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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
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
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
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,
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
Aggregate measurement of support (AMS)—See
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
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
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.
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
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
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
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
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
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
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
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
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
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
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
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)
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
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'
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
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
Diversion payment—See paid
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
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
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
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
Farmers' Markets Promotion Program—See Direct-to-Consumers
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
Federal Crop Insurance Program—See crop
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
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).
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
on Tariffs and Trade (GATT) in ERS WTO Briefing Room
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
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
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
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
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
Jones Act—Cargo preference legislation that
requires shipping of most government cargo, including
foreign food aid, on U.S.-built, owned, crewed, and operated
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
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
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
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
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
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
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
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
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
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.
NRI—The National Research
Initiatives for Food, Agriculture, and Environment of
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
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
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
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
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
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
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
Price support loans—See nonrecourse
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
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
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
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
Risk Management Agency (RMA)—USDA agency
that administers programs of the Federal Crop Insurance
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
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
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
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.
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
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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