural commodities.
            ``(3) Name.--The agricultural commodity reserve established 
        under this subsection shall be known as the `Renewable Energy 
        Reserve'.
            ``(4) Purchases.--The Secretary shall purchase agricultural 
        commodities at commercial rates in order to establish, 
        maintain, or enhance the reserve when--
                    ``(A) such commodities are in abundant supply; and
                    ``(B) there is need for adequate carryover stocks 
                to ensure a reliable supply of the commodities to meet 
                the purposes of the reserve; or
                    ``(C) it is otherwise necessary to fulfill the 
                needs and purposes of the renewable energy program 
                administered or assisted by the Secretary.
            ``(5) Limitation.--Purchases under this subsection shall be 
        limited to--
                    ``(A) the type and quantities of agricultural 
                commodities necessary to provide approximately one-
                year's estimated utilization for renewable energy 
                purposes;
                    ``(B) an additional amount of commodities to 
                provide incentives for research and development of new 
                renewable fuels and bio-energy initiatives; and
                    ``(C) such maximum quantities of agricultural 
                commodities determined by the Secretary as will enable 
                the purposes of the renewable energy program to be 
                achieved.
            ``(6) Release of stocks.--Stocks shall be released at cost 
        of acquisition, and in amounts determined appropriate by the 
        Secretary, when market prices of the agricultural commodity 
        exceed 100 percent of the full economic cost of production of 
        those commodities. Cost of production for the commodity shall 
        be determined by the Economic Research Service using the best 
        available information, and based on a three year moving 
        average.
            ``(7) Storage payments.--The Secretary shall provide 
        storage payments to producers of agricultural commodities to 
        maintain the reserve established under this subsection. Storage 
        payments shall--
                    ``(A) be in such amounts and under such conditions 
                as the Secretary determines appropriate to encourage 
                producers to participate in the program;
                    ``(B) reflect local, commercial storage rates 
                subject to appropriate conditions concerning quality 
                management and other factors; and
                    ``(C) not be less than comparable local commercial 
                rates, except as may be provided by paragraph (B).
    ``(d) Commodity Credit Corporation.--The Secretary shall use the 
Commodity Credit Corporation to fulfill the purposes of this 
subsection. To the maximum extent practicable consistent with the 
purposes, and effective and efficient administration of this 
subsection, the Secretary shall utilize the usual and customary 
channels, facilities and arrangement of trade and commerce.''.

SEC. 204. DISCRETIONARY INVENTORY MANAGEMENT AND PROGRAM COST-
              CONTAINMENT.

    (a) Short Title.--This section may be cited as the ``Discretionary 
Inventory Management, Program Cost-Containment, and Fiscal 
Responsibility Act of 2001''.
    (b) Amendments to the Federal Agriculture Improvement and Reform 
Act.--Subtitle F of title I of the Federal Agriculture Improvement and 
Reform Act (7 U.S.C. 7201) is amended by--
            (1) striking out the subtitle heading and inserting the 
        following new heading--

                  ``Subtitle F--Permanent Authorities

                     ``CHAPTER 1--PRICE SUPPORT'';

        and
            (2) by adding at the end the following new chapter--

   ``CHAPTER 2--DISCRETIONARY INVENTORY MANAGEMENT AND PROGRAM COST-
                              CONTAINMENT

``SEC. 173. DISCRETIONARY INVENTORY MANAGEMENT AUTHORITY.

    ``(a) Generally.--Notwithstanding any other provision of this Act, 
or the Agricultural Act of 1949, the Secretary may establish a 
voluntary inventory management program for loan commodities under the 
provisions of this section. Such program shall be established on a 
whole farm basis and shall include total program crop acreage for the 
farm.
    ``(b) Incentives Offered.--The Secretary may offer incentives, as 
defined in subsection (f), to agricultural producers of loan 
commodities that agree to forgo production on a specified percentage of 
the acreage planted to eligible commodities. The production management 
program may be announced when the Secretary determines that the 
estimated total supply of loan commodities for the next crop year, in 
the absence of such a program, will be excessive taking into account 
the need for an adequate carryover to maintain reasonable and stable 
supplies and prices and to meet a national emergency.
    ``(c) Acreage Defined.--Inventory management acreage must be 
acreage that either--
            ``(1) has previously been under a production flexibility 
        contract, or
            ``(2) was previously planted as eligible loan commodities 
        for at least three of the last five years.
    ``(d) Conservation Uses.--Inventory management acreage shall be 
devoted to approved conservation and wildlife uses, as defined by the 
Secretary. Adequate safeguards from weeds, and wind, soil, and water 
erosion must be provided.
    ``(e) Acreage Options.--If announced, the inventory management 
program shall offer the producer a range of acreage participation 
options. Under such a program, the Secretary shall offer producers the 
option to set-aside 5 percent, 10 percent, 15 percent, or 20 percent of 
total commodity acreage. Total program acreage shall include applicable 
inventory management acres from the previous crop year.
    ``(f) Incentive Defined.--
            ``(1) The incentive offered by the Secretary for agreement 
        to forgo production on a specified percentage of loan commodity 
        production acres shall be an increase in the marketing loan 
        rates for eligible commodities for the individual producer in 
        an amount that is equal to one-half of the percentage of the 
        percentage inventory management or acreage option selected 
        under subsection (e).
            ``(2) The increase in the marketing loan rate for an 
        individual producer, shall be as follows--if the inventory 
        management acreage is--
                    ``(A) 5 percent, then the marketing loan rate shall 
                be increased by 2.5 percent,
                    ``(B) 10 percent, then the marketing loan rate 
                shall be increased by 5 percent,
                    ``(C) 15 percent, then the marketing loan rate 
                shall be increased by 7.5 percent, and
                    ``(D) 20 percent, then the marketing loan rate 
                shall be increased by 10 percent.
    ``(g) Commodity Credit Corporation.--The Secretary shall carry out 
the program authorized by this section through the Commodity Credit 
Corporation.
    ``(h) Regulations.--The Secretary shall issue such regulations as 
may be necessary to carry out this section.
    ``(i) Cross Compliance and Offsetting Compliance.--The Secretary 
shall require that compliance on a farm with the terms and conditions 
of any other commodity, conservation, or any other program is required 
as a condition of eligibility for inventory management incentives 
provided under authority of this section.''.
                                 <all>