II 110th CONGRESS 1st Session S. 1872 IN THE SENATE OF THE UNITED STATES July 25, 2007 Mr. Durbin (for himself and Mr. Brown) introduced the following bill; which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry A BILL To amend the Farm Security and Rural Investment Act of 2002 to make revenue counter-cyclical payments available to producers on a farm to ensure that the producers at least receive a minimum level of revenue from the production of a covered commodity, and for other purposes.

1.

Short title

This Act may be cited as the Farm Safety Net Improvement Act of 2007.

2.

Revenue counter-cyclical program

Section 1104 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7914) is amended to read as follows:

1104.

Revenue counter-cyclical program

(a)

In general

For each of the 2008 through 2012 crop years for each covered commodity, the Secretary shall make revenue counter-cyclical payments available to producers on a farm in a State for a crop year for a covered commodity if— (1)the actual State revenue from the crop year for the covered commodity in the State determined under subsection (b); is less than (2)the revenue counter-cyclical program guarantee for the crop year for the covered commodity in the State determined under subsection (c). (b)

Actual State revenue

(1)

In general

For purposes of subsection (a)(1), the amount of the actual State revenue for a crop year of a covered commodity shall equal the product obtained by multiplying— (A)the actual State yield for each planted acre for the crop year for the covered commodity determined under paragraph (2); and (B)the revenue counter-cyclical program harvest price for the crop year for the covered commodity determined under paragraph (3). (2)

Actual State yield

For purposes of paragraph (1)(A) and subsection (c)(1)(A), the actual State yield for each planted acre for a crop year for a covered commodity in a State shall equal— (A)the quantity of the covered commodity that is produced in the State, and reported to the Secretary, during the crop year; divided by (B)the number of acres that are planted or considered planted to the covered commodity in the State, and reported to the Secretary, during the crop year. (3)

Revenue counter-cyclical program harvest price

For purposes of paragraph (1)(B), the revenue counter-cyclical program harvest price for a crop year for a covered commodity shall equal the harvest price that is used to calculate revenue under revenue coverage plans that are offered for the crop year for the covered commodity under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.). (c)

Revenue counter-cyclical program guarantee

(1)

In general

The revenue counter-cyclical program guarantee for a crop year for a covered commodity in a State shall equal 90 percent of the product obtained by multiplying— (A)the expected State yield for each planted acre for the crop year for the covered commodity in a State determined under paragraph (2); and (B)the revenue counter-cyclical program pre-planting price for the crop year for the covered commodity determined under paragraph (3). (2)

Expected State yield

(A)

In general

For purposes of paragraph (1)(A), subject to subparagraph (B), the expected State yield for each planted acre for a crop year for a covered commodity in a State shall equal the projected yield for the crop year for the covered commodity in the State, based on a linear regression trend of the yield per acre planted to the covered commodity in the State during the 1980 through 2006 period using National Agricultural Statistics Service data. (B)

Assigned yield

If the Secretary cannot establish the expected State yield for each planted acre for a crop year for a covered commodity in a State in accordance with subparagraph (A), the Secretary shall assign an expected State yield for each planted acre for the crop year for the covered commodity in the State on the basis of expected State yields for planted acres for the crop year for the covered commodity in similar States. (3)

Revenue counter-cyclical program pre-planting price

(A)

In general

For purposes of paragraph (1)(B), subject to subparagraph (B), the revenue counter-cyclical program pre-planting price for a crop year for a covered commodity shall equal the average price that is used to determine crop insurance guarantees for the crop year for the covered commodity under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) during the crop year and the preceding 2 crop years. (B)

Minimum and maximum price

The revenue counter-cyclical program pre-planting price for a crop year for a covered commodity under subparagraph (A) shall not decrease or increase more than 15 percent from the pre-planting price for the preceding year. (d)

Payment amount

If revenue counter-cyclical payments are required to be paid for any of the 2008 through 2012 crop years of a covered commodity, the amount of the revenue counter-cyclical payment to be paid to the producers on the farm for the crop year under this section shall be equal to the product obtained by multiplying— (1)the difference between— (A)the revenue counter-cyclical program guarantee for the crop year for the covered commodity in the State determined under subsection (c); and (B)the actual State revenue from the crop year for the covered commodity in the State determined under subsection (b); (2)the acreage planted or considered planted to the covered commodity for harvest on the farm in the crop year; (3)the quotient obtained by dividing— (A)the actual production history on the farm; by (B)the expected State yield for the crop year, as determined under subsection (c)(2); and (4)90 percent. (e)

Recourse loans

For each of the 2008 through 2012 crops of a covered commodity, the Secretary shall make available to producers on a farm recourse loans, as determined by the Secretary, on any production of the covered commodity.

.

3.

Impact on crop insurance programs

(a)

Rating

(1)

In general

The Secretary of Agriculture, acting through the Administrator of the Risk Management Agency shall carry out a study to identify such actions as are necessary to ensure, to the maximum extent practicable, that all policies and plans of insurance under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) are properly rated to take into account a rebalancing of risk as a result of the enactment of this Act and the amendments made by this Act. (2)

Implementation

Not later than 180 days after the date of enactment of this Act, the Secretary shall carry out the actions identified under paragraph (1). (b)

Prevention of duplication

The Administrator of the Risk Management Agency and Administrator of the Farm Service Agency shall work together to ensure, to the maximum extent practicable, that producers on a farm are not compensated through the revenue counter-cyclical program established under section 1104 of the Farm Security and Rural Investment Act of 2002 (as amended by section 2) and under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) for the same loss, including by reducing crop insurance indemnity payments by the amount of the revenue counter-cyclical payments.

4.

Conforming amendments

(a)Section 166(a) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7286(a)) is amended by striking B and. (b)Section 1001 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7901) is amended— (1)by striking paragraphs (3), (6), (8), and (15); (2)by redesignating paragraphs (4), (5), (7), (9), (10), (11), (12), (13), (14), and (16) as paragraphs (3), (4), (5), (6), (7), (8), (9), (11), (12), and (13), respectively; (3)in paragraph (7) (as so redesignated), by striking and counter-cyclical payments; (4)in paragraph (8) (as so redesignated)— (A)in subparagraph (A), by striking (A) In general.—; and (B)by striking subparagraph (B); (5)by inserting after paragraph (9) (as so redesignated) the following: (10)

Revenue counter-cyclical payments

The term revenue counter-cyclical payments means a payment made to producers on a farm under section 1104. . (c)The subtitle heading of subtitle A of title I of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. prec. 7911) is amended by inserting revenue before counter-cyclical. (d)Section 1101 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7911) is amended by striking and counter-cyclical payments each place it appears in subsections (a)(1) and (e)(2). (e)Section 1102 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7912) is amended— (1)in subsection (a), by striking and counter-cyclical payments; and (2)by striking subsection (e). (f)Section 1103 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7913) is amended by striking 2007 each place it appears and inserting 2012. (g)Section 1105 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7915) is amended— (1)in the section heading, by inserting revenue before counter-cyclical; and (2)by inserting revenue before counter-cyclical each place it appears. (h)Subtitle B of title I of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7931 et seq.) is repealed. (i)Subtitles C through F of title I of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7951 et seq.) are amended by striking 2007 each place it appears and inserting 2012. (j)Section 1307(a)(6) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7957)(a)(6)) is amended in the first sentence by striking 2006 and inserting 2011. (k)Section 1601(d)(1) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7991(d)(1)) is amended by striking and counter-cyclical payments under subtitle A and subtitle C and inserting under subtitle A. (l)Section 1605 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7993) is repealed. (m)Section 1615(2) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7998(2)) is amended— (1)in subparagraph (B), by striking Loan and inserting Covered; and (2)in subparagraph (C), by striking loan and inserting covered. (n)Section 1001 of the Food Security Act of 1985 (7 U.S.C. 1308) is amended— (1)in subsection (c)(1), by inserting revenue before counter-cyclical; and (2)in subsection (d)— (A)by striking paragraph (1); and (B)in paragraph (2)— (i)by striking (2) Other commodities.—; (ii)in subparagraph (A), by striking , wool, mohair, or honey under subtitle B or and inserting under subtitle; (iii)in subparagraph (B), by striking , peanuts, wool, mohair, and honey under those subtitles and inserting under that subtitle; and (iv)by redesignating subparagraphs (A) and (B) as paragraphs (1) and (2), respectively, and indenting appropriately.