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Farm and Commodity Policy: Glossary

2008 Farm Bill Side-By-Side

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0,50/85-92 provisions—Refers to the so-called 50/85 and 50/92 provisions for rice and cotton and the 0/85 and 0/92 provisions for wheat and feed grains that were in effect in various forms from 1986 through 1995. Under these provisions, farmers could idle all or part of their permitted acreage, putting the idled land in a conserving use, and still receive deficiency payments for part of the acreage. A minimum planting requirement of 50 percent of maximum payment acreage was required in order to receive these payments in the case of rice and cotton.

1614 data—Data which tracks the benefits provided, directly or indirectly, to individuals and entities under titles I and II and the amendments made by those titles. 1614 refers to the section in the 2002 Farm Act that required USDA to track benefits.

1862 colleges/universities—The original land grant colleges and universities established by the Land Grant College Act of 1862 (see Land-Grant Institutions).

1890s colleges/universities—These institutions resulted from provisions of the second Morrill Act, which prohibited racial discrimination in Land-Grant Colleges and Universities. States had the option of creating separate institutions to serve African-American students. The Southern States elected to have separate educational institutions, sometimes referred to as "historically black colleges and universities." While not a land-grant college, Tuskegee University traditionally has been associated with the African-American land-grant institutions. It was granted 25,000 acres of land by the U.S. Congress in 1899 and has espoused the land-grant philosophy throughout its history.

1938 Farm Act—See Agricultural Adjustment Act (AAA) of 1938.

1949 Farm Act—See Agricultural Act of 1949.

1985 Farm Act—See Food Security Act of 1985.

1990 Farm Act—See Food, Agriculture, Conservation and Trade Act of 1990.

1994 Institutions—Land-Grant Institutions that traditionally served Native Americans. The Equity in Educational Land-Grant Status Act of 1994 conferred land-grant status for 29 tribal colleges that address agriculture and mechanical arts.

1996 Farm Act—See Federal Agriculture Improvement and Reform Act of 1996.

2002 Farm Act—See Farm Security and Rural Investment Act of 2002.

Acreage reduction program (ARP)—An annual land retirement system for wheat, feed grains, cotton, or rice in which farmers participating in Federal commodity programs idled a crop-specific, nationally set portion of their crop acreage base in order to be eligible for benefits such as Commodity Credit Corporation (CCC) crop loans and deficiency payments. No deficiency payments were made on the idled ARP land. The 1996 and 2002 Farm Acts did not reauthorize ARPs.

ACRE actual farm revenue—The actual commodity farm yield X the ACRE national average market price.

ACRE actual State revenue—The ACRE actual State yield X the ACRE national average market price.

ACRE actual State yield—The crop year commodity production (quantity) produced in the State per planted acre.

ACRE benchmark farm revenue—The 5-yr Olympic average farm crop yields X [ACRE program guarantee price – crop insurance premiums per acre]

ACRE benchmark State yield—The 5-year Olympic average commodity yield per planted acre in the State.

ACRE farm-specific productivity ratio—A ratio of the 5-year Olympic average farm crop yield divided by the ACRE benchmark State yield.

ACRE national average market price—The greater of (A) the national average commodity market price received by producers during the 12-month marketing year; or (B) the reduced marketing assistance commodity loan rate.

ACRE program guarantee—The optional ACRE program guarantee of 90% of the [5-year ACRE benchmark State yield X 2-year ACRE program guarantee price] for the crop year and respective commodity.

ACRE program guarantee price—The commodity-specific 2-year national average market price received by producers.

Additional or buy-up coverage—Any coverage level greater than catastrophic coverage.

Additional peanuts—See peanuts, additional.

Adjusted gross revenue (AGR) —A plan of insurance that bases coverage on adjusted gross revenue calculated from Schedule F income tax data.

Adjusted world price, cotton (AWP)—As part of the upland cotton marketing assistance loan program, USDA calculates and publishes a loan repayment rate, on a weekly basis, known as the adjusted world price. The AWP is the prevailing world price for upland cotton, adjusted to account for U.S. quality and location. Producers who have taken out USDA marketing assistance loans may choose to repay them at either the lesser of the established commodity loan rate for upland cotton, plus interest, or the announced AWP for that week. The AWP for cotton also was used for determining Step 2 cotton program payments prior to suspension of Step 2 in 2006.

Adjusted world price, rice (AWP)—As part of the rice marketing assistance loan program, USDA calculates and publishes a loan repayment rate, the world price for each class of milled rice (long grain, medium grain, and short grain) based on the prevailing world market price for each of the classes, modified to reflect U.S. quality and the U.S. cost of exporting milled rice. USDA sets this prevailing market price after reviewing milled rice prices in major world markets, and taking into account the effects of supply-demand changes, government-assisted sales, and other relevant price indicators. The steps for calculating and announcing the world prices are prescribed in more detail in Federal regulations.

Aggregate measurement of support (AMS)—See aggregate measurement of support in ERS WTO Briefing Room Glossary.

Agreement on Agriculture—See Agreement on Agriculture in ERS WTO Briefing Room Glossary.

Agricultural Act of 1949—P.L. 89-439 (October 31, 1949), along with the Agricultural Adjustment Act of 1938, makes up the major part of permanent law that mandates commodity price and farm income support. The original 1949 Act designated mandatory support for basic commodities and the following nonbasic commodities: wool and mohair, tung nuts, honey, Irish potatoes (excluded in the Agricultural Act of 1954), as well as milk, butterfat, and their products. Provisions of this law are generally superseded by more current legislation. If the current legislation expires and new legislation is not enacted, the law reverts back to the permanent provisions of the 1938 and 1949 Acts, unless Congress enacts an extension of current legislation.

Agricultural Adjustment Act (AAA) of 1938—P.L. 75-430 (February 16, 1938) was enacted to replace farm subsidy policies found unworkable in the AAA legislation of 1933. The 1938 Act was the first to make price support mandatory for corn, cotton, and wheat to help maintain a sufficient supply in low production periods, along with marketing quotas to keep supply in line with market demand. It established permissive supports for butter, dates, figs, hops, turpentine, rosin, pecans, prunes, raisins, barley, rye, grain sorghum, wool, winter cover-crop seeds, mohair, peanuts, and tobacco for the 1938-40 period. Title V of the Act established the Federal Crop Insurance Corporation. The 1938 Act is considered part of permanent legislation for commodity programs and farm income support (along with the Commodity Credit Corporation Charter Act and the Agricultural Act of 1949). Provisions of the law are generally superseded by more current legislation.

Agricultural and food science—Congress defines "agricultural and food science" as basic, applied, and developmental research, extension, and teaching activities in food and fiber, agricultural, renewable natural resources, forestry, and physical and social sciences.

Agricultural Management Assistance (AMA) program—Established under the Agricultural Risk Protection Act of 2000 and amended under the 2002 Farm Act, the Agricultural Management Assistance program provides financial assistance for conserving practices under 3- to 10-year contracts. The program focuses on producers in 15 States where participation in the Federal Crop Insurance Program has historically been low. The 2008 Farm Act added Hawaii to the list of designated states.

Agricultural Market Transition Act (AMTA)—Title I of the 1996 Act allowed farmers who participated in the wheat, feed grain, cotton, and rice programs in any one of the previous 5 years to enter into 7-year production flexibility contracts for 1996-2002 and receive payments based on the enrolled acreage. Total production flexibility contract payment levels for each fiscal year were fixed. The AMTA allowed farmers to plant 100 percent of their total contract acreage to any crop, except for limitations on fruits and vegetables, and receive a full payment. Land had to be maintained in agricultural uses, including idling or conserving uses. Unlimited haying and grazing were allowed, as was the planting and harvesting of alfalfa and other forage corps—with no reduction in payments. Production flexibility contract payments, also referred to as AMTA payments, were replaced with direct payments in the 2002 Farm Act and the payment rates were fixed.

Agricultural Risk Protection Act of 2000 (ARPA)—Federal crop insurance legislation amended to strengthen the safety net for agricultural producers. Included a provision recognizing organic farming as a "good farming practices" that would be covered by Federal crop insurance.

Agricultural use—Refers to cropland planted to an agricultural crop, used for haying or grazing, idled for weather-related reasons or natural disasters, or diverted from crop production to an approved cultural practice that prevents erosion or other degradation.

Amber box policies—See amber box policies in ERS WTO Briefing Room Glossary.

Appropriations—An appropriations act of Congress permits USDA or other federal agencies to incur financial obligations to be drawn from the Federal Treasury. Appropriations do not represent cash actually set aside in the Treasury for the purposes specified in the appropriations act; they represent limitations of amounts that agencies may obligate for the purposes and during the time periods specified in the appropriations act. Appropriations may be annual (one year in duration), multiple-year (a definite period in excess of one fiscal year), or no-year (available indefinitely). Appropriations are definite (for a specific amount of money) or indefinite (for an unspecified amount of money), and either current (for the immediate fiscal year in question) or permanent (always available).

Area plan of insurance—Crop yield or revenue insurance coverage based on county-level yield or revenue.

Authorization—Legislation that establishes or continues the legal operation of a Federal program or agency, either indefinitely or for a specific period of time, or that sanctions a particular type of expenditure. An authorization normally is a prerequisite for an appropriation or other kind of budget authority. An authorization also may limit the amount of budget authority to be provided or may authorize the appropriation of "such sums as may be necessary."

Average crop revenue election (ACRE)—An optional revenue-based program provision introduced in the 2008 farm legislation that replaces counter-cyclical payments for those producers who elect to participate in ACRE. Once producers elect to participate, participation continues until 2012. Producers continue to receive reduced direct payments and are eligible for reduced loan deficiency payments.

Base acreage (or crop acreage base)—A farm's crop-specific acreage of wheat, feed grains, upland cotton, rice, oilseeds, pulse crops, or peanuts eligible to participate in commodity programs. Base acreage includes land that would have been eligible to receive production flexibility contract payments in 2002 and acreage (specified in legislation) planted to other covered commodities (oilseed and peanut producers). Base acreage refers to cropland on a farm, not to specific parcels of land. For a description of rules for determining base see Crop Acreage Bases and Program Payment Yields, 1981 Through 2002 Farm Acts.PDF file

Beginning farmer or rancher—These are farmers and ranchers (or all members of the entity) who (a) have not operated a farm or ranch for more than 10 consecutive years, and (b) will materially or substantially participate in the operation of the farm or ranch.

Beginning farmer or rancher loans—To qualify as a beginning farmer or rancher under USDA's Farm Service Agency guidelines, the loan applicant must be an individual or entity who (1) has not operated a farm or ranch for more than 10 years; (2) meets the loan eligibility requirements of the program to which he/she is applying; and (3) substantially participates in the operation. For farm ownership (FO) loan purposes, applicant cannot own a farm greater than 30 percent of the average size farm in the county. For direct FO loans, applicant must have participated in business operation of a farm for at least 3 years. If the applicant is an entity, all members must be related by blood or marriage, and all stockholders in a corporation must be eligible beginning farmers.

Beneficial interest—When a producer controls the commodity and retains the ability to make all decisions affecting the commodity, including movement, sale and the request for and repayment of a loan or LDP.

Bill Emerson Humanitarian Trust—See Emerson Humanitarian Trust.

Broadband—A descriptive term for communication technologies that can provide consumers integrated access to voice, high-speed data service, video-demand services, and interactive delivery services.

Capacity and Infrastructure Programs—Programs that improve overall effectiveness and ability. Some important Capacity and Infrastructure Programs include Hatch funds for State Agricultural Experiment Stations, McIntire-Stennis funds for forestry research, and Smith-Lever funds for cooperative extension.

Capped entitlement—Under an entitlement program, eligible individuals must be allowed to participate, regardless of the cost. Agricultural examples include loan deficiency payments and marketing loan gains. Capped entitlements are entitlement programs with spending ceilings ("capped spending"). However, because they are still entitlements, and anyone who is eligible can participate, stringent eligibility requirements are used to limit participation to the number of individuals or farms for which funds are available. For example, the Conservation Security Program is open to all farms that are located in a watershed there the program is offered in a given year and meet all other eligibility criteria. Once available funds are expended, however, enrollment is suspended.

Catastrophic coverage (CAT)—Minimum coverage level available under the Federal crop insurance program. CAT coverage is 50 percent of expected yield, indemnified at 55 percent of the price election.

Commodity certificates (Certs)—Commodity certificates, issued by the Commodity Credit Corporation (CCC), can be purchased at the posted county price for wheat, feed grains, and oilseeds or at the effective adjusted world price for rice or upland cotton. The certificates are available for producers to use immediately in acquiring crop collateral they pledged to the CCC for a commodity loan. When the posted county price or effective adjusted world price is below the loan rate, producers who are facing payment limits can benefit from the lower loan repayment rates. The use of commodity certificates to repay loans ends after the 2009 crop year. Certificates were also used during the mid-1980s in lieu of cash to compensate program beneficiaries and to reduce the large, costly, and price-depressing commodity surpluses held by the CCC.

Commodity Credit Corporation (CCC)—A federally owned and operated corporation within the USDA created to stabilize and support agricultural prices and farm income by making loans and payments to producers, purchasing commodities, and engaging in various other operations. The CCC handles all money transactions for agricultural price and income support and related programs.

Commodity Exchange Act—The Commodity Exchange Act, 7 USC 1, et seq., provides for the Federal regulation of commodity futures and options trading. See Commodity Futures Modernization Act.

Commodity Futures Modernization Act—The Commodity Futures Modernization Act of 2000 (CFMA), Pub. L. No. 106-554, 114 Stat. 2763, reauthorized the Commodity Futures Trading Commission for 5 years and overhauled the Commodity Exchange Act to create a flexible structure for the regulation of futures and options trading. Significantly, the CFMA codified an agreement between the CFTC and the Securities and Exchange Commission to repeal the 18-year-old ban on the trading of single stock futures.

Commodity Futures Trading Commission—The Federal regulatory agency established by the Commodity Futures Trading Act of 1974 to administer the Commodity Exchange Act.

Commodity loan rate—The price per unit (pound, bushel, bale, or hundredweight) at which the Commodity Credit Corporation provides commodity-secured loans to farmers for a specified period of time.

Commodity Supplemental Food Program—Program providing food to supplement the diets of low-income pregnant and breastfeeding women, other new mothers up to 1 year postpartum, infants, children up to age 6, and the elderly. Predecessor to the WIC Program. Funded under the authority of the Agriculture and Consumer Protection Act of 1973.

Community Food Projects Competitive Grant Program—Established in 1996 to encourage development of community food projects that help promote the self-sufficiency of low-income communities. Grants provided to support projects that seek to increase food security in communities by establishing linkages among local groups to develop and support the local food system.

Competitive grants—Funds that are allocated by panels of relevant professional peers after consideration of research proposals submitted to the review panel.

Congressional Hunger Fellows—An anti-hunger leadership program of the Congressional Hunger Center. Initially funded with a challenge grant from VISTA and through private donations. In 1999, Congress provided supporting funds through USDA to establish the Mickey Leland International and Bill Emerson National Hunger Fellowships.

Conservation activities—Conservation systems, practices, or management measures designed to address a resource concern. Structural, vegetative, and land management measures (including agricultural drainage management systems), and planning needed to address a resource concern are included.

Conservation Compliance—Requires producers who cropped highly erodible land (HEL) before December 23, 1985 to implement a soil conservation plan or risk losing their Federal farm program benefits, including most commodity, conservation, and disaster payments. Conservation compliance requirements are similar to those of the Sodbuster requirements, (compliance on newly planted land) but tend to be less stringent.

Conservation measurement tool—Procedure to estimate the level of environmental gain achieved by a producer in implementing conservation activities, including indices or other measures developed by the Secretary.

Conservation of Private Grazing Land Initiative—The 1996 Farm Act authorized a coordinated technical, educational, and related assistance program for owners and managers of private grazing lands, including rangeland, pasture land, grazed forest land, and hay land. The purpose of the program is to promote improved management of grazing land resources for enhanced economic uses and environmental services.

Conservation plan—A combination of land uses and farming practices to protect and improve soil productivity and water quality and prevent deterioration of natural resources on all or part of a farm. Conservation plans must be both technically and economically feasible.

Conservation practice—Any technique or measure used to protect or improve natural resources and environmental quality, for which standards and specifications for installation, operation, or maintenance have been developed. Practices approved by the Natural Resources Conservation Service are compiled at each conservation district in its field office technical guide.

Conservation Reserve Enhancement Program (CREP)—Initiated following the 1996 Farm Act, CREP is a State-Federal conservation partnership program targeted to address specific State and nationally significant water quality, soil erosion, and wildlife habitat issues related to agriculture. The program offers additional financial incentives beyond the Conservation Reserve Program to encourage farmers and ranchers to enroll in 10-15 year contracts to retire land from production. CREP is funded through the Commodity Credit Corporation.

Conservation Reserve Program (CRP)—Established in 1985 and administered by USDA's Farm Service Agency, CRP is the latest version of long-term land retirement programs used in the 1930s and 1960s. CRP provides farm owners or operators with an annual per-acre rental payment and half the cost of establishing a permanent land cover, in exchange for retiring environmentally sensitive cropland from production for 10-15 years. In 1996, Congress limited enrollment to 36.4 million acres at any time. The 2002 Farm Act increased the enrollment limit to 39.2 million acres. Beginning in 2010, the 2008 Farm Act will limit enrollment to 32 million acres. Producers can offer land for competitive bidding based on an Environmental Benefits Index during periodic signups or automatically enroll more limited acreages in such practices as riparian buffers, field windbreaks, and grass strips on a continuous basis. CRP is funded through the Commodity Credit Corporation.

Conservation Reserve Program (CRP) Continuous Sign-up—Initiated following the 1996 Farm Act, continuous sign-up allows enrollment of land in riparian buffers, filter strips, grass waterways, and other high priority practices at any time and without competition. Eligible land is automatically accepted into the program. Continuous sign-up acreage is under the overall CRP acreage cap.

Conservation Security Program (CSP)—Established in the 2002 Farm Act, CSP provides payments to producers for maintaining or adopting structural and/or land management practices that address a wide range of local and/or national resource concerns. As with the Environmental Quality Incentives Program, a wide range of practices can be subsidized. But CSP will focus on land-based practices and specifically excludes livestock waste handling facilities. Producers can participate at one of three tiers; higher tiers require greater conservation effort and offer higher payments. Participants must use the lowest cost practices that meet conservation standards. After September 30, 2008, new enrollment will be prohibited, but existing contracts will continue until they expire. CSP is replaced by a new, but similar program, The Conservation Stewardship Program.

Conservation Stewardship Program (CSP)—Established in the 2008 Farm Act, CSP provides payments to producers for adopting or maintaining wide range of conservation management and land-based structural practices that address 1 or more resources of concern, such as soil, water, and wildlife habitat.

Conservation Technical Assistance (CTA)—Since 1936, CTA, administered by USDA's Natural Resources Conservation Service (NRCS) and local conservation districts, has provided technical assistance to farmers for planning and implementing conservation practices.

Conserving use acreage—Farmland diverted from crop production to an approved cultural practice that prevents erosion or other degradation. Though crops are not produced, conserving use is considered an agricultural use of the land.

Considered planted—Acreage idled for weather-related reasons or natural disasters, acreage devoted to conservation purposes or planted to certain other allowed commodities, and acreage USDA determined as necessary to include for fair and equitable treatment. A provision of the Agricultural Act of 1949 used to implement the base acreage and yield system for 1991-95 crops and used to determine acreage planted within the 2008 ACRE program.

Contract acreage—Land voluntarily enrolled in a production flexibility contract (PFC) under the 1996 Farm Act. Land was eligible for the PFC enrollment the landowner had at least one crop acreage base for a contract crop that would have been in effect for 1996 under previous farm law. A farmer could voluntarily choose to reduce contract acreage in subsequent years. Base acreage under previous farm law could, upon leaving the Conservation Reserve Program, be entered into a PFC. Otherwise, the maximum amount of contract acreage was established during the one-time signup for the PFC in 1996. Landowners could convert contract acreage to base acreage under the 2002 Farm Act.

Contract crops—The term that referred to crops eligible for production flexibility contract payments under Title I of the 1996 Act: wheat, corn, sorghum, barley, oats, rice, and upland cotton.

Cost-sharing—Payments to producers to cover a specified portion of the cost of installing, implementing, or maintaining a conservation (structural or land management) practice.

Counter-cyclical payments—Counter-cyclical payments are available to producers with historic program payment acres and yields of wheat, corn, barley, grain sorghum, oats, upland cotton, long-grain and medium-grain rice, soybeans, other oilseeds, peanuts, and pulse crops (dry peas, lentils, small and large chickpeas). Payments are made whenever the current effective commodity price is less than the target price. The effective price is calculated by adding:1) the national average farm price for the marketing year, or the commodity national loan rate, whichever is higher and 2) the direct payment rate for the commodity.

Covered commodity (aka program commodity)—Commodities for which Federal support programs are available to producers, including wheat, corn, barley, grain sorghum, oats, upland cotton, medium and long grain rice, oilseeds, and pulse crops (small and large chickpeas, dry beans and lentils). Programs for peanuts are separate in the 2002 and 2008 Farm Acts but are similar to those for covered commodities.

Crop insurance—Insurance that protects farmers from crop losses due to natural hazards. A subsidized multiperil Federal insurance program, administered by the USDA's Risk Management Agency, is available to most farmers. Federal crop insurance is sold and serviced through private insurance companies. The Federal Government subsidizes a portion of the premium, as well as some administrative and operating expenses of the private companies. The Federal Crop Insurance Corporation reinsures the companies by absorbing the losses of the program when indemnities exceed total premiums. Various types of yield and revenue insurance products are available for major crops. Hail and fire insurance are offered through private companies without Federal subsidy.

Cropland—Land used primarily for production of row crops, close-growing crops, and fruit and nut crops. It includes cultivated and noncultivated acreage, but not land enrolled in the Conservation Reserve Program. For details on land use of U.S. non-Federal lands, see USDA National Resources Conservation Services' National Resources Inventory.

Crop year (marketing year)—The 12-month period starting with the month when the harvest of a specific crop typically begins. The 2008 wheat crop year, for example, is June 1, 2008, through May 30, 2009. The amount harvested during this time is then considered the "2008 crop."

Dairy Export Incentive Program—A program that offers subsidies to exporters of U.S. dairy products based on the volume of exports. The intent is to make U.S. products more competitive in world markets, thereby increasing U.S. exports. The Commodity Credit Corporation receives export-price bids from exporters and makes the payments either in cash or through certificates redeemable for commodities. The program was originally authorized by the 1985 Farm Act, and reauthorized by subsequent Acts.

Decoupled payments—See decoupled payments in ERS WTO Briefing Room Glossary.

Deficiency payments—Direct government payments made prior to 1996 to farmers who participated in an annual commodity program for wheat, feed grains, rice, or cotton. The crop-specific payment rate for a particular crop year was based on the difference between an established target price and the higher of the commodity loan rate or the national average market price for the commodity during a specified time period. Deficiency payments are not the same as loan deficiency payments.

De minimis rule—See de minimis rule in ERS WTO Briefing Room Glossary.

Department of Defense Fresh Fruit and Vegetable Program—USDA, in collaboration with the Department of Defense, procures fresh fruits and vegetables from the Defense Supply Center Philadelphia (DSCP) for use in USDA school meals programs. DSCP operates a nationwide system to purchase and distribute a wide variety of high-quality fresh produce to military installations, Federal prisons, and veterans' hospitals. States and/or schools place orders directly with DSCP's field offices for a variety of available, U.S.-grown fresh products.

Direct loan—"Direct" farm loans are made by USDA's Farm Service Agency (FSA) to family-size farmers and ranchers who cannot obtain commercial credit from conventional lenders. The FSA also services these loans and provides supervision and credit counseling so borrowers have a better chance for success. Farm Ownership (FO), Operating (OL), Emergency, and Youth loans are the main types of loans available under the Direct farm loan programs. Direct loan funds are also set aside each year for loans to minority applicants and beginning farmers. Direct loan applications are made at the local FSA office.

Direct payments—Fixed payments for eligible historic production of wheat, corn, barley, grain sorghum, oats, upland cotton, long and medium grain rice, soybeans, other oilseeds, and peanuts. Producers enroll annually in the program to receive payments based on payment rates specified in the Farm Act and their historic program payment acres and yields.

Direct-to-Consumers Marketing Program—Program administered by USDA's Agricultural Marketing Service to improve direct market access for operators of small and medium-size farms, enabling them to compete outside the supermarket system and other large wholesale market channels. Program includes farmers' markets, farm stands, roadside stands, community-supported agriculture, pick-your-own farms, Internet marketing, and niche markets.

Disaster payments—Payments made to producers through existing or special legislation due to crop and livestock losses because of natural disasters such as floods, drought, hail, excessive moisture, or related conditions.

Diversion payment—See paid land diversion.

EarmarksCongressional designations of funding for specific projects. When using this practice, Congress, in report language or law, directs that appropriated funds go to a specific performer or designates awards for certain types of performers or geographic locations.

Easement—Voluntary sale or donation of specific use rights to land. Examples of rights that could be sold include the rights to use land for cropping purposes (in Wetlands Reserve Program and Grassland Reserve Program) or the rights to develop land for urban uses (Farmland Preservation Program). Landowners who sell or donate an easement retain all other ownership rights to the land, including the right to sell the land. Future owners of land subject to an easement are legally required to abide by easement terms. Easements are perpetual or are long-term, 25 years or more.

Ecosystem service—Those components of nature that are directly valued by people, or combined with other factors to produce valued goods and services.

Electronic Benefit Transfer (EBT)—Debit card technology used for issuing food stamp benefits.

Emergency farm loan—The USDA's Farm Service Agency (FSA) provides emergency loans to help farmers and ranchers recover from production and physical losses due to drought, flooding, other natural disasters, or quarantine. The farmers or ranchers must own or operate land in a county declared a disaster area by the President or designated by the Secretary of Agriculture as a disaster or quarantine area. The FSA administrator may authorize emergency loan assistance for physical losses only. The farmer or rancher must have suffered at least a 30-percent loss in crop production or a physical loss to livestock, livestock products, real estate, or chattel property.

Emerson Humanitarian Trust—A special wheat, corn, grain sorghum, and rice reserve to be used for humanitarian food aid purposes. The Trust was formerly the Food Security Commodity Reserve and the Food Security Wheat Reserve. Created by the Agriculture Act of 1980 (P.L. 96-494), the reserve is generally used to provide famine and other emergency relief when commodities are not available under P.L. 480 (Food for Peace Program). The 1996 Farm Act expanded the reserve to include corn, grain sorghum, and rice in addition to wheat, and made other administrative changes. Commodity Credit Corporation also is authorized to hold money as well as commodities in the reserve.

Environmental Benefits Index—The Environmental Benefits Index (EBI) is used to rank contract proposals for acceptance in the Conservation Reserve Program general sign-up. Environmental scores are based on potential to create wildlife habitat, reduce soil erosion, improve water quality, improve air quality, or sequester carbon. Contract cost is also an important factor.

Environmental Quality Incentives Program (EQIP)—EQIP was established by the 1996 Farm Act to consolidate and better target the functions of the Agricultural Conservation Program, Water Quality Incentives Program, Great Plains Conservation Program, and Colorado River Basin Salinity Program. The objective of EQIP is to encourage farmers and ranchers to adopt practices that reduce environmental and resource problems through 1- to 10-year contracts. The program provides education and technical assistance, as well as financial assistance through cost-share payments for structural and vegetative practices and incentive payments for management practices. EQIP is run by the Natural Resources Conservation Service and is funded through Commodity Credit Corporation.

Erodibility Index (EI)—A measure of the potential for soil productivity to be damaged by soil erosion. The higher the index, the higher the likelihood of soil damage in the absence of soil conservation measures. EI scores above 8 are equated to highly erodible land.

Exempt commercial market—An electronic trading facility that trades exempt commodities on a principal-to-principal basis solely between persons that are eligible commercial entities.

Export Enhancement Program (EEP)—Program started in May 1985 under the Commodity Credit Corporation Charter Act to help U.S. exporters meet competitors' prices in subsidized markets. Under the EEP, exporters received subsidies based on the volume of exports to specifically targeted countries. The program was reauthorized by the 1985 Farm Act and subsequent farm acts, until it was repealed by the 2008 Farm Bill.

Farm Credit System (FCS) — A network of cooperatively owned lending institutions and related service organizations serving all 50 States and the Commonwealth of Puerto Rico. The FCS specializes in providing farm real estate and rural homeowner loans, operating credit, and related services to farmers, ranchers, and producers or harvesters of aquatic products.

Farm Credit System Insurance Corporation (FCSIC) — An entity of the Farm Credit System (FCS), established by law in 1987, to insure the timely repayment of principal and interest on FCS debt securities.

Farmland Protection Program (FPP)—Established in the 1996 Farm Act, FPP provides funding to State, local, and tribal entities and nongovernmental organizations with existing farmland protection programs to purchase conservation easements or other interests in land that limit nonagricultural uses of the land. The Natural Resources Conservation Service purchases conservation easements by partnering with eligible entities that have pending offers for the acquisition of conservation easements.

Farm ownership loan (FO)—Farm Ownership (FO) loans may be made by the Farm Service Agency (FSA) to purchase farmland, construct or repair buildings and other fixtures, develop farmland to promote soil and water conservation, or to refinance debt. FO loans are made under both guaranteed and direct loan programs, and are made to producers unable to obtain credit from conventional lenders.

Farm Security and Rural Investment Act of 2002 (2002 Farm Act) (P.L. 107-171)—The omnibus food and agriculture legislation (2002 Farm Act) that provided a framework for the Secretary of Agriculture to administer various agricultural and food programs from 2002 to 2007. The legislation was signed into law on May 13, 2002. This farm act replaced production flexibility contract payments of the 1996 Farm Act with direct payments, and introduced counter-cyclical payments and the Conservation Security Program. The 2002 Act was the first farm act to include a separate energy title.

Farmed wetland—Farmed wetlands are wetlands that have been partially drained or are naturally dry enough to allow crop production in some years but otherwise meet the soil, hydrological, and vegetative criteria defining a wetland.

Farmers' Markets Promotion Program—See Direct-to-Consumers Marketing Program.

Federal Agriculture Improvement and Reform Act of 1996 (1996 Farm Act) (P.L. 104-127)—The omnibus food and agriculture legislation (Farm Act) signed into law on April 4, 1996, provided a 7-year framework (1996-2002) for the Secretary of Agriculture to administer various agricultural and food programs. The 1996 Act redesigned income support and supply management programs for producers of wheat, corn, grain sorghum, barley, oats, rice, and upland cotton. Production flexibility contract payments were made available under Title I of the 1996 Act (see Agricultural Market Transition Act). The legislation also suspended acreage reduction programs, revised and consolidated Federal milk marketing orders. Made program changes for sugar and peanuts, and consolidated and extended environmental programs.

Federal Agricultural Mortgage Corporation — An organization more commonly referred to as Farmer Mac, which is a secondary (resale) market for agricultural mortgages. Farmer Mac was authorized by the Agricultural Credit Act of 1987

Federal Crop Insurance Act—Legislation that provides a framework for the operation of the Federal crop insurance program. Enacted in 1938, with major amendments in 1980, 1994, and 2000. The 2000 amendment is referred to as the Agricultural Risk Protection Act of 2000.

Federal Crop Insurance Corporation (FCIC) —Federally owned and operated corporation within USDA that promotes the economic stability of agriculture through a sound system of crop insurance and provides the means for the research and experience necessary to devise and establish such insurance.

Federal Crop Insurance Program—See crop insurance.

Federal milk marketing orders—Regulations issued by the Secretary of Agriculture specifying minimum prices that regulated handlers must pay for milk and other conditions under which milk can be bought and sold within a specified area. The orders establish minimum class prices according to the products for which milk is used that are then "blended" as a weighted average. The 1996 Farm Act required consolidation of the Federal milk marketing orders into 10-14 regional orders, down from 33. In 2008, there are 10 Federal milk marketing orders.

Flex acreage—See normal flex acreage and optional flex acreage.

Food, Agriculture, Conservation and Trade Act of 1990 (1990 Farm Act) (P.L. 101-624)—Omnibus food and agriculture legislation (Farm Act) signed into law on November 28, 1990, provided a 5-year framework (1991-95) for the Secretary of Agriculture to administer various agricultural and food programs. Commodity programs were continued, with modifications, such as creation of optional flex acreage, making the programs more market oriented.

Food Distribution Program on Indian Reservations (FDPIR)—Program created in 1977 as an alternative to the FSP because many Native Americans live in remote areas where food costs are high and access to food stamp offices and grocery stores is limited. FDPIR provides monthly food packages to low-income individuals and families living on reservations, and to American Indian households living in approved areas near reservations and in approved service areas in Oklahoma. In fiscal year 2003, 5 States and 98 tribal authorities administered the program on 243 reservations.

Food Security Act of 1985 (1985 Farm Act) (P.L. 99-198)—Omnibus food and agriculture legislation (Farm Act) signed into law on December 23, 1985, provided a 5-year framework (1986-90) for the Secretary of Agriculture to administer various agricultural and food programs. The law provided for lower price and income supports and a dairy herd buy-out program, and established marketing loans, loan deficiency payments, and the Conservation Reserve Program.

Food Security Commodity Reserve—See the Bill Emerson Humanitarian Trust.

Food Stamp Employment and Training (FSE&T)—See the Supplemental Nutrition Assistance Program Employment and Training.

Food Stamp Nutrition Education (FSNE) Program—See Supplemental Nutrition Assistance Program Nutrition Education (SNAP-Ed).

Food Stamp Program (FSP)—See Supplemental Nutrition Assistance Program (SNAP).

ForexOver-the-counter market for foreign exchange transactions. Also called the foreign exchange market.

Formula funds—The amount of funds provided for agricultural research and extension to land-grant institutions (1862, 1890 and 1994 institutions), schools of forestry, and schools of veterinary medicine through several formula program authorities. The funds to each institution are determined by formula, often statutorily defined, that may include variables such as the rural population or farm population. Local or regional university leaders decide which specific projects will be supported by an institution's formula fund allotment. These decisions are informed, in part, by stakeholders who both conduct and use agricultural research and extension.

Fruit and vegetable planting restrictions—Planting for harvest of fruits, vegetables (other than lentils, mung beans, and dry peas), and wild rice is prohibited on base acres of commodity program participants, except in certain situations specified in farm legislation (e.g., if the farm has a history of planting a specific crop in these categories. These restrictions were initiated in 1990 and extended in the 1996, 2002 and 2008 Farm Acts.

FSP administration—FSP benefits are Federally funded, but the program is administered jointly with State and local welfare agencies. Interactions with clients are handled by State and local agencies that determine eligibility and calculate and issue benefits. USDA, FNS authorizes and monitors retail stores that redeem food stamp benefits. Federal and State authorities cooperate in developing and implementing nutrition education and outreach plans and in administering a nationwide quality control system that monitors accuracy of benefit determination.

FSP benefit formula—An individual household's food stamp allotment equal to the maximum benefit for that household's size, less 30 percent of the household's net income. Households with no countable income receive the maximum allotment. Allotment levels are higher for Alaska, Hawaii, Guam, and the Virgin Islands, reflecting higher food prices in those areas.

FSP countable resources—Assets applied to the resource limit, including cash on hand, checking and savings accounts, saving certificates, stocks and bonds, individual retirement accounts (IRAs) and Keogh plans, as well as some less liquid assets, such as vehicles and property not producing income. Not included are residential equity, business assets, personal property, lump-sum earned income tax credit payments and other nonrecurring payments, burial plots, the cash value of life insurance policies, and pension plans (other than Keogh plans and IRAs).

FSP dependent care deduction—Deduction for dependent care that was needed to allow work, training, or education activities. Capped at $200 per month per child 2 and under and $175 for others.

FSP Maximum Benefit—The maximum monthly benefit depends on the number of people in the household and the cost of the Thrifty Food Plan (which is annually indexed for inflation.) For FY 2008 the maximum benefit is $162 for a 1 person household; $298 for 2; $426 for 3; $542 for 4; $643 for 5; $772 for 6, $853 for 7, $975 for 8, and $122 for each additional person. Maximum benefits are higher for Alaska, Hawaii, Guam, and the Virgin Islands, reflecting higher food prices in those areas.

FSP minimum benefit—Minimum benefit ($10) for eligible households with 1 or 2 members.

Fundamental or basic research—Research conducted primarily to increase scientific understanding, not necessarily for direct application or new commercial products or processes. Also known as "basic research."

General Agreement on Tariffs and Trade (GATT)—See General Agreement on Tariffs and Trade (GATT) in ERS WTO Briefing Room Glossary.

Grassland Reserve Program (GRP)—Program established in the 2002 Farm Act to assist owners, through long-term contracts or easements, in restoring grassland and conserving virgin grassland. Restored, improved, or natural grassland, rangeland, and pasture, including prairie, can be enrolled. Eligible grassland can be enrolled under long term contracts or easements. The program is administered jointly by the Natural Resources Conservation Service, Farm Service Agency, and Forest Service.

Green box policies—See green box policies in ERS WTO Briefing Room Glossary.

Guaranteed loan—Farm Service Agency (FSA) guarantees loans lenders (e.g., banks, Farm Credit System institutions, credit unions) up to 95 percent of any loss of principal and interest on a loan. The guarantee permits lenders to extend agricultural credit to farmers who do not meet the lenders' normal underwriting criteria. FSA guaranteed loans are made for both farm ownership (FO) and operating (OL) purposes. FSA can guarantee OL or FO loans up to $949,000 (amount adjusted annually based on inflation).

High-tier tariff rate—See over-quota tariff in ERS WTO Briefing Room Glossary.

Highly erodible land (HEL)—Soils with an erodibility index (EI) equal to or greater than eight are defined as HEL. An EI of eight indicates that without any cover or conservation practices, the soil will erode at a rate eight times the soil tolerance level. Fields containing at least one-third or 50 acres (whichever is less) of HEL are designated as highly erodible for the purpose of Highly-Erodible Land Conservation Provisions.

Highly Erodible Land Conservation—Includes conservation compliance and sodbuster provisions.

Homestead property: A family's principle property composed of a house and a lot, which can be filed as a homestead by State law. The homestead status protects USDA farm loan borrowers who lack the financial means to make timely payments, is ineligible for a restructured loan, and is unable to buy out the loan at the net recovery value of the collateral property by allowing them to instead convey the property to USDA in lieu of loan payments.

Horticulture crops—See specialty crops.

Incentive payments—Payments to producers in an amount or at a rate necessary to encourage producers to adopt one or more land management practices.

Indirect costs—Portion of a grant that its recipient can use to cover general, administrative, and other costs not specifically related to the purposes of the grant.

Indirect (grant) costs—The portion of a grant that covers general operating expenses and administrative activities not directly related to activities sponsored by the grant.

Initiative for Future Agriculture and Food Systems (IFAFS)—Authorized in the Agricultural Research, Extension and Education Reform Act of 1998. Implements research, extension, and education grants to address critical emerging agricultural issues related to 1) future food production, 2) environmental quality and natural resource management, or 3) farm income; and activities authorized by the Alternative Agricultural Research and Commercialization Act of 1990.

In-quota tariff—See in-quota tariff in ERS WTO Briefing Room Glossary.

Insular Areas of the United States: The Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau.

Jones Act—Cargo preference legislation that requires shipping of most government cargo, including foreign food aid, on U.S.-built, owned, crewed, and operated vessels.

Land-Grant Institutions—A land-grant college or university is an institution designated by its State legislature or Congress to receive benefits of the Morrill Acts of 1862 and 1890. A principal mission of these institutions, set forth in the first Morrill Act (Land-Grant Act), was to teach agriculture and the mechanical arts. This law gave each State a grant of Federal land to be sold to provide an endowment for at least one land-grant institution. Additional colleges and universities have been established with land-grant status and certain existing institutions have received land-grant status (see 1890s colleges/universities and 1994 institutions).

Land management practice—See management practice.

Limited-resource farmer or rancher—Farmers and ranchers with (a) direct or indirect gross farm sales of $116,800 or less (adjusted for inflation starting in 2005) in each of the previous 2 years and (b) total household income at or below the national poverty level for a family of 4 OR less than 50 percent of county median household income in each of the previous 2 years.

Loan commodity—Wheat, corn, grain sorghum, barley, oats, upland cotton, extra long staple cotton, long grain rice, medium grain rice, soybeans, other oilseeds, graded wool, nongraded wool, mohair, honey, dry peas, lentils, small chickpeas, and large chickpeas.

Loan deficiency payments—A provision initiated in the Food Security Act of 1985 that gives the Secretary of Agriculture discretion to provide direct payments for loan commodities to producers who agree not to obtain a commodity loan on their production for a particular crop year. Loan deficiency payments (LDP) continue to be available for all loan commodities except extra-long staple cotton. LDPs are also available for unshorn pelts or hay and silage derived from a loan commodity. The LDP provision is applicable only if a marketing loan repayment provision has been implemented (i.e., if the market price of a commodity is below the commodity loan rate). The intent of the LDP provision (as well as the marketing loan repayment provision) is to minimize accumulation and storage of stocks by the government and allow U.S. commodities to be marketed freely and competitively. The LDP payment amount is determined by multiplying the local marketing loan repayment rate by the amount of the commodity eligible for a loan. Loan deficiency payments are not the same as deficiency payments.

Loan rate—See commodity loan rate.

Loan repayment rate—See marketing loan repayment rate.

Make allowance (or milk manufacturing marketing adjustment)—Used by USDA in its calculation of Commodity Credit Corporation purchase prices for butter, nonfat dry milk, and cheese. It is intended to reflect manufacturing cost for the products purchased. This margin is administratively set so that manufacturers who receive the purchase price for their outputs should be able to pay dairy farmers the equivalent of the support price. The USDA make allowance is not a guaranteed margin to manufacturers.

Marketing loan gain—The difference between the announced commodity loan rate and the marketing loan repayment rate. This represents a program benefit to producers and is aimed at reducing government costs of stock accumulation.

Marketing loan repayment rate—Rate at which farmers are allowed to repay their loans when market prices are below the commodity loan rate. This lower repayment rate is based on the local, posted county prices (PCPs) for wheat, feed grains, or oilseeds; on the adjusted world price for rice or upland cotton; and on the national posted price for peanuts. Any accrued interest on the loan is waived.

Management practices—Changes in the management of agricultural production in the context of environmental programs, e.g., nutrient or manure management, integrated pest management, irrigation management, tillage or residue management, and grazing management.

Market Access Program (MAP)—Formerly the Market Promotion Program, designed to encourage development, maintenance, and expansion of commercial commodity exports to specific export markets. Participating organizations include nonprofit trade associations, State and regional trade groups, and private companies. Activities financed include consumer promotions, market research, technical assistance, and trade servicing.

Market loss assistance payments—Direct payments to producers to partially offset financial losses due to severe weather and other natural disasters or stressful economic conditions, such as low commodity prices or pest and animal disease outbreaks.

Marketing allotments—When in effect, these provide each processor or producer of a specified commodity a specific limit on sales for the year, above which penalties would apply. Sugar allotments, for example, were authorized during 1991-95, suspended by the 1996 Farm Act, and reauthorized under the 2002 and 2008 Farm Acts.

Marketing assessments—A fee paid by producers, processors, or handlers to help cover costs of commodity programs.

Marketing loan program—Provisions that allow producers to repay nonrecourse commodity loans at less than the announced loan rate whenever the world price or loan repayment rate for the commodity is less than the loan rate. Marketing loan provisions are aimed at reducing government costs of stock accumulation. Marketing loan provisions were originally mandated only for rice and upland cotton. Marketing loan provisions are implemented for feed grains, wheat, rice, upland cotton, all oilseeds, peanuts, small and large chickpeas, lentils, dry beans, wool, mohair, and honey.

Marketing orders—Federal marketing orders authorize agricultural producers in a designated region to take various actions to promote orderly marketing, such as influencing supply and quality and pooling funds for promotion and research. Marketing orders are initiated by the industry, but must be approved by the Secretary of Agriculture and by a vote among affected producers. Once approved, a marketing order is mandatory for all producers in the marketing order area. There are marketing orders for a number of fruits, nuts, and vegetables, and for milk. (See also Federal milk marketing orders.)

Marketing year—See crop year.

Market News—A program administered by USDA's Agricultural Marketing Service to provide current, unbiased price and sales data to assist in the orderly marketing and distribution of farm commodities. Reports include prices, volume, quality, condition, and other market data on agricultural commodities in specific markets and marketing areas, domestically and in international markets.

Matching funds—Funds that a grant recipient must provide personally or from another source as a condition for receiving grant funds.

Milk marketing orders—See Federal milk marketing orders.

Minor oilseeds—See other oilseeds.

NIFA—National Institute for Food and Agriculture.

National Organic Program—USDA organic regulatory program for organic agriculture established under the Organic Foods Production Act of 1990.

National posted price—Weekly price announced by the CCC for peanuts used to determine the loan repayment rate.

National Research Initiatives for Food, Agriculture and Environment of 1990—The 1990 Farm Act extended the role of competitive grants within USDA by formalizing the competitive process via the National Research Initiatives for Food, Agriculture and Environment.

National School Lunch Program—Federally assisted meal program operating in public and nonprofit private schools and residential child care institutions. Established under the National School Lunch Act in 1946. It provides nutritionally balanced, low-cost lunches that are free to children in households with incomes at or below 130 percent of poverty and reduced price for those in households with incomes between 130 and 185 percent of poverty.

No net cost—A requirement that a price support program be operated at no cost to the Federal Government. The No-Net-Cost Act of 1982 required participants in the 1982 and subsequent tobacco programs to pay an assessment to cover potential losses in operating the tobacco price support program. A no-net-cost provision for sugar was initiated under the Food Security Act of 1985, suspended under the 1996 Farm Act, and reimplemented under the 2002 Farm Act and is continued in the 2008 Farm Act.

Noninsured Crop Disaster Assistance Program (NAP)—Program that provides coverage similar to CAT insurance to producers of noninsurable crops. Administered by USDA's Farm Service Agency.

Nonrecourse loan program—Program providing commodity-secured loan funds to producers for a specified period of time (typically 9 months), after which producers may either repay the loan and accrued interest or transfer ownership of the commodity amount pledged as collateral to the Commodity Credit Corporation (CCC) as full settlement of the loan, without penalty. These loans, also referred to as "commodity loans," are available on a crop year basis for wheat, feed grains, cotton, peanuts, rice, oilseeds, pulse crops, wool, mohair and honey. Sugar processors are also eligible for nonrecourse loans. Participants in commodity loan programs receive loan funds based on the commodity-specific, per-unit loan rate specified in legislation. The loans are called nonrecourse because, at the producer's option, the CCC has no recourse but to accept the commodity as full settlement of the loan. Under the Marketing Loan Program, producers of eligible commodities may repay the loan at the world price (rice and upland cotton), posted county price (wheat, feed grains, and oilseeds) or national posted price (peanuts) when these prices are below the year's set commodity loan rate, thus providing a disincentive to crop forfeiture. Some commodity loans are recourse loans, meaning producers must pay back the loans in cash.

Nontariff barriers (NTB)—See nontariff barriers in ERS WTO Briefing Room Glossary.

Normal flex acreage—A term given to the 15 percent of a farmer's acreage base that was not eligible for deficiency payments during 1991-95 but could receives nonrecourse loans and marketing loans for the commodity produced. Producers were allowed to plant any crop on this normal flex acreage, except fruits, vegetables, and some other prohibited crops, without a reduction in their crop acreage base.

NRIThe National Research Initiatives for Food, Agriculture, and Environment of 1990.

Oilseeds—Soybeans, sunflower seed, canola, rapeseed, safflower, mustard seed, and flaxseed.

Olympic average—An average during a 5-year period, dropping the highest and lowest values.

The Omnibus Budget Reconciliation Act of 1990 (P.L. 101-508)—A law covering a range of government budget issues that amended the 1990 Farm Act to address budgetary concerns for 1991-95. It mandated a reduction in payment acreage equal to 15 percent of base acreage and established assessments for certain crop loans and incentive payments.

Operating loan (OL)—Farm Service Agency (FSA) operating loans (OL) may be used to purchase livestock, farm equipment, feed, seed, fuel, farm chemicals, insurance, and other operating expenses. Operating Loans can also be used to pay for minor improvements to buildings, costs associated with land and water development, family living expenses, and to refinance debts under certain conditions. Operating loans are made under both direct and guaranteed programs, to producers who cannot obtain funding from conventional lenders.

Optional flex acreage—Under the planting flexibility provision of the 1990 Farm Act, producers of specific crops could choose to plant up to 25 percent of their base acreage for a specific crop to other CCC-specified crops (except fruits and vegetables) without a reduction in their base acreage. Optional flex acreage is a term given to the 10 percent of a farmer's acreage base in 1991-95 beyond the 15-percent normal flex acreage that farmers could choose to plant to crops other than the base program crop. Optional flex acreage was eligible for deficiency payments when planted to the original program crop. However, no deficiency payments would be received on optional flex acreage if planted to another crop. The optional flex acreage planting provision was eliminated in the1996 Farm Act.

Organic certification—Agricultural products grown and processed according to USDA's national organic standards and certified by a USDA-accredited State or private certification organization. Certifying agents review applications from farmers and processors for certification eligibility and qualified inspectors conduct annual onsite inspections of organic operations. Certifying agents determine whether operators are in compliance with organic production standards.

Organic production—Production system managed in accordance with the Organic Foods Production Act of 1990 and subsequent Federal regulations. Organic production systems respond to site-specific conditions by integrating cultural, biological, and mechanical practices that foster cycling of resources, promote ecological balance, and conserve biodiversity.

Other oilseeds—Term referring to oilseed crops other than soybeans: sunflower seed, canola, rapeseed, safflower, mustard seed, flaxseed, crambe and sesame seed. Also referred to as minor oilseeds.  Additional oilseeds may be designated by the Secretary.

Over-quota tariff—See over-quota tariff in ERS WTO Briefing Room Glossary.

Over-the-counter (OTC)—Trading of commodities, contracts, or other instruments not listed on any exchange. OTC transactions can occur electronically or over the telephone. Also referred to as Off-Exchange.

Paid land diversion—Programs that offered payments to producers to reduce planted acreage of program crops, if the Secretary determined that crop-specific planted acreage should be reduced more than under the acreage reduction program. Farmers were given a specific payment per acre idled in a given year that exceeded acreage reduction program requirements.

Parity-based support prices—Commodity-specific support prices (such as loan rates or commodity program purchase prices) whose level in a given year is mandated to be calculated in a way that will maintain the commodity's purchasing power at the level of the 1910-14 base period. Under "permanent legislation" (whose provisions would automatically apply in the absence of current farm acts), the prices of some commodities would be supported at 50-90 percent of parity through direct government purchases or nonrecourse loans.

Payment acres—Equal to 85 percent of the base acres for calculating direct and counter-cyclical payments. The 2008 Farm Act set payment acres at 83.3 percent of base acres for crop years 2009-11.

Payment limitation—The maximum annual amount of commodity program benefits a person can receive by law. The total amount of payments must be attributed (linked) to a person, by taking into account direct and indirect ownership interests of the person in a legal entity, such as limited partnerships, corporations, associations, trusts, and estates, that are actively engaged in farming. Payment limits are set at $40,000 per person per crop year for direct payments and $65,000 for counter-cyclical payments. The 2008 Farm Act eliminated payment limits for marketing loan benefits. For producers who elect the Average Crop Revenue Election (ACRE) program the limit on direct payments is reduced by 20 percent. The limit on ACRE payments is $65,000 plus the 20 percent reduction in direct payments. The 2008 Farm Act established separate limits on the farm and nonfarm components of adjusted gross income based on the type of payment. These new limits include two applicable to nonfarm income and one applicable to farm income.

Payment yield (also called program yield)—Farm's yield of record (per acre) for a specific commodity, determined by a procedure outlined in farm legislation and used in calculating direct payments and counter-cyclical payments.

Peanuts, additional—Under the peanut program prior to 2002, these were peanuts sold from a farm in any marketing year in excess of the farm's peanut poundage quota. The higher of two price-support loan rate levels applied only to the quantity of peanuts within the annually determined poundage quota. "Additional peanuts" were eligible only for the lower price-support loan rate, the level of which was determined by the Secretary of Agriculture, taking into consideration the demand for peanut oil and meal, expected prices of other vegetable oils and protein meals, and the demand for peanuts in foreign markets.

Peanut poundage quota—The maximum quantity of peanuts eligible for the higher of two price support loan rates under the peanut program ended by the 2002 Farm Act. The 1977 Farm Act initiated the two-tier price support program for peanuts. Each producer received a share of a national poundage quota. Producers could market more than their quota, but only the quota amount was eligible for domestic edible use. Over-quota marketings or "additional peanuts" could be sold only for export or processing (crush). Quota peanuts were eligible for a higher commodity loan rate than additionals. The 1996 Farm Act permitted the sale, lease, and transfer of a quota across county lines within a State up to specified amounts of quota annually.

Permanent legislation—Legislation on which the major farm programs are based and that would be in effect in the absence of or expiration of a current farm act. Farm acts are essentially temporary amendments to permanent legislation that includes provisions of the Agricultural Adjustment Act of 1938, the Commodity Credit Corporation Charter Act of 1948, and the Agricultural Act of 1949. Generally, each new farm act suspends the permanent legislation for a specified period.

Personal Responsibility and Work Opportunity Reconciliation Act of 1996—Legislation enacted in 1996 that reformed the Nation's public assistance programs, replacing the cash welfare entitlement under the AFDC program with State-designed temporary assistance programs (TANF) that encouraged parents to work.

Planted yield—Crop year commodity production (quantity) per planted acre.

Posted county price (PCP)—Calculated for wheat, feed grains, and oilseeds for each county by USDA's Farm Service Agency, the PCP reflects price changes in major terminal grain markets (of which there are 18 in the United States) corrected for the cost of transporting grain from county to terminal. Under the marketing loan repayment provisions and loan deficiency payment provisions of the commodity programs, PCP is used as the loan repayment rate, allowing wheat, feed grain, and oilseed producers to repay commodity loans at less than the original loan rate.

Precision agriculture—An integrated information and production-based farming system designed to increase long-term, site-specific, and whole-farm production efficiencies, productivity, and profitability while minimizing unintended impacts on wildlife and the environment.

Prevented planting acreage—Land on which a farmer intended to plant a program crop or insurable crop but was unable to do so because of drought, flood, or other natural disaster or condition. Used in the calculation of disaster payments and crop insurance indemnity payments.

Price election—Crop price at which indemnities are paid. When enrolling in crop insurance, producers choose a percentage of the price election at which to insure.

Price support loans—See nonrecourse loan program.

Producer—An owner, operator, landlord, tenant, or sharecropper who 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 had the crop been produced.

Production flexibility contract (AMTA) payments—Payments during 1996-2002 to farmers who enrolled "contract acreage," under Title I, Subtitle B of the 1996 Farm Act in a one-time sign-up in 1996. The annual total amount, specified in legislation, was allocated to specific crops (wheat, rice, feed grains, and upland cotton) based on percentage allocation factors established in the 1996 Act. Each participating producer of a contract crop received payments determined by multiplying their production flexibility contract payment quantity by the national average production flexibility contract payment rate (see below). Farmers could plant 100 percent of their total contract acreage to any crop, except for limitations on fruits and vegetables, Production Flexibility contract payments were replaced with direct payments under the 2002 Farm Act.

Production flexibility contract payment quantity—The quantity of a farm's production eligible for production flexibility contract payments under the 1996 Farm Act. Payment quantity was calculated as the farm's payment yield (per acre) multiplied by 85 percent of the farm's contract acreage.

Production flexibility contract payment rate—The amount paid to farmers per unit of participating production under the 1996 Farm Act. A farm's contract acreage and farm program payment yield was established in 1996 during the one-time sign-up period. The national average per-unit payment rate for each crop was calculated annually based on the total amount to be paid out for the crop (largely predetermined by the 1996 Act), divided by the total contract payment quantity of the commodity for the fiscal year.

Program crops—Crops for which Federal support programs are available to producers, including wheat, corn, barley, grain sorghum, oats, extra long staple and upland cotton, rice, oilseeds, peanuts, and sugar.

Program yield—See payment yield.

Public Law 480 (P.L. 480)—Common name for the Agricultural Trade Development and Assistance Act of 1954, which seeks to expand foreign markets for U.S. agricultural products, combat hunger, and encourage economic progress in developing countries. Title I of P.L. 480, also called the Food for Peace Program, makes U.S. agricultural commodities available through long-term dollar credit sales at low interest rates for up to 30 years. Government donations for humanitarian food needs are provided under Title II. Title III authorizes government-to-government "food for development" grants, with donated commodities sold in the developing countries and the revenue used for economic development programs.

Pulse crops—Term used in North American agriculture that commonly refers to dry (mature) peas, lentils and small and large chickpeas (garbanzo beans) used as food or feed crops (with "food" referring to human use and "feed" to animal use).

Recourse loan program—A provision allowing farmers or processors participating in Government commodity programs to pledge a quantity of a commodity as collateral and obtain a loan from the Commodity Credit Corporation (CCC), which the borrower must repay with interest within a specified period. This provision is unlike nonrecourse loans, which allow producers to settle their loans by delivering the collateral to the CCC.

REEO—Research Extension and Education Office.

Regional Equity—Provision enacted in the 2002 Farm Act that requires that each State be allocated an amount of conservation funding through specific conservation programs, that collectively exceeds a predetermined minimum amount. The programs that are subject to this provision include the Environmental Quality Incentives Program, the Farmland Protection Program, the Wildlife Habitat Incentives Program and the Grassland Reserve Program.

Reinsurance year—Year used to administer risk sharing and other terms of the Standard Reinsurance Agreement. The reinsurance year is from July 1 to June 30; the number of the year is the year containing June. For example, reinsurance year 2012 is July 1, 2011 – June 30, 2012.

Revenue insurance—An insurance policy offered to farmers that pays indemnities based on revenue shortfalls. These programs are subsidized and reinsured by USDA's Risk Management Agency.

RFP—Request for proposals to provide specific government-commissioned work.

Risk Management Agency (RMA)—USDA agency that administers programs of the Federal Crop Insurance Corporation.

SAESState Agricultural Experiment Stations.

Safety net—A policy that ensures a minimum income, consumption, or wage level for everyone in a society or subgroup. It may also provide persons (including businesses) with protection against risks, such as lost income, limited access to credit, or devastation from natural disasters.

School Breakfast Program—Provides nutritional meals to students at participating schools (and to children in a few residential child care institutions). Certified low-income students receive free or reduced-price breakfasts.

Section 32—Section 32 of Agricultural Adjustment Act Amendment of 1935 was enacted to widen market outlets for surplus agricultural commodities as one means of strengthening farm prices. Section 32 programs are financed by a permanent appropriation equal to 30 percent of the import duties collected on all items entering the United States under the customs laws, plus any unused balances up to $300 million. Most funds are annually transferred by appropriators to pay for child nutrition programs.

Section 416—Section 416 of the Agricultural Act of 1949 provides for the disposition of agricultural commodities held by the Commodity Credit Corporation to prevent waste. Disposal is usually carried out by donation of commodities to charitable groups and foreign governments.

Senior Farmers' Market Nutrition Program—Program providing low-income seniors with coupons that can be exchanged for eligible foods at farmers' markets, roadside stands, and community-supported agriculture programs through grants awarded to States, U.S. territories, and federally recognized Indian tribal organizations. Participants receive nutrition education and a Federal food benefit of $20-$50 per year.

Simplified reporting—A State food stamp option that allows States to minimize the information that food stamp recipients must provide to the food stamp office during the food stamp certification period. Households report only those changes in circumstances that result in income exceeding the food stamp eligibility limit of 130 percent of the Federal poverty level. At 6 months, a State must recertify the household or, if it uses a 12-month certification period, require the household to submit a semiannual report that will be used to update its eligibility and benefit level.

Smith-Lever 3(b) and 3(c) extension funds: Federal funds for USDA cooperative extension activities.

Smith-Lever 3(d) special emphasis extension funds: Smith-Lever 3(d) funds provide support to State and territory programs in Integrated Pest Management (IPM); Sustainable Agriculture Research and Education Farm Safety funds, which support health and safety efforts in the agricultural sector; and National Children, Youth, and Families at Risk, Federally Recognized Tribes Extension Program and Expanded Food and Nutrition Education Program, which support the nutritional education needs of the underserved, targeting citizens with limited incomes.

Socially-disadvantaged farmer or rancher (SDA)—A farmer or rancher who is a member of a group whose members have been subjected to racial or ethnic (and in some cases gender) prejudice because of his or her identity as a member of the group. The definition of SDA farmers varies by Title.

Sodbuster—Requires producers who began cropping highly erodible land (HEL) after December 23, 1985 to implement a soil conservation plan or risk losing their Federal farm program benefits, including most commodity, conservation, and disaster payments. Sodbuster requirements are similar to those of conservation compliance, but tend to be less stringent.

Special grants—The Special Research Grants Act of 1965 created a mechanism outside the competitive grants process for the distribution of funds to State Agricultural Experiment Stations, public institutions, and individuals to study specific problems of concern to USDA, as defined by Congress. (See also definition for earmarks.)

Specialty crops—Fruits, vegetables, tree nuts, dried fruits, nursery crops, and floriculture. Also referred to as horticulture crops.

Standard Reinsurance Agreement—A cooperative financial assistance agreement between Federal Crop Insurance Corporation and approved insurance providers to deliver eligible crop insurance contracts.

State Agricultural Experiment Stations (SAES)—SAES work with land-grant universities to carry out a joint research-teaching-extension mission. The Hatch Act of 1887 offered States the option of establishing stations to perform science-based research and acquire and disseminate information of use to the agricultural sector. Each State (as well as some territories) now has an SAES, and some States have additional substations. The experiment stations cooperate closely with USDA.

Step 2 payments for upland cotton—Issued to exporters and domestic mill users of U.S. upland cotton on a weekly basis subject to price conditions in the United States and Northern Europe. Payments were made in cash or certificates to domestic users on documented raw cotton consumption, and to exporters on documented export shipments. Program terminated on August 1, 2006.

Stewardship threshold—The level of natural resource conservation and environmental management required, as determined by the Secretary using conservation measurement tools, to improve and conserve the quality and condition of a resource.

Structural practice—A practice that involves a constructed facility, land shaping, or permanent vegetative cover designed to preserve soil; reduce runoff of nutrient, sediment, and pesticides; enhance wildlife habitat; or other purposes. Examples include animal waste-management facilities, terraces, grassed waterways, contour grass strips, filter strips, tailwater pits, permanent wildlife habitats, and constructed wetlands.

Supplemental Agricultural Disaster Assistance—Disaster assistance payments provided to producers of eligible commodities (crops, farm-raised fish, honey, and livestock) in counties declared by the Secretary to be "disaster counties."

Supplemental Nutrition Assistance Program (SNAP)—New name for the former Food Stamp Program (FSP). SNAP provides monthly benefits to eligible low-income households and is designed to alleviate hunger and malnutrition by enabling participants to obtain a more nutritious diet. Benefits can be used to purchase food at authorized food stores. The 2008 Farm Act changed the name of the Food Stamp Program to the Supplemental Nutrition Assistance Program (SNAP), effective on October 1, 2008.

Supplemental Nutrition Assistance Program Employment and Training (SNAP E&T)—Program requirement that certain members of participating households must register for work, accept suitable job offers, and fulfill work or training requirements (such as looking or training for a job) established by State welfare agencies. The Food Security Act of 1985 required all States to implement a Food Stamp Employment Training (FSE&T) Program to improve work opportunities for program participants. Funds for E&T; were made available to States by Federal grants, with additional funding available on a 50-percent matching basis. Legislation in 1997 and 1998 targeted E&T funding to nonworking adults without dependents.

Supplemental Nutrition Assistance Program Nutrition Education (SNAP-Ed)—A component of SNAP supporting nutrition education activities. SNAP-Ed focuses on improving the likelihood that SNAP participants and other low-income Americans will make healthy food choices within a limited budget and choose active lifestyles consistent with the Dietary Guidelines for Americans and MyPyramid food guidance system. State agencies have the option of participating in SNAP-Ed if they are willing to match Federal funding. USDA's Food and Nutrition Service approves State plans on an annual basis and then reimburses States for 50 percent of allowable expenditures.

Supplemental Revenue Assistance Payments—Payments made to eligible producers on farms in disaster counties that incurred crop production or crop quality losses or both during the crop year.

Swampbuster—Wetland conservation provision first established farm legislation in 1985. Producers who drain a wetland to make it ready for crop production can lose Federal farm program benefits, including most commodity, conservation, and disaster payments. Natural Resources Conservation Service certifies technical compliance, and USDA's Farm Services Agency administers changes in farm program benefits.

Target price—Unit price level (e.g., for bushel, pound, or ton) established in the 2002 Farm Act used for calculating counter-cyclical payments for covered (program) commodities. Prior to 1996, target prices were used to calculate deficiency payments.

Tariff—See tariff in ERS WTO Briefing Room Glossary.

Tariff-rate quota (TRQ)—See tariff-rate quota (TRQ) in ERS WTO Briefing Room Glossary.

Temporary Assistance for Needy Families (TANF)—A Federal-State, block-grant program that replaced AFDC program in 1996. TANF provides cash benefits to low-income families with children. Under TANF, States have flexibility to determine eligibility requirements and benefit levels, but benefits are subject to a 5-year Federal time limit and work requirements.

The Emergency Food Assistance Program (TEFAP)—Provides commodities for distribution through the private emergency food system. Provides mandatory multiyear funding and commodity donations from excess CCC inventories of foodstuffs for food distribution by emergency feeding organizations serving the needy and homeless. TEFAP buys and donates commodities and provides grants for State and local costs of transporting, storing, and distributing them to emergency feeding organizations, soup kitchens, and food banks serving low-income persons.

Three-entity rule—Limits the number of farms from which a person can receive program payments. Under the rule, an individual can receive a full payment directly and up to a half payment from two additional entities.

Thrifty Food Plan—One of 4 USDA-designed food plans specifying foods and amounts of foods to provide adequate nutrition. Used as the basis for designing Food Stamp Program (FSP) benefits, it is the lowest cost food plan that can be priced monthly using the price data collected for the consumer price index. The monthly cost of the TFP used for the FSP represents a national average of prices (4-person household consisting of an adult couple and 2 school-age children) adjusted for other household sizes through the use of a formula reflecting economies of scale. For food stamp purposes, the TFP as priced each June sets maximum benefit levels for the fiscal year beginning the following October.

Transitional benefits—Up to 5 months of transitional food stamp benefits provided by States to families that leave welfare without requiring the family to reapply or submit any additional paperwork or other information. During the transitional period, the household's benefit level is frozen at the amount it received prior to its TANF case closure, adjusted for the loss of TANF income.

Uruguay Round (UR)—See Uruguay Round (UR) in ERS WTO Briefing Room Glossary.

Wetlands Conservation—See swampbuster.

Wetlands Reserve Program (WRP)—Established in 1985 Farm Act and administered by the Natural Resources Conservation Service in consultation with USDA's Farm Service Agency and other Federal agencies. WRP is funded through Commodity Credit Corporation and has an acreage enrollment cap. All landowners who choose to participate in WRP must implement an approved wetlands restoration and protection plan. They may sell a permanent or 30-year conservation easement to USDA and receive payments, or enter into a 10-year cost-share restoration agreement to restore and protect wetlands. The landowner voluntarily limits future use of the land yet retains private ownership.

Wildlife Habitat Incentives Program (WHIP)—The 1996 Farm Act created WHIP to provide cost-sharing and technical assistance to landowners for developing habitat for upland wildlife, wetland wildlife, threatened and endangered species, fish, and other types of wildlife. Participating landowners, with the assistance of the Natural Resources Conservation Service district office, develop plans for wildlife habitat restoration and development. Standard contracts are generally 5-10 years in length. Cost-share payments may be used to establish and maintain practices. Cooperating State wildlife agencies and nonprofit or private organizations may provide additional expertise and funding. WHIP funds are distributed to States based on State, regional, and national priorities, which may involve wildlife habitat areas, targeted species and their habitats, or specific practices.

World price (cotton)—See adjusted world price, cotton.

World price (rice)—See adjusted world price, rice.

World Trade Organization (WTO)—An international organization established by the Uruguay Round trade agreement to replace the institution created by the General Agreement on Tariffs and Trade, known as the GATT. The Uruguay Round trade agreement modified the code and the framework and established the WTO on January 1, 1995. The WTO provides a code of conduct for international commerce and a framework for periodic multilateral negotiations on trade liberalization and expansion.

Youth loan—The Farm Service Agency (FSA) makes loans to individual rural youths to establish and operate income-producing projects of modest size in connection with their participation in 4-H clubs, Future Farmers of America, and similar organizations. Each project must be part of an organized and supervised program of work. The project must be planned and operated with the help of the organization adviser, produce sufficient income to repay the loan, and provide the youth with practical business and educational experience. The project adviser must recommend the project and the loan, and agree to provide adequate supervision. The applicant cannot be less than 10 years or more than 20 years old and must live in a town of less than 10,000 people. The maximum amount for FSA youth loans is $5,000.


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For more information, contact: Farm policy team (Anne Effland, James Stout, Joe Cooper, Robert Dismukes, Erik O'Donoghue, and Paul Westcott)

Web administration: webadmin@ers.usda.gov

Updated date: September 21, 2009