[Congressional Record Volume 141, Number 152 (Wednesday, September 27, 1995)]
[Senate]
[Pages S14408-S14411]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY:
  S. 1276. A bill to permit agricultural producers to enter into market 
transition contracts and receive loans, to require a pilot revenue 
insurance program, and for other purposes; to the Committee on 
Agriculture, Nutrition, and Forestry.


                 the farm income transition act of 1995

  Mr. GRASSLEY. Mr. President, today the Senate Agriculture Committee 
began marking up the commodity title to the 1995 farm bill. Although I 
am no longer a member of that committee, the farm bill has as much 
impact on my State as any other piece of legislation considered before 
this body.
  For that reason, Mr. President, I have used my position on other 
committees to indirectly influence farm policy. I have also formed a 
group, the Farm Policy Coalition, that is cochaired by Senator Dorgan 
and consists of 52 Members of the Senate. In order to more directly 
influence the debate.
  Today, however, the Agriculture Committee was not able to agree on a 
farm bill to take to reconciliation. And there are rumors that the 
Budget Committee may have to act to make the necessary cuts in farm 
spending. As a member of the Budget Committee, I publicly stated that 
the Agriculture Committee, and not the Budget Committee, is the best 
place to write the farm bill.
  But now with the Agriculture Committee deadlocked, I feel it 
necessary to send a clear signal, as a Budget Committee member and a 
Senator interested in the future of agriculture, on how I believe we 
should proceed on the 1995 farm bill; taking into consideration what is 
in the best interests of my State and American agriculture as a whole.
  Therefore, Mr. President, I rise today to introduce the Farm Income 
Transition Act of 1995. This bill is similar to one introduced by the 
distinguished chairman of the House Agriculture Committee, Pat Roberts, 
known as the Freedom to Farm Act.
  My bill represents a transition to a new era of farm programs; an era 
that will be characterized by limited Government intrusion in the 
market and the unleashing of the productivity of American agriculture. 
Yet the Federal Government will still play a role in providing a 
safety-net for the family farmer.
  Mr. President, this bill is a dramatic departure from the farm 
programs of the past. We all know that our current farm programs were 
established during the Great Depression of the 1930's.
  The intent of the program then, as it is now, was to stabilize farm 
income while ensuring a dependable, abundant, and inexpensive food 
supply. This is accomplished mainly by making direct payments to 
farmers when commodity prices are low, and implementing production 
controls to limit the supply of commodities.
  To a large extent, the programs of the past have been successful. The 
American consumer spends less than 10 percent of their disposable 
income on food; the lowest of any Nation in the world.
  Despite its success, the farm program has had many critics. Some 
criticize the program for its high degree of Government intervention. 
Others argue that the benefits go primarily to large, corporate farms. 
Many farmers, themselves, have grown tired of the endless amount of 
paperwork and redtape associated with the program.
  Through all the criticism, however, the farm program has remained 
virtually unchanged for the last 50 years. But times have changed. And 
these changes mandate that a new direction be taken on farm programs.
  The crisis of the 1930's was rampant unemployment and poverty. 
Drastic action was needed to support the income of ordinary Americans.
  The crisis of the 1990's is rampant Government spending and 
intervention into the lives of ordinary Americans. The voters told us 
in no uncertain terms last November that they wanted the Government out 
of their lives and the budget deficit brought under control.
  Mr. President, the Senate approved a budget resolution this spring 
that will bring the Federal budget into balance in the year 2002. 
This resolution contains a sense-of-the Senate calling for a cut in 
spending on agriculture commodity programs of about $9.6 billion over 
the next 7 years.

  During the debate on the budget, I voiced my strong opposition to 
further cuts in agriculture spending. I will not repeat all of the 
arguments I made at that time, but it is clear to me that agriculture 
has contributed disproportionately to deficit reduction in the past. 
All I asked for at that time, Mr. President, was that agriculture be 
treated equitably in the budget process.
  I also argued during the budget debate that agriculture, more than 
any other sector of this economy, has much to gain by achieving a 
balanced budget.
  Agriculture is a capital-intensive business, its success dependent on 
low-interest rates. Only by getting our fiscal house in order can we 
ensure a sustained period of low-interest rates and the continued 
success of the family farmer.
  So although Federal spending on agriculture will be reduced, because 
this reduction is within the context of a balanced budget, agriculture 
will benefit greatly in the long run.
  But, Mr. President, it is vital that as Federal spending on 
agriculture is reduced, the regulations and restrictions on individual 
farmers are reduced accordingly. Because if farmers are getting less 
from the Government, they must have the tools to earn more income from 
the marketplace.
  This bill meets both of these goals: It reduces spending to meet the 
requirements of my sense-of-the Senate in the budget resolution and it 
dramatically reduces the regulatory burden placed on farmers.
  Mr. President, I will take a moment to describe how this bill 
accomplishes these goals. First, it mirrors the Freedom to Farm Act by 
providing farmers with a 7-year contract consisting of annual payments. 
In return, the farmer must maintain compliance with current 
conservation requirements. The total payments over the 7-year period 
are capped at $43 billion, which meets the requirements of the budget 
resolution.
  Furthermore, the regulatory burden on farmers is significantly 
diminished. For many years, the planting decisions of American farmers 
have been dictated, in part, by the U.S. Congress and the Department of 
Agriculture. This limits a farmer's ability to maximize his profit from 
the marketplace. These decisions must be removed from the hands of 
bureaucrats and put back into the hands of the farmers.
  My bill provides for full planting flexibility. Farmers' planting 
decisions will no longer be restricted by their historical crop base. 
This will allow farmers to plant for the marketplace and not the 
Federal farm program.
  The bill also eliminates the acreage reduction program. No longer 
will farmers be required to leave a portion of their productive land 
unplanted because of a mandate imposed by Washington.
  Furthermore, the bill maintains certain aspects of the current farm 
program while reforming others. For instance, nonrecourse loans will 
continue to be made available. This is a necessary and important 
marketing tool for farmers that does not require direct Government 
spending.
  On the other hand, the three-entity rule is eliminated. Payments will 
now be directly attributed to farmers instead of corporations and other 
entities. 

[[Page S 14409]]

  Last, the bill provides for a new era of farm programs based on risk 
management. Specifically, it directs the Secretary to initiate a 
revenue insurance pilot program as an alternative to the crop insurance 
program.
  Revenue insurance will cost the Federal Government no more than the 
current crop insurance program. But it will give the farmer a solid and 
dependable safety net.
  The program will allow a farmer to pay a premium to protect himself 
from a significant decline in revenue, whether it is caused by crop 
loss or low prices. Thus unlike crop insurance, the farmer is protected 
from both natural disasters and from situations when too much grain on 
the market causes extremely low prices.
  This revenue insurance program truly represents a revolutionary new 
farm program.
  Mr. President, the future of American agriculture is not in 
Government payments and subsidies. The future of American agriculture 
rests on the ability of farmers to remain competitive in a world 
marketplace.
  The role of government consists of opening access to new markets for 
agricultural products, providing research for the development of better 
crops and new uses for existing commodities, and providing a safety net 
for the family farm structure.
  Mr. President, I am convinced that not only will American agriculture 
reach unprecedented levels of productivity and profitability in the 
future, but there will continue to be a vital role for the family 
farmer.
  The independent, family farmer is still the backbone of the 
agricultural economy in my State of Iowa. These farmers tell me that 
they can compete with the large farms, if they only have a level 
playing field and equal access to markets and information.
  Government should do everything in its power to provide this level 
playing field. I believe that the bill I have introduced today helps 
put all farmers on an equal footing as agriculture approaches the 21st 
century.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1276

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Farm Income Transition Act 
     of 1995 ''.

     SEC. 2. CERTAINTY AND FLEXIBILITY FOR AGRICULTURAL PROGRAMS.

       The Agricultural Act of 1949 (7 U.S.C. 1441 et seq.) is 
     amended--
       (1) by transferring sections 106, 106A, and 106B to the end 
     of part I of subtitle B of title III of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1311 et seq.) and 
     redesignating the sections as sections 320D, 320E, and 320F, 
     respectively;
       (2) by moving sections 104, 111, 112, 114, and 202 to the 
     end of title IV and redesignating the sections as sections 
     428, 429, 430, 431, and 432 respectively;
       (3) by moving sections 108B, 204, and 206 to the end of 
     title IV (as amended by paragraph (2)) and redesignating the 
     sections as sections 433, 434, and 435, respectively; and
       (4) by striking titles I through III and inserting the 
     following:

     ``SEC. 2. DEFINITIONS.

       ``In this Act:
       ``(1) Considered planted.--The term `considered planted', 
     with respect to acreage on a farm, means acreage considered 
     planted to a covered commodity (as defined in section 201(a)) 
     in the conservation reserve, or under a program in effect 
     under this Act through the 1995 crop of a commodity or the 
     1996 crop of winter wheat on--
       ``(A) any reduced acreage on the farm;
       ``(B) any acreage on the farm that producers were prevented 
     from planting to the commodity because of drought, flood, or 
     other natural disaster, or other condition beyond the control 
     of the producers;
       ``(C) acreage in a quantity equal to the difference between 
     the permitted acreage for a commodity and the acreage planted 
     to the commodity, if the acreage considered to be planted is 
     devoted to conservation uses or the production of crops 
     permitted by the Secretary under the programs established for 
     any of the 1990 through 1994 crops of a commodity; or
       ``(D) any acreage on the farm that the Secretary determines 
     is necessary to be included in establishing a fair and 
     equitable crop acreage base.
       ``(2) Crop acreage base.--The term `crop acreage base' 
     means the average of the quantity of acres planted and 
     considered planted to the commodity for the 1990 through 1994 
     crops, including the crop acreage base for extra long staple 
     cotton established under section 103(h)(5) (as in effect 
     prior to the date of enactment of the Farm Income Transition 
     Act of 1995).
       ``(3) Double cropping.--The term `double cropping' means a 
     farming practice, as defined by the Secretary, that has been 
     carried out on a farm during at least 3 of the 5 crop years 
     immediately preceding the crop year for which the crop 
     acreage base for the farm is established.
       ``(4) Market transition payment.--The term `market 
     transition payment' means a payment made pursuant to a 
     contract entered into under section 201 with producers on a 
     farm who--
       ``(A) satisfy the eligibility requirements of section 
     201(c); and
       ``(B) in exchange for annual payments, are in compliance 
     with the conservation compliance plan for the farm prepared 
     in accordance with section 1212 of the Food Security Act of 
     1985 (16 U.S.C. 3812) and wetland protection requirements 
     applicable to the farm under subtitle C of title XII of the 
     Act (16 U.S.C. 3821 et seq.).
       ``(5) Nonrecourse commodity loan.--The term `nonrecourse 
     commodity loan' means a nonrecourse loan paid to producers on 
     a farm under the terms provided in section 202.
       ``(6) Person.--The term `person' means an individual, 
     corporation, or other entity, as defined by the Secretary.
       ``(7) Producers.--The term `producers' means 1 or more 
     individual persons who, as determined by the Secretary--
       ``(A) share in the risk of production of a commodity; and
       ``(B) is, or would have been, entitled to a share of the 
     proceeds from the marketing of the commodity.
       ``(8) Secretary.--The term `Secretary' means the Secretary 
     of Agriculture.
       ``(9) United states.--The term `United States' means the 
     several States, the District of Columbia, the Commonwealth of 
     Puerto Rico, the Virgin Islands, Guam, American Samoa, and 
     the other territories and possessions of the United States.
     ``TITLE I--FUNDING FOR FEDERAL FARM PROGRAM COMMODITY PAYMENTS

     ``SEC. 101. EXPENDITURES FOR MARKET TRANSITION PAYMENTS FOR 
                   1996 THROUGH 2002 CROP YEARS.

       ``(a) Total Expenditures.--The total amount of funds 
     expended by the Commodity Credit Corporation under this title 
     may not exceed $46,920,000,000 for--
       ``(1) payments made for the 1995 crop of a commodity after 
     September 30, 1995; and
       ``(2) market transition payments for a commodity for the 
     1996 through 2002 crops.
       ``(b) Total Expenditures Per Crop Year.--The Secretary 
     shall, to the maximum extent practicable, expend not more 
     than the following amounts on market transition payments:
       ``(1) For the 1996 crop, $8,260,000,000.
       ``(2) For the 1997 crop, $7,240,000,000.
       ``(3) For the 1998 crop, $7,080,000,000.
       ``(4) For the 1999 crop, $6,850,000,000.
       ``(5) For the 2000 crop, $6,590,000,000.
       ``(6) For the 2001 crop, $5,490,000,000.
       ``(7) For the 2002 crop, $5,380,000,000.
       ``(c) Commodity Credit Corporation.--
       ``(1) Salaries and expenses.--No funds of the Commodity 
     Credit Corporation may be used to pay any salary or expense 
     of an officer or employee of the Department of Agriculture in 
     connection with the administration of market transition 
     payments or nonrecourse commodity loans.
       ``(2) Agricultural production.--No funds of the Commodity 
     Credit Corporation in excess of the amounts authorized by 
     subsection (b) may be used to support--
       ``(A) the price of a covered commodity (as defined in 
     section 201(a)) or any similar activity in relation to the 
     commodity; or
       ``(B) the income of producers on a farm.
    ``TITLE II--MULTIYEAR PAYMENTS TO IMPROVE FARMING CERTAINTY AND 
                              FLEXIBILITY

     ``SEC. 201. MARKET TRANSITION PAYMENTS.

       ``(a) Definition of Covered Commodity.--In this section, 
     the term `covered commodity' means wheat, corn, grain 
     sorghums, barley, oats, upland cotton, extra long staple 
     cotton, and rice.
       ``(b) Market Transition Contracts.--
       ``(1) Offer and consideration.--Beginning as soon as 
     practicable after the date of enactment of the Farm Income 
     Transition Act of 1995, but not later than February 1, 1996, 
     the Secretary shall offer to enter into a market transition 
     contract with producers on a farm who satisfy the 
     requirements of subsection (c). Participating producers shall 
     agree, in exchange for annual payments, to comply with the 
     conservation compliance plan for the farm established under 
     section 1212 of the Food Security Act of 1985 (16 U.S.C. 
     3812) and the wetland protection requirements applicable to 
     the farm under subtitle C of title XII of the Act (16 U.S.C. 
     3821 et seq.).
       ``(2) Entry into contracts.--
       ``(A) Deadline.--Except as provided in subparagraphs (B) 
     and (C), producers on a farm shall elect whether to enter 
     into a market transition contract not later than April 15, 
     1996.
       ``(B) Conservation reserve lands.--
       ``(i) In general.--In the case of a conservation reserve 
     contract applicable to cropland on a farm that expires after 
     April 15, 1996, producers on the farm shall have the option 
     of including the cropland on the farm that has considered 
     planting history (as determined by the Secretary) in a market 
     transition contract of the producers. To be eligible, the 
     cropland must include 1 or more crop 

[[Page S 14410]]
     acreage bases attributable to the cropland (as determined by the 
     Secretary).
       ``(ii) Whole farm enrolled in conservation reserve.--
     Producers on a farm who have enrolled the entire cropland on 
     the farm, as determined by the Secretary, into the 
     conservation reserve shall have the option, on expiration of 
     the conservation reserve contract, to enter into a market 
     transition contract.
       ``(iii) Amount.--Market transition payments made for 
     cropland under this subparagraph shall be made at the rate 
     and amount applicable to the market transition payment level 
     for that year.
       ``(C) 1996 crop of winter wheat.--
       ``(i) In general.--Producers on a farm who plant a 1996 
     crop of winter wheat in 1995 may elect to enter into a market 
     transition contract, or obtain loans and payments for the 
     1996 crop of winter wheat, under the same terms and 
     conditions as were in effect for the 1995 crop of winter 
     wheat.
       ``(ii) Timing of payments.--The Secretary shall, if the 
     Secretary determines practicable, pay producers on a farm who 
     plant a 1996 crop of winter wheat and elect to enter into a 
     market transition contract for the crop--

       ``(I) an advance payment not later than June 1, 1996; and
       ``(II) a final payment not later than September 30, 1996.

       ``(iii) Subsequent crops.--Producers on a farm who plant a 
     1996 crop of winter wheat shall elect whether to enter into a 
     market transition contract for each of the 1997 through 2002 
     crops not later than April 15, 1996.
       ``(3) Duration of contract.--Except for the 1996 crop of 
     winter wheat, a market transition contract shall apply to the 
     1996 crop of a covered commodity and terminate on December 
     31, 2002.
       ``(c) Eligibility for Market Transition Payments.--
       ``(1) In general.--To be eligible for market transition 
     payments, producers on a farm must--
       ``(A) own, rent, or crop share land that has a crop acreage 
     base that is attributable to the farm, as determined by the 
     Secretary; and
       ``(B) satisfy the criteria under paragraph (2).
       ``(2) Payments based on production history.--Producers on a 
     farm shall be eligible for market transition payments if 
     deficiency payments and, if applicable, conservation reserve 
     payments were made for covered commodities that were planted, 
     or considered planted, on a crop acreage base established on 
     the farm for at least 2 of the 1990 through 1994 crops.
       ``(d) Amount of Market Transition Payments.--
       ``(1) Definition of payments.--In this subsection (except 
     as otherwise specifically provided), the term `payments' 
     means--
       ``(A) deficiency payments; and
       ``(B) if applicable, the lesser of--
       ``(i) conservation reserve payments; or
       ``(ii) the amount of deficiency payments that would have 
     been made for the quantity of the covered commodity 
     considered planted if the commodity had been planted, as 
     determined by the Secretary.
       ``(2) 1990-1994 payments.--The Secretary shall determine 
     the total amount of payments--
       ``(A) made to producers on a farm for all covered 
     commodities that were planted or considered planted on the 
     farm for the 1990 through 1994 crops; and
       ``(B) made for all covered commodities that were planted 
     and considered planted throughout the United States for the 
     1990 through 1994 crops.
       ``(3) Market transition payment for 1996-2002 crops.--The 
     annual market transition payment for each of the 1996 through 
     2002 crops shall equal the product of--
       ``(A) the total amount of payments made to producers on a 
     farm determined under paragraph (2)(A) divided by the total 
     amount of payments made throughout the United States 
     determined under paragraph (2)(C); and
       ``(B) the annual funding available for the crop under 
     section 101(b).
       ``(4) Adjustment.--To maintain equity and fairness in 
     market transition payments, the Secretary shall, as 
     determined appropriate, adjust the payments to producers on a 
     farm to reflect the ratio of--
       ``(A) the land on the farm on which there is historical 
     production and considered planting history on 1 or more crop 
     acreage bases; to
       ``(B) the land on the farm for which the producers on the 
     farm are at risk in the year of the market transition 
     payment.
       ``(e) Receipt of Market Transition Payments.--
       ``(1) Annual payment estimate.--The Secretary shall 
     announce the estimated minimum payment to producers entering 
     into a market transition contract not later than March 15 of 
     each year of the term of the contract. The producers may 
     terminate the contract without penalty not later than 15 days 
     after the date of the announcement.
       ``(2) Timing of payments.--
       ``(A) In general.--Payments shall be made not later than 
     September 30 of the year covered by the contract.
       ``(B) Advance payment.--
       ``(i) In general.--Subject to clause (ii), the Secretary 
     may provide \1/2\ of the annual payment in advance to 
     producers on a farm not later than March 15 of the same year, 
     at the option of the producers.
       ``(ii) 1996 crop.--If the Secretary elects to provide 
     advance payments for the 1996 crop, the Secretary shall make 
     the advance payments as soon as practicable after the date of 
     enactment of the Farm Income Transition Act of 1995, as 
     determined by the Secretary.
       ``(3) Eligibility.--Producers on a farm who have entered 
     into a market transition contract shall be eligible to 
     receive market transition payments if the producers comply 
     with the conservation compliance plan for the farm and 
     applicable wetland protection requirements, as determined by 
     the Secretary.
       ``(f) Planting Flexibility.--Producers on a farm who 
     possess 1 or more crop acreage bases shall plant any crop or 
     conserving crop on the acreage base to receive a market 
     transition payment. If a perennial conserving crop is 
     planted, the producers shall not be required to replant the 
     crop in the subsequent year.
       ``(g) Payment Limitation.--
       ``(1) Amount.--The total amount of payments made to a 
     person under a market transition contract for any year may 
     not exceed $50,000.
       ``(2) Attribution.--The Secretary shall attribute payments 
     to a natural person in proportion to the ownership interests 
     of the person in a corporation, limited partnership, or other 
     entity (as determined by the Secretary).
       ``(3) Scheme or device.--If the Secretary determines that a 
     person has knowingly adopted a material scheme or device to 
     obtain market transition payments to which the person is not 
     entitled, has evaded the requirements of this section, or has 
     acted with the purpose of evading the requirements of this 
     section, the person shall be ineligible to receive all 
     payments applicable to the crop year for which the scheme or 
     device was adopted and the succeeding crop year. The 
     authority provided by this paragraph shall be in addition to, 
     and shall not supplant, the authority provided by subsection 
     (h).
       ``(4) Regulations.--The Secretary shall issue regulations--
       ``(A) defining the term `person', as used in this 
     subsection, in a manner that conforms, to the maximum extent 
     practicable, to the regulations defining the term `person' 
     issued under section 1001 of the Food Security Act of 1985 (7 
     U.S.C. 1308);
       ``(B) prescribing such rules as the Secretary determines 
     are necessary to ensure a fair and reasonable application of 
     the limitation established under this subsection; and
       ``(C) providing for the tracking of payments made or 
     attributed to a person or entity (as determined by the 
     Secretary) on the basis of the social security account number 
     of the person or the employer identification number of the 
     entity.
       ``(h) Violation of Contract.--
       ``(1) In general.--Except as provided in paragraph (2), if 
     the Secretary determines that producers on a farm are in 
     violation of, or have violated, the conservation compliance 
     plan for the farm or wetland protection requirements 
     applicable to the farm, the Secretary may terminate the 
     market transition contract with respect to the producers. On 
     termination, the producers shall forfeit all rights to 
     receive future payments under the contract and shall refund 
     to the Secretary all payments received by the producers 
     during the period of the violation with interest (as 
     determined by the Secretary).
       ``(2) Refund or adjustment.--If the Secretary determines 
     that a violation does not warrant termination of the 
     contract, the Secretary shall require the producers to--
       ``(A) refund to the Secretary a portion of the payments 
     received during the period of the violation, together with 
     interest, that is proportionate to the severity of the 
     violation (as determined by the Secretary); or
       ``(B) accept a reduction in the amount of future payments 
     that is proportionate to the severity of the violation (as 
     determined by the Secretary).
       ``(i) Transfer of Interest in Land Subject to Contract.--
       ``(1) Effect of transfer.--Except as provided in paragraph 
     (2), if producers on a farm who have entered into a market 
     transition contract transfer title of the land of the farm to 
     another person, or otherwise transfer the right to receive 
     market transition payments, the transfer shall void the 
     contract with the producers on the farm, effective as of the 
     date of the transfer, unless--
       ``(A) the transferee of the land or the right to receive 
     the remaining market transition payments agrees to assume all 
     or a portion of the obligations of the contract in proportion 
     to the transfer (as determined by the Secretary); and
       ``(B) the transferor agrees to transfer all or a portion of 
     the remaining transition payments in proportion to the 
     transfer (as determined by the Secretary).
       ``(2) Exception.--If a producer who is eligible for 
     payments under a market transition contract dies, becomes 
     incompetent, or is otherwise unable to receive the payments, 
     the Secretary shall make the payments in accordance with 
     regulations prescribed by the Secretary.

     ``SEC. 202. NONRECOURSE AND MARKETING LOANS.

       ``(a) Definition of Covered Commodity.--In this section, 
     the term `covered commodity' means corn, grain sorghums, 
     barley, oats, rye, wheat, upland cotton, extra long staple 
     cotton, rice, soybeans, sunflower seed, rapeseed, canola, 
     safflower, flaxseed, and mustard seed.

[[Page S 14411]]

       ``(b) Nonrecourse Loans.--For each of the 1996 through 2002 
     crops of a covered commodity, the Secretary shall make 
     available to producers on a farm a nonrecourse commodity loan 
     under terms and conditions prescribed by the Secretary. A 
     nonrecourse commodity loan 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 and may be extended at the 
     discretion of the Secretary.
       ``(c) Loan Rate.--
       ``(1) In general.--The Secretary shall announce the loan 
     rate for each covered commodity not later than the first day 
     of the marketing year for which the loan rate is to be in 
     effect.
       ``(2) Calculation.--The loan rate for a marketing 
     transition loan for a crop shall be equal to 80 percent of 
     the simple average price received by the producer for the 
     covered commodity during the immediately preceding 5 
     marketing years for the commodity, excluding the year in 
     which the average price was lowest and the year in which the 
     average price was highest.
       ``(3) Simple average price.--For purposes of paragraph (2), 
     the Secretary shall determine the simple average price 
     received by producers of a covered commodity for the 
     immediately preceding marketing year.
       ``(d) Marketing Loans.--
       ``(1) In general.--The Secretary may permit producers on a 
     farm to repay a loan made under this section for a covered 
     commodity at a level that is the lesser of--
       ``(A) the loan level; or
       ``(B) the prevailing world market price for the commodity 
     (adjusted to United States quality and location), as 
     determined by the Secretary.
       ``(2) Prevailing world market price.--If the Secretary 
     permits producers on a farm to repay a loan in accordance 
     with paragraph (1), the Secretary shall prescribe by 
     regulation--
       ``(A) a formula to determine the prevailing world market 
     price for the crop of a covered commodity, adjusted to United 
     States quality and location; and
       ``(B) a mechanism by which the Secretary shall announce 
     periodically the prevailing world market price for the crop 
     of the commodity.
                      ``TITLE III--ADMINISTRATION

     ``SEC. 301. REVENUE INSURANCE.

       ``(a) Pilot Program.--Not later than December 31, 1996, the 
     Secretary shall carry out a pilot program in a limited number 
     of States or groups of States, as determined by the 
     Secretary, under which a producer of an agricultural 
     commodity can elect to receive revenue insurance that will 
     ensure that the producer receives an indemnity if the 
     producer suffers a loss of revenue, as determined by the 
     Secretary.
       ``(b) National Program.--Not later than December 31, 2000, 
     the Secretary shall offer revenue insurance to agricultural 
     producers at 1 or more levels of coverage that is in addition 
     to, or in place of, catastrophic and higher levels of crop 
     insurance.
       ``(c) Administration.--Revenue insurance under this section 
     shall--
       ``(1) be offered through reinsurance arrangements with 
     private insurance companies;
       ``(2) offer at least a minimum level of coverage that is an 
     alternative to catastrophic crop insurance;
       ``(3) be actuarily sound; and
       ``(4) require the payment of premiums and administrative 
     fees by participating producers.

     ``SEC. 302. ADMINISTRATION.

       ``(a) Equitable Relief.--
       ``(1) Loans and payments.--Notwithstanding section 201(h), 
     if the failure of producers on a farm to comply fully with 
     the terms and conditions of the program conducted under 
     titles I through III 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 producers 
     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.
       ``(b) Commodity Credit Corporation.--The Secretary shall 
     carry out the programs authorized by title I through this 
     title through the Commodity Credit Corporation.
       ``(c) Assignment of Payments.--Section 8(g) of the Soil 
     Conservation and Domestic Allotment Act (16 U.S.C. 590h(g)) 
     shall apply to payments or loans made under title I through 
     this title.
       ``(d) Sharing of Payments.--The Secretary shall provide for 
     the sharing of payments made under title I through this title 
     for any farm among the producers on the farm on a fair and 
     equitable basis.
       ``(e) Tenants and Sharecroppers.--In carrying out this Act, 
     the Secretary shall provide adequate safeguards to protect 
     the interests of tenants and sharecroppers.''.

     SEC. 3. CONFORMING AMENDMENTS.

       Title X of the Food Security Act of 1985 is amended by 
     striking sections 1001, 1001A, 1001B, and 1001D (7 U.S.C. 
     1308 et seq.).

     SEC. 4. EFFECTIVE DATE.

       (a) Effective Date.--
       (1) In general.--Except as provided in this subsection and 
     as otherwise specifically provided in this Act, this Act and 
     the amendments made by this Act shall apply beginning with 
     the earlier of--
       (A) the 1996 crop of an agricultural commodity; or
       (B) December 1, 1995.
       (2) Market transition contract.--Title II of the 
     Agricultural Act of 1949 (as amended by section 2(4)) shall 
     apply as of the beginning of signup for market transition 
     payments under section 201 of the Act.
       (b) Prior Crops.--
       (1) In general.--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 or production adjustment program for any of the 
     1991 through 1995 crops of an agricultural commodity 
     established under a provision of law in effect immediately 
     before the effective date specified in subsection (a).
       (2) Liability.--A provision of this Act or an amendment 
     made by this Act shall not affect the liability of any person 
     under any provision of law as in effect before the 
     application of the provision in accordance with subsection 
     (a).
                                 ______