[Senate Report 112-203]
[From the U.S. Government Publishing Office]


112th Congress                                                   Report

 2d Session                      SENATE                         112-203
_______________________________________________________________________

 
             AGRICULTURE REFORM, FOOD AND JOBS ACT OF 2012

                               __________


                              R E P O R T

                                 of the

            COMMITTEE ON AGRICULTURE, NUTRITION AND FORESTRY

                                   on

                                S. 3240

                             together with

                            ADDITIONAL VIEWS




                August 28, 2012.--Ordered to be printed

  Filed, under authority of the order of the Senate of August 2, 2012
        SENATE COMMITTEE ON AGRICULTURE, NUTRITION AND FORESTRY
                      ONE HUNDRED TWELFTH CONGRESS
                             FIRST SESSION

                 DEBBIE STABENOW, Michigan, Chairwoman

PATRICK J. LEAHY, Vermont            PAT ROBERTS, Kansas, Ranking 
TOM HARKIN, Iowa                         Member
KENT CONRAD, North Dakota            RICHARD G. LUGAR, Indiana
MAX BAUCUS, Montana                  THAD COCHRAN, Mississippi
BEN NELSON, Nebraska                 MITCH McCONNELL, Kentucky
SHERROD BROWN, Ohio                  SAXBY CHAMBLISS, Georgia
ROBERT P. CASEY, Jr., Pennsylvania   MIKE JOHANNS, Nebraska
AMY KLOBUCHAR, Minnesota             JOHN BOOZMAN, Arkansas
MICHAEL BENNET, Colorado             CHUCK GRASSLEY, Iowa
KIRSTEN GILLIBRAND, New York         JOHN THUNE, South Dakota
                                     JOHN HOEVEN, North Dakota
112th Congress                                                   Report
                                 SENATE
 2d Session                                                     112-203

======================================================================



 
             AGRICULTURE REFORM, FOOD AND JOBS ACT OF 2012

                                _______
                                

                August 28, 2012.--Ordered to be printed

  Filed, under authority of the order of the Senate of August 2, 2012

                                _______
                                

    Ms. Stabenow, from the Committee on Agriculture, Nutrition and 
                   Forestry, submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 3240]

    The Committee on Agriculture, Nutrition and Forestry (the 
Committee), reported an original bill (S. 3240) to reauthorize 
agricultural programs through fiscal year 2017, and for other 
purposes, having considered the same, reports favorably thereon 
and recommends that the bill do pass.

                          PURPOSE OF THE BILL

    The purpose of this legislation is to reform, extend, 
modify, streamline and strengthen the nation's policies and 
programs pertaining to food, fiber, agriculture, conservation, 
rural development, agricultural trade and food aid, rural 
energy initiatives, forestry on private lands and research, 
education, and extension encompassing these subjects. Congress 
most recently addressed these programs comprehensively in the 
Food, Conservation, and Energy Act of 2008 (P.L. 110-627).
    The reported bill reduces the deficit by reductions in 
mandatory spending through policy-based revisions that improve 
the function and effectiveness of the programs created or 
extended by this legislation. These revisions include reforming 
assistance to farmers and ranchers through coverage for the 
actual risks that farmers and ranchers face; strengthening the 
efforts by farmers and landowners to conserve and enhance the 
quality of natural resources related to agriculture production, 
including privately owned forest land; and promoting 
agricultural trade and market opportunities and providing food 
aid and development assistance to developing countries.
    The bill also works to improve the integrity of food 
assistance to low-income families and the diets and health of 
all Americans. It streamlines the authorities for the provision 
of credit to farmers and ranchers and improves efforts to help 
young and beginning farmers and ranchers. The bill also fosters 
economic growth and a high quality of life in rural communities 
while streamlining the authorizations and improving program 
effectiveness.
    A significant purpose of the reported bill is improving 
support for the research, education and extension efforts 
involving food, agriculture and related fields. The reported 
bill also invests in the research, development and use of 
agriculturally-based renewable energy, chemicals and other 
biobased products, and it continues and enhances investments 
that assist and promote specialty crops and organics. Finally, 
the reported bill aims to enhance and improve federal crop 
insurance for all crops.
    The reported bill authorizes programs for the 2013 through 
2017 crop and fiscal years.

                          BACKGROUND AND NEEDS


                      TITLE I--COMMODITY PROGRAMS

    For nearly 80 years, the United States has provided support 
to agricultural producers through a variety of programs and 
initiatives. Historically, the vast majority of that support 
has come in the form of protection from low prices, supply or 
production controls and general subsidy or income transfer 
payments. In recent years, Congress has emphasized policies 
that address farm risks. In 2000, Congress passed the 
Agriculture Risk Protection Act that enhanced risk management 
for farmers through the public-private partnership with crop 
insurance providers. In 2008, the Food, Conservation, and 
Energy Act (the 2008 Farm Bill) included two revenue-based 
assistance programs: one as an alternative to counter-cyclical 
payments and another targeted at assistance for natural 
disasters. The bill reported by the Committee builds upon those 
earlier efforts and takes a significant step forward in 
reforming commodity policy by moving away from income and price 
supports and towards risk management with assistance only in 
the case of loss.
    Recently, the agricultural sector has experienced 
unprecedented strength and economic growth, while at the same 
time the national economy has struggled to recover from an 
economic downturn. The Economic Research Service at the U.S. 
Department of Agriculture (USDA) has forecast record net farm 
income in 2011 and 2012, exceeding $90 billion each year. 
Additionally, USDA estimates that the five years of highest 
earnings for farmers over the last three decades have occurred 
since 2004. Record high commodity and livestock prices, caused 
by strong demand both domestically and overseas, have driven 
farm incomes. However, historic prices are also pushing up 
input costs and land values to record levels and increasing the 
level of risk a farmer must manage.
    The reported bill accomplishes significant and fundamental 
reform of the commodity programs, delivering substantial 
reductions in mandatory spending while still helping farmers 
and ranchers in times of need. Direct payments, counter-
cyclical payments and the Average Crop Revenue Election 
payments are eliminated beginning with the 2013 crop year. In 
their place, a new risk-based, market-oriented program is 
authorized for the 2013 through 2017 crop years. The 
Agriculture Risk Coverage (ARC) program updates and modernizes 
commodity assistance, reforming federal agricultural policy in 
significant ways.
    Current programs make payments utilizing what are known as 
base acres, in combination with payment rates and target prices 
established by Congress. The base acres used for current 
programs are determined using historic planting records of 
covered commodities on farms. Often these records date to the 
1980s and come with historical yields from the same era. 
Congress provided for a voluntary ``base update'' in the Farm 
Security and Rural Investment Act of 2002 (the 2002 Farm Bill) 
but it was not widely utilized. In 1996, Congress provided 
farmers the flexibility to plant any covered commodity on their 
farms but payments were disconnected from actual plantings; a 
policy known as ``de-coupling'' of payments.
    In response to market conditions, producers have updated 
their farming practices and changed what they plant on their 
farms significantly since the 1980s. For example, market forces 
have recently led many farmers in all regions of the country to 
plant soybeans on their farms. However, most base acres do not 
take into account these new, market-based planting decisions. 
As such, farmers today in different regions of the country can 
grow the exact same covered commodity, such as soybeans, but 
receive substantially different payments from Title I programs. 
Average direct payments for rice base are nearly ten times 
higher than direct payments for soybean base, so a farmer 
growing soybeans on rice base will receive almost ten times the 
Federal support as a farmer growing the same soybeans on 
soybean base. Counter-cyclical payments also utilize base 
acres. Using the same example, if prices for rice fall below 
the target price, a counter-cyclical payment is made to farmers 
with rice base. The farmer growing soybeans on rice base would 
thus receive a counter-cyclical payment for rice and the larger 
rice direct payment, while the farmer growing soybeans on 
soybean base does not receive a rice counter-cyclical payment.
    The reported bill eliminates base acres and instead makes 
payments on a producer's planted acres. Payments are determined 
by actual county or individual farm yields and actual market 
prices. The guarantee upon which a payment is triggered 
utilizes a benchmark calculation of actual yields and market 
prices on a rolling five-year basis, dropping out the highest 
and lowest years of each (known as the ``Olympic average''). As 
such, ARC treats every covered commodity and every farmer 
growing a covered commodity in the same fashion.
    ARC is designed to provide assistance with the actual risks 
a farmer faces. It is not intended to enhance or protect any 
one covered commodity's share of the Congressional Budget 
Office's forecast of future spending (the CBO baseline). The 
Committee acknowledges that the risks a farmer must manage to 
produce crops are immense and come from both weather impacting 
crop yields, and from the market delivering a price too low to 
cover the costs of producing a crop. The Committee acknowledges 
that crop insurance provides very effective coverage for yield 
risk for many crops and farmers. The improvements contained in 
Title XI are designed to make it more effective for more 
farmers and more crops. However, crop insurance, covers only a 
portion of the loss and includes a ``deductible'' above which 
the farmer is self-insured. The deductible can be larger than a 
farmer's operating margin. ARC provides limited assistance 
within the deductible range for revenue losses not otherwise 
covered by crop insurance.
    Because crop insurance does not cover multi-year price 
risk, the Committee acknowledges that significant risk exposure 
for farmers comes from a collapse in prices that is sustained 
or multiple years in which prices decline. Low or declining 
prices are especially problematic because farm input costs--
such as the cost of seed, fuel and fertilizer--tend to increase 
with commodity prices but not decrease as quickly as commodity 
prices. Farmers typically contract in advance for these inputs 
further exposing them to downside price risk. Previously, 
Congress turned to counter-cyclical policies that used 
statutorily-established target prices to provide payments when 
prices fall below the target price. Because the statutory 
target prices do not keep pace with the market, this policy is 
ineffective. Simply raising target prices can also cause 
distortions when farmers plant for program payments in times of 
low market prices and can pay a farmer in high-revenue years 
when yields make up for price declines. This is especially true 
when target prices are tied to planted acres.
    The Committee created ARC to provide effective, market-
oriented assistance for price declines without insulating 
farmers from long-term trends in the market. By using a rolling 
five-year Olympic average of historical prices, the program 
provides assistance when the market decreases significantly 
year-over-year; allowing farmers and input prices the ability 
to respond. If the market decline is short-term, program 
assistance can help with the volatility. If the decline is 
longer-term, such as more than four or five years, ARC adjusts 
with the market and the guarantee decreases to avoid 
distortions. The Committee understands that price declines over 
a longer timeframe do not constitute shocks to the system that 
threaten farm operations; rather they are trends requiring 
appropriate responses by farmers. Accordingly, ARC provides 
assistance in the initial years of collapsed or declining 
prices allowing input prices to follow commodity prices lower 
and provide farmers time to adjust their operations. The five-
year Olympic average price used in ARC is a market-oriented 
solution to the multi-year price risks a farmer must manage.
    The reported bill also continues marketing assistance loans 
and loan deficiency payments through the 2017 crop year with 
only two changes. Due to the loss before the World Trade 
Organization in a dispute initiated by Brazil against U.S. 
cotton supports, the loan rate for cotton is revised so that it 
can float between $0.52 per pound and $0.47 per pound based on 
a rolling two year average of prices. In addition, the 
conservation compliance provisions currently applicable to 
Title I programs and continued in this legislation are also 
applied in their entirety to the marketing loan program.
    The current sugar program is also continued without change 
through the 2017 crop year.
    Subtitle D of Title I provides assistance to dairy 
producers by establishing new programs that utilize risk 
management concepts while contributing to deficit reduction. 
The programs will provide market signals to help prevent over-
supply and to help insure against profit margin reduction. The 
dairy industry experienced serious hardship in 2009 when prices 
received for milk marketings decreased significantly, resulting 
in an estimated 20 percent loss in dairy farm equity. The total 
loss of equity from 2007 through 2009 is estimated at $20 
billion. Existing dairy support programs, including the Milk 
Income Loss Contract (MILC) program and the Dairy Product Price 
Support Program (DPPSP), proved insufficient for ensuring the 
viability of the domestic dairy industry. In response, dairy 
producers representing operations of all sizes undertook a 
nationwide effort to create a proposal that would help insure 
against reduced operating margins and stabilize dairy markets 
in times of overproduction. The reported legislation formalizes 
concepts of the producers' proposal.
    The reported legislation repeals MILC, DPPSP, and the Dairy 
Export Incentive Program (DEIP) and replaces them with a new, 
voluntary safety net, comprised of the Dairy Production Margin 
Protection Program (DPMPP) and the Dairy Market Stabilization 
Program (DMSP). The Committee's revisions to the original 
proposals contained in the reported bill are intended to ensure 
that the programs are growth and export oriented, as well as 
more equitable to farms across the country. The new safety net 
can be customized for each dairy farm, putting affordable risk 
management in the hands of dairy producers. To participate, 
producers will opt-in to the DMPP, elect a level of protection 
that fits each operation's risk management needs, and share in 
program costs, allowing producers of all sizes to manage risk 
on more of their milk production at higher protection levels. 
Previous safety net programs did not require producer 
investment and had limited effectiveness for many dairy farms 
due to various limitations on the assistance provided.
    The first component of the new safety net, the DPMPP, 
provides support based on the fluctuating margin between prices 
received for milk marketings and feed input costs. The DPMPP 
guarantees basic, catastrophic margin protection on an 
established production base for all participating dairy 
operations when margin dips below $4.00 for defined consecutive 
two-month periods. Producers pay an administrative fee for the 
program. The fee structure is marginally progressive, requiring 
higher fees from larger operations that may benefit more in 
times of low margins. The fee is intended only to supplement 
the costs of administering the programs and support other 
measures that will improve dairy markets. In addition to the 
basic guarantee, the DPMPP also provides producers with an 
annual opportunity to manage market volatility by buying up 
additional, supplemental margin protection over the $4.00 basic 
guarantee, in $0.50 increments, up to $8.00 margin protection 
on no less than 25 percent and no more than 90 percent of milk 
marketed. The production base for supplemental margin 
protection may be updated annually to allow dairy operations 
and the domestic dairy industry the opportunity to grow over 
time.
    Small and medium size operations tend to have higher 
relative overhead costs than larger operations due to 
efficiencies of scale. The Committee recognizes the 
differences, and provided additional premium subsidies for 
smaller farms. The reported bill provides a discounted premium 
on the first four million pounds of milk marketed by each 
participating producer. To make the program more equitable, all 
participating dairy operations will qualify for the discounted 
premium regardless of operation size.
    The second component of the new safety net, the DMSP, is 
designed to correct imbalances in dairy supply and demand when 
margins are low. The stabilization program provides a market 
signal based on margin that indicates when producers are 
oversupplying the market. Generally, when prices for milk 
marketings fall operations often work to produce more milk in 
order to increase revenue. This behavior can rapidly lead to an 
oversupply of milk, further depressing prices. The DMSP 
requires producers participating in the margin protection 
program to temporarily slow production when supply is outpacing 
demand. When the DMSP is in effect, participating operations 
will be paid on a percentage of a rolling base, requiring an 
operation to reduce milk marketings or face a reduced payment. 
By reducing a participating operation's milk payment by a 
percentage during times of oversupply, DMSP removes the 
incentive for farms to overproduce during times of low margins. 
Money withheld by the DMSP will be used for USDA dairy product 
purchases and other activities that rebuild demand. DMSP also 
includes a program suspension trigger based on world prices to 
help ensure the stabilization program does not result in an 
increase of cheaper imports into the U.S. market , and to help 
maintain U.S. dairy product competitiveness in export markets.
    Federal Milk Marketing Order (FMMO) reform was not included 
in the reported legislation. The Committee believes the 
Department's well-established process for considering FMMO 
reform is adequate for addressing potential reform. The 
Committee reauthorized the authority for the FMMO Review 
Commission.
    The reported legislation includes provisions that require 
dairy processors to report on more product characteristics to 
aid in price discovery, including price, quantity, and moisture 
content of dairy products sold. Additionally, the legislation 
requires cold storage reporting on quantity and characteristics 
of dairy products stored by processors or other cold storage 
facilities.
    The reported legislation also requires a study of the new 
programs' impacts on the dairy industry prior to consideration 
of the next Farm Bill. The Committee wants to ensure that the 
DMSP is working as intended, strengthens the dairy industry as 
a whole, and is not harming the U.S. dairy industry's ability 
to thrive in an expanding global marketplace.
    Subtitle E of Title I represents another significant change 
in farm commodity policy. In 2008, the Farm Bill established a 
suite of programs to assist farmers and ranchers with losses 
due to natural disasters. Those programs included Supplemental 
Revenue Assistance Payments (SURE), Livestock Indemnity 
Payments (LIP), the Livestock Forage Disaster Program (LFP), 
Emergency Assistance for Livestock, Honey Bees, and Farm-Raised 
Fish (ELAP), and the Tree Assistance Program (TAP). All funding 
and program authorities expired at the end of fiscal year 2011 
and do not cover losses suffered by farmers and ranchers in 
fiscal year 2012. This legislation reauthorizes LIP, LFP, ELAP 
and TAP with some modifications for fiscal years 2012 through 
2017. The legislation moves the programs into Title I and funds 
them out of the funds of the Commodity Credit Corporation. The 
assistance provided by LIP, LFP, ELAP and TAP is now 
incorporated into Title I, thereby providing permanent funding 
baseline for these important disaster assistance programs and 
placing them on the same reauthorization schedule as the rest 
of this title. The SURE program is not re-authorized.
    Finally, the reported bill contains substantial reforms for 
commodity programs in terms of limiting payments to farmers, 
tightening the eligibility requirements based on the producer's 
Adjusted Gross Income (AGI) and prohibiting individuals who are 
not actually farming from being able to qualify themselves or 
an entity for payments under Title I. ARC payments are limited 
to $50,000 per individual, which can be doubled with a spouse 
as in current law. In addition, the current practice of 
providing a separate payment limit for peanuts is applied to 
payments under ARC. The legislation also revises the AGI 
limitation, removing the farm/nonfarm distinction in 
calculating income and setting the eligibility requirement at 
$750,000.
    Current law requires that to receive a payment a person or 
entity must be ``actively engaged in farming.'' This 
requirement allows multiple people to qualify as actively 
engaged in the farming operation on the basis of providing 
``active personal management.'' The reported bill removes the 
``active personal management'' component, requiring the 
provision of labor to qualify as actively engaged. A farm 
entity may include one person who can qualify as actively 
engaged as a manager of the farm, but limits it to a single 
individual and precludes that individual from qualifying 
multiple entities or qualifying the farm operation for more 
than the statutory payment limit.
    The current farm bill authorizations expire with the 
current crop and fiscal years. If they are allowed to expire, 
farm policy reverts to the 1949 Agricultural Adjustment Act and 
the outdated policies contained therein. The impact on farmers 
cannot be estimated but it is expected to be extremely 
expensive for the federal taxpayer. Moreover, the U.S. 
Department of Agriculture would struggle to abruptly adjust 
administration of current programs and implement policies 
created over 60 years ago. Accordingly, the reforms and policy 
changes in this legislation are necessary in their own right, 
but are also needed to avoid complications resulting from a 
return to long-outdated permanent law.

                         TITLE II--CONSERVATION

    Agriculture is measured in generations. The most successful 
farms and ranches are those that can be passed along to 
children and grandchildren. Agriculture prospers with good, 
quality soil and clean water in sufficient quantities. As such, 
the reported bill continues current investments to help farmers 
and ranchers conserve vital natural resources.
    The Committee acknowledges estimates that by 2050 our world 
population will reach 9 billion people; requiring a 70 percent 
to 80 percent increase in agricultural production. As incomes 
rise around the world, diets improve and the demand for higher 
quality food increases. Much of this demand will be met by 
America's farmers and ranchers, who will also need to sustain 
vital natural resources such as soil and water. While advancing 
technology for seeds, inputs, and farming practices will enable 
farmers and ranchers worldwide to meet increasing demand, sound 
agricultural conservation practices are necessary to preserve 
agricultural productivity for future generations.
    The Committee recognized that savings could be achieved in 
this title responsibly through a review of current programs. 
Emphasis was placed on improvements that enhance program 
effectiveness and achieve reductions in future outlays. The 
reported bill continues important conservation investments, 
while streamlining and improving programs to make them more 
effective and reducing overall spending in this title. The most 
significant changes in the reported bill involve the 
Conservation Reserve Program, conservation easements and 
regional partnerships for conservation. The legislation 
achieves savings in the Environmental Quality Incentives 
Program in part through consolidation of the Wildlife Habit 
Incentive Program. Savings also are achieved through 
improvements to the Conservation Stewardship Program, along 
with a slight reduction in the annual acreage enrollment 
limitation.
    For 25 years, the Conservation Reserve Program (CRP) has 
helped preserve soil, water and wildlife resources by placing 
highly erodible and environmentally sensitive farmland in 
conserving uses through voluntary contracts with farmers, 
ranchers and landowners. The 2008 Farm Bill limited CRP 
enrollment to 32 million acres. Recently, however, high prices 
and strong demand for land on which to grow commodities have 
dampened enrollments, reducing the program to just under 30 
million acres. Over the next two years alone, contracts on more 
than 10 million acres currently in the program will expire, 
many of which are likely to transition to productive 
agricultural uses. As such, the Committee concluded that 
lowering the enrollment cap better reflected current program 
demand, and that significant savings also could be achieved. 
Understanding the challenges involved in lowering the 
enrollment cap, the Committee established a multi-year ``step 
down'' of the acreage cap over the five-year life of this 
legislation. This achieves savings while providing for annual 
signups that allow the most sensitive and erodible lands to 
remain in the program, while those lands suitable for 
production return to agricultural uses. The reported bill 
provides greater certainty for lands enrolled in CRP to be used 
for grazing and harvesting, consistent with the conservation 
purposes of the program. It includes new opportunities for 
owners and operators to prepare lands for agricultural uses in 
the last year of the contract.
    Conservation easements help to protect specific types of 
environmentally sensitive lands, such as wetlands and important 
grazing lands. Easements are also valuable tools for preserving 
farm and ranch land that is under development pressure. Such 
easements retain those lands in agricultural uses to produce 
the crops vital to our national security and economy, as well 
as the growing food needs of an expanding world population. 
Current law has three easement programs: the Grasslands Reserve 
Program (GRP); the Wetlands Reserve Program (WRP) and the 
Farmland Protection Program (FPP). The authorities for two of 
these programs expire in fiscal year 2012, as does their 
baseline for reauthorization, which would put at risk the 
opportunity to protect and preserve these lands.
    The Committee consolidated the three conservation easement 
authorities into a single, simplified program, the Agricultural 
Conservation Easement Program. The overall program contains two 
parts: Agricultural Land Easements and Wetland Easements. 
Agricultural Land Easements are used to protect lands from 
development and keep them devoted to agricultural uses, 
including protecting grazing lands or traditional grasslands 
and keeping them in grazing and related uses. Wetland Easements 
are used to restore, protect, and enhance wetlands, which are 
important for water quality, quantity and wildlife habitat 
objectives in many areas. The single program is better focused 
on long-term land protection with a sufficient investment to be 
effective in achieving the program's goals.
    Other significant changes in the reported bill involve 
consolidating four existing programs into a single, innovative 
approach to support locally led conservation projects that 
address soil, water, or wildlife habitat issues in a specific 
area or region. The Regional Conservation Partnership Program 
combines core functions of the Agricultural Water Enhancement 
Program, the Chesapeake Bay Watershed Program, the Cooperative 
Conservation Partnership Initiative and the Great Lakes Basin 
Program for Soil Erosion and Sediment Control. In both the 2002 
and 2008 farm bills efforts were made to allow eligible 
organizations to partner with the Secretary and agricultural 
producers to build solutions-oriented approaches to local 
natural resource conservation issues. These past efforts have 
formed a foundation for the Committee's work in the reported 
bill. The Regional Conservation Partnership Program takes the 
next step by consolidating the best features of those efforts 
under one set of core authorities. This will streamline and 
simplify the partnership approach for producers, eligible 
partners and USDA. The Committee believes that partnerships are 
a cornerstone for conservation and will only continue to grow 
in importance in the future. The Regional Conservation 
Partnership Program is a competitive, merit-based program that 
encourages producers to come together in a collaborative way. 
Producers and the organizations that they know and trust will 
sit around the same table with USDA and come up with a joint 
strategy for how to tackle their most pressing conservation 
issues. Importantly, limited federal resources will be 
magnified and multiplied by private resources; all of which are 
focused on natural resource conserving efforts at the farm and 
ranch level with a regional focus.

                            TITLE III--TRADE

    The Committee has jurisdiction over two types of program 
authorities in this title: (1) programs that promote exports of 
U.S. agricultural products; and (2) programs that provide food 
aid to other nations. Both types of programs are important to 
the agricultural economy and to our nation's geopolitical 
interests, including providing humanitarian relief to nations 
facing significant food emergencies such as famine.
    Agricultural exports remain a bright spot for U.S. trade as 
it is one of the only sectors where the U.S. runs a trade 
surplus, exporting more than we import. U.S. farm exports 
reached record levels in 2010 and 2011 at over $115 billion and 
over $136 billion respectively. In comparison, the U.S. 
exported $53.7 billion worth of agricultural products in 2001--
an increase of over 150 percent. Title III of this legislation 
reauthorizes important programs to continue expanding 
agricultural exports and trade through promotion activities 
that open new markets and develop new customers, as well as 
working to combat trade barriers for U.S. products.
    In general, the reported bill extends current 
authorizations and funding levels for the export promotion 
programs in this title. These programs include the Market 
Access Program, the Foreign Market Development Program, the 
Emergency Markets and Facility Guarantee Loan Program, 
Technical Assistance for Specialty Crops and the Global Crop 
Diversity Trust. Minor changes are made to the Export Credit 
Guarantee Program (GSM-102) to help meet our obligations 
pursuant to the dispute settlement brought by Brazil before the 
World Trade Organization.
    The Committee also recognizes the importance of America's 
leadership in times of food emergencies. Between 850 million 
and 1 billion people in 77 countries are currently estimated to 
be food insecure. In 2011, the Food for Peace program 
authorized in this title benefitted over 46 million people. 
Annually, Food for Peace donates over 2.5 million metric tons 
of commodities around the world. Additionally, the McGovern-
Dole program authorized by this title helps feed about 3 
million children each year, while the Food for Progress program 
benefits about 7 million people annually. The food aid programs 
in this title benefit over 60 countries. The Committee 
recognizes the importance of this assistance and has 
reauthorized the relevant programs while at the same time 
reforming key policies to reduce waste in the system and 
provide flexibility to respond to changing food aid needs.
    In general, the reported bill extends current 
authorizations for international food aid through fiscal year 
2017. The reported bill also increases funding available to 
support strategic prepositioning, which brings food aid 
commodities to at-risk regions before food emergencies strike. 
The bill also expands on the success of a pilot program from 
the 2008 Farm Bill for local and regional food aid procurement, 
which allows organizations to purchase food through local and 
regional markets. By linking local and regional purchasing with 
the McGovern-Dole International Food for Education and Child 
Nutrition Program in the application process, this bill also 
encourages project graduation for schools participating in 
McGovern-Dole. The bill puts into action the recommendations of 
a study authorized by the 2008 Farm Bill to research the 
quality of U.S. food aid. The Administrator is given increased 
flexibility to improve the nutritional profile of food aid for 
target populations, such as children under five and mothers. 
Since passage of the last farm bill, the famine in the Horn of 
Africa has brought new organizations and governments to the 
region, all intent on helping reduce hunger and improve food 
security. This pilot helps coordinate the efforts on the ground 
by looking at interactions and providing for groups doing 
resiliency work--efforts that will help ensure that famine does 
not occur again.

                          TITLE IV--NUTRITION

    The legislation reauthorizes the Supplemental Nutrition 
Assistance Program (SNAP), formerly known as ``Food Stamps.'' 
SNAP provided food and nutrition assistance for an average of 
44.7 million low-income Americans per month with average 
benefits of $4.46 per individual per day. The Committee 
acknowledges that SNAP has proven vital for families who have 
lost their jobs or significant income during the Nation's 
recent economic downturn. According to the Census Bureau's 
Supplemental Poverty Measure, SNAP lifted about 4 million 
people out of poverty in 2010, including over 2 million 
children.
    SNAP assistance goes to truly poor families and the most 
vulnerable members of our society. Roughly 93 percent of SNAP 
benefits go to households with incomes below the poverty line 
and nearly 75 percent of SNAP participants are in families with 
children. About 16 percent of all households receiving SNAP 
include an elderly member of the family and nearly 20 percent 
include someone who is disabled. In 2012, SNAP is expected to 
serve 4 million seniors, 4 million adults with a serious 
disability, and 23 million children--including 10 million 
children who live in severe poverty because their families' 
cash income is below half of the poverty line.
    SNAP is a counter-cyclical program which expands when the 
economy is weak and contracts as the economy improves. The 
Congressional Budget Office projects that SNAP will shrink to 
nearly pre-recession levels as the economy recovers. For most 
families, SNAP is a temporary lifeline when a troubled economy 
hits home limiting their ability to put food on the table. 
Approximately half of new SNAP recipients receive assistance 
for 10 months or less. As the economy recovers and the economic 
situation in a household improves, the need for assistance 
recedes and many families exit the program. Moreover, Moody's 
Analytics estimates that every $1 increase in SNAP benefits 
generates $1.72 in economic activity.
    The Committee acknowledges any program of SNAP's size and 
scope will need periodic review for improvements to ensure 
program integrity. The Committee recognizes SNAP error rates 
were at an all-time low of 3.81 percent in fiscal year 2010, 
and that less than 1 cent of every dollar is lost through fraud 
and abuse. The Committee also recognizes commercial retailer 
trafficking was about 1 percent. The reported bill includes 
provisions to enhance program integrity, including the 
prevention of SNAP participation for individuals with 
significant lottery or gambling winnings, limits on eligibility 
for traditional college students, and the provision of 
additional resources to help the Department of Agriculture 
prevent the trafficking of SNAP benefits.
    The Committee strengthened program integrity and achieved 
budgetary savings by addressing concerns regarding the 
connections between the Low-Income Home Energy Assistance 
Program (LIHEAP) and the Standard Utility Allowance (SUA) used 
in the SNAP food benefit calculation. To streamline State 
administration of the SNAP program, each State develops and 
uses a simplified SUA, a fixed dollar amount representing the 
average household energy costs in the State. States use the SUA 
to calculate the utilities expense deduction for households in 
their State. SNAP households that qualify for the SUA will 
typically receive a higher average amount of monthly SNAP food 
benefits based on average utilities being paid. Typically, to 
qualify for the SUA, SNAP households must provide actual 
utility bills. An exception is LIHEAP. Because LIHEAP rarely 
covers the full amount of utilities a household pays, receipt 
of LIHEAP is considered to be a reasonable proxy for actual 
utility expenses. SNAP allows households that receive LIHEAP to 
claim the SUA. Some States have chosen to provide an annual 
nominal amount (e.g. $1) in LIHEAP benefits to households all 
SNAP households to boost monthly SNAP food benefits. According 
to the Congressional Budget Office, 17 State agencies are 
issuing nominal LIHEAP benefits to qualify households for 
additional monthly SNAP benefits.
    In general, the Committee supports continuing the practice 
of utilizing income and deductions as a means to determine 
appropriate benefit levels based on the amount of income that 
is available for a household to make necessary food purchases. 
``Shelter costs'' are one of the key components in this 
determination. The intent of the excess shelter deduction is to 
appropriately increase benefits for those households with 
significant housing and utility expenses. LIHEAP is targeted to 
low-income households who cannot afford to pay their energy 
bills. Moreover, the Congressional Budget Office has indicated 
that this connection also reduces SNAP administrative costs. 
The Committee is concerned with the use of nominal LIHEAP 
payments to increase SNAP benefits. The Committee contends that 
State issuance of nominal LIHEAP payments to qualify all SNAP 
households to claim the SUA is not consistent with the intent 
of the SNAP utility expense deduction. As such, the reported 
bill requires SNAP households to receive at least $10 in annual 
LIHEAP benefits to qualify for the Standard Utility Allowance. 
The Committee intends for this change to sufficiently deter the 
practice of using nominal LIHEAP benefits while not disrupting 
the relationship between SNAP and LIHEAP and minimizing the 
impact on SNAP recipients.
    In addition to provisions related to program integrity in 
SNAP, the reported bill builds upon programs to reduce hunger 
and improve access to healthy fruits and vegetables for 
seniors, schoolchildren, and both urban and rural residents in 
low-income communities. The Committee recognizes the need for 
additional resources to help the most vulnerable, and the 
reported bill provides additional resources for USDA through 
the Emergency Food Assistance Program to provide assistance to 
our Nation's food banks. The bill also modifies the Commodity 
Supplemental Food Program to better focus limited resources on 
seniors who represent nearly 97 percent of program 
participants. In addition, the bill continues the distribution 
of fresh fruits and vegetables by the Department of Defense to 
schools and service institutions, and authorizes USDA to 
utilize modern technology for SNAP food benefit redemption at 
farmers markets and grocery stores.

                            TITLE V--CREDIT

    The Committee is dedicated to preserving the ability of 
rural America to access financial credit at reasonable rates in 
order to ensure continued economic health and growth. 
Agricultural lending is used to purchase and operate farms, 
start and expand agricultural businesses, and to purchase 
agricultural equipment. Important sources of agricultural 
credit include commercial lending, USDA, the Farm Credit 
System, and Farmer Mac. The Committee will continue to work 
with these stakeholders to increase access to affordable credit 
in rural America.
    The USDA operates a suite of lending programs for farmers 
and ranchers through the Farm Service Agency's (FSA) Farm Loan 
Programs. The programs provide assistance for beginning farmers 
and ranchers, and for farmers and ranchers with limited 
resources. Farming today requires substantial capital to begin 
and continue operating, a significant challenge to young and 
beginning farmers who have a difficult time obtaining capital 
and face other barriers to entry. The Committee recognizes the 
success of FSA's lending portfolio. In fiscal year 2010, FSA 
made more than $5 billion in loans to over 36,000 farmers. In 
fiscal year 2011, FSA made more than $4.8 million in loans to 
over 32,000 farmers. Both years represent some of the highest 
lending levels for the Agency and demonstrate the continued 
strong demand for FSA loans. 14,800 of the loans were made to 
young, new and beginning farmers. In fiscal year 2011, the 
direct loan delinquency rate was 5.7 percent and the direct 
loan loss rate is 0.9 percent. For the guaranteed programs, the 
delinquency rate is 1.43 percent and the loss rate is 0.50 
percent.
    The reported bill reauthorizes current programs through 
fiscal year 2017. Of note, the reported bill includes 
substantial legislative language for both Titles V and VI 
(Rural Development). The underlying statute for both titles is 
Public Law 87-128, the Consolidated Farm and Rural Development 
Act of 1961 (ConAct). Subsequent farm bills and other 
legislation added programs, requirements, and other provisions 
to the ConAct, and several ConAct provisions have become 
inoperable and contradictory. Over the course of 51 years of 
amendments, the ConAct has become confusing, convoluted and 
disorganized. The Committee undertook an effort to streamline 
and reorganize the ConAct to improve the clarity and 
administration of authorized programs, which is reflected in 
the legislative text of both Titles V and VI of the reported 
bill. Specifically for credit programs, general authorities for 
Title V continue in one consolidated subtitle. In carrying out 
the programs and activities authorized in Title V, the 
Committee expects USDA to continue operating the programs and 
activities in accordance with the regulations and procedures in 
effect on the date of enactment of this Act to the extent that 
they are consistent with the requirements applicable to such 
programs and activities provided in this Act. The Committee 
stresses that it is important that the streamlining of the 
ConAct not disrupt lending to rural America.
    The Committee provides continued support to new and 
beginning farmers and ranchers by adjusting down payment loan 
limits, expanding eligibility for new legal entities created 
for succession planning, adjusting term limits for direct 
operating loans, and eliminating term limits for guaranteed 
operating loans. The Committee also provided additional support 
for military veterans interested in pursuing careers as farmers 
and ranchers.
    The reported bill also adjusts programs to provide lending 
assistance to farmers and ranchers that struggle with obtaining 
access to credit, including the historically disadvantaged. 
First, the reported bill allows the Secretary of Agriculture to 
establish intermediate relending for the highly fractionated 
land program for Indian tribes and tribal corporations. Second, 
the reported bill updates the term limits for the receipt of 
both direct and guaranteed loans. In 1996, the Federal 
Agricultural Improvement and Reform Act added provisions to the 
ConAct to impose term limits on direct and guaranteed operating 
loans administered by FSA. The term limits were suspended by 
Congress in 2002, 2006, and most recently by the 2008 Farm Bill 
which extended the suspension through December 31, 2010.
    The reported bill eliminates the 15-year lifetime term 
limits for guaranteed operating loans, and modifies the 7-year 
lifetime term limits for direct operating loans. For guaranteed 
operating loans, the term limits were eliminated, as the 
program is self-sufficient without cost to the American 
taxpayer and assists commercial lenders in offering needed 
credit. For direct operating loans, for every three consecutive 
years a borrower does not take out a loan from FSA, a borrower 
gains one additional year of eligibility. The change to direct 
operating loans addresses the potential of future down cycles 
for farmers and ranchers, and encourages graduation to 
commercial credit.

                      TITLE VI--RURAL DEVELOPMENT

    As in Title V, this title of the reported bill contains 
significant legislative language to streamline and reorganize 
the Consolidated Farm and Rural Development Act of 1961, Public 
Law 87-128, (ConAct) so as to improve the administration of 
authorized programs and to simplify the process for those 
seeking assistance. The legislative text in Title VI is also 
the result of that effort. The general authorities for rural 
development are continued but have been organized into specific 
subtitles. In carrying out the programs and activities 
authorized in the rural development title, the Committee again 
expects that the Secretary will continue to operate such 
programs and activities in accordance with the regulations and 
procedures in effect on the date of enactment of this Act to 
the extent that they are consistent with the requirements 
applicable to such programs and activities provided in this 
Act.
    The Committee has reauthorized the core rural development 
programs that rural constituents rely on to improve 
infrastructure and support community and economic development. 
The Committee believes these programs provide resources that 
are essential to the future of our rural communities. Rural 
areas struggle with higher costs for infrastructure needs 
because of low population density and the unfortunate out-
migration that has become all-too common in many rural 
communities. Traditional infrastructure investments in 
electricity, telephones, water and sewers are continued, and 
the more recent infrastructure investments in broadband service 
are augmented by the addition of authority for USDA to provide 
grant funding for the expansion of broadband service.
    The Committee has heard about the challenges rural 
communities have in accessing resources because they have 
difficulty completing application forms or determining their 
eligibility for such programs. It is the Committee's intent 
that these programs provide federal resources that improves the 
quality of life for those living in rural America in an 
efficient manner with simplified applications and a reduction 
in unnecessary or redundant paperwork and processes.
    Additionally, the Committee encourages rural entities to 
utilize rural development programs in a manner that supports 
projects and initiatives that develop long-term community and 
economic growth strategies. Traditionally, rural development 
programs have been used to meet an immediate need. The 
Committee understands that it is essential that versatile 
programs such as the Community Facilities Loan, Loan Guarantee 
and Grant Program are available to rural residents to address 
pressing needs and concerns, and the Committee wants to ensure 
that the programs authorized in this title continue to provide 
that type of assistance. However, to the extent possible, the 
Committee encourages rural communities to consider how they 
might use rural development resources to address multi-
jurisdictional needs, by leveraging Federal, State, local or 
private funding, or otherwise capitalize upon the unique 
strengths of the rural area to support successful community and 
economic development. The Committee believes that projects that 
reflect even one of these characteristics can help to maximize 
the resources available at all levels of government and 
ultimately help rural communities reach their full potential. 
For these reasons, the Committee has provided the Secretary 
with the discretion to prioritize applications for funding that 
reflect an applicant's efforts to maximize resources and 
support strategic community and economic development.
    Another concern brought to this Committee by both USDA and 
rural constituents, is the confusion resulting from the 
multiple definitions of ``rural'' used by USDA to determine 
program eligibility. The many versions are the result of 
changes brought about by successive Farm Bills. The Committee 
acknowledges that the previous definitions were developed for 
sound reasons and with good intent. However, the Committee is 
concerned that 96 different cities and towns had received 
waivers through legislation passed by the Congress subsequent 
to passage of previous Farm Bills that granted them eligibility 
for Rural Development programs despite the fact that their 
populations had grown beyond the population limits established 
in Farm Bill legislation. USDA will begin using data from the 
2010 Census data in the Fall of 2012, and the Committee expects 
that a number of currently eligible communities will lose that 
eligibility.
    Therefore, to address these concerns, the Committee has 
provided a single definition of ``rural'' that is intended to 
clarify eligibility. The new definition grants eligibility to 
cities and towns of less than 50,000 in population and not 
contiguous or adjacent to urbanized areas. The Committee 
recognizes that some cities and towns of less than 50,000 in 
population that are located within an urbanized area may in 
fact be ``rural in character.'' To ensure that these cities and 
towns that were previously eligible for the Community 
Facilities, Water and Waste Disposal, and Broadband programs 
maintain that eligibility, the Committee has provided for a 
process by which USDA must determine these areas to not be 
``rural in character'' and thus ineligible for these programs. 
The Committee has directed USDA to consider the following 
factors when making such determinations: population density, 
economic conditions, and commuting patterns. The Committee's 
intent in authorizing a ``rural in character'' determination 
process is to provide USDA with the ability to make practical 
eligibility determinations, therefore in making such 
determinations, the Under Secretary may also give consideration 
to the unique structure of local government and the history of 
the area in question. Finally, the Committee has prohibited the 
Under Secretary from making a determination that a city or town 
is not ``rural in character'' for three years to ensure that 
ongoing projects are completed and not impacted by the changes 
contained in this Act in order to protect previous federal 
investments.

                          TITLE VII--RESEARCH

    Agricultural research, extension, and education programs 
serve the food and agriculture sector, consumers of American 
agricultural products, and rural communities throughout the 
United States. Research programs and funding utilize two basic 
agencies at USDA: the Agriculture Research Service (ARS), which 
focuses on ``intramural'' research and basic research; and the 
National Institute of Food and Agriculture (NIFA) created by 
the 2008 Farm Bill to restructure, combine and improve 
``extramural'' research functions at USDA to make better use of 
limited funds.
    The reported bill builds upon the efforts from 2008, 
allowing unfunded and unused program authorities to expire with 
fiscal year 2012 and combining, consolidating and streamlining 
authorities to make a more concentrated and effective use of 
limited funding. The remaining authorities are extended through 
fiscal year 2017 with few changes.
    The Committee provided additional funding for both the 
Specialty Crop Research Initiative and the Organic Research and 
Education Initiative beyond the levels in the 2008 Farm Bill. 
One of the primary activities necessary to encourage continued 
market growth, improved food safety and risk management for 
both of these industries is adequate dedicated research 
support. The Committee recognizes that research is one of the 
primary means by which the Farm Bill provides these farmers 
assistance, so the reported bill increases funding beyond the 
levels in the 2008 Farm Bill, consistent with increased market 
needs.
    The Committee also expects USDA to provide more detailed 
information regarding expected research expenditures when 
submitting its annual budget request to Congress in an effort 
to improve transparency and safeguard against unnecessary 
duplication.
    The reported bill provides for the creation of the 
Foundation for Food and Agriculture Research (FFAR). Modeled 
after the National Institute for Health Foundation and other 
successful government-sponsored research foundations, FFAR is 
intended to leverage Federal dollars and private research money 
to reverse the recent downward trend in agriculture and food 
research funding. The increased productivity and boost in crop 
yields experienced by American farmers can be attributed to 
research investments made 30 to 50 years ago. Federal 
investment in public agricultural research has been trending 
downward at a time when the demands of a growing and hungry 
world require that American agriculture research again take a 
leading role in pushing forward food production. USDA, the 
National Academy of Sciences, the National Science Foundation 
and agricultural research stakeholders play an integral role in 
establishing the Foundation. The Committee does not intend for 
the Foundation to be duplicative of current funding or research 
efforts, but rather foster public-private partnerships among 
the agricultural research community, including federal 
agencies, academia, non-profit organizations, corporations and 
individual donors to identify and prioritize the most pressing 
needs facing agriculture. It is the Committee's view that the 
Foundation will complement the work of USDA basic and applied 
research activities and further advance USDA's research 
mission. Furthermore, the Committee does not intend for the 
Foundation's funding to in any way offset or allow for a 
reduction in the appropriated dollars that go to agricultural 
research.

                          TITLE VIII--FORESTRY

    There are an estimated 354,000,000 acres of non-industrial 
forestland in the United States under private ownership. The 
Committee acknowledges the important role these forests play in 
providing clean air and water, wildlife habitat, and 
recreational opportunities. This title provides private forest 
landowners with important tools to conserve their forest acres.
    The reported bill asserts the Committee's oversight role by 
placing authorization levels on programs and putting their 
reauthorization cycle in line with the Farm Bill. These changes 
are not intended to be a statement on the quality or purpose of 
these programs.
    The Committee recognizes the impact of insect infestation 
and disease on our nation's forests. In some places, 
infestations are reaching epidemic proportions and becoming a 
central threat to forest health. With this in mind, the 
reported bill seeks to give forest managers greater opportunity 
to identify and manage risk in the forest.
    Stewardship End Result Contracting is a tool that has been 
authorized in the past by the Appropriations Committees. By 
addressing this activity through the Farm Bill, the Committee 
intends to situate the authorization of this tool within an 
authorizing committee. Over the last decade, Stewardship 
Contracting has been a proven method for carrying out needed 
forest restoration activities, particularly in areas without a 
strong timber industry presence.

                            TITLE IX--ENERGY

    Since the 2002 Farm Bill, this Committee has invested in 
helping rural communities and American farmers to advance 
renewable energy alternatives. The Committee recognizes the 
numerous benefits from the expansion of renewable energy, 
biofuel and biobased products manufacturing and the innovative 
and pioneering investments made by the programs in this title. 
The Committee reauthorizes almost all of the programs from the 
2008 Farm Bill and provides mandatory funding for the 
investments made by this title. Continuing a ten-year 
investment in this area, the energy title supports the creation 
of new market opportunities for farmers. It also helps 
producers and rural businesses save money on their energy bills 
and helps boost the production of farm-grown renewable 
alternatives to fossil fuels.
    In the current economic climate, the new bio-economy is one 
opportunity for rural communities to strategically develop new 
markets and create jobs. Biobased manufacturing is an example 
of how a developing industry can benefit and reinvigorate a 
rural economy. Most biobased manufacturers will locate near the 
feedstock, in small towns surrounded by farmland. The economic 
benefit is twofold: first, the farmers growing the feedstock 
will have new markets for their crops. And, second, this not 
only drives the farm economy but it also boosts the local and 
regional economy by creating new jobs and wealth that stays in 
those communities. According to a recent USDA study, the bio-
based plastic and chemical products industry could create over 
100,000 American jobs. By nature, most of these jobs will be 
located in rural America.
    The investments made through this title support innovation 
by assisting entrepreneurs and businesses with investments in 
projects ranging from commercial-scale digester projects that 
turn food and agriculture waste into energy to on-farm energy 
audits, educational efforts and similar undertakings to reduce 
energy consumption and boost alternative energy production. The 
Rural Energy for America Program, known as REAP, helps 
producers reduce their energy costs through renewable or 
efficiency measures. REAP has helped farmers, livestock 
producers and small businesses reduce their energy costs 
through various activities. These small investments not only 
improve the farmer's profit margins but also help create and 
retain jobs in local communities. According to recent testimony 
from USDA, the REAP program has created or saved over 14,000 
jobs in rural America.
    Innovations that produce advanced biofuels, bioenergy and 
other biobased materials are important to our economy and 
national security but they are often dependent on feedstocks 
not currently produced on our farms. While farmers can realize 
substantial economic opportunities in new feedstock markets, 
the risks of producing them create significant barriers and 
stifle the growth of these new markets. The Committee has 
focused on policies to help farmers overcome these barriers, 
while connecting them to bio-economy innovators so as to create 
new market opportunities, products and jobs.
    The investments that help propel biorefineries are also 
important job creation investments that help build wealth in 
rural communities. Biobased manufacturing and refining are 
rooted in our small towns, employing rural residents and 
developing new markets for biomass feedstocks from local farms 
and ranches. Often times, financing these facilities can be 
beyond the capacity of the local communities and banks. The 
policies in this title are designed to help bridge the capital 
gap and support innovation in communities and entrepreneurs. 
For example, loan guarantees and grants can seed opportunities 
that will grow new businesses for the community, new markets 
for farmers, and new jobs for rural residents.
    Finally, this title makes investments that seek to save 
energy and boost the bottom line for America's farmers and 
ranchers. Like most small businesses, farmers and ranchers 
worry about the energy costs associated with running their 
operations. The relatively small federal investments in on-farm 
energy production and energy efficiency made by this title can 
provide real help to farmers that will save money and improve 
their bottom lines. Energy policy investments spur local job 
creation and retention, help farmers and rural businesses, and 
boost local and regional economies.

                         TITLE X--HORTICULTURE

    The 2008 Farm Bill contained the first title for specialty 
and organic crops, recognizing the importance of fruits and 
vegetables, nuts, floriculture and nursery products for the 
first time in any Farm Bill. The Committee recognizes that 
according to the most recent Agricultural Census these crops 
account for 12.7 percent of harvested acreage and 46.9 percent 
of total crop value in the United States; demonstrating the 
significant and growing role of specialty crops in the U.S. 
farm economy. Specialty crop producers are both expanding 
American export markets and helping to develop strong, local 
food systems. Fruits and vegetables also represent a key 
component of a complete diet which many Americans continue to 
lack. The 2010 Dietary Guidelines for Americans suggests 
Americans should consume between 9 and 13 servings of fruits, 
vegetables and nuts. For a balanced diet, the Guidelines 
suggest that half the plate be filled with fruits and 
vegetables at each meal.
    The reported bill builds upon the provisions from the 2008 
Farm Bill for specialty crop producers, organic agriculture and 
local food systems. First, the bill expands the Specialty Crop 
block grants, which go to States to support research and 
promotion of fruits and vegetables, and adjusts the grant 
allocation formula to better account for both high value crops 
as well as the number of acres devoted to specialty crop 
production in a state. While the Committee continues to support 
the administration of block grants through a Federal and State 
partnership, the Committee acknowledges that this structure 
poses a challenge in coordinating projects between multiple 
states. To facilitate projects of common interest, the 
Committee has authorized multistate projects related to pests 
and disease, food safety, and commodity-specific areas. Second, 
the Committee recognizes the pest and disease risks and common 
challenges for specialty crop producers, as well as the need to 
streamline authorities to improve the effectiveness for 
producers and ensure that the functions of both of these 
programs are maintained. As such, the reported bill 
consolidates the National Clean Plant Network and the Pest and 
Disease Management and Disaster Prevention Program, while 
continuing the focus on early detection and surveillance of 
invasive pests, interventions to prevent crop damage, and the 
supply of clean, pathogen-free plant material for producers.
    Third, the reported bill builds on support for local and 
regional food systems. The Economic Research Service found that 
over 40 percent of vegetable, fruit and nut farms in the United 
States sell their products in local and regional markets, 
employing on average 13 fulltime workers per $1 million in 
revenue earned. The Committee bill supports continued growth in 
local and regional food systems, increasing funding for 
Farmer's Markets and expanding authorities so resources can 
help develop local infrastructure. The program provides 
competitive grants to improve and expand farmer's markets, 
roadside stands, community-supported agriculture programs, and 
other direct producer-to-consumer market opportunities as well 
as assisting producers in ``scaling up'' through aggregation 
and other marketing techniques that facilitate farm-to-
institution and other market opportunities.
    Finally, the Committee recognizes that organic production 
and the demand for organic products continues to grow. A 2010 
survey of organic growers shows that organic sales reached 
$28.6 billion in 2010, surging 7.7 percent above sales in 2009. 
The reported bill expands support for the National Organic 
Programs and key organic programs such as the Organic Research 
and Education Certification Cost-Share Program that helps 
farmers achieve certification for organic farming. The bill 
also continues to support organic data collection, a component 
to improving risk management for organic producers. It also 
provides additional authority for enforcement of organic 
standards, addressing shortcomings in the National Organic 
Program identified in a 2010 report by USDA's Office of the 
Inspector General.

                        TITLE XI--CROP INSURANCE

    The Committee recognizes the Federal Crop Insurance program 
as the cornerstone of the farm safety net. This is a message 
that was heard consistently by the Committee throughout the 
farm bill hearing process, and this title embodies the 
expressed priority of producers to protect, preserve and 
improve the Federal Crop Insurance program. Producers face a 
multitude of risks over which they have no control, including 
weather and market fluctuations within the crop year. One storm 
can wipe out an entire crop in a matter of minutes and put the 
future of a farming operation in jeopardy. Crop insurance helps 
producers manage exactly this type of risk, which allows 
producers to obtain credit and provides a way for them to 
recover quickly from disaster to put seed in the ground another 
year. The provisions in this title also follow the general 
principle that the purpose of farm programs should be to help 
producers manage the risk they face every day, and the 
provisions focus on expanding the program's reach to assist 
farmers and crops that currently are not covered by the program 
or are inadequately covered.
    The Federal Crop Insurance program is the most crucial 
component of the farm safety net for U.S. farmers. In 2007, 
farmers insured more than 271 million acres through either 
catastrophic coverage or buy-up coverage. That year the 
estimated liability was $67 billion and represented a 97 
percent increase in liability covered since 2000. For the 2011 
crop year, the crop insurance program covered over 265 million 
acres and over $114 billion in liability. The significant 
disasters in 2011 also resulted in $10.8 billion in indemnity 
payments. These staggering numbers demonstrate the fundamental 
importance of and need for crop insurance. These substantial 
increases in the liability covered are attributable both to 
enhanced participation in the program and to a significant 
increase in the prices of most commodities insured under the 
program.
    As discussed previously, the reported bill includes a new 
crop insurance program for producers of upland cotton. In 2002, 
Brazil initiated a dispute settlement case before the World 
Trade Organization against U.S. support for cotton production. 
In 2004, a WTO panel found that payments to cotton producers 
pursuant to the marketing loan and counter-cyclical program 
were in violation of the U.S. WTO commitments. The panel 
reached the same conclusion with regard to the export credit 
guarantees under the GSM-102 program. The United States 
responded by making some changes to domestic cotton support and 
GSM-102, but Brazil argued the response was inadequate and a 
WTO compliance panel ruled for Brazil in 2007. That ruling was 
upheld on appeal in 2008. The dispute went before a WTO 
arbitration panel to determine the level of retaliation in 
August of 2009, and Brazil announced that it would impose 
retaliation of $829.3 million in U.S. goods, including $268.3 
million in cross-retaliation, in April 2010 based on the 
arbitration panel's findings.
    In April 2010, the U.S and Brazil reached a temporary 
settlement agreement to avoid retaliation, and in June they 
signed the ``Framework for a Mutually Agreed Solution to the 
Cotton Dispute in the WTO (WT/DS267)'' (the Framework 
Agreement). Under the Framework Agreement, Brazil suspended 
retaliation against the U.S. pending U.S. compliance and in 
return for $147.3 million in annual payments from the U.S. (out 
of funds of the Commodity Credit Corporation) to a newly 
created Brazilian Cotton Institute for the provision of 
technical assistance and capacity-building for the Brazil 
cotton industry. The U.S. and Brazil also agreed to quarterly 
discussions on changes to U.S. cotton supports leading up to 
``successor legislation to the 2008 Farm Bill'' with a view to 
reaching a mutually agreed solution to the dispute.
    The Committee recognizes that it is necessary for the U.S. 
and Brazil to resolve the dispute and the important role that 
changes in the reported bill for upland cotton play in moving 
to a resolution. The Committee also recognizes the significant 
risks that cotton farmers face and the continuing need for a 
safety net for those producers. As such, the reported bill 
removes upland cotton from the list of ``covered commodities'' 
in Title I, thus making upland cotton ineligible for the 
Agriculture Risk Coverage program. The reported bill creates 
the Stacked Income Protection Plan (STAX) for producers of 
upland cotton to permit upland cotton farmers to purchase an 
area-wide revenue plan of coverage above or in lieu of their 
individual coverage. STAX is modeled off of existing Group Risk 
Income Protection plans of insurance, using county data and 
triggering at a loss of 10 percent or greater, down to 30 
percent where it is presumed the producer will buy up 
individual coverage.
    The Committee contends that STAX should help resolve the 
WTO dispute with Brazil because it represents a significant 
shift in domestic assistance to cotton farmers. STAX is an 
insurance plan, not a direct subsidy program. As such, it has 
four important mitigating factors as compared to subsidy 
programs that justify resolution. First, farmers have to pay 
some of the cost for the coverage out of their own pockets and 
the cost of the program will be rated on an actuarially sound 
basis, meaning farmers will pay for the actual value of the 
coverage. Second, assistance to cotton farmers under STAX will 
only occur when there has been a loss at the county level and 
is not tied directly to losses on the individual farm. Third, 
STAX contains a 10 percent deductible, leaving the farmer 
responsible for the first 10 percent of any loss. Finally, STAX 
as written by the Committee does not contain a reference or 
floor price so that the revenue coverage provided by STAX to 
the farmer will reset every spring when RMA calculates the 
spring price and that price will be determined by the markets, 
rather than a set price established by Congress. This makes 
STAX market-oriented and avoids any potential insulation from 
signals of the market and will avoid distorting domestic or 
international markets.
    The Committee asserts that the significant reform in 
domestic cotton support as a result of STAX, in combination 
with the adjustments in the cotton loan rate and the 
adjustments to the GSM-102 program subsidy, should serve as a 
sufficient basis for the U.S. and Brazil to reach a mutually-
agreeable solution to the WTO dispute without need for further 
payments to Brazil and without any need for retaliatory 
measures by Brazil. The Committee encourages USDA and the U.S. 
Trade Representative to work with Brazil on this resolution.
    As discussed previously, the reported bill is a significant 
change in federal agriculture policy with a focus on risk 
management and assistance only when farmers have suffered a 
loss. Recognizing the need for more tools for farmers as they 
seek to best manage their risk, the Committee has also created 
a new insurance option for producers called the Supplemental 
Coverage Option (SCO). The reported bill amends section 508(c) 
of the Federal Crop Insurance Act to permit farmers to 
supplement their individual coverage with coverage based on an 
area yield and loss basis. The SCO coverage extends above the 
individual coverage in the deductible range but requires a 10 
percent deductible. Indemnity payments are triggered only if 
losses in the area exceed 10 percent of expected levels. In the 
case of those producers participating in ARC, the deductible is 
21 percent of the expected value of the crop under the 
underlying insurance policy. SCO provides for a premium subsidy 
of 70 percent of the premium associated with the coverage. In 
SCO, the reported bill provides farmers a valuable new tool to 
help them manage their risks in conjunction with underlying 
individual coverage and the ARC program. Producers who cannot 
afford high levels of individual buy-up coverage now have an 
affordable area-wide option to supplement completely or in 
conjunction with ARC.
    The remainder of Title XI in the reported bill contains 
important improvements to existing crop insurance coverage to 
make insurance more effective for farmers, as well as some 
technical changes to the administration of crop insurance to 
improve the program's operation. Specifically, the reported 
bill makes the enterprise unit pilot a permanent part of the 
program due to its popularity with farmers. The bill allows the 
Federal Crop Insurance Corporation to split enterprise units 
between irrigated and non-irrigated acres so that the insurance 
coverage better matches the significant differences between 
those two practices. The reported bill also improves the 
transitional yield and provides new authority for the FCIC 
Board to conduct and prioritize research and development of new 
plans of insurance. The Committee recognizes the vital 
importance of helping young and beginning farmers get started 
and succeed in farming. As such, the Committee has made 
revisions to the Federal Crop Insurance Act to help young and 
beginning farmers better manage their risk through additional 
premium assistance, better transitional yields and improved 
accounting for prior experience through the use of previous 
production history.
    The final set of changes in this title involve the 
Committee's efforts to help expand crop insurance to crops that 
are not currently covered or that are underserved, especially 
for livestock, peanuts, catfish and specialty crops. These 
changes are intended to improve the process for developing new 
crop insurance products for underserved crops and regions by 
allowing the FCIC to increase the advance payment for research 
and development of new policies by 50 percent. The bill also 
allows the Risk Management Agency to conduct research and 
development activities to maintain or improve existing policies 
or to develop new policies. The bill also supports the 
development of whole-farm insurance and index-based weather 
insurance.

                        TITLE XII--MISCELLANEOUS

    The Miscellaneous Title addresses challenges faced by, and 
improves communication and outreach with, small and 
disadvantaged producers, and veterans. It provides for improved 
safety and training of the agricultural workforce, removes 
overlap between certain programs, and allows for more efficient 
sharing of information. In addition, the Committee recognizes 
the importance of animal health, marketing, and sustainability 
and the Miscellaneous Title contains critical provisions to 
preserve domestic livestock production.
    Finally, the Miscellaneous Title makes improvements to the 
Noninsured Crop Disaster Assistance Program (NAP) that are in 
line with the overall goals of the reported legislation to 
improve tools for farmers to manage their risks and to 
eliminate duplication and overlap among programs. For producers 
of crops that are not covered by crop insurance, the Committee 
recognized the need for effective risk management tools and 
concerns that current support under NAP was inadequate and 
limited producer participation. As such, the reported 
legislation includes a revision to NAP that provides an option 
to producers to purchase a higher level of NAP coverage for 
their crops, known as a ``buy-up'' option. The reported 
legislation also eliminates overlap between NAP and the 
disaster provisions in Title I.

                         SUMMARY OF PROVISIONS


                      TITLE I--COMMODITY PROGRAMS


Repeals

    The reported bill eliminates direct payments, counter-
cyclical payments and the Average Crop Revenue Election 
payments.

Agriculture Risk Coverage

    The bill establishes the Agriculture Risk Coverage (ARC) 
program as a new risk management tool for producers of covered 
commodities that provides market-oriented, multi-year price 
assistance, as well as yield assistance.
    ARC payments are made on eligible acres, not base acres. 
Eligible acres are defined as the farmer's actual planted acres 
not to exceed the acreage planted to covered commodities and 
upland cotton during the 2009 to 2012 crop years (with 
adjustments for acres coming out of the Conservation Reserve 
Program and for resource-conserving crop rotations such as 
summer fallow). ARC provides a producer with a one-time, 
irrevocable election whether to receive individual farm or 
county level coverage. The ARC guarantee is set at 89 percent 
of the benchmark revenue, which is calculated as the product of 
the 5-year Olympic average prices and the 5-year Olympic 
average yields (county or individual farm) for each commodity. 
Payments are made on the shortfall between the guarantee and 
the actual revenue, but cannot exceed 10 percent of the 
benchmark revenue. For farmers electing coverage at the county 
level, payments are made on 80 percent of their eligible acres 
(45 percent of those acres prevented from being planted) and 
for those farmers electing coverage at the individual level, 
payments are made on 65 percent of the eligible acres (45 
percent of those acres prevented from being planted).

Upland Cotton

    Upland cotton is no longer a covered commodity and 
producers of upland cotton are not eligible for the ARC 
program. Due to the loss before a WTO panel in a dispute 
brought by Brazil, the Committee, at the request of cotton 
producers, has removed upland cotton from the definition of 
covered commodities and has created a separate insurance policy 
for cotton producers in Title XI. Removal of upland cotton from 
the list of covered commodities, changes in the marketing loan 
rate for upland cotton and changes to the Export Credit 
Guarantee Program (GSM-102) contained in the reported bill are 
intended to help reach a resolution to the WTO dispute.

Marketing Assistance Loans and Loan Deficiency Payments

    Marketing Assistance Loans and Loan Deficiency Payments are 
continued in the reported bill through the 2017 crop year with 
only two changes from the program as designed by the 2008 Farm 
Bill. First, due to the above-mentioned WTO dispute with 
Brazil, the upland cotton loan rate has been revised to adjust 
based upon the preceding two year average price for upland 
cotton, but not to exceed $0.52 per pound nor drop below $0.47 
per pound. The current marketing loan rate for upland cotton in 
the 2008 Farm Bill is $0.52 per pound. Second, the reported 
legislation revises the conservation compliance provisions from 
the 2008 Farm Bill to align with the conservation compliance 
provisions for ARC. As such, farmers utilizing marketing 
assistance loans must certify that they are in compliance with 
the same provisions as they are required to for ARC payments.

Sugar

    The sugar program as designed in the 2008 Farm Bill is 
continued through crop year 2017 without change.

Dairy

    The legislation seeks to reform and improve dairy policy by 
replacing existing programs (Milk Income Loss Contract, the 
Dairy Product Price Support Program, and the Dairy Export 
Incentive Program) with the Dairy Production Margin Protection 
and Dairy Market Stabilization Programs. The first is a 
voluntary program that helps provide assistance when dairy 
operation margins are below $4.00 as calculated using the all-
milk price and a national average feed cost. Operations can 
also purchase additional margin protection above $4.00 but not 
to exceed $8.00 in $0.50 increments. The second program is 
required for an operation participating in the margin 
protection program and it is designed to promote growth while 
also encouraging producers to temporarily scale back marketings 
in times when the market is oversupplied and margins are low.

Supplemental Agricultural Disaster Assistance

    The 2008 Farm Bill established a suite of programs to 
assist farmers and ranchers with losses due to natural 
disasters which included Supplemental Revenue Assistance 
Payments (SURE), Livestock Indemnity Payments (LIP), the 
Livestock Forage Disaster Program (LFP), Emergency Assistance 
for Livestock, Honey Bees, and Farm-Raised Fish (ELAP), and the 
Tree Assistance Program (TAP). All programs expired at the end 
of fiscal year 2011 and thus do not currently cover losses 
suffered in fiscal year 2012. This legislation reauthorizes 
LIP, LFP, ELAP and TAP with some modifications for fiscal years 
2012 through 2017, moves the programs into Title I and funds 
them out of the funds of the Commodity Credit Corporation. As 
such, the assistance provided by LIP, LFP, ELAP and TAP are now 
incorporated into the Title I baseline and will require 
reauthorization on the same schedule as the rest of Title I. 
SURE is not re-authorized.

Payment Limitation Reforms

    The legislation undertakes three significant reforms. 
First, payments made pursuant to the ARC program are limited to 
$50,000 per individual (but can be doubled with a spouse, 
similar to current law). This compares to a current combined 
limit of $105,000 for direct payments and the counter-cyclical 
program. In addition, a second payment limitation for peanuts 
is maintained. Second, the adjusted gross income eligibility 
requirement is revised by eliminating the differentiation 
between farm and nonfarm AGI and using a single three-year 
rolling average of a producer's AGI for eligibility. The AGI 
requirement is set at $750,000. Finally, the requirement that 
an individual be ``actively engaged in farming'' to be eligible 
to receive payments has been reformed by eliminating the 
``active personal management'' provisions that allowed multiple 
individuals to claim eligibility by only providing management 
to the operation. The legislation strikes the phrase ``active 
personal management'' and creates a specific class of actively 
engaged that permits a single individual to be actively engaged 
as the manager for a farm. Only one person in a farm operation 
can be eligible for providing management and not labor to the 
farm and that person cannot qualify other farm operations as 
actively engaged or permit the farm operation to exceed the 
$50,000 payment limitation.

                         TITLE II--CONSERVATION


Conservation Reserve Program

    The Conservation Reserve Program (CRP) helps preserve soil, 
water and wildlife resources by placing highly erodible and 
environmentally sensitive land in conserving uses through 
voluntary contracts with farmers, ranchers and landowners. The 
2008 Farm Bill limited enrollment in CRP to 32 million acres. 
Current enrollment in the program is just under 30 million 
acres with contracts on more than 10 million acres set to 
expire in the next two fiscal years. The reported bill provides 
for a ``step down'' of the acreage cap over the five-year life 
of this legislation as follows:
          Fiscal year 2013, no more than 30 million acres
          Fiscal year 2014, no more than 27.5 million acres
          Fiscal year 2015, no more than 26.5 million acres
          Fiscal year 2016, no more than 25.5 million acres
          Fiscal year 2017, no more than 25 million acres.
    The reported bill also allows for the enrollment of up to 
1.5 million acres of grasslands by merging provisions of the 
previous Grasslands Reserve Program into CRP. Additionally, 
this legislation provides greater flexibility for certain lands 
enrolled in CRP to be used for grazing and harvesting.

Agricultural Conservation Easement Program

    The reported legislation combines three conservation 
easement authorities into a single program, the Agricultural 
Conservation Easement Program. The overall program contains two 
parts: Agricultural Land Easements and Wetland Easements. 
Agricultural Land Easements are used to protect agricultural 
land from development and keep them devoted to agricultural 
uses, including keeping grazing lands and important grasslands 
in grazing and related uses. Wetland Easements are used to 
restore, protect, and enhance wetlands, which are important for 
water quality, quantity and wildlife habitat in many areas. 
Sufficient funding and authority is provided to create a 10-
year baseline for all types of easements.

Environmental Quality Incentives Program

    The legislation continues the Environmental Quality 
Incentives Program (EQIP), providing farmers and ranchers with 
important cost-share assistance on working lands for 
conservation activities that help farmers meet or avoid the 
need for natural resource regulation. Additionally, many parts 
of the Wildlife Habitat Incentive Program (WHIP) have been 
consolidated into EQIP, focusing the program on farmers and 
ranchers looking to create or improve areas for wildlife 
habitat on their working lands.

Conservation Stewardship Program

    The legislation continues the Conservation Stewardship 
Program (CSP) as revised in the 2008 Farm Bill. This program 
encourages higher levels of conservation and the adoption of 
new and emerging conservation technologies on farms, ranches, 
and forests. The Committee made changes to the program to ease 
use and implementation, including a slight reduction in the 
annual enrollment cap. The cap on nonindustrial private 
forestland that can be enrolled in the program is removed and 
greater focus is given to identifying resource concerns at the 
local level. The program also adds flexibility to accept land 
coming out of the Conservation Reserve Program when priority 
resource concerns will be addressed.

Regional Conservation Partnership Program

    Current law authorizes four programs that are designed to 
work with farmers, ranchers and partner organizations to 
achieve conservation objectives: Agricultural Water Enhancement 
Program; Chesapeake Bay Watershed Program; Cooperative 
Conservation Partnership Initiative; and Great Lakes Basin 
Program for Soil Erosion and Sediment Control. The reported 
bill consolidates these four programs into one that will 
support projects that improve soil quality, water quality and 
quantity, or wildlife habitat in a specific area or region. 
Projects are selected through a competitive, merit-based 
process, and leverage partner resources to achieve project 
goals. Within the program is a Critical Conservation Area 
component through which the Secretary shall designate areas 
with particularly significant water quality and quantity issues 
and natural resource regulatory pressures.

Conservation Innovation Grants

    Conservation Innovation Grants (CIG) are continued in the 
reported bill, providing grants on a competitive basis to 
encourage the development of new or improved conservation 
practices. CIG is geared towards projects that offer new 
approaches to providing producers environmental and production 
benefits. The set-aside for air quality is removed. The 
legislation includes a new reporting requirement to increase 
program transparency.

Voluntary Public Access and Habitat Incentive Program

    Private landowners are able to realize a value-added 
benefit by creating wildlife habitat and opening their land up 
to hunting, fishing, and other kinds of public outdoor 
recreation. The legislation continues this program and requires 
the Secretary to report to Congress on the program's 
effectiveness by 2015.

Conservation of Private Grazing Land

    The program is reauthorized to improve private grazing land 
by offering technical assistance and educational activities to 
landowners looking to better manage their land.

Grassroots Source Water Protection Program

    State rural water associations are encouraged to use 
technical assistance in order to promote conservation 
activities that protect the quality of our nation's drinking 
water through this program.

Small Watershed Rehabilitation Program

    Many of the flood control structures (mainly dams) in our 
country are reaching their maximum life expectancy. This 
program provides funds for projects to rehabilitate and improve 
the longevity of existing structures.

Terminal Lakes Assistance

    The reported bill provides assistance for addressing unique 
concerns regarding terminal lakes, defined as the lake and its 
riparian and watershed resources that are considered flooded 
with no natural outlet or at risk because of insufficient 
water. For the flooded terminal lakes, the reported bill 
creates a land purchase grant program in conjunction with the 
State for the purchase of land flooded by the terminal lake. 
For terminal lakes with insufficient water, the reported bill 
transfers funds to the Department of the Interior to assist in 
providing water through leases, land and related water rights 
purchases and research, support and conservation activities.

                            TITLE III--TRADE


Export Credit Guarantee Program

    The Export Credit Guarantee Program, also known as GSM-102, 
provides export credit guarantees that help ensure the 
availability of credit to finance the exports of U.S. 
agricultural products to countries where financing might not be 
available. The reported legislation continues the authorization 
for the program through 2017 with one change. The Committee 
seeks a resolution to the WTO dispute with Brazil by reducing 
the current levels of export credit guarantees from $5.5 
billion to $4.5 billion, while maintaining United States export 
competitiveness for agriculture.

Market Access Program

    The reported bill extends the authority and provides $200 
million per year through fiscal year 2017.

Foreign Market Development Program

    The reported bill extends that authority with $34.5 million 
each fiscal year for fiscal years 2013 through 2017.

Emerging Markets and Facility Guarantee Loan Program

    The legislation extends the program through fiscal year 
2017 at existing funding and loan guarantee levels.

Technical Assistance for Specialty Crops

    This program provides financial assistance to producers and 
exporters of specialty crops in addressing barriers to trade in 
their products in overseas markets. The reported bill makes 
slight revisions to the purpose of the program to ensure that 
technical barriers to trade (e.g., burdensome regulatory 
requirements) can be addressed. The reported bill reauthorizes 
the program through fiscal year 2017 with $9 million each 
fiscal year.

Global Crop Diversity Trust

    The reported bill authorizes annual appropriations of $60 
million for each fiscal year through 2017 to fund the Global 
Crop Diversity Trust. The bill also requires that U.S. 
contributions may not exceed one fourth of the total of funds 
contributed to the Trust from all sources.

Food for Peace

    The reported legislation continues the authorities under 
the Food for Peace Act through fiscal year 2017. In particular, 
Title II of the Act contains the title's primary food aid 
budget authority and is reauthorized to continue the nation's 
ability to provide for emergency aid and non-emergency 
development projects. This program enables the U.S. to donate 
food overseas to promote food security. Additionally, the 
reported bill increases the amount of funds available to 
support strategic prepositioning, which brings food aid 
commodities to at-risk regions before food emergencies strike.
    The reported legislation also continues the Farmer-to-
Farmer program and slightly raises the percentage of funds that 
may be used for this program from 0.5 percent to 0.6 percent.

McGovern-Dole International Food for Education and Child Nutrition 
        Program

    The reported bill reauthorizes the McGovern-Dole 
International Food for Education and Child Nutrition Program 
through fiscal year 2017. The legislation also expands on the 
success of the Local and Regional Food Aid Procurement pilot 
program created by the 2008 Farm Bill. The authority allows 
organizations to purchase food through local and regional 
markets and promotes stability by supporting local producers 
and economies.

Food Aid Quality

    The 2008 Farm Bill authorized a study to research the 
quality of U.S. food aid. The reported bill puts into action 
the recommendations of the study giving the Administrator 
increased flexibility to improve the nutritional profile of 
food aid for target populations, such as children under five 
and mothers.

Resiliency Pilot in the Horn of Africa

    Famine in the Horn of Africa has brought new organizations 
and governments to the region, all intent on helping reduce 
hunger and improve food security. The reported bill creates a 
pilot program to help coordinate the efforts on the ground by 
looking at interactions and providing for groups doing 
resiliency. The bill authorizes the appropriation of $10 
million in funding to this pilot through 2017.

Bill Emerson Humanitarian Trust

    The Bill Emerson Humanitarian Trust holds extra resources 
so that the U.S. can respond quickly to food crises when 
domestic supplies are short. The Committee reauthorizes the Act 
creating the trust through fiscal year 2017.

                          TITLE IV--NUTRITION


Supplemental Nutrition Assistance Program

    The reported bill reauthorizes the SNAP program through 
fiscal year 2017 with a series of changes to improve the 
program's effectiveness in providing food assistance to poor 
families and individuals, while helping to eliminate fraud, 
abuse and misuse of the program and its benefits. Specifically, 
the Committee provides additional funding to USDA to prevent 
trafficking of food assistance benefits and to strengthen 
retailer program integrity. The legislation address concerns 
about SNAP households with lottery or gambling winnings by 
requiring households with substantial lottery or gambling 
winnings to lose benefits immediately after receiving winnings. 
Winners will be prevented from receiving new benefits if they 
do not meet the financial requirements of SNAP. Eligibility for 
college students is tied to Perkins program criteria to focus 
eligibility on students participating in technical and 
vocational education programs, primarily 2 year colleges, trade 
studies, remedial course work, basic adult literacy, or English 
as a second language.
    The reported bill also requires participating retailers to 
stock more staple foods like fruits and vegetables and bans 
stores from participating if sales of prohibited items like 
liquor and tobacco is higher than 45 percent of the store's 
total sales. Further, the Committee reviewed benefit amounts 
which are determined by evaluating both income and living 
expenses. The Standard Utility Allowance is used by many states 
to estimate average utility costs to make benefit 
determinations. The reported bill includes a provision to stop 
states from issuing nominal Low-Income Heating and Energy 
Assistance Program (LIHEAP) benefits to qualify households to 
receive Standard Utility Allowances for the sole purpose of 
increasing households' SNAP benefits. The provision will not 
affect households that receive more than $10.00 in annual 
LIHEAP assistance, or any household that can demonstrate 
utility costs. Finally, the bill directs the Food and Nutrition 
Service to conduct demonstration projects to test modern 
technology including smartphones and online payments to improve 
access to SNAP retailers.

SNAP Nutrition Education and Employment and Training Programs

    The bill continues the Employment and Training components 
of SNAP. The reported bill also adds physical activity as an 
eligible use of the program, and maintains current funding 
levels through fiscal year 2017.

Commodity Supplemental Food Program

    The reported bill maintains funding authorizations at 
current levels for the Commodity Supplemental Food Program 
(CSFP) through fiscal year 2017. Additionally, the legislation 
contains provisions to transition CSFP to a program for senior 
citizen populations while allowing the small percentage of 
women and children currently participating in CSFP to continue 
receiving benefits until they exceed the age of eligibility.

The Emergency Food Assistance Program

    The Emergency Food Assistance Program (TEFAP) helps 
supplement the diets of low-income individuals by providing 
emergency food and nutrition assistance, largely through food 
banks. The reported bill provides additional resources to fund 
TEFAP through fiscal year 2017.

Department of Defense Fresh Program

    The reported bill reauthorizes and maintains current 
funding for the Department of Defense Fresh Program, which 
distributes fresh fruits and vegetables to schools and service 
institutions.

Senior Farmers Market Nutrition Program

    The reported bill reauthorizes and maintains current 
funding levels for the Senior Farmers Market Nutrition Program, 
which provides low-income seniors with coupons to be exchanged 
for eligible foods (fruits, vegetables, honey, and fresh-cut 
herbs) at farmers' markets, roadside stands, and community 
supported agriculture programs.

Whole Grain Products

    The reported bill continues the whole grain products 
program to encourage school meals programs to sample a variety 
of whole grains and whole-grain products. The program requires 
an evaluation to determine whether whole-grain consumption 
increased, and which products were most acceptable to 
schoolchildren.

Healthy Food Financing Initiative

    The reported bill authorizes the Healthy Food Financing 
Initiative to administer loans and grants to improve access to 
healthy foods in food deserts with goals of improving the 
health of families and creating and preserving jobs.

Fresh Fruit and Vegetables Program

    The reported bill reauthorizes and maintains current 
funding levels for the Fresh Fruit and Vegetables Program, 
which provides free fresh fruits and vegetables to elementary 
school children throughout the school day in school districts 
with a high proportion of low-income students.

Community Food Projects

    The reported bill provides grants to eligible nonprofit 
organizations to improve community access to food through the 
development of innovative projects including school-to-garden 
programs and urban greenhouse initiatives.

Hunger Free Communities

    The reported bill authorizes grants to incentivize the 
purchase of fruits and vegetables by SNAP participants in 
underserved communities, with the Federal share limited to 50 
percent.

                            TITLE V--CREDIT


Conservation Loan and Loan Guarantee Program

    The Conservation Loan and Loan Guarantee Programs provide 
authority for loans to borrowers to build conservation 
structures or establish conservation practices. The reported 
bill reauthorizes the program through fiscal year 2017 at 
current funding levels.

Beginning Farmer and Rancher Individual Development Accounts Pilot 
        Program

    The reported legislation reauthorizes the Beginning Farmer 
and Rancher Individual Development Accounts Pilot Program which 
provide matching-funds for savings accounts specifically to be 
used for farming-related expenses for beginning farmers and 
ranchers.

Ownership and Operating Direct and Guaranteed Loans

    The reported bill reauthorizes the direct and guaranteed 
ownership and operating loans administered through the Farm 
Service Agency at existing levels through fiscal year 2017. The 
bill maintains higher loan funds reserved for direct farm 
ownership loans and improves the down payment loan program. The 
bill continues the reserved portion of guaranteed farm 
ownership loan and direct operating loan funding for beginning 
farmers and ranchers. Also, the bill eliminates term limits for 
guaranteed operating loans, and revises term limits for direct 
operating loans to permit a borrower to receive eligibility of 
one additional year for each period of three consecutive years 
the borrower does not obtain a direct loan.

State-Mediation Program

    State mediation programs assist in resolving agriculture 
and USDA-related lending-related disputes. The reported bill 
incorporates the program into the title by extending the 
authorization to 2017.

                      TITLE VI--RURAL DEVELOPMENT


Water, Waste Disposal and Wastewater Facility Grants and Loans

    This program provides grants, loans and loan guarantees to 
public agencies for projects that support the development, 
storage, treatment, purification, or distribution of water or 
the collection, treatment, or disposal of waste in rural areas. 
The reported bill reauthorizes the program through fiscal year 
2017 and provides that rural communities with populations of 
less than 5,500 are prioritized for funding.

Community Facilities Loans, Loan Guarantees and Grants

    The bill reauthorizes the Community Facilities Program 
which supports projects related to economic development, public 
safety, and health care delivery, and prioritizes communities 
with less than 20,000 residents. It also provides that the 
Secretary make up to 3 percent of funds provided through the 
Community Facilities Loan and Grant Program available to 
applicants for technical assistance to help smaller communities 
in the development of their applications to the Community 
Facilities program.

Rural Water and Wastewater Circuit Rider Program

    The legislation continues the Rural Water and Wastewater 
Circuit Rider Program which provides competitive grants to non-
profit organizations that give technical assistance to rural 
public water systems. This technical assistance helps the water 
systems to comply with state and federal environmental 
regulations. The program is reauthorized to receive $25 million 
annually.

Rural Business Development Programs

    In general, the reported bill reauthorizes the suite of 
rural business development programs through fiscal year 2017. 
Notably, it combines two existing programs, the Rural Business 
Opportunity Grants program and the Rural Business Enterprise 
Grants program, into a single program, the Rural Business 
Development Grants program, which awards competitive grants to 
public agencies and non-profit community development 
organizations for business development, planning, technical 
assistance, or job training in rural areas. Also extended are 
the Rural Cooperative Development Grants program, the Rural 
Microenterprise Assistance Program created by the 2008 Farm 
Bill, the Appropriate Technology Transfer for Rural Areas 
Program, the Value-Added Producers Grant Program with a 
priority for projects in which at least 25 percent of 
recipients are beginning farmers or socially-disadvantaged. The 
Business and Industry Direct and Guaranteed Loan Program is 
extended. The bill also reserves funds made available through 
the program for projects that include the processing, 
distribution, storage, and marketing of locally produced 
agricultural food products.

General Rural Development Programs

    The reported bill reauthorizes general loan and grant 
authorities for rural development. Additionally, it authorizes 
the Secretary to give priority to applications submitted for 
funds through Rural Development programs that support regional 
approaches to community and economic development. These 
applications should reflect the participation of multiple 
stakeholders in the service area of the proposal. The 
applications should also have clear objectives and an 
explanation of performance measures that will be used to 
determine progress in meeting those objectives.

Access to Broadband Services in Rural Areas

    Through the Broadband Program, USDA provides funds for the 
construction, improvement, and acquisition of facilities and 
equipment needed to provide broadband service in rural 
communities. The reported bill authorizes USDA to begin 
providing combinations of grants and loans for the expansion of 
broadband service. The program will target funds to rural 
communities isolated from significant population centers.

Distance Learning and Telemedicine

    This program provides competitive grant and loan funding 
that supports equipment and infrastructure improvements that 
enhance telecommunications capabilities at educational and 
medical facilities and is reauthorized through 2017.

Rural Energy Savings Program

    The reported bill authorizes a new loan program, 
administered by USDA, which will issue zero-interest loans to 
any electric cooperative or coordinated group of electric 
cooperatives for the purpose of lending the funds to their 
customers to make energy saving retrofit and structural 
improvements.

                          TITLE VII--RESEARCH

    The reported bill reauthorizes critical agricultural 
research programs that were reauthorized in the 2008 Farm Bill. 
The Committee recognized the need to streamline the authorities 
in this title and permitted some authorities that had not 
received funding in recent years to expire.

Foundation for Food and Agriculture Research

    The Committee recognizes the significant need for 
agricultural research and the challenge to find funding in the 
current fiscal environment. As such the reported bill creates a 
new non-profit foundation, the Foundation for Food and 
Agriculture Research, to leverage private funding, matched with 
federal dollars, to support public agricultural research. This 
innovative approach will foster continued innovation in 
agricultural research.

Specialty Crop Research Initiative

    The reported bill reauthorizes this program and provides 
mandatory funding over 10 years for the Specialty Crop Research 
Initiative, ensuring funding will be available for key research 
projects for fruits, vegetables and other specialty crops.

Agriculture and Food Research Initiative

    The reported bill reauthorizes the Agriculture and Food 
Research Initiative (AFRI) program through fiscal year 2017 
without policy changes; continuing to provide competitive 
grants for basic and applied research.

University Research and Extension Service

    The bill reauthorizes agricultural research activities at 
1862, 1890 and 1994 land-grant institutions and funding for 
extension service activities through fiscal year 2017 without 
policy changes.

National Agricultural Research, Extension, Education and Economics 
        (NAREEE) Advisory Board

    The bill reauthorizes the NAREEE advisory board through 
fiscal year 2017, which provides consultation to USDA, industry 
and Congress on agricultural research priorities. The 
legislation directs the NAREEE advisory board to consult with 
industry groups on agricultural research, extension, education, 
and economics, and to make recommendations to the Secretary 
based on that consultation.

Policy Research Centers

    This program provides competitive grants for cooperative 
agreements with policy research centers to conduct research and 
education programs concerning the effect of policies on the 
farm and agricultural sectors, the environment, rural families 
and economies, and consumers, food and nutrition through fiscal 
year 2017.

Capacity Building Grants for Non-Land Grant Colleges of Agriculture 
        (NLGCA) Institutions

    This program provides competitive grants to assist NLGCA 
institutions in maintaining and expanding the capacity to 
conduct education, research, and outreach activities related to 
agriculture, renewable resources, and other similar 
disciplines. It is continued through fiscal year 2017 without 
change.

Organic Research Initiative

    Funding for the Organic Research and Extension Initiative 
is provided over 5 years.

Beginning Farmer and Rancher Development Program

    The bill continues the Beginning Farmer program, which 
develops and offers education, training, outreach and mentoring 
programs to ensure the success of the next generation of 
farmers. The bill expands eligibility to include military 
veterans who wish to begin a career in agriculture.

Addresses Critical Shortages of Veterinarians

    The reported bill seeks to help address the shortage of 
veterinarians in rural agricultural areas by supporting 
veterinary education and rural recruitment.

Increased Transparency for Budget Submissions

    In order to increase transparency and reduce duplication 
across agencies, the reported bill requires USDA to provide 
more detailed information regarding expected research 
expenditures when submitting its annual budget request to 
Congress.

                          TITLE VIII--FORESTRY


Healthy Forest Reserve Program

    The bill reauthorizes the Healthy Forest Reserve Program 
(HFRP), a voluntary program that enhances forest ecosystems to 
promote the recovery of threatened and endangered species, 
improve biodiversity, and enhance carbon sequestration.

Forest Legacy Program

    This program protects water quality, provides habitat, 
recreational opportunities and other public benefits on our 
working forests; making sure that we maintain our forests, the 
program is extended through fiscal year 2017.

Community Forest and Open Space Conservation Program

    The Community Forest and Open Space Conservation Program is 
reauthorized. This program leverages federal dollars to help 
communities, including tribes, to protect forests in threat of 
conversion to non-forest use.

Forest Stewardship Program

    Private forest landowners benefit from the landscape level 
information that Forest Stewardship Plans developed through 
this program provide. The reported bill seeks to make sure that 
landowners have the resources necessary to manage their forests 
in an economically and environmentally effective manner by 
continuing this program through 2017.

International Forestry

    The International Forestry Program encourages the trade of 
legally harvested timber. It also supports domestic production 
by working to prevent invasive species from entering the 
country. The program is reauthorized through 2017.

Urban and Community Forestry

    This program helps communities develop and maintain urban 
forestry programs, which protect urban trees and forests, and 
is reauthorized through 2017.

Stewardship Contracting

    The reported bill provides permanent authority for 
Stewardship End Result Contracting.

                            TITLE IX--ENERGY


Rural Energy for America Program

    The reported bill reauthorizes the program through fiscal 
year 2017 with $48.2 million in mandatory funding for each 
fiscal year and provides for a streamlined application process 
for farmers and rural businesses applying for small and medium 
sized projects.

Biomass Crop Assistance Program 

    The Biomass Crop Assistance Program (BCAP) program created 
by the 2008 Farm Bill provides support for farmers and ranchers 
who wish to plant energy crops to produce and use biomass crops 
for conversion to advanced biofuels or bioenergy. Agricultural 
producers in BCAP project areas may contract with the 
Department of Agriculture to receive biomass crop establishment 
payments up to 50 percent of costs, plus annual payments in 
amounts determined by the Secretary in subsequent years to help 
to compensate for lost opportunity costs until crops are 
established. The program is reauthorized through fiscal year 
2017 with $38.6 million in mandatory funding each fiscal year. 
The reported bill revises the Collection, Harvest, Storage and 
Transportation assistance provisions to limit payments for 
wood-based biomass, while limiting the amount of funding that 
can be used for this assistance.

BioPreferred Program and Federal Government Procurement Preference 
        Program

    The bill reauthorizes USDA's BioPreferred Program and the 
Federal Government Procurement Preference Program with 
modifications to include reporting of biobased purchases by the 
federal agencies, as well as providing for auditing and 
enforcement of biobased purchasing activities. The reported 
bill provides $3 million in mandatory funding each fiscal year.

Biorefinery Assistance Program

    This program provides loan guarantees for renewable energy 
projects and is extended through fiscal year 2017 with $100 
million in mandatory funds for fiscal year 2013 and $58 million 
for each of fiscal years 2014 and 2015. Eligibility for the 
program has been expanded to include biobased manufacturing, 
which is defined as a facility that uses agricultural products 
to make end user products on a commercial scale, including 
renewable chemicals.

Bioenergy Program for Advanced Biofuels

    This program provides production payments for advanced 
bioenergy sources such as methane digesters, advanced biofuels 
and biopower and is reauthorized through fiscal year 2017.

Biodiesel Fuel Education Program

    The Biodiesel Fuel Education Program provides competitive 
grants to non-profit entities to provide information about the 
benefits of biodiesel fuel use to government and private 
organizations. The bill reauthorizes the program through fiscal 
year 2017 with $1 million per fiscal year in mandatory funding.

Biomass Research and Development Initiative (BRDI)

    The bill reauthorizes research on biomass feedstock 
development for bioenergy and biobased products through fiscal 
year 2017 with $26 million in mandatory funding for each fiscal 
year.

Feedstock Flexibility Program for Bioenergy Producers

    The Feedstock Flexibility Program assures that sugar 
imports do not result in increased forfeitures of U.S. sugar 
and it is reauthorized through 2017.

Community Wood Energy Program

    This program provides competitive, cost-share grants for 
communities to supply public buildings with energy from 
sustainably-harvested wood from the local area and is 
reauthorized through fiscal year 2017.

                TITLE X--SPECIALTY CROPS & HORTICULTURE


Farmers Market and Local Food Promotion Program

    The Farmers Market and Local Food Promotion Program 
authorized in the reported bill continues the efforts from the 
Farmers Market Promotion Program by providing competitive 
grants to improve and expand farmers markets, roadside stands, 
community-supported agriculture programs, and other direct 
producer-to-consumer market opportunities. The program 
authority is expanded to also provide assistance in developing 
local food system infrastructure and central regional food 
development centers like food hubs and terminal markets that 
help producers with training, aggregating, distributing and 
other market activities.

Local Food Data and Evaluation

    The bill expands collection of data related to local and 
regional food systems and directs USDA to evaluate the success 
of and recommend improvements to current programs designed to 
strengthen access to local foods.

Specialty Crop Block Grants

    The reported bill adjusts the grant allocation formula from 
solely the value of specialty crop production in a state to the 
average of both the value of specialty crop production and 
acres of specialty crops planted in a state. The bill also 
allows funding for multistate projects related to pest and 
disease, food safety, and commodity-specific projects.

Continues Data Collection on Organics

    The bill improves coordination between the Agriculture 
Marketing Service and the Risk Management Agency to ensure risk 
management tools are sufficient.

National Organic Program

    The National Organic Program is reauthorized and one-time 
mandatory funding is provided for technology upgrades to 
improve program performance.

National Organic Program

    The bill continues to provide assistance to organic 
producers seeking certification under the National Organic 
Program. This program will provide up to 75 percent of the cost 
of certification, but no more than $750.

Organic Promotion

    The bill directs the Secretary to assess the feasibility of 
creating an organic promotion program.

Pest and Disease Management

    The bill consolidates the National Clean Plant Network and 
the Pest and Disease Management and Disaster Prevention 
Program.

                        TITLE XI--CROP INSURANCE


Supplemental Coverage Option

    The reported bill creates a Supplemental Coverage Option 
insurance policy that allows producers to purchase additional 
coverage on an area yield and loss basis. The coverage option 
establishes a coverage deductible of 21 percent for producers 
enrolled in ARC and 10 percent for all other producers.

Crop Insurance for Fruit and Vegetable Producers

    Crop insurance coverage is expanded for underserved crops 
and regions, including fruit and vegetable producers. The bill 
provides additional assistance for underserved producers to 
partner with private developers of crop insurance to create 
improved insurance products. The bill also allows the Risk 
Management Agency (RMA) to conduct research and development on 
new or improved crop insurance products.

Stacked Income Protection Plan for Producers of Upland Cotton

    The reported bill creates a new stand-alone revenue 
protection coverage program for cotton growers. The program 
covers between 10 percent and 30 percent of expected county 
revenue, using the expected price established under existing 
Group Risk Income Protection and higher of the expected county 
yield or average county yield for the most recent five crop 
years, dropping the highest and lowest years. The program 
utilizes a multiplier factor to establish the maximum 
protection at not more than 120 percent, provides distinct 
coverage for irrigated and non-irrigated practices, and 
provides 80 percent premium subsidy.

Peanut Revenue Crop Insurance

    The reported bill creates a separate peanut revenue 
insurance product with an effective price for peanut growers 
using the Rotterdam price index with an adjustment to reflect 
the farmer stock price.

Improves Crop Insurance for Beginning Farmers and Ranchers

    The reported bill contains provisions to help these young 
and beginning farmers fully utilize the Federal crop insurance 
program. Beginning farmers and ranchers are given a 10 
percentage point discount for all crop insurance premiums. The 
bill also provides beginning farmers and ranchers with an 
improved production history when they have previous farming 
experience or when they face natural disasters.

Enterprise Units

    The reported bill makes the pilot enterprise unit premium 
assistance permanent and allows producers the choice to 
separate their irrigated and non-irrigated enterprise unit 
coverage on the farm.

Standard Reinsurance Agreement

    The reported bill requires the FCIC Board to ensure budget 
neutrality to the maximum extent practicable during 
renegotiation of the Standard Reinsurance Agreement (SRA), and 
return any savings realized in these renegotiations to RMA 
programs

                        TITLE XII--MISCELLANEOUS


Outreach for Socially Disadvantaged Farmers

    The reported bill continues grants to organizations that 
work with minority farmers to help them acquire, own, operate, 
and retain farms and ranches and equally participate in all 
USDA programs.

Continues Advocacy and Outreach Efforts

    The reported bill reauthorizes the Office of Advocacy and 
Outreach, which was created in the 2008 Farm Bill to increase 
the viability and profitability of small farms and ranches, 
beginning farmers or ranchers, and socially disadvantaged 
farmers or ranchers.

Wildlife Reservoir Zoonotic Disease Initiative

    To ensure continued research to combat devastating 
livestock diseases, the reported bill includes a Wildlife 
Reservoir Zoonotic Disease Initiative to improve diagnostic 
testing and vaccines for bovine tuberculosis, brucellosis, and 
other zoonotic diseases.

Ensures Health of American Livestock

    The reported bill reauthorizes the Trichinae Certification 
Program and the National Aquatic Health Plan.

Sheep Production and Marketing Grant Program

    The reported bill includes a competitive grant program to 
enhance production and marketing of the sheep industry.

Pilot Program To Eradicate Feral Swine

    The reported bill includes a pilot project that directs the 
Natural Resources Conservation Service and the Animal and Plant 
Health Inspection Service to work together on eradication 
methods that can be used throughout the country.

Grants To Improve Agricultural Labor Supply, Stability, Safety, and 
        Training

    The reported bill reauthorizes the Agricultural Career and 
Employment Grants Program. Funds may be used to assist 
agricultural employers and farmworkers to develop skills, the 
provision of agricultural labor market information, 
transportation and short-term housing.

                          LEGISLATIVE HISTORY


                                Hearings


Agriculture: Growing America's Economy

    On February 17, 2011, the Committee held a hearing to 
discuss growing America's economy through agricultural policy. 
Witnesses giving testimony included: Honorable Thomas Vilsack, 
Secretary, United States Department of Agriculture, Washington, 
DC; Keith Creagh, Director, Michigan Department of Agriculture 
and Rural Development, Lansing, MI; Thomas M. Hoenig, 
President, Federal Reserve Bank of Kansas City, Kansas City, 
MO; Fred Yoder, Former President, National Corn Growers 
Association, Plain City, OH; Dr. Joe Outlaw, Economist, Texas 
A&M University, College Station, TX.

Fundamentals and Farming: Evaluating High Gas Prices and How New Rules 
        and Innovative Farming Can Help

    On March 30, 2011, the Committee held a hearing to evaluate 
high gas prices and examine how new rules and innovative 
farming can help with this issue. Witnesses giving testimony 
included: Dr. Richard G. Newell, Administrator, Energy 
Information Administration, United States Department of Energy, 
Washington, DC; Dan M. Berkovitz, General Counsel, Commodity 
Futures Trading Commission, Washington, DC; Stanley R. 
Townsend, on behalf of the Kansas Farm Bureau, Weskan, KS; Jeff 
Broin, President and CEO of POET, LLC, Co-Chairman of Growth 
Energy, Sioux Falls, SD; Dr. Bruce E. Dale, Professor of 
Chemical Engineering and Materials Science, Michigan State 
University, Lansing, MI.

Food for Thought: The Role, Risks and Challenges for American 
        Agriculture and the Next Farm Bill in Meeting the Demands of a 
        Growing World

    On May 26, 2011, the Committee held a hearing to discuss 
the role, risks and challenges for American agriculture and the 
next farm bill in meeting the demands of a growing world. 
Witnesses giving testimony included: Honorable Tom Vilsack, 
Secretary, United States Department of Agriculture, Washington, 
DC; Honorable Dan Glickman, Co-Chair of the Chicago Council's 
Global Agricultural Development Initiative, Chicago, IL; former 
Secretary, United States Department of Agriculture, Washington, 
DC; Barry Mumby, Senior Member, Wakeshma Farms LLC, Colon, MI; 
Dr. Andrew Rosenberg, Senior Vice President for Science and 
Knowledge, Conservation International, Arlington, VA; Douglas 
DeVries, Senior Vice President, Global Marketing Services, 
Agriculture and Turf Division, Deere and Company, Moline, IL; 
Dr. Per Pinstrup-Andersen, H.E. Babcock Professor of Food, 
Nutrition, and Public Policy, J. Thomas Clark Professor of 
Entrepreneurship, and Professor of Applied Economics, Cornell 
University, Professor of Agricultural Economics, Copenhagen 
University, Ithaca, NY.

Opportunities for Growth: Michigan and the 2012 Farm Bill: East 
        Lansing, MI

    On May 31, 2011, the Committee held a field hearing to 
consider opportunities for growth for Michigan in the 2012 Farm 
Bill in East Lansing, MI. Witnesses giving testimony included: 
Dr. Lou Anna K. Simon, President, Michigan State University, 
East Lansing, MI; Dr. J. Ian Gray, Vice President for Research 
and Graduate Studies, Michigan State University, East Lansing, 
MI; Dr. Thomas G. Coon, Director, Michigan State University 
Extension, East Lansing, MI; Clark Gerstacker, Corn and Soybean 
Production, Member, Michigan Corn Growers Association, Midland, 
MI; Ben LaCross, Cherry Production, Chair, American Farm 
Bureau, Young Farmers and Ranchers Committee, Cedar, MI; Ray 
Van Driessche, Sugar Beet Production and Conservation, Director 
of Community and Government Relations, Michigan Sugar Company, 
Bay City, MI; Julia Baehre Rothwell, Apple Production, Chair, 
Michigan Apple Association, Belding, MI; Ken Nobis, Dairy 
Production, President, Michigan Milk Producers Association, 
Novi, MI; Peter B. Blauwiekel, Pork Production, Member, 
Michigan Pork Producers Council, Fowler, MI; Karen Serfass, 
Forestry Production, Past President, Michigan Forest 
Association, Dafter, MI; Kristen Holt, President, Quality 
Assurance International, Senior Vice President, Food Safety and 
Quality, NSF International, Ann Arbor, MI; Eric Davis, 
Director, Food Initiative, United Way for Southeastern 
Michigan, Detroit, MI; Dennis West, President, Northern 
Initiatives, Marquette, MI; James Reid, Reid Dairy Farm, Grant 
Township, MI; David Armstrong, President and Chief Executive 
Officer, Greenstone Farm Credit Services, East Lansing, MI.

Farm Bill Accountability: The Importance of Measuring Performance, 
        While Eliminating Duplication and Waste

    On June 23, 2011, the Committee held a hearing on Farm Bill 
accountability and the importance of measuring performance 
while eliminating the duplication of waste. Witnesses giving 
testimony included: Honorable Dallas Tonsager, Under Secretary, 
Rural Development, United States Department of Agriculture, 
Washington, DC; Honorable Michael Scuse, Acting Under 
Secretary, Farm and Foreign Agricultural Services, United 
States Department of Agriculture, Washington, DC; Honorable 
Harris Sherman, Under Secretary, Natural Resources and 
Environment, United States Department of Agriculture, 
Washington, DC; Honorable Kevin Concannon, Under Secretary, 
Food, Nutrition, and Consumer Services, United States 
Department of Agriculture, Washington, DC; Honorable Joe 
Leonard, Assistant Secretary for Civil Rights, United States 
Department of Agriculture, Washington, DC; Phillis Fong, 
Inspector General, United States Department of Agriculture, 
Washington, DC; Brett Blankenship, Blankenship Brothers, 
Washtucna, WA; Masouda Omar, Manager of Business Finance Loan 
Production, Colorado Housing and Finance Authority, Denver, CO.

The State of Livestock in America

    On June 28, 2011, the Committee held a hearing on the state 
of livestock in America. Witnesses giving testimony included: 
Dr. Joe Glauber, Chief Economist, United States Department of 
Agriculture, Washington, DC; Dr. Greg Parham, Administrator, 
Animal and Plant Health Inspection Service, United States 
Department of Agriculture, Washington, DC; Alfred V. Almanza, 
Administrator, Food Safety and Inspection Service, United 
States Department of Agriculture, Washington, DC; Dave White, 
Chief, National Resources Conservation Service, United States 
Department of Agriculture, Washington, DC; Rick Sietsema, 
Farmer, Sietsema Farms, Allendale, MI; Dennis O. Jones, Pork 
Producer, South Dakota Farmers Union, Bath, SD; Steven D. Hunt, 
Chief Executive Officer, U.S. Premium Beef, LLC, Kansas City, 
MO; Frank Harper, President-elect, Kansas Livestock 
Association, Sedgwick, KS; Michael Welch, President and CEO, 
Harrison Poultry, Inc., Bethlehem, GA; Hans McPherson, Rancher 
and Member, Montana Farm Bureau, Stevensville, MT.

Growing Jobs in Rural America

    On July 14, 2011, the Committee held a hearing to discuss 
ways to grow jobs in rural America. The witnesses on the first 
panel were: Bruce Graham, CEO, Indiana Statewide Association of 
Rural Electric Cooperatives, Inc., Indianapolis, IN; Zac 
Stewart, Ambient, LLC, Ignacio, CO; Paul Bony, Director, 
Residential Market Development, Climate Master, Oklahoma City, 
OK; Dr. Helen Sanders, Vice President, Technical Business 
Development, SAGE Electrochromics, Inc, Faribault, MN. The 
witnesses on the second panel were: Dr. Marc Verbruggen, 
President and CEO, NatureWorks LLC, Wayzata, MN; Dr. Oliver 
Peoples, Founder and Chief Scientific Officer, Metabolix, Inc., 
Cambridge, MA; John McIntosh, Vice President of Sales and 
Marketing, Signature Crypton Carpet, Dalton, GA; Dennis Hall, 
Assistant Director, Ohio BioProducts Innovation Center, 
Columbus, OH.

Opportunities for Specialty Crops and Organics in the Farm Bill

    On July 28, 2011, the Committee held a hearing to discuss 
opportunities for specialty crops and organics in the Farm 
Bill. The witnesses on the first panel were: Dr. Catherine 
Woteki, Under Secretary, USDA, Research, Education and 
Economics, Washington, DC; Ann Wright, Deputy Under Secretary, 
USDA, Marketing and Regulatory Programs, Washington, DC. The 
witnesses on the second panel were: Glenn Abbett, Manager, 
Abbett Farms, LLC, LaCrosse, IN; Paul Bencal, Owner, Paul 
Bencal Farm, Ransomville, NY; Dennis Engelhard, Owner, 
Engelhard Family Farms, Unionville, MI; Kim Tait, Owner, Tait 
Farm Foods, Inc., Centre Hall, PA; Charles Wingard, Director of 
Field Operations, W.P. Rawls and Sons, Pelion, SC; Robert 
Woolley, Dave Wilson Nursery, Hickman, CA.

Looking Ahead: Kansas and the 2012 Farm Bill

    On August 25, 2011, the Committee held a field hearing in 
Kansas to discuss ways to grow agriculture and strengthen rural 
communities. The witnesses on the first panel were: Honorable 
Sam Brownback, Governor, state of Kansas, Topeka, KS; Dr. Kirk 
Schulz, President, Kansas State University, Manhattan, KS. The 
witnesses on the second panel were: Steve Baccus, President, 
Kansas Farm Bureau, Minneapolis, KS; Karl Esping, Kansas 
Sunflower Commission, Lindsborg, KS; Kent Goyen, Kansas Cotton 
Association, Cunningham, KS; Ken Grecian, Kansas Livestock 
Association, Palco, KS; Bob Henry, Kansas Soybean Association, 
Robinson, KS; Kenneth McCauley, Kansas Corn Growers, White 
Cloud, KS; David Schemm, Kansas Association of Wheat Growers, 
Sharon Springs, KS; Gregory Shelor, Kansas Grain Sorghum 
Producers, Minneola, KS. The witnesses on the third panel were: 
Ron Bach, High Plains Farm Credit, Jetmore, KS; Kathleen 
Brinker, Nemaha-Marshall Electric Cooperative Association, 
Inc., Axtell, KS; Ron Brown, Kansas Association of Conservation 
Districts, Fort Scott, KS; Barth Crouch, Playa Lakes Joint 
Venture, Salina, KS; Robert Tempel, Windriver Grain LLC, Garden 
City, KS; Jeff Whitham, Western State Bank, Garden City, KS; 
Karen Wilder, The Schwan Food Company, Salina, KS.

Energy and Economic Growth for Rural America

    On February 15, 2012, the Committee held a hearing to 
examine USDA rural development and energy programs, and to 
review policies to promote rural economic development and job 
growth in connection with development of the 2012 farm 
legislation. The witness on the first panel was: The Honorable 
Thomas Vilsack, Secretary, USDA, Washington, DC. The witnesses 
on the second panel were: Mathias McCauley, Regional Planning 
and Community Development, Northwest Michigan Council of 
Governments, National Association of Counties and National 
Association of Development Organizations, Traverse City, MI; 
Florine Raitano, Rural Community Assistance Corp, Dillom, CO; 
Mark Rembert, Energize Clinton County, Wilmington, OH; Charles 
Fluharty, Rural Policy Research Institute, Columbia, MO. The 
witnesses on the third panel were: Steve Flick, Show Me Energy 
Cooperative, National Farmers Union, Centerview, MO; Lee 
Edwards, Virent, Inc., Madison, WI; Bennie Hutchins, Energy 
Program, Ag Energy Resources, LLC, Brookhaven, MS; William 
Greving, Greving Farms Inc., Prairie View, KS.

Strengthening Conservation through the 2012 Farm Bill

    On February 28, 2012, the Committee held a hearing to 
review performance of USDA agriculture conservation programs. 
The witnesses on the first panel were: Bruce Nelson, Farm 
Service Agency, USDA, Washington, DC; David White, Chief, 
Natural Resources Conservation Service, USDA, Washington, DC., 
The witnesses on the second panel were: Jeff Trandahl, National 
Fish and Wildlife Foundation, Washington, DC; Becky Humphries, 
Great Lakes/Atlantic Regional Office, Ducks Unlimited, Inc., 
Ann Arbor, MI; Dean Stoskopf, Stoskopf Farms, Hoisington, KS; 
Carl Mattson, George Mattson Farms, Chester, MT; Darrel Mosel, 
Land Stewardship Project, Gaylord, MN; Earl Garber, National 
Association of Conservation Districts, Washington, DC.

Healthy Food Initiatives, Local Production, and Nutrition

    On March 7, 2012, the Committee held a hearing to examine 
policies to promote regional and local agricultural markets and 
improve access to healthy foods, and to review federal food 
assistance programs. The witness on the first panel was: 
Honorable Thomas Vilsack, Secretary, USDA, Washington, DC. The 
witnesses on the second panel were: Dan Carmody, Eastern Market 
Corporation, Detroit, MI; Ronald McCormick, Sustainable 
Agriculture, Produce, Floral and Local Sourcing, Wal-Mart 
Stores, Bentonville, AR; Jody Hardin, Grady, AR; Anne Goodman, 
Cleveland Food Bank, Cleveland, OH; John Weidman, One Penn 
Center, Philadelphia, PA.

Risk Management and Commodities in the 2012 Farm Bill

    On March 15, 2012, the Committee held a hearing to examine 
risk management and commodity programs. The witness on the 
first panel was: Michael Scuse, Acting Under Secretary, Farm 
and Foreign Agricultural Services, USDA, Washington, DC. The 
witnesses on the second panel were: Hope Hills, Spicebush Creek 
Farms, Bangor, MI; Jarvis Garetson, Copeland, KS; Bob Carden, 
Carden & Associates, Inc, Winter Haven, FL; Steve Rutledge, 
Farmers Mutual Hail Insurance Company, West Des Moines, IA. The 
witnesses on the third panel were: Steve Wellman, American 
Soybean Association, Syracuse, NE; Pam Johnson, National Corn 
Growers Association, Floyd, IA; Erik Younggren, National 
Association of Wheat Growers, Hallock, MN; Jimbo Grissom, 
Western Peanut Growers Association, Seminole, TX; Travis 
Satterfield, Satterfield Farms, Benoit, MS; Chuck Coley, 
National Cotton Council, Vienna, GA. The witnesses on the third 
panel were: Roger Johnson, National Farmers Union, Washington, 
DC; Bob Stallman, American Farm Bureau Federation, Washington, 
DC; Ryan Best, Future Farmers of America, Portales, NM.

Committee Consideration

    On April 26, 2012, the Committee met in open session to 
mark up the legislation. Those members in attendance included: 
Senators Stabenow, Roberts, Leahy, Harkin, Conrad, Baucus, 
Nelson, Brown, Casey, Klobuchar, Bennet, Gillibrand, Lugar, 
Cochran, Chambliss, Johanns, Boozman, Grassley, Thune and 
Hoeven. Committee Members made opening statements starting at 
10:44 a.m. A substitute amendment containing a Manager's 
Amendment to the Committee Print was accepted by voice vote, 
with Senators Chambliss, Boozman, and Cochran recorded as 
voting no. The substitute was considered the original text for 
the purpose of further amendment. The Committee proceeded by 
considering amendments to each title of the legislation.

                        TITLE XII--MISCELLANEOUS

    An amendment was offered by Senator Chambliss to amend the 
Immigration and Nationality Act to provide for the temporary 
employment of foreign agricultural workers.
    The amendment was withdrawn.
    An amendment was offered by Senator Nelson with Senator 
Johanns to clarify areas classified as rural for the Rural 
Housing Act. The amendment was withdrawn.
    An amendment was offered by Senator Boozman to enable the 
Secretary of Agriculture to determine whether major rules 
promulgated by any Federal agency could have a negative effect 
on access to affordable food. The amendment was withdrawn.
    An amendment was offered by Senator Boozman to transfer 
regulatory authority over child labor regulations for 
agriculture from the Secretary of Labor to the Secretary of 
Agriculture. The amendment was withdrawn.
    An amendment was offered by Senator Baucus with Senators 
Nelson, Klobuchar, and Boozman to clarify payment terms for 
sales of agricultural commodities or products to Cuba under the 
Trade Sanctions Reform and Export Enhancement Act of 2000. The 
amendment was withdrawn.

                         TITLE II--CONSERVATION

    An amendment was offered by Senator Bennet to allow the 
Secretary of Agriculture to waive eligible entity contribution 
requirements for agricultural land easements of special 
significance. The amendment was withdrawn.

                            TITLE III--TRADE

    An amendment was offered by Senator Johanns to require a 
USDA study on the creation of an Under Secretary for Trade and 
Foreign Agricultural Affairs. The amendment was adopted by 
voice vote.

                         TITLE X--HORTICULTURE

    No amendments pertaining to the horticulture title were 
offered.

                          TITLE VII--RESEARCH

    No amendments pertaining to the research title were 
offered.

                            TITLE V--CREDIT

    No amendments pertaining to the credit title were offered 
initially. After it was closed, Senator Brown asked for 
unanimous consent to revisit the title. An amendment was 
offered by Senator Brown to provide USDA with the authority to 
conduct pilot projects on a limited scale to test different 
approaches that could improve program delivery and consumer 
service. The amendment was adopted by voice vote.

                      TITLE VI--RURAL DEVELOPMENT

    An amendment was offered by Senator Casey to assist in 
production of locally and regionally produced food through the 
RMAP program. The amendment was withdrawn.
    Prior to a vote on final passage of the bill, Senator Brown 
asked unanimous consent to revisit title VI to offer an 
amendment. He offered an amendment to create a temporary task 
force directed to help make USDA rural development programs 
more accessible and user-friendly. The amendment was withdrawn.

                          TITLE VIII--FORESTRY

    No amendments pertaining to the forestry title were 
offered.

                            TITLE IX--ENERGY

    An amendment was offered by Senator Conrad with Senator 
Lugar to provide mandatory funding for agricultural energy 
programs. A second degree amendment was offered by Senator 
Chambliss to strike the language that calls for an offset and 
instead uses the savings of the legislation to fund Senator 
Conrad's amendment. Senator Chambliss' second degree amendment 
was adopted by unanimous consent and Senator Conrad's amendment 
was adopted by voice vote, with Senator Roberts recorded as 
voting no.
    An amendment was offered by Senator Hoeven to confirm that 
USDA can provide REAP funds for blender pumps. The amendment 
was withdrawn.

                          TITLE IV--NUTRITION

    An amendment was offered by Senator Brown on behalf of 
Senator Casey with Senators Gillibrand and Leahy to clarify the 
authority of the Secretary of Agriculture to purchase emergency 
food. After a discussion, an agreement was made to delay the 
consideration of the amendment before final passage of the bill 
to give USDA and the Secretary an opportunity to make an 
assessment of the amendment.
    An amendment was offered by Senator Boozman to close the 
LIHEAP loophole entirely and use part of the savings to 
increase reimbursements for school breakfast and lunches to 
offset increased costs from new nutrition standards. The 
amendment was withdrawn.
    An amendment was offered by Senator Gillibrand to protect 
children from harm due to SNAP cuts. The amendment was 
withdrawn.
    An amendment was offered by Chairwoman Stabenow on behalf 
of Senator Leahy to allow greater flexibility in the use of 
benefits for the purchase of community-supported agriculture 
(CSA) share. A second degree amendment was offered by 
Chairwoman Stabenow on behalf of Ranking Member Roberts. The 
second degree amendment was adopted by unanimous consent and 
the first degree amendment was adopted by voice vote.
    The Committee revisited the amendment offered by Senator 
Brown on behalf of Senator Casey with Senators Gillibrand and 
Leahy to clarify the authority of the Secretary of Agriculture 
to purchase emergency food. The amendment, as modified, was 
adopted by voice vote. Committee members were in agreement that 
the amendment should not adversely impact the $4 billion in 
deficit reductions from nutrition spending agreed to by members 
of the Committee.

                        TITLE XI--CROP INSURANCE

    No amendments pertaining to the crop insurance title were 
offered.

                          TITLE I--COMMODITIES

    An amendment was offered by Senator Baucus with Senators 
Conrad, Harkin, and Hoeven to make changes to the individual 
program under ARC. The amendment was adopted by voice vote.

                             FINAL PASSAGE

    The legislation, as amended and subject to technical 
changes, was reported out by roll call vote of 16 yeas and 5 
nays with the requisite quorum present, at which point the 
Committee adjourned.
    On May 24, 2012, the Committee held a business meeting to 
vote on changes to the legislation. Those members in attendance 
included: Senators Stabenow, Roberts, Leahy, Conrad, Nelson, 
Casey, Klobuchar, Bennet, Gillibrand, Lugar, Johanns, and 
Grassley. The bill as modified was ordered reported by voice 
vote.

                            ESTIMATED COSTS

    In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:
    Congressional Budget Office letter is attached as pages 49A 
through 49J.

S. 3240--Agriculture Reform, Food, and Jobs Act of 2012

    Summary: S. 3240 would amend and extend a number of major 
programs administered by the U.S. Department of Agriculture 
(USDA), including those addressing farm income support, food 
and nutrition, land conservation, trade promotion, rural 
development, research, forestry, energy, horticulture, and crop 
insurance.
    When combined with estimated spending under CBO's baseline 
projections for those programs, CBO estimates that enacting S. 
3240 would bring total direct spending for those USDA programs 
to $970 billion over the 2013-2022 period--$23.1 billion less 
than we project would be spent if those programs were continued 
as under current law.
    Pay-as-you-go procedures apply because enacting the 
legislation would affect direct spending. Enacting S. 3240 
would not affect revenues.
    The act also would authorize appropriations over the 2013-
2017 period for existing and new USDA programs involving 
research and education, nutrition, trade promotion, rural 
development, credit assistance, forestry, and conservation 
initiatives. CBO estimates that implementing those provisions 
would cost about $29 billion over the next five years, assuming 
appropriation of the necessary amounts.
    S. 3240 contains no intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act (UMRA).
    The nontax provisions of S. 3240 would impose private-
sector mandates, as defined in UMRA, on entities in the dairy 
industry and spectators of animal fighting ventures. Because 
the cost of some of the mandates would depend on future 
regulations, CBO cannot determine whether the aggregate cost of 
the mandates would exceed the annual threshold established in 
UMRA for private-sector mandates ($146 million in 2012, 
adjusted annually for inflation).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 3240--relative to CBO baseline 
projections--is shown in Table 1. The costs of this legislation 
fall within budget functions 150 (international affairs), 270 
(energy), 300 (natural resources and environment), 350 
(agriculture), 450 (community and regional development), and 
600 (income security).

                           TABLE 1.--SUMMARY OF ESTIMATED BUDGETARY EFFECTS OF S. 3240 AS PASSED BY THE SENATE ON JUNE 21, 2012
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        By fiscal year, in millions of dollars--
                               -------------------------------------------------------------------------------------------------------------------------
                                  2013      2014      2015      2016      2017      2018      2019      2020      2021      2022    2013-2017  2013-2022
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                                               CHANGES IN DIRECT SPENDING

Estimated Budget Authority....       -93      -729    -2,852    -2,253    -2,222    -2,984    -2,838    -2,918    -2,871    -2,745     -8,149    -22,504
Estimated Outlays.............       -24    -1,714    -2,956    -2,153    -2,209    -2,806    -2,774    -2,871    -2,870    -2,767     -9,055    -23,143


                                                      CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level.     6,859     7,354     7,393     7,421     7,465     1,238       627       638       650       662     36,493     40,308
Estimated Outlays.............     2,845     5,165     6,606     7,096     7,325     4,693     2,450     1,172       816       677     29,036    38,844
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Components may not sum to totals because of rounding.

    Basis of estimate: For this estimate, CBO assumes that S. 
3240 will be enacted around the end of fiscal year 2012. The 
legislation would provide direct spending authority for most of 
the USDA programs authorized, amended, or created by the 
legislation through the 2013-2017 period. Following the 
baseline projection rules of section 257 of the Balanced Budget 
and Emergency Deficit Control Act, CBO estimates the 10-year 
costs of S. 3240 by assuming that most of those programs 
continue to operate beyond that five-year authorization period.
    A description of the major budgetary effects of each title 
of the act, including changes in direct spending for mandatory 
programs and changes in spending that are subject to future 
appropriation for discretionary programs, was provided in CBO's 
cost estimate for S. 3240 as introduced on May 24, 2012.

Direct Spending

    CBO's estimates of the changes in direct spending that 
would result from enacting the legislation are presented in 
Table 2. All estimates are relative to CBO's March 2012 
baseline projections for spending by mandatory agriculture 
programs. That baseline assumes that the agriculture programs 
authorized by the most recent farm bill (Public Law 110-246) 
continue to operate beyond their statutory expiration dates 
through 2022. (The 2008 farm bill established authorizations 
through 2012 for most such programs.)

                                               TABLE 2.--ESTIMATED EFFECTS ON DIRECT SPENDING FOR S. 3240 AS PASSED BY THE SENATE ON JUNE 21, 2012
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        By fiscal year, in millions of dollars--
                                                       -----------------------------------------------------------------------------------------------------------------------------------------
                                                          2013      2014      2015      2016      2017      2018      2019      2020      2021      2022        2013-2017          2013-2022
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             CHANGES IN OUTLAYS FROM DIRECT SPENDING

Title I--Commodity Programs
    End Direct Payments...............................         0    -4,958    -4,958    -4,958    -4,958    -4,958    -4,958    -4,958    -4,958    -4,958            -19,832            -44,622
    End Countercyclical Payments......................         0         0      -101      -127      -121      -123      -130      -137      -134      -135               -349             -1,008
    End Average Crop Revenue Elections Payments.......         0         0      -863      -637      -470      -479      -452      -547      -632      -533             -1,970             -4,613
    Agriculture Risk Coverage.........................         0     2,906     2,954     3,447     3,444     2,951     3,101     3,118     3,282     3,333             12,751             28,536
    Dairy Program.....................................       -31       -45       -42       -32         9        15        -6        19        45         9               -141                -59
    Supplemental Agriculture Disaster Assistance......        -2       447       217       214       221       219       219       221       225       231              1,097              2,212
    Other Commodity Provisions........................         0        85        17         2         3         3         4         4         3         4                107                125
                                                       -----------------------------------------------------------------------------------------------------------------------------------------
      Subtotal, Title I...............................       -33    -1,565    -2,776    -2,091    -1,872    -2,372    -2,222    -2,280    -2,169    -2,049             -8,336            -19,428
Title II--Conservation
    Conservation Reserve Program......................        27        25      -399      -438      -531      -523      -512      -478      -497      -469             -1,316             -3,795
    Conservation Stewardship..........................        -7       -50       -93      -129      -173      -221      -264      -307      -350      -393               -452             -1,987
    Environmental Quality Incentives Program..........       -70       -89       -80       -92      -100      -111      -121      -101      -100      -100               -431               -964
    Agricultural Conservation Easement................      -222       -72       226       304       211       123        72        56        47        64                447                809
    Regional Conservation Partnership.................        -3        -7        -8        -8       -10       -10       -10       -10       -10       -10                -36                -86
    Other Conservation................................       168        18        18        18        18        10        10        10        10        10                240                290
    Repeal of Wildlife Habitat Incentives.............       -18       -37       -47       -57       -66       -76       -85       -85       -85       -85               -225               -641
                                                       -----------------------------------------------------------------------------------------------------------------------------------------
      Subtotal, Title II..............................      -125      -212      -383      -402      -651      -808      -910      -915      -985      -983             -1,775             -6,374
Title IV--Nutrition
    Utility Allowances................................         0      -130      -530      -540      -540      -540      -550      -550      -550      -560             -1,740             -4,490
    Grant Programs....................................        39        49        49        44        49        24        24        24        24        24                228                345
    Retailer Equipment................................        -7        -8        -8        -8        -8        -8        -8        -8        -8        -8                -39                -79
    Expiring Provisions...............................        33        49        29        23        15        15        15        15        15        15                149                224
                                                       -----------------------------------------------------------------------------------------------------------------------------------------
      Subtotal, Title IV..............................        65       -41      -461      -482      -485      -510      -520      -520      -520      -530             -1,403             -4,000
Title VI--Rural Development
    Value-Added Marketing Grants......................         0         0         5         8        12        12         8         4         1         0                 25                 50
    Rural Microenterprise Program.....................         0         1         2         4         4         3         1         0         0         0                 11                 15
    Rural Water and Waste Disposal....................         0         3        14        13         7         6         5         2         0         0                 37                 50
                                                       -----------------------------------------------------------------------------------------------------------------------------------------
      Subtotal, Title VI..............................         0         4        21        25        23        21        14         6         1         0                 73                115
Title VII--Research, Extension, and Related Matters
    Organic Agriculture Research and Extension........         8        13        16        16        16         8         3         0         0         0                 69                 80
    Specialty Crop Research...........................        13        23        29        48        50        53        50        50        50        50                163                416
    Beginning Farmer and Rancher Development..........         4         9        14        17        17        13         8         4         0         0                 60                 85
    Foundation for Food and Agriculture Research......        10        20        20        30        20         0         0         0         0         0                100                100
                                                       -----------------------------------------------------------------------------------------------------------------------------------------
      Subtotal, Title VII.............................        34        64        79       111       103        74        61        54        50        50                391                681

Title VIII--Forestry..................................         0         1         1         1         1         1         1         1         1         1                  4                  9

Title IX--Energy
    Biorefinery Assistance............................         5        32        50        55        44        20        10         0         0         0                186                216
    Rural Energy for America Program..................        10        30        42        48        48        38        20         4         0         0                178                240
    Biomass Research and Development..................         1         5        16        25        26        25        21        10         1         0                 73                130
    Biomass Crop Assistance...........................         4        12        20        27        31        29        23        16         8         4                 94                174
    Other Energy Programs.............................        -2        -1        12         6         4         1         0         0         0         0                 19                 20
                                                       -----------------------------------------------------------------------------------------------------------------------------------------
      Subtotal, Title IX..............................        18        78       140       161       153       113        74        30         9         4                550                780
Title X--Horticulture
    Farmers Market and Local Food Promotion...........        20        20        20        20        20         0         0         0         0         0                100                100
    National Clean Plant Network......................         3         6         8         9        11        13        14        15        15        15                 37                109
    Specialty Crop Block Grants.......................         8        14        15        15        15        15        15        15        15        15                 67                142
    Other Horticulture................................         1         2         2         2         2         0         0         0         0         0                  9                  9
                                                       -----------------------------------------------------------------------------------------------------------------------------------------
      Subtotal, Title X...............................        32        42        45        46        48        28        29        30        30        30                213                360
Title XI--Crop Insurance
    Supplemental Coverage Option......................         0        32       306       354       345       385       382       395       404       398              1,037              3,001
    CAT Premiums......................................         0        -5       -45       -53       -54       -54       -55       -56       -57       -58               -157               -437
    Enterprise Units..................................         0         5        50        59        60        62        65        67        68        70                174                506
    Adjustment in APH Yields..........................         0         2        26        53        82       111       139       146       147       149                163                855
    Stacked Income Protection for Cotton..............         0         0       263       334       315       417       463       481       473       478                912              3,224
    Peanut Revenue Crop Insurance.....................         0         3        26        30        30        30        30        30        30        30                 89                239
    Beginning Farmer Provisions.......................         0         2        16        20        21        25        27        27        27        28                 59                193
    Crop Production on Native Sod.....................         0        -1        -6       -13       -19       -25       -26       -26       -26       -26                -39               -168
    Participation Effects of Commodity Programs.......       -23      -220      -260      -294      -296      -263      -268      -272      -284      -289             -1,093             -2,469
    Other Crop Insurance Provisions...................         9        30        37        35        33         9        -7       -17       -18       -18                144                 93
                                                       -----------------------------------------------------------------------------------------------------------------------------------------
      Subtotal, Title XI..............................       -14      -152       413       525       517       697       750       775       764       762              1,289              5,036
                                                       -----------------------------------------------------------------------------------------------------------------------------------------

Title XII--Miscellaneous
    Outreach Tor Socially Disadvantaged Farmers.......         3         4         5         5         5         2         1         0         0         0                 22                 25
    Sheep Production and Marketing Grant..............         1         1         0         0         0         0         0         0         0         0                  2                  2
    Noninsured Crop Disaster Assistance...............        -5        63       -40       -52       -52       -52       -52       -52       -52       -52                -86               -346
                                                       -----------------------------------------------------------------------------------------------------------------------------------------
      Subtotal, Title XII.............................        -1        68       -35       -47       -47       -50       -51       -52       -52       -52                -62               -319
        Total Changes in Direct Spending..............       -24    -1,714    -2,956    -2,153    -2,209    -2,806    -2,774    -2,871    -2,870    -2,767             -9,035           -23,143
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: CAT = Catastrophic Crop Insurance; APH = Average Producer History.
Components may not sum to totals because of rounding.

Spending Subject to Appropriation

    CBO estimates that implementing the provisions of S. 3240 
that authorize appropriations would cost $29 billion over the 
2013-2017 period, assuming appropriation of the necessary 
funds. Those discretionary costs are displayed in Table 3. Most 
of those provisions were described in CBO's cost estimate of S. 
3240 as introduced on May 24, 2012.

 TABLE 3.--ESTIMATED EFFECTS ON DISCRETIONARY SPENDING FOR IMPLEMENTING S. 3240 AS PASSED BY THE SENATE ON JUNE
                                                    21, 2012
----------------------------------------------------------------------------------------------------------------
                                                              By fiscal year, in millions of dollars--
                                                  --------------------------------------------------------------
                                                     2013      2014      2015      2016      2017     2013-2017
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Title I--Commodity Programs:
    Estimated Authorization Level................         5         5         5         5         5           25
    Estimated Outlays............................         4         5         5         5         5           24
Title II--Conservation:
    Estimated Authorization Level................       155       130       130       130       130          675
    Estimated Outlays............................        72        92       114       127       130          535
Title III--Trade:
    Estimated Authorization Level................     2,124     2,751     2,754     2,757     2,761       13,146
    Estimated Outlays............................       805     1,967     2,492     2,653     2,719       10,636
Title IV--Nutrition:
    Estimated Authorization......................       318       181       183       187       189        1,058
    Level Estimated Outlays......................       297       186       183       186       189        1,041
Title V--Credit:
    Estimated Authorization Level................        91        91        91        99        99          471
    Estimated Outlays............................        84        91        91        98        99          463
Title VI--Rural Development:
    Estimated Authorization Level................     1,120     1,128     1,137     1,144     1,156        5,685
    Estimated Outlays............................       158       527       812       980     1,065        3,542
Title VII--Research, Extension, and Related
 Matters:
    Estimated Authorization Level................     2,078     2,102     2,128     2,154     2,180       10,641
    Estimated Outlays............................     1,061     1,675     2,110     2,136     2,162        9,144
Title VIII--Forestry:
    Estimated Authorization Level................       590       590       590       590       590        2,949
    Estimated Outlays............................       265       413       501       560       590        2,330
Title IX--Energy:
    Estimated Authorization Level................       228       228       228       228       228        1,140
    Estimated Outlays............................        29        96       160       205       228          718
Title X--Horticulture:
    Estimated Authorization Level................        50        50        50        50        50          250
    Estimated Outlays............................        35        47        50        50        50          231
Title XII--Miscellaneous:
    Estimated Authorization Level................       101        98        98        78        78          453
    Estimated Outlays............................        36        66        88        95        88          373
    Total Changes:
        Estimated Authorization Level............     6,859     7,354     7,393     7,421     7,465       36,493
        Estimated Outlays........................     2,845     5,165     6,606     7,096     7,325       29,036
----------------------------------------------------------------------------------------------------------------
Note: Components may not sum to totals because of rounding.

    Pay-as-you-go-considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting on-budget direct spending 
or revenues. The net changes in outlays that are subject to 
those pay-as-you-go procedures are shown in Table 4.

             TABLE 4.--CBO ESTIMATE OF THE STATUTORY PAY-AS-YOU-GO EFFECTS FOR S. 3240, THE AGRICULTURE REFORM, FOOD, AND JOBS ACT OF 2012, AS PASSED BY THE SENATE ON JUNE 21, 2012
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           By fiscal year, in millions of dollars--
                                                             -----------------------------------------------------------------------------------------------------------------------------------
                                                               2012    2013     2014      2015      2016      2017      2018      2019      2020      2021      2022     2012-2017    2012-2022
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           NET INCREASE OR DECREASE (-) IN THE DEFICIT

Statutory Pay-As-You-Go Impact..............................       0     -24    -1,714    -2,956    -2,153    -2,209    -2,806    -2,774    -2,871    -2,870    -2,767       -9,055      -23,143
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Estimated impact on state, local, and tribal governments: 
S. 3240 contains no intergovernmental mandates as defined in 
UMRA. In general, state, local, and tribal governments would 
benefit from the continuation of existing agricultural 
assistance and the creation of new grant programs.
    Estimated impact on the private sector: The nontax 
provisions of the act would impose private-sector mandates as 
defined in UMRA. Specifically, the act would:
     Expand reporting requirements on manufacturers of 
dairy products. Because manufacturers already report 
information about dairy products to USDA, CBO expects that the 
cost of reporting additional information would not be 
significant.
     Impose mandates on dairy handlers that purchase 
milk from dairy producers participating in the Dairy Market 
Stabilization Program (DMSP). Under the DMSP, when producer 
margins fall below a designated amount, handlers would be 
required to report information to USDA and reduce payments for 
milk to participating dairy producers. In addition, the program 
would require handlers to pay to USDA the amount by which the 
payment was reduced. According to information from industry 
sources, the cost for handlers to collect and report 
information under the DMSP could amount to hundreds of millions 
of dollars annually, depending on regulations to be issued by 
USDA.
     Prohibit individuals from attending animal 
fighting ventures (defined as any event that involves a fight 
between at least two animals and is conducted for purposes of 
sport, wagering, or entertainment). Currently, sponsoring an 
animal fighting venture involving live birds is permitted, 
under certain conditions, in states and territories where such 
events would not violate the laws of the state or territory. 
Because animal fighting ventures are banned in all states and 
the District of Columbia, CBO expects that the cost of the 
prohibition would be small.
    Because the compliance cost for dairy handlers would depend 
on future regulations, CBO has no basis to determine whether 
the aggregate cost of the mandates in the act would exceed the 
annual threshold established in UMRA for private-sector 
mandates ($146 million in 2012, adjusted annually for 
inflation).
    Previous CBO estimate: On May 24, 2012, CBO transmitted a 
cost estimate for S. 3240, the Agriculture Reform, Food, and 
Jobs Act of 2012, as introduced in the United States Senate on 
May 24, 2012. CBO estimated that version of the legislation, 
when combined with estimated spending under CBO's baseline 
projections for the mandatory agriculture and nutrition 
programs included in the act, would bring total direct spending 
for those USDA programs to $969 billion over the 2013-2022 
period--S23.6 billion less than we projected would be spent if 
those programs were continued as under current law.
    The Senate passed S. 3240 on June 21, 2012, with several 
amendments. CBO estimates that those amendments would increase 
direct spending by $450 million over 10 years, compared with 
the version of the legislation as introduced (see Table 5). 
Taking into account the estimated outlay effects of the adopted 
amendments, mandatory spending under S. 3240 for USDA programs 
would be $970 billion over the 2013-2022 period--$23.1 billion 
less than estimated under current law. Table 5 itemizes the 
costs of the amendments adopted by the Senate.
    S. 3240, as passed by the Senate, also includes several 
amendments that would authorize more discretionary spending 
compared with the version of the legislation introduced on May 
24. 2012. CBO estimates that discretionary spending under the 
act would total $29 billion over the 2013-2017 period, or $590 
million more than for S. 3240 as introduced, assuming 
appropriation of the necessary amounts. Those additional 
authorizations of appropriations include:
           $100 million a year to combat bark beetles 
        on forest land;
           $20 million a year to promote maple syrup 
        production;
           $25 million a year to research poultry feed; 
        and
           $10 million to purchase pulse (certain grain 
        legume) crops for the School Lunch Program.
    Other provisions of S. 3240 would require USDA to study a 
variety of issues, establish a USDA Office of Tribal Relations, 
and amend the operation of various discretionary USDA programs.

                                             TABLE 5.--CBO ESTIMATE OF THE IMPACT ON DIRECT SPENDING OF AMENDMENTS TO S. 3240 ADOPTED BY THE SENATE
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               By fiscal year, in millions of dollars--
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                          2013         2014         2015         2016         2017         2018         2019         2020         2021         2022      2013-2017    2013-2022
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              CHANGES IN DIRECT SPENDING FOR S. 3240 AS INTRODUCED ON MAY 24, 2012

Estimated Budget Authority..........          295       -1,352       -2,909       -2,305       -2,272       -3,000       -2,855       -2,934       -2,888       -2,764       -8,542      -22,983
Estimated Outlays...................          338       -2,092       -3,087       -2,226       -2,270       -2,869       -2,812       -2,897       -2,884       -2,795       -9,337      -23,593

                                                                          AMENDMENTS ADOPTED AFFECTING DIRECT SPENDING

Manager's Amendment:
    Estimated Budget Authority......         -355          410           22           18           18           18           19           19           19           21          113          209
    Estimated Outlays...............         -353          260           95           39           20           30           17           18           15           31           61          172
Improve Livestock Forage Disaster
 Program:
    Estimated Budget Authority......            0           11            5            5            6            6            6            6            6            6           27           57
    Estimated Outlays...............            0           11            5            5            6            6            6            6            6            6           27           57
Strengthen Rural Communities:
    Estimated Budget Authority......          -33           83           33           33           33            0            0            0            0            0          149          149
    Estimated Outlays...............           -9            0           20           32           40           34           22           10            1            0           83          150
Organic Crop Price Elections For
 Crop Insurance:
    Estimated Budget Authority......            0            1            1            1            1            1            1            1            1            1            4            9
    Estimated Outlays...............            0            0            1            1            1            1            1            1            1            1            3            8
Disaster Assistance for 2012 Fruit
 Losses:
    Estimated Budget Authority......            0          120            0            0            0            0            0            0            0            0          120          120
    Estimated Outlays...............            0          108           12            0            0            0            0            0            0            0          120          120
Conservation Compliance for Crop
 Insurance:
    Estimated Budget Authority......            0           -2           -4           -6           -9           -9           -9           -9           -9           -9          -21          -66
    Estimated Outlays...............            0            0           -2           -4          --6           -9           -9           -9           -9           -9          -12          -56
Total Changes:
    Estimated Budget Authority......         -388          623           57           51           49           16           17           17           17           19          392          478
    Estimated Outlays...............         -362          379          131           73           61           63           37           26           14           29          282          450                                                         CHANGES IN DIRECT SPENDING FOR S. 3240 AS PASSED BY THE SENATE ON JUNE 21,2012Estimated Budget Authority..........          -93         -729       -2,852       -2,253       -2,222       -2,984       -2,838       -2,918       -2,871       -2,745       -8,149      -22,504
    Estimated Outlays...............          -24       -1,714       -2,956       -2,153       -2,209       -2,806       -2,774       -2,871       -2,870       -2,767       -9,055      -23,143
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Estimate prepared by: Federal Costs: Jim Langley, Greg 
Hitz, Dave Hull, Kathleen FitzGerald, Emily Holcombe, Ann 
Futrell, Dan Hoople, and Jeff LaFave; Impact on State, Local, 
and Tribal Governments: J'nell L. Blanco and Lisa Ramirez-
Branum; Impact on the Private Sector: Amy Petz.
    Estimate approved by: Peter H. Fontaine, Assistant Director 
for Budget Analysis.

                      REGULATORY IMPACT STATEMENT

    In compliance with subsection (b)(2) of paragraph 11 of 
rule XXVI of the Standing Rules of the Senate, the Committee 
states that, in its opinion, it is necessary to dispense with 
the requirements of paragraph (1) of that subsection in order 
to expedite the business of the Senate. The Committee further 
notes that the programs in the reported bill are, by and large, 
voluntary and are assistance-based not regulatory in nature 
and, thus, the Committee does not foresee significant 
regulatory impacts on groups or classes of individuals and 
businesses as a result of this legislation. The regulations 
issued pursuant to the implementation of the bill will 
prescribe and define the programs authorized. Significant new 
regulatory burdens are not expected to result from the 
regulations issued pursuant to the reported bill.

                       NUMBER OF PERSONS COVERED

    The Committee notes that nearly every American will be 
affected in some way by the reported legislation as it pertains 
to the production of food, feed, fiber and fuel for the nation, 
as well as providing assistance for conserving natural 
resources, promoting international trade, providing assistance 
to low-income Americans to feed themselves and their families, 
provides economic development assistance for rural communities 
and renewable energy, as well as for food and agricultural-
based research.

                            ECONOMIC IMPACT

    The Committee concludes that the reported legislation will 
not have an adverse economic impact on the nation. The reported 
bill provides assistance to farmers, ranchers, rural 
communities, rural businesses, low-income families and 
universities. The reported legislation helps to support 16 
million jobs in the U.S. and will have a positive impact on the 
national economy.

                                PRIVACY

    The Committee concludes that the reported legislation will 
not have a negative impact on the personal privacy of 
individuals.

                               PAPERWORK

    The Committee does not anticipate a major increase in 
paperwork burdens resulting from the reported legislation. In 
fact, the reported legislation contains numerous efforts to 
eliminate, consolidate and otherwise streamline programs and 
improve the efficiency of administration, which the Committee 
intends to help reduce overall paperwork for participants in 
the programs contained within the reported legislation.

                   CONGRESSIONALLY DIRECTED SPENDING

    In compliance with paragraph 4(b) of rule XLIV of the 
Standing Rules of the Senate, the Committee states that, in its 
opinion, the reported bill does not contain any congressionally 
directed spending items requiring report.

                      SECTION-BY-SECTION ANALYSIS


Section 1. Short Title; Table of Contents

    This section supplies the short title for the legislation, 
``Agriculture Reform, Food and Jobs Act of 2012'' and the table 
of contents for the entire legislation.

                    SUBTITLE A--REPEALS AND REFORMS

    Sections 1101, 1102 and 1103 repeal direct payments, 
counter-cyclical payments and Average Crop Revenue Election 
program, respectively, effective with the 2013 crop year.

Section 1104. Definitions

    Section 1104 provides definitions for various terms used in 
this subtitle.
    ``Actual Crop Revenue'' with respect to a covered commodity 
for a crop year means the amount determined by the Secretary 
under section 1105(c)(4) that establishes whether agriculture 
risk coverage payments are required to be made for that crop 
year.
    ``Agriculture Risk Coverage Guarantee'' with respect to a 
covered commodity for a crop year means the amount determined 
by the Secretary under section 1105(c)(4) to determine whether 
payments are required to be made for that crop year.
    ``Agriculture Risk Coverage Payment'' means a payment for a 
covered commodity made under section 1105(c).
    ``County Coverage'' is for the purposes of agriculture risk 
coverage under section 1105 and means the level of coverage 
determined using the total quantity of all acreage in a county 
of the covered commodity that is planted or prevented from 
being planted by a producer with the yield determined by the 
average county yield.
    ``Covered Commodity'' means wheat, corn, grain, sorghum, 
barley, oats, long grain rice, medium grain rice, pulse crops, 
soybeans, other oilseeds, and peanuts. Additionally, the 
Secretary is instructed to study the feasibility of including 
popcorn as a covered commodity by 2014 and if the Secretary 
determines it to be feasible, shall designate popcorn as a 
covered commodity.
    ``Eligible acres'' means all acres planted or prevented 
from being planted to covered commodities on a farm in any crop 
year. Eligible acres shall not exceed the average total acres 
planted or prevented from being planted to covered commodities 
and upland cotton on the farm for the 2009 through 2012 crop 
years. The Secretary shall provide for an adjustment to 
eligible acres to account for cropland coming out of 
Conservation Reserve Program contracts and to account for 
resource conserving rotations such as summer fallow. 
Agricultural land that has been used for the purpose of 
enriching land or conserving moisture in conjunction with a 
crop rotation practice between crop years 2009-2012 is an 
essential part of the definition of eligible land in the 
Agricultural Risk Coverage program proposed in this bill. It is 
the intent of the Committee that a land enriching crop such as 
alfalfa be included in a rotation practice included in the 
definition of eligible land. The Secretary is directed to 
specifically include alfalfa as an eligible crop as part of a 
rotation practice in this context when promulgating regulations 
to implement the Agricultural Risk Coverage program.
    ``Extra Long Staple Cotton'' means cotton that is produced 
from pure strain varieties of the Barbadense species or any 
hybrid of the species, or other similar types of extra-long 
staple cotton, designated by the Secretary, having 
characteristics needed for various end uses for which United 
States upland cotton is not suitable and grown in irrigated 
cotton-growing regions of the Unites States designated by the 
Secretary or other areas designated by the Secretary as 
suitable for the production of the varieties to types.
    ``Individual Coverage'' for purposes of the Agriculture 
Risk Coverage program means the level of coverage determined 
based on the sum of all of a producer's acreage in a county 
planted or prevented from being planted to a covered commodity 
and the yields associated with those acres.
    ``Medium Grain Rice'' includes short gain rice.
    ``Midseason price'' means the applicable national average 
price received by producers for the first 5 months of the 
applicable marketing year.
    ``Other Oilseed'' means a crop of sunflower seed, rapeseed, 
canola, safflower, flaxseed, mustard seed, crambe, sesame seed, 
or any oilseed designated by the Secretary.
    ``Producer'' means an owner, operator, landlord, tenant, or 
sharecropper that shares in the risk of producing a crop and is 
entitled to share, in the crop available for marketing from the 
farm, or would have shared the crop been produced.
    ``Pulse Crop'' means dry peas, lentils, small chickpeas, 
and large chickpeas.
    ``State'' means a State of the United States and includes 
the District of Columbia, the Commonwealth of Puerto Rico, and 
any other territory or possession of the United States.
    ``Transitional Yield'' has the meaning given the term in 
section 502(b) of the Federal Crop Insurance Act.

Section 1105. Agriculture risk coverage

    Section 1105 authorizes Agriculture Risk Coverage (ARC) 
payments for the 2013 through 2017 crop years. Producers are 
provided an opportunity to make a one-time election to receive 
coverage at either the individual level or county level for all 
covered commodities and all acres under the control of the 
producer. The coverage election is binding on the producer 
through the 2017 crop year, so that new acreage coming under 
the producer's control would be subject to the coverage level 
elected by that producer and not a previous producer. Acreage 
leaving the producer's control would no longer be subject to 
that producer's election but would be subject to the subsequent 
producer's election. Furthermore, the Secretary is required to 
ensure that producers are not able to reconstitute or transfer 
control of acreage in an attempt to alter or reverse the 
coverage election.
    ARC payments are required to be made when a producer's 
actual crop revenue for a covered commodity is less than the 
ARC coverage guarantee. The guarantee is set as 89 percent of 
the benchmark revenue, which is defined as the product obtained 
by multiplying the 5-year Olympic yield (individual or county) 
by the 5 year Olympic national average price. The payment rate 
is the difference between the agriculture risk coverage 
guarantee for the covered commodity and the actual crop revenue 
for the covered commodity, but not to exceed 10 percent of the 
benchmark revenue for the crop year for the covered commodity. 
This subsection establishes the ARC coverage band as between 89 
percent and 79 percent of the benchmark or rolling historic 
revenue. Payments for individual coverage are made on 65 
percent of the eligible acres that were planted to the covered 
commodity or 45 percent for those acres that were prevented 
from being planted. Payments for county coverage are made on 80 
percent of the eligible acres that were planted to the covered 
commodity or 45 percent for those acres that were prevented 
from being planted. Finally, the Secretary is required to use 
all information to check for anomalies in making payments, 
calculate a separate guarantee for irrigated and non-irrigated 
commodities, differentiate by type or class the national 
average price of sunflower, barley (using malting barley 
values) and wheat, and assign a yield for producers who do not 
have a yield history or whose yield is an unrepresentative 
average yield.
    The Committee intends for the Farm Service Agency (FSA) to 
administer ARC through its existing system, but expects very 
close cooperation and coordination between FSA and the Risk 
Management Agency (RMA), especially with regard to sharing 
information and reporting by farmers. For the yields in the ARC 
calculation, the Committee intends that USDA utilize 
information from RMA and the Federal Crop Insurance Corporation 
(FCIC) as much as possible and where available. Individual 
yields should be based on the yields the producer reports to 
RMA for crop insurance and that are used to calculate the 
producers' Actual Production History. The Committee does not 
intend for USDA to duplicate yield information collection 
efforts between RMA and FSA.
    As discussed above, the eligible acres concept is a 
significant departure from current policy regarding base acres. 
The Committee does not intend for FSA to utilize any aspect of 
historical base acres in the administration and operation of 
ARC. Eligible acres are those planted or prevented from being 
planted to covered commodities on the FSA farm. Eligible acres 
are not to exceed the average annual total acres planted to 
covered commodities and upland cotton during the 2009 through 
2012 crop years. Specifically, this is a cap on the total 
number of planted acres that can be eligible for payments under 
ARC, rather than a revised or new base acre calculation. 
Payments will not be made on eligible acres unless they are 
planted to a covered commodity and the ARC program is triggered 
for that covered commodity.
    ARC payments are calculated using all of a producer's 
planted or prevented acres in a county, (i.e., on an enterprise 
unit basis), however the total acres eligible for ARC payments 
planted cannot exceed the eligible acre cap on a FSA farm.
    While the decision to opt for individual or county coverage 
applies to all farms under control of a producer and while 
benefits of ARC are calculated on an enterprise unit basis, the 
acreage cap is to be applied on a farm by farm basis. The 
following is an example of how this acreage cap would be 
applied to two separate farms under the control of a single 
producer:
    Farm #1 has a 2009-2012 planting history of 200 acres of 
covered commodities and upland cotton. These are the eligible 
acres for Farm #1. In 2014, Farm #1 plants 100 acres of 
soybeans and 100 acres of wheat for a total of 200 planted 
acres. If this farm is eligible for an ARC payment for wheat or 
soybeans, there would be no prorate factor because this 
producer is planting the same number of acres as the eligible 
acreage cap for that farm.
    Farm #2, which is operated by the same producer as Farm #1, 
has a 2009-2012 planting history of 700 acres of covered 
commodities and upland cotton. These are the eligible acres for 
Farm #2. In 2014, Farm #2 plants 400 acres of soybean and 400 
acres of wheat for a total of 800 planted acres. This exceeds 
the eligible acreage cap by 100 acres, so if the farm is 
eligible for an ARC payment for wheat or soybeans, there would 
be a prorate factor of 87.5% (700 acre cap/800 acres planted).
    If the soybean actual revenue is less than the soybean 
guarantee, but the wheat actual revenue is more than the wheat 
guarantee, the producer will receive payment on 450 soybean 
acres, 100 of the 450 soybean acres receiving payment will be 
on Farm #1 and the remaining 350 acres receiving payment will 
be on Farm #2 (350 acres is the prorate factor of 87.5% times 
400 acres of planted soybeans on Farm #2). If the soybean 
payment is $25 per acre and the producer elected county 
coverage then the producer will be paid $9,000 ($25 multiplied 
by 80% multiplied by 450 acres). If the producer receives less 
than 100 percent of the crop production for either of the farms 
due to, but not limited to partnership or share-crop 
agreements, then the producer's share of the eligible acres for 
each farm will be proportional to the producer's share of the 
crop production.

Section 1106. Producer agreement required as condition of provision of 
        payments

    Section 1106 continues current law regarding conservation 
compliance, acreage reporting and transfers of interest for 
eligibility for ARC payments. Producers are required to comply 
with applicable conservation and wetland protections and 
effectively control noxious weeds and otherwise maintain the 
land in accordance with sound agricultural practices as 
determined by the Secretary. As in current law, there is no 
penalty with respect to benefits assessed against producers on 
the farm for an inaccurate acreage or production report. Data 
that is reported by the producer must meet the requirements 
under the Federal Crop Insurance Act without additional 
submission to the Department. Additionally, adequate safeguards 
to protect the interests of tenants and sharecroppers are 
required.

Section 1107. Period of effectiveness

    Section 1107 establishes that the programs and provisions 
of this subtitle are applicable through the 2017 crop year.

  SUBTITLE B--MARKETING ASSISTANCE LOANS AND LOAN DEFICIENCY PAYMENTS

Section 1201. Availability of nonrecourse marketing assistance loans 
        for loan commodities

    In general, section 1201 continues current law through 2017 
authorizing the Secretary to make nonrecourse marketing 
assistance loans for loan commodities. The section defines 
``Loan Commodity'' same as current law, except replaces 
``wool'' with ``graded wool'' and ``non-graded wool.'' The only 
revision to current law in this section involves applying the 
same conservation compliance provisions applicable to ARC to 
this program such that to be eligible to receive marketing 
assistance loans producers must comply with applicable 
conservation and wetland protections and effectively control 
noxious weeds and otherwise maintain the land in accordance 
with sound agricultural practices as determined by the 
Secretary. Similarly, it sets requirements governing transfers 
of interest, requires acreage and production reports, provides 
for adequate safeguards to protect the interests of tenants and 
sharecroppers and incorporates special loan, storage, handling, 
and marketing rules for peanuts.

Section 1202. Loan rates for nonrecourse marketing assistance loans

    Section 1202 continues current law establishing loan rates 
for the loan commodities. The loan rates are the same as 
provided for in the 2008 Farm Bill except the upland cotton 
loan rate which has been adjusted due to the WTO dispute with 
Brazil. The section also continues current law establishing 
single loan rates in each county for each of the ``other 
oilseeds.'' The following are the loan rates for the 2013-2017 
crop years:
    Wheat, $2.94 per bushel (Same as current law)
    Corn, $1.95 per bushel (Same as current law)
    Grain Sorghum, $1.95 per bushel (Same as current law)
    Barley, $1.95 per bushel (Same as current law)
    Oats, $1.39 per bushel (Same as current law)
    Upland Cotton (changed from 2008 Farm Bill from $0.52 per 
pound): for the 2013 and each subsequent crop year, the simple 
average of the adjusted prevailing world price for the 2 
immediately preceding the next domestic plantings, but in no 
case less than $0.47 per pound or more than $0.52 per pound.
    Extra-long staple cotton, $.7977 per pound (Same as current 
law)
    Long grain rice, $6.50 (Same as current law)
    Medium grain rice, $6.50 (Same as current law)
    Soybeans, $5.00 per bushel (Same as current law)
    Other oilseeds, $10.09 per hundredweight (Same as current 
law)
    Dry Peas, $5.40 per hundredweight (Same as current law)
    Lentils, $11.28 per hundredweight (Same as current law)
    Small chickpeas, $7.43 per hundredweight (Same as current 
law)
    Large chickpeas, $11.28 per hundredweight (Same as current 
law)
    Graded wool, $1.15 per pound (Same as current law)
    Non-graded wool, $0.40 per pound (Same as current law)
    Mohair, $4.20 per pound (Same as current law)
    Honey, $0.69 per pound ( $0.03 cents lower than current 
law)
    Peanuts, $355 per ton (Same as current law)

Section 1203. Terms of Loans

    Section 1203 continues current law setting marketing 
assistance loan terms at nine months and prohibiting 
extensions.

Section 1204. Repayment of Loans

    Section 1204 continues current law regarding repayment of 
loans. Producers are required to repay a marketing assistance 
loan for a loan commodity (other than upland cotton, long grain 
rice, medium grain rice, extra long staple cotton, peanuts, and 
confectionary and each other kind of sunflower seed (other than 
oil sunflower seed)) at a rate established for the commodity 
plus interest, calculated based on the average market prices 
for the loan commodity during the preceding 30 day period.
    The loan repayment rate for extra-long staple cotton is the 
loan rate established under section 1202, plus interest. In 
addition, it requires the Secretary to issue by regulation a 
formula to determine the prevailing world market price for 
upland cotton, long grain rice, and medium grain rice, and a 
mechanism by which the Secretary shall announce periodically 
those prevailing world market prices.
    Current statutory requirements regarding adjustment to the 
prevailing world market prices for long grain rice, medium 
grain rice and upland cotton are continued. The Secretary is 
required to establish a mechanism for determining and 
announcing these adjustments in order to avoid undue disruption 
in the United States market. Current law regarding the 
repayment rates for confectionery and other kinds of sunflower 
seeds (other than oil sunflower seed) at a rate that is lesser 
of the loan rate established under section 1202, plus interest, 
or the repayment rate established for oil sunflower seed is 
continued.
    The Secretary will temporarily adjust repayment rates in 
the event of a severe disruption to marketing, transportation, 
or related infrastructure.

Section 1205. Loan deficiency payments

    Section 1205 continues current law through 2017 authorizing 
the Secretary to make loan deficiency payments available to 
producers who agree to forego marketing loans for the same 
commodities. It authorizes loan deficiency payments for 
producers of unshorn pelts and hay and silage, although such 
producers are not eligible for marketing loans. The section 
also establishes the computation for loan deficiency payments 
as the product of the payment rate for commodity multiplied by 
the quantity of the commodity produced by using the rate in 
effect as of the date the producer requests payment.

Section 1206. Payments in lieu of loan deficiency payments for grazed 
        acreage

    Section 1206 continues current law through 2017 authorizing 
the Secretary to make payments to producers of wheat, barley, 
oats, or triticale if the producer agrees to use the acreage 
for grazing livestock and to forgo any other harvesting. 
Payments must be made at the same time as loan deficiency 
payments, in an amount that is the product of the loan 
deficiency payment rate and the payment quantity, as determined 
by multiplying the quantity of grazed acreage by the payment 
yield. Separate rules apply for determining the triticale 
payment amount. Such acreage is not eligible for a crop 
insurance indemnity or noninsured crop assistance.

Section 1207. Special marketing loan provisions for upland cotton.

    Section 1207 continues current law through 2017 requiring 
an import quota program for upland cotton whenever the 
Secretary determines that, for any consecutive four-week 
period, the Friday through Thursday average price for the 
lowest priced U.S. growth delivered C.I.F. Northern Europe 
exceeds the Northern Europe price by more than 1.25 cents per 
pound. This section prohibits the Secretary from adjusting the 
average price quotation for the value of any certificates 
during any month for which the Secretary estimates the season-
ending U.S. upland cotton stocks-to-use ratio to be below 16 
percent. In making such estimates, the Secretary is required to 
estimate and report the season-ending U.S. stocks-to-use ratio 
on a monthly basis.
    The Secretary must continue to provide economic adjustment 
assistance to domestic users of upland cotton in the form of 
payments for all documented use of that upland cotton during 
the previous monthly period, regardless of the origin of the 
upland cotton. Assistance provided should be 3 cents per pound 
and made available only to domestic users of upland cotton that 
certify that the assistance is used to acquire, construct, 
install, modernize, develop, convert, or expand land, plant, 
buildings, equipment, facilities, or machinery.

Section 1208. Special competitive provisions for extra long staple 
        cotton

    Section 1208 continues current law through 2017 requiring a 
program to expand the domestic use of extra-long staple cotton 
produced in the U.S., increase exports, and ensure that the 
U.S. remains competitive in world markets. The Secretary makes 
payments when, for a four week period, the world market price 
for the lowest priced extra-long staple cotton is below the 
prevailing price for a competing growth of extra-long staple 
cotton is less than 134 percent of the loan rate for extra-long 
staple cotton.

Section 1209. Availability of recourse loans for high moisture feed 
        grains and seed cotton

    Section 1209 continues current law through 2017 authorizing 
the Secretary to make recourse loans available to producers of 
corn and grain sorghum who normally harvest all or a portion of 
their crop in a high moisture state. Producers must present 
certified scale tickets or field or other physical measurements 
of the standing or stored crop. In regions without certified 
commercial scales, producers must certify that they were the 
owners of the feed grain and comply with established deadlines. 
The section defines ``high moisture state'' as corn or grain 
sorghum having moisture content in excess of Commodity Credit 
Corporation standards for marketing assistance loans. The 
Secretary is also authorized to make available recourse seed 
cotton loans on any production.

Section 1210. Adjustments of loans.

    Section 1210 provides that the programs and provisions of 
this subtitle are applicable through 2017, and authorizes the 
Secretary to make adjustments in the loan rates for any 
commodity based on differences in grade, type, quality, 
location, and other factors.

                           SUBTITLE C--SUGAR

Section 1301. Sugar

    Section 1301 continues current law through 2017 requiring 
the Secretary to make loans available to sugarcane processors 
at 18.75 cents per pound for raw cane sugar, and to sugar beet 
processors at a rate that is 128.5 percent of the loan rate for 
raw cane sugar. The Secretary is authorized to reduce the loan 
rates if negotiated reductions in domestic and export subsidies 
of other major sugar producing countries in the aggregate 
exceed the commitments made as part of the Agreement on 
Agriculture. It also authorizes the Secretary to provide that 
refined sugars, whether from beets or cane, are substitutable 
for purposes of the refined sugar and sugar containing products 
re-export programs. In addition, the Secretary will annually 
estimate: the quantity of sugar subject to human consumption in 
the United States; the quantity of sugar that would provide 
reasonable carryover stocks; the quantity available from carry-
in stocks for human consumption; the quantity of sugar 
available from domestic processing of sugarcane, sugar beets, 
and in-process beet sugar; and the quantity of sugars, syrups, 
and molasses that will be imported for human consumption.

                           SUBTITLE D--DAIRY

  PART I--DAIRY PRODUCTION MARGIN PROTECTION PROGRAM AND DAIRY MARKET 
                         STABILIZATION PROGRAMS

    The United States dairy industry should be allowed to grow 
and compete globally to help ensure a strong American 
agricultural economy. The Committee recognizes the importance 
of both the producer and processor sectors of the dairy 
industry. The Secretary should use his authority granted in 
this subtitle and his discretion to ensure the entire dairy 
industry is strengthened by the new programs and policies.

Section 1401. Definitions

    Section 1401 defines the terms used in the Dairy Production 
Margin Protection Program (DPMPP) and Dairy Market 
Stabilization Program (DMSP):
    ``Milk price'' is the ``all-milk price,'' or average price 
received by dairy operations across the United States.
    ``Average feed cost'' is calculated based on specific 
national corn, soybean meal, and alfalfa prices.
    ``Actual Dairy Production Margin'' is the difference 
between the ``all-milk price'' and the ``average feed cost.''
    ``Dairy operation'' means 1 or more producers that produce 
and market milk as a single operation, and each dairy producer 
shares in the pooling of resources and a common ownership 
structure, is at risk in the production of milk, and 
contributes land, labor, management, equipment, or capital to 
the dairy operation. The Secretary is allowed to determine 
additional ownership structures.
    ``Handler'' means an initial handler that is the initial 
individual or entity making payments directly to a dairy 
operation.
    ``Consecutive 2-month period'' refers to the 2-month period 
consisting of January and February, March and April, May and 
June, July and August, September and October, November and 
December.
    ``Basic Production History'' is the production history 
determined for a participation operation for basic margin 
protection
    ``Annual Production History'' is the production history 
determined for a participating dairy operation when the 
operation purchases supplemental margin protection.

Section 1402. Calculation of average feed cost and actual dairy 
        producer margins

    Section 1402 establishes that the national average feed 
cost shall be calculated by the Secretary, based on U.S. prices 
for corn, soybean meal, and alfalfa each month. In the margin 
protection program, actual dairy operation margin is calculated 
by the Secretary by subtracting a defined, national average 
feed cost from the all-milk price for defined consecutive 2-
month periods. In the stabilization program, actual dairy 
operation margin is calculated by the Secretary by subtracting 
the average feed cost from the all-milk price for the preceding 
month. The Committee expects the Secretary to collect the data 
necessary for the administration, functionality, and success of 
the new programs as soon as practicable.

         SUBPART A--DAIRY PRODUCTION MARGIN PROTECTION PROGRAM

Section 1411. Establishment of dairy production margin protection 
        program

    Section 1411 establishes the DPMP program, to provide 
assistance to dairy operations based on a calculated margin of 
milk price over feed costs. Basic margin protection is 
available to all operations with coverage for a $4.00 margin on 
80 percent of production based on an established basic 
production history. Supplemental margin protection is available 
for purchase on an annual production history with subsidized 
premiums. An operation will have the opportunity to purchase 
supplemental coverage from a $4.50 margin up to an $8.00 margin 
in $0.50 increments on up to 90 percent (no less than 25 
percent) of the annual production history.

Section 1412. Participation of dairy operations in production margin 
        protection program

    Section 1412 establishes that all operations are eligible 
for payments pursuant to the margin protection program, 
provided they sign up for basic or supplemental protection. 
Operations may opt for coverage through the Milk Income Loss 
Contract (MILC) established by FCEA of 2008, until June 2013 at 
modified support levels. Operations may participate in either 
MILC or DPMP program, but not both, through June 2013. 
Additionally, dairy operations may participate in either 
Livestock Gross Margin-Dairy (LGM-Dairy) or DPMP, but not both. 
There are no guarantees that LGM-Dairy funding will be 
available or that all producers will be able to get LGM-Dairy 
coverage when funding is available. The Committee extended the 
MILC program at modified levels until June 2013 to provide a 
transition period for producers while the Secretary finalizes 
rules for the new programs. The Department should notify MILC 
participants of the MILC program end date. The Committee 
intends for the Secretary to educate the dairy industry, 
including potential program participants, about the new options 
and obligations included in both the margin protection and 
market stabilization programs. The Committee encourages the 
Secretary to partner with market participants and State and 
local organizations to carry out the educational activities.
    The section also establishes an administration fee for the 
margin protection program. Fees will be used to cover costs to 
administer DPMP and DMSP and for USDA-administered dairy market 
transparency measures. The administration fee is waived in the 
case of limited resource farmers. The Committee intends for the 
provided program administrative fees to be used to supplement 
the Secretary's current budget for dairy programs, and not 
serve as the primary source of funding for program 
implementation. The Committee expects the fees to be used for 
providing additional staff and services only if necessary to 
expedite program implementation and to ensure sufficient staff 
for program administration. The Committee also intends for the 
Secretary to use the fees for providing consistent funding for 
transparency measures.

Section 1413. Production history of participating dairy operations

    Section 1413 establishes the methods for calculating 
production histories for the basic and supplemental margin 
protection programs. It allows herd growth by annually updating 
production history for supplemental margin protection. The 
section also authorizes the Secretary to specify conditions for 
transferring production history of a dairy operation by sale or 
lease. It prohibits a purchaser or lessee from obtaining a 
different level of basic or supplemental protection coverage 
during the calendar year in which the transfer is made. These 
provisions are intended to ensure program integrity and not 
allow dairy operations to game the program.

Section 1414. Basic margin protection

    Section 1414 provides that basic protection is available to 
all participating operations to receive a basic margin 
protection payment whenever actual dairy margin for a 
consecutive 2-month period is less than $4.00 per hundredweight 
(cwt) of milk. Operations will receive payments equal to the 
difference between $4.00 and the actual margin (when actual 
margin is less than $4.00) on 80 percent of base production.

Section 1415. Supplemental margin protection

    Section 1415 allows a dairy operation participating in the 
basic margin protection program to annually purchase 
supplemental protection to cover higher margins in increments 
of $0.50 for margins between $4.50 and $8.00 on 25 percent to 
90 percent of milk production. Operations must pay an annual 
premium for supplemental protection based on actual production. 
A discounted premium is offered on the first 4 million pounds 
of milk, which covers production from approximately 200 to 250 
cows annually. The premiums are as follows:

------------------------------------------------------------------------
                             Premium/cwt (< 4         Premium/cwt (>4
     Coverage Level            million lbs)            million lbs)
------------------------------------------------------------------------
          $4.50                    $0.01                   $0.02
           5.00                     0.02                    0.04
           5.50                     0.035                   0.10
           6.00                     0.045                   0.15
           6.50                     0.09                    0.29
           7.00                     0.40                    0.62
           7.50                     0.60                    0.83
           8.00                     0.95                    1.06
------------------------------------------------------------------------

    Participating operations will receive payment whenever the 
average actual margin for a defined consecutive two-month 
period is less than the selected coverage threshold. Payment is 
based on the difference between actual margin and guaranteed 
margin, multiplied by the selected coverage percentage and the 
lesser of the annual production history divided by 6, or the 
actual amount of milk marketed during the previous 2-month 
period.
    The Committee expects the Secretary to provide flexibility 
for producers when establishing payment plans for the new 
programs. Limited discretion is provided to design the new 
programs with flexibilities for producers, including the 
monthly payment of administrative fees and premium payments, or 
payment using other appropriate time periods to maximize 
program integrity and producer convenience. Where applicable 
and practicable, premium payments should be withheld from a 
producer's milk check.

Section 1416. Effect of failure to pay premiums

    Section 1416 establishes that a participating operation 
that fails to pay the required administrative fees or premiums 
remains legally obligated to pay them and may not receive basic 
or supplemental margin protections payments until fees are 
fully paid.

             SUBPART B--DAIRY MARKET STABILIZATION PROGRAM

Section 1431. Establishment of dairy market stabilization program

    Section 1431 creates the Dairy Market Stabilization Program 
to assist in balancing the supply of milk with demand when 
producers are experiencing low or negative operating margins. 
Subject to exceptions in Section 1436, when dairy margins fall 
below a certain level, the Secretary is required to have 
initial dairy handlers reduce the payments to dairy operations 
in order to encourage them to either scale back milk production 
temporarily or to avoid increasing production while margins are 
considered low or negative. The payment reductions are based on 
actual margin, according to the following schedule:

------------------------------------------------------------------------
                                            Milk payment, greater of the
               Actual margin                          following
------------------------------------------------------------------------
>$5.00-<$6.00/2-month.....................  98% of base or 94% of
                                             month's milk marketed
<$5.00->$4.00/2-month.....................  97% of base or 93% of
                                             month's milk marketed
<$4.00/1-month............................  96% of base or 92% of
                                             month's milk marketed
------------------------------------------------------------------------

    This program is voluntary, but any operation enrolled in 
the Dairy Production Margin Protection Program is required to 
enroll in Dairy Market Stabilization. Handlers that are tasked 
with reducing the payments and remitting them to the Secretary 
are initial handlers defined as the initial individual or 
entity making payments directly to a dairy operation. The Dairy 
Market Stabilization program is voluntary, but any operation 
enrolled in the Dairy Production Margin Protection Program is 
required to enroll in the Dairy Market Stabilization Program. 
To permit overall growth in dairy production in general, 
operations may update their production history base calculation 
method annually.

Section 1432. Threshold for implementation and reduction in dairy 
        operation payments

    Section 1432 requires the Secretary to announce that the 
stabilization program takes effect when actual margin has been 
$6.00 or less for two months, or actual margin has been $4.00 
or less for one month. The stabilization program will go into 
effect on the first day of the month following an announcement 
by the Secretary that margin triggers have been met. The 
stabilization program will be suspended, or not triggered, as 
soon as certain conditions are met.

Section 1433. Producer milk marketings information

    Section 1433 directs the Secretary to establish a process 
for collecting milk marketing information from dairy operations 
and handlers and to minimize regulatory burden on dairy 
operations and handlers. It also requires the Secretary to 
minimize the regulatory burden on operations and handlers.

Section 1434. Calculation and collection of reduced dairy producer 
        payments

    Section 1434 defines payment reduction requirements for the 
stabilization program based on actual dairy margin. Payments 
will not be reduced if an operation's monthly milk marketings 
are equal to or less than the percentage of a defined rolling 
base.

Section 1435. Remitting monies to the secretary and use of monies

    Section 1435 requires initial handlers to remit to the 
Secretary an amount equal to that which they withheld from 
dairy operations. The Secretary must use the remitted monies 
for the purpose of expanding consumption and building demand 
for dairy products by purchasing dairy products for donation to 
food banks and other appropriate programs.

Section 1436. Suspension of reduced payment requirement

    Section 1436 provides the criteria by which the 
stabilization program will be suspended. The section creates a 
suspension trigger that is based on world prices, as determined 
by the Secretary, for dairy products such that U.S. cheddar 
cheese and nonfat dry milk prices are compared to world cheddar 
cheese and skim milk powder prices. If certain conditions are 
met, the Secretary shall suspend the program or simply not make 
the announcement to trigger the program. Once suspended, 
stabilization cannot resume until 2 months have passed and the 
stabilization criteria have been met to warrant stabilization 
implementation. The suspension triggers are as follows:
    Actual margin is greater than $6.00 for two months, or
    Actual margin is greater than $5.00 and less than or equal 
to $6.00 for 2 months and: the U.S. price for cheddar cheese is 
equal to or greater than the world price for cheddar cheese, or 
the U.S. price for nonfat dry milk is equal to or greater than 
the world price for skim milk powder, or
    Actual margin is greater than $4.00 and less than or equal 
to $5.00 for 2 months and: the U.S. price for cheddar cheese is 
more than 5 percent above the world price for cheddar cheese, 
or the U.S. price for nonfat dry milk is more than 5 percent 
above the world price for skim milk powder, or
    Actual margin is less than or equal to $4.00 for 2 months 
and: the U.S. price for cheddar cheese is more than 7 percent 
above the world price for cheddar cheese, or nonfat dry milk is 
more than 7 percent above the world price for skim milk powder.
    The suspension trigger ensures that the stabilization 
program will be sensitive to world market conditions. The 
Committee intends for the market stabilization program to 
suspend when supply outpaces demand as authorized by the world 
price provisions. This Committee has included a voluntary 
stabilization program to send signals to all dairy producers 
that they should slow down milk marketings in order to better 
balance milk supply and demand, decrease price volatility, and 
increase margins received by producers. The programs allow 
dairy producers to take risk management into their own hands.

Section 1437. Enforcement

    Section 1437 requires timely and accurate reporting of 
stabilization funds to the Secretary and allows the Secretary 
to take necessary actions to ensure compliance.

Section 1438. Audit requirements

    Section 1438 authorizes the Secretary to conduct periodic 
audits of participating dairy operations and handlers to ensure 
compliance. The audits must be random and statistically valid 
and the Secretary shall submit audit results to Congress, 
including recommendations the Secretary considers appropriate 
regarding the stabilization program.

Section 1439. Study; report

    Section 1439 requires the Secretary to direct the Office of 
the Chief Economist to conduct a study of the impacts of the 
stabilization program and report to Congress by December 1, 
2016.

                          SUBPART C--DURATION

Section 1451. Duration

    Section 1451 authorizes the DPMP and DMSP through fiscal 
year 2017.

                   PART II--DAIRY MARKET TRANSPARENCY

Section 1461. Dairy product mandatory reporting

    Section 1461 amends the Agricultural Marketing Act of 1946 
to allow the Secretary to report on any products that may 
significantly aid price discovery in the dairy markets; 
requiring each manufacturer to report to the Secretary, at 
least monthly, information concerning price, quantity, moisture 
content, or any characteristics that may aid in price discovery 
of dairy products sold. The section further allows the 
Secretary to modify the format used to provide information to 
ensure the information is readily understood by market 
participants. Each manufacturer and person storing dairy 
products is required to report to the Secretary, at least 
monthly, information on the quantity of dairy products stored, 
and ensuring dairy products in cold storage are included in 
reportable products. The Committee provided the Secretary with 
additional authority for collecting information on dairy 
products and dairy product prices to enhance price discovery. 
The Secretary should use the authority whenever appropriate. 
Whilethis Committee supports increased transparency, it expects 
the Secretary will use this additional authority judiciously and 
consider public and Congressional input when considering potential 
changes to reporting requirements.

Section 1462. Federal Milk Marketing Order (FMMO) information

    Section 1462 directs the Secretary to establish an 
information clearinghouse for the purposes of educating the 
public about the FMMO system and any order referenda, including 
proposal information and timelines. FMMO information must be 
made available through website and appropriate publications. 
The Committee extended the Federal Milk Marketing Orders (FMMO) 
Review Commission and provided funding to consider FMMO 
changes.

 PART III--REPEAL OR REAUTHORIZATION OF OTHER DAIRY-RELATED PROVISIONS

    Sections 1471 and 1472 repeal the following programs: Dairy 
Product Price Support Price Support from the Food, 
Conservation, and Energy Act of 2008 and the Dairy Export 
Incentive Program from the Food Security Act of 1985. However, 
the Milk Income Loss Contract Program is extended through June 
2013 to permit time to implement the programs contained in the 
reported bill at the current 45 percent level and provides 
conforming amendments to the Trade Sanctions Reform and Export 
Enhancement Act of 2000.
    Sections 1473, 1474, 1475, and 1476 extend the Dairy 
Forward Pricing Program, Dairy Indemnity Program, Dairy 
Promotion and Research Program, and the Federal Milk Marketing 
Order Review Commission through 2017.

                        PART IV--EFFECTIVE DATE

Section 1481. Effective date

    Section 1481 requires the amendments made by the reported 
bill to take effect on October 1, 2012.

   SUBTITLE E--SUPPLEMENTAL AGRICULTURAL DISASTER ASSISTANCE PROGRAMS

Section 1501. Supplemental agricultural disaster assistance

    Section 1501 provides for certain supplemental agricultural 
disaster assistance programs created in the 2008 Farm Bill to 
be available to producers through fiscal year 2017 and that 
funding for the programs shall be out of the funds of the 
Commodity Credit Corporation.
    Livestock Indemnity Payments (LIP) are to be made for 
livestock lost in excess of normal mortality rates due to 
adverse weather including hurricanes, blizzards, extreme heat, 
floods, disease, wildfires, extreme cold and attacks by animals 
reintroduced into the wild by the Federal Government. Payments 
are 65 percent of the market value of the animal. LIP is to 
provide benefits to all livestock producers, including but not 
limited to those involved in range operations, who follow 
appropriate management practices.
    Livestock Forage Disaster Program (LFP) provides payments 
that are to be made for forage losses to eligible livestock 
producers due to drought or fire. Eligible land to be covered 
includes native or improved pastureland with permanent 
vegetative cover or land that has crops planted specifically 
for the purpose of providing grazing for livestock. Payments 
are to be calculated using the monthly feed cost for all 
covered livestock and the normal carrying capacity of eligible 
grazing lands. With regard to section 1501(c)(1)(E), the 
Committee notes that the program covers grazing loses due to 
drought during the grazing season, which is the normal period 
of time in which livestock graze in the geographic area. The 
Committee emphasizes that LFP is designed to cover grazing 
losses during the normal grazing period, not the normal growing 
period.
    Emergency Assistance for Livestock, Honey Bees and Farm 
Raised Fish (ELAP) is to be made to eligible producers of 
livestock, honey bees and farm raised fish to aid with losses 
due to disease, adverse weather, or other conditions that are 
not otherwise covered by LIP or LFP. The funding for ELAP is 
$10 million per fiscal year.
    The Secretary shall provide assistance to eligible 
orchardists and nursery tree growers for losses due to natural 
disaster under the Tree Assistance Program (TAP).

Section 1502. Conforming Amendments

    Section 1502 continues current law through 2017 and 
requires the Secretary to use such sums as are necessary of the 
Commodity Credit Corporation to carry out the programs in this 
subtitle.

                       SUBTITLE F--ADMINISTRATION

Section 1601. Administration generally

    Section 1601 continues current law regarding administration 
of programs in the title through 2017 and reauthorizes the use 
of the funds, facilities, and authorities of the Commodity 
Credit Corporation to carry out the programs, including the 
current law for promulgation of regulations. The Secretary is 
required to make adjustments in the amount of expenditures 
under subtitles A through E that are subject to the total 
allowable domestic support levels under the Uruguay Round 
Agreements, if the Secretary determines that those expenditures 
will exceed such allowable levels for any applicable reporting 
periods.

Section 1602. Suspension of permanent price support authority

    Section 1602 continues current law through 2017 pursuant to 
which the permanent price support authority of the Agricultural 
Adjustment Act of 1938 and Agricultural Act of 1949 is 
suspended for the 2013 through 2017 fiscal years for covered 
commodities (as defined in section 1104), cotton, and sugar. 
Those provisions shall not be applicable to milk during the 
period beginning on the date of enactment of this Act through 
December 31, 2017.

Section 1603. Payment limitations

    Section 1603 limits the total amount of payments received, 
directly, or indirectly, by a person or legal entity (except a 
joint venture or general partnership) for any crop year under 
subtitle A of the Agriculture Reform, Food, and Jobs Act to 
$50,000 for all covered commodities and a separate limit for 
peanuts of $50,000.

Section 1604. Payments limited to active farmers

    Section 1604 amends Section 1001A of the Food Security Act 
of 1985 to ensure that payments do not go to individuals who 
are not farming by striking ``or active personal management'' 
each place it appears in subparagraphs (A)(i)(II) and(B)(ii). 
In its place, the section permits a single person to qualify as 
actively engaged solely based upon providing management to the 
farming operation, but that individual cannot qualify multiple 
entities. However, the Committee does not intend for the 
addition of a manager to qualify the farm operation for 
payments above the payment limit established in section 1603.
    The Committee also recognizes the importance of spouses to 
family farming operations and the long-standing policy that 
permits the individual who qualifies as actively engaged in 
farming to also qualify his or her spouse as actively engaged, 
including qualifying for an additional payment and payment 
limit. Nothing in this section alters current law with regard 
to the spouse in a farming operation, and so long as one spouse 
qualifies as actively engaged the other spouse qualifies as 
well. If, however, the qualifying spouse was considered 
actively engaged solely based on providing active personal 
management to the farm operation neither spouse will now 
qualify as actively engaged, unless one qualifies under 
subparagraph 7 pertaining to the single manager for the farm 
operation.

Section 1605. Adjusted gross income limitation

    Section 1605 amends current law regarding the adjusted 
gross income (AGI) eligibility requirements. The reported bill 
eliminates the distinction between farm AGI and nonfarm AGI. 
Pursuant to the reported bill, a person or legal entity is 
prohibited from receiving benefits under subtitle A in any year 
where the average gross income of the person or legal entity 
exceeds $750,000. AGI is calculated by using a three-year, 
moving average.

Section 1606. Geographically disadvantaged farmers and ranchers

    Section 1606 continues current law through 2017 authorizing 
the Secretary to provide geographically disadvantaged farmers 
and ranchers direct reimbursement payments as described.

Section 1607. Personal liability for producers for deficiencies

    Section 1607 continues current law exempting producers from 
liability for certain deficiencies in collateral.

Section 1608. Prevention of deceased individuals receiving payments 
        under farm commodity

    Section 1608 continues current law through 2017 requiring 
the Secretary to reconcile social security numbers of all 
individuals who receive payments, whether directly or 
indirectly, with the Commissioner or Social Security to 
determine if the individuals are alive. The Secretarywill 
preclude the issuance of payments to, and on behalf of, deceased 
individuals that were not eligible for payments.
    The Committee recognizes the improvements made by the 
Secretary in recent years to prevent payments to deceased 
individuals. The Committee also recognizes that individuals can 
be entitled to a payment but become deceased before that 
payment is issued, and that such a payment is proper.

Section 1609. Appeals

    Section 1609 amends current law to improve the appeals 
process at USDA and to ensure proper oversight, transparency 
and accountability for the Director of the National Appeals 
Division without inhibiting the proper functioning of the 
appeals process.

Section 1610. Technical corrections

    This section continues current law permitting necessary 
technical changes be made in program operation and 
administration.

Section 1611. Assignments of payments

    This section continues current law regarding the assignment 
of payments including that they be assigned in accordance with 
USDA regulations.

Section 1612. Tracking of benefits

    Section 1612 continues current law through 2017 requiring 
the Secretary to establish procedures to track program benefits 
under Title I and II of that Act directly or indirectly to 
individuals and entities.

Section 1613. Signature authority

    Section 1613 continues current law through 2017 authorizing 
the Secretary to approve documents containing signatures of 
program applicants. The Secretary shall not subsequently 
determine a document is inadequate or invalid because of the 
lack of authority of any applicant signing the document on 
behalf of the applicant unless the applicant knowingly and 
willfully falsified the evidence of signature authority or a 
signature.

Section 1614. Implementation

    Section 1614 authorizes the Secretary to make $100,000,000 
in funds available to the Farm Service Agency to carry out this 
title and instructs the Secretary to seek to reduce paperwork 
and other administrative burdens, take advantage of new 
technologies to improve efficiency, as well as improve 
coordination with the Risk Management Agency and the Natural 
Resources Conservation Service.

                         TITLE II--CONSERVATION

                SUBTITLE A--CONSERVATION RESERVE PROGRAM

Section 2001. Extension and enrollment requirements of conservation 
        reserve program

    Section 2001 extends the Conservation Reserve Program (CRP) 
authorization through 2017, and adds the definition for 
grasslands that will be eligible to be enrolled in the program. 
The reported bill also reduces the limit on the acres that can 
be enrolled in CRP contracts, such that the maximum enrolled 
acres shall be: 32 million acres for fiscal year (FY) 2012; 30 
million acres for FY2013; 27.5 million acres for FY2014; 26.5 
million acres for FY2015; 25.5 million acres for FY2016; and 25 
million acres for FY2017.
    Within the overall acreage cap, the bill provides for the 
enrollment in CRP of up to 1.5 million acres of grasslands and 
authorizes the Secretary to grant priority to lands expiring 
from current conservation reserve program contracts that will 
retain grass cover. This modification accommodates acreage that 
previously would have been eligible for short-term rental 
contracts under the Grasslands Reserve Program (GRP).
    The specific priority designations for the Chesapeake Bay 
Region, the Great Lakes Region, and the Long Island Sound 
Region are removed. The authority for the Secretary to 
designate conservation priority areas is retained, recognizing 
the importance of the program for addressing State-identified 
areas of special environmental sensitivity.

Section 2002. Farmable wetland program

    Section 2002 extends the Pilot Program for Enrollment and 
Buffer Acreage in Conservation Reserve authorization through 
2017, and renames it the Farmable Wetland Program. The pilot 
has been in place since 2002, and the Committee action changes 
the program from a pilot program to a standing program.

Section 2003. Duties of owners and operators

    Section 2003 removes the provisions for harvesting, 
grazing, and wind turbines, and rental rate reductions for 
authorized activities from the duties of owners and operators. 
These provisions are revised and moved to the duties of the 
Secretary.

Section 2004. Duties of the Secretary

    Section 2004 amends current law to address reductions in 
rental rates for harvesting, grazing, or other commercial use 
of CRP lands. For harvesting, grazing or other commercial use 
of the forage on CRP lands in response to flooding, drought, or 
other emergency, the reported bill removes the requirement to 
reduce the rental rate. The bill provides for a reduction in 
the rental rate of not less than 25 percent for authorized 
harvesting or grazing activity, or in the case of grazing by 
livestock of beginning farmers or ranchers, no reduction in 
rental rate.
    The Committee did not specify the range of situations under 
which CRP could be used to mitigate the impacts on agricultural 
producers resulting from adverse and extreme weather events or 
conditions. While these acres can provide additional forage 
when they are located within the disaster footprint, these 
forages also could assist in meeting livestock forage needs 
when near to the affected area, or when other CRP contract 
holders are willing to make their forage available to those 
affected by the emergency, or when flooding displaces grazing 
livestock. In the waiver of rental rate reduction, it is 
expected USDA will take appropriate action to ensure the 
program participant does not receive additional compensation of 
cash or in-kind services for the hay, or grazing from this 
permitted use of the forage. This section establishes the 
frequency of harvesting and routine grazing on acres enrolled 
in CRP contracts, consistent with a conservation plan, and 
provides for the incidental use of buffers adjacent to 
agricultural lands.
    Authorized activities for newly eligible grasslands include 
grazing, haying, mowing, or harvesting for seed production. The 
Secretary shall permit activities such as fire pre-suppression, 
rehabilitation and construction of fire breaks, fencing, 
livestock watering, and necessary cultural practices. These 
uses of the land are consistent with those allowed for rental 
contracts under the Grassland Reserve Program, and are carried 
over here to align with the authorized eligibility for those 
grasslands in the conservation reserve.
    Provisions are added to allow conservation and land 
improvement practices in the final year of a contract, with a 
commensurate reduction in rental value. Re-enrollment of lands 
modified through this provision is prohibited for at least 5 
years.
    The Committee intends that the intensity of all specified 
activities permitted by the revisions to section 1233(b) of 
current law shall be conducted within the parameters outlined 
in the statute, and consistent with the conservation of soil, 
water quality, and wildlife habitat and other the purposes of 
the program, and to control invasive species. Additionally, the 
Secretary with advice from State Technical Committees shall 
ensure that the frequency and duration of all specified 
activities permitted are reflected in associated conservation 
plans appropriate for the local climatic conditions, 
precipitation, soils, and other necessary factors in order to 
meet the purposes of the program.
    For the purposes of this program, the term ``critical 
birds'' shall include candidate, threatened or endangered 
species; species of economic significance; and priority fish 
and wildlife species identified in state, regional, or national 
wildlife plans and initiatives.
    The revisions made to section 1233(b)(2) of the current 
statute clarify the intent of the Committee to allow some uses 
of the conservation reserve when the activities are beneficial 
to the health and viability of the established cover. In doing 
so, the Committee focused on grasslands-related activities 
since grasslands are the predominant cover for the program. The 
Secretary should consider this sufficient authority to allow 
such activities to occur on other cover types when they could 
serve a similar benefit to the health and vigor of the cover. 
For example, the pre-commercial thinning of pine, or the 
harvesting of pine straw may be allowed with commensurate 
reduction of rental rates if these activities would be a 
technically accepted activity for improving the health and 
viability of the stand, as reflected in the conservation plan.

Section 2005. Payments

    Section 2005 clarifies the cost-share payments for proper 
thinning and practices to improve the condition of lands 
planted to trees, windbreaks, shelterbelts, and wildlife 
corridors. The section provides that annual payments for 
grasslands enrolled shall not be in amount that is more than 75 
percent of the grazing value of the land under contract and 
provides flexibility for the Secretary to consider the NASS 
survey data in establishing payment rates. It also strikes 
theprovisions for ``payments in kind'' through Commodity Credit 
Corporation stocks.

Section 2006. Contract requirements

    Section 2006 continues the language for transitioning lands 
for a retiring farmer and rancher to a beginning farmer or 
rancher, or socially disadvantaged farmer or rancher with 
conforming changes to other sections.

Section 2007. Conversion of land subject to contract to other 
        conserving uses

    Section 2007 repeals this provision which is no longer 
applicable for contracts in place prior to November 28, 1990.

Section 2008. Effective date

    Section 2008 sets the effective date of the amendments made 
by the reported bill as October 1, 2012, except that section 
2001 (acreage limitations) is effective upon passage of the 
Act, and establishes no effect on existing contracts.

              SUBTITLE B--CONSERVATION STEWARDSHIP PROGRAM

Section 2101. Conservation stewardship program

    Section 2101 of the reported bill contains a complete 
revision to the Conservation Stewardship Program (CSP) 
contained in current law and while constituting a substitute 
for it, the reported bill's provisions are primarily derived 
from current law. The legislation amends section 1238D by 
adding definitions of ``agricultural operation'' and ``eligible 
land,'' clarifies ``priority resource concern'' and 
``stewardship threshold,'' and strikes ``conservation 
measurement tool'' and ``resource concern'' definitions.
    The revised section 1238D in the reported bill streamlines 
and consolidates key definitions for the program. The meaning 
of agricultural operation tracks existing law. Conservation 
activities involve conservation systems, practices, and 
management measures. The term has an inclusive plain language 
meaning, encompassing, for example, conservation planning. The 
specific mention in the statute of inclusions does not exclude 
conservation activities that are otherwise within the 
definition. The definition of conservation stewardship plan 
makes it clear the plan is to inventory and identify priority 
resource concerns and to contain the additional specified 
elements encompassing new as well as existing conservation 
activities. Eligible land is defined to mean private and tribal 
land on which agricultural commodities, livestock, or forest-
related products are produced plus associated land on which 
priority resource concerns could be addressed through a 
contract under the program.
    A priority resource concern is defined to mean a natural 
resource concern or problem that is identified at the national, 
state, or local level as a priority for a particular area, and 
that represents a significant concern in a state or region that 
is likely to be addressed successfully through implementing 
conservation activities. The Committee understands that the 
process of identifying priority resource concerns should 
involve consultation, such as with State Technical Committees, 
at the state and local levels to the maximum extent 
practicable. The stewardship threshold is the level of 
management required to conserve and improve the quality and 
condition of a natural resource. The stewardship threshold for 
a natural resource is a science-based standard at an advanced 
level of conservation providing for the long-term continued 
productivity, use, and quality of the resource.
    The reported bill extends the conservation stewardship 
program for the fiscal years 2013 through 2017 in order to 
encourage producers to address priority resource concerns and 
to improve and conserve the quality and condition of natural 
resources in a comprehensive manner. The program assists 
producers who accomplish this purpose by undertaking additional 
conservation activities and by improving, maintaining, and 
managing conservation activities existing at the beginning of 
the contract.
    Subsection (b) excludes from the program land that is 
enrolled in the conservation reserve program, in a wetland 
easement, or in the conservation security program. The 
provision prevents concurrent enrollment in and receipt of 
payments through the conservation stewardship program and any 
of the listed programs. It does not prohibit enrollment in the 
program if other land in the operation is enrolled in the 
conservation reserve program or a wetland easement, nor does it 
prohibit the uninterrupted entry of land into the conservation 
stewardship program upon expiration of a contract under one of 
the other programs described in this subsection.
    The Secretary shall prioritize for enrollment in the 
program lands that are expiring from the Conservation Reserve 
Program in an effort to protect the taxpayer's conservation 
investment by continuing conservation benefits on those lands 
and enabling the transition from CRP to a sustainable grass-
based or other type of agricultural operation where some of the 
conservation benefits will continue. The Committee encourages 
the Secretary to conduct outreach to producers and to 
facilitate enrollment of such land into the conservation 
stewardship program in order to maintain and improve 
conservation values, such as through grass-based production 
systems. The subsection also updates the provision excluding 
land recently converted to cropland.
    The amended section 1238F pertains to Stewardship 
contracts. An eligible contract offer must also demonstrate 
that by the end of the stewardship contract the producer will 
at a minimum be meeting or exceeding the stewardship threshold 
for at least one priority resource concern in addition to 
continuing to meet or exceed the stewardship threshold for the 
two priority resource concerns that were the basis for the 
producer's eligibility to submit a contract offer and enroll in 
the program.
    Subsection (b) lists six criteria for ranking contract 
offers, prohibits giving a higher ranking to a contract offer 
based on the applicant's willingness to accept a reduced 
payment, and allows the development and use of additional 
criteria to ensure national, state, and local priority resource 
concerns are addressed effectively. Such additional criteria, 
should they be developed and used, are not to supersede or be 
more heavily weighted than the six statutory ranking criteria.
    Subsection (c) provides for entering into conservation 
stewardship program contracts.
    Subsection (d) specifies that conservation stewardship 
contracts shall be for a period of five years, shall require 
the producer to implement a conservation stewardship plan that 
describes the program purposes to be achieved through one or 
more conservation activities, shall permit all economic uses of 
the eligible land that maintain its agricultural nature and are 
consistent with the conservation purposes of the contract, 
shall include a provision to ensure the producer is not 
considered in violation of the contract for failure to comply 
with the contract due to circumstances beyond the control of 
the producer, shall include provisions specifying the remedies 
available to the Secretary upon violation of a term or 
condition of the contract, shall include provisions governing a 
change of interest in land subject to the contract and 
modification or termination of the contract, and shall include 
additional provisions the Secretary determines necessary to 
carry out the program. The Committee expects that the Secretary 
will allow for appropriate modification of contracts and 
commensurate adjustment in annual payments to take into account 
the addition of acreage to an operation by purchase or lease or 
a reduction in acreage through sale, termination of a lease, or 
enrollment of land in a land retirement or easement program
    Subsection (e) provides that the Secretary may allow a 
producer to renew the contract for one additional five-year 
period if the producer demonstrates compliance with the terms 
of the existing initial contract, agrees to adopt and continue 
to integrate conservation activities across the producer's 
entire agricultural operation, and agrees at a minimum to meet 
or exceed the stewardship threshold as to at least two priority 
resource concerns in addition to the priority resource concerns 
that were the basis of meeting the eligibility requirements of 
the initial contract offer specified in subsection (a).
    The revised section 1238G contains the duties of the 
Secretary in the administration of CSP and increases the number 
of locally identified priority resource concerns from 3 to 5 to 
at least 5. It also eliminates the requirement for use of the 
conservation measurement tool but calls for establishing a 
science-based stewardship threshold for each priority resource 
concern.
    Subsection (a) provides that the Secretary shall make the 
conservation stewardship program available for continuous 
enrollment with one or more ranking periods, one of which 
occurring in the first quarter of each fiscal year, shall 
identify not less than five priority resource concerns in a 
particular watershed or appropriate region or area within a 
state, and shall establish a science-based stewardship 
threshold for each priority resource concern that is 
identified.
    Subsection (b) provides criteria for the Secretary to 
allocate acreage to the states for enrollment in the program.
    Subsection (c) provides that during the period October 1, 
2012 through September 30, 2021 the Secretary shall, to the 
maximum extent practicable, enroll in the conservation 
stewardship program an additional 10,348,000 acres for each 
fiscal year and manage the program to achieve a national 
average annual rate of $18 an acre, including the costs of all 
financial assistance, technical assistance, and any other 
expenses associated with enrollment or participation in the 
program.
    Subsection (d) provides that the Secretary shall make 
annual payments under the program to compensate producers for 
installing and adopting additional conservation activities and 
for improving, maintaining, and managing conservation 
activities in place in the operation of the producer at the 
time the conservation stewardship contract offer is accepted. 
The subsection specifies factors the Secretary shall use to 
determine the amount of the conservation stewardship annual 
payment, practices and activities that are excluded from 
payments, and proration and timing of payments.
    Subsection (e) provides for the continuation of the 
availability, requirements, and eligibility with respect to 
supplemental payments for resource-conserving crop rotations.
    Subsection (f) provides that a person or legal entity may 
not directly or indirectly receive payments under the 
conservation stewardship program that in the aggregate exceed 
$200,000 under all contracts entered into during fiscal years 
2013 through 2017, excluding arrangements with Indian tribes.
    Subsection (g) continues the requirement for outreach 
activities and appropriate technical assistance to specialty 
crop and organic producers and for ensuring they are able to 
participate effectively in the program.
    Subsection (h) continues the requirement for establishing a 
transparent means for producers to initiate certification under 
the Organic Foods Production Act of 1990 while participating in 
the conservation stewardship program.
    Subsection (i) provides for the issuance of regulations by 
the Secretary to carry out the conservation stewardship program 
and to ensure a fair and reasonable application and enforcement 
of the payment limitations in subsection (f).
    Finally, subsection (c) of section 2101 provides that the 
amendment made by this section to subchapter B of chapter 2 of 
subtitle D of title XII of the Food Security Act of 1985 (16 
U.S.C. 3838d et seq.) shall not affect the validity or terms of 
any contract, or any payments required to be made in connection 
with the contract, entered by the Secretary under such 
subchapter before October 1, 2012 and provides for the use of 
funds made available under section 1241(a)(4) of the Food 
Security Act of 1985 (16 U.S.C. 3841(a)(4) (as amended by 
section 2601(a)) to administer and make payments to 
participants enrolled in conservation stewardship contracts 
during any of fiscal years 2009 through 2012.

          SUBTITLE C--ENVIRONMENTAL QUALITY INCENTIVES PROGRAM

Section 2201. Purposes

    Section 2201 adds ``develop and improve wildlife habitat'' 
as a purpose for assisting producers to install and maintain 
conservation practices.

Section 2202. Definitions

    Section 2202 removes the definition for the National 
Organic Program and incorporates the reference to the program 
in the organic system plan definition.

Section 2203. Establishment and administration

    Section 2203 extends the program authorization through 
2017. It allows limited resource, socially disadvantaged, 
beginning, and veteran farmers or ranchers to obtain advance 
payments and up to 90 days to implement practices from the date 
of the advance. It continues the allocation of funding 
practices related to livestock production as at least 60 
percent of the funds.
    It also establishes at least five percent of the funds will 
be targeted to practices benefitting wildlife habitat, and 
establishes wildlife habitat incentive practices as 
conservation practices that support restoration, development, 
and improvement of wildlife habitat for upland wildlife, 
wetland wildlife, threatened and endangered species, fish 
habitat, pivot corners and irregular fields, and other types.
    The Committee intends that the revisions to Section 
1240B(3)(f)(2) of the statute made by this section regarding 
funding of wildlife habitat practices should prioritize fish 
and wildlife species identified in state, regional, or national 
wildlife plans and initiatives.
    Management practices for which the Secretary may accord 
special significance in determining payment amounts are revised 
to reflect better the natural resource objectives of program 
participants, including soil health, water quality and quantity 
improvement, nutrient management, pest management, wildlife 
habitat development, and invasive species management. The 
Committee intends to continue the ability of the Secretary to 
enter into contracts for long-term grassland rotation, 
conversion to less water-intensive crops or dryland farming, or 
irrigation reduction, as well as other water conservation 
measures. The Committee expects that the EQIP program will 
continue to emphasize and allocate considerable funding to the 
critical issue of surface and groundwater conservation, 
including groundwater conservation in multistate areas 
overlying an aquifer with significant agricultural use.
    The Committee intends that conservation programs should 
recognize the use of innovative technology, such as enhanced 
efficiency fertilizers (e.g., slow and controlled-release 
fertilizers, stabilized nitrogen fertilizers). This innovative 
technology can help producers to protect water quality and 
reduce greenhouse emissions, and are recognized by State 
regulators of fertilizers. In the case of EQIP applications 
involving manure-to-energy projects, the Committee encourages 
the Secretary to consider whether the projects include an 
integrative approach to addressing nutrient management and 
water quality issues.

Section 2204. Evaluation of applications

    Section 2204 makes minor wording changes to the underlying 
law to emphasize the conservation purpose of the program.

Section 2205. Duties of producers

    Section 2205 makes minor wording changes to the underlying 
statute to clarify duties of producers relate only to enrolled 
lands.

Section 2206. Limitation on payments

    Section 2206 amends current law to replace the 6-year 
rolling payment limit with a firm time period of 2013 through 
2017 that will streamline and simplify program administration. 
This revision aligns the payment limitation with the time 
period to be covered by this bill.

Section 2207. Conservation innovation grants and payments

    Section 2207 includes a reporting requirement for the 
Secretary to increase transparency of how funds are used and 
the derived benefits. The Committee acknowledges the emphasis 
and successes of EQIP in assisting producers to address 
Federal, state, and local air quality regulatory requirements 
and expects the Secretary to continue the existing commitment 
to air quality under the program.

Section 2208. Effective date

    Section 2208 establishes October 1, 2012, as the effective 
date for this section and clarifies that this amendment will 
not affect contracts entered into before October 1, 2012.

         SUBTITLE D--AGRICULTURAL CONSERVATION EASEMENT PROGRAM

Section 2301. Agricultural Conservation Easement Program

    Section 2301 establishes a new Subtitle H within the Food 
Security Act of 1985, as amended, that combines the easement 
authorities of the Wetlands Reserve Program (WRP), Grasslands 
Reserve Program (GRP), and Farmland Protection Program (FPP) 
into an agricultural conservation easement program.
    Section 1265A defines common terms for the program, 
including the two easement types (agricultural land easements 
and wetland easements), eligible entities, and eligible lands. 
The Committee includes non-industrial private forest land in 
the eligible land definition for ALE. It is the Committee's 
intent that non-industrial private forest land used for farming 
or agriculture as defined by State law shall be treated as 
cropland for the purposes of the program. For example, where 
the cultivation of maple trees, collection of maple sap, and 
the production of maple syrup are defined as farming or 
agriculture in State law, the Secretary shall treat such land 
as cropland for the program.
    Section 1265B describes agricultural land easements (ALE), 
which are acquired and held by eligible entities with cost-
share assistance from the Secretary. Three valuation options 
are established for determining the fair market value of an 
easement, consistent with the methods used under the 
consolidated programs. The terms of easements are permanent, or 
the maximum allowed by state law.
    The language clarifies that the Secretary may provide up to 
50 percent of the appraised fair market value of an 
agricultural land easement and that eligible entities may 
include a landowner donation as part of their match. The 
Committee recognizes the cost incurred by eligible entities in 
completing transactions and the reported bill continues to 
allow for landowner donations as part of the non-federal match 
requirement. It also provides a waiver authority for the 
Secretary to provide up to 75 percent of the appraised fair 
market value of an easement placed on grasslands of special 
environmental significance. The consolidation of easement 
programs eliminated the Grasslands Reserve Program provisions 
that permitted the Secretary to acquire and hold grassland 
easements or acquire and transfer easements to eligible 
entities at no cost to the entity. The Committee recognizes the 
need to protect important grasslands and permits the Secretary 
in special circumstances to provide up to 75 percent of the 
fair market value of the easement. The increased cost share 
available for specific grasslands easements is intended to help 
in the transition to the new program format, and reflects the 
Committees commitment to the nation's grasslands.
    The entity certification process from FPP is retained and 
the opportunity for non-certified entities to participate. The 
Committee expects the term `agricultural viability' in the ALE 
purpose to clarify that eligible entities may include in their 
terms and conditions for conservation easements a right to 
purchase at the property's agricultural use value, if the 
seller agrees to accept such terms and conditions.
    Pursuant to section 1265B, the Secretary shall emphasize 
the protection of agriculture-producing areas when developing 
criteria for the evaluation of applications for ALE. The 
Committee intends that eligible entities should seek to 
maximize the protection of eligible land in viable agricultural 
areas where applicable. The Committee does not intend that 
easement parcels must abut each other, but that to the extent 
possible they should be contiguous with other lands in 
agricultural uses, irrespective of whether or not those lands 
are under an easement. The Secretary should consider regional 
variation in agricultural land use patterns when establishing 
evaluation criteria. Additionally, the Secretary shall 
emphasize acquisition of easements to protect the agricultural 
use and conservation values of the agricultural lands, 
including retention of native grasslands and rangelands that 
are at high risk for conversion to uses other than grazing or 
related activities.
    The Committee expects that eligible entities will be 
responsible for enforcement of the easement terms and 
conditions. The right of enforcement for the Secretary that is 
required under section 1265B is included in the event that the 
eligible entity is dissolved or otherwise fails to carry out 
its responsibility in which case USDA will enforce the easement 
terms and conditions. The Committee does not intend for the 
Secretary to be directly in the chain of title.
    Section 1265C describes wetland easements. The reported 
bill provides 30 year, permanent, and maximum duration by state 
law easement enrollment options, and 30 year contract 
enrollment option for Indian Tribes. It also establishes a land 
ownership requirement of 24 months prior to enrollment, which 
is reduced from the 7-year requirement in current law. It 
retains WRP ranking criteria and priority for migratory and 
other wildlife habitat and WRP easement terms and conditions 
(permitted and prohibited activities) and compatible uses. It 
revises the WRP grazing rights pilot such that it is a 
permanent provision, and includes a wetlands enhancement option 
for States, which is the same as the wetlands reserve 
enhancement in WRP.
    In carrying out the provisions in section 1265C, the 
Secretary shall encourage the use of wildlife plans and wetland 
protection plans to assist in making priority determinations 
for easement acquisitions to protect and enhance habitat for 
migratory birds and other wildlife. The Committee intends that 
priority determinations will guide easement acquisition to 
achieve the greatest benefits for the federal funds invested. 
This includes considering a priority for easements that are 
permanent in duration.
    To ensure wetland functions and values are developed, the 
Committee expects that the Secretary may permit the use of 
berms, water control structures, pumps and other acceptable 
wetland management and enhancement techniques, as appropriate. 
The Committee expects the Secretary to encourage the wetland 
plan developed under this section, with input from the 
landowner, to achieve: (1) restoration of wetlands that were 
formerly on site or in the immediate region, to the extent 
practicable; (2) wetland restoration needs and priorities 
identified in a state or regional restoration plan; or (3) 
restoration of other appropriate wetland types and 
configurations, as determined by the Secretary. The easement 
restoration plan should include the priorities identified in 
the section for protecting and enhancing habitat for migratory 
birds and other wildlife.
    Section 1265D contains administration provisions common to 
both easement types. It describes certain ineligible land and 
provides clarification and criteria for easement subordination, 
exchange, modification, and termination determinations (new for 
agricultural land easements and subordination added for WRP). 
In evaluating applications, the Secretary may allow an 
enrollment priority for acres expiring from CRP, where 
continuing environmental benefits would be achieved through 
enrollment in the program. It establishes October 1, 2012, as 
the effective date for this section.
    The Committee expects that the funding allocations made 
available under section 1265D(e) shall be managed at the 
national level, affording flexibility at the State level for 
prioritizing easement needs: agricultural land easements or 
wetland easements, as appropriate. The Committee expects that 
the Secretary will annually target no less than 40 percent of 
funds for agricultural land easements.

         SUBTITLE E--REGIONAL CONSERVATION PARTNERSHIP PROGRAM

Section 2401. Regional Conservation Partnership Program

    Section 2401 combines the authorities of the agricultural 
water enhancement program (AWEP), Chesapeake Bay watershed 
program, cooperative conservation partnership initiative 
(CCPI), and Great Lakes basin program for soil erosion and 
sediment control into a regional conservation partnership 
program (RCPP).
    Section 1271 specifies that the program will work through 
partnership agreements and contracts directly with 
participating producers. Program purposes include furthering 
conservation efforts at regional or watershed scales, and 
encouraging partners to work with producers to meet or 
eliminate the need for regulatory requirements related to 
agriculture and implement projects that benefit multiple 
producers on a local, regional, state or multistate basis.
    Section 1271A identifies EQIP, CSP, and ACEP as the covered 
programs through which RCPP is delivered. It defines eligible 
activities that address water resource concerns (flooding, 
drought, retention, quality, conversion to dryland farming, 
sedimentation reduction), erosion, and wildlife, with a 
flexibility for the Secretary to identify other activities. It 
defines eligible partners to include producer associations or 
cooperatives, States or units of local government, Indian 
tribes, institutions of higher education, and organizations 
with a history of working with producers on agricultural land 
(all partners previously eligible for AWEP and CCPI). The 
Committee expects that the Secretary will work cooperatively 
with eligible partners that have a history of working with 
farmers and ranchers. The Secretary should give strong 
consideration to partnerships that seek to restore and enhance 
water quantity in the nation's large river systems and 
aquifers; addressing areas where there is low annual 
precipitation or high variability in annual precipitation and 
multiple demands on limited water resources.
    Section 1271B establishes partnership agreement authority 
for the Secretary. It clarifies that the duties of the partners 
include defining the scope of the project, identifying the 
program resources needed, conducting producer outreach and 
education, leveraging resources, and reporting to the Secretary 
on the results of the project. It also clarifies that proposal 
selection is competitive and merit-based. The Committee also 
expects the Secretary to include the type of projects that are 
innovative in nature, public-private market instruments that 
assist the producers in meeting or avoiding the need for a 
natural resource regulatory requirement, such as water quality 
trading markets.
    The Committee recognizes the importance of water resource 
management at the watershed scale, especially interconnected 
bodies of water, and the need for fully integrating the effort 
across regions and programs. Accordingly, the Committee has 
included outreach and education in the duties of partners 
(section 1271B(c)(1)(B)) and strongly recommends USDA look 
across titles to combine resources, program authorities and 
priorities strategically in addressing these large-scale, 
conservation challenges. The Committee recommends that USDA 
coordinate available authorities to provide grants and funding 
to universities working in collaboration with producers and 
conservation partners, especially for the critical conservation 
areas designated pursuant to section 1271F. The effort should 
include research into conservation solutions, combined with 
education and outreach programs to producers, communities, 
partners and other stakeholders. The Committee encourages 
approaches that include analysis of the programs, tools and 
solutions put into practice so they can be evaluated for 
overall effectiveness and help inform future policy decisions.
    Section 1271C describes that contracts with producers must 
be consistent with the rules of the covered programs, but 
allows the Secretary to make limited adjustments in 
discretionary program requirements, at the request of the 
partner. It provides authority for the Secretary to enter into 
alternative funding arrangements with up to 10 multi-state 
water resource agencies or authorities if they can ensure 
programmatic integrity and comply with rigorous reporting and 
audit requirements to the Secretary. It clarifies that payments 
are made consistent with the covered programs. It allows for 
payments for a period of 5 years for conversion to less water-
intensive crops, or from irrigated to dryland farming or long-
term grassland rotation. The Committee encourages the Secretary 
to continue to provide funding for individual agricultural 
producers to promote groundwater conservation, as appropriate 
for their operations, including adoption of water conserving 
crops and production practices, conversion to dryland farming, 
or diversification of operations to include long-term grassland 
rotation. The Committee also encourages the Secretary to 
consult with State agencies and coordinate federal assistance 
with state programs.
    Section 1271D authorizes the program from 2013 through 2017 
and makes available $100,000,000 per year in mandatory funding. 
It provides additional funding and acres at 6 percent from each 
of the covered programs (EQIP, CSP, and ACEP). It allocates 
funding as 50 percent to national competition, 25 percent to 
State level competition, and 25 percent for critical 
conservation areas. In allocating the funds in this way, the 
Committee intends for the program to address partnership 
projects and resource concerns at local, state, multistate and 
regional levels.
    Section 1271E requires the Secretary to report biennially 
to Congress on the status of projects under the program. The 
reporting requirement includes specific oversight reporting on 
any selected alternative funding arrangements to ensure 
adequate scrutiny on the use of funds through these 
arrangements.
    Section 1271F authorizes the Secretary to designate up to 8 
critical conservation areas with priority for multistate areas 
with significant agricultural production, areas covered by an 
existing plan with established goals and objectives (the 
managers encourage USDA to look to include areas where they 
have an existing initiative in place), areas with large bodies 
of water with water quality concerns, areas with water quantity 
concerns (flood prevention, water retention, water supply 
(including multistate areas with substantial groundwater 
withdrawals for agricultural use and high historic levels of 
groundwater depletion.)), or areas that may be subject to 
regulatory requirements that could reduce the economic scope of 
agriculture in the area. These designations do not require the 
presence of a partner or partnership agreement, although it is 
the Committee's expectation that these areas will garner 
significant interest by local, state, and regional entities. 
Once designated, producers within critical conservation areas 
may begin to apply for program assistance independent of a 
partner or in connection with a partnership agreement if one 
exists.
    Subsection (b) of section 2401 establishes October 1, 2012, 
as the effective date for this section.

                SUBTITLE F--OTHER CONSERVATION PROGRAMS

Section 2501. Conservation of private grazing land

    Section 2510 reauthorizes funding at a reduced level of 
$30,000,000 in appropriations for each fiscal year from 2013 
through 2017.

Section 2502. Grassroots source water protection program

    Section 2502 reauthorizes funding at a reduced level of 
$15,000,000 in appropriations for each fiscal year from 2013 
through 2017.

Section 2503. Voluntary public access and habitat incentive program

    Section 2503 authorizes mandatory funding at $40,000,000 
for FY 2013 through 2017, and requires the Secretary to report 
on the effectiveness of the program.

Section 2504. Agriculture conservation experienced services program

    Section 2504 adds ACEP to the programs that can be used 
under the agriculture conservation experienced services 
program.

Section 2505. Small watershed rehabilitation program

    Section 2505 reauthorizes program and authorizes 
appropriations at $85,000,000 each year through FY 2017.

Section 2506. Terminal lakes assistance program

    Section 2506 reauthorizes and amends the Desert Terminal 
Lakes program to include an appropriations authorization for 
land purchase grant opportunities. It authorizes mandatory 
funding at $150,000,000 for FY 2013 through 2017 and authorizes 
appropriations of $25 million. It is the Committee's intent 
that the Secretary of the Interior, acting through the 
Commissioner of Reclamation, use as guidance for implementing 
subsection (d) Water Assistance, the authorities in the 
following provisions of Public Law: section 207 of Public Law 
108-7, section 208 of Public Law 109-103, sections 206 and 208 
of Public Law 111-85, and subsection 208(b) of Public Law 112-
74.

                 SUBTITLE G--FUNDING AND ADMINISTRATION

Section 2601. Funding

    Section 2601 authorizes Commodity Credit Corporation 
funding for programs under this title through FY2017. It 
authorizes conservation reserve program transition incentive 
payments at $50,000,000 and tree thinning activities at 
$10,000,000. It authorizes the Agriculture Conservation 
Easement Program at: $450,000,000 for FY2013, $475,000,000 for 
FY2014, $500,000,000 for FY2015, $525,000,000 for FY2016, and 
$250,000,000 for FY2017. It authorizes the conservation 
security program, the conservation stewardship program, and the 
environmental quality incentives program at: $1,500,000,000 for 
FY2013; $1,600,000,000 for FY2014; and $1,650,000,000 for 
FY2015 through FY2017.

Section 2602. Technical assistance

    Section 2602 adds a requirement for the Secretary to report 
annually to the Committees on the amount of funds requested and 
apportioned for technical assistance. The Committee intends for 
the Secretary to encourage any qualified third-party provider 
who meets the certification requirements of section 1242(e) and 
who has experience working with individuals who do not accept 
government assistance due to religious tenets, to enroll as a 
technical service provider.

Section 2603. Regional equity

    Section 2603 strikes the $15,000,000 target for regional 
equity allocations and replaces it with 0.6 percent in order to 
allow allocations to synchronize with annual program 
appropriations.

Section 2604. Reservation of funds to provide assistance to certain 
        farmers or ranchers for conservation access

    Section 2604 extends the EQIP and CSP 5 percent set aside 
for beginning and socially disadvantaged farmers and ranchers 
to 2017 and adds priority for eligible producers who are also 
veterans.

Section 2605. Annual report on program enrollments and assistance

    Section 2605 aligns the Secretary's reporting requirements 
on program enrollments and assistance to reflect the 
consolidation and related program adjustments made by this 
amendment.

Section 2606. Administrative requirements applicable to all 
        conservation programs

    Section 2606 combines language on improved administrative 
efficiency and streamlining from individual programs and places 
it here to apply to all conservation programs. It expands and 
clarifies requirements for developing a streamlined 
conservation application process. It clarifies that any payment 
received under this title is in addition to and does not affect 
total payments that an owner or operator is otherwise eligible 
to receive. The Committee encourages the Secretary to 
significantly increase the use of computer-based conservation 
practice planning tools that incorporate Light Detection and 
Ranging (LiDAR) elevation data to modernize and simplify 
conservation planning, improve efficiency of technical 
assistance, and improve service to private landowners.
    The Committee expects the Secretary to promptly establish 
and maintain a user-friendly, publicly available website to 
provide information on Federal, State, local and private 
resources available to those interested in implementing 
conservation practices which provides: (1) user-friendly access 
for agricultural producers, owners of nonindustrial private 
forest land, Federal, State, and local governments, academic 
and nongovernmental organizations, industry associations, and 
other interested parties to industry-specific regulatory 
compliance and conservation program information that the 
Secretary considers potentially useful to agricultural 
producers and owners of nonindustrial private forest land 
located in critical conservation areas; and (2) detailed 
examples of successful conservation projects. The Committee 
further expects the Secretary to enhance and update the website 
as necessary.

Section 2607. Rulemaking authority

    Section 2607 directs the Secretary to move expeditiously 
with rulemaking and provides for operation of programs under 
interim rules.

Section 2608. Standards for State technical committees

    Section 2608 modifies language to require the Secretary to 
review and update state technical committee operating standards 
only as necessary.

 SUBTITLE H--REPEAL OF SUPERSEDED PROGRAM AUTHORITIES AND TRANSITIONAL 
                               PROVISIONS

Section 2701. Comprehensive conservation enhancement program

    Section 2701 repeals the comprehensive conservation 
enhancement program.

Section 2702. Emergency forestry conservation reserve program

    Section 2702 removes this provision for enrolling lands in 
response to the hurricanes of calendar year 2005 and provides 
for enrolled contracts to continue until their expiration date 
because it is no longer applicable.

Section 2703. Wetlands reserve program

    Section 2703 repeals the wetlands reserve program.

Section 2704. Farmland protection program and farm viability program

    Section 2704 repeals the farmland protection program.

Section 2705. Grassland reserve program

    Section 2705 repeals the grassland reserve program.

Section 2706. Agricultural water enhancement program

    Section 2706 repeals the agricultural water enhancement 
program.

Section 2707. Wildlife habitat incentive program

    Section 2707 repeals the wildlife habitat incentive 
program.

Section 2708. Great Lakes basin program

    Section 2708 repeals the Great Lakes basin program for soil 
erosion and sediment control. The Committee recognizes that the 
Great Lakes Basin Program has been an important and successful 
program for 22 years that has implemented over 400 projects 
that have reduced soil erosion and improved water quality in 
Great Lakes watersheds. Since 2008, the program has supported 
implementation of both the Great Lakes Regional Collaboration 
(GLRC) and the Great Lakes Restoration Initiative (GLRI) by 
directing resources to priority watersheds. The Committee 
intends the program to continue serving this purpose for the 
duration of the GLRI.

Section 2709. Chesapeake Bay watershed program

    Section 2709 repeals the Chesapeake Bay watershed. The 
Committee recognizes that the Chesapeake Bay Watershed Program 
established in 2008 complemented other conservation programs by 
enhancing their reach and effectiveness within the tributary 
watersheds. Since 2008, the program has supported farm level 
implementation of conservation practices benefiting water 
quality by improving nutrient management, reducing 
sedimentation, and restoring riparian areas. With the 
consolidation of the Chesapeake Bay watershed program into the 
regional conservation partnership program (RCPP), the Committee 
intends the RCPP to continue assistance to agricultural 
producers consistent with the purposes of the Chesapeake Bay 
Watershed Program.

Section 2710. Cooperative conservation partnership initiative

    Section 2710 repeals the cooperative conservation 
partnership initiative.

Section 2711. Environmental easement program

    Section 2711 repeals the environmental easement program.

                            TITLE III--TRADE

                     SUBTITLE A--FOOD FOR PEACE ACT

Section 3001. Support for eligible organizations

    Section 3001 raises the amount of funds available to 
organizations to facilitate the delivery of food aid to 15 
percent of the total appropriation.

Section 3002. Food aid quality

    Section 3002 expands the Administrator's ability to develop 
nutritious food aid products.

Section 3003. Minimum levels of assistance

    Section 3003 reauthorizes program authority through 2017.

Section 3004. Reauthorization of Food Aid Consultative Group

    Section 3004 reauthorizes program authority through 2017.

Section 3005. Monitoring and evaluation

    Section 3005 removes authority to spend money on upgrading 
IT systems, deletes section on a completed GAO report, and 
reauthorizes program authority through 2017.

Section 3006. Food aid delivery

    Section 3006 reauthorizes program authority through 2017.

Section 3007. Monetization

    Section 3007 sets a 70 percent cost recovery rate when 
monetizing commodities. If the rate of return is below that 
threshold, the Administrator must report the reasons to 
Congress.

Section 3008. Flexibility

    Section 3008 adds flexibility for the Administrator to 
facilitate food aid distribution.

Section 3009. Prepositioning

    Section 3009 increases funds available for getting food aid 
to strategic positions in case of emergency.

Section 3010. Deadline for agreements to finance sales or to provide 
        other assistance

    Section 3010 reauthorizes program authority through 2017.

Section 3011. Safebox

    Section 3011 provides for the Administrator to spend 
between 15 percent and 30 percent of the total appropriation on 
non-emergency projects.

Section 3012. Coordination of foreign assistance programs report

    Section 3012 strikes language for a completed report.

Section 3013. Micronutrient fortification programs

    Section 3013 deletes reference to an obsolete study.

Section 3014. John Ogonowski and Doug Bereuter farmer-to-farmer program

    Section 3014 changes the alternative minimum on the program 
to 0.6 percent of the total appropriation.

               SUBTITLE B--AGRICULTURAL TRADE ACT OF 1978

Section 3101. Export credit guarantee program

    Section 3101 reauthorizes program authority through 2017 
and allows for up to $4,500,000,000 in credit guarantees.

Section 3102. Market access program

    Section 3102 reauthorizes program authority through 2017.

Section 3103. Foreign Market Development Cooperator Program

    Section 3103 reauthorizes program authority through 2017.

               SUBTITLE C--OTHER AGRICULTURAL TRADE LAWS

Section 3201. Food for Progress Act of 1985

    Section 3201 deletes reference to a completed project in 
Malawi and adds flexibility for the Administrator to facilitate 
food aid distribution. It sets a 70 percent cost recovery rate 
when monetizing commodities, and provides that when the rate of 
return is below that threshold, the Administrator must report 
to Congress.

Section 3202. Bill Emerson Humanitarian Trust

    Section 3202 reauthorizes program authority through 2017.

Section 3203. Promotion of agricultural exports to emerging markets

    Section 3203 reauthorizes program authority through 2017.

Section 3204. McGovern-Dole

    Section 3204 reauthorizes program authority through 2017.

Section 3205. Technical assistance for specialty crops

    Section 3205 reauthorizes program authority through 2017.

Section 3206. Global crop diversity trust

    Section 3206 reauthorizes program authority through 2017.

Section 3207. Local and regional procurement projects

    Section 3207 continues the authority for USDA to conduct 
local and regional procurement projects. It gives preference to 
organizations with projects under the McGovern-Dole program to 
promote graduation from that program and requires the Secretary 
to submit a report to Congress on the impact of these projects.

Section 3208. Donald Payne Horn of Africa food resilience program

    Section 3208 provides grants for projects that are working 
on the ground in the Horn of Africa to build resilience to food 
crises and prevent future outbreaks. It requires a study of the 
projects implemented through government agencies and how they 
can better work together to improve outcomes.

Section 3209. Agricultural trade enhancement study

    Section 3209 requests that the Secretary study a 
reorganization of the international trade functions (imports 
and exports) at USDA including the establishment of an Under 
Secretary for Trade and Foreign Agricultural Affairs.

                          TITLE IV--NUTRITION

               SUBTITLE A--SUPPLEMENTAL NUTRITION PROGRAM

Section 4001. Food distribution on indian reservations

    Section 4001 reauthorizes the Food Distribution Program on 
Indian Reservations.

Section 4002. Standard utility allowances based on the receipt of 
        energy assistance payments

    Section 4002 amends current law in order to preclude States 
from annually issuing nominal LIHEAP benefits to qualify 
otherwise ineligible households for Standard Utility 
Allowances, which result in increased monthly SNAP benefits. 
Only annual LIHEAP benefits of $10 or more will qualify a 
household without out-of-pocket utility expenses to receive a 
Standard Utility Allowance deduction for calculating monthly 
SNAP food benefits. The Committee intends that the Secretary 
utilize this authority only to further the intent of the 
connection between SNAP and LIHEAP as outlined in this report.

Section 4003. Eligibility disqualifications

    Section 4003 limits SNAP eligibility for college students 
to students participating in technical and vocational education 
programs, such as 2-year colleges, remedial course work, basic 
adult literacy, and English as a Second Language instruction.

Section 4004. Ending Supplemental Nutrition Assistance Program benefits 
        for gambling winners

    Section 4004 makes households ineligible to receive SNAP 
food benefits if one of the household members receives 
substantial lottery or gambling winnings. The household remains 
ineligible for SNAP until income eligibility requirements are 
met. It requires States to coordinate with State lottery and 
gambling authorities to identify individuals participating in 
SNAP who receive substantial winnings.
    In May 2011, news reports indicated that a man who had 
recently received lotto winnings totaling $1 million was 
continuing to receive SNAP benefits. The Committee acknowledges 
that this is a rare, but also egregious, violation of the 
intent for the program. The Committee seeks to provide the 
Secretary clear direction to assist states in improving 
oversight of major gambling activities that result in large 
winnings, and help states to improve coordination between 
entities responsible for gambling and SNAP administrative 
offices. The Committee does not intend to increase the 
administrative burden on states by instituting extensive 
oversight of private or charitable gaming activities, such as 
those that occur at senior centers, churches, private homes or 
other non-commercial gaming. Further, it is not the intent of 
the Committee that the Secretary be required to impose 
statutory requirements that may otherwise be waived under State 
option in this Act. The Committee encourages the Secretary to 
evaluate the criteria for substantial winnings in a manner that 
does not produce an outcome that increases poverty.

Section 4005. Retailers

    Section 4005 requires participating retailers to stock at 
least 3 of the 4 staple food categories: dairy products; meat 
poultry or fish; fruits or vegetables; and bread or cereals. 
Previously, a qualified SNAP retailer had to carry 2 of the 4 
staple food categories. It bans retailers from participating in 
SNAP if sales attributable to liquor and tobacco exceed 45 
percent of total sales. It requires SNAP retailers to pay 100 
percent of the cost of electronic benefit transfer machines, 
with an exemption for farmers' markets, military commissaries, 
nonprofit food buying cooperatives or other entities determined 
by the Secretary. It restricts States from issuing manual 
vouchers for SNAP unless the Secretary deems it necessary for 
emergency purposes. It requires all parties providing EBT 
machines to provide unique identification numbers to enable the 
Secretary to access precise data for addressing retailer 
trafficking. The Committee notes that the changes in this 
section should not be interpreted as support for any action 
that would result in interchange fees being imposed on SNAP 
transactions. The Committee acknowledges that many small 
businesses and direct-to-consumer retailers continue to face 
challenges related to the cost of utilizing EBT and advanced 
technologies. The Committee encourages the Secretary to take 
steps to minimize the impact of these provisions on those 
retailers.

Section 4006. Improving Security of Food Assistance

    Section 4006 requires households with excessive replacement 
card requests to provide State agencies with an explanation for 
the lost cards. It allows State agencies to decline issuance of 
replacement cards until the household provides an explanation. 
It requires States to protect the interests of homeless, 
disabled, victims of crimes, and other vulnerable citizens. The 
Committee intends for this provision to require that a state 
agency be allowed to withhold an EBT card only until such time 
as an explanation is provided by the SNAP recipient. Any 
additional actions, including denial of benefits, should follow 
due process as described in the underlying statute.

Section 4007. Technology modernization for retailers

    Section 4007 authorizes demonstration projects for 
authorized retailers to accept SNAP benefits through mobile 
electronic devices other than stationary EBT machines, and to 
accept SNAP benefits through on-line transactions. It requires 
retailers and States to protect consumer information privacy, 
ensure the price of food is not higher when using mobile 
technologies, and pay costs associated with implementing mobile 
technologies. It requires States to test mobile technologies 
before approving use in all SNAP retailers, and requires the 
Secretary to issue a report to Congress. It prohibits SNAP 
benefits for the payment of any food delivery fees and any 
purchase online other than eligible food.

Section 4008. Use of benefits for purchase of community-supported 
        agriculture share

    Section 4008 allows SNAP benefits for the purchase of CSA 
shares. The initial cost of the share may be paid at an 
appropriate amount of time in advance of food delivery. The 
Committee does not intend to require the Secretary to make any 
adjustments to benefits allocations in order to accommodate the 
purchase of CSA shares under this section.

Section 4009. Restaurant meals program

    Section 4009 ensures the integrity of the SNAP restaurant 
meals program by providing the Secretary with additional 
authority over State restaurant meal program options and 
retailer eligibility requirements.

Section 4010. Quality control error rate determination

    Section 4010 establishes the State threshold level for 
reporting SNAP errors at $25 or greater.

Section 4011. Authorization of appropriations

    Section 4011 reauthorizes appropriations for the 
administration of SNAP through fiscal year 2017.

Section 4012. Assistance for community food projects

    Section 4012 provides grants to eligible nonprofit 
organizations to improve community access to food. It 
eliminates grant eligibility for infrastructure improvement and 
development. It increases funding by $5 million per year 
starting in fiscal year 2013; raising the total annual funding 
to $10 million per year.

Section 4013. Emergency food assistance

    Section 4013 requires funding for the Emergency Food 
Assistance Program to be available for 2 years. It increases 
existing funding indexed to inflation by $150 million over 10 
years. It front-loads the funding increase by $28 million in 
FY2013, $24 million in FY2014, $20 million in FY2015, $18 
million in FY2016, and by adding $10 in FY2017 and every 
following fiscal year. The Committee encourages the Secretary 
to utilize existing authority to make additional purchases for 
use at food banks in times of high need when funds are 
available within the existing budget to accommodate additional 
commodity purchasing.

Section 4014. Nutrition education

    Section 4104 allows ``physical activity'' as an eligible 
use of SNAP Nutrition Education funding.

Section 4015. Retailer and recipient trafficking

    Section 4105 provides the Secretary $18.5 million per year 
in additional funding to prevent SNAP food benefit trafficking. 
The additional funding in this section is intended to 
supplement trafficking interventions, which may include data 
mining, activities in partnership with state agencies involved 
in the investigation of both recipients and retail food stores 
and any other actions necessary to investigate program abuses.

Section 4016. Technical and conforming amendments

              SUBTITLE B--COMMODITY DISTRIBUTION PROGRAMS

Section 4101. Commodity distribution program

    Section 4101 reauthorizes the Commodity Distribution 
Program.

Section 4102. Commodity supplemental food program

    Section 4102 revises the Commodity Supplemental Food 
Program (CSFP) to serve senior citizens, and phases-out 
eligibility for women, infants, and children. The Committee 
intends for the women, infants and children participating in 
CSFP to instead participate in the Women, Infants, and Children 
(WIC) program because WIC is better suited to meet 
participants' needs.

Section 4103. Distribution of surplus commodities to special nutrition 
        projects

    Section 4103 reauthorizes the Secretary's authority to 
participate in reprocessing agreements with private companies 
to stretch the value and amount of surplus commodity foods 
available for nutrition programs.

Section 4104. Technical and conforming amendments

                       SUBTITLE C--MISCELLANEOUS

Section 4201. Purchase of fresh fruits and vegetables for distribution 
        to schools and service institutions

    Section 4201 reauthorizes the Department of Defense Fresh 
Program.

Section 4202. Senior Farmers' Market Nutrition Program

    Section 4202 reauthorizes the Senior Farmers' Market 
Nutrition Program.

Section 4203. Nutrition information awareness pilot program

    Section 4203 repeals the nutrition information awareness 
pilot program.

Section 4204. Whole grains products

    Section 4204 renews funding for the whole grain products 
program at $10 million for 2 years.

Section 4205. Hunger-free communities

    Section 4205 establishes hunger-free communities incentive 
grants to incentivize purchases of fruits and vegetables by 
SNAP participants in underserved communities. It limits the 
Federal cost share of grants to 50 percent, and provides $100 
million over 5 years in mandatory funding: $15 million for 
FY2013; $20 million for FY2014-2016; and $25 million for 
FY2017. Additionally, $5 million per year is authorized for 
appropriations. The Committee encourages the Secretary to award 
grants to projects that maximize the impact of incentives on 
both SNAP recipients and local agricultural producers.

Section 4206. Healthy food financing initiative

    Section 4206 provides an authorization of funding for 
community development financial institutions to create 
revolving loan programs for fresh, healthy food retailers to 
overcome high costs of entry into underserved areas. It 
authorizes $125 million to remain available until expended.

Section 4207. Purchase of commodities by the commodity credit 
        corporation

    Section 4207 clarifies the Secretary's authority for 
considering the needs of emergency feeding organizations when 
making Section 32 commodity food purchases.

                            TITLE V--CREDIT

Section 5001. Farm loans, servicing and other assistance under the 
        Consolidated Farm and Rural Development Act.

    Titles V and VI of this bill restructure the Consolidated 
Farm and Rural Development Act. While most of current law is 
maintained, the reorganization required considerable movement 
and restatement of the program provisions. Provisions of the 
renumbered sections that relate to farm credit are described in 
detail below.

        SUBTITLE A--FARM LOANS, SERVICING, AND OTHER ASSISTANCE

Section 3101. Farm ownership loans

    Section 3101 permits farm ownership loans for ``joint 
operation, or other such legal entities as the Secretary 
determines to be appropriate'' to expand access to farm loans 
in response to modern legal entities created for estate 
succession planning. It allows the Secretary to define 
additional qualifying agriculture experience to make it easier 
for applicants to meet the 3-year farming or ranching 
experience requirement.

Section 3102. Purposes of loans

    Section 3102 continues current law.

Section 3103. Conservation loan and loan guarantee program

    Section 3103 reauthorizes the program through 2017.

Section 3104. Loan maximums

    Section 3104 continues current law.

Section 3105. Repayment requirements for farm ownership loans

    Section 3105 continues current law.

Section 3106. Limited-resource loans

    Section 3106 continues current law.

Section 3107. Down payment loan program

    Section 3107 reauthorizes the program through 2017, and 
increases the maximum loan value in the program to 45 percent 
of $667,000.

Section 3201. Operating loans

    Section 3201 permits operating loans for ``other such legal 
entity as the Secretary determines to be appropriate to expand 
access to farm loans in response to modern legal entities 
created for estate succession planning. It extends the 7-year 
term limits for direct operating loans by allowing one 
additional year for every three consecutive years a borrower 
does not receive a direct operating loan. It eliminates the 15-
year term limits for guaranteed operating loans.

Section 3202. Purposes of loans

    Section 3202 continues current law.

Section 3203. Restrictions on loans

    Section 3203 continues current law.

Section 3204. Terms of loans

    Section 3204 continues current law.

Section 3301. Emergency loans

    Section 3301 continues current law.

Section 3302. Purposes of loans

    Section 3302 continues current law.

Section 3303. Terms of loans

    Section 3303 continues current law.

Section 3304. Production losses

    Section 3304 continues current law.

Section 3401. Agricultural credit insurance

    Section 3401 continues current law.

Section 3402. Guaranteed farmer loans

    Section 3402 continues current law.

Section 3403. Provision of information to borrowers

    Section 3403 continues current law.

Section 3404. Notice of loan service programs

    Section 3404 continues current law.

Section 3405. Planting and production history guidelines

    Section 3405 continues current law.

Section 3406. Special conditions and limitations on loans

    Section 3406 continues current law.

Section 3407. Graduation of borrowers

    Section 3407 continues current law.

Section 3408. Debt adjustment and credit counseling

    Section 3408 continues current law.

Section 3409. Security servicing

    Section 3409 continues current law.

Section 3410. Contracts on loan security properties

    Section 3410 continues current law.

Section 3411. Debt restructuring and loan servicing

    Section 3411 continues current law.

Section 3412. Relief for mobilized military reservists from certain 
        agricultural loan obligations

    Section 3412 continues current law.

Section 3413. Interest rate reduction program

    Section 3413 continues current law.

Section 3414. Homestead property

    Section 3414 continues current law.

Section 3415. Transfer on inventory land

    Section 3415 continues current law.

Section 3416. Target participation rates

    Section 3416 continues current law.

Section 3417. Compromise or adjustment of debts of claims by guaranteed 
        lender

    Section 3417 continues current law.

Section 3418. Waiver of mediation rights by borrowers

    Section 3418 continues current law.

Section 3419. Borrower training

    Section 3419 continues current law.

Section 3420. Loan assessments

    Section 3420 continues current law.

Section 3421. Supervised credit

    Section 3421 continues current law.

Section 3422. Market placement

    Section 3422 continues current law.

Section 3423. Recordkeeping of loans by gender of borrower

    Section 3423 continues current law.

Section 3424. Crop insurance requirement

    Section 3424 continues current law.

Section 3425. Loan and loan servicing limitations

    Section 3425 continues current law.

Section 3426. Short form certification of farm program borrower 
        compliance

    Section 3426 continues current law.

Section 3427. Underwriting forms and standards

    Section 3427 continues current law.

Section 3428. Beginning farmer individual development accounts pilot 
        program.

    Section 3428 reauthorizes the program through 2017.

Section 3429. Farmer loan pilot projects

    Section 3429 allows the Secretary to conduct targeted pilot 
projects within the Farm Loan programs after soliciting input 
from the Committee on Agriculture of the House of 
Representatives and the Committee on Agriculture, Nutrition, 
and Forestry of the Senate.

Section 3430. Authorization of appropriations and allocation of funds

    Section 3430 reauthorizes direct ownership and operating 
loan levels through 2017.

Section 5101. State agricultural mediation programs

    Section 5101 reauthorizes the program through 2017.

Section 5102. Loans to purchasers of highly fractionated lands.

    Section 5102 allows the Secretary to establish intermediary 
relending for the highly fractionated land program for Indian 
tribes and tribal corporations.

Section 5103. Removal of duplicative appraisals.

    Section 5103 simplifies the appraisal process for loans to 
Indian tribes or tribal corporations for the purchase of highly 
fractionated land by allowing an appraisal from either the 
Secretary of Agriculture or the Secretary of the Interior.

                      TITLE VI--RURAL DEVELOPMENT

     SUBTITLE A--REORGANIZATION OF THE CONSOLIDATED FARM AND RURAL 
                            DEVELOPMENT ACT

Section 6001. Reorganization of the Consolidated Farm and Rural 
        Development Act

    Titles V and VI of this bill restructure the Consolidated 
Farm and Rural Development Act. While most of current law is 
maintained, the reorganization required considerable movement 
and restatement of the program provisions. Provisions of the 
renumbered sections that relate to rural development are 
described in detail below.

Section 6002. Conforming amendments

    Section 6002 corrects references to the Consolidated Farm 
and Rural Development Act to comport with the Act as 
restructured.

Section 3002. Definitions

    Section 3002 defines ``rural'' and ``rural area.'' It 
raises population eligibility requirement to 50,000 for Rural 
Community and Rural Business Programs. It excludes urbanized 
areas contiguous or adjacent to city or towns larger than 
50,000 from being defined as ``rural.'' It also allows cities 
or towns located within an urbanized area to petition the Under 
Secretary for Rural Development to be considered a rural area 
and includes criteria for the Under Secretary to take in 
consideration when making such determinations, including 
population density, economic conditions, commuting patterns, 
and whether a community was eligible for Rural Water, Community 
Facilities or Rural Broadband programs under previous 
definition of rural.
    This section extends the current exclusion for ``urbanized 
areas'' where a single road may cause a rural town or area to 
be included within an urbanized area. The exclusion language 
directs the Secretary to disregard the urbanized area 
classification for areas that are rural in all aspects but for 
a road connecting the area to a bigger city.
    The Committee recognizes the concerns by both USDA and 
rural constituents about the confusion resulting from the 
multiple definitions of ``rural'' used by USDA to determine 
program eligibility that were instituted by previous Farm 
Bills. The Committee acknowledges that the previous definitions 
were developed for sound reasons and with good intent. However, 
the Committee is concerned that 96 different cities and towns 
had received waivers through legislation passed by the Congress 
subsequent to passage of previous Farm Bills that granted them 
eligibility for rural development programs despite the fact 
that their populations had grown beyond the population limits 
established in Farm Bill legislation. USDA will begin using 
data from the 2010 Census data in the Fall of 2012, and the 
Committee expects that a number of currently eligible 
communities will lose that eligibility. Therefore, to address 
these concerns, the Committee has provided a single definition 
of ``rural'' that is intended to clarify eligibility. The new 
definition grants eligibility to cities and towns of less than 
50,000 in population and not contiguous or adjacent to 
urbanized areas. The Committee recognizes that some cities and 
towns of less than 50,000 in population that are located within 
an urbanized area may in fact be ``rural in character.'' To 
provide these cities and towns with an opportunity to maintain 
their eligibility for rural development programs, the Committee 
has provided for a process by which USDA may determine these 
areas ``rural in character.'' The Committee has directed USDA 
to consider the following factors when making such 
determinations: population density, economic conditions, 
commuting patterns, and whether a community was eligible for 
Rural Water, Community Facilities or Rural Broadband programs 
under the definition of ``rural'' established in the 2008 Farm 
Bill.
    This section also expands eligibility for farm ownership 
loans for new and beginning farmers by changing the 
definitional requirement that beginning farmer loan applicants 
cannot own real estate that is over 30 percent of the median 
farm size in their county to that they cannot own over 30 
percent of the average farm size in their county.

Section 3501.Water and waste disposal loans, loan guarantees, and 
        grants

    Section 3501 reauthorizes the Rural Water Grant and Loan 
Program, the Revolving Funds for Financing Water and Wastewater 
Projects, the Emergency and Imminent Community Water Assistance 
Program, the Water and Waste Facility Loans and Grants to 
Alleviate Health Risks, Solid Waste Management Grants, Rural 
Water and Wastewater Technical Assistance and Training 
Programs, including the Rural Water and Wastewater Circuit 
Rider Program, and the Special Evaluation Assistance for Rural 
Communities and Households (SEARCH) Program. It specifies 
eligibility for native villages for Alaska and Hawaii for Water 
and Waste Facility Loans and Grants to Alleviate Health Risks. 
It establishes priorities for Rural Water programs, which is 
similar to current law, and includes prioritization of 
communities of less than 5,500 in population. It maintains 
current law preventing larger municipal systems from 
encroaching upon the service area of rural water program 
borrowers.

Section 3502. Community facilities loans, loan guarantees, and grants

    Section 3502 reauthorizes the Community Facilities 
Programs. It establishes priorities for programs, including 
prioritization of communities with less than 20,000 in 
population. It reauthorizes Tribal Colleges and Universities 
Program and authorizes Technical Assistance for Community 
Facilities Projects as a part of current Community Facilities 
program.

Section 3503. Health care services

    Section 3503 reauthorizes the Delta Heath Care Services 
Program.

Section 3601. Business programs

    Section 3601 creates the Rural Business Development Grant 
Program by combining the Rural Business Opportunity Grants and 
Rural Business Enterprise Grants authorities into one program. 
It reauthorizes Value Added Agricultural Producer Grants and 
establishes priority for projects in which at least 25 percent 
of the project recipients are beginning farmers or ranchers or 
socially disadvantaged farmers or ranchers. It reauthorizes 
Rural Cooperative Development Grants and includes a directive 
for the Secretary to coordinate an interagency working group 
among Federal agencies to support cooperative development. It 
reauthorizes the Appropriate Technology Transfer for Rural 
Areas Program. It reauthorizes Business and Industry Direct and 
Guaranteed Loans and raises the initial fee to three percent 
from current authorization of two percent. It reauthorizes 
Relending Programs, the Intermediate Relending Program, and the 
Rural Microentrepreneur Assistance Program. It adds a 
definition of ``training'' and ``technical assistance.'' It 
also clarifies the match requirement of 15 percent. The 
Committee encourages the Secretary to continue working with 
dairy product processors to enhance their ability to produce 
dairy products and access export markets. Exports have become 
an integral focus of the U.S. dairy industry and the industry 
needs to accommodate an increasingly global market.

Section 3602. Rural business investment program

    Section 3602 reauthorizes the Rural Business Investment 
Program, while providing authority to the Secretary to 
establish capital requirements, establish fees for applicants 
applying for a license to operate as a rural business 
investment company, and ensures the majority of capital of each 
rural business company is invested in rural concerns.

Section 3701. General provisions for loans and grants

    Section 3701 reauthorizes general provisions for Loans and 
Grants authority.

Section 3702. Strategic economic and community development

    Section 3702 authorizes the Secretary to prioritize 
otherwise eligible applications that support strategic economic 
and community development, and establishes criteria by which 
the Secretary should evaluate strategic applications. The bill 
also gives the Secretary discretion to prioritize applications 
for funding that reflect an applicant's efforts to think 
strategically about long-term community and economic 
development. The Committee has provided criteria for the 
Secretary to consider when determining that an application 
should be considered ``strategic'' and thus prioritized. The 
Committee encourages the Secretary to use the discretion to 
prioritize these applications in manner that rewards rural 
communities and entities for proposing an effective use of 
resources.

Section 3703. Guaranteed rural development loans

    Section 3703 reauthorizes guaranteed rural development loan 
authority.

Section 3704. Rural Development Insurance Fund

    Section 3704 reauthorizes the Rural Development Insurance 
Fund.

Section 3705. Rural economic Area Partnership zones

    Section 3705 establishes a competitive process for the 
Secretary to designate new Rural Economic Area Partnership 
zones, and directs the Secretary to carry out those rural 
economic area partnership zones in effect on date of enactment 
of the bill.

Section 3706. Streamlining applications and improving accessibility of 
        rural development programs

    Section 3706 directs the Secretary to expedite the process 
of creating user-friendly and accessible application forms and 
procedures prioritizing programs and applications at the 
individual level with an emphasis on utilizing current 
technologies such as online applications.

Section 3801 through Section 3814. Delta Regional Authority

    Sections 3801 through 3814 reauthorize the Delta Regional 
Authority.

Section 3821 through Section 3835. Northern Great Plains Regional 
        Authority

    Sections 3821 through 3835 reauthorize the Northern Great 
Plains Regional Authority.
    Section 3834 establishes a cap on administrative expenses 
of ten percent, an increase from the current five percent cap.

                     SUBTITLE C--GENERAL PROVISIONS

Section 3901. Full faith and credit

    Section 3901 establishes that a contract of insurance or 
guarantee executed by the Secretary under this title shall be 
an obligation supported by the full faith and credit of the 
United States.

Section 3902. Purchase and sale of guaranteed portions of loans

    Section 3902 establishes that terms under which the 
Secretary may purchase and sell the guaranteed portion of a 
loan guaranteed under this title if the Secretary determines 
that an adequate secondary market is not available in the 
private sector.

Section 3903. Administration

    Section 3903 re-establishes that terms under which the 
Secretary may administer programs under this title.

Section 3904. Loan moratorium and policy on foreclosures

    Section 3904 re-establishes the Secretary's authority to 
permit, at the request of the borrower, the deferral of 
principal and interest on any outstanding loan made or 
guaranteed by the Secretary under this title and to forgo 
foreclosure on the loan for a time period that the Secretary 
considers necessary upon demonstration that the borrower is 
temporarily unable to continue making payments.

Section 3905. Oil and gas royalty payments on loans

    Section 3905 re-establishes the Secretary's authority to 
permit a borrower to make a prospective payment on a loan with 
proceeds from the leasing of oil, gas, or other mineral rights 
to real property used to secure the loan or the sale of oil, 
gas, or other minerals removed from the property used to secure 
the loan if the value of the rights to the oil, gas, or other 
minerals has not been used to secure the loan.

Section 3906. Taxation

    Section 3906 re-establishes that all property subject to a 
lien held by the United States or the title to which is 
acquired or held by the Secretary under this title (other than 
property used for administrative purposes) will be subject to 
taxation by state, territory, district, and local political 
subdivisions in the same manner and to the same extent as other 
property is taxed.

Section 3907. Conflicts of interest

    Section 3907 re-establishes that no officer, attorney, or 
other employee of USDA may, directly or indirectly, be the 
beneficiary of or receive any fee, commission, gift, or other 
consideration for or in connection with any transaction or 
business under this title other than such salary, fee, or other 
compensation as they might receive in those positions, and 
states penalties for violation of the section. It re-
establishes that an officer or employee of USDA that has 
reviewed an application for a loan to purchase land under this 
title may not acquire an interest in that land for a period of 
three years, and states penalties for violation of the section.

Section 3908. Loan summary statements

    Section 3908 re-establishes that upon the request of a 
borrower of a loan made (but not guaranteed) under this title, 
the Secretary shall issue to the borrower a loan summary 
statement that reflects the account activity during the summary 
period for each loan made under this title to the borrower.

Section 3909. Certified lenders program

    Section 3909 directs the Secretary to establish a program 
under which the Secretary will guarantee loans under this title 
that are made by lending institutions certified by the 
Secretary.

Section 3910. Loans to resident aliens

    Section 3910 re-establishes the Secretary's authority to 
make a loan under this title to an alien lawfully admitted to 
the United States for permanent residence under the Immigration 
and Nationality Act (8 U.S.C. 1101 et seq.).

Section 3911. Expedited clearing of title to inventory property

    Section 3911 re-establishes the Secretary's authority to 
employ local attorneys, on a case-by-case basis, to process 
legal procedures necessary to clear the title to foreclosed 
properties in USDA's inventory.

Section 3912. Prohibition on use of loans for certain purposes

    Section 3912 re-establishes that the Secretary may not 
approve a loan under this title to drain, dredge, fill, level 
or otherwise manipulate a wetland or engage in any activity 
that results in impairing or reducing the flow, circulation or 
reach of water. An exemption is provided in the case of an 
activity begun before November 28, 1990 or a loan made for a 
utility line.

Section 3913. Regulations

    Section 3913 establishes the Secretary's authority to issue 
regulations and rules necessary to implement the title.

                   SUBTITLE B--RURAL ELECTRIFICATION

Section 6101. Definition of rural area

    Section 6101 changes the definition of rural area for 
programs under the Rural Electrification Act to be the same as 
in Section 3002(28)(A)(i).

Section 6102. Guarantees for Bonds and Notes Issued for Electrification 
        or Telephone Purposes

    Section 6102 reauthorizes Guarantees for Bonds and Notes 
Issued for Electrification or Telephone Purposes.

Section 6103. Expansion of 911 Access

    Section 6103 reauthorizes Expansion of 911 Access 
authority.

Section 6104. Access to broadband telecommunications services in rural 
        areas

    Section 6104 establishes a grant component to the current 
Broadband Loan Program. It creates priority for communities 
without an incumbent service provider, for communities with a 
population of less than 20,000 permanent residents, rural 
communities experiencing outmigration, a community with a high 
percentage of low-income residents, or a rural community 
isolated from other significant population centers. It 
establishes the maximum grant limit as 50 percent of project 
development costs. It provides the Secretary with the authority 
to increase the grant up to 75 percent for communities that do 
not have an existing service provider, are remote and have low-
income populations. It establishes transparency and reporting 
requirements for projects that receive funding.

                       SUBTITLE C--MISCELLANEOUS

Section 6201. Distance Learning and Telemedicine

    Section 6201 reauthorizes Distance Learning and 
Telemedicine.

Section 6202. Rural Energy Savings Program

    Section 6202 authorizes a Rural Energy Savings Program 
through which the Rural Utilities Service (RUS) at the U.S. 
Department of Agriculture (USDA) provides loans to eligible 
borrowers, such as rural electric cooperatives, for the purpose 
of relending to their customers for durable, cost-effective 
energy efficiency improvements. Consumers repay the loans to 
the borrowers on their monthly utility bill. The borrowing 
entity, not the consumer, holds responsibility for repayment of 
the loan to RUS.

                          TITLE VII--RESEARCH

  SUBTITLE A--NATIONAL AGRICULTURAL RESEARCH, EXTENSION, AND TEACHING 
                           POLICY ACT OF 1977

Section 7101. National Agricultural Research, Extension, Education, and 
        Economics Advisory Board

    Section 7101 reauthorizes the National Agricultural 
Research, Extension, Education, and Economics Advisory Board 
(NAREEE). The NAREEE Board will consult with affected industry 
groups before recommendations are given to the Secretary.

Section 7102. Specialty Crop Committee

    Section 7102 enhances the Specialty Crop Committee, 
strengthens its role with the Specialty Crop Research 
Initiative, and clarifies that Committee membership shall 
reflect the diversity in the specialty crop industry.

Section 7103. Veterinary Services Grant Program

    Section 7103 authorizes the Veterinary Services Grant 
Program and an additional matching competitive grant program 
with qualified entities to develop, implement, and sustain 
veterinary services. A qualifying entity must carry out 
programs that: (1) relieve veterinarian shortage situations, 
(2) support private veterinary practices engaged in public 
health activities, or (3) support practices of veterinarians 
who are participating in or have successfully completed a 
specified service requirement. This program is authorized at 
$10 million per year.

Section 7104. Grants and Fellowships for Food and Agriculture Sciences 
        Education

    Section 7104 reauthorizes Grants and Fellowships for Food 
and Agriculture Sciences Education at $40 million per year.

Section 7105. Agriculture and Food Policy Research Centers

    Section 7105 authorizes Policy Research Centers. The 
Secretary will award grants through the Office of the Chief 
Economist, only competitive grants may be awarded under this 
section and preference is given to centers that have databases, 
models and experience providing Congress with agricultural 
market projections, rural development analysis, agriculture 
policy analysis and baseline projections. This program is 
authorized at $5 million per year.

Section 7106. Education Grants to Alaska Native Serving Institutions 
        and Native Hawaiian Serving Institutions

    Section 7106 reauthorizes the Education Grants to Alaska 
Native Serving Institutions and Native Hawaiian Serving 
Institutions and clarifies only competitive grants may be 
awarded under this section.

Section 7107. Nutrition Education Program

    Section 7107 reauthorizes the Nutrition Education Program.

Section 7108. Continuing Animal Health and Disease Research Programs

    Section 7108 reauthorizes the Continuing Animal Health and 
Disease Research Programs at $25 million per year.

Section 7109. Grants to Upgrade Agricultural and Food Sciences 
        Facilities at 1890 Land-Grant Colleges, Including Tuskegee 
        University

    Section 7109 reauthorizes Grants to Upgrade Agricultural 
and Food Sciences Facilities at 1890 Land-Grant Colleges, 
Including Tuskegee University.

Section 7110. Grants to Upgrade Agricultural and Food Sciences 
        Facilities and Equipment at Insular Area Land-Grant 
        Institutions

    Section 7110 reauthorizes Grants to Upgrade Agricultural 
and Food Sciences Facilities and Equipment at Insular Area 
Land-Grant Institutions.

Section 7111. Hispanic-Serving Institutions

    Section 7111 reauthorizes the Hispanic-Serving 
Institutions.

Section 7112. Competitive Grants for International Agricultural Science 
        and Education Programs

    Section 7112 reauthorizes the Competitive Grants for 
International Agricultural Science and Education Programs at $5 
million per year.

Section 7113. University Research

    Section 7113 reauthorizes University Research.

Section 7114. Extension Service

    Section 7114 reauthorizes Extension Service. The 
Cooperative Extension System is a nationwide, non-credit 
educational network. Each state and territory has an office at 
its land-grant university and a network of local or regional 
offices which are staffed by one or more experts who provide 
practical, research-based information to agricultural 
producers, small business owners, youth, consumers, and others 
in rural communities.The Committee encourages the Secretary to 
ensure that the Cooperative Extension Service is effectively 
and efficiently utilized to deliver the educational component 
of USDA programs. The Secretary is also encouraged to engage in 
discussions with other federal departments and agencies to 
consider ways to use the Cooperative Extension Service to 
deliver education extension for other federal programs as 
practicable.

Section 7115. Supplemental and Alternative Crops

    Section 7115 reauthorizes Supplemental and Alternative 
Crops research at $1 million per year and clarifies that only 
competitive grants can be awarded under this section.

Section 7116. Capacity Building Grants for NLGCA Institutions

    Section 7116 reauthorizes Capacity Building Grants for 
NLGCA Institutions.

Section 7117. Aquaculture Assistance Programs

    Section 7117 reauthorizes the Aquaculture Assistance 
Programs at $5 million per year and clarifies that only 
competitive grants can be awarded under this section.

Section 7118. Rangeland Research Programs

    Section 7118 reauthorizes the Rangeland Research Programs 
at $2 million per year.

Section 7119. Special Authorization for Biosecurity Planning and 
        Response

    Section 7119 reauthorizes the Special Authorization for 
Biosecurity Planning and Response at $20 million per year.

Section 7120. Distance Education and Resident Instruction Grants 
        Program for Insular Area Institutions of Higher Education

    Section 7120 reauthorizes the Distance Education and 
Resident Instruction Grants Program for Insular Area 
Institutions of Higher Education at $2 million per year and 
clarifies that only competitive grants will be awarded under 
the section of Distance Education Grants for Insular Areas.

   SUBTITLE B--FOOD, AGRICULTURE, CONSERVATION, AND TRADE ACT OF 1990

Section 7201. Best Utilization of Biological Applications

    Section 7201 reauthorizes the Best Utilization of 
Biological Applications at $40 million per year.

Section 7202. Integrated Management Systems

    Section 7202 reauthorizes the Integrated Management Systems 
at $20 million per year.

Section 7203. Sustainable Agriculture Technology Development and 
        Transfer Program

    Section 7203 reauthorizes the Sustainable Agriculture 
Technology Development and Transfer Program.

Section 7204. National Training Program

    Section 7204 reauthorizes the National Training Program at 
$20 million per year.

Section 7205. National Genetics Resources Program

    Section 7205 reauthorizes the National Genetics Resources 
Program at $1 million per year.

Section 7206. National Agricultural Weather Information System

    Section 7206 reauthorizes National Agricultural Weather 
Information System at $1 million per year.

Section 7207. High-priority research and extension initiatives

    Section 7207 reauthorizes authority for grants to address 
Pollinator Protection, Alfalfa Forage Research Program, Deer 
Initiative, Bighorn and Domestic Sheep Disease Mechanisms, 
Potato Research and Extension, Dairy Financial Risk Management 
Research and Extension, and Wood Use Research and Extension. It 
moves authority for the Secretary to designate Regional Centers 
of Excellence to a separate section of the Act (see section 
7210). This section also authorizes the Pulse Health Initiative 
and Training Coordination for Food and Agriculture Protection. 
It allows the Secretary to appoint a task force to make 
recommendations on high priority research and extension.

Section 7208. Organic Agriculture Research and Extension Initiative

    Section 7208 reauthorizes the Organic Agriculture Research 
and Extension Initiative and provides $80 million in mandatory 
funding at $16 million per year for fiscal years 2013 through 
2017. It adds education as a function of the program and makes 
minor modifications to priority areas.

Section 7209. Farm Business Management

    Section 7209 reauthorizes the Farm Business Management 
program at $5 million per year.

Section 7210. Regional Centers of Excellence

    Section 7210 reauthorizes Regional Centers of Excellence at 
$10 million per year and moves the provisions from a separate 
section of the Act (see section 7207).

Section 7211. Assistive Technology Program for Farmers with 
        Disabilities

    Section 7211 reauthorizes the Assistive Technology Program 
for Farmers with Disabilities at $5 million per year.

Section 7212. National Rural Information Center Clearinghouse

    Section 7212 reauthorizes the National Rural Information 
Center Clearinghouse.

 SUBTITLE C--AGRICULTURE RESEARCH, EXTENSION, AND EDUCATION REFORM ACT 
                                OF 1998

Section 7301. Relevance and merit of agricultural research, extension, 
        and education funded by the department

    Section 7301 amends the law to emphasize that the 
``relevance'' of the underlying research and extension programs 
to the affected industry shall be considered in evaluating 
grant applications. The Secretary will also consult regularly 
with the Advisory Board.

Section 7302. Integrated Research, Education, and Extension Competitive 
        Grants Program

    Section 7302 reauthorizes the Integrated Research, 
Education, and Extension Competitive Grants Program.

Section 7303. Support for Research Regarding Diseases of Wheat, 
        Triticale, and Barley Caused by Fusarium Graminearum or by 
        Tilletia Indica

    Section 7303 reauthorizes Research Regarding Diseases of 
Wheat, Triticale, and Barley Caused by Fusarium Graminearum or 
by Tilletia Indica at $10 million per year.

Section 7304. Grants for Youth Organizations

    Section 7304 reauthorizes the Grants for Youth 
Organizations at $3 million per year.

Section 7305. Specialty Crop Research Initiative

    Section 7305 reauthorizes the Specialty Crop Research 
Initiative which now includes language for handling and 
processing in the priority areas. It modifies the matching fund 
provision to allow for the use of other federal and non-federal 
funds in meeting the match requirements. It removes 10 percent 
minimum funding carve out for program priorities 1 through 5. 
It provides mandatory funding for the program as follows for 
each fiscal year: $25 million for 2013; $30 million for 2014 
through 2015; $65 million for 2016; $50 million for 2017 and 
each fiscal year thereafter. The Committee directs the 
Secretary to incorporate appropriate industry consultation as 
an integral part of the proposal review process. Such industry 
review shall be coordinated with the specialty crops 
subcommittee, as directed under Section 7102 of this Act. The 
Secretary shall ensure the specialty crop subcommittee has 
appropriate representation to provide comment on the relevance 
and impact of any proposal for the affected industry segment 
and provide a means for additional industry consultation should 
an appropriate representative not be available on the 
subcommittee.
    The Committee expects that industry comments on specific 
proposals will be provided and taken into consideration by the 
scientific review panel prior to the scientific peer review.

Section 7306. Food Animal Residue Avoidance Database Program

    Section 7306 reauthorizes the Food Animal Residue Avoidance 
Database Program at $2.5 million per year.

Section 7307. Office of Pest Management Policy

    Section 7307 reauthorizes the Office of Pest Management 
Policy at $3 million per year.

Section 7308. Authorization of Regional Integrated Pest Management 
        Centers

    Section 7308 authorizes the Regional Integrated Pest 
Management Centers.

                         SUBTITLE D--OTHER LAWS

Section 7401. Critical Agricultural Materials Act

    Section 7401 reauthorizes the Critical Agricultural 
Materials Act at $2 million per year.

Section 7402. Equity in Educational Land-Grant Status Act of 1994

    Section 7402 reauthorizes the Equity in Educational Land-
Grant Status Act of 1994, and updates the names of 
institutions, as well as providing for additional entities and 
one deletion. It changes research grant requirements by 
allowing grant applications to be submitted in cooperative 
agreement with ARS or at least 1 other land grants institution, 
a non-land-grant college of agriculture or a cooperating 
forestry school.

Section 7403. Research Facilities Act

    Section 7403 reauthorizes the Research Facilities Act.

Section 7404. Competitive, Special, and Facilities Research Grant Act

    Section 7404 reauthorizes USDA's Agriculture and Food 
Research Initiative (AFRI) at $700 million per year. It directs 
USDA to report on barriers that exist in the competitive grant 
process that may prevent eligible institutions with limited 
resources to apply and provide specific recommendations the 
Department may take to remove these barriers. The Committee 
recognizes concerns with the impact that inefficiencies in the 
current regulatory process for agricultural biotechnology and 
related court decisions have begun to take on growers who have 
adopted plant biotechnology products and the effect on research 
and development of additional products with new food and 
industrial uses that can benefit the priority areas identified 
in subsection (b) of the Competitive, Special, and Facilities 
Research Grant Act (7 U.S.C. 450i(b)). The Secretary is 
encouraged to provide information to the Committee on 
themeasures taken and to be taken under statutory authorities to 
provide for balanced and non-duplicative regulatory oversight between 
Federal Agencies and Departments of products of agricultural 
biotechnology, the impact of court decisions on the affected agencies' 
budgets, and estimated financial impact on growers.

Section 7405. Enhanced Use Lease Authority Pilot Program Under 
        Department of Agriculture Reorganization Act of 1994

    Section 7405 reauthorizes Enhanced Use Lease Authority 
Pilot Program Under Department of Agriculture Reorganization 
Act of 1994.

Section 7406. Renewable Resources Extension Act of 1978

    Section 7406 reauthorizes the Renewable Resources Extension 
Act of 1978.

Section 7407. National Aquaculture Act of 1980

    Section 7407 reauthorizes the National Aquaculture Act of 
1980.

Section 7408. Beginning Farmer and Rancher Development Program

    Section 7408 reauthorizes Beginning Farmer and Rancher 
Development Program. It adds dedicated funds to military 
veterans as defined and provides for a one-time allocation of 
$50 million in mandatory funding to remain available until 
expended.

    SUBTITLE E--FOOD, CONSERVATION, AND ENERGY ACT OF 2008 PART I: 
                         AGRICULTURAL SECURITY

Section 7501. Agricultural Biosecurity Communication Center

    Section 7501 reauthorizes the Agricultural Biosecurity 
Communication Center at $2 million per year.

Section 7502. Assistance to Build Local Capacity in Agricultural 
        Biosecurity Planning, Preparation, and Response

    Section 7502 reauthorizes the Assistance to Build Local 
Capacity in Agricultural Biosecurity Planning, Preparation, and 
Response at $15 million per year.

Section 7503. Research and Development of Agricultural Countermeasures

    Section 7503 reauthorizes the Research and Development of 
Agricultural Countermeasures at $15 million per year.

Section 7504. Agricultural Biosecurity Grant Program

    Section 7504 reauthorizes the Agricultural Biosecurity 
Grant Program at $5 million per year.

                         PART II--MISCELLANEOUS

Section 7511. Grazing-lands Research Laboratory

    Section 7511 reauthorizes the Grazing-lands Research 
Laboratory.

Section 7512. Budget submission and funding

    Section 7512 promotes transparency and accountability with 
regard to intramural and extramural research programs 
administered by the Department. The annual Presidential Budget 
Submission must include sufficient information for the Congress 
to thoroughly evaluate and approve future spending plans with 
regard to extramural competitive grants programs and intramural 
research spending.
    The Committee recognizes that the U.S. ethanol industry has 
increased the efficiency of their production process in recent 
years such that the amount of ethanol produced from a bushel of 
corn has increased. Current yield calculations used by USDA 
agencies may no longer reflect the current production. The 
Committee recognizes the concerns that the calculations impact 
corn supply forecasts by overestimating the amount of corn 
needed to meet U.S. ethanol production. The Committee 
encourages the National Agricultural Statistics Service to 
provide an accurate, up-to-date value for the ethanol yield 
from a bushel of corn.

Section 7513. Natural Products Research Program

    Section 7513 reauthorizes the Natural Products Research 
Program at $7 million per year.

Section 7514. Sun Grant Program

    Section 7514 reauthorizes, consolidates, and amends the Sun 
Grant Program to expand input from other appropriate federal 
agencies, authorize bioproducts, eliminate authorization for 
gasification research and make the program competitive. The 
Committee recognizes the leadership and work of the Sun Grant 
Centers in each region and intends that the revisions to the 
program to make it competitive do not reduce the effectiveness 
of the overall program. The Committee recognizes the importance 
of demonstrated experience in working with multiple federal 
agencies and in awarding and managing funding provided through 
competitive grants to land grant institutions and institutions 
partnering with land grant institutions. Finally, the Committee 
recognizes the value and importance of committed use of peer 
review principles and other research best practices in the 
selection, management, and dissemination of research projects.

                       SUBTITLE F--MISCELLANEOUS

Section 7601. Foundation for food and agriculture research

    Section 7601 establishes a non-profit organization 
administered by an appointed Board of Directors representing 
the diverse sectors of the agriculture and agricultural 
research community with the primary purpose of supplementing 
the efforts of USDA basic and applied research activities. 
Federal investment is leveraged in agricultural research 
through soliciting and accepting private donations to award 
grants for collaborative public/private partnerships with 
scientists and entities including USDA, academia, non-profits, 
and the private sector. This section also incorporates 
accountability and transparency measures for good governance.

                          TITLE VIII--FORESTRY

            SUBTITLE A--REPEAL OF CERTAIN FORESTRY PROGRAMS

Section 8001. Forest land enhancement program

    Section 8001 repeals the forest land enhancement program.

Section 8002. Watershed forestry assistance program

    Section 8002 repeals the watershed forestry assistance 
program.

Section 8003. Expired cooperative national forest products marketing 
        program

    Section 8003 repeals cooperative national forest products 
marketing program.

Section 8004. Hispanic-serving institution agricultural land national 
        resources leadership program

    Section 8004 repeals the Hispanic-serving institution 
agricultural land national resources leadership program.

Section 8005. Tribal watershed forestry assistance program

    Section 8005 repeals the Tribal watershed forestry 
assistance program.

 SUBTITLE B--REAUTHORIZATION OF COOPERATIVE FORESTRY ASSISTANCE ACT OF 
                             1978 PROGRAMS

Section 8101. State-Wide Assessment and Strategies for Forest Resources

    Section 8101 reauthorizes the State-Wide Assessment and 
Strategies for Forest Resources at $10 million per year. It 
focuses state efforts on achieving national priorities by 
assisting landowners with planning and implementing forest and 
land management practices.

Section 8102. Forest Stewardship Program

    Section 8102 reauthorizes the Forest Stewardship Program at 
a new authorized level of $50 million per year.

Section 8103.Forest Legacy Program

    Section 8103 reauthorizes the Forest Legacy Program at a 
new authorized level of $200 million per year.

Section 8104. Community Forest and Open Space Conservation Program

    Section 8104 reauthorizes the Community Forest and Open 
Space Conservation Program at a new authorized level of $50 
million per year.

Section 8105. Urban and Community Forestry Assistance

    Section 8105 reauthorizes the Urban and Community Forestry 
Assistance at a new authorized level of $50 million per year.

       SUBTITLE C--REAUTHORIZATION OF OTHER FORESTRY-RELATED LAWS

Section 8201. Rural revitalization technologies

    Section 8201 reauthorizes rural revitalization 
technologies.

Section 8202. Office of International Forestry

    Section 8202 reauthorizes the Office of International 
Forestry at a new authorized level of $10 million per year.

Section 8203. Insect infestations and related diseases

    Section 8203 reauthorizes the Secretary to designate areas 
impacted by insect infestation and disease for treatment. The 
Secretary will also designate treatment areas on National 
Forest land due to insect or disease infestation. This section 
is authorizes for appropriations at $100 million per year.

Section 8204. Stewardship end result contracting projects.

    Section 8204 reauthorizes Stewardship end result 
contracting projects.

Section 8205. Healthy Forest Reserve Program

    Section 8205 expands the Healthy Forest Reserve Program 
eligibility for lands owned by Indian tribes and reauthorizes 
the program at a new authorization level at $9.75 million per 
year.

                  SUBTITLE D--MISCELLANEOUS PROVISIONS

Section 8301. McIntire-Stennis Cooperative Forestry Act

    Section 8301 provides the Secretary the ability to waive 
matching requirement for 1890 institutions and to expand 
program participation eligibility for institutions in the 
Federated States of Micronesia, American Samoa, Northern 
Mariana Islands and Guam.

Section 8302. Revision of strategic plan for forest inventory and 
        analysis

    Section 8302 requires the Secretary to revise the strategic 
plan for forest inventory and analysis to include further 
investigation into a series of areas to improve forest 
management.

                            TITLE IX--ENERGY

Section 9001: Definitions

    Section 9001 adds a definition for renewable chemical.

Section 9002. Biobased Markets Program

    Section 9002 reauthorizes the Biobased Markets Program at 
$2 million per year and allows the Secretary to establish a 
targeted number of biobased procurement requirements for the 
Biobased Procurement Preference Program. It requires reporting 
of biobased purchases from federal government procurement 
agencies. The Secretary will designate assembled and finished 
products for the procurement and labeling program. This section 
also adds auditing and compliance provisions for the 
biopreferred labeling program. It allows outreach and education 
activities for the biobased markets program. It directs USDA to 
conduct an economic impact study on biobased products and sets 
a new focus on products that demonstrate innovation regardless 
of date of entry into the marketplace. The Forest Products Lab 
is to assist in approval for forest related products as well as 
providing technical assistance to the forestry industry. 
Mandatory funding is $3,000,000 for each of fiscal years 2013 
through 2017. The Committee recognizes the growth and 
development of biobased markets and the potential these markets 
offer for significant job growth and economic development. As 
biobased companies reach their full potential, new 
manufacturing jobs will be created in the United States while 
also providing environmental and energy security benefits.
    The Committee recognizes concerns with the USDA Biobased 
Markets Program and the exclusion of most forest products. This 
exclusion, created in USDA rulemaking, has effectively made 
many forest products ineligible for the program. Therefore, the 
language included in Section 9002 (a)(1)(B)(i)(III)(vi) is 
intended to clarify that all forest products, regardless of the 
market share the product holds, the age of the product, or 
whether the product's market is new or emerging, are eligible 
for the procurement and labeling program as long as the product 
meets the innovation standards for the program as outlined in 
Section 9002(a)(1)(B)(i)(III)(vi). It is the Committee's 
intention that all products in the program use innovative 
approaches in the growing, harvesting, procuring, processing, 
or manufacturing of the product. The Committee directs USDA to 
work through the USDA Forest Products Laboratory to develop a 
set of guidelines for forest product inclusion in the program 
thatincorporates these and other relevant innovations to ensure 
forest products are included in the program.

Section 9003. Biorefinery, renewable chemical and biobased product 
        manufacturing assistance

    Section 9003 reauthorizes the Biorefinery Assistance 
Program at $150 million per year. Program eligibility is 
expanded to include renewable chemicals and biobased products. 
It defines Biobased Product Manufacturing as the development, 
construction, and retrofitting of technologically new 
commercial-scale processing and manufacturing equipment and 
required facilities that will be used to convert renewable 
chemicals and other biobased outputs of biorefineries into end-
user products on a commercial scale. Mandatory funding is 
provided for the program at $100 million for fiscal year 2013 
and $58 million for each of fiscal years 2014 and 2015. Of the 
total amount of funds made available for the period of fiscal 
years 2013 through 2015 not more than $25,000,000 can be 
directed towards biobased product manufacturing.

Section 9004. Repeal of repowering assistance program and transfer of 
        remaining funds

    Section 9004 repeals repowering assistance program and 
directs the remaining funds to the Rural Energy for America 
Program (REAP). The Committee has simplified the REAP 
application process requirements and believes that these 
changes will improve access for all applicants. The Committee 
does not believe that a farmer, rancher or rural small business 
should find it necessary to pay significant consulting fees in 
order to successfully compete for funding through this program.

Section 9005. Bioenergy Program for Advanced Biofuels

    Section 905 reauthorizes the Bioenergy Program at $20 
million per year.

Section 9006. Biodiesel Fuel Education Program

    Section 9006 reauthorizes the Biofuels Education Program at 
$1 million per year in mandatory funding.

Section 9007. Rural Energy for America Program (REAP)

    Section 9007 reauthorizes the Rural Energy for America 
Program (REAP) at $20 million per year and amends the 2-meter 
rule by including ``agricultural and associated residential 
purposes'' as eligible. It allows RC&D councils to be eligible 
for energy audit and technical assistance portion of the 
program and removes feasibility studies. The grant application 
process is revised into three tiers of grants: less than 
$80,000; between $80,000 and $200,000; and greater than 
$200,000. This section also instructs the Secretary to 
streamline and simplify grant application process for grants 
under $80,000 and sets a cap of $500,000 for grants. Mandatory 
funding is provided at $48.2 million for each of fiscal years 
2013 through 2017.

Section 9008. Biomass research and development initiative

    Section 9008 reauthorizes the Biomass R&D Program at $30 
million per year, with mandatory funding of $26 million for 
each of fiscal years 2013 through 2017. The Committee 
encourages the Department to support research, development and 
demonstration efforts focused on reducing the costs of 
producing sugars from cellulosic biomass.

Section 9009. Feedstock Flexibility Program for bioenergy producers

    Section 9009 reauthorizes the Feedstock Flexibility 
Program.

Section 9010. Biomass Crop Assistance Program (BCAP)

    Section 9010 reauthorizes the Biomass Crop Assistance 
Program at $20 million per fiscal year and specifies eligible 
verses non-eligible materials for the Collection, Harvest, 
Storage, and Transport (CHST) payments with modifications to 
ensure spending in line with Congressional intent. Mandatory 
funding is provided at $38.6 million for each of fiscal years 
2013 through 2017. Of the mandatory money made available for 
each fiscal year, the Secretary shall use not less than 10 
percent, nor more than 50 percent, of the amount to make 
collection, harvest, transportation, and storage payments.

Section 9011. Repeal of Forest Biomass for Energy

    Section 9011 repeals Forest Biomass for Energy.

Section 9012. Community Wood Energy Program

    Section 9012 reauthorizes the Community Wood Energy Program 
at $5 million per year.

Section 9013. Repeal of Renewable Fertilizer Study

    Section 9013 repeals the Study on Renewable Fertilizer.

                        TITLE X--SPECIALTY CROPS

Section 10001. Specialty crops market news allocation

    Section 10001 reauthorizes specialty crop market news 
allocation and expands market news activities to provide timely 
price information on fruits and vegetables with funding 
authorized at $9 million per year.

Section 10002. Repeal of grant program to improve movement of specialty 
        crops

    Section 10002 repeals the grant program to improve the 
movement of specialty crops.

Section 10003. Farmers Market and Local Food Promotion Program

    Section 10003 reauthorizes and expands the existing Farmers 
Market Promotion Program. It provides competitive grants to 
improve and expand farmers markets, roadside stands, community-
supported agriculture programs, and other direct producer-to-
consumer market opportunities. Grants may also be used to help 
develop local food system infrastructure targeted at serving 
low-income populations. The section requires cost share of 25 
percent of funding. Mandatory funding of $100 million is 
provided for five years and $20 million per year is authorized 
for appropriations. The reported bill restricts grant funding 
from being used for the purchase, construction or 
rehabilitation of a building or structure. This provision is 
specifically intended to prevent activities such as acquiring 
land, repairing roofing structures or building warehouses. The 
Committee does not intend for this language to restrict 
resources for other key uses such as cold storage or equipment.

Section 10004. Study on local food production and program evaluation

    Section 10004 directs Secretary to collect data on the 
production and marketing of locally or regionally produced 
agricultural food products, facilitate interagency 
collaboration and data sharing on programs related to local and 
regional food systems, and evaluate the success of current 
local promotion programs. No resources are provided for this 
study and evaluation.

Section 10005. Organic agriculture

    Section 10005 authorizes the Organic Production and Market 
Data Initiatives. The Organic Production and Market Data 
Initiatives program funds basic USDA data collection on the 
organic sector. One-time mandatory funding of $5 million is 
provided and $5 million per year is authorized for 
appropriations. This section also authorizes the National 
Organic Program (NOP) and ensures the integrity of the organic 
seal by enforcing standards and accrediting certifiers. A 
report is required to be submitted to the House and Senate 
Agriculture Committees describing the efforts of the Secretary 
to assess the feasibility of establishing an organic research 
and promotion program. The funding level authorized for the NOP 
is $15 million per year. This section upgrades the NOP 
technology that will modernize NOP organic database technology 
systems. The new funding level is set at a $5 million mandatory 
lump sum payment.

Section 10006. Food safety and education initiatives

    Section 10006 maintains the current authorization for food 
safety and education initiatives. This program educates persons 
involved in fresh produce industry, and public, about sanitary 
handling practices and ways to reduce pathogens in fresh 
produce. The funding level is authorized at $1 million per 
year.

Section 10007. Consolidation of plant pest and disease management and 
        disaster prevention programs

    Section 10007 consolidates the National Clean Plant 
Network, which produces clean pathogen free plant material for 
producers, into a larger program focused on plant pest and 
disease management, early detection and surveillance, and 
disaster prevention projects. The funding level for the 
consolidated program is increased. The reported bill provides 
mandatoryfunding of $60 million in fiscal years 2013 through 
2016 and $65 million for fiscal year 2017. The Committee has provided 
funding at a level that it believes is sufficient to continue the 
functions of both the Plant Pest and Disease Management and Disaster 
Prevention Program and the National Clean Plant Network. The Committee 
provided a modest increase in resources for the consolidated program in 
order to address unmet needs. Therefore, the Committee expects that 
annual funding for the National Clean Plant Network will be not less 
than that level provided in fiscal year 2012.

Section 10008. Specialty Crop Block Grants

    Section 10008 increases funding for Specialty Crop Block 
Grants which provide States with funding for projects that 
benefit both producers and consumers of fruits, vegetables, 
tree nuts, and nursery crops. Examples of project areas that 
would qualify for funds include, but are not limited to: food 
safety; food security; nutrition; trade enhancement; education; 
research; promotion; marketing, and plant health programs. The 
changes made to the grant allocation formula are from using 
solely the value of specialty crop production in a state, to 
use of the average of both value of specialty crop production 
and acres of specialty crops planted in a state. It includes a 
new set aside for multi-state projects which is re-allocated to 
States if funds are unused. Mandatory funding of $70 million 
per year is provided. The Committee encourages the Secretary to 
incorporate financial benchmarking through state block grant 
proposals or as a part of multistate projects as a tool to 
enhance the competiveness of specialty crops.

Section 10009. Recordkeeping, investigations, and enforcement

    Section 10009 requires all organic producers to maintain 
records of contracts, agreements, and receipts associated with 
the organic certification program. The Secretary is given 
authority to carry out investigations, administer oaths and 
affirmations, subpoena witnesses, and obtain documentation 
related to an investigation. The Secretary may suspend or 
revoke organic certification if producers or handlers do not 
provide Secretary with requested information pertinent to 
organic certification. The Secretary is also given authority to 
stop sale if a producer or handler misrepresents their product 
as being organic. A civil penalty is issued if not more than 
$10,000 for violating an order of organic certification 
revocation.

Section 10010. Report on honey

    Subsection (a) requires the Secretary to consult with honey 
industry stakeholders, including the American Honey Producers 
Association, the American Beekeeping Federation, the National 
Honey Packers and Dealers Association, the Sioux Honey 
Association, and the Western States Honey Packers and Dealers 
Association, on a report describing the contents of a new 
federal standard of identity for honey. The honey industry is 
currently faced with a number of major challenges, including 
the dilution of honey with increased quantities of other 
substances as well as the addition or substitution of 
substances in order to mask dilution. This subsection requires 
that this report be submitted to the Commissioner of the Food 
and Drug Administration within 180 days of enactment.
    Subsection (b) refers to the citizens' petition filed with 
the Food and Drug Administration in March 2006, which 
represented the honey industry's previous effort to develop a 
federal honey standard of identity. Since 2006, a number of 
states have enacted differing honey standards raising concerns 
about inconsistencies, the flow of commerce within the honey 
industry, confusion in the market place and unanticipated legal 
challenges. The honey industry is now undertaking efforts to 
develop a consensus federal standard of identity for 
consideration in the Secretary's report to the Food and Drug 
Administration.

Section 10011. Effective date

    Section 10011 establishes October 1, 2012 as the effective 
date for the provisions in the title.

                        TITLE XI--CROP INSURANCE

Section 11001. Supplemental Coverage Option

    Section 11001 amends section 508(c) of the Federal Crop 
Insurance Act to create a new coverage option that allows 
coverage based on an area yield and loss basis that covers all 
or part of the deductible under the individual yield or loss 
policy. The Supplemental Coverage Option (SCO) includes the 
following provisions: (1) triggers only if losses in the area 
exceed 10 percent of normal levels; (2) includes a deductible 
of 21 percent of the expected value of the crop under the 
underlying insurance policy for producers in ARC and 10 percent 
for those not participating in ARC; (3) provides for a premium 
subsidy of 70 percent of the premium associated with the 
coverage; and (4) covers the operating and administrative 
expenses in accordance with the rules applicable to other area 
policies. For administrative purposes, SCO policies are to be 
treated as separate policies from individual policies. For 
purposes of implementation, cotton policies should be the 
priority until policies under section 11011 are fully 
available.
    This section also allows for margin insurance policies to 
be utilized in conjunction with individual yield and loss 
policies.

Section 11002. Premium amounts for catastrophic risk protection

    Section 11002 amends Section 508(d) of the Federal Crop 
Insurance Act to establish, in the case of catastrophic risk 
protection, that the amount of the premium established by the 
Corporation for each crop for which catastrophic risk 
protection is available, shall be reduced by the percentage 
equal to the difference between the average loss ratio for the 
crop and 100 percent, plus a reasonable reserve.

Section 11003. Permanent enterprise unit

    Section 11003 amends section 508(e)(5) of the Federal Crop 
Insurance Act to allow the Corporation to pay a portion of 
premiums for whole farm or enterprise unit insurance policies. 
The Committee recognizes that enterprise units and the 
additional assistance provided for enterprise unit policies has 
made higher levels of buy-up crop insurance more attainable for 
many farmers. Accordingly, the reported bill makes the pilot 
enterprise unit premium assistance permanent and allows 
producers the choice to separate their irrigated and non-
irrigated enterprise unit coverage on the farm.

Section 11004. Enterprise units for irrigated and nonirrigated crops

    Section 11004 amends section 508(e)(5) of the Federal Crop 
Insurance Act to make available to a producer the option to 
choose to separate enterprise units for irrigated and 
nonirrigated acreages of crops in counties beginning in the 
2013 crop year.

Section 11005. Data collection

    Section 11005 amends section 508(g)(2) of the Federal Crop 
Insurance Act to allow the use of data collected by the Risk 
Management Agency, the National Agricultural Statistics 
Service, or both, to determine yields. Where sufficient county 
data is not available, the Secretary is authorized to use data 
from other sources.

Section 11006. Adjustment in actual production history to establish 
        insurable yields

    Section 11006 amends section 508(g)(4)(B) of the Federal 
Crop Insurance Act to increase the percentage of the applicable 
transitional yield used to replace excluded recorded or 
appraised yields from 60 percent to 70 percent for the 2013 and 
subsequent crop years.

Section 11007. Submission and review of policies

    Section 11007 amends section 508(h)(1) of the Federal Crop 
Insurance Act to require the Corporation to review policies 
developed under the research and development contracting 
authority in section 522(c), or pilot program developed under 
section 523, and to submit to the Board for review programs 
that will likely result in viable and marketable policies, 
provide crop insurance in a significantly improved form, and 
adequately protect the interests of producers.

Section 11008. Board review and approval

    Section 11008 amends section 508(h) of the Federal Crop 
Insurance Act to provide additional guidance to the Board to 
approve plans that do not unfairly discriminate among producers 
or have adverse impacts on crop insurance delivery, and are 
likely to result in viable and marketable policies, offer an 
improved form of insurance, or provide previously unavailable 
coverage. It allows the Board to establish and publish annual 
priorities on its website and requires the Board to consider 
prioritizing products that address underserved commodities, 
inadequate coverage, and low participation.

Section 11009. Consultation

    Section 11009 amends Section 508(h)(4) of the Federal Crop 
Insurance Act to require the submitter to consult with groups 
representing producers of agricultural commodities in all major 
producing areas for the commodities to be served or impacted by 
the submission. Thisconsultation is intended to ascertain the 
support or opposition of potentially impacted agricultural producers in 
all major producing areas before making a determination to proceed with 
the product development and is to be included as part of the submission 
under the 508(h) process. This consultation requirement also 
establishes that any product developer must provide a market impact 
assessment and analysis of the potential impacts on regional and 
national markets for the development of any new product.

Section 11010. Budget limitations on renegotiation of the Standard 
        Reinsurance Agreement

    Section 11010 amends section 508(k)(8) of the Federal Crop 
Insurance Act to require the Board to ensure budget neutrality 
to the maximum extent practicable during renegotiation of the 
Standard Reinsurance Agreement (SRA), and return any savings 
realized in these renegotiations to RMA programs. Crop 
insurance is recognized by this Committee as the cornerstone to 
farmers' ability to manage risk. As such, the Committee has 
made it a priority to protect and preserve the crop insurance 
program and therefore included the language in this section to 
ensure Administrative action through the renegotiation of the 
Standard Reinsurance Agreement cannot be a means by which 
funding is removed from the crop insurance system.

Section 11011. Stacked income protection plan for producers of upland 
        cotton

    Section 11011 adds a new section 508B to the Federal Crop 
Insurance Act that provides upland cotton producers an area-
wide revenue loss coverage option of not more than 30 percent 
of expected county revenue, specified in increments of five 
percent and with deductible no less than 10 percent. It 
establishes coverage based on: (1) an expected price that is 
the expected price established under existing Group Risk Income 
Protection or is the area wide policy offered by the 
Corporation; and (2) an expected county yield that is the 
higher of the expected county yield for area wide plans or the 
average of applicable yield data from the county for the most 
recent five years, excluding the highest and lowest years. It 
uses a multiplier factor to establish maximum protection per 
acre of not more than 120 percent. It also establishes distinct 
coverage for irrigated and non-irrigated practices, and 
provides for a premium subsidy of 80 percent of the premium by 
the Corporation. This coverage can stand alone or be combined 
with an underlying individual policy. For administrative 
purposes, STAX policies are to be treated as separate policies 
from individual policies. Finally, the Committee intends for 
administrative and operating expenses to be covered in 
accordance with the rules applicable to other area policies.

Section 11012. Peanut revenue crop insurance

    Section 11012 adds a new section 508C to the Federal Crop 
Insurance Act to create a revenue crop insurance program for 
peanut producers, beginning in crop year 2013, using the 
effective price for peanuts equal to the Rotterdam price index, 
adjusted to reflect the farmer stock price of peanuts in the 
U.S.

Section 11013. Authority to correct errors

    Section 11013 amends section 515(c) of the Federal Crop 
Insurance Act to allow an insurance provider or agent to 
correct information to make it consistent with information a 
producer reported to FSA, provided the corrections do not allow 
the producer to obtain a disproportionate benefit or avoid any 
ineligibility requirements or legal obligations.

Section 11014. Implementation

    Section 11014 amends section 515 of the Federal Crop 
Insurance Act to implement an acreage report streamlining 
initiative that will allow producers to report acreage and 
other information directly to the Department. It requires the 
Secretary to notify Congress of substantial completion of the 
initiative by July 1, 2013, and provides funding of $25 million 
for fiscal year 2013 and $10 million for fiscal years 2014 
through 2017. If initiative deadlines are met, it provides for 
$15 million per year for fiscal years 2014 through 2017 instead 
of $10 million.

Section 11015. Approval of costs for research and development

    Section 11015 amends Section 522(b)(2) of the Federal Crop 
Insurance Act to allow the Board, at its discretion, to 
increase the 50 percent limitation to 75 percent on advance 
payments for research and development if the proposal provides 
coverage for an underserved region or crop, including specialty 
crops, and the submitter of the proposal does not have 
sufficient resources to fund development.

Section 11016. Whole farm risk management insurance

    Section 11016 amends section 522(c) of the Federal Crop 
Insurance Act to develop a whole farm risk management insurance 
plan with a liability limitation of $1,500,000 that allows a 
diversified crop and livestock producer to qualify for an 
indemnity if actual gross revenue is below 85 percent of 
average gross farm revenue or reasonable expected gross farm 
revenue. It includes provisions on eligible producers, 
diversification, and market readiness value, and requires a 
report to Congress not later than two years after enactment to 
determine the results and feasibility of the research and 
development, including an analysis of potential adverse market 
distortions.

Section 11017. Crop insurance for livestock

    Section 11017 amends section 522(c) of the Federal Crop 
Insurance Act (as amended by section 11016) by requiring a 
contract with a qualified person to conduct a study to 
determine the feasibility of insuring swine producers for a 
catastrophic event. It requires the Corporation to submit a 
report to the Committee on Agriculture, Nutrition, and Forestry 
of the Senate on results of the study.

Section 11018. Margin coverage for catfish

    Section 11018 amends section 522(c) of the Federal Crop 
Insurance Act (as amended by section 11017) by requiring the 
Corporation to offer a contract to a qualified entity to 
conduct research and development regarding a policy to insure 
producers against reduction in the margin between the market 
value of catfish and selected costs incurred in the production 
of catfish.

Section 11019. Research and development

    Section 11019 amends section 522(c) of the Federal Crop 
Insurance Act by allowing the Corporation to conduct activities 
or enter into contracts to carry out research and development 
to maintain or improve existing policies or develop new 
policies, in accordance with the consultation requirement in 
section 11009.

Section 11020. Pilot programs

    Section 11020 amends section 523(a) of the Federal Crop 
Insurance Act to increase Corporation discretion to conduct 
pilot programs and eliminates the evaluation and reporting 
requirement.

Section 11021. Index-based weather insurance pilot program

    Section 11021 amends section 523(a)(2) of the Federal Crop 
Insurance Act to allow the Corporation to conduct a pilot 
program to provide financial assistance for producers of 
underserved crops and livestock (including specialty crops) to 
purchase an index-based weather insurance product from a 
private insurance company. This type of coverage, also referred 
to as parametric weather insurance, automatically provides 
payments to producers when a weather-related event occurs that 
typically results in yield or revenue loss. It requires the 
Corporation to use $10 million to carry out the pilot programs 
for each of the fiscal years 2013 through 2017.

Section 11022. Enhancing producer self-help through farm financial 
        benchmarking

    Section amends section 502(b) of the Federal Crop Insurance 
Act by adding farm financial benchmarking, which is the process 
of comparing the performance of an agricultural enterprise 
against the performance of other similar enterprises. It also 
amends section 522(d)(3)(F) of the Federal Crop Insurance Act 
by adding ``farm financial benchmarking'' after ``management'' 
and section 524(a) of the Federal Crop Insurance Act by adding 
``farm financial benchmarking'' after ``risk reduction'' and 
adding ``including farm financial benchmarking'' after 
``management strategies''. The Committee recognizes that the 
profitability and financial viability of agricultural producers 
depends on their ability to make sound economic and financial 
farming decisions while managing and mitigating significant 
risks in a frequently changing policy environment. Likewise, 
the Committee and other policy makers benefit from receiving 
analysis that is timely and sound; constituting feedback based 
on the events, decisions and outcomes in the day-to-day 
operation of farms as producers utilize various programs and 
policies. The significant reforms contained in the reported 
bill for farmers provides a unique and necessary focus on this 
as federal agriculture policy becomes more centered on risk 
management. Because farming does not fit neatly into one 
program or title, the Committee encourages USDA to look for 
opportunities that combine programs, resources and authorities 
across titles in an integrated approach with a goal towards 
developing comprehensive research and educationfocused on risk 
management, risk mitigation, improved farm practices, financial 
benchmarking and farm management. The research and education should be 
targeted to agricultural producers, educators and agribusinesses 
(including crop insurance), as well as providing evaluation and 
feedback to state and federal policymakers. As the Committee works to 
move towards risk-based agricultural policy, efforts to enable the 
deployment of strategies and practices that help farmers manage and 
mitigate their risks are paramount, especially in the face of changing 
technologies that require modification of products, practices and 
policies for timely adaptation to the challenges farmers face today and 
into the future.

Section 11023. Beginning farmer and rancher provisions

    Section 11023 amends section 502(b) of the Federal Crop 
Insurance Act by adding the definition of ``beginning farmer or 
rancher''. It also amends section 508 of the Federal Crop 
Insurance Act to allow: (1) beginning farmers or ranchers to 
receive premium assistance 10 percentage points greater than 
premium assistance that would be otherwise is available; (2) 
beginning farmers or ranchers previously involved in a farming 
operation to use the previous producer's production history or 
assigned yield in determining yield coverage; and (3) beginning 
farmers or ranchers to replace each excluded yield with a yield 
equal to 80 percent of the applicable transitional yield.

Section 11024. Agricultural management assistance, risk management 
        education, and organic certification cost share assistance

    Section 11024 amends section 524 of the Federal Crop 
Insurance Act to provide assistance for: (1) provisions of 
organic certification cost share assistance; (2) activities to 
support risk management education and community outreach 
partnerships; and (3) provisions of agricultural management 
assistance grants to producers in States in which there has 
been a low level of Federal crop insurance participation. The 
assistance is limited to $50,000 per person per year. It 
requires the Commodity Credit Corporation to make available $23 
million for each of fiscal years 2013 through 2017 to carry out 
this assistance. Additionally, the program provides organic 
producers with up to 75 percent of or $750 toward the cost of 
organic certification with funding set at $11.5 million each of 
fiscal years 2013 through 2017.

Section 11025. Crop production on native sod

    Section 11025 amends Section 508(o) of the Federal Crop 
Insurance Act to provide sod producers during the first 4 years 
of planting on native sod acreage the following: (1) 65 percent 
of the transitional yield; and (2) a crop insurance premium 
subsidy 50 percentage points less than the premium subsidy that 
would otherwise apply. It requires the Secretary to submit a 
report that describes the cropland acreage in each county and 
State, and the change in cropland acreage from the preceding 
year in each county and State to the Committee on Agriculture, 
Nutrition, and Forestry of the Senate..

Section 11026. Technical amendments

    Section 11026 amends section 508(b) Federal Crop Insurance 
Act to remove the requirement that producers purchase 
catastrophic insurance or waive eligibility for emergency crop 
loss assistance to be eligible for certain payments and loans.

                        TITLE XII--MISCELLANEOUS

   SUBTITLE A--SOCIALLY DISADVANTAGED PRODUCERS AND LIMITED RESOURCE 
                               PRODUCERS

Section 12001. Outreach and assistance for socially disadvantaged 
        farmers and ranchers

    Section 12001 extends the program with an authorization 
level of $20 million per fiscal year and provides $5 million in 
mandatory funds per fiscal year. Veteran farmers and ranchers 
have also been included in the Outreach and Assistance for 
Socially Disadvantaged Producers and Limited Resource 
Producers.

Section 12002. Office of Advocacy and Outreach

    Section 12002 extends the office with an authorization 
level of $2 million per year.

                         SUBTITLE B--LIVESTOCK

    In general with regard to livestock issues, the Committee 
is aware that equine disease outbreaks have occurred with 
increased frequency over the last several years. These 
outbreaks threaten the health and welfare of U.S. horses and 
the economic viability of the $102 billion horse industry. The 
Animal and Plant Health Inspection Service (APHIS) is directed 
to coordinate with equine stakeholders and others to develop a 
national equine health plan for the purpose of detecting, 
controlling, and/or eradicating contagious equine diseases and 
promoting equine-specific biosecurity practices. The Committee 
is also concerned that the equine veterinary position at APHIS 
has been vacant for an extended period of time. This equine 
veterinary position is vital for an efficient and coordinated 
response to equine disease outbreaks and to handle the many 
equine issues for which APHIS is responsible. The Committee 
expects APHIS to fill this position as soon as possible.

Section 12101. Wildlife reservoir zoonotic disease initiative

    Section 12101 authorizes a competitive grant program to 
improve diagnostic testing and vaccines for Bovine 
Tuberculosis, Brucellosis and other zoonotic diseases in 
livestock, authorized for $7 million in appropriations per 
fiscal year.

Section 12102. Trichinae Certification Program

    Section 12102 reauthorizes the Trichinae Certification 
Program.

Section 12103. National Aquatic Health Plan

    Section 12103 reauthorizes the National Aquatic Health 
Plan.

Section 12104. Sheep production and marketing grant program

    Section 12104 authorizes a competitive grant program to 
improve the sheep industry and provides mandatory funding of 
$1.5 million and authorizes $3 million in appropriations per 
fiscal year.

Section 12105. Pilot to eradicate feral swine

    Section 12105 authorizes a pilot between NRCS and APHIS to 
eradicate feral swine and authorizes $2 million per fiscal 
year.

               SUBTITLE C--OTHER MISCELLANEOUS PROVISIONS

Section 12201. Military veterans agricultural liaison

    Section 12201 establishes a military veteran liaison to 
connect returning veterans with beginning farmer training and 
help veterans access USDA programs.

Section 12202. Information gathering

    Section 12202 revises section 1619 of the 2008 Farm Bill to 
permit information sharing with certain State agencies.

Section 12203. Grants to improve supply, stability, safety, and 
        training of agricultural labor force

    Section 12203 reauthorizes grants to improve Supply, 
Stability, Safety, and Training of Agricultural Labor Force at 
$10 million per fiscal year.

Section 12204. Noninsured Crop Disaster Assistance Program

    Section 12204 contains a revision to the Noninsured Crop 
Disaster Assistance Program (NAP) that provides a ``buy-up'' 
option to producers of crops that are not covered by crop 
insurance. The section allows producers to elect and pay for 
higher coverage levels between 55 percent and 65 percent. 
Producers who elect higher coverage levels would pay a premium 
based upon the value of their production and acres planted. The 
buy-up option in Section 12204 was included to assist producers 
of non-covered crops who have been left without adequate 
support when facing loses under NAP as it now exists. The 
Committee recognizes concerns that the inadequate level of 
support under NAP has been a disincentive for utilization of 
the program by producers. The Committee intends for the new 
buy-up option to provide more effective coverage for producers 
of non-covered crops against losses and improve their ability 
to manage the risks they face. Additionally, section 12204 
removes overlap between NAP and the disaster programs in Title 
I.

Section 12205. Regional and economic infrastructure development

    Section 12205 reauthorizes the program, with a slight 
adjustment to the cap on administration fees.

Section 12206. Canada geese removal

    Section 12206 directs the Secretary, in consultation with 
Interior and FAA, to publish a management plan to remove Canada 
geese residing on NPS land within five miles of any commercial 
airport.

Section 2. Definition of secretary.

    This section defines the term ``Secretary'' for the entire 
act as the Secretary of Agriculture.

              ADDITIONAL, SUPPLEMENTAL, OR MINORITY VIEWS

                  Additional Views of Senator Roberts

    While I agree with much of the content of the committee 
report, I regretfully file these additional views to clarify 
committee action and consideration of the Senate Committee on 
Agriculture, Nutrition and Forestry originally reported bill, 
S. 3240.

                          TITLES I, II AND XI

    The devastating drought impacting the vast majority of the 
country puts a fine point on the need for many of the 
provisions included in this bill. The livestock disaster 
programs will help producers purchase feed when forage and 
pastureland is destroyed by drought, flood, or other weather-
related disasters. These programs can also help producers when 
mortality rates increase due to natural disasters.
    Several crop insurance provisions are also designed to help 
producers manage risk in the face of severe weather events. 
Specifically, the increase in yield plugs in Section 11006 
would help producers maintain yield coverage guarantees even 
after a disaster, and allowing the split of irrigated and non-
irrigated enterprise units in Section 11004 would be invaluable 
in years such as this when rainfall is scarce.
    This bill also revises the emergency haying and grazing 
provisions of the Conservation Reserve Program, eliminating the 
rental rate reduction for producers affected by drought and 
other emergencies.

                                TITLE IV

    The USDA Supplemental Nutrition Assistance Program (SNAP) 
provided a total of $71.8 billion in food benefits to an 
average of 44.7 million people per month in fiscal year 2011. 
While USDA should continue efforts on access for needy 
Americans, Congress and USDA must strive to eliminate waste, 
fraud, and abuse within the nutrition assistance programs. The 
bill addresses waste, fraud, and abuse with provisions outlined 
below.
    First, the bill takes a small step toward stopping States 
from taking advantage of the Low Income Home Energy Assistance 
Program (LIHEAP) loophole, where at least 17 State agencies 
annually issue as little as $1.00 in LIHEAP benefits to 
increase monthly SNAP food benefits by $90.00 ($1,080 per 
year). Each State develops and uses a simplified Standard 
Utility Allowance (SUA), a fixed dollar amount representing the 
average household energy costs in the State, to determine the 
SNAP utilities expense deduction when calculating households' 
SNAP food benefits. Households that qualify for the SUA will 
typically receive a higher than average amount of monthly SNAP 
food benefits. To qualify for the SUA, in most cases, 
households must provide actual utility bills. Households do not 
normally qualify for the SUA if they do not pay utilities out 
of pocket. An exception is LIHEAP. SNAP allows households that 
receive LIHEAP but do not otherwise pay utilities out of pocket 
to claim the SUA, thus increasing households' monthly SNAP food 
benefits. To narrow this ``LIHEAP loophole,'' the bill raises 
the minimum LIHEAP payment required to qualify households for 
the SUA. However, under this provision, States can still confer 
$10.00 in annual LIHEAP benefits to qualify otherwise 
ineligible households for an average of $1,080 in annual SNAP 
benefits.
    Second, the bill provides additional resources to help USDA 
fight SNAP food benefit trafficking. The percentage of SNAP 
food benefits trafficked reached an historic low of 1 percent, 
but totaled over $700 million in FY2011. The Committee will 
continue to work with USDA to improve program integrity.
    Third, the bill terminates SNAP food benefits for 
households with substantial lottery or gambling winnings. 
Winners may reapply for SNAP, but will not receive food 
benefits if SNAP eligibility requirements are not met.
    Overall, the nutrition title saves nearly $4 billion over 
10 years by trimming wasteful, abusive practices by States, and 
makes key investments to help fight fraud. During the Committee 
Markup, several amendments were filed by Senators to achieve 
greater program accountability, but unfortunately were not 
adopted by the Committee. While the bill is a step in the right 
direction, there is more work to be done to safeguard the 
American taxpayers' investment in food assistance. Program 
improvements the Committee should consider in the future 
include but are not limited to the following:
    1. Eliminating the LIHEAP Loophole. As described above, 
States should not have the ability to leverage nominal LIHEAP 
payments for billions of dollars in Federal expenditures. 
According to the CBO, a complete elimination of the LIHEAP 
loophole would save taxpayers an estimated $13.96 billion over 
10 years (Of note, on September 26, 2011, CBO estimated the 
complete elimination would save $8.372 billion over 10 years; 
the amount potentially saved increased by 60 percent due to 
food price inflation, additional States participating, and 
increased use by previously participating States.).
    2. Restoring Program Integrity for SNAP by limiting SNAP 
Categorical Eligibility to cash assistance. Today, 43 States 
are gaming the system to qualify otherwise ineligible 
households for SNAP. Under current law, States have the option 
of using ``broad-based categorical eligibility,'' or automatic 
eligibility (Cat-El) for recipients of the Temporary Assistance 
for Needy Families program (TANF). Cat-El was originally 
intended to help streamline States' administration of SNAP by 
allowing households to be certified as eligible for SNAP 
without evaluating household assets or gross income if the 
household received assistance through TANF. However, at the 
encouragement of USDA in a 2009 policy memo to States, States 
are exploiting an unintended loophole of TANF-provided 
informational brochures and informational 1-800 numbers to 
maximize SNAP enrollment and the corresponding increase in 
Federal food benefits. According to CBO, limiting SNAP Cat-El 
to TANF cash assistance would save $10.045 billion over 10 
years.
    3. Eliminating Inflation Adjustments for Countable 
Resources. The 2008 farm bill indexed the SNAP asset 
requirements to inflation using the Consumer Price Index to 
gradually increase the pool of households eligible for SNAP, 
and to encourage savings for current SNAP participants (liquid 
assets are used to calculate SNAP eligibility along with gross 
income, and current liquid asset limits are $2,000 for most 
adults and $3,000 for the elderly and disabled.). While 
individuals' savings should be encouraged, increasing the 
Federal cost of SNAP by expanding eligibility should not be 
encouraged. Savings of $234 million over 10 years would result 
from maintaining current SNAP asset levels without expanding 
eligibility over time due to inflation.
    4. Eliminating SNAP State Bonuses. Under current law, USDA 
awards $48 million each fiscal year to State agencies for 
``Best Program Access'' (signing up as many households for SNAP 
as possible); ``Most Improved Program Access'' (how many 
additional households signed up for SNAP compared to the 
previous year); and ``Best Application Processing Timeliness'' 
(handling SNAP applications within required guidelines). In 
essence, State agencies are rewarded for performing what the 
taxpayer should expect, at a minimum, for stewardship of the 
tax dollar. The bonuses are not required to be used for SNAP 
administration; the State may choose to use the funding for any 
State priority. Savings of $480 million over 10 years would 
result from ending the State bonuses.
    5. Eliminating Duplicative Employment and Training (E&T). 
The Government Accountability Office reported in January 2011 
there are 47 Federal employment and training programs at an 
annual cost of $18 billion. SNAP participants should utilize 
the existing Department of Labor's Workforce Investment Act 
(WIA) programs. Some States already contract with WIA programs 
to conduct the State's SNAP E&T programs. USDA provides a total 
of $99 million in base program funding to State agencies each 
fiscal year to operate SNAP E&T programs. In addition to the 
base program funding, States have the option of providing their 
own funding to their State E&T program, which USDA is required 
to match dollar for dollar. In FY2010, 4 States received over 
78 percent of the total 50/50 match funding, including New York 
(36 percent), California (20.2 percent), Pennsylvania (12.4 
percent), and New Jersey (9.7 percent). This optional 50/50 
Federal match is uncapped, and can be used by States to provide 
reimbursement for participants' expenses that are ``reasonable 
and necessary and directly related to participation in E&T,'' 
including union dues, test fees; clothing and tools required 
for the job; relocation expenses; licensing and bonding fees; 
transportation; and child care. Eliminating the SNAP E&T 
programs would save $3.806 billion over 10 years.
    6. Eliminating Inflation Adjustments for Emergency Food 
Assistance Resources. The 2008 farm bill indexed the annual 
program amount to inflation using the Consumer Price Index. 
Under current law, TEFAP provides $260 million annually in 
USDA-purchased commodities to food banks. While food bank 
donations are important, food banks should rely more on 
privatedonations and less on the American taxpayer. Savings of $330 
million would result from ending the increases in program spending due 
to inflation.
    7. Eliminating the SNAP Nutrition Education Federal block 
grant program. States provide SNAP Nutrition Education to SNAP 
participants with 100 percent Federal-funded block grants. The 
funding formula is skewed to only a few States, with the top 4 
States receiving over 54 percent of the funding including: 
California (37 percent); Michigan (6.8 percent); Pennsylvania 
(6.5 percent); and New York (4.4 percent). Other existing 
nutrition education programs are delivered more equitably 
through by other government programs, including, but not 
limited to: USDA National Agricultural Library ``Healthy Meals 
Resource System''; USDA Center for Nutrition Policy and 
Prevention ``MyPlate.gov''; USDA Food and Nutrition Service--
``Eat Smart, Live Strong materials for Older Adults''; National 
Institute of Health ``Eat, Think, and Be Active''; National 
Food Service Management Institute; and the Land Grant 
University Extension Programs. Ending the SNAP Nutrition 
Education program would save $4.296 billion over 10 years.
    8. Terminating the Stimulus' Temporary Increase in SNAP 
Benefits. The American Recovery and Reinvestment Act of 2009 
(ARRA) included a temporary increase to SNAP food benefits. The 
current end date for the temporary increase is October 31, 
2013. The end date had been moved up twice in FY2010 to pay for 
education jobs and Medicaid (cut $11.9 billion from SNAP), and 
school meals programs (cut $2.5 billion from SNAP). Terminating 
the temporary increase would save taxpayers $5.289 billion over 
the next 10 years, which represents less than a 0.7 percent cut 
to SNAP food benefits over 10 years.
    While the Committee report states ``that SNAP will shrink 
to nearly pre-recession levels as the economy recovers,'' CBO 
estimates the SNAP program will continue to cost taxpayers at 
least twice as much as compared to the $33.2 billion it cost in 
2007 which was before the recession. The CBO estimates Federal 
expenditures for SNAP will remain above $72.6 billion per year 
for at least the next 10 years. In this budget climate, it is 
absolutely critical that Congress reign in the out of control 
spending and reinstitute program integrity for the SNAP 
program.

                                TITLE IX

    Unfortunately, the committee report fails to accurately 
reflect the views of the entire Committee with regard to the 
Energy Title. The various Energy Title programs have broad 
based support, but given the budget climate in which the 
Agriculture Reform, Food and Jobs Act of 2012 has been 
developed, the future funding for these programs should be 
maintained as discretionary budget items, and not provided 
mandatory spending through the bill.
    The 2002 and 2008 Farm Bills each made 5-year investments 
in several USDA energy programs. With these bills, Congress 
created programs providing for outreach, education, and the 
development of new technology, markets and feedstock 
production. As with any federal government program, Congress 
must be careful not to adversely impact existing markets, 
especially when providing significant federal financial 
resources for the program. For example, implementation of 
provisions of the Energy Title of the 2008 Farm Bill resulted 
in adverse impacts to wood products markets. The reported bill 
strives to correct the administrative decisions USDA made while 
implementing that legislation.
    As demand for energy increases, our nation's energy policy 
should foster growth in all aspects of energy production 
including both traditional and renewable resources.

                        CHANGES IN EXISTING LAW

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee states that, in its 
opinion, it is necessary to dispense with the requirements of 
that paragraph in order to expedite the business of the Senate.

                                  
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