Title I — Commodity programs

S. 10 · 113th Congress · Jan 22, 2013 · Lineage

I Commodity programs

A Repeals and reforms

Sec. 1101 Repeal of direct payments

(a)

Repeal— Sections 1103 and 1303 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8713, 8753) are repealed.

(b)

Continued application for 2013 crop year— Sections 1103 and 1303 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8713, 8753), as in effect on the day before the date of enactment of this Act, shall continue to apply through the 2013 crop year with respect to all covered commodities (as defined in section 1001 of that Act (7 U.S.C. 8702)) (except pulse crops) and peanuts on a farm.

Sec. 1102 Repeal of counter-cyclical payments

(a)

Repeal— Sections 1104 and 1304 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8714, 8754) are repealed.

(b)

Continued application for 2013 crop year— Sections 1104 and 1304 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8714, 8754), as in effect on the day before the date of enactment of this Act, shall continue to apply through the 2013 crop year with respect to all covered commodities (as defined in section 1001 of that Act (7 U.S.C. 8702)) and peanuts on a farm.

Sec. 1103 Repeal of average crop revenue election program

(a)

Repeal— Section 1105 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8715) is repealed.

(b)

Continued application for 2013 crop year— Section 1105 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8715), as in effect on the day before the date of enactment of this Act, shall continue to apply through the 2013 crop year with respect to all covered commodities (as defined in section 1001 of that Act (7 U.S.C. 8702)) and peanuts on a farm for which the irrevocable election under section 1105 of that Act is made before the date of enactment of this Act.

Sec. 1104 Definitions

In this subtitle, subtitle B, and subtitle F:

(1)

Actual crop revenue— The term actual crop revenue, with respect to a covered commodity for a crop year, means the amount determined by the Secretary under section 1105(c)(3).

(2)

Agriculture risk coverage guarantee— The term agriculture risk coverage guarantee, with respect to a covered commodity for a crop year, means the amount determined by the Secretary under section 1105(c)(4).

(3)

Agriculture risk coverage payment— The term agriculture risk coverage payment means a payment under section 1105(c).

(4)

Average individual yield— The term average individual yield means the yield reported by a producer for purposes of subtitle A of the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.), to the maximum extent practicable.

(5)

County coverage— For the purposes of agriculture risk coverage under section 1105, the term county coverage means coverage determined using the total quantity of all acreage in a county of the covered commodity that is planted or prevented from being planted for harvest by a producer with the yield determined by the average county yield described in subsection (c) of that section.

(6)

Covered commodity—

(A)

In general— The term covered commodity means wheat, corn, grain sorghum, barley, oats, long grain rice, medium grain rice, pulse crops, soybeans, other oilseeds, and peanuts.

(B)

Popcorn— The Secretary—

(i)

shall study the feasibility of including popcorn as a covered commodity by 2014; and

(ii)

if the Secretary determines it to be feasible, shall designate popcorn as a covered commodity.

(7)

Eligible acres—

(A)

In general— Except as provided in subparagraphs (B) through (D), the term eligible acres means all acres planted or prevented from being planted to all covered commodities on a farm in any crop year.

(B)

Maximum— Except as provided in (C), the total quantity of eligible acres on a farm determined under subparagraph (A) shall not exceed the average total acres planted or prevented from being planted to covered commodities and upland cotton on the farm for the 2009 through 2012 crop years, as determined by the Secretary.

(C)

Adjustment— The Secretary shall provide for an adjustment, as appropriate, in the eligible acres for covered commodities for a farm if any of the following circumstances occurs:

(i)

If a conservation reserve contract for a farm in a county entered into under section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831) expires or is voluntarily terminated or cropland is released from coverage under a conservation reserve contract, the Secretary shall provide for an adjustment, as appropriate, in the eligible acres for the farm to a total quantity that is the higher of—

(I)

the total base acreage for the farm, less any upland cotton base acreage, that was suspended during the conservation reserve contract; or

(II)

the product obtained by multiplying—

(aa)

the average proportion that—

(AA)

the total number of acres planted to covered commodities and upland cotton in the county for crop years 2009 through 2012; bears to

(BB)

the total number of all acres of covered commodities, grassland, and upland cotton acres in the county for the same crop years; by

(bb)

the total acres for which coverage has expired, voluntarily terminated, or been released under the conservation reserve contract.

(ii)

The producer has eligible oilseed acreage as the result of the Secretary designating additional oilseeds, which shall be determined in the same manner as eligible oilseed acreage under section 1101(a)(1)(D) of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8711(a)(1)(D)).

(iii)

The producer has any acreage not cropped during the 2009 through 2012 crop years, but placed into an established rotation practice for the purposes of enriching land or conserving moisture for subsequent crop years, including summer fallow, as determined by the Secretary.

(D)

Exclusion— The term eligible acres does not include any crop subsequently planted during the same crop year on the same land for which the first crop is eligible for payments under this subtitle, unless the crop was planted in an area approved for double cropping, as determined by the Secretary.

(8)

Extra long staple cotton— The term extra long staple cotton means cotton that—

(A)

is produced from pure strain varieties of the Barbadense species or any hybrid of the species, or other similar types of extra long staple cotton, designated by the Secretary, having characteristics needed for various end uses for which United States upland cotton is not suitable and grown in irrigated cotton-growing regions of the United States designated by the Secretary or other areas designated by the Secretary as suitable for the production of the varieties or types; and

(B)

is ginned on a roller-type gin or, if authorized by the Secretary, ginned on another type gin for experimental purposes.

(9)

Individual coverage— For purposes of agriculture risk coverage under section 1105, the term individual coverage means coverage determined using the total quantity of all acreage in a county of the covered commodity that is planted or prevented from being planted for harvest by a producer with the yield determined by the average individual yield of the producer described in subsection (c) of that section.

(10)

Medium grain rice— The term medium grain rice includes short grain rice.

(11)

Midseason price— The term midseason price means the applicable national average market price received by producers for the first 5 months of the applicable marketing year, as determined by the Secretary.

(12)

Other oilseed— The term other oilseed means a crop of sunflower seed, rapeseed, canola, safflower, flaxseed, mustard seed, crambe, sesame seed, or any oilseed designated by the Secretary.

(13)

Producer—

(A)

In general— The term producer means an owner, operator, landlord, tenant, or sharecropper that shares in the risk of producing a crop and is entitled to share in the crop available for marketing from the farm, or would have shared had the crop been produced.

(B)

Hybrid seed— In determining whether a grower of hybrid seed is a producer, the Secretary shall—

(i)

not take into consideration the existence of a hybrid seed contract; and

(ii)

ensure that program requirements do not adversely affect the ability of the grower to receive a payment under this title.

(14)

Pulse crop— The term pulse crop means dry peas, lentils, small chickpeas, and large chickpeas.

(15)

State— The term State means—

(A)

a State;

(B)

the District of Columbia;

(C)

the Commonwealth of Puerto Rico; and

(D)

any other territory or possession of the United States.

(16)

Transitional yield— The term transitional yield has the meaning given the term in section 502(b) of the Federal Crop Insurance Act (7 U.S.C. 1502(b)).

(17)

United States— The term United States, when used in a geographical sense, means all of the States.

(18)

United States premium factor— The term United States Premium Factor means the percentage by which the difference in the United States loan schedule premiums for Strict Middling (SM) 11/8-inch upland cotton and for Middling (M) 13/32-inch upland cotton exceeds the difference in the applicable premiums for comparable international qualities.

Sec. 1105 Agriculture risk coverage

(a)

Payments required— If the Secretary determines that payments are required under subsection (c), the Secretary shall make payments for each covered commodity available to producers in accordance with this section.

(b)

Coverage election—

(1)

In general— For the period of crop years 2014 through 2018, the producers shall make a 1-time, irrevocable election to receive—

(A)

individual coverage under this section, as determined by the Secretary; or

(B)

in the case of a county with sufficient data (as determined by the Secretary), county coverage under this section.

(2)

Effect of election— The election made under paragraph (1) shall be binding on the producers making the election, regardless of covered commodities planted, and applicable to all acres under the operational control of the producers, in a manner that—

(A)

acres brought under the operational control of the producers after the election are included; and

(B)

acres no longer under the operational control of the producers after the election are no longer subject to the election of the producers but become subject to the election of the subsequent producers.

(3)

Duties of the Secretary— The Secretary shall ensure that producers are precluded from taking any action, including reconstitution, transfer, or other similar action, that would have the effect of altering or reversing the election made under paragraph (1).

(c)

Agriculture risk coverage—

(1)

Payments— The Secretary shall make agriculture risk coverage payments available under this subsection for each of the 2014 through 2018 crop years if the Secretary determines that—

(A)

the actual crop revenue for the crop year for the covered commodity; is less than

(B)

the agriculture risk coverage guarantee for the crop year for the covered commodity.

(2)

Time for payments— If the Secretary determines under this subsection that agriculture risk coverage payments are required to be made for the covered commodity, the agriculture risk coverage payments shall be made as soon as practicable thereafter.

(3)

Actual crop revenue— The amount of the actual crop revenue for a crop year of a covered commodity shall be equal to the product obtained by multiplying—

(A)

(i)

in the case of individual coverage, the actual average individual yield for the covered commodity, as determined by the Secretary; or

(ii)

in the case of county coverage, the actual average yield for the county for the covered commodity, as determined by the Secretary; and

(B)

the higher of—

(i)

the midseason price; or

(ii)

if applicable, the national marketing assistance loan rate for the covered commodity under subtitle B.

(4)

Agriculture risk coverage guarantee—

(A)

In general— The agriculture risk coverage guarantee for a crop year for a covered commodity shall equal 89 percent of the benchmark revenue.

(B)

Benchmark revenue—

(i)

In general— The benchmark revenue shall be the product obtained by multiplying—

(I)

(aa)

in the case of individual coverage, subject to clause (ii), the average individual yield, as determined by the Secretary, for the most recent 5 crop years, excluding each of the crop years with the highest and lowest yields; or

(bb)

in the case of county coverage, the average county yield, as determined by the Secretary, for the most recent 5 crop years, excluding each of the crop years with the highest and lowest yields; and

(II)

subject to clause (iii), the average national marketing year average price for the most recent 5 crop years, excluding each of the crop years with the highest and lowest prices.

(ii)

Use of transitional yields— If the yield determined under clause (i)(I)(aa)—

(I)

for the 2013 crop year or any prior crop year, is less than 60 percent of the applicable transitional yield, the Secretary shall use 60 percent of the applicable transitional yield for that crop year; and

(II)

for the 2014 crop year and any subsequent crop year, is less than 70 percent of the applicable transitional yield, the Secretary shall use 70 percent of the applicable transitional yield for that crop year.

(iii)

Special rule for rice and peanuts— If the national marketing year average price under clause (i)(II) for any of the applicable crop years is lower than the price for the covered commodity listed below, the Secretary shall use the following price for that crop year:

(I)

For long grain rice, $13.00 per hundredweight.

(II)

For medium grain rice, $13.00 per hundredweight.

(III)

For peanuts, $530.00 per ton.

(5)

Payment rate— The payment rate for each covered commodity shall be equal to the lesser of—

(A)

the amount that—

(i)

the agriculture risk coverage guarantee for the covered commodity; exceeds

(ii)

the actual crop revenue for the crop year of the covered commodity; or

(B)

10 percent of the benchmark revenue for the crop year of the covered commodity.

(6)

Payment amount— If agriculture risk coverage payments under this subsection are required to be paid for any of the 2014 through 2018 crop years of a covered commodity, the amount of the agriculture risk coverage payment for the crop year shall be equal to the product obtained by multiplying—

(A)

the payment rate under paragraph (5); and

(B)

(i)

in the case of individual coverage the sum of—

(I)

65 percent of the planted eligible acres of the covered commodity; and

(II)

45 percent of the eligible acres that were prevented from being planted to the covered commodity; or

(ii)

in the case of county coverage—

(I)

80 percent of the planted eligible acres of the covered commodity; and

(II)

45 percent of the eligible acres that were prevented from being planted to the covered commodity.

(7)

Duties of the Secretary— In carrying out the program under this subsection, the Secretary shall—

(A)

to the maximum extent practicable, use all available information and analysis to check for anomalies in the determination of payments under the program;

(B)

to the maximum extent practicable, calculate a separate actual crop revenue and agriculture risk coverage guarantee for irrigated and nonirrigated covered commodities;

(C)

differentiate by type or class the national average price of—

(i)

sunflower seeds;

(ii)

barley, using malting barley values; and

(iii)

wheat; and

(D)

assign a yield for each acre planted or prevented from being planted for the crop year for the covered commodity on the basis of the yield history of representative farms in the State, region, or crop reporting district, as determined by the Secretary, if the Secretary cannot establish the yield as determined under paragraph (3)(A)(ii) or (4)(B)(i) or if the yield determined under paragraph (3)(A)(ii) or (4) is an unrepresentative average yield for the covered commodity as determined by the Secretary.

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

(a)

Compliance with certain requirements—

(1)

Requirements— Before the producers on a farm may receive agriculture risk coverage payments, the producers shall agree, during the crop year for which the payments are made and in exchange for the payments—

(A)

to comply with applicable conservation requirements under subtitle B of title XII of the Food Security Act of 1985 (16 U.S.C. 3811 et seq.);

(B)

to comply with applicable wetland protection requirements under subtitle C of title XII of that Act (16 U.S.C. 3821 et seq.);

(C)

to use the land on the farm for an agricultural or conserving use in a quantity equal to the attributable eligible acres of the farm, and not for a nonagricultural commercial, industrial, or residential use, as determined by the Secretary; and

(D)

to effectively control noxious weeds and otherwise maintain the land in accordance with sound agricultural practices, as determined by the Secretary, if the agricultural or conserving use involves the noncultivation of any portion of the land referred to in subparagraph (C).

(2)

Compliance— The Secretary may issue such rules as the Secretary considers necessary to ensure producer compliance with the requirements of paragraph (1).

(3)

Modification— At the request of the transferee or owner, the Secretary may modify the requirements of this subsection if the modifications are consistent with the objectives of this subsection, as determined by the Secretary.

(b)

Transfer or change of interest in farm—

(1)

Termination—

(A)

In general— Except as provided in paragraph (2), a transfer of (or change in) the interest of the producers on a farm for which agriculture risk coverage payments are made shall result in the termination of the agriculture risk coverage payments, unless the transferee or owner of the acreage agrees to assume all obligations under subsection (a).

(B)

Effective date— The termination shall take effect on the date determined by the Secretary.

(2)

Exception— If a producer entitled to an agriculture risk coverage payment dies, becomes incompetent, or is otherwise unable to receive the payment, the Secretary shall make the payment, in accordance with rules issued by the Secretary.

(c)

Reports—

(1)

Acreage reports— As a condition on the receipt of any benefits under this subtitle or subtitle B, the Secretary shall require producers on a farm to submit to the Secretary annual acreage reports with respect to all cropland on the farm.

(2)

Production reports— As a condition on the receipt of any benefits under section 1105, the Secretary shall require producers on a farm to submit to the Secretary annual production reports with respect to all covered commodities produced on the farm.

(3)

Penalties— No penalty with respect to benefits under this subtitle or subtitle B shall be assessed against the producers on a farm for an inaccurate acreage or production report unless the producers on the farm knowingly and willfully falsified the acreage or production report.

(4)

Data reporting— To the maximum extent practicable, the Secretary shall use data reported by the producer pursuant to requirements under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) to meet the obligations described in paragraphs (1) and (2), without additional submissions to the Department.

(d)

Tenants and sharecroppers— In carrying out this subtitle, the Secretary shall provide adequate safeguards to protect the interests of tenants and sharecroppers.

Sec. 1107 Period of effectiveness

Sections 1104 through 1106 shall be effective beginning with the 2014 crop year of each covered commodity through the 2018 crop year.

Sec. 1108 Adjusted gross income limitation for conservation programs

Section 1001D(b)(2)(A) of the Food Security Act of 1985 (7 U.S.C. 1308–3a(b)(2)(A)) is amended—

(1)

by striking “Limits.—” and all that follows through “clause (ii),” and inserting “Limits.—Notwithstanding any other provision of law,”; and

(2)

by striking clause (ii).

B Marketing assistance loans and loan deficiency payments

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

(a)

Definition of loan commodity— In this subtitle, the term loan commodity means wheat, corn, grain sorghum, barley, oats, upland cotton, extra long staple cotton, long grain rice, medium grain rice, peanuts, soybeans, other oilseeds, graded wool, nongraded wool, mohair, honey, dry peas, lentils, small chickpeas, and large chickpeas.

(b)

Nonrecourse loans available—

(1)

In general— For each of the 2014 through 2018 crops of each loan commodity, the Secretary shall make available to producers on a farm nonrecourse marketing assistance loans for loan commodities produced on the farm.

(2)

Terms and conditions— The marketing assistance loans shall be made under terms and conditions that are prescribed by the Secretary and at the loan rate established under section 1202 for the loan commodity.

(c)

Eligible production— The producers on a farm shall be eligible for a marketing assistance loan under subsection (b) for any quantity of a loan commodity produced on the farm.

(d)

Compliance with conservation and wetlands requirements—

(1)

Requirements— Before the producers on a farm may receive a marketing assistance loan or any other payment or benefit under this subtitle, the producers shall agree, for the crop year for which the payments are made and in exchange for the payments—

(A)

to comply with applicable conservation requirements under subtitle B of title XII of the Food Security Act of 1985 (16 U.S.C. 3811 et seq.);

(B)

to comply with applicable wetland protection requirements under subtitle C of title XII of that Act (16 U.S.C. 3821 et seq.);

(C)

(D)

(2)

Compliance— The Secretary may issue such rules as the Secretary considers necessary to ensure producer compliance with paragraph (1).

(3)

Modification— At the request of a transferee or owner, the Secretary may modify the requirements of this subsection if the modifications are consistent with the purposes of this subsection, as determined by the Secretary.

(e)

Special rules for peanuts—

(1)

In general— This subsection shall apply only to producers of peanuts.

(2)

Options for obtaining loan— A marketing assistance loan under this section, and loan deficiency payments under section 1205, may be obtained at the option of the producers on a farm through—

(A)

a designated marketing association or marketing cooperative of producers that is approved by the Secretary; or

(B)

the Farm Service Agency.

(3)

Storage of loan peanuts— As a condition on the approval by the Secretary of an individual or entity to provide storage for peanuts for which a marketing assistance loan is made under this section, the individual or entity shall agree—

(A)

to provide the storage on a nondiscriminatory basis; and

(B)

to comply with such additional requirements as the Secretary considers appropriate to accomplish the purposes of this section and promote fairness in the administration of the benefits of this section.

(4)

Storage, handling, and associated costs—

(A)

In general— To ensure proper storage of peanuts for which a loan is made under this section, the Secretary shall pay handling and other associated costs (other than storage costs) incurred at the time at which the peanuts are placed under loan, as determined by the Secretary.

(B)

Redemption and forfeiture— The Secretary shall—

(i)

require the repayment of handling and other associated costs paid under subparagraph (A) for all peanuts pledged as collateral for a loan that is redeemed under this section; and

(ii)

pay storage, handling, and other associated costs for all peanuts pledged as collateral that are forfeited under this section.

(5)

Marketing— A marketing association or cooperative may market peanuts for which a loan is made under this section in any manner that conforms to consumer needs, including the separation of peanuts by type and quality.

(6)

Reimbursable agreements and payment of administrative expenses— The Secretary may implement any reimbursable agreements or provide for the payment of administrative expenses under this subsection only in a manner that is consistent with those activities in regard to other loan commodities.

Sec. 1202 Loan rates for nonrecourse marketing assistance loans

(a)

In general— For purposes of each of the 2014 through 2018 crop years, the loan rate for a marketing assistance loan under section 1201 for a loan commodity shall be equal to the following:

(1)

In the case of wheat, $2.94 per bushel.

(2)

In the case of corn, $1.95 per bushel.

(3)

In the case of grain sorghum, $1.95 per bushel.

(4)

In the case of barley, $1.95 per bushel.

(5)

In the case of oats, $1.39 per bushel.

(6)

In the case of base quality of upland cotton, for the 2013 and each subsequent crop year, the simple average of the adjusted prevailing world price for the 2 immediately preceding marketing years, as determined by the Secretary and announced October 1 preceding the next domestic plantings, but in no case less than $0.47 per pound or more than $0.52 per pound.

(7)

In the case of extra long staple cotton, $0.7977 per pound.

(8)

In the case of long grain rice, $6.50 per hundredweight.

(9)

In the case of medium grain rice, $6.50 per hundredweight.

(10)

In the case of soybeans, $5.00 per bushel.

(11)

In the case of other oilseeds, $10.09 per hundredweight for each of the following kinds of oilseeds:

(A)

Sunflower seed.

(B)

Rapeseed.

(C)

Canola.

(D)

Safflower.

(E)

Flaxseed.

(F)

Mustard seed.

(G)

Crambe.

(H)

Sesame seed.

(I)

Other oilseeds designated by the Secretary.

(12)

In the case of dry peas, $5.40 per hundredweight.

(13)

In the case of lentils, $11.28 per hundredweight.

(14)

In the case of small chickpeas, $7.43 per hundredweight.

(15)

In the case of large chickpeas, $11.28 per hundredweight.

(16)

In the case of graded wool, $1.15 per pound.

(17)

In the case of nongraded wool, $0.40 per pound.

(18)

In the case of mohair, $4.20 per pound.

(19)

In the case of honey, $0.69 per pound.

(20)

In the case of peanuts, $355 per ton.

(b)

Single county loan rate for other oilseeds— The Secretary shall establish a single loan rate in each county for each kind of other oilseeds described in subsection (a)(11).

Sec. 1203 Term of loans

(a)

Term of loan— In the case of each loan commodity, a marketing assistance loan under section 1201 shall have a term of 9 months beginning on the first day of the first month after the month in which the loan is made.

(b)

Extensions prohibited— The Secretary may not extend the term of a marketing assistance loan for any loan commodity.

Sec. 1204 Repayment of loans

(a)

General rule— The Secretary shall permit the producers on a farm to repay a marketing assistance loan under section 1201 for a loan commodity (other than upland cotton, long grain rice, medium grain rice, extra long staple cotton, peanuts and confectionery and each other kind of sunflower seed (other than oil sunflower seed)) at a rate that is the lesser of—

(1)

the loan rate established for the commodity under section 1202, plus interest (determined in accordance with section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283));

(2)

a rate (as determined by the Secretary) that—

(A)

is calculated based on average market prices for the loan commodity during the preceding 30-day period; and

(B)

will minimize discrepancies in marketing loan benefits across State boundaries and across county boundaries; or

(3)

a rate that the Secretary may develop using alternative methods for calculating a repayment rate for a loan commodity that the Secretary determines will—

(A)

minimize potential loan forfeitures;

(B)

minimize the accumulation of stocks of the commodity by the Federal Government;

(C)

minimize the cost incurred by the Federal Government in storing the commodity;

(D)

allow the commodity produced in the United States to be marketed freely and competitively, both domestically and internationally; and

(E)

minimize discrepancies in marketing loan benefits across State boundaries and across county boundaries.

(b)

Repayment rates for upland cotton, long grain rice, and medium grain rice— The Secretary shall permit producers to repay a marketing assistance loan under section 1201 for upland cotton, long grain rice, and medium grain rice at a rate that is the lesser of—

(1)

(2)

the prevailing world market price for the commodity, as determined and adjusted by the Secretary in accordance with this section.

(c)

Repayment rates for extra long staple cotton— Repayment of a marketing assistance loan for extra long staple cotton shall be at the loan rate established for the commodity under section 1202, plus interest (determined in accordance with section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283)).

(d)

Prevailing world market price— For purposes of this section, the Secretary shall prescribe by regulation—

(1)

a formula to determine the prevailing world market price for each of upland cotton, long grain rice, and medium grain rice; and

(2)

a mechanism by which the Secretary shall announce periodically those prevailing world market prices.

(e)

Adjustment of prevailing world market price for upland cotton, long grain rice, and medium grain rice—

(1)

Rice— The prevailing world market price for long grain rice and medium grain rice determined under subsection (d) shall be adjusted to United States quality and location.

(2)

Cotton— The prevailing world market price for upland cotton determined under subsection (d)—

(A)

shall be adjusted to United States quality and location, with the adjustment to include—

(i)

a reduction equal to any United States Premium Factor for upland cotton of a quality higher than Middling (M) 13/32-inch; and

(ii)

the average costs to market the commodity, including average transportation costs, as determined by the Secretary; and

(B)

may be further adjusted, during the period beginning on the date of enactment of this Act and ending on July 31, 2018, if the Secretary determines the adjustment is necessary—

(i)

to minimize potential loan forfeitures;

(ii)

to minimize the accumulation of stocks of upland cotton by the Federal Government;

(iii)

to ensure that upland cotton produced in the United States can be marketed freely and competitively, both domestically and internationally; and

(iv)

to ensure an appropriate transition between current-crop and forward-crop price quotations, except that the Secretary may use forward-crop price quotations prior to July 31 of a marketing year only if—

(I)

there are insufficient current-crop price quotations; and

(II)

the forward-crop price quotation is the lowest such quotation available.

(3)

Guidelines for additional adjustments— In making adjustments under this subsection, the Secretary shall establish a mechanism for determining and announcing the adjustments in order to avoid undue disruption in the United States market.

(f)

Repayment rates for confectionery and other kinds of sunflower seeds— The Secretary shall permit the producers on a farm to repay a marketing assistance loan under section 1201 for confectionery and each other kind of sunflower seed (other than oil sunflower seed) at a rate that is the lesser of—

(1)

(2)

the repayment rate established for oil sunflower seed.

(g)

Payment of cotton storage costs— Effective for each of the 2014 through 2018 crop years, the Secretary shall make cotton storage payments available in the same manner, and at the same rates as the Secretary provided storage payments for the 2006 crop of cotton, except that the rates shall be reduced by 20 percent.

(h)

Repayment rate for peanuts— The Secretary shall permit producers on a farm to repay a marketing assistance loan for peanuts under subsection (a) at a rate that is the lesser of—

(1)

the loan rate established for peanuts under subsection (b), plus interest (determined in accordance with section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283)); or

(2)

a rate that the Secretary determines will—

(A)

minimize potential loan forfeitures;

(B)

minimize the accumulation of stocks of peanuts by the Federal Government;

(C)

minimize the cost incurred by the Federal Government in storing peanuts; and

(D)

allow peanuts produced in the United States to be marketed freely and competitively, both domestically and internationally.

(i)

Authority To temporarily adjust repayment rates—

(1)

Adjustment authority— In the event of a severe disruption to marketing, transportation, or related infrastructure, the Secretary may modify the repayment rate otherwise applicable under this section for marketing assistance loans under section 1201 for a loan commodity.

(2)

Duration— Any adjustment made under paragraph (1) in the repayment rate for marketing assistance loans for a loan commodity shall be in effect on a short-term and temporary basis, as determined by the Secretary.

Sec. 1205 Loan deficiency payments

(a)

Availability of loan deficiency payments—

(1)

In general— Except as provided in subsection (d), the Secretary may make loan deficiency payments available to producers on a farm that, although eligible to obtain a marketing assistance loan under section 1201 with respect to a loan commodity, agree to forgo obtaining the loan for the commodity in return for loan deficiency payments under this section.

(2)

Unshorn pelts, hay, and silage—

(A)

Marketing assistance loans— Subject to subparagraph (B), nongraded wool in the form of unshorn pelts and hay and silage derived from a loan commodity are not eligible for a marketing assistance loan under section 1201.

(B)

Loan deficiency payment— Effective for the 2014 through 2018 crop years, the Secretary may make loan deficiency payments available under this section to producers on a farm that produce unshorn pelts or hay and silage derived from a loan commodity.

(b)

Computation— A loan deficiency payment for a loan commodity or commodity referred to in subsection (a)(2) shall be equal to the product obtained by multiplying—

(1)

the payment rate determined under subsection (c) for the commodity; by

(2)

the quantity of the commodity produced by the eligible producers, excluding any quantity for which the producers obtain a marketing assistance loan under section 1201.

(c)

Payment rate—

(1)

In general— In the case of a loan commodity, the payment rate shall be the amount by which—

(A)

the loan rate established under section 1202 for the loan commodity; exceeds

(B)

the rate at which a marketing assistance loan for the loan commodity may be repaid under section 1204.

(2)

Unshorn pelts— In the case of unshorn pelts, the payment rate shall be the amount by which—

(A)

the loan rate established under section 1202 for ungraded wool; exceeds

(B)

the rate at which a marketing assistance loan for ungraded wool may be repaid under section 1204.

(3)

Hay and silage— In the case of hay or silage derived from a loan commodity, the payment rate shall be the amount by which—

(A)

the loan rate established under section 1202 for the loan commodity from which the hay or silage is derived; exceeds

(B)

the rate at which a marketing assistance loan for the loan commodity may be repaid under section 1204.

(d)

Exception for extra long staple cotton— This section shall not apply with respect to extra long staple cotton.

(e)

Effective date for payment rate determination— The Secretary shall determine the amount of the loan deficiency payment to be made under this section to the producers on a farm with respect to a quantity of a loan commodity or commodity referred to in subsection (a)(2) using the payment rate in effect under subsection (c) as of the date the producers request the payment.

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

(a)

Eligible producers—

(1)

In general— Effective for the 2014 through 2018 crop years, in the case of a producer that would be eligible for a loan deficiency payment under section 1205 for wheat, barley, or oats, but that elects to use acreage planted to the wheat, barley, or oats for the grazing of livestock, the Secretary shall make a payment to the producer under this section if the producer enters into an agreement with the Secretary to forgo any other harvesting of the wheat, barley, or oats on that acreage.

(2)

Grazing of triticale acreage— Effective for the 2014 through 2018 crop years, with respect to a producer on a farm that uses acreage planted to triticale for the grazing of livestock, the Secretary shall make a payment to the producer under this section if the producer enters into an agreement with the Secretary to forgo any other harvesting of triticale on that acreage.

(b)

Payment amount—

(1)

In general— The amount of a payment made under this section to a producer on a farm described in subsection (a)(1) shall be equal to the amount determined by multiplying—

(A)

the loan deficiency payment rate determined under section 1205(c) in effect, as of the date of the agreement, for the county in which the farm is located; by

(B)

the payment quantity determined by multiplying—

(i)

the quantity of the grazed acreage on the farm with respect to which the producer elects to forgo harvesting of wheat, barley, or oats; and

(ii)

(I)

the yield in effect for the calculation of agriculture risk coverage payments under subtitle A with respect to that loan commodity on the farm; or

(II)

in the case of a farm without a payment yield for that loan commodity, an appropriate yield established by the Secretary.

(2)

Grazing of triticale acreage— The amount of a payment made under this section to a producer on a farm described in subsection (a)(2) shall be equal to the amount determined by multiplying—

(A)

the loan deficiency payment rate determined under section 1205(c) in effect for wheat, as of the date of the agreement, for the county in which the farm is located; by

(B)

the payment quantity determined by multiplying—

(i)

the quantity of the grazed acreage on the farm with respect to which the producer elects to forgo harvesting of triticale; and

(ii)

(I)

the yield in effect for the calculation of agriculture risk coverage payments under subtitle A with respect to wheat on the farm; or

(II)

in the case of a farm without a payment yield for wheat, an appropriate yield established by the Secretary in a manner consistent with section 1102 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8712).

(c)

Time, manner, and availability of payment—

(1)

Time and manner— A payment under this section shall be made at the same time and in the same manner as loan deficiency payments are made under section 1205.

(2)

Availability—

(A)

In general— The Secretary shall establish an availability period for the payments authorized by this section.

(B)

Certain commodities— In the case of wheat, barley, and oats, the availability period shall be consistent with the availability period for the commodity established by the Secretary for marketing assistance loans authorized by this subtitle.

(d)

Prohibition on crop insurance indemnity or noninsured crop assistance— A 2014 through 2018 crop of wheat, barley, oats, or triticale planted on acreage that a producer elects, in the agreement required by subsection (a), to use for the grazing of livestock in lieu of any other harvesting of the crop shall not be eligible for an indemnity under a policy or plan of insurance authorized under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) or noninsured crop assistance under section 196 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333).

Sec. 1207 Special competitive provisions for extra long staple cotton

(a)

Competitiveness program— Notwithstanding any other provision of law, during the period beginning on the date of enactment of this Act through July 31, 2018, the Secretary shall carry out a program—

(1)

to maintain and expand the domestic use of extra long staple cotton produced in the United States;

(2)

to increase exports of extra long staple cotton produced in the United States; and

(3)

to ensure that extra long staple cotton produced in the United States remains competitive in world markets.

(b)

Payments under program; trigger— Under the program, the Secretary shall make payments available under this section whenever—

(1)

for a consecutive 4-week period, the world market price for the lowest priced competing growth of extra long staple cotton (adjusted to United States quality and location and for other factors affecting the competitiveness of such cotton), as determined by the Secretary, is below the prevailing United States price for a competing growth of extra long staple cotton; and

(2)

the lowest priced competing growth of extra long staple cotton (adjusted to United States quality and location and for other factors affecting the competitiveness of such cotton), as determined by the Secretary, is less than 134 percent of the loan rate for extra long staple cotton.

(c)

Eligible recipients— The Secretary shall make payments available under this section to domestic users of extra long staple cotton produced in the United States and exporters of extra long staple cotton produced in the United States that enter into an agreement with the Commodity Credit Corporation to participate in the program under this section.

(d)

Payment amount— Payments under this section shall be based on the amount of the difference in the prices referred to in subsection (b)(1) during the fourth week of the consecutive 4-week period multiplied by the amount of documented purchases by domestic users and sales for export by exporters made in the week following such a consecutive 4-week period.

Sec. 1208 Availability of recourse loans for high moisture feed grains and seed cotton

(a)

High moisture feed grains—

(1)

Definition of high moisture state— In this subsection, the term high moisture state means corn or grain sorghum having a moisture content in excess of Commodity Credit Corporation standards for marketing assistance loans made by the Secretary under section 1201.

(2)

Recourse loans available— For each of the 2014 through 2018 crops of corn and grain sorghum, the Secretary shall make available recourse loans, as determined by the Secretary, to producers on a farm that—

(A)

normally harvest all or a portion of their crop of corn or grain sorghum in a high moisture state;

(B)

present—

(i)

certified scale tickets from an inspected, certified commercial scale, including a licensed warehouse, feedlot, feed mill, distillery, or other similar entity approved by the Secretary, pursuant to regulations issued by the Secretary; or

(ii)

field or other physical measurements of the standing or stored crop in regions of the United States, as determined by the Secretary, that do not have certified commercial scales from which certified scale tickets may be obtained within reasonable proximity of harvest operation;

(C)

certify that the producers on the farm were the owners of the feed grain at the time of delivery to, and that the quantity to be placed under loan under this subsection was in fact harvested on the farm and delivered to, a feedlot, feed mill, or commercial or on-farm high-moisture storage facility, or to a facility maintained by the users of corn and grain sorghum in a high moisture state; and

(D)

comply with deadlines established by the Secretary for harvesting the corn or grain sorghum and submit applications for loans under this subsection within deadlines established by the Secretary.

(3)

Eligibility of acquired feed grains— A loan under this subsection shall be made on a quantity of corn or grain sorghum of the same crop acquired by the producer equivalent to a quantity determined by multiplying—

(A)

the acreage of the corn or grain sorghum in a high moisture state harvested on the farm of the producer; by

(B)

the lower of the actual average yield used to make payments under subtitle A or the actual yield on a field, as determined by the Secretary, that is similar to the field from which the corn or grain sorghum was obtained.

(b)

Recourse loans available for seed cotton— For each of the 2014 through 2018 crops of upland cotton and extra long staple cotton, the Secretary shall make available recourse seed cotton loans, as determined by the Secretary, on any production.

(c)

Repayment rates— Repayment of a recourse loan made under this section shall be at the loan rate established for the commodity by the Secretary, plus interest (determined in accordance with section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283)).

Sec. 1209 Adjustments of loans

(a)

Adjustment authority— Subject to subsection (e), the Secretary may make appropriate adjustments in the loan rates for any loan commodity (other than cotton) for differences in grade, type, quality, location, and other factors.

(b)

Manner of adjustment— The adjustments under subsection (a) shall, to the maximum extent practicable, be made in such a manner that the average loan level for the commodity will, on the basis of the anticipated incidence of the factors, be equal to the level of support determined in accordance with this subtitle and subtitles C through E.

(c)

Adjustment on county basis—

(1)

In general— The Secretary may establish loan rates for a crop for producers in individual counties in a manner that results in the lowest loan rate being 95 percent of the national average loan rate, if those loan rates do not result in an increase in outlays.

(2)

Prohibition— Adjustments under this subsection shall not result in an increase in the national average loan rate for any year.

(d)

Adjustment in loan rate for cotton—

(1)

In general— The Secretary may make appropriate adjustments in the loan rate for cotton for differences in quality factors.

(2)

Revisions to quality adjustments for upland cotton—

(A)

In general— Not later than 180 days after the date of enactment of this Act, the Secretary shall implement revisions in the administration of the marketing assistance loan program for upland cotton to more accurately and efficiently reflect market values for upland cotton.

(B)

Mandatory revisions— Revisions under subparagraph (A) shall include—

(i)

the elimination of warehouse location differentials;

(ii)

the establishment of differentials for the various quality factors and staple lengths of cotton based on a 3-year, weighted moving average of the weighted designated spot market regions, as determined by regional production;

(iii)

the elimination of any artificial split in the premium or discount between upland cotton with a 32 or 33 staple length due to micronaire; and

(iv)

a mechanism to ensure that no premium or discount is established that exceeds the premium or discount associated with a leaf grade that is 1 better than the applicable color grade.

(C)

Discretionary revisions— Revisions under subparagraph (A) may include—

(i)

the use of non-spot market price data, in addition to spot market price data, that would enhance the accuracy of the price information used in determining quality adjustments under this subsection;

(ii)

adjustments in the premiums or discounts associated with upland cotton with a staple length of 33 or above due to micronaire with the goal of eliminating any unnecessary artificial splits in the calculations of the premiums or discounts; and

(iii)

such other adjustments as the Secretary determines appropriate, after consultations conducted in accordance with paragraph (3).

(3)

Consultation with private sector—

(A)

Prior to revision— In making adjustments to the loan rate for cotton (including any review of the adjustments) as provided in this subsection, the Secretary shall consult with representatives of the United States cotton industry.

(B)

Inapplicability of Federal Advisory Committee Act— The Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to consultations under this subsection.

(4)

Review of adjustments— The Secretary may review the operation of the upland cotton quality adjustments implemented pursuant to this subsection and may make further revisions to the administration of the loan program for upland cotton, by—

(A)

revoking or revising any actions taken under paragraph (2)(B); or

(B)

revoking or revising any actions taken or authorized to be taken under paragraph (2)(C).

(e)

Rice— The Secretary shall not make adjustments in the loan rates for long grain rice and medium grain rice, except for differences in grade and quality (including milling yields).

C Sugar

Sec. 1301 Sugar program

(a)

Continuation of current program and loan rates—

(1)

Sugarcane— Section 156(a)(5) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272(a)(5)) is amended by striking “the 2012 crop year” and inserting “each of the 2014 through 2018 crop years”.

(2)

Sugar beets— Section 156(b)(2) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272(b)(2)) is amended by striking “2012” and inserting “2018”.

(3)

Effective period— Section 156(i) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272(i)) is amended by striking “2012” and inserting “2018”.

(b)

Flexible marketing allotments for sugar—

(1)

Sugar estimates— Section 359b(a)(1) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359bb(a)(1)) is amended by striking “2012” and inserting “2018”.

(2)

Sugar import quota adjustment date— Section 359k(b) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359kk(b)) is amended—

(A)

by striking “April 1” each place it appears and inserting “February 1”; and

(B)

by striking “April 1” each place it appears and inserting “February 1”.

(3)

Effective period— Section 359l(a) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359ll(a)) is amended by striking “2012” and inserting “2018”.

D Dairy

I Dairy production margin protection and dairy market stabilization programs

Sec. 1401 Definitions

In this part:

(1)

Actual dairy production margin— The term actual dairy production margin means the difference between the all-milk price and the average feed cost, as calculated under section 1402.

(2)

All-milk price— The term all-milk price means the average price received, per hundredweight of milk, by dairy operations for all milk sold to plants and dealers in the United States, as determined by the Secretary.

(3)

Annual production history— The term annual production history means the production history determined for a participating dairy operation under section 1413(b) whenever the participating dairy operation purchases supplemental production margin protection.

(4)

Average feed cost— The term average feed cost means the average cost of feed used by a dairy operation to produce a hundredweight of milk, determined under section 1402 using the sum of the following:

(A)

The product determined by multiplying 1.0728 by the price of corn per bushel.

(B)

The product determined by multiplying 0.00735 by the price of soybean meal per ton.

(C)

The product determined by multiplying 0.0137 by the price of alfalfa hay per ton.

(5)

Basic production history— The term basic production history means the production history determined for a participating dairy operation under section 1413(a) for provision of basic production margin protection.

(6)

Consecutive 2-month period— The term consecutive 2-month period refers to the 2-month period consisting of the months of January and February, March and April, May and June, July and August, September and October, or November and December, respectively.

(7)

Dairy operation—

(A)

In general— The term dairy operation means, as determined by the Secretary, 1 or more dairy producers that produce and market milk as a single dairy operation in which each dairy producer—

(i)

shares in the pooling of resources and a common ownership structure;

(ii)

is at risk in the production of milk on the dairy operation; and

(iii)

contributes land, labor, management, equipment, or capital to the dairy operation.

(B)

Additional ownership structures— The Secretary shall determine additional ownership structures to be covered by the definition of dairy operation.

(8)

Handler—

(A)

In general— The term handler means the initial individual or entity making payment to a dairy operation for milk produced in the United States and marketed for commercial use.

(B)

Producer-handler— The term includes a producer-handler when the producer satisfies the definition in subparagraph (A).

(9)

Participating dairy operation— The term participating dairy operation means a dairy operation that—

(A)

signs up under section 1412 to participate in the production margin protection program under subpart A; and

(B)

as a result, also participates in the stabilization program under subpart B.

(10)

Production margin protection program— The term production margin protection program means the dairy production margin protection program required by subpart A.

(11)

Secretary— The term Secretary means the Secretary of Agriculture.

(12)

Stabilization program— The term stabilization program means the dairy market stabilization program required by subpart B for all participating dairy operations.

(13)

Stabilization program base— The term stabilization program base, with respect to a participating dairy operation, means the stabilization program base calculated for the participating dairy operation under section 1431(b).

(14)

United States— The term United States, in a geographical sense, means the 50 States, the District of Columbia, American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, the Commonwealth of Puerto Rico, the Virgin Islands of the United States, and any other territory or possession of the United States.

Sec. 1402 Calculation of average feed cost and actual dairy production margins

(a)

Calculation of average feed cost— The Secretary shall calculate the national average feed cost for each month using the following data:

(1)

The price of corn for a month shall be the price received during that month by farmers in the United States for corn, as reported in the monthly Agricultural Prices report by the Secretary.

(2)

The price of soybean meal for a month shall be the central Illinois price for soybean meal, as reported in the Market News–Monthly Soybean Meal Price Report by the Secretary.

(3)

The price of alfalfa hay for a month shall be the price received during that month by farmers in the United States for alfalfa hay, as reported in the monthly Agricultural Prices report by the Secretary.

(b)

Calculation of actual dairy production margins—

(1)

Production margin protection program— For use in the production margin protection program under subpart A, the Secretary shall calculate the actual dairy production margin for each consecutive 2-month period by subtracting—

(A)

the average feed cost for that consecutive 2-month period, determined in accordance with subsection (a); from

(B)

the all-milk price for that consecutive 2-month period.

(2)

Stabilization program— For use in the stabilization program under subpart B, the Secretary shall calculate each month the actual dairy production margin for the preceding month by subtracting—

(A)

the average feed cost for that preceding month, determined in accordance with subsection (a); from

(B)

the all-milk price for that preceding month.

(3)

Time for calculations— The calculations required by paragraphs (1) and (2) shall be made as soon as practicable using the full month price of the applicable reference month.

A Dairy production margin protection program

Sec. 1411 Establishment of dairy production margin protection program

Effective not later than 120 days after the effective date of this subtitle, the Secretary shall establish and administer a dairy production margin protection program under which participating dairy operations are paid—

(1)

basic production margin protection program payments under section 1414 when actual dairy production margins are less than the threshold levels for such payments; and

(2)

supplemental production margin protection program payments under section 1415 if purchased by a participating dairy operation.

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

(a)

Eligibility— All dairy operations in the United States shall be eligible to participate in the production margin protection program, except that a participating dairy operation shall be required to register with the Secretary before the participating dairy operation may receive—

(1)

basic production margin protection program payments under section 1414; and

(2)

if the participating dairy operation purchases supplemental production margin protection under section 1415, supplemental production margin protection program payments under such section.

(b)

Registration process—

(1)

In general— The Secretary shall specify the manner and form by which a participating dairy operation may register to participate in the production margin protection program.

(2)

Treatment of multiproducer dairy operations— If a participating dairy operation is operated by more than 1 dairy producer, all of the dairy producers of the participating dairy operation shall be treated as a single dairy operation for purposes of—

(A)

registration to receive basic production margin protection and election to purchase supplemental production margin protection;

(B)

payment of the participation fee under subsection (d) and producer premiums under section 1415; and

(C)

participation in the stabilization program under subtitle B.

(3)

Treatment of producers with multiple dairy operations— If a dairy producer operates 2 or more dairy operations, each dairy operation of the producer shall separately register to receive basic production margin protection and purchase supplemental production margin protection and only those dairy operations so registered shall be covered by the stabilization program.

(c)

Time for registration—

(1)

Existing dairy operations— During the 15-month period beginning on the date of the initiation of the registration period for the production margin protection program, a dairy operation that is actively engaged as of such date may register with the Secretary—

(A)

to receive basic production margin protection; and

(B)

if the dairy operation elects, to purchase supplemental production margin protection.

(2)

New Entrants— A dairy producer that has no existing interest in a dairy operation as of the date of the initiation of the registration period for the production margin protection program, but that, after such date, establishes a new dairy operation, may register with the Secretary during the 1-year period beginning on the date on which the dairy operation first markets milk commercially—

(A)

to receive basic production margin protection; and

(B)

if the dairy operation elects, to purchase supplemental production margin protection.

(d)

Transition from MILC to production margin protection—

(1)

Definition of transition period— In this subsection, the term transition period means the period during which the milk income loss program established under section 1506 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8773) and the production margin protection program under this subtitle are both in existence.

(2)

Notice of availability— Not later than 30 days after the date of enactment of this Act, the Secretary shall publish a notice in the Federal Register to inform dairy operations of the availability of basic production margin protection and supplemental production margin protection, including the terms of the protection and information about the option of dairy operations during the transition period to make an election described in paragraph (3).

(3)

Election— Except as provided in paragraph (4), a dairy operation may elect to participate in either the milk income loss program established under section 1506 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8773) or the production margin protection program under this subtitle for the duration of the transition period.

(4)

Transfer to production margin protection— A dairy operation that elects to participate in the milk income loss program established under section 1506 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8773) during the transition period may, at any time, make a permanent transfer to the production margin protection program.

(e)

Administration fee—

(1)

Administration fee required— Except as provided in paragraph (5), a participating dairy operation shall—

(A)

pay an administration fee under this subsection to register to participate in the production margin protection program; and

(B)

pay the administration fee annually thereafter to continue to participate in the production margin protection program.

(2)

Fee amount— The administration fee for a participating dairy operation for a calendar year shall be based on the pounds of milk (in millions) marketed by the participating dairy operation in the previous calendar year, as follows:

(3)

Deposit of Fees— All administration fees collected under this subsection shall be credited to the fund or account used to cover the costs incurred to administer the production margin protection program and the stabilization program and shall be available to the Secretary, without further appropriation and until expended, for use or transfer as provided in paragraph (4).

(4)

Use of Fees— The Secretary shall use administration fees collected under this subsection—

(A)

to cover administrative costs of the production margin protection program and stabilization program; and

(B)

to cover costs of the Department of Agriculture relating to reporting of dairy market news, carrying out the amendments made by section 1476, and carrying out section 273 of the Agricultural Marketing Act of 1946 (7 U.S.C. 1637b), to the extent funds remain available after operation of subparagraph (A).

(5)

Waiver— The Secretary shall waive or reduce the administration fee required under paragraph (1) in the case of a limited-resource dairy operation, as defined by the Secretary.

(f)

Limitation— A dairy operation may only participate in the production margin protection program or the livestock gross margin for dairy program under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.), but not both.

Sec. 1413 Production history of participating dairy operations

(a)

Production history for basic production margin protection—

(1)

Determination required— For purposes of providing basic production margin protection, the Secretary shall determine the basic production history of a participating dairy operation.

(2)

Calculation— Except as provided in paragraph (3), the basic production history of a participating dairy operation for basic production margin protection is equal to the highest annual milk marketings of the participating dairy operation during any 1 of the 3 calendar years immediately preceding the calendar year in which the participating dairy operation first signed up to participate in the production margin protection program.

(3)

Election by new dairy operations— In the case of a participating dairy operation that has been in operation for less than a year, the participating dairy operation shall elect 1 of the following methods for the Secretary to determine the basic production history of the participating dairy operation:

(A)

The volume of the actual milk marketings for the months the participating dairy operation has been in operation extrapolated to a yearly amount.

(B)

An estimate of the actual milk marketings of the participating dairy operation based on the herd size of the participating dairy operation relative to the national rolling herd average data published by the Secretary.

(4)

No change in production history for basic production margin protection— Once the basic production history of a participating dairy operation is determined under paragraph (2) or (3), the basic production history shall not be subsequently changed for purposes of determining the amount of any basic production margin protection payments for the participating dairy operation made under section 1414.

(b)

Annual production history for supplemental production margin protection—

(1)

Determination required— For purposes of providing supplemental production margin protection for a participating dairy operation that purchases supplemental production margin protection for a year under section 1415, the Secretary shall determine the annual production history of the participating dairy operation under paragraph (2).

(2)

Calculation— The annual production history of a participating dairy operation for a year is equal to the actual milk marketings of the participating dairy operation during the preceding calendar year.

(3)

New dairy operations— Subsection (a)(3) shall apply with respect to determining the annual production history of a participating dairy operation that has been in operation for less than a year.

(c)

Required information— A participating dairy operation shall provide all information that the Secretary may require in order to establish—

(1)

the basic production history of the participating dairy operation under subsection (a); and

(2)

the production history of the participating dairy operation whenever the participating dairy operation purchases supplemental production margin protection under section 1415.

(d)

Transfer of production histories—

(1)

Transfer by sale or lease— In promulgating the rules to initiate the production margin protection program, the Secretary shall specify the conditions under which and the manner by which the production history of a participating dairy operation may be transferred by sale or lease.

(2)

Coverage level—

(A)

Basic production margin protection— A purchaser or lessee to whom the Secretary transfers a basic production history under this subsection shall not obtain a different level of basic production margin protection than the basic production margin protection coverage held by the seller or lessor from whom the transfer was obtained.

(B)

Supplemental production margin protection— A purchaser or lessee to whom the Secretary transfers an annual production history under this subsection shall not obtain a different level of supplemental production margin protection coverage than the supplemental production margin protection coverage in effect for the seller or lessor from whom the transfer was obtained for the calendar year in which the transfer was made.

(e)

Movement and transfer of production history—

(1)

Movement and transfer authorized— Subject to paragraph (2), if a participating dairy operation moves from 1 location to another location, the participating dairy operation may transfer the basic production history and annual production history associated with the participating dairy operation.

(2)

Notification requirement— A participating dairy operation shall notify the Secretary of any move of a participating dairy operation under paragraph (1).

(3)

Subsequent occupation of vacated location— A party subsequently occupying a participating dairy operation location vacated as described in paragraph (1) shall have no interest in the basic production history or annual production history previously associated with the participating dairy operation at such location.

Sec. 1414 Basic production margin protection

(a)

Payment threshold— The Secretary shall make a payment to participating dairy operations in accordance with subsection (b) whenever the average actual dairy production margin for a consecutive 2-month period is less than $4.00 per hundredweight of milk.

(b)

Basic production margin protection payment— The basic production margin protection payment for a participating dairy operation for a consecutive 2-month period shall be equal to the product obtained by multiplying—

(1)

the difference between the average actual dairy production margin for the consecutive 2-month period and $4.00, except that, if the difference is more than $4.00, the Secretary shall use $4.00; by

(2)

the lesser of—

(A)

80 percent of the production history of the participating dairy operation, divided by 6; or

(B)

the actual quantity of milk marketed by the participating dairy operation during the consecutive 2-month period.

Sec. 1415 Supplemental production margin protection

(a)

Election of supplemental production margin protection— A participating dairy operation may annually purchase supplemental production margin protection to protect, during the calendar year for which purchased, a higher level of the income of a participating dairy operation than the income level guaranteed by basic production margin protection under section 1414.

(b)

Selection of payment threshold— A participating dairy operation purchasing supplemental production margin protection for a year shall elect a coverage level that is higher, in any increment of $0.50, than the payment threshold for basic production margin protection specified in section 1414(a), but not to exceed $8.00.

(c)

Coverage percentage— A participating dairy operation purchasing supplemental production margin protection for a year shall elect a percentage of coverage equal to not more than 90 percent, nor less than 25 percent, of the annual production history of the participating dairy operation.

(d)

Premiums for supplemental production margin protection—

(1)

Premiums required— A participating dairy operation that purchases supplemental production margin protection shall pay an annual premium equal to the product obtained by multiplying—

(A)

the coverage percentage elected by the participating dairy operation under subsection (c);

(B)

the annual production history of the participating dairy operation; and

(C)

the premium per hundredweight of milk, as specified in the applicable table under paragraph (2) or (3).

(2)

Premium per hundredweight for first 4 million pounds of production— For the first 4,000,000 pounds of milk marketings included in the annual production history of a participating dairy operation, the premium per hundredweight corresponding to each coverage level specified in the following table is as follows:

(3)

Premium per hundredweight for production in excess of 4 million pounds— For milk marketings in excess of 4,000,000 pounds included in the annual production history of a participating dairy operation, the premium per hundredweight corresponding to each coverage level is as follows:

(4)

Time for payment— In promulgating the rules to initiate the production margin protection program, the Secretary shall provide more than 1 method by which a participating dairy operation that purchases supplemental production margin protection for a calendar year may pay the premium under this subsection for that year in any manner that maximizes participating dairy operation payment flexibility and program integrity.

(e)

Premium obligations—

(1)

Pro-ration of premium for new dairy operations— A participating dairy operation described in section 1412(c)(2) that purchases supplemental production margin protection for a calendar year after the start of the calendar year shall pay a pro-rated premium for that calendar year based on the portion of the calendar year for which the participating dairy operation purchases the coverage.

(2)

Legal obligation— A participating dairy operation that purchases supplemental production margin protection for a calendar year shall be legally obligated to pay the applicable premium for that calendar year, except that the Secretary may waive that obligation, under terms and conditions determined by the Secretary, for 1 or more producers in any participating dairy operation in the case of death, retirement, permanent dissolution of a participating dairy operation, or other circumstances as the Secretary considers appropriate to ensure the integrity of the program.

(f)

Supplemental payment threshold— A participating dairy operation with supplemental production margin protection shall receive a supplemental production margin protection payment whenever the average actual dairy production margin for a consecutive 2-month period is less than the coverage level threshold selected by the participating dairy operation under subsection (b).

(g)

Supplemental production margin protection payments—

(1)

In general— The supplemental production margin protection payment for a participating dairy operation is in addition to the basic production margin protection payment.

(2)

Amount of payment— The supplemental production margin protection payment for the participating dairy operation shall be determined as follows:

(A)

The Secretary shall calculate the difference between the coverage level threshold selected by the participating dairy operation under subsection (b) and the greater of—

(i)

the average actual dairy production margin for the consecutive 2-month period; or

(ii)

$4.00.

(B)

The amount determined under subparagraph (A) shall be multiplied by the percentage selected by the participating dairy operation under subsection (c) and by the lesser of the following:

(i)

The annual production history of the participating dairy operation, divided by 6.

(ii)

The actual amount of milk marketed by the participating dairy operation during the consecutive 2-month period.

Sec. 1416 Effect of failure to pay administration fees or premiums

(a)

Loss of benefits— A participating dairy operation that fails to pay the required administration fee under section 1412 or is in arrears on premium payments for supplemental production margin protection under section 1415—

(1)

remains legally obligated to pay the administration fee or premiums, as the case may be; and

(2)

may not receive basic production margin protection payments or supplemental production margin protection payments until the fees or premiums are fully paid.

(b)

Enforcement— The Secretary may take such action as necessary to collect administration fees and premium payments for supplemental production margin protection.

B Dairy market stabilization program

Sec. 1431 Establishment of dairy market stabilization program

(a)

Program required; purpose— Effective not later than 120 days after the effective date of this subtitle, the Secretary shall establish and administer a dairy market stabilization program applicable to participating dairy operations for the purpose of assisting in balancing the supply of milk with demand when participating dairy operations are experiencing low or negative operating margins.

(b)

Election of stabilization program base calculation method—

(1)

Election— When a dairy operation signs up under section 1412 to participate in the production margin protection program, the dairy operation shall inform the Secretary of the method by which the stabilization program base for the participating dairy operation will be calculated under paragraph (3).

(2)

Change in calculation method— A participating dairy operation may change the stabilization program base calculation method to be used for a calendar year by notifying the Secretary of the change not later than a date determined by the Secretary.

(3)

Calculation methods— A participating dairy operation may elect either of the following methods for calculation of the stabilization program base for the participating dairy operation:

(A)

The volume of the average monthly milk marketings of the participating dairy operation for the 3 months immediately preceding the announcement by the Secretary that the stabilization program will become effective.

(B)

The volume of the monthly milk marketings of the participating dairy operation for the same month in the preceding year as the month for which the Secretary has announced the stabilization program will become effective.

Sec. 1432 Threshold for implementation and reduction in dairy payments

(a)

When stabilization program required— Except as provided in subsection (b), the Secretary shall announce that the stabilization program is in effect and order reduced payments by handlers to participating dairy operations that exceed the applicable percentage of the participating dairy operation’s stabilization program base whenever—

(1)

the actual dairy production margin has been $6.00 or less per hundredweight of milk for each of the immediately preceding 2 months; or

(2)

the actual dairy production margin has been $4.00 or less per hundredweight of milk for the immediately preceding month.

(b)

Exception— If any of the conditions described in section 1436(b) have been met during the 2-month period immediately preceding the month in which the announcement under subsection (a) would otherwise be made by the Secretary in the absence of this exception, the Secretary shall—

(1)

suspend the stabilization program;

(2)

refrain from making the announcement under subsection (a) to implement order the stabilization payment; or

(3)

order reduced payments.

(c)

Effective date for implementation of payment reductions— Reductions in dairy payments shall commence beginning on the first day of the month immediately following the date of the announcement by the Secretary under subsection (a).

Sec. 1433 Milk marketings information

(a)

Collection of milk marketing data— The Secretary shall establish, by regulation, a process to collect from participating dairy operations and handlers such information that the Secretary considers necessary for each month during which the stabilization program is in effect.

(b)

Reduce regulatory burden— When implementing the process under subsection (a), the Secretary shall minimize the regulatory burden on participating dairy operations and handlers.

Sec. 1434 Calculation and collection of reduced dairy operation payments

(a)

Reduced participating dairy operation payments required— During any month in which payment reductions are in effect under the stabilization program, each handler shall reduce payments to each participating dairy operation from whom the handler receives milk.

(b)

Reductions based on actual dairy production margin—

(1)

Reduction requirement 1— If the Secretary determines that the average actual dairy production margin has been less than $6.00 but greater than $5.00 per hundredweight of milk for 2 consecutive months, the handler shall make payments to a participating dairy operation for a month based on the greater of the following:

(A)

98 percent of the stabilization program base of the participating dairy operation.

(B)

94 percent of the marketings of milk for the month by the participating dairy operation.

(2)

Reduction requirement 2— If the Secretary determines that the average actual dairy production margin has been less than $5.00 but greater than $4.00 for 2 consecutive months, the handler shall make payments to a participating dairy operation for a month based on the greater of the following:

(A)

97 percent of the stabilization program base of the participating dairy operation.

(B)

93 percent of the marketings of milk for the month by the participating dairy operation.

(3)

Reduction requirement 3— If the Secretary determines that the average actual dairy production margin has been $4.00 or less for any 1 month, the handler shall make payments to a participating dairy operation for a month based on the greater of the following:

(A)

96 percent of the stabilization program base of the participating dairy operation.

(B)

92 percent of the marketings of milk for the month by the participating dairy operation.

(c)

Continuation of reductions— The largest level of payment reduction required under paragraph (1), (2), or (3) of subsection (b) shall be continued for each month until the Secretary suspends the stabilization program and terminates payment reductions in accordance with section 1436.

(d)

Payment reduction exception— Notwithstanding any preceding subsection of this section, a handler shall make no payment reductions for a participating dairy operation for a month if the participating dairy operation’s milk marketings for the month are equal to or less than the percentage of the stabilization program base applicable to the participating dairy operation under paragraph (1), (2), or (3) of subsection (b).

Sec. 1435 Remitting funds to the Secretary and use of funds

(a)

Remitting funds— As soon as practicable after the end of each month during which payment reductions are in effect under the stabilization program, each handler shall remit to the Secretary an amount equal to the amount by which payments to participating dairy operations are reduced by the handler under section 1434.

(b)

Deposit of remitted funds— All funds received under subsection (a) shall be available to the Secretary, without further appropriation and until expended, for use or transfer as provided in subsection (c).

(c)

Use of funds—

(1)

Availability for certain commodity donations— Not later than 90 days after the funds described in subsection (a) are due as determined by the Secretary, the Secretary shall obligate the funds for the purpose of—

(A)

purchasing dairy products for donation to food banks and other programs that the Secretary determines appropriate; and

(B)

expanding consumption and building demand for dairy products.

(2)

No duplication of effort— The Secretary shall ensure that expenditures under paragraph (1) are compatible with, and do not duplicate, programs supported by the dairy research and promotion activities conducted under the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4501 et seq.).

(3)

Accounting— The Secretary shall keep an accurate account of all funds expended under paragraph (1).

(d)

Annual Report— Not later than December 31 of each year that the stabilization program is in effect, the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that provides an accurate accounting of—

(1)

the funds received by the Secretary during the preceding fiscal year under subsection (a);

(2)

all expenditures made by the Secretary under subsection (b) during the preceding fiscal year; and

(3)

the impact of the stabilization program on dairy markets.

(e)

Enforcement— If a participating dairy operation or handler fails to remit or collect the amounts by which payments to participating dairy operations are reduced under section 1434, the participating dairy operation or handler responsible for the failure shall be liable to the Secretary for the amount that should have been remitted or collected, plus interest. In addition to the enforcement authorities available under section 1437, the Secretary may enforce this subsection in the courts of the United States.

Sec. 1436 Suspension of reduced payment requirement

(a)

Determination of prices— For purposes of this section:

(1)

The price in the United States for cheddar cheese and nonfat dry milk shall be determined by the Secretary.

(2)

The world price of cheddar cheese and skim milk powder shall be determined by the Secretary.

(b)

Suspension thresholds— The stabilization program shall be suspended or the Secretary shall refrain from making the announcement under section 1432(a) if the Secretary determines that—

(1)

the actual dairy production margin is greater than $6.00 per hundredweight of milk for 2 consecutive months;

(2)

the actual dairy production margin is equal to or less than $6.00 (but greater than $5.00) for 2 consecutive months, and during the same 2 consecutive months—

(A)

the price in the United States for cheddar cheese is equal to or greater than the world price of cheddar cheese; or

(B)

the price in the United States for nonfat dry milk is equal to or greater than the world price of skim milk powder;

(3)

the actual dairy production margin is equal to or less than $5.00 (but greater than $4.00) for 2 consecutive months, and during the same 2 consecutive months—

(A)

the price in the United States for cheddar cheese is more than 5 percent above the world price of cheddar cheese; or

(B)

the price in the United States for nonfat dry milk is more than 5 percent above the world price of skim milk powder; or

(4)

the actual dairy production margin is equal to or less than $4.00 for 2 consecutive months, and during the same 2 consecutive months—

(A)

the price in the United States for cheddar cheese is more than 7 percent above the world price of cheddar cheese; or

(B)

the price in the United States for nonfat dry milk is more than 7 percent above the world price of skim milk powder.

(c)

Implementation by handlers— Effective on the day after the date of the announcement by the Secretary under subsection (b) of the suspension of the stabilization program, the handler shall cease reducing payments to participating dairy operations under the stabilization program.

(d)

Condition on resumption of stabilization program— Upon the announcement by the Secretary under subsection (b) that the stabilization program has been suspended, the stabilization program may not be implemented again until, at the earliest—

(1)

2 months have passed, beginning on the first day of the month immediately following the announcement by the Secretary; and

(2)

the conditions of section 1432(a) are again met.

Sec. 1437 Enforcement

(a)

Unlawful act— It shall be unlawful and a violation of the this subpart for any person subject to the stabilization program to willfully fail or refuse to provide, or delay the timely reporting of, accurate information and remittance of funds to the Secretary in accordance with this subpart.

(b)

Order— After providing notice and opportunity for a hearing to an affected person, the Secretary may issue an order against any person to cease and desist from continuing any violation of this subpart.

(c)

Appeal— An order of the Secretary under subsection (b) shall be final and conclusive unless an affected person files an appeal of the order of the Secretary in United States district court not later than 30 days after the date of the issuance of the order. A finding of the Secretary in the order shall be set aside only if the finding is not supported by substantial evidence.

(d)

Noncompliance with order— If a person subject to this subpart fails to obey an order issued under subsection (b) after the order has become final and unappealable, or after the appropriate United States district court has entered a final judgment in favor of the Secretary, the United States may apply to the appropriate United States district court for enforcement of the order. If the court determines that the order was lawfully made and duly served and that the person violated the order, the court shall enforce the order.

Sec. 1438 Audit requirements

(a)

Audits of dairy operation and handler compliance—

(1)

Audits authorized— If determined by the Secretary to be necessary to ensure compliance by participating dairy operations and handlers with the stabilization program, the Secretary may conduct periodic audits of participating dairy operations and handlers.

(2)

Sample of dairy operations— Any audit conducted under this subsection shall include, at a minimum, investigation of a statistically valid and random sample of participating dairy operations.

(b)

Submission of results— The Secretary shall submit the results of any audit conducted under subsection (a) to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate and include such recommendations as the Secretary considers appropriate regarding the stabilization program.

Sec. 1439 Study; report

(a)

In general— The Secretary shall direct the Office of the Chief Economist to conduct a study of the impacts of the program established under section 1431(a).

(b)

Considerations— The study conducted under subsection (a) shall consider—

(1)

the economic impact of the program throughout the dairy product value chain, including the impact on producers, processors, domestic customers, export customers, actual market growth and potential market growth, farms of different sizes, and different regions and States; and

(2)

the impact of the program on the competitiveness of the United States dairy industry in international markets.

(c)

Report— Not later than December 1, 2017, the Office of the Chief Economist shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes the results of the study conducted under subsection (a).

C Administration

Sec. 1451 Duration

The production margin protection program and the stabilization program shall end on December 31, 2018.

Sec. 1452 Administration and enforcement

(a)

In general— The Secretary shall promulgate regulations to address administrative and enforcement issues involved in carrying out the production margin protection, supplemental production margin protection, and market stabilization programs.

(b)

Reconstitution and eligibility issues—

(1)

Reconstitution— Using authorities under section 1001(f) and 1001B of the Food Security Act of 1985 (7 U.S.C. 1308(f), 1308–2), the Secretary shall promulgate regulations to prohibit a dairy producer from reconstituting a dairy operation for the sole purpose of the dairy producer—

(A)

receiving basic margin protection;

(B)

purchasing supplemental margin protection; or

(C)

avoiding participation in the market stabilization program.

(2)

Eligibility issues— Using authorities under section 1001(f) and 1001B of the Food Security Act of 1985 (7 U.S.C. 1308(f), 1308–2), the Secretary shall promulgate regulations—

(A)

to prohibit a scheme or device;

(B)

to provide for equitable relief; and

(C)

to provide for other issues affecting eligibility and liability issues.

(3)

Administrative appeals— Using authorities under section 1001(h) of the Food Security Act of 1985 (7 U.S.C. 1308(h)) and subtitle H of the Department of Agriculture Reorganization Act (7 U.S.C. 6991 et seq.), the Secretary shall promulgate regulations to provide for administrative appeals of decisions of the Secretary that are adverse to participants of the programs described in subsection (a).

II Dairy market transparency

Sec. 1461 Dairy product mandatory reporting

(a)

Definitions— Section 272(1)(A) of the Agricultural Marketing Act of 1946 (7 U.S.C. 1637a(1)(A)) is amended by inserting “, or any other products that may significantly aid price discovery in the dairy markets, as determined by the Secretary” after “of 1937”.

(b)

Mandatory reporting for dairy products— Section 273(b) of the Agricultural Marketing Act of 1946 (7 U.S.C. 1637b(b)) is amended—

(1)

by striking paragraph (1) and inserting the following new paragraph:

“(1) In general—In establishing the program, the Secretary shall only—

“(A)

“(i) subject to the conditions described in paragraph (2), require each manufacturer to report to the Secretary, more frequently than once per month, information concerning the price, quantity, and moisture content of dairy products sold by the manufacturer and any other product characteristics that may significantly aid price discovery in the dairy markets, as determined by the Secretary; and

“(ii) modify the format used to provide the information on the day before the date of enactment of this subtitle to ensure that the information can be readily understood by market participants; and

“(B) require each manufacturer and other person storing dairy products (including dairy products in cold storage) to report to the Secretary, more frequently than once per month, information on the quantity of dairy products stored.”

(2)

in paragraph (2), by inserting “or those that may significantly aid price discovery in the dairy markets” after “Federal milk marketing order” each place it appears in subparagraphs (A), (B), and (C).

Sec. 1462 Federal milk marketing order information

(a)

Information clearinghouse—

(1)

In general— The Secretary shall, on behalf of each milk marketing order issued under the Agricultural Adjustment Act (7 U.S.C. 601 et seq.), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, establish an information clearinghouse for the purposes of educating the public about the Federal milk marketing order system and any marketing order referenda, including proposal information and timelines that shall be kept current and updated as information becomes available.

(2)

Requirements— Information under paragraph (1) shall include—

(A)

information on procedures by which cooperatives vote;

(B)

if applicable, information on the manner by which producers may cast an individual ballot;

(C)

in applicable, instructions on the manner in which to vote online;

(D)

due dates for each specific referendum;

(E)

the text of each referendum question under consideration;

(F)

a description in plain language of the question;

(G)

any relevant background information to the question; and

(H)

any other information that increases Federal milk marketing order transparency.

(b)

Notification list for upcoming referendum— Each Federal milk marketing order shall—

(1)

make available the information described in subsection (b) through an Internet site; and

(2)

publicize the information in major agriculture and dairy-specific publications on upcoming referenda.

(c)

Study—

(1)

In general— The Secretary shall conduct a study of the feasibility of establishing 2 classes of milk, a fluid class and a manufacturing class, to replace the 4–class system in effect on the date of enactment of this Act in administering Federal milk marketing orders.

(2)

Federal Milk Market Order Review Commission— The Secretary may elect to use the Federal Milk Market Order Review Commission established under section 1509(a) of the Food, Conservation, and Energy Act of 2008 (Public Law 110–246; 122 Stat. 1726), or documents of the Commission, to conduct all or part of the study.

(3)

Report— Not later than 180 days after the date of enactment of this Act, the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes the results of the study required under this subsection, including any recommendations.

III Repeal or reauthorization of other dairy-Related provisions

Sec. 1471 Repeal of dairy product price support and milk income loss contract programs

(a)

Repeal of dairy product price support program— Section 1501 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8771) is repealed.

(b)

Repeal of milk income loss contract program—

(1)

Payments under milk income loss contract program— Section 1506(c)(3) of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8773(c)(3)) is amended—

(A)

in subparagraph (A), by inserting “and” after the semicolon;

(B)

in subparagraph (B), by striking “August 31, 2013, 45 percent; and” and inserting “June 30, 2014, 45 percent.”; and

(C)

by striking subparagraph (C).

(2)

Extension— Section 1506(h)(1) of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8773(h)(1)) is amended by striking “September 30, 2013” and inserting “June 30, 2014”.

(3)

Repeal— Effective July 1, 2014, section 1506 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8773) is repealed.

Sec. 1472 Repeal of dairy export incentive program

(a)

Repeal— Section 153 of the Food Security Act of 1985 (15 U.S.C. 713a–14) is repealed.

(b)

Conforming amendments— Section 902(2) of the Trade Sanctions Reform and Export Enhancement Act of 2000 (22 U.S.C. 7201(2)) is amended—

(1)

by striking subparagraph (D); and

(2)

by redesignating subparagraphs (E) and (F) as subparagraphs (D) and (E), respectively.

Sec. 1473 Extension of dairy forward pricing program

Section 1502(e) of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8772(e)) is amended—

(1)

in paragraph (1), by striking “2012” and inserting “2018”; and

(2)

in paragraph (2), by striking “2015” and inserting “2021”.

Sec. 1474 Extension of dairy indemnity program

Section 3 of Public Law 90–484 (7 U.S.C. 450l) is amended by striking “2012” and inserting “2018”.

Sec. 1475 Extension of dairy promotion and research program

Section 113(e)(2) of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4504(e)(2)) is amended by striking “2012” and inserting “2018”.

Sec. 1476 Extension of Federal Milk Marketing Order Review Commission

Section 1509(a) of the Food, Conservation, and Energy Act of 2008 (Public Law 110–246; 122 Stat. 1726) is amended by inserting “or other funds” after “Subject to the availability of appropriations”.

IV Federal milk marketing order reform

Sec. 1481 Federal milk marketing orders

(a)

Amendments— The Secretary shall provide an analysis on the effects of amending each Federal milk marketing order issued under section 8c of the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937 (in this part referred to as a milk marketing order), as required by this section.

(b)

Use of end-Product price formulas— In carrying out subsection (a), the Secretary shall—

(1)

consider replacing the use of end-product price formulas with other pricing alternatives; and

(2)

submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report describing the findings of the Secretary on the impact of the action considered under paragraph (1).

V Effective date

Sec. 1491 Effective date

Except as otherwise provided in this subtitle, this subtitle and the amendments made by this subtitle take effect on October 1, 2013.

E Supplemental agricultural disaster assistance programs

Sec. 1501 Supplemental agricultural disaster assistance programs

(a)

Definitions— In this section:

(1)

Eligible producer on a farm—

(A)

In general— The term eligible producer on a farm means an individual or entity described in subparagraph (B) that, as determined by the Secretary, assumes the production and market risks associated with the agricultural production of crops or livestock.

(B)

Description— An individual or entity referred to in subparagraph (A) is—

(i)

a citizen of the United States;

(ii)

a resident alien;

(iii)

a partnership of citizens of the United States; or

(iv)

a corporation, limited liability corporation, or other farm organizational structure organized under State law.

(2)

Farm—

(A)

In general— The term farm means, in relation to an eligible producer on a farm, the total of all crop acreage in all counties that is planted or intended to be planted for harvest, for sale, or on-farm livestock feeding (including native grassland intended for haying) by the eligible producer.

(B)

Aquaculture— In the case of aquaculture, the term farm means, in relation to an eligible producer on a farm, all fish being produced in all counties that are intended to be harvested for sale by the eligible producer.

(C)

Honey— In the case of honey, the term farm means, in relation to an eligible producer on a farm, all bees and beehives in all counties that are intended to be harvested for a honey crop for sale by the eligible producer.

(3)

Farm-raised fish— The term farm-raised fish means any aquatic species that is propagated and reared in a controlled environment.

(4)

Livestock— The term livestock includes—

(A)

cattle (including dairy cattle);

(B)

bison;

(C)

poultry;

(D)

sheep;

(E)

swine;

(F)

horses; and

(G)

other livestock, as determined by the Secretary.

(b)

Livestock indemnity payments—

(1)

Payments— For each of fiscal years 2012 through 2018, the Secretary shall use such sums as are necessary of the funds of the Commodity Credit Corporation to make livestock indemnity payments to eligible producers on farms that have incurred livestock death losses in excess of the normal mortality, as determined by the Secretary, due to—

(A)

attacks by animals reintroduced into the wild by the Federal Government or protected by Federal law, including wolves; or

(B)

adverse weather, as determined by the Secretary, during the calendar year, including losses due to hurricanes, floods, blizzards, disease, wildfires, extreme heat, and extreme cold.

(2)

Payment rates— Indemnity payments to an eligible producer on a farm under paragraph (1) shall be made at a rate of 65 percent of the market value of the applicable livestock on the day before the date of death of the livestock, as determined by the Secretary.

(3)

Special rule for payments made due to disease— The Secretary shall ensure that payments made to an eligible producer under paragraph (1) are not made for the same livestock losses for which compensation is provided pursuant to section 10407(d) of the Animal Health Protection Act (7 U.S.C. 8306(d)).

(c)

Livestock forage disaster program—

(1)

Establishment— There is established a livestock forage disaster program to provide 1 source for livestock forage disaster assistance for weather-related forage losses, as determined by the Secretary, by combining—

(A)

the livestock forage assistance functions of—

(i)

the noninsured crop disaster assistance program established by section 196 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333); and

(ii)

the emergency assistance for livestock, honey bees, and farm-raised fish program under section 531(e) of the Federal Crop Insurance Act (7 U.S.C. 1531(e)) (as in existence on the day before the date of enactment of this Act); and

(B)

the livestock forage disaster program under section 531(d) of the Federal Crop Insurance Act (7 U.S.C. 1531(d)) (as in existence on the day before the date of enactment of this Act).

(2)

Definitions— In this subsection:

(A)

Covered livestock—

(i)

In general— Except as provided in clause (ii), the term covered livestock means livestock of an eligible livestock producer that, during the 60 days prior to the beginning date of an eligible forage loss, as determined by the Secretary, the eligible livestock producer—

(I)

owned;

(II)

leased;

(III)

purchased;

(IV)

entered into a contract to purchase;

(V)

was a contract grower; or

(VI)

sold or otherwise disposed of due to an eligible forage loss during—

(aa)

the current production year; or

(bb)

subject to paragraph (4)(B)(ii), 1 or both of the 2 production years immediately preceding the current production year.

(ii)

Exclusion— The term covered livestock does not include livestock that were or would have been in a feedlot, on the beginning date of the eligible forage loss, as a part of the normal business operation of the eligible livestock producer, as determined by the Secretary.

(B)

Drought monitor— The term drought monitor means a system for classifying drought severity according to a range of abnormally dry to exceptional drought, as defined by the Secretary.

(C)

Eligible forage loss— The term eligible forage loss means 1 or more forage losses that occur due to weather-related conditions, including drought, flood, blizzard, hail, excessive moisture, hurricane, and fire, occurring during the normal grazing period, as determined by the Secretary, if the forage—

(i)

is grown on land that is native or improved pastureland with permanent vegetative cover; or

(ii)

is a crop planted specifically for the purpose of providing grazing for covered livestock of an eligible livestock producer.

(D)

Eligible livestock producer—

(i)

In general— The term eligible livestock producer means an eligible producer on a farm that—

(I)

is an owner, cash or share lessee, or contract grower of covered livestock that provides the pastureland or grazing land, including cash-leased pastureland or grazing land, for the covered livestock;

(II)

provides the pastureland or grazing land for covered livestock, including cash-leased pastureland or grazing land that is physically located in a county affected by an eligible forage loss;

(III)

certifies the eligible forage loss; and

(IV)

meets all other eligibility requirements established under this subsection.

(ii)

Exclusion— The term eligible livestock producer does not include an owner, cash or share lessee, or contract grower of livestock that rents or leases pastureland or grazing land owned by another person on a rate-of-gain basis.

(E)

Normal carrying capacity— The term normal carrying capacity, with respect to each type of grazing land or pastureland in a county, means the normal carrying capacity, as determined under paragraph (4)(D)(i), that would be expected from the grazing land or pastureland for livestock during the normal grazing period, in the absence of an eligible forage loss that diminishes the production of the grazing land or pastureland.

(F)

Normal grazing period— The term normal grazing period, with respect to a county, means the normal grazing period during the calendar year for the county, as determined under paragraph (4)(D)(i).

(3)

Program— For each of fiscal years 2012 through 2018, the Secretary shall use such sums as are necessary of the funds of the Commodity Credit Corporation to provide compensation under paragraphs (4) through (6), as determined by the Secretary for eligible forage losses affecting covered livestock of eligible livestock producers.

(4)

Assistance for eligible forage losses due to drought conditions—

(A)

Eligible forage losses—

(i)

In general— An eligible livestock producer of covered livestock may receive assistance under this paragraph for eligible forage losses that occur due to drought on land that—

(I)

is native or improved pastureland with permanent vegetative cover; or

(II)

is planted to a crop planted specifically for the purpose of providing grazing for covered livestock.

(ii)

Exclusions— An eligible livestock producer may not receive assistance under this paragraph for eligible forage losses that occur on land used for haying or grazing under the conservation reserve program established under subchapter B of chapter 1 of subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3831 et seq.), unless the land is grassland eligible for the conservation reserve program under section 1231(d)(2) of the Food Security Act of 1985 (16 U.S.C. 3831(d)(2)) (as amended by section 2001).

(B)

Monthly payment rate—

(i)

In general— Except as provided in clause (ii), the payment rate for assistance for 1 month under this paragraph shall, in the case of drought, be equal to 60 percent of the lesser of—

(I)

the monthly feed cost for all covered livestock owned or leased by the eligible livestock producer, as determined under subparagraph (C); or

(II)

the monthly feed cost calculated by using the normal carrying capacity of the eligible grazing land of the eligible livestock producer.

(ii)

Partial compensation— In the case of an eligible livestock producer that sold or otherwise disposed of covered livestock due to drought conditions in 1 or both of the 2 production years immediately preceding the current production year, as determined by the Secretary, the payment rate shall be 80 percent of the payment rate otherwise calculated in accordance with clause (i).

(C)

Monthly feed cost—

(i)

In general— The monthly feed cost shall equal the product obtained by multiplying—

(I)

30 days;

(II)

a payment quantity that is equal to the feed grain equivalent, as determined under clause (ii); and

(III)

a payment rate that is equal to the corn price per pound, as determined under clause (iii).

(ii)

Feed grain equivalent— For purposes of clause (i)(II), the feed grain equivalent shall equal—

(I)

in the case of an adult beef cow, 15.7 pounds of corn per day; or

(II)

in the case of any other type of weight of livestock, an amount determined by the Secretary that represents the average number of pounds of corn per day necessary to feed the livestock.

(iii)

Corn price per pound— For purposes of clause (i)(III), the corn price per pound shall equal the quotient obtained by dividing—

(I)

the higher of—

(aa)

the national average corn price per bushel for the 12-month period immediately preceding March 1 of the year for which the disaster assistance is calculated; or

(bb)

the national average corn price per bushel for the 24-month period immediately preceding that March 1; by

(II)

56.

(D)

Normal grazing period and drought monitor intensity—

(i)

FSA county committee determinations—

(I)

In general— The Secretary shall determine the normal carrying capacity and normal grazing period for each type of grazing land or pastureland in the county served by the applicable Farm Service Agency committee.

(II)

Changes— No change to the normal carrying capacity or normal grazing period established for a county under subclause (I) shall be made unless the change is requested by the appropriate State and county Farm Service Agency committees.

(ii)

Drought intensity—

(I)

D2— An eligible livestock producer that owns or leases grazing land or pastureland that is physically located in a county that is rated by the U.S. Drought Monitor as having a D2 (severe drought) intensity in any area of the county for at least 8 consecutive weeks during the normal grazing period for the county, as determined by the Secretary, shall be eligible to receive assistance under this paragraph in an amount equal to 1 monthly payment using the monthly payment rate determined under subparagraph (B).

(II)

D3— An eligible livestock producer that owns or leases grazing land or pastureland that is physically located in a county that is rated by the U.S. Drought Monitor as having at least a D3 (extreme drought) intensity in any area of the county at any time during the normal grazing period for the county, as determined by the Secretary, shall be eligible to receive assistance under this paragraph—

(aa)

in an amount equal to 3 monthly payments using the monthly payment rate determined under subparagraph (B);

(bb)

if the county is rated as having a D3 (extreme drought) intensity in any area of the county for at least 4 weeks during the normal grazing period for the county, or is rated as having a D4 (exceptional drought) intensity in any area of the county at any time during the normal grazing period, in an amount equal to 4 monthly payments using the monthly payment rate determined under subparagraph (B); or

(cc)

if the county is rated as having a D4 (exceptional drought) intensity in any area of the county for at least 4 weeks during the normal grazing period, in an amount equal to 5 monthly payments using the monthly rate determined under subparagraph (B).

(iii)

Annual payment based on drought conditions determined by means other than the U.S. Drought Monitor—

(I)

In general— An eligible livestock producer that owns grazing land or pastureland that is physically located in a county that has experienced on average, over the preceding calendar year, precipitation levels that are 50 percent or more below normal levels, according to sufficient documentation as determined by the Secretary, may be eligible, subject to a determination by the Secretary, to receive assistance under this paragraph in an amount equal to not more than 1 monthly payment using the monthly payment rate under subparagraph (B).

(II)

No duplicate payment— A producer may not receive a payment under both clause (ii) and this clause.

(5)

Assistance for losses due to fire on public managed land—

(A)

In general— An eligible livestock producer may receive assistance under this paragraph only if—

(i)

the eligible forage losses occur on rangeland that is managed by a Federal agency; and

(ii)

the eligible livestock producer is prohibited by the Federal agency from grazing the normal permitted livestock on the managed rangeland due to a fire.

(B)

Payment rate— The payment rate for assistance under this paragraph shall be equal to 50 percent of the monthly feed cost for the total number of livestock covered by the Federal lease of the eligible livestock producer, as determined under paragraph (4)(C).

(C)

Payment duration—

(i)

In general— Subject to clause (ii), an eligible livestock producer shall be eligible to receive assistance under this paragraph for the period—

(I)

beginning on the date on which the Federal agency excludes the eligible livestock producer from using the managed rangeland for grazing; and

(II)

ending on the last day of the Federal lease of the eligible livestock producer.

(ii)

Limitation— An eligible livestock producer may only receive assistance under this paragraph for losses that occur on not more than 180 days per year.

(6)

Assistance for eligible forage losses due to other than drought or fire—

(A)

Eligible forage losses—

(i)

In general— Subject to subparagraph (B), an eligible livestock producer of covered livestock may receive assistance under this paragraph for eligible forage losses that occur due to weather-related conditions other than drought or fire on land that—

(I)

is native or improved pastureland with permanent vegetative cover; or

(II)

is planted to a crop planted specifically for the purpose of providing grazing for covered livestock.

(ii)

(B)

Payments for eligible forage losses—

(i)

In general— The Secretary shall provide assistance under this paragraph to an eligible livestock producer for eligible forage losses that occur due to weather-related conditions other than—

(I)

drought under paragraph (4); and

(II)

fire on public managed land under paragraph (5).

(ii)

Terms and conditions— The Secretary shall establish terms and conditions for assistance under this paragraph that are consistent with the terms and conditions for assistance under this subsection.

(7)

No duplicative payments— An eligible livestock producer may elect to receive assistance for eligible forage losses under either paragraph (4), (5), or (6), if applicable, but may not receive assistance under more than 1 of those paragraphs for the same loss, as determined by the Secretary.

(8)

Determinations by Secretary— A determination made by the Secretary under this subsection shall be final and conclusive.

(d)

Emergency assistance for livestock, honey bees, and farm-Raised fish—

(1)

In general— For each of fiscal years 2012 through 2018, the Secretary shall use not more than $5,000,000 of the funds of the Commodity Credit Corporation to provide emergency relief to eligible producers of livestock, honey bees, and farm-raised fish to aid in the reduction of losses due to disease, adverse weather, or other conditions, such as blizzards and wildfires, as determined by the Secretary, that are not covered under subsection (b) or (c).

(2)

Use of funds— Funds made available under this subsection shall be used to reduce losses caused by feed or water shortages, disease, or other factors as determined by the Secretary.

(3)

Availability of funds— Any funds made available under this subsection shall remain available until expended.

(e)

Tree assistance program—

(1)

Definitions— In this subsection:

(A)

Eligible orchardist— The term eligible orchardist means a person that produces annual crops from trees for commercial purposes.

(B)

Natural disaster— The term natural disaster means plant disease, insect infestation, drought, fire, freeze, flood, earthquake, lightning, or other occurrence, as determined by the Secretary.

(C)

Nursery tree grower— The term nursery tree grower means a person who produces nursery, ornamental, fruit, nut, or Christmas trees for commercial sale, as determined by the Secretary.

(D)

Tree— The term tree includes a tree, bush, and vine.

(2)

Eligibility—

(A)

Loss— Subject to subparagraph (B), for each of fiscal years 2012 through 2018, the Secretary shall use such sums as are necessary of the funds of the Commodity Credit Corporation to provide assistance—

(i)

under paragraph (3) to eligible orchardists and nursery tree growers that planted trees for commercial purposes but lost the trees as a result of a natural disaster, as determined by the Secretary; and

(ii)

under paragraph (3)(B) to eligible orchardists and nursery tree growers that have a production history for commercial purposes on planted or existing trees but lost the trees as a result of a natural disaster, as determined by the Secretary.

(B)

Limitation— An eligible orchardist or nursery tree grower shall qualify for assistance under subparagraph (A) only if the tree mortality of the eligible orchardist or nursery tree grower, as a result of damaging weather or related condition, exceeds 15 percent (adjusted for normal mortality).

(3)

Assistance— Subject to paragraph (4), the assistance provided by the Secretary to eligible orchardists and nursery tree growers for losses described in paragraph (2) shall consist of—

(A)

(i)

reimbursement of 65 percent of the cost of replanting trees lost due to a natural disaster, as determined by the Secretary, in excess of 15 percent mortality (adjusted for normal mortality); or

(ii)

at the option of the Secretary, sufficient seedlings to reestablish a stand; and

(B)

reimbursement of 50 percent of the cost of pruning, removal, and other costs incurred by an eligible orchardist or nursery tree grower to salvage existing trees or, in the case of tree mortality, to prepare the land to replant trees as a result of damage or tree mortality due to a natural disaster, as determined by the Secretary, in excess of 15 percent damage or mortality (adjusted for normal tree damage and mortality).

(4)

Limitations on assistance—

(A)

Definitions of legal entity and person— In this paragraph, the terms legal entity and person have the meaning given those terms in section 1001(a) of the Food Security Act of 1985 (7 U.S.C. 1308(a)).

(B)

Amount— The total amount of payments received, directly or indirectly, by a person or legal entity (excluding a joint venture or general partnership) under this subsection may not exceed $100,000 for any crop year, or an equivalent value in tree seedlings.

(C)

Acres— The total quantity of acres planted to trees or tree seedlings for which a person or legal entity shall be entitled to receive payments under this subsection may not exceed 500 acres.

(f)

Payments—

(1)

Payment limitations—

(A)

Definitions of legal entity and person— In this subsection, the terms “legal entity” and “person” have the meanings given those terms in section 1001(a) of the Food Security Act of 1985 (7 U.S.C. 1308(a)).

(B)

Amount— The total amount of disaster assistance payments received, directly or indirectly, by a person or legal entity (excluding a joint venture or general partnership) under this section (excluding payments received under subsection (e)) may not exceed $100,000 for any crop year.

(C)

Direct attribution— Subsections (d) and (e) of section 1001 of the Food Security Act of 1985 (7 U.S.C. 1308) or any successor provisions relating to direct attribution shall apply with respect to assistance provided under this section.

(2)

Payment delivery— The Secretary shall make payments under this section after October 1, 2013, for losses incurred in the 2012 and 2013 fiscal years, and as soon as practicable for losses incurred in any year thereafter.

F Administration

Sec. 1601 Administration generally

(a)

Use of Commodity Credit Corporation— The Secretary shall use the funds, facilities, and authorities of the Commodity Credit Corporation to carry out this title.

(b)

Determinations by Secretary— A determination made by the Secretary under this title shall be final and conclusive.

(c)

Regulations—

(1)

In general— Except as otherwise provided in this subsection, not later than 90 days after the date of enactment of this Act, the Secretary and the Commodity Credit Corporation, as appropriate, shall promulgate such regulations as are necessary to implement this title and the amendments made by this title.

(2)

Procedure— The promulgation of the regulations and administration of this title and the amendments made by this title and sections 11001 and 11011 shall be made without regard to—

(A)

the notice and comment provisions of section 553 of title 5, United States Code;

(B)

chapter 35 of title 44, United States Code (commonly known as the “Paperwork Reduction Act”); and

(C)

the Statement of Policy of the Secretary of Agriculture effective July 24, 1971 (36 Fed. Reg. 13804), relating to notices of proposed rulemaking and public participation in rulemaking.

(3)

Congressional review of agency rulemaking— In carrying out this subsection, the Secretary shall use the authority provided under section 808 of title 5, United States Code.

(d)

Adjustment Authority Related to Trade Agreements Compliance—

(1)

Required determination; adjustment— If the Secretary determines that expenditures under this title that are subject to the total allowable domestic support levels under the Uruguay Round Agreements (as defined in section 2 of the Uruguay Round Agreements Act (19 U.S.C. 3501)) will exceed the allowable levels for any applicable reporting period, the Secretary shall, to the maximum extent practicable, make adjustments in the amount of the expenditures during that period to ensure that the expenditures do not exceed the allowable levels.

(2)

Congressional notification— Before making any adjustment under paragraph (1), the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report describing the determination made under that paragraph and the extent of the adjustment to be made.

Sec. 1602 Suspension of permanent price support authority

(a)

Agricultural Adjustment Act of 1938— The following provisions of the Agricultural Adjustment Act of 1938 shall not be applicable to the 2014 through 2018 crops of covered commodities (as defined in section 1104), cotton, and sugar and shall not be applicable to milk during the period beginning on the date of enactment of this Act through December 31, 2018:

(1)

Parts II through V of subtitle B of title III (7 U.S.C. 1326 et seq.).

(2)

In the case of upland cotton, section 377 (7 U.S.C. 1377).

(3)

Subtitle D of title III (7 U.S.C. 1379a et seq.).

(4)

Title IV (7 U.S.C. 1401 et seq.).

(b)

Agricultural Act of 1949— The following provisions of the Agricultural Act of 1949 shall not be applicable to the 2014 through 2018 crops of covered commodities (as defined in section 1104), cotton, and sugar and shall not be applicable to milk during the period beginning on the date of enactment of this Act and through December 31, 2018:

(1)

Section 101 (7 U.S.C. 1441).

(2)

Section 103(a) (7 U.S.C. 1444(a)).

(3)

Section 105 (7 U.S.C. 1444b).

(4)

Section 107 (7 U.S.C. 1445a).

(5)

Section 110 (7 U.S.C. 1445e).

(6)

Section 112 (7 U.S.C. 1445g).

(7)

Section 115 (7 U.S.C. 1445k).

(8)

Section 201 (7 U.S.C. 1446).

(9)

Title III (7 U.S.C. 1447 et seq.).

(10)

Title IV (7 U.S.C. 1421 et seq.), other than sections 404, 412, and 416 (7 U.S.C. 1424, 1429, and 1431).

(11)

Title V (7 U.S.C. 1461 et seq.).

(12)

Title VI (7 U.S.C. 1471 et seq.).

(c)

Suspension of certain quota provisions— The joint resolution entitled “A joint resolution relating to corn and wheat marketing quotas under the Agricultural Adjustment Act of 1938, as amended”, approved May 26, 1941 (7 U.S.C. 1330 and 1340), shall not be applicable to the crops of wheat planted for harvest in the calendar years 2014 through 2018.

Sec. 1603 Payment limitations

(a)

In general— Section 1001 of the Food Security Act of 1985 (7 U.S.C. 1308) is amended by striking subsections (b) and (c) and inserting the following:

“(b) Limitation on payments for peanuts and other covered commodities—The total amount of payments received, directly or indirectly, by a person or legal entity (except a joint venture or general partnership) for any crop year under subtitle A of title I of the Agriculture Reform, Food, and Jobs Act of 2013 for—

“(1) peanuts may not exceed $50,000; and

“(2) 1 or more other covered commodities may not exceed $50,000.”

(b)

Limitation on marketing loan gains and loan deficiency payments for peanuts and other covered commodities— Section 1001 of the Food Security Act of 1985 (7 U.S.C. 1308) is amended by striking subsection (d) and inserting the following:

“(d) Limitation on marketing loan gains and loan deficiency payments for peanuts and other covered commodities—The total amount of marketing loan gains and loan deficiency payments received, directly or indirectly, by a person or legal entity (except a joint venture or general partnership) for any crop year under subtitle B of the Agriculture Reform, Food, and Jobs Act of 2013 (or a successor provision) for—

“(1) peanuts may not exceed $75,000; and

“(2) 1 or more other covered commodities may not exceed $75,000.”

(c)

Conforming amendments—

(1)

Section 1001 of the Food Security Act of 1985 (7 U.S.C. 1308) is amended—

(A)

in subsection (a)(1), by striking “section 1001 of the Food, Conservation, and Energy Act of 2008” and inserting “section 1104 of the Agriculture Reform, Food, and Jobs Act of 2013”;

(B)

in subsection (e)—

(i)

in paragraph (1), by striking “subsections (b) and (c) and a program described in paragraphs (1)(C)” and inserting “subsection (b) and a program described in paragraph (1)(B)”; and

(ii)

in paragraph (3)(B), by striking “subsections (b) and (c)” each place it appears and inserting “subsection (b)”;

(C)

in subsection (f)—

(i)

by striking “or title XII” each place it appears in paragraphs (5)(A) and (6)(A) and inserting “, title I of the Agriculture Reform, Food, and Jobs Act of 2013, or title XII”;

(ii)

in paragraph (2), by striking “Subsections (b) and (c)” and inserting “Subsection (b)”;

(iii)

in paragraph (4)(B), by striking “subsection (b) or (c)” and inserting “subsection (b)”;

(iv)

in paragraph (5)—

(I)

in subparagraph (A), by striking “subsection (d)” and inserting “subsection (c)”; and

(II)

in subparagraph (B), by striking “subsection (b), (c), or (d)” and inserting “subsection (b) or (c)”; and

(v)

in paragraph (6)—

(I)

in subparagraph (A), by striking “subsection (d), except as provided in subsection (g)” and inserting “subsection (c), except as provided in subsection (f)”; and

(II)

in subparagraph (B), by striking “subsections (b), (c), and (d)” and inserting “subsections (b) and (c)”;

(D)

in subsection (g)—

(i)

in paragraph (1)—

(I)

bv striking “subsection (f)(6)(A)” and inserting “subsection (e)(6)(A)” and

(II)

by striking “subsection (b) or (c)” and inserting “subsection (b)”; and

(ii)

in paragraph (2)(A), by striking “subsections (b) and (c)” and inserting “subsection (b)”; and

(E)

by redesignating subsections (d) through (h) as subsections (c) through (g), respectively.

(2)

Section 1001A of the Food Security Act of 1985 (7 U.S.C. 1308–1) is amended—

(A)

in subsection (a), by striking “subsections (b) and (c)” and inserting “subsection (b)”; and

(B)

in subsection (b)(1), by striking “subsection (b) or (c)” and inserting “subsection (b)”.

(3)

Section 1001B(a) of the Food Security Act of 1985 (7 U.S.C. 1308–2(a)) is amended in the matter preceding paragraph (1) by striking “subsections (b) and (c)” and inserting “subsection (b)”.

(4)

Section 1001C(a) of the Food Security Act of 1985 (7 U.S.C. 1308–3(a)) is amended by inserting “title I of the Agriculture Reform, Food, and Jobs Act of 2013,” after “2008,”.

(d)

Application— The amendments made by this section shall apply beginning with the 2013 crop year.

Sec. 1604 Payments limited to active farmers

Section 1001A of the Food Security Act of 1985 (7 U.S.C. 1308–1) is amended—

(1)

in subsection (b)(2)—

(A)

by striking “or active personal management” each place it appears in subparagraphs (A)(i)(II) and (B)(ii); and

(B)

in subparagraph (C), by striking “, as applied to the legal entity, are met by the legal entity, the partners or members making a significant contribution of personal labor or active personal management” and inserting “are met by partners or members making a significant contribution of personal labor, those partners or members”; and

(2)

in subsection (c)—

(A)

in paragraph (1)—

(i)

by striking subparagraph (A) and inserting the following:

“(A) the landowner share-rents the land at a rate that is usual and customary;”

(ii)

in subparagraph (B), by striking the period at the end and inserting “; and”; and

(iii)

by adding at the end the following:

“(C) the share of the payments received by the landowner is commensurate with the share of the crop or income received as rent.”

(B)

in paragraph (2)(A), by striking “active personal management or”;

(C)

in paragraph (5)—

(i)

by striking “(5)” and all that follows through “(A) In general.—A person” and inserting the following:

“(5) Custom farming services—A person”

(ii)

by inserting “under usual and customary terms” after “services”; and

(iii)

by striking subparagraph (B); and

(D)

by adding at the end the following:

“(7) Farm managers—A person who otherwise meets the requirements of this subsection other than (b)(2)(A)(i)(II) shall be considered to be actively engaged in farming, as determined by the Secretary, with respect to the farming operation, including a farming operation that is a sole proprietorship, a legal entity such as a joint venture or general partnership, or a legal entity such as a corporation or limited partnership, if the person—

“(A) makes a significant contribution of management to the farming operation necessary for the farming operation, taking into account—

“(i) the size and complexity of the farming operation; and

“(ii) the management requirements normally and customarily required by similar farming operations;

“(B) is the only person in the farming operation qualifying as actively engaged in farming;

“(C) does not use the management contribution under this paragraph to qualify as actively engaged in more than 1 farming operation; and

“(D) manages a farm operation that does not substantially share equipment, labor, or management with persons or legal entities that with the person collectively receive, directly or indirectly, an amount equal to more than the applicable limits under section 1001(b).”

Sec. 1605 Adjusted gross income limitation

(a)

In general— Section 1001D(b)) of the Food Security Act of 1985 (7 U.S.C. 1308–3a(b)) is amended by striking paragraph (1) and inserting the following:

“(1) Commodity programs

“(A) Limitation—Notwithstanding any other provision of law, a person or legal entity shall not be eligible to receive any benefit described in subparagraph (B) during a crop, fiscal or program year, as appropriate, if the average adjusted gross income (or comparable measure over the 3 taxable years preceding the most immediately preceding complete taxable year, as determined by the Secretary) of the person or legal entity exceeds $750,000.

“(B) Covered benefits—Subparagraph (A) applies with respect to the following:

“(i) A payment under section 1105 of the Agriculture Reform, Food, and Jobs Act of 2013.

“(ii) A marketing loan gain or loan deficiency payment under subtitle B of title I of the Agriculture Reform, Food, and Jobs Act of 2013.

“(iii) A payment under subtitle E of the Agriculture Reform, Food, and Jobs Act of 2013.”

“(iv) A payment under section 196 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333).”

(b)

Application— The amendments made by this section shall apply beginning with the 2013 crop year.

Sec. 1606 Geographically disadvantaged farmers and ranchers

Section 1621(d) of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8792(d)) is amended by striking “2012” and inserting “2018”.

Sec. 1607 Personal liability of producers for deficiencies

Section 164 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7284) is amended by striking “and title I of the Food, Conservation, and Energy Act of 2008” each place it appears and inserting “title I of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8702 et seq.), and title I of the Agriculture Reform, Food, and Jobs Act of 2013”.

Sec. 1608 Prevention of deceased individuals receiving payments under farm commodity programs

(a)

Reconciliation— At least twice each year, the Secretary shall reconcile social security numbers of all individuals who receive payments under this title, whether directly or indirectly, with the Commissioner of Social Security to determine if the individuals are alive.

(b)

Preclusion— The Secretary shall preclude the issuance of payments to, and on behalf of, deceased individuals that were not eligible for payments.

Sec. 1609 Appeals

(a)

Direction, control, and support— Section 272 of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6992) is amended by striking subsection (c) and inserting the following:

“(c) Direction, control, and support

“(1) Direction and control

“(A) In general—Except as provided in paragraph (2), the Director shall be free from the direction and control of any person other than the Secretary or the Deputy Secretary of Agriculture.

“(B) Administrative support—The Division shall not receive administrative support (except on a reimbursable basis) from any agency other than the Office of the Secretary.

“(C) Prohibition on delegation—The Secretary may not delegate to any other officer or employee of the Department, other than the Deputy Secretary of Agriculture or the Director, the authority of the Secretary with respect to the Division.

“(2) Exception—The Assistant Secretary for Administration is authorized to investigate, enforce, and implement the provisions in law, Executive order, or regulations that relate in general to competitive and excepted service positions and employment within the Division, including the position of Director, and such authority may be further delegated to subordinate officials.”

(b)

Determination of appealability of agency decisions— Section 272 of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6992) is amended by striking subsection (d) and inserting the following:

“(d) Determination of appealability of agency decisions

“(1) Definition of a matter of general applicability—In this subsection, the term a matter of general applicability means a matter that challenges the merits or authority of a rule, procedure, local or national program practice, or determination of an agency that applies, or can apply, to more than 1 interested party as opposed to the particular application of the rule, procedure, or practice to a specific set of facts or the facts themselves as the facts apply to 1 particular interested party.

“(2) Matters not subject to appeal—The Division may not hear appeals—

“(A) unless the determination of the agency is adverse to the appellant;

“(B) that involve matters of general applicability; and

“(C) that involve requests for equitable relief unless the equitable relief has been denied by the agency.

“(3) Equitable relief

“(A) In general—An appeal requesting equitable relief may not be granted by the Director to an appellant unless, using the rules and practices that the agency applies to itself, the agency could in fact have granted the relief because the appellant acted in good faith, but failed to fully comply with the requirement of the rule or practice of the agency.

“(B) Remand—If it cannot be determined whether the agency would have granted equitable relief because the appellant acted in good faith, but failed to comply with the rule or practice of the agency, the matter shall be remanded to the agency for further consideration.

“(4) Determination of appealability—If an officer, employee, or committee of an agency determines that a decision is not appealable and a participant appeals the decision to the Director, the Director shall determine whether the decision is adverse to the individual participant and appealable or is a matter of general applicability and not subject to appeal.

“(5) Appealability of determination—The determination of the Director as to whether a decision is appealable is final.”

(c)

Equitable relief— Section 278 of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6998) is amended by striking subsection (d).

(d)

Conforming amendment— Section 296(b) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 7014(b)) is amended—

(1)

in paragraph (6)(C), by striking “or” at the end;

(2)

in paragraph (7), by striking the period at the end and inserting “; or”; and

(3)

by adding at the end the following:

“(8) the authority of the Secretary to carry out amendments to sections 272 and 278 made by the Agriculture Reform, Food, and Jobs Act of 2013.”

Sec. 1610 Technical corrections

(a)

Section 359f(c)(1)(B) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359ff(c)(1)(B)) is amended by adding a period at the end.

(b)

(1)

Section 1603(g) of the Food, Conservation, and Energy Act of 2008 (Public Law 110–246; 122 Stat. 1739) is amended in paragraphs (2) through (6) and the amendments made by those paragraphs by striking “1703(a)” each place it appears and inserting “1603(a)”.

(2)

This subsection and the amendments made by this subsection take effect as if included in the Food, Conservation, and Energy Act of 2008 (Public Law 110–246; 122 Stat. 1651).

Sec. 1611 Assignment of payments

(a)

In general— The provisions of section 8(g) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(g)), relating to assignment of payments, shall apply to payments made under this title.

(b)

Notice— The producer making the assignment, or the assignee, shall provide the Secretary with notice, in such manner as the Secretary may require, of any assignment made under this section.

Sec. 1612 Tracking of benefits

As soon as practicable after the date of enactment of this Act, the Secretary may track the benefits provided, directly or indirectly, to individuals and entities under titles I and II and the amendments made by those titles.

Sec. 1613 Signature authority

(a)

In general— In carrying out this title and title II and amendments made by those titles, if the Secretary approves a document, the Secretary shall not subsequently determine the document is inadequate or invalid because of the lack of authority of any person signing the document on behalf of the applicant or any other individual, entity, general partnership, or joint venture, or the documents relied upon were determined inadequate or invalid, unless the person signing the program document knowingly and willfully falsified the evidence of signature authority or a signature.

(b)

Affirmation—

(1)

In general— Nothing in this section prohibits the Secretary from asking a proper party to affirm any document that otherwise would be considered approved under subsection (a).

(2)

No retroactive effect— A denial of benefits based on a lack of affirmation under paragraph (1) shall not be retroactive with respect to third-party producers who were not the subject of the erroneous representation of authority, if the third-party producers—

(A)

relied on the prior approval by the Secretary of the documents in good faith; and

(B)

substantively complied with all program requirements.

Sec. 1614 Implementation

(a)

Streamlining— In implementing this title, the Secretary shall, to the maximum extent practicable—

(1)

seek to reduce administrative burdens and costs to producers by streamlining and reducing paperwork, forms, and other administrative requirements;

(2)

improve coordination, information sharing, and administrative work with the Risk Management Agency and the Natural Resources Conservation Service; and

(3)

take advantage of new technologies to enhance efficiency and effectiveness of program delivery to producers.

(b)

Implementation— On October 1, 2013, the Secretary shall make available to the Farm Service Agency to carry out this title $100,000,000.

Lineage

Jan 22, 2013viewing Introduced in Senate Mr. Reid (for himself, Ms. Stabenow, Mr. Durbin, Mr. Schumer, Mr. Johnson of South Dakota, Mr. Leahy, Mr. Baucus, Mr. Bennet, Mr. Brown, Mr. Tester, Mr. Casey, Mr. Harkin, Mr. Schatz, Ms. Heitkamp, Ms. Klobuchar, Mr. Coons, Mr. Donnelly, Mr. Levin, and Mr. Franken) introduced the following bill; which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry