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2014 Farm Bill Summary

Core Content

The Farm Bill is a multi-year, omnibus law that governs a wide range of agricultural and food programs. It is renewed approximately every five years and provides a structured opportunity for policymakers to address agricultural and food-related issues comprehensively. The most recent farm bill, the Agricultural Act of 2014 (P.L. 113-79), was enacted in February 2014 and expires in 2018. It succeeded the Food, Conservation, and Energy Act of 2008 (P.L. 110-246).

The 2014 Farm Bill includes 12 titles, covering areas such as commodity price and income supports, conservation, trade, nutrition, rural development, research, and energy. It also introduced new programs and modified existing ones, aiming to support farmers, promote environmental sustainability, and improve nutrition for low-income populations.

Main Provisions and Key Changes

Commodity Programs (Title I)

• Restructured support for traditional commodity crops (grains, oilseeds, cotton) by eliminating direct payments, counter-cyclical programs, and the Average Crop Revenue Election.
• Introduced two new programs: Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC), which provide payments based on price or revenue declines.
• Replaced the dairy product price support, Milk Income Loss Contract (MILC), and export subsidies with a new margin-based program.
• Set a $125,000 per person cap on total payments from PLC, ARC, marketing loan gains, and loan deficiency payments.
• Adjusted adjusted gross income (AGI) limits for eligibility, setting a $900,000 total AGI cap.
• Reauthorized and funded four disaster assistance programs for livestock and tree fruit producers, with retroactive coverage from FY2012.

Conservation (Title II)

• Consolidated over 20 conservation programs into two new programs: Agricultural Conservation Easement Program (ACEP) and Regional Conservation Partnership Program (RCPP).
• Retained major programs such as Conservation Reserve Program (CRP), Environmental Quality Incentives Program (EQIP), and Conservation Stewardship Program (CSP).
• Introduced conservation compliance requirements, which link eligibility for farm programs to the implementation of approved conservation plans or exemptions.
• Repealed previous programs related to wetlands, grasslands, and farmland protection, integrating them into ACEP.

Trade (Title III)

• Reauthorized and amended USDA's food aid, export market development, and export credit guarantee programs.
• Extended support for Food for Peace Title II, which includes both emergency and nonemergency food aid.
• Created a new local and regional purchase program to replace the expired LRP pilot program.
• Adjusted export credit guarantee programs to comply with WTO obligations, particularly the cotton case.
• Proposed reorganization of USDA's trade functions to better coordinate with international standards and address trade barriers.

Nutrition (Title IV)

• Accounts for 80% of the farm bill's projected spending.
• Reauthorized and revised the Supplemental Nutrition Assistance Program (SNAP), which provides benefits for low-income individuals.
• Retained most SNAP eligibility and benefit calculation rules, but made changes to LIHEAP and SNAP benefit issuance.
• Established new policies for SNAP Employment and Training (E&T), including a pilot project for work programs.
• Included funding for Food Insecurity Nutrition Incentive grants to support programs that offer bonus incentives for purchasing fruits and vegetables.
• Disqualified certain ex-offenders from receiving SNAP benefits if they do not comply with their sentence.

Credit (Title V)

• Made minor changes to the USDA Farm Service Agency (FSA) and Farm Credit System (FCS).
• Allowed alternative legal entities to qualify for farm loans and meet the three-year farming experience requirement.
• Increased the maximum size of down-payment loans and removed term limits on guaranteed operating loans.

Rural Development (Title VI)

• Supports rural business and community development through grants and loans for infrastructure, economic development, broadband, and telecommunications.
• Encourages coordination with local, state, and federal programs.

Research (Title VII)

• Provides a wide range of agricultural research and extension programs to improve efficiency, innovation, and productivity in farming.

Forestry (Title VIII)

• Supports forestry management programs run by the USDA's Forest Service.

Energy (Title IX)

• Encourages renewable energy development through grants, loan guarantees, and feedstock procurement initiatives.
• Covers biofuel production, marketing, and research.

Horticulture (Title X)

• Supports specialty crops (fruits, vegetables, tree nuts, floriculture) through market promotion, plant pest and disease prevention, and public research.
• Includes assistance for certified organic production.

Crop Insurance (Title XI)

• Enhanced the federally authorized crop insurance program.
• Introduced Stacked Income Protection (STAX) for cotton and Supplemental Coverage Option (SCO) for other crops.
• Added crop insurance premiums to the list of benefits that could be lost if producers violate conservation compliance rules.

Miscellaneous (Title XII)

• Includes programs for livestock and poultry production, and limited-resource and socially disadvantaged farmers.

Cost Analysis

Estimated Cost at Enactment (2014)

• The CBO estimated the total cost of mandatory programs to be $489 billion over the five-year period FY2014-FY2018.
• Nutrition (including SNAP) accounted for 80% of the total cost.
• Crop insurance, conservation, and commodity support accounted for 99% of the mandatory outlays.

Current Projections (April 2018)

• The new five-year estimated cost for the four largest titles is $455 billion, $28 billion less than the original projection.
• SNAP outlays are projected to be $26 billion less.
• Crop insurance is projected to be $10 billion less.
• Conservation is projected to be $5 billion less.
• Farm commodity and disaster payments are projected to be $13 billion higher due to lower commodity prices and higher livestock payments from disasters.

Historical Cost Trends

• The farm bill's cost has increased over time, though the relative share of each program group has shifted.
• Conservation spending has grown steadily.
• Farm commodity programs have generally decreased in cost due to higher market prices, but this trend has reversed with the 2014 bill.
• Crop insurance costs have increased significantly and now exceed traditional commodity programs in total cost.
• SNAP spending rose sharply after the 2008 recession but has since declined more slowly.

Summary of Key Figures and Tables

• Figure 1: Provides a timeline of important farm bill policy dates and related laws.

• Figure 2: Shows projected and actual outlays for the four major titles of the 2014 farm bill.

• Figure 3: Illustrates the historical cost distribution across major mandatory programs.

• Table 1: Lists the projected outlays for each title of the 2014 farm bill at enactment and in April 2018.

• Table 2: Shows the shares and growth in projected outlays from 2008 to 2014, highlighting the significant increase in nutrition and the decline in commodity programs.

Conclusion

The 2014 Farm Bill represents a comprehensive overhaul of U.S. agricultural and food policy, emphasizing nutrition, risk management, and environmental conservation. While the cost of mandatory programs has decreased in recent years due to economic conditions, certain areas such as commodity and disaster payments have seen increases. The bill's structure and provisions reflect a shift in priorities and a response to changing market and policy environments.