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104th Congress                                            Rept. 104-462
                        HOUSE OF REPRESENTATIVES

 2d Session                                                      Part 1
_______________________________________________________________________


 
                   AGRICULTURAL MARKET TRANSITION ACT
_______________________________________________________________________


February 9, 1996.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______


Mr. Roberts, from the Committee on Agriculture, submitted the following

                              R E P O R T

                             together with

        MINORITY, DISSENTING, ADDITIONAL, AND SUPPLEMENTAL VIEWS

                        [To accompany H.R. 2854]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Agriculture, to whom was referred the bill 
(H.R. 2854) to modify the operation of certain agricultural 
programs, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.
  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Agricultural Market 
Transition Act''.
  (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.

            TITLE I--AGRICULTURAL MARKET TRANSITION PROGRAM

Sec. 101. Purpose.
Sec. 102. Definitions.
Sec. 103. Production flexibility contracts.
Sec. 104. Nonrecourse marketing assistance loans and loan deficiency 
payments.
Sec. 105. Payment limitations.
Sec. 106. Peanut program.
Sec. 107. Sugar program.
Sec. 108. Administration.
Sec. 109. Elimination of permanent price support authority.
Sec. 110. Effect of amendments.

                            TITLE II--DAIRY

          Subtitle A--Milk Price Support and Other Activities

Sec. 201. Milk price support program.
Sec. 202. Recourse loans for commercial processors of dairy products.
Sec. 203. Dairy export incentive program.
Sec. 204. Dairy promotion program.
Sec. 205. Fluid milk standards under milk marketing orders.
Sec. 206. Manufacturing allowance.
Sec. 207. Establishment of temporary Class I price and temporary Class 
I equalization pools.
Sec. 208. Establishment of temporary Class IV price and temporary Class 
IV equalization pool.
Sec. 209. Authority for establishment of standby pools.

          Subtitle B--Reform of Federal Milk Marketing Orders

Sec. 221. Issuance or amendment of Federal milk marketing orders to 
implement certain reforms.
Sec. 222. Reform process.
Sec. 223. Effect of failure to comply with reform process requirements.

                        TITLE III--CONSERVATION

Sec. 301. Conservation.

          TITLE IV--AGRICULTURAL PROMOTION AND EXPORT PROGRAMS

Sec. 401. Market promotion program.
Sec. 402. Export enhancement program.

                         TITLE V--MISCELLANEOUS

Sec. 501. Crop insurance.
Sec. 502. Collection and use of agricultural quarantine and inspection 
fees.
Sec. 503. Commodity Credit Corporation interest rate.
Sec. 504. Establishment of Office of Risk Management.
Sec. 505. Business Interruption Insurance Program.
Sec. 506. Continuation of options pilot program.

      TITLE VI--COMMISSION ON 21ST CENTURY PRODUCTION AGRICULTURE

Sec. 601. Establishment.
Sec. 602. Composition.
Sec. 603. Comprehensive review of past and future of production 
agriculture.
Sec. 604. Reports.
Sec. 605. Powers.
Sec. 606. Commission procedures.
Sec. 607. Personnel matters.
Sec. 608. Termination of Commission.

              TITLE VII--EXTENSION OF CERTAIN AUTHORITIES

Sec. 701. Extension of authority under Public Law 480.
Sec. 702. Extension of food for progress program.

            TITLE I--AGRICULTURAL MARKET TRANSITION PROGRAM

SEC. 101. PURPOSE.

  It is the purpose of this title--
          (1) to authorize the use of binding production flexibility 
        contracts between the United States and agricultural producers 
        to support farming certainty and flexibility while ensuring 
        continued compliance with farm conservation compliance plans 
        and wetland protection requirements;
          (2) to make nonrecourse marketing assistance loans and loan 
        deficiency available for certain crops;
          (3) to improve the operation of farm programs for peanuts and 
        sugar; and
          (4) to terminate price support authority under the 
        Agricultural Act of 1949.

SEC. 102. DEFINITIONS.

  In this title:
          (1) Considered planted.--The term ``considered planted'' 
        means acreage that is considered planted under title V of the 
        Agricultural Act of 1949 (7 U.S.C. 1461 et seq.) (as in effect 
        prior to the amendment made by section 109(b)(2)).
          (2) Contract.--The term ``contract'' means a production 
        flexibility contract entered into under section 103.
          (3) Contract acreage.--The term ``contract acreage'' means 1 
        or more crop acreage bases established for contract commodities 
        under title V of the Agricultural Act of 1949 (as in effect 
        prior to the amendment made by section 109(b)(2)) that would 
        have been in effect for the 1996 crop (but for the amendment 
        made by section 109(b)(2)).
          (4) Contract commodity.--The term ``contract commodity'' 
        means wheat, corn, grain sorghum, barley, oats, upland cotton, 
        and rice.
          (5) Contract payment.--The term ``contract payment'' means a 
        payment made under section 103 pursuant to a contract.
          (6) Corn.--The term ``corn'' means field corn.
          (7) Department.--The term ``Department'' means the United 
        States Department of Agriculture.
          (8) Farm program payment yield.--The term ``farm program 
        payment yield'' means the farm program payment yield 
        established for the 1995 crop of a contract commodity under 
        title V of the Agricultural Act of 1949 (as in effect prior to 
        the amendment made by section 109(b)(2)).
          (9) Loan commodity.--The term ``loan commodity'' means each 
        contract commodity, extra long staple cotton, and oilseeds.
          (10) Oilseed.--The term ``oilseed'' means a crop of soybeans, 
        sunflower seed, rapeseed, canola, safflower, flaxseed, mustard 
        seed, or, if designated by the Secretary, other oilseeds.
          (11) Person.--The term ``person'' means an individual, 
        partnership, firm, joint-stock company, corporation, 
        association, trust, estate, or State agency.
          (12) Producer.--
                  (A) In general.--The term ``producer'' means a person 
                who, as owner, landlord, tenant, or sharecropper, 
                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.--The term ``producer'' includes a 
                person growing hybrid seed under contract. In 
                determining the interest of a grower of hybrid seed in 
                a crop, the Secretary shall not take into consideration 
                the existence of a hybrid seed contract.
          (13) Program.--The term ``program'' means the agricultural 
        market transition program established under this title.
          (14) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.
          (15) State.--The term ``State'' means each of the several 
        States of the United States, the District of Columbia, the 
        Commonwealth of Puerto Rico, and any other territory or 
        possession of the United States.
          (16) United states.--The term ``United States'', when used in 
        a geographical sense, means all of the States.

SEC. 103. PRODUCTION FLEXIBILITY CONTRACTS.

  (a) Contracts Authorized.--
          (1) Offer and terms.--Beginning as soon as practicable after 
        the date of the enactment of this title, the Secretary shall 
        offer to enter into a contract with an eligible owner or 
        operator described in paragraph (2) on a farm containing 
        eligible farmland. Under the terms of a contract, the owner or 
        operator shall agree, in exchange for annual contract payments, 
        to comply with--
                  (A) the conservation plan for the farm prepared in 
                accordance with section 1212 of the Food Security Act 
                of 1985 (16 U.S.C. 3812);
                  (B) wetland protection requirements applicable to the 
                farm under subtitle C of title XII of the Act (16 
                U.S.C. 3821 et seq.); and
                  (C) the planting flexibility requirements of 
                subsection (j).
          (2) Eligible owners and operators described.--The following 
        persons shall be considered to be an owner or operator eligible 
        to enter into a contract:
                  (A) An owner of eligible farmland who assumes all of 
                the risk of producing a crop.
                  (B) An owner of eligible farmland who shares in the 
                risk of producing a crop.
                  (C) An operator of eligible farmland with a share-
                rent lease of the eligible farmland, regardless of the 
                length of the lease, if the owner enters into the same 
                contract.
                  (D) An operator of eligible farmland who cash rents 
                the eligible farmland under a lease expiring on or 
                after September 30, 2002, in which case the consent of 
                the owner is not required.
                  (E) An operator of eligible farmland who cash rents 
                the eligible farmland under a lease expiring before 
                September 30, 2002, if the owner consents to the 
                contract.
                  (F) An owner of eligible farmland who cash rents the 
                eligible farmland and the lease term expires before 
                September 30, 2002, but only if the actual operator of 
                the farm declines to enter into a contract. In the case 
                of an owner covered by this subparagraph, contract 
                payments shall not begin under a contract until the 
                fiscal year following the fiscal year in which the 
                lease held by the nonparticipating operator expires.
                  (G) An owner or operator described in any preceding 
                subparagraph of this paragraph regardless of whether 
                the owner or operator purchased catastrophic risk 
                protection for a fall-planted 1996 crop under section 
                508(b) of the Federal Crop Insurance Act (7 U.S.C. 
                1508(b)).
          (3) Tenants and sharecroppers.--In carrying out this section, 
        the Secretary shall provide adequate safeguards to protect the 
        interests of operators who are tenants and sharecroppers.
  (b) Elements.--
          (1) Time for contracting.--
                  (A) Deadline.--Except as provided in subparagraph 
                (B), the Secretary may not enter into a contract after 
                April 15, 1996.
                  (B) Conservation reserve lands.--
                          (i) In general.--At the beginning of each 
                        fiscal year, the Secretary shall allow an 
                        eligible owner or operator on a farm covered by 
                        a conservation reserve contract entered into 
                        under section 1231 of the Food Security Act of 
                        1985 (16 U.S.C. 3831) that terminates after the 
                        date specified in subparagraph (A) to enter 
                        into or expand a production flexibility 
                        contract to cover the contract acreage of the 
                        farm that was subject to the former 
                        conservation reserve contract.
                          (ii) Amount.--Contract payments made for 
                        contract acreage under this subparagraph shall 
                        be made at the rate and amount applicable to 
                        the annual contract payment level for the 
                        applicable crop.
          (2) Duration of contract.--
                  (A) Beginning date.--A contract shall begin with--
                          (i) the 1996 crop of a contract commodity; or
                          (ii) in the case of acreage that was subject 
                        to a conservation reserve contract described in 
                        paragraph (1)(B), the date the production 
                        flexibility contract was entered into or 
                        expanded to cover the acreage.
                  (B) Ending date.--A contract shall extend through the 
                2002 crop.
          (3) Estimation of contract payments.--At the time the 
        Secretary enters into a contract, the Secretary shall provide 
        an estimate of the minimum contract payments anticipated to be 
        made during at least the first fiscal year for which contract 
        payments will be made.
  (c) Eligible Farmland Described.--Land shall be considered to be 
farmland eligible for coverage under a contract only if the land has 
contract acreage attributable to the land and--
          (1) for at least 1 of the 1991 through 1995 crops, at least a 
        portion of the land was enrolled in the acreage reduction 
        program authorized for a crop of a contract commodity under 
        section 101B, 103B, 105B, or 107B of the Agricultural Act of 
        1949 (as in effect prior to the amendment made by section 
        109(b)(2)) or was considered planted;
          (2) was subject to a conservation reserve contract under 
        section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831) 
        whose term expired, or was voluntarily terminated, on or after 
        January 1, 1995; or
          (3) is released from coverage under a conservation reserve 
        contract by the Secretary during the period beginning on 
        January 1, 1995, and ending on the date specified in subsection 
        (b)(1)(A).
  (d) Time for Payment.--
          (1) In general.--An annual contract payment shall be made not 
        later than September 30 of each of fiscal years 1996 through 
        2002.
          (2) Advance payments.--
                  (A) Fiscal year 1996.--At the option of the owner or 
                operator, 50 percent of the contract payment for fiscal 
                year 1996 shall be made not later than June 15, 1996.
                  (B) Subsequent fiscal years.--At the option of the 
                owner or operator for fiscal year 1997 and each 
                subsequent fiscal year, 50 percent of the annual 
                contract payment shall be made on December 15.
  (e) Amounts Available for Contract Payments for Each Fiscal Year.--
          (1) In general.--The Secretary shall, to the maximum extent 
        practicable, expend on a fiscal year basis the following 
        amounts to satisfy the obligations of the Secretary under all 
        contracts:
                  (A) For fiscal year 1996, $5,570,000,000.
                  (B) For fiscal year 1997, $5,385,000,000.
                  (C) For fiscal year 1998, $5,800,000,000.
                  (D) For fiscal year 1999, $5,603,000,000.
                  (E) For fiscal year 2000, $5,130,000,000.
                  (F) For fiscal year 2001, $4,130,000,000.
                  (G) For fiscal year 2002, $4,008,000,000.
          (2) Allocation.--The amount made available for a fiscal year 
        under paragraph (1) shall be allocated as follows:
                  (A) For wheat, 26.26 percent.
                  (B) For corn, 46.22 percent.
                  (C) For grain sorghum, 5.11 percent.
                  (D) For barley, 2.16 percent.
                  (E) For oats, 0.15 percent.
                  (F) For upland cotton, 11.63 percent.
                  (G) For rice, 8.47 percent.
          (3) Adjustment.--The Secretary shall adjust the amounts 
        allocated for each contract commodity under paragraph (2) for a 
        particular fiscal year by--
                  (A) adding an amount equal to the sum of all 
                repayments of deficiency payments received under 
                section 114(a)(2) of the Agricultural Act of 1949 (as 
                in effect prior to the amendment made by section 
                109(b)(2)) for the commodity;
                  (B) to the maximum extent practicable, adding an 
                amount equal to the sum of all contract payments 
                withheld by the Secretary, at the request of an owner 
                or operator subject to a contract, as an offset against 
                repayments of deficiency payments otherwise required 
                under section 114(a)(2) of the Act (as so in effect) 
                for the commodity;
                  (C) adding an amount equal to the sum of all refunds 
                of contract payments received during the preceding 
                fiscal year under subsection (h) of this section for 
                the commodity; and
                  (D) subtracting an amount equal to the amount, if 
                any, necessary during that fiscal year to satisfy 
                payment requirements for the commodity under sections 
                103B, 105B, or 107B of the Agricultural Act of 1949 (as 
                in effect prior to the amendment made by section 
                109(b)(2)) for the 1994 and 1995 crop years.
          (4) Special adjustment to cover existing rice payment 
        requirements.--As soon as possible after the date of the 
        enactment of this Act, the Secretary shall determine the 
        amount, if any, necessary to satisfy remaining payment 
        requirements under section 101B of the Agricultural Act of 1949 
        (as in effect prior to the amendment made by section 109(b)(2)) 
        for the 1994 and 1995 crops of rice. The total amount 
        determined under this paragraph shall be deducted, in equal 
        amounts each fiscal year, from the amount allocated for rice 
        under paragraph (2)(G) for fiscal years after the fiscal year 
        in which the final remaining payments are made for rice.
  (f) Determination of Contract Payments.--
          (1) Individual payment quantity of contract commodities.--For 
        each contract, the payment quantity of a contract commodity for 
        each fiscal year shall be equal to the product of--
                  (A) 85 percent of the contract acreage; and
                  (B) the farm program payment yield.
          (2) Annual payment quantity of contract commodities.--The 
        payment quantity of each contract commodity covered by all 
        contracts for each fiscal year shall equal the sum of the 
        amounts calculated under paragraph (1) for each individual 
        contract.
          (3) Annual payment rate.--The payment rate for a contract 
        commodity for each fiscal year shall be equal to--
                  (A) the amount made available under subsection (e) 
                for the contract commodity for the fiscal year; divided 
                by
                  (B) the amount determined under paragraph (2) for the 
                fiscal year.
          (4) Annual payment amount.--The amount to be paid under a 
        contract in effect for each fiscal year with respect to a 
        contract commodity shall be equal to the product of--
                  (A) the payment quantity determined under paragraph 
                (1) with respect to the contract; and
                  (B) the payment rate in effect under paragraph (3).
          (5) Assignment of contract payments.--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 contract payments under this subsection. The 
        owner or operator making the assignment, or the assignee, shall 
        provide the Secretary with notice, in such manner as the 
        Secretary may require in the contract, of any assignment made 
        under this paragraph.
          (6) Sharing of contract payments.--The Secretary shall 
        provide for the sharing of contract payments among the owners 
        and operators subject to the contract on a fair and equitable 
        basis.
  (g) Payment Limitation.--The total amount of contract payments made 
to a person under a contract during any fiscal year may not exceed the 
payment limitations established under sections 1001 through 1001C of 
the Food Security Act of 1985 (7 U.S.C. 1308 through 1308-3).
  (h) Effect of Violation.--
          (1) Termination of contract.--Except as provided in paragraph 
        (2), if an owner or operator subject to a contract violates the 
        conservation plan for the farm containing eligible farmland 
        under the contract, wetland protection requirements applicable 
        to the farm, or the planting flexibility requirements of 
        subsection (j), the Secretary shall terminate the contract with 
        respect to the owner or operator on each farm in which the 
        owner or operator has an interest. On the termination, the 
        owner or operator shall forfeit all rights to receive future 
        contract payments on each farm in which the owner or operator 
        has an interest and shall refund to the Secretary all contract 
        payments received by the owner or operator during the period of 
        the violation, together with interest on the contract payments 
        as determined by the Secretary.
          (2) Refund or adjustment.--If the Secretary determines that a 
        violation does not warrant termination of the contract under 
        paragraph (1), the Secretary may require the owner or operator 
        subject to the contract--
                  (A) to refund to the Secretary that part of the 
                contract payments received by the owner or operator 
                during the period of the violation, together with 
                interest on the contract payments as determined by the 
                Secretary; or
                  (B) to accept a reduction in the amount of future 
                contract payments that is proportionate to the severity 
                of the violation, as determined by the Secretary.
          (3) Foreclosure.--An owner or operator subject to a contract 
        may not be required to make repayments to the Secretary of 
        amounts received under the contract if the contract acreage has 
        been foreclosed on and the Secretary determines that forgiving 
        the repayments is appropriate in order to provide fair and 
        equitable treatment. This paragraph shall not void the 
        responsibilities of such an owner or operator under the 
        contract if the owner or operator continues or resumes 
        operation, or control, of the contract acreage. On the 
        resumption of operation or control over the contract acreage by 
        the owner or operator, the provisions of the contract in effect 
        on the date of the foreclosure shall apply.
          (4) Review.--A determination of the Secretary under this 
        subsection shall be considered to be an adverse decision for 
        purposes of the availability of administrative review of the 
        determination.
  (i) Transfer of Interest in Lands Subject to Contract.--
          (1) Effect of transfer.--Except as provided in paragraph (2), 
        the transfer by an owner or operator subject to a contract of 
        the right and interest of the owner or operator in the contract 
        acreage shall result in the termination of the contract with 
        respect to the acreage, effective on the date of the transfer, 
        unless the transferee of the acreage agrees with the Secretary 
        to assume all obligations of the contract. At the request of 
        the transferee, the Secretary may modify the contract if the 
        modifications are consistent with the objectives of this 
        section as determined by the Secretary.
          (2) Exception.--If an owner or operator who is entitled to a 
        contract payment dies, becomes incompetent, or is otherwise 
        unable to receive the contract payment, the Secretary shall 
        make the payment, in accordance with regulations prescribed by 
        the Secretary.
  (j) Planting Flexibility.--
          (1) Permitted crops.--Subject to paragraph (2), any commodity 
        or crop may be planted on contract acreage on a farm.
          (2) Limitations.--
                  (A) Haying and grazing.--
                          (i) Time limitations.--Haying and grazing on 
                        land exceeding 15 percent of the contract 
                        acreage on a farm as provided in clause (iii) 
                        shall be permitted, except during any 
                        consecutive 5-month period between April 1 and 
                        October 31 that is determined by the State 
                        committee established under section 8(b) of the 
                        Soil Conservation and Domestic Allotment Act (6 
                        U.S.C. 590h(b)) for a State. In the case of a 
                        natural disaster, the Secretary may permit 
                        unlimited haying and grazing on the contract 
                        acreage of a farm.
                          (ii) Contract commodities.--Contract acreage 
                        planted to a contract commodity for harvest may 
                        be hayed or grazed at any time without 
                        limitation.
                          (iii) Haying and grazing limitation on 
                        portion or contract acreage.--Unlimited haying 
                        and grazing shall be permitted on not more than 
                        15 percent of the contract acreage on a farm.
                  (B) Alfalfa.--Alfalfa may be grown on contract 
                acreage in excess of the acreage limitation in 
                subparagraph (A)(iii) and without regard to the time 
                limitation in subparagraph (A)(i), except that each 
                contract acre on a farm that is planted for harvest to 
                alfalfa in excess of 15 percent of the total contract 
                acreage on the farm shall be ineligible for contract 
                payments.
                  (C) Fruits and vegetables.--
                          (i) In general.--The planting for harvest of 
                        fruits and vegetables shall be prohibited on 
                        contract acreage, except in any region in which 
                        there is a history of double-cropping, as 
                        determined by the Secretary.
                          (ii) Unrestricted vegetables.--
                        Notwithstanding clause (i), lentils, mung 
                        beans, and dry peas may be planted for harvest 
                        without limitation on contract acreage.

SEC. 104. NONRECOURSE MARKETING ASSISTANCE LOANS AND LOAN DEFICIENCY 
                    PAYMENTS.

  (a) Availability of Marketing Assistance Loans.--
          (1) Nonrecourse loans available.--For each of the 1996 
        through 2002 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. The 
        loans shall be made under terms and conditions that are 
        prescribed by the Secretary and at the loan rate established 
        under subsection (b) for the loan commodity.
          (2) Eligible production.--The following production shall be 
        eligible for a marketing assistance loan under paragraph (1):
                  (A) In the case of a marketing assistance loan for a 
                contract commodity, any production by a producer who 
                has entered into a production flexibility contract.
                  (B) In the case of a marketing assistance loan for 
                extra long staple cotton and oilseeds, any production.
          (3) Recourse loans for high moisture feed grains.--
                  (A) Recourse loans available.--For each of the 1996 
                through 2002 crops of corn and grain sorghum, the 
                Secretary shall make available recourse loans, as 
                determined by the Secretary, to producers on a farm 
                who--
                          (i) normally harvest all or a portion of 
                        their crop of corn or grain sorghum in a high 
                        moisture state;
                          (ii) present--
                                  (I) certified scale tickets from an 
                                inspected, certified commercial scale, 
                                including licensed warehouses, 
                                feedlots, feed mills, distilleries, or 
                                other similar entities approved by the 
                                Secretary, pursuant to regulations 
                                issued by the Secretary; or
                                  (II) present field or other physical 
                                measurements of the standing or stored 
                                crop in regions of the country, 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;
                          (iii) certify that they were the owners of 
                        the feed grain at the time of delivery to, and 
                        that the quantity to be placed under loan under 
                        this paragraph 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 such facilities maintained by 
                        the users of corn and grain sorghum in a high 
                        moisture state; and
                          (iv) comply with deadlines established by the 
                        Secretary for harvesting the corn or grain 
                        sorghum and submit applications for loans under 
                        this paragraph within deadlines established by 
                        the Secretary.
                  (B) Eligibility of acquired feed grains.--Loans under 
                this paragraph 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--
                          (i) the acreage of the corn or grain sorghum 
                        in a high moisture state harvested on the 
                        producer's farm; by
                          (ii) the lower of the farm program payment 
                        yield 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.
                  (C) High moisture state defined.--In this paragraph, 
                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 paragraph 
                (1).
  (b) Loan Rates.--
          (1) Wheat.--
                  (A) Loan rate.--Subject to subparagraph (B), the loan 
                rate for a marketing assistance loan under subsection 
                (a)(1) for wheat shall be--
                          (i) not less than 85 percent of the simple 
                        average price received by producers of wheat, 
                        as determined by the Secretary, during the 
                        marketing years for the immediately preceding 5 
                        crops of wheat, excluding the year in which the 
                        average price was the highest and the year in 
                        which the average price was the lowest in the 
                        period; but
                          (ii) not more than $2.58 per bushel.
                  (B) Stocks to use ratio adjustment.--If the Secretary 
                estimates for any marketing year that the ratio of 
                ending stocks of wheat to total use for the marketing 
                year will be--
                          (i) equal to or greater than 30 percent, the 
                        Secretary may reduce the loan rate for wheat 
                        for the corresponding crop by an amount not to 
                        exceed 10 percent in any year;
                          (ii) less than 30 percent but not less than 
                        15 percent, the Secretary may reduce the loan 
                        rate for wheat for the corresponding crop by an 
                        amount not to exceed 5 percent in any year; or
                          (iii) less than 15 percent, the Secretary may 
                        not reduce the loan rate for wheat for the 
                        corresponding crop.
                  (C) No effect on future years.--Any reduction in the 
                loan rate for wheat under subparagraph (B) shall not be 
                considered in determining the loan rate for wheat for 
                subsequent years.
          (2) Feed grains.--
                  (A) Loan rate for corn.--Subject to subparagraph (B), 
                the loan rate for a marketing assistance loan under 
                subsection (a)(1) for corn shall be--
                          (i) not less than 85 percent of the simple 
                        average price received by producers of corn, as 
                        determined by the Secretary, during the 
                        marketing years for the immediately preceding 5 
                        crops of corn, excluding the year in which the 
                        average price was the highest and the year in 
                        which the average price was the lowest in the 
                        period; but
                          (ii) not more than $1.89 per bushel.
                  (B) Stocks to use ratio adjustment.--If the Secretary 
                estimates for any marketing year that the ratio of 
                ending stocks of corn to total use for the marketing 
                year will be--
                          (i) equal to or greater than 25 percent, the 
                        Secretary may reduce the loan rate for corn for 
                        the corresponding crop by an amount not to 
                        exceed 10 percent in any year;
                          (ii) less than 25 percent but not less than 
                        12.5 percent, the Secretary may reduce the loan 
                        rate for corn for the corresponding crop by an 
                        amount not to exceed 5 percent in any year; or
                          (iii) less than 12.5 percent the Secretary 
                        may not reduce the loan rate for corn for the 
                        corresponding crop.
                  (C) No effect on future years.--Any reduction in the 
                loan rate for corn under subparagraph (B) shall not be 
                considered in determining the loan rate for corn for 
                subsequent years.
                  (D) Other feed grains.--The loan rate for a marketing 
                assistance loan under subsection (a)(1) for grain 
                sorghum, barley, and oats, respectively, shall be 
                established at such level as the Secretary determines 
                is fair and reasonable in relation to the rate that 
                loans are made available for corn, taking into 
                consideration the feeding value of the commodity in 
                relation to corn.
          (3) Upland cotton.--
                  (A) Loan rate.--Subject to subparagraph (B), the loan 
                rate for a marketing assistance loan under subsection 
                (a)(1) for upland cotton shall be established by the 
                Secretary at such loan rate, per pound, as will reflect 
                for the base quality of upland cotton, as determined by 
                the Secretary, at average locations in the United 
                States a rate that is not less than the smaller of--
                          (i) 85 percent of the average price (weighted 
                        by market and month) of the base quality of 
                        cotton as quoted in the designated United 
                        States spot markets during 3 years of the 5-
                        year period ending July 31 in the year in which 
                        the loan rate is announced, excluding the year 
                        in which the average price was the highest and 
                        the year in which the average price was the 
                        lowest in the period; or
                          (ii) 90 percent of the average, for the 15-
                        week period beginning July 1 of the year in 
                        which the loan rate is announced, of the 5 
                        lowest-priced growths of the growths quoted for 
                        Middling 1\3/32\-inch cotton C.I.F. Northern 
                        Europe (adjusted downward by the average 
                        difference during the period April 15 through 
                        October 15 of the year in which the loan is 
                        announced between the average Northern European 
                        price quotation of such quality of cotton and 
                        the market quotations in the designated United 
                        States spot markets for the base quality of 
                        upland cotton), as determined by the Secretary.
                  (B) Limitations.--The loan rate for a marketing 
                assistance loan for upland cotton shall not be less 
                than $0.50 per pound or more than $0.5192 per pound.
          (4) Extra long staple cotton.--The loan rate for a marketing 
        assistance loan under subsection (a)(1) for extra long staple 
        cotton shall be--
                  (A) not less than 85 percent of the simple average 
                price received by producers of extra long staple 
                cotton, as determined by the Secretary, during 3 years 
                of the 5 previous marketing years, excluding the year 
                in which the average price was the highest and the year 
                in which the average price was the lowest in the 
                period; but
                  (B) not more than $0.7965 per pound.
          (5) Rice.--The loan rate for a marketing assistance loan 
        under subsection (a)(1) for rice shall be $6.50 per 
        hundredweight.
          (6) Oilseeds.--
                  (A) Soybeans.--The loan rate for a marketing 
                assistance loan under subsection (a)(1) for soybeans 
                shall be $4.92 per bushel.
                  (B) Sunflower seed, canola, rapeseed, safflower, 
                mustard seed, and flaxseed.--The loan rates for a 
                marketing assistance loan under subsection (a)(1) for 
                sunflower seed, canola, rapeseed, safflower, mustard 
                seed, and flaxseed, individually, shall be $0.087 per 
                pound.
                  (C) Other oilseeds.--The loan rates for a marketing 
                assistance loan under subsection (a)(1) for other 
                oilseeds shall be established at such level as the 
                Secretary determines is fair and reasonable in relation 
                to the loan rate available for soybeans, except in no 
                event shall the rate for the oilseeds (other than 
                cottonseed) be less than the rate established for 
                soybeans on a per-pound basis for the same crop.
  (c) Term of Loan.--In the case of each loan commodity (other than 
upland cotton or extra long staple cotton), a marketing assistance loan 
under subsection (a)(1) 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. 
A marketing assistance loan for upland cotton or extra long staple 
cotton shall have a term of 10 months beginning on the first day of the 
first month after the month in which the loan is made. The Secretary 
may not extend the term of a marketing assistance loan for any loan 
commodity.
  (d) Repayment.--
          (1) Repayment rates generally.--The Secretary shall permit 
        producers to repay a marketing assistance loan under subsection 
        (a)(1) for a loan commodity (other than extra long staple 
        cotton) at a level that is the lesser of--
                  (A) the loan rate established for the commodity under 
                subsection (b); or
                  (B) the prevailing world market price for the 
                commodity (adjusted to United States quality and 
                location), as determined by the Secretary.
          (2) Additional repayment rates for wheat, feed grains, and 
        oilseeds.--In the case of a marketing assistance loan under 
        subsection (a)(1) for wheat, corn, grain sorghum, barley, oats, 
        or oilseeds, the Secretary shall also permit a producer to 
        repay the loan at such level as 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; and
                  (D) allow the commodity produced in the United States 
                to be marketed freely and competitively, both 
                domestically and internationally.
          (3) 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 
        subsection (b), plus interest (as determined by the Secretary).
          (4) Prevailing world market price.--For purposes of paragraph 
        (1) and subsection (f), the Secretary shall prescribe by 
        regulation--
                  (A) a formula to determine the prevailing world 
                market price for each loan commodity, adjusted to 
                United States quality and location; and
                  (B) a mechanism by which the Secretary shall announce 
                periodically the prevailing world market price for each 
                loan commodity.
          (5) Adjustment of prevailing world market price for upland 
        cotton.--
                  (A) In general.--During the period ending July 31, 
                2003, the prevailing world market price for upland 
                cotton (adjusted to United States quality and location) 
                established under paragraph (4) shall be further 
                adjusted if--
                          (i) the adjusted prevailing world market 
                        price is less than 115 percent of the loan rate 
                        for upland cotton established under subsection 
                        (b), as determined by the Secretary; and
                          (ii) the Friday through Thursday average 
                        price quotation for the lowest-priced United 
                        States growth as quoted for Middling (M) 1\3/
                        32\-inch cotton delivered C.I.F. Northern 
                        Europe is greater than the Friday through 
                        Thursday average price of the 5 lowest-priced 
                        growths of upland cotton, as quoted for 
                        Middling (M) 1\3/32\-inch cotton, delivered 
                        C.I.F. Northern Europe (referred to in this 
                        subsection as the ``Northern Europe price'').
                  (B) Further adjustment.--Except as provided in 
                subparagraph (C), the adjusted prevailing world market 
                price for upland cotton shall be further adjusted on 
                the basis of some or all of the following data, as 
                available:
                          (i) The United States share of world exports.
                          (ii) The current level of cotton export sales 
                        and cotton export shipments.
                          (iii) Other data determined by the Secretary 
                        to be relevant in establishing an accurate 
                        prevailing world market price for upland cotton 
                        (adjusted to United States quality and 
                        location).
                  (C) Limitation on further adjustment.--The adjustment 
                under subparagraph (B) may not exceed the difference 
                between--
                          (i) the Friday through Thursday average price 
                        for the lowest-priced United States growth as 
                        quoted for Middling 1\3/32\-inch cotton 
                        delivered C.I.F. Northern Europe; and
                          (ii) the Northern Europe price.
  (e) Loan Deficiency Payments.--
          (1) Availability.--Except as provided in paragraph (4), the 
        Secretary may make loan deficiency payments available to 
        producers who, although eligible to obtain a marketing 
        assistance loan under subsection (a)(1) with respect to a loan 
        commodity, agree to forgo obtaining the loan for the commodity 
        in return for payments under this subsection.
          (2) Computation.--A loan deficiency payment under this 
        subsection shall be computed by multiplying--
                  (A) the loan payment rate determined under paragraph 
                (3) for the loan commodity; by
                  (B) the quantity of the loan commodity that the 
                producers on a farm are eligible to place under loan 
                but for which the producers forgo obtaining the loan in 
                return for payments under this subsection.
          (3) Loan payment rate.--For purposes of this subsection, the 
        loan payment rate shall be the amount by which--
                  (A) the loan rate established under subsection (b) 
                for the loan commodity; exceeds
                  (B) the rate at which a loan for the commodity may be 
                repaid under subsection (d).
          (4) Exception for extra long staple cotton.--This subsection 
        shall not apply with respect to extra long staple cotton.
  (f) Special Marketing Loan Provisions for Upland Cotton.--
          (1) Cotton user marketing certificates.--
                  (A) Issuance.--Subject to subparagraph (D), during 
                the period ending July 31, 2003, the Secretary shall 
                issue marketing certificates or cash payments to 
                domestic users and exporters for documented purchases 
                by domestic users and sales for export by exporters 
                made in the week following a consecutive 4-week period 
                in which--
                          (i) the Friday through Thursday average price 
                        quotation for the lowest-priced United States 
                        growth, as quoted for Middling (M) 1\3/32\-inch 
                        cotton, delivered C.I.F. Northern Europe 
                        exceeds the Northern Europe price by more than 
                        1.25 cents per pound; and
                          (ii) the prevailing world market price for 
                        upland cotton (adjusted to United States 
                        quality and location) does not exceed 130 
                        percent of the loan rate for upland cotton 
                        established under subsection (b).
                  (B) Value of certificates or payments.--The value of 
                the marketing certificates or cash payments shall be 
                based on the amount of the difference (reduced by 1.25 
                cents per pound) in the prices during the 4th week of 
                the consecutive 4-week period multiplied by the 
                quantity of upland cotton included in the documented 
                sales.
                  (C) Redemption, marketing, or exchange.--The 
                Secretary shall establish procedures to assist persons 
                receiving marketing certificates under this paragraph 
                in the redemption of certificates for cash, or in the 
                marketing or exchange of certificates for agricultural 
                commodities owned by the Commodity Credit Corporation, 
                in such manner and at such price levels as the 
                Secretary determines will best effectuate the purposes 
                of the marketing certificates. Any price restrictions 
                that may otherwise apply to the disposition of 
                agricultural commodities by the Commodity Credit 
                Corporation shall not apply to the redemption of 
                certificates under this paragraph.
                  (D) Exception.--The Secretary shall not issue 
                marketing certificates or cash payments under 
                subparagraph (A) if, for the immediately preceding 
                consecutive 10-week period, the Friday through Thursday 
                average price quotation for the lowest priced United 
                States growth, as quoted for Middling (M) 1\3/32\-inch 
                cotton, delivered C.I.F. Northern Europe, adjusted for 
                the value of any certificate issued under this 
                paragraph, exceeds the Northern Europe price by more 
                than 1.25 cents per pound.
                  (E) Limitation on expenditures.--Total expenditures 
                under this paragraph shall not exceed $701,000,000 
                during fiscal years 1996 through 2002.
          (2) Special import quota.--
                  (A) Establishment.--The President shall carry out an 
                import quota program that provides that, during the 
                period ending July 31, 2003, whenever the Secretary 
                determines and announces that for any consecutive 10-
                week period, the Friday through Thursday average price 
                quotation for the lowest-priced United States growth, 
                as quoted for Middling (M) 1\3/32\-inch cotton, 
                delivered C.I.F. Northern Europe, adjusted for the 
                value of any certificates issued under paragraph (1), 
                exceeds the Northern Europe price by more than 1.25 
                cents per pound, there shall immediately be in effect a 
                special import quota.
                  (B) Quantity.--The quota shall be equal to 1 week's 
                consumption of upland cotton by domestic mills at the 
                seasonally adjusted average rate of the most recent 3 
                months for which data are available.
                  (C) Application.--The quota shall apply to upland 
                cotton purchased not later than 90 days after the date 
                of the Secretary's announcement under subparagraph (A) 
                and entered into the United States not later than 180 
                days after the date.
                  (D) Overlap.--A special quota period may be 
                established that overlaps any existing quota period if 
                required by subparagraph (A), except that a special 
                quota period may not be established under this 
                paragraph if a quota period has been established under 
                subsection (g).
                  (E) Preferential tariff treatment.--The quantity 
                under a special import quota shall be considered to be 
                an in-quota quantity for purposes of--
                          (i) section 213(d) of the Caribbean Basin 
                        Economic Recovery Act (19 U.S.C. 2703(d));
                          (ii) section 204 of the Andean Trade 
                        Preference Act (19 U.S.C. 3203);
                          (iii) section 503(d) of the Trade Act of 1974 
                        (19 U.S.C. 2463(d)); and
                          (iv) General Note 3(a)(iv) to the Harmonized 
                        Tariff Schedule.
                  (F) Definition.--In this paragraph, the term 
                ``special import quota'' means a quantity of imports 
                that is not subject to the over-quota tariff rate of a 
                tariff-rate quota.
  (g) Limited Global Import Quota for Upland Cotton.--
          (1) In general.--The President shall carry out an import 
        quota program that provides that whenever the Secretary 
        determines and announces that the average price of the base 
        quality of upland cotton, as determined by the Secretary, in 
        the designated spot markets for a month exceeded 130 percent of 
        the average price of such quality of cotton in the markets for 
        the preceding 36 months, notwithstanding any other provision of 
        law, there shall immediately be in effect a limited global 
        import quota subject to the following conditions:
                  (A) Quantity.--The quantity of the quota shall be 
                equal to 21 days of domestic mill consumption of upland 
                cotton at the seasonally adjusted average rate of the 
                most recent 3 months for which data are available.
                  (B) Quantity if prior quota.--If a quota has been 
                established under this subsection during the preceding 
                12 months, the quantity of the quota next established 
                under this subsection shall be the smaller of 21 days 
                of domestic mill consumption calculated under 
                subparagraph (A) or the quantity required to increase 
                the supply to 130 percent of the demand.
                  (C) Preferential tariff treatment.--The quantity 
                under a limited global import quota shall be considered 
                to be an in-quota quantity for purposes of--
                          (i) section 213(d) of the Caribbean Basin 
                        Economic Recovery Act (19 U.S.C. 2703(d));
                          (ii) section 204 of the Andean Trade 
                        Preference Act (19 U.S.C. 3203);
                          (iii) section 503(d) of the Trade Act of 1974 
                        (19 U.S.C. 2463(d)); and
                          (iv) General Note 3(a)(iv) to the Harmonized 
                        Tariff Schedule.
                  (D) Definitions.--In this subsection:
                          (i) Supply.--The term ``supply'' means, using 
                        the latest official data of the Bureau of the 
                        Census, the Department of Agriculture, and the 
                        Department of the Treasury--
                                  (I) the carry-over of upland cotton 
                                at the beginning of the marketing year 
                                (adjusted to 480-pound bales) in which 
                                the quota is established;
                                  (II) production of the current crop; 
                                and
                                  (III) imports to the latest date 
                                available during the marketing year.
                          (ii) Demand.--The term ``demand'' means--
                                  (I) the average seasonally adjusted 
                                annual rate of domestic mill 
                                consumption in the most recent 3 months 
                                for which data are available; and
                                  (II) the larger of--
                                          (aa) average exports of 
                                        upland cotton during the 
                                        preceding 6 marketing years; or
                                          (bb) cumulative exports of 
                                        upland cotton plus outstanding 
                                        export sales for the marketing 
                                        year in which the quota is 
                                        established.
                          (iii) Limited global import quota.--The term 
                        ``limited global import quota'' means a 
                        quantity of imports that is not subject to the 
                        over-quota tariff rate of a tariff-rate quota.
                  (E) Quota entry period.--When a quota is established 
                under this subsection, cotton may be entered under the 
                quota during the 90-day period beginning on the date 
                the quota is established by the Secretary.
          (2) No overlap.--Notwithstanding paragraph (1), a quota 
        period may not be established that overlaps an existing quota 
        period or a special quota period established under subsection 
        (f)(2).
  (h) Source of Loans.--
          (1) In general.--The Secretary shall provide the loans 
        authorized by this section and the Agricultural Adjustment Act 
        of 1938 (7 U.S.C. 1281 et seq.) through the Commodity Credit 
        Corporation and other means available to the Secretary.
          (2) Processors.--Whenever any loan or surplus removal 
        operation for any agricultural commodity is carried out through 
        purchases from or loans or payments to processors, the 
        Secretary shall, to the extent practicable, obtain from the 
        processors such assurances as the Secretary considers adequate 
        that the producers of the commodity have received or will 
        receive maximum benefits from the loan or surplus removal 
        operation.
  (i) Adjustments of Loans.--
          (1) In general.--The Secretary may make appropriate 
        adjustments in the loan levels for any commodity for 
        differences in grade, type, quality, location, and other 
        factors.
          (2) Loan level.--The adjustments shall, to the maximum extent 
        practicable, be made in such 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 as provided in this section or the Agricultural 
        Adjustment Act of 1938 (7 U.S.C. 1281 et seq.).
  (j) Personal Liability of Producers for Deficiencies.--
          (1) In general.--Except as provided in paragraph (2), no 
        producer shall be personally liable for any deficiency arising 
        from the sale of the collateral securing any nonrecourse loan 
        made under this section or the Agricultural Adjustment Act of 
        1938 (7 U.S.C. 1281 et seq.) unless the loan was obtained 
        through a fraudulent representation by the producer.
          (2) Limitations.--Paragraph (1) shall not prevent the 
        Commodity Credit Corporation or the Secretary from requiring a 
        producer to assume liability for--
                  (A) a deficiency in the grade, quality, or quantity 
                of a commodity stored on a farm or delivered by the 
                producer;
                  (B) a failure to properly care for and preserve a 
                commodity; or
                  (C) a failure or refusal to deliver a commodity in 
                accordance with a program established under this 
                section or the Agricultural Adjustment Act of 1938.
          (3) Acquisition of collateral.--The Secretary may include in 
        a contract for a nonrecourse loan made under this section or 
        the Agricultural Adjustment Act of 1938 a provision that 
        permits the Commodity Credit Corporation, on and after the 
        maturity of the loan, to acquire title to the unredeemed 
        collateral without obligation to pay for any market value that 
        the collateral may have in excess of the loan indebtedness.
          (4) Sugarcane and sugar beets.--A security interest obtained 
        by the Commodity Credit Corporation as a result of the 
        execution of a security agreement by the processor of sugarcane 
        or sugar beets shall be superior to all statutory and common 
        law liens on raw cane sugar and refined beet sugar in favor of 
        the producers of sugarcane and sugar beets and all prior 
        recorded and unrecorded liens on the crops of sugarcane and 
        sugar beets from which the sugar was derived.
  (k) Commodity Credit Corporation Sales Price Restrictions.--
          (1) In general.--The Commodity Credit Corporation may sell 
        any commodity owned or controlled by the Corporation at any 
        price that the Secretary determines will maximize returns to 
        the Corporation.
          (2) Nonapplication of sales price restrictions.--Paragraph 
        (1) shall not apply to--
                  (A) a sale for a new or byproduct use;
                  (B) a sale of peanuts or oilseeds for the extraction 
                of oil;
                  (C) a sale for seed or feed if the sale will not 
                substantially impair any loan program;
                  (D) a sale of a commodity that has substantially 
                deteriorated in quality or as to which there is a 
                danger of loss or waste through deterioration or 
                spoilage;
                  (E) a sale for the purpose of establishing a claim 
                arising out of a contract or against a person who has 
                committed fraud, misrepresentation, or other wrongful 
                act with respect to the commodity;
                  (F) a sale for export, as determined by the 
                Corporation; and
                  (G) a sale for other than a primary use.
          (3) Presidential disaster areas.--
                  (A) In general.--Notwithstanding paragraph (1), on 
                such terms and conditions as the Secretary may consider 
                in the public interest, the Corporation may make 
                available any commodity or product owned or controlled 
                by the Corporation for use in relieving distress--
                          (i) in any area in the United States 
                        (including the Virgin Islands) declared by the 
                        President to be an acute distress area because 
                        of unemployment or other economic cause, if the 
                        President finds that the use will not displace 
                        or interfere with normal marketing of 
                        agricultural commodities; and
                          (ii) in connection with any major disaster 
                        determined by the President to warrant 
                        assistance by the Federal Government under the 
                        Robert T. Stafford Disaster Relief and 
                        Emergency Assistance Act (42 U.S.C. 5121 et 
                        seq.).
                  (B) Costs.--Except on a reimbursable basis, the 
                Corporation shall not bear any costs in connection with 
                making a commodity available under subparagraph (A) 
                beyond the cost of the commodity to the Corporation 
                incurred in--
                          (i) the storage of the commodity; and
                          (ii) the handling and transportation costs in 
                        making delivery of the commodity to designated 
                        agencies at 1 or more central locations in each 
                        State or other area.
          (4) Efficient operations.--Paragraph (1) shall not apply to 
        the sale of a commodity the disposition of which is desirable 
        in the interest of the effective and efficient conduct of the 
        operations of the Corporation because of the small quantity of 
        the commodity involved, or because of the age, location, or 
        questionable continued storability of the commodity.

SEC. 105. PAYMENT LIMITATIONS.

  (a) In General.--Section 1001 of the Food Security Act of 1985 (7 
U.S.C. 1308) is amended by striking paragraphs (1) through (4) and 
inserting the following:
          ``(1) Limitation on payments under production flexibility 
        contracts.--The total amount of contract payments made under 
        section 103 of the Agricultural Market Transition Act to a 
        person under 1 or more production flexibility contracts entered 
        into under the section during any fiscal year may not exceed 
        $40,000.
          ``(2) Limitation on marketing loan gains and loan deficiency 
        payments.--For each of the 1996 through 2002 crops of loan 
        commodities, the total amount of payments specified in 
        paragraph (3) that a person shall be entitled to receive under 
        section 104 of the Agricultural Market Transition Act for one 
        or more loan commodities may not exceed $75,000.
          ``(3) Description of payments subject to limitation.--The 
        payments referred to in paragraph (2) are the following:
                  ``(A) Any gain realized by a producer from repaying a 
                marketing assistance loan for a crop of any loan 
                commodity at a lower level than the original loan rate 
                established for the loan commodity under section 104(b) 
                of the Agricultural Market Transition Act.
                  ``(B) Any loan deficiency payment received for a loan 
                commodity under section 104(e) of the Act.
          ``(4) Definitions.--In this title, the terms `contract 
        payment' and `loan commodity' have the meaning given those 
        terms in section 102 of the Agricultural Market Transition 
        Act.''.
  (b) Conforming Amendments.--
          (1) Section 1001A of the Food Security Act of 1985 (7 U.S.C. 
        1308-1) is amended--
                  (A) in subsection (a)(1), by striking ``under the 
                Agricultural Act of 1949 (7 U.S.C. 1421 et seq.)''; and
                  (B) in subsection (b)(1), by striking ``under the 
                Agricultural Act of 1949''.
          (2) Section 1001C(a) of the Act (7 U.S.C. 1308-3(a)) is 
        amended--
                  (A) by striking ``For each of the 1991 through 1997 
                crops, any'' and inserting ``Any'';
                  (B) by striking ``production adjustment payments, 
                price support program loans, payments, or benefits made 
                available under the Agricultural Act of 1949 (7 U.S.C. 
                1421 et seq.),'' and inserting ``loans or payments made 
                available under title I of the Agricultural Market 
                Transition Act,''; and
                  (C) by striking ``during the 1989 through 1997 crop 
                years''.

SEC. 106. PEANUT PROGRAM.

  (a) Quota Peanuts.--
          (1) Availability of loans.--The Secretary shall make 
        nonrecourse loans available to producers of quota peanuts.
          (2) Loan rate.--The national average quota loan rate for 
        quota peanuts shall be $610 per ton.
          (3) Inspection, handling, or storage.--The loan amount may 
        not be reduced by the Secretary by any deductions for 
        inspection, handling, or storage.
          (4) Location and other factors.--The Secretary may make 
        adjustments in the loan rate for quota peanuts for location of 
        peanuts and such other factors as are authorized by section 411 
        of the Agricultural Adjustment Act of 1938.
          (5) Offers from handlers.--In the case of any producer who 
        had an offer available from a handler to purchase quota 
        peanuts, for delivery within the same county or a contiguous 
        county, at a price equal to or greater than the applicable 
        quota support rate, the Secretary shall reduce the support rate 
        by 5 percent for the peanuts that were subject to the offer.
  (b) Additional Peanuts.--
          (1) In general.--The Secretary shall make nonrecourse loans 
        available to producers of additional peanuts at such rates as 
        the Secretary finds appropriate, taking into consideration the 
        demand for peanut oil and peanut meal, expected prices of other 
        vegetable oils and protein meals, and the demand for peanuts in 
        foreign markets.
          (2) Announcement.--The Secretary shall announce the loan rate 
        for additional peanuts of each crop not later than February 15 
        preceding the marketing year for the crop for which the loan 
        rate is being determined.
  (c) Area Marketing Associations.--
          (1) Warehouse storage loans.--
                  (A) In general.--In carrying out subsections (a) and 
                (b), the Secretary shall make warehouse storage loans 
                available in each of the producing areas (described in 
                section 1446.95 of title 7 of the Code of Federal 
                Regulations (January 1, 1989)) to a designated area 
                marketing association of peanut producers that is 
                selected and approved by the Secretary and that is 
                operated primarily for the purpose of conducting the 
                loan activities. The Secretary may not make warehouse 
                storage loans available to any cooperative that is 
                engaged in operations or activities concerning peanuts 
                other than those operations and activities specified in 
                this section and section 358e of the Agricultural 
                Adjustment Act of 1938 (7 U.S.C. 1359a).
                  (B) Administrative and supervisory activities.--An 
                area marketing association shall be used in 
                administrative and supervisory activities relating to 
                loans and marketing activities under this section and 
                section 358e of the Agricultural Adjustment Act of 1938 
                (7 U.S.C. 1359a).
                  (C) Association costs.--Loans made to the association 
                under this paragraph shall include such costs as the 
                area marketing association reasonably may incur in 
                carrying out the responsibilities, operations, and 
                activities of the association under this section and 
                section 358e of the Agricultural Adjustment Act of 1938 
                (7 U.S.C. 1359a).
          (2) Pools for quota and additional peanuts.--
                  (A) In general.--The Secretary shall require that 
                each area marketing association establish pools and 
                maintain complete and accurate records by area and 
                segregation for quota peanuts handled under loan and 
                for additional peanuts placed under loan, except that 
                separate pools shall be established for Valencia 
                peanuts produced in New Mexico. Bright hull and dark 
                hull Valencia peanuts shall be considered as separate 
                types for the purpose of establishing the pools.
                  (B) Net gains.--Net gains on peanuts in each pool, 
                unless otherwise approved by the Secretary, shall be 
                distributed only to producers who placed peanuts in the 
                pool and shall be distributed in proportion to the 
                value of the peanuts placed in the pool by each 
                producer. Net gains for peanuts in each pool shall 
                consist of the following:
                          (i) Quota peanuts.--For quota peanuts, the 
                        net gains over and above the loan indebtedness 
                        and other costs or losses incurred on peanuts 
                        placed in the pool.
                          (ii) Additional peanuts.--For additional 
                        peanuts, the net gains over and above the loan 
                        indebtedness and other costs or losses incurred 
                        on peanuts placed in the pool for additional 
                        peanuts.
  (d) Losses.--Losses in quota area pools shall be covered using the 
following sources in the following order of priority:
          (1) Transfers from additional loan pools.--The proceeds due 
        any producer from any pool shall be reduced by the amount of 
        any loss that is incurred with respect to peanuts transferred 
        from an additional loan pool to a quota loan pool by the 
        producer under section 358-1(b)(8) of the Agricultural 
        Adjustment Act of 1938 (7 U.S.C. 1358-1(b)(8)).
          (2) Other producers in same pool.--Further losses in an area 
        quota pool shall be offset by reducing the gain of any producer 
        in the pool by the amount of pool gains attributed to the same 
        producer from the sale of additional peanuts for domestic and 
        export edible use.
          (3) Buy-back gains within area.--Further losses in an area 
        quota pool shall be offset by gains or profits attributable to 
        sales of additional peanuts in that area pursuant to the 
        provisions of section 358e(g)(1)(A) of the Agricultural 
        Adjustment Act of 1938 (7 U.S.C. 1359a(g)(1)(A)).
          (4) Use of marketing assessments.--The Secretary shall use 
        funds collected under subsection (g) (except funds attributable 
        to handlers) to offset further losses in area quota pools. The 
        Secretary shall transfer to the Treasury those funds collected 
        under subsection (g) and available for use under this 
        subsection that the Secretary determines are not required to 
        cover losses in area quota pools.
          (5) Cross compliance.--Further losses in area quota pools, 
        other than losses incurred as a result of transfers from 
        additional loan pools to quota loan pools under section 358-
        1(b)(8) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 
        1358-1(b)(8)), shall be offset by any gains or profits from 
        quota pools in other production areas (other than separate type 
        pools established under subsection (c)(2)(A) for Valencia 
        peanuts produced in New Mexico) in such manner as the Secretary 
        shall by regulation prescribe. If losses in area quota pools 
        have not been entirely offset through use of the preceding 
        sentence, then further losses shall be offset by gains or 
        profits attributable to sales of additional peanuts in other 
        areas pursuant to section 358e(g)(1)(A) of such Act (7 U.S.C. 
        1359a(g)(1)(A)).
          (6) Increased assessments.--If use of the authorities 
        provided in the preceding paragraphs is not sufficient to cover 
        losses in an area quota pool, the Secretary shall increase the 
        marketing assessment established under subsection (g) by such 
        an amount as the Secretary considers necessary to cover the 
        losses. The increased assessment shall apply only to quota 
        peanuts covered by that pool. Amounts collected under 
        subsection (g) as a result of the increased assessment shall be 
        retained by the Secretary to cover losses in that pool.
  (e) Disapproval of Quotas.--Notwithstanding any other provision of 
law, no loan for quota peanuts may be made available by the Secretary 
for any crop of peanuts with respect to which poundage quotas have been 
disapproved by producers, as provided for in section 358-1(d) of the 
Agricultural Adjustment Act of 1938 (7 U.S.C. 1358-1(d)).
  (f) Quality Improvement.--
          (1) In general.--With respect to peanuts under loan, the 
        Secretary shall--
                  (A) promote the crushing of peanuts at a greater risk 
                of deterioration before peanuts of a lesser risk of 
                deterioration;
                  (B) ensure that all Commodity Credit Corporation 
                inventories of peanuts sold for domestic edible use 
                must be shown to have been officially inspected by 
                licensed Department inspectors both as farmer stock and 
                shelled or cleaned in-shell peanuts;
                  (C) continue to endeavor to operate the peanut 
                program so as to improve the quality of domestic 
                peanuts and ensure the coordination of activities under 
                the Peanut Administrative Committee established under 
                Marketing Agreement No. 146, regulating the quality of 
                domestically produced peanuts (under the Agricultural 
                Adjustment Act (7 U.S.C. 601 et seq.), reenacted with 
                amendments by the Agricultural Marketing Agreement Act 
                of 1937); and
                  (D) ensure that any changes made in the peanut 
                program as a result of this subsection requiring 
                additional production or handling at the farm level 
                shall be reflected as an upward adjustment in the 
                Department loan schedule.
          (2) Exports and other peanuts.--The Secretary shall require 
        that all peanuts in the domestic and export markets fully 
        comply with all quality standards under Marketing Agreement No. 
        146.
  (g) Marketing Assessment.--
          (1) In general.--The Secretary shall provide for a 
        nonrefundable marketing assessment. The assessment shall be 
        made on a per pound basis in an amount equal to 1.1 percent for 
        each of the 1994 and 1995 crops, 1.15 percent for the 1996 
        crop, and 1.2 percent for each of the 1997 through 2002 crops, 
        of the national average quota or additional peanut loan rate 
        for the applicable crop.
          (2) First purchasers.--
                  (A) In general.--Except as provided under paragraphs 
                (3) and (4), the first purchaser of peanuts shall--
                          (i) collect from the producer a marketing 
                        assessment equal to the quantity of peanuts 
                        acquired multiplied by--
                                  (I) in the case of each of the 1994 
                                and 1995 crops, .55 percent of the 
                                applicable national average loan rate;
                                  (II) in the case of the 1996 crop, .6 
                                percent of the applicable national 
                                average loan rate; and
                                  (III) in the case of each of the 1997 
                                through 2002 crops, .65 percent of the 
                                applicable national average loan rate;
                          (ii) pay, in addition to the amount collected 
                        under clause (i), a marketing assessment in an 
                        amount equal to the quantity of peanuts 
                        acquired multiplied by .55 percent of the 
                        applicable national average loan rate; and
                          (iii) remit the amounts required under 
                        clauses (i) and (ii) to the Commodity Credit 
                        Corporation in a manner specified by the 
                        Secretary.
                  (B) Definition of first purchaser.--In this 
                subsection, the term ``first purchaser'' means a person 
                acquiring peanuts from a producer except that in the 
                case of peanuts forfeited by a producer to the 
                Commodity Credit Corporation, the term means the person 
                acquiring the peanuts from the Commodity Credit 
                Corporation.
          (3) Other private marketings.--In the case of a private 
        marketing by a producer directly to a consumer through a retail 
        or wholesale outlet or in the case of a marketing by the 
        producer outside of the continental United States, the producer 
        shall be responsible for the full amount of the assessment and 
        shall remit the assessment by such time as is specified by the 
        Secretary.
          (4) Loan peanuts.--In the case of peanuts that are pledged as 
        collateral for a loan made under this section, \1/2\ of the 
        assessment shall be deducted from the proceeds of the loan. The 
        remainder of the assessment shall be paid by the first 
        purchaser of the peanuts. For purposes of computing net gains 
        on peanuts under this section, the reduction in loan proceeds 
        shall be treated as having been paid to the producer.
          (5) Penalties.--If any person fails to collect or remit the 
        reduction required by this subsection or fails to comply with 
        the requirements for recordkeeping or otherwise as are required 
        by the Secretary to carry out this subsection, the person shall 
        be liable to the Secretary for a civil penalty up to an amount 
        determined by multiplying--
                  (A) the quantity of peanuts involved in the 
                violation; by
                  (B) the national average quota peanut rate for the 
                applicable crop year.
          (6) Enforcement.--The Secretary may enforce this subsection 
        in the courts of the United States.
  (h) Crops.--Subsections (a) through (f) shall be effective only for 
the 1996 through 2002 crops of peanuts.
  (i) Marketing Quotas.--
          (1) In general.--Part VI of subtitle B of title III of the 
        Agricultural Adjustment Act of 1938 is amended--
                  (A) in section 358-1 (7 U.S.C. 1358-1)--
                          (i) in the section heading, by striking 
                        ``1991 through 1997 crops of'';
                          (ii) in subsections (a)(1), (b)(1)(B), 
                        (b)(2)(A), (b)(2)(C), and (b)(3)(A), by 
                        striking ``of the 1991 through 1997 marketing 
                        years'' each place it appears and inserting 
                        ``marketing year'';
                          (iii) in subsection (a)(3), by striking 
                        ``1990'' and inserting ``1990, for the 1991 
                        through 1995 marketing years, and 1995, for the 
                        1996 through 2002 marketing years'';
                          (iv) in subsection (b)(1)(A)--
                                  (I) by striking ``each of the 1991 
                                through 1997 marketing years'' and 
                                inserting ``each marketing year''; and
                                  (II) in clause (i), by inserting 
                                before the semicolon the following: ``, 
                                in the case of the 1991 through 1995 
                                marketing years, and the 1995 marketing 
                                year, in the case of the 1996 through 
                                2002 marketing years''; and
                          (v) in subsection (f), by striking ``1997'' 
                        and inserting ``2002'';
                  (B) in section 358b (7 U.S.C. 1358b)--
                          (i) in the section heading, by striking 
                        ``1991 through 1995 crops of''; and
                          (ii) in subsection (c), by striking ``1995'' 
                        and inserting ``2002'';
                  (C) in section 358c(d) (7 U.S.C. 1358c(d)), by 
                striking ``1995'' and inserting ``2002''; and
                  (D) in section 358e (7 U.S.C. 1359a)--
                          (i) in the section heading, by striking 
                        ``for 1991 through 1997 crops of 
                        peanuts''; and
                          (ii) in subsection (i), by striking ``1997'' 
                        and inserting ``2002''.
          (2) Eligibility for farm poundage quota.--
                  (A) Certain farms ineligible.--Section 358-1(b)(1) of 
                the Act (7 U.S.C. 1358-1(b)(1)) is amended by adding at 
                the end the following:
                  ``(D) Certain farms ineligible to hold quota.--
                Effective beginning with the 1997 marketing year, the 
                Secretary shall no longer establish farm poundage 
                quotas under subparagraph (A) for farms--
                          ``(i) owned or controlled by municipalities, 
                        airport authorities, schools, colleges, 
                        refuges, and other public entities (not 
                        including universities for research purposes); 
                        or
                          ``(ii) owned or controlled by a person who is 
                        not a producer and resides in another State.''.
                  (B) Allocation of quota to other farms.--Section 358-
                1(b)(2) of the Act (7 U.S.C. 1358-1(b)(2)) is amended 
                by adding at the end the following:
                  ``(E) Transfer of quota from ineligible farms.--Any 
                farm poundage quota held at the end of the 1996 
                marketing year by a farm described in paragraph (1)(D) 
                shall be allocated to other farms in the same State on 
                such basis as the Secretary may by regulation 
                prescribe.''.
          (3) Elimination of quota floor.--Section 358-1(a)(1) of the 
        Act (7 U.S.C. 1358-1(a)(1)) is amended by striking the second 
        sentence.
          (4) Temporary quota allocation.--Section 358-1 of the Act (7 
        U.S.C. 1358-1) is amended--
                  (A) in subsection (a)(1), by striking ``domestic 
                edible, seed,'' and inserting ``domestic edible use'';
                  (B) in subsection (b)(2)--
                          (i) in subparagraph (A), by striking 
                        ``subparagraph (B) and subject to''; and
                          (ii) by striking subparagraph (B) and 
                        inserting the following:
                  ``(B) Temporary quota allocation.--
                          ``(i) Allocation related to seed peanuts.--
                        Temporary allocation of quota pounds for the 
                        marketing year only in which the crop is 
                        planted shall be made to producers for each of 
                        the 1996 through 2002 marketing years as 
                        provided in this subparagraph.
                          ``(ii) Quantity.--The temporary quota 
                        allocation shall be equal to the pounds of seed 
                        peanuts planted on the farm, as may be adjusted 
                        under regulations prescribed by the Secretary.
                          ``(iii) Additional quota.--The temporary 
                        allocation of quota pounds under this paragraph 
                        shall be in addition to the farm poundage quota 
                        otherwise established under this subsection and 
                        shall be credited, for the applicable marketing 
                        year only, in total to the producer of the 
                        peanuts on the farm in a manner prescribed by 
                        the Secretary.
                          ``(iv) Effect of other requirements.--Nothing 
                        in this section alters or changes the 
                        requirements regarding the use of quota and 
                        additional peanuts established by section 
                        358e(b).''; and
                  (C) in subsection (e)(3), strike ``and seed and use 
                on a farm''.
          (5) Spring and fall transfers within a state.--Section 
        358b(a)(1) of the Act (7 U.S.C. 1358b(a)(1)) is amended--
                  (A) by striking ``, conditions, or limitations'' in 
                the matter preceding the subparagraphs and inserting 
                ``and conditions'';
                  (B) by striking ``any such lease'' in the matter 
                preceding the subparagraphs and inserting ``any such 
                sale or lease''; and
                  (C) by striking ``in the fall or after the normal 
                planting season--'' and subparagraphs (A) and (B) and 
                inserting the following: ``in the spring (or before the 
                normal planting season) or in the fall (or after the 
                normal planting season) with the owner or operator of a 
                farm located within any county in the same State. In 
                the case of a fall transfer or a transfer after the 
                normal planting season, the transfer may be made only 
                if not less than 90 percent of the basic quota (the 
                farm quota exclusive of temporary quota transfers), 
                plus any poundage quota transferred to the farm under 
                this subsection, has been planted or considered planted 
                on the farm from which the quota is to be leased.''.
          (6) Undermarketings.--Part VI of subtitle B of title III of 
        the Act is amended--
                  (A) in section 358-1(b) (7 U.S.C. 1358-1(b))--
                          (i) in paragraph (1)(B), by striking 
                        ``including--'' and clauses (i) and (ii) and 
                        inserting ``including any increases resulting 
                        from the allocation of quotas voluntarily 
                        released for 1 year under paragraph (7).'';
                          (ii) in paragraph (3)(B), by striking 
                        ``include--'' and clauses (i) and (ii) and 
                        inserting ``include any increase resulting from 
                        the allocation of quotas voluntarily released 
                        for 1 year under paragraph (7).''; and
                          (iii) by striking paragraphs (8) and (9); and
                  (B) in section 358b(a) (7 U.S.C. 1358b(a))--
                          (i) in paragraph (1), by striking 
                        ``(including any applicable under marketings)'' 
                        both places it appears;
                          (ii) in paragraph (2), by striking 
                        ``(including any applicable under 
                        marketings)''; and
                          (iii) in paragraph (3), by striking 
                        ``(including any applicable undermarketings)''.
          (7) Disaster transfers.--Section 358-1(b) of the Act (7 
        U.S.C. 1358-1(b)), as amended by paragraph (6)(A)(iii), is 
        further amended by adding at the end the following:
          ``(8) Disaster transfers.--
                  ``(A) In general.--Except as provided in subparagraph 
                (B), additional peanuts produced on a farm from which 
                the quota poundage was not harvested and marketed 
                because of drought, flood, or any other natural 
                disaster, or any other condition beyond the control of 
                the producer, may be transferred to the quota loan pool 
                for pricing purposes on such basis as the Secretary 
                shall by regulation provide.
                  ``(B) Limitation.--The poundage of peanuts 
                transferred under subparagraph (A) shall not exceed the 
                difference between--
                          ``(i) the total quantity of peanuts meeting 
                        quality requirements for domestic edible use, 
                        as determined by the Secretary, marketed from 
                        the farm; and
                          ``(ii) the total farm poundage quota, 
                        excluding quota pounds transferred to the farm 
                        in the fall.
                  ``(C) Support rate.--Peanuts transferred under this 
                paragraph shall be supported at 70 percent of the quota 
                support rate for the marketing years in which the 
                transfers occur. The transfers for a farm shall not 
                exceed 25 percent of the total farm quota pounds, 
                excluding pounds transferred in the fall.''.

SEC. 107. SUGAR PROGRAM.

  (a) Sugarcane.--The Secretary shall make loans available to 
processors of domestically grown sugarcane at a rate equal to 18 cents 
per pound for raw cane sugar.
  (b) Sugar Beets.--The Secretary shall make loans available to 
processors of domestically grown sugar beets at a rate equal to 22.9 
cents per pound for refined beet sugar.
  (c) Reduction in Loan Rates.--
          (1) Reduction required.--The Secretary shall reduce the loan 
        rate specified in subsection (a) for domestically grown 
        sugarcane and subsection (b) for domestically grown sugar beets 
        if the Secretary determines that negotiated reductions in 
        export subsidies and domestic subsidies provided for sugar of 
        the European Union and other major sugar growing, producing, 
        and exporting countries in the aggregate exceed the commitments 
        made as part of the Agreement on Agriculture.
          (2) Extent of reduction.--The Secretary shall not reduce the 
        loan rate under subsection (a) or (b) below a rate that 
        provides an equal measure of support to that provided by the 
        European Union and other major sugar growing, producing, and 
        exporting countries, based on an examination of both domestic 
        and export subsidies subject to reduction in the Agreement on 
        Agriculture.
          (3) Announcement of reduction.--The Secretary shall announce 
        any loan rate reduction to be made under this subsection as far 
        in advance as is practicable.
          (4) Major sugar countries defined.--For purposes of this 
        subsection, the term ``major sugar growing, producing, and 
        exporting countries'' means--
                  (A) the countries of the European Union; and
                  (B) the ten foreign countries not covered by 
                subparagraph (A) that the Secretary determines produce 
                the greatest amount of sugar.
          (5) Agreement on agriculture defined.--For purposes of this 
        subsection, the term ``Agreement on Agriculture'' means the 
        Agreement on Agriculture referred to in section 101(d)(2) of 
        the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(2)).
  (d) Term of Loans.--
          (1) In general.--Loans under this section during any fiscal 
        year shall be made available not earlier than the beginning of 
        the fiscal year and shall mature at the earlier of--
                  (A) the end of 9 months; or
                  (B) the end of the fiscal year.
          (2) Supplemental loans.--In the case of loans made under this 
        section in the last 3 months of a fiscal year, the processor 
        may repledge the sugar as collateral for a second loan in the 
        subsequent fiscal year, except that the second loan shall--
                  (A) be made at the loan rate in effect at the time 
                the second loan is made; and
                  (B) mature in 9 months less the quantity of time that 
                the first loan was in effect.
  (e) Loan Type; Processor Assurances.--
          (1) Recourse loans.--Subject to paragraph (2), the Secretary 
        shall carry out this section through the use of recourse loans.
          (2) Nonrecourse loans.--During any fiscal year in which the 
        tariff rate quota for imports of sugar into the United States 
        is established at, or is increased to, a level in excess of 
        1,500,000 short tons raw value, the Secretary shall carry out 
        this section by making available nonrecourse loans. Any 
        recourse loan previously made available by the Secretary under 
        this section during the fiscal year shall be changed by the 
        Secretary into a nonrecourse loan.
          (3) Processor assurances.--If the Secretary is required under 
        paragraph (2) to make nonrecourse loans available during a 
        fiscal year or to change recourse loans into nonrecourse loans, 
        the Secretary shall obtain from each processor that receives a 
        loan under this section such assurances as the Secretary 
        considers adequate to ensure that the processor will provide 
        payments to producers that are proportional to the value of the 
        loan received by the processor for sugar beets and sugarcane 
        delivered by producers served by the processor. The Secretary 
        may establish appropriate minimum payments for purposes of this 
        paragraph.
  (f) Marketing Assessment.--
          (1) Sugarcane.--Effective for marketings of raw cane sugar 
        during the 1996 through 2003 fiscal years, the first processor 
        of sugarcane shall remit to the Commodity Credit Corporation a 
        nonrefundable marketing assessment in an amount equal to--
                  (A) in the case of marketings during fiscal year 
                1996, 1.1 percent of the loan rate established under 
                subsection (a) per pound of raw cane sugar, processed 
                by the processor from domestically produced sugarcane 
                or sugarcane molasses, that has been marketed 
                (including the transfer or delivery of the sugar to a 
                refinery for further processing or marketing); and
                  (B) in the case of marketings during each of fiscal 
                years 1997 through 2003, 1.375 percent of the loan rate 
                established under subsection (a) per pound of raw cane 
                sugar, processed by the processor from domestically 
                produced sugarcane or sugarcane molasses, that has been 
                marketed (including the transfer or delivery of the 
                sugar to a refinery for further processing or 
                marketing).
          (2) Sugar beets.--Effective for marketings of beet sugar 
        during the 1996 through 2003 fiscal years, the first processor 
        of sugar beets shall remit to the Commodity Credit Corporation 
        a nonrefundable marketing assessment in an amount equal to--
                  (A) in the case of marketings during fiscal year 
                1996, 1.1794 percent of the loan rate established under 
                subsection (a) per pound of beet sugar, processed by 
                the processor from domestically produced sugar beets or 
                sugar beet molasses, that has been marketed; and
                  (B) in the case of marketings during each of fiscal 
                years 1997 through 2003, 1.47425 percent of the loan 
                rate established under subsection (a) per pound of beet 
                sugar, processed by the processor from domestically 
                produced sugar beets or sugar beet molasses, that has 
                been marketed.
          (3) Collection.--
                  (A) Timing.--A marketing assessment required under 
                this subsection shall be collected on a monthly basis 
                and shall be remitted to the Commodity Credit 
                Corporation not later than 30 days after the end of 
                each month. Any cane sugar or beet sugar processed 
                during a fiscal year that has not been marketed by 
                September 30 of the year shall be subject to assessment 
                on that date. The sugar shall not be subject to a 
                second assessment at the time that it is marketed.
                  (B) Manner.--Subject to subparagraph (A), marketing 
                assessments shall be collected under this subsection in 
                the manner prescribed by the Secretary and shall be 
                nonrefundable.
          (4) Penalties.--If any person fails to remit the assessment 
        required by this subsection or fails to comply with such 
        requirements for recordkeeping or otherwise as are required by 
        the Secretary to carry out this subsection, the person shall be 
        liable to the Secretary for a civil penalty up to an amount 
        determined by multiplying--
                  (A) the quantity of cane sugar or beet sugar involved 
                in the violation; by
                  (B) the loan rate for the applicable crop of 
                sugarcane or sugar beets.
          (5) Enforcement.--The Secretary may enforce this subsection 
        in a court of the United States.
  (g) Forfeiture Penalty.--
          (1) In general.--A penalty shall be assessed on the 
        forfeiture of any sugar pledged as collateral for a nonrecourse 
        loan under this section.
          (2) Cane sugar.--The penalty for cane sugar shall be 1 cent 
        per pound.
          (3) Beet sugar.--The penalty for beet sugar shall bear the 
        same relation to the penalty for cane sugar as the marketing 
        assessment for sugar beets bears to the marketing assessment 
        for sugarcane.
          (4) Effect of forfeiture.--Any payments owed producers by a 
        processor that forfeits of any sugar pledged as collateral for 
        a nonrecourse loan shall be reduced in proportion to the loan 
        forfeiture penalty incurred by the processor.
  (h) Information Reporting.--
          (1) Duty of processors and refiners to report.--A sugarcane 
        processor, cane sugar refiner, and sugar beet processor shall 
        furnish the Secretary, on a monthly basis, such information as 
        the Secretary may require to administer sugar programs, 
        including the quantity of purchases of sugarcane, sugar beets, 
        and sugar, and production, importation, distribution, and stock 
        levels of sugar.
          (2) Penalty.--Any person willfully failing or refusing to 
        furnish the information, or furnishing willfully any false 
        information, shall be subject to a civil penalty of not more 
        than $10,000 for each such violation.
          (3) Monthly reports.--Taking into consideration the 
        information received under paragraph (1), the Secretary shall 
        publish on a monthly basis composite data on production, 
        imports, distribution, and stock levels of sugar.
  (i) Marketing Allotments.--Part VII of subtitle B of title III of the 
Agricultural Adjustment Act of 1938 (7 U.S.C. 1359aa et seq.) is 
repealed.
  (j) Crops.--This section (other than subsection (i)) shall be 
effective only for the 1996 through 2002 crops of sugar beets and 
sugarcane.

SEC. 108. ADMINISTRATION.

  (a) Commodity Credit Corporation.--
          (1) Use of corporation.--The Secretary shall carry out this 
        title through the Commodity Credit Corporation.
          (2) Prohibition on salaries and expenses.--Notwithstanding 
        any other provision of law, no funds of the Corporation shall 
        be used for any salary or expense of any officer or employee of 
        the Department of Agriculture.
  (b) Determinations by Secretary.--A determination made by the 
Secretary under this title or the Agricultural Adjustment Act of 1938 
(7 U.S.C. 1281 et seq.) shall be final and conclusive.
  (c) Regulations.--The Secretary may issue such regulations as the 
Secretary determines necessary to carry out this title.

SEC. 109. ELIMINATION OF PERMANENT PRICE SUPPORT AUTHORITY.

  (a) Agricultural Adjustment Act of 1938.--The Agricultural Adjustment 
Act of 1938 is amended--
          (1) in title III--
                  (A) in subtitle B--
                          (i) by striking parts II through V (7 U.S.C. 
                        1326-1351); and
                          (ii) in part VI--
                                  (I) by moving subsection (c) of 
                                section 358d (7 U.S.C. 1358d(c)) to 
                                appear after section 301(b)(17) (7 
                                U.S.C. 1301(b)(17)), redesignating the 
                                subsection as paragraph (18), and 
                                moving the margin of the paragraph 2 
                                ems to the right; and
                                  (II) by striking sections 358, 358a, 
                                and 358d (7 U.S.C. 1358, 1358a, and 
                                1359); and
                  (B) by striking subtitle D (7 U.S.C. 1379a-1379j); 
                and
          (2) by striking title IV (7 U.S.C. 1401-1407).
  (b) Agricultural Act of 1949.--
          (1) Transfer of certain sections.--The Agricultural Act of 
        1949 is amended--
                  (A) by transferring sections 106, 106A, and 106B (7 
                U.S.C. 1445, 1445-1, 1445-2) to appear after section 
                314A of the Agricultural Adjustment Act of 1938 (7 
                U.S.C. 1314-1) and redesignating the transferred 
                sections as sections 315, 315A, and 315B, respectively;
                  (B) by transferring section 111 (7 U.S.C. 1445f) to 
                appear after section 304 of the Agricultural Adjustment 
                Act of 1938 (7 U.S.C. 1304) and redesignating the 
                transferred section as section 305; and
                  (C) by transferring sections 404 and 416 (7 U.S.C. 
                1424 and 1431) to appear after section 390 of the 
                Agricultural Adjustment Act of 1938 (7 U.S.C. 1390) and 
                redesignating the transferred sections as sections 390A 
                and 390B, respectively.
          (2) Repeal.--The Agricultural Act of 1949 (7 U.S.C. 1421 et 
        seq.) (as amended by paragraph (1)) is repealed.
  (c) Conforming Amendments.--
          (1) Section 361 of the Agricultural Adjustment Act of 1938 (7 
        U.S.C. 1361) is amended by striking ``, corn, wheat, cotton, 
        peanuts, and rice, established''.
          (2) Section 371 of the Agricultural Adjustment Act of 1938 (7 
        U.S.C. 1371) is amended--
                  (A) in the first sentence of subsection (a), by 
                striking ``cotton, rice, peanuts, or''; and
                  (B) in the first sentence of subsection (b), by 
                striking ``cotton, rice, peanuts or''.

SEC. 110. EFFECT OF AMENDMENTS.

  (a) Effect on Prior Crops.--Except as otherwise specifically provided 
and notwithstanding any other provision of law, this title and the 
amendments made by this title shall not affect the authority of the 
Secretary to carry out a price support or production adjustment program 
for any of the 1991 through 1995 crops of an agricultural commodity 
established under a provision of law in effect immediately before the 
date of the enactment of this Act.
  (b) Liability.--A provision of this title or an amendment made by 
this title shall not affect the liability of any person under any 
provision of law as in effect before the date of the enactment of this 
Act.

                            TITLE II--DAIRY

          Subtitle A--Milk Price Support and Other Activities

SEC. 201. MILK PRICE SUPPORT PROGRAM.

  (a) Support Activities.--To replace the milk price support program 
established under section 204 of the Agricultural Act of 1949 (7 U.S.C. 
1446e), which is repealed by section 109(b)(2)), the Secretary of 
Agriculture shall use the authority provided in this section to support 
the price of milk produced in the 48 contiguous States through the 
purchase of cheddar cheese produced from such milk. Until the first day 
of the first month beginning not less than 30 days after the date of 
the enactment of this Act, the Secretary also may support the price of 
milk under this section through the purchase of butter and nonfat dry 
milk produced from milk produced in the 48 contiguous States.
  (b) Rate.--The price of milk shall be supported at the following 
rates per hundredweight for milk containing 3.67 percent butterfat:
          (1) During calendar year 1996, not less than $10.35.
          (2) During calendar year 1997, not less than $10.25.
          (3) During calendar year 1998, not less than $10.15.
          (4) During calendar year 1999, not less than $10.05.
          (5) During calendar year 2000, not less than $9.95.
          (6) During calendar years 2001 and 2002, not less than $9.85.
  (c) Bid Prices.--The Commodity Credit Corporation support purchase 
prices under this section for cheddar cheese (and for butter and nonfat 
dry milk subject to subsection (a)) announced by the Corporation shall 
be the same for all of that milk product sold by persons offering to 
sell the product to the Corporation. The purchase prices shall be 
sufficient to enable plants of average efficiency to pay producers, on 
average, a price not less than the rate of price support for milk in 
effect during a 12-month period under this section.
  (d) Use of Commodity Credit Corporation.--The Secretary shall use the 
funds, facilities, and authorities of the Commodity Credit Corporation 
to carry out this section.
  (e) Residual Authority for Refund of Budget Deficit Assessments.--
          (1) Application of subsection.--This subsection shall apply 
        with respect to the reductions made under subsection (h)(2) of 
        section 204 of the Agricultural Act of 1949, as in effect on 
        the day before the date of the enactment of this Act, in the 
        price of milk received by producers during calendar years 1995 
        and 1996.
          (2) Refund required.--The Secretary shall provide a refund of 
        the entire reduction made under such subsection (h)(2) in the 
        price of milk received by a producer during a calendar year 
        referred to in paragraph (1) if the producer provides evidence 
        that the producer did not increase marketings in that calendar 
        year when compared to the preceding calendar year.
          (3) Treatment of refunds.--A refund under this subsection 
        shall not be considered as any type of price support or payment 
        for purposes of sections 1211 and 1221 of the Food Security Act 
        of 1985 (16 U.S.C. 3811, 3821).
  (g) Transfer of Milk Products to Military and Veterans Hospitals.--
          (1) Transfer authorized.--As a means of increasing the 
        utilization of milk and milk products, upon the certification 
        by the Secretary of Veterans Affairs or by the Secretary of the 
        Army, acting for the military departments under the Single 
        Service Purchase Assignment for Subsistence of the Department 
        of Defense, that the usual quantities of milk products have 
        been purchased in the normal channels of trade, the Commodity 
        Credit Corporation shall make available--
                  (A) to the Secretary of Veterans Affairs at 
                warehouses where milk products are stored, such milk 
                products acquired under this section as the Secretary 
                of Veterans Affairs certifies are required in order to 
                provide milk products as a part of the ration in 
                hospitals under the jurisdiction of the Secretary of 
                Veterans Affairs; and
                  (B) to the Secretary of the Army, at warehouses where 
                milk products are stored, such milk products acquired 
                under this section as the Secretary of the Army 
                certifies can be utilized in order to provide 
                additional milk products as a part of the ration--
                          (i) of the Army, Navy, Air Force, or Coast 
                        Guard;
                          (ii) in hospitals under the jurisdiction of 
                        the Department of Defense; and
                          (iii) of cadets and midshipmen at, and other 
                        personnel assigned to, the United States 
                        Merchant Marine Academy.
          (2) Reports.--The Secretary of Veterans Affairs and the 
        Secretary of the Army shall report every six months to the 
        Committee on Agriculture, Nutrition, and Forestry of the Senate 
        and the Committee on Agriculture of the House of 
        Representatives and the Secretary of Agriculture the amount of 
        milk products used under this subsection.
          (3) Process.--The Secretary of Veterans Affairs and the 
        Secretary of the Army shall reimburse the Commodity Credit 
        Corporation for all costs associated in making milk products 
        available under this subsection.
          (4) Limitation.--The obligation of the Commodity Credit 
        Corporation to make milk products available pursuant to this 
        subsection shall be limited to milk products acquired by the 
        Corporation under this section and not disposed of under 
        provisions (1) and (2) of section 390B(a) of the Agricultural 
        Adjustment Act of 1938.
  (h) Period of Effectiveness.--Notwithstanding any other provision of 
law, this section shall be effective only during the period
          (1) beginning on the date of the enactment of this Act; and
          (2) ending on December 31, 2002.

SEC. 202. RECOURSE LOANS FOR COMMERCIAL PROCESSORS OF DAIRY PRODUCTS.

  (a) Recourse Loans Available.--The Secretary of Agriculture shall 
make recourse loans available to commercial processors of eligible 
dairy products to assist such processors to manage inventories of 
eligible dairy products to assure a greater degree of price stability 
for the dairy industry during the year. Recourse loans may be made 
available under such reasonable terms and conditions as the Secretary 
may prescribe. The Secretary shall use the funds, facilities, and 
authorities of the Commodity Credit Corporation to carry out this 
section.
  (b) Amount of Loan.--The Secretary shall establish the amount of a 
loan for eligible dairy products, which shall reflect 90 percent of the 
reference price for that product. The rate of interest charged 
participants in this program shall not be less than the rate of 
interest charged the Commodity Credit Corporation by the United States 
Treasury.
  (c) Period of Loans.--A recourse loan made under this section may not 
extend beyond the end of the fiscal year during which the loan is made, 
except that the Secretary may extend the loan for an additional period 
not to exceed the end of the next fiscal year.
  (d) Definitions.--In this section:
          (1) The term ``eligible dairy products'' means cheddar 
        cheese, butter, and nonfat dry milk.
          (2) The term ``reference price'' means--
                  (A) for cheddar cheese, the average National (Green 
                Bay) Cheese Exchange price for 40 pound blocks of 
                cheddar cheese for the previous three months;
                  (B) for butter, the average Chicago Mercantile 
                Exchange price for Grade AA butter for the previous 
                three months; and
                  (C) for nonfat dry milk, the average Western States 
                Extra Grade and Grade A price for nonfat dry milk for 
                the previous three months.

SEC. 203. DAIRY EXPORT INCENTIVE PROGRAM.

  (a) Duration.--Subsection (a) of section 153 of the Food Security Act 
of 1985 (15 U.S.C. 713a-14) is amended by striking ``2001'' and 
inserting ``2002''.
  (b) Elements of Program.--Subsection (c) of such section is amended--
          (1) by striking ``and'' at the end of paragraph (1);
          (2) by striking the period at the end of paragraph (2) and 
        inserting ``; and''; and
          (3) by adding at the end the following new paragraphs:
          ``(3) the maximum volume of dairy product exports allowable 
        consistent with the obligations of the United States as a 
        member of the World Trade Organization are exported under the 
        program each year (minus the volume sold under section 1163 of 
        this Act (7 U.S.C. 1731 note) during that year), except to the 
        extent that the export of such a volume under the program 
        would, in the judgment of the Secretary, exceed the limitations 
        on the value set forth in subsection (f); and
          ``(4) payments may be made under the program for exports to 
        any destination in the world for the purpose of market 
        development, except a destination in a country with respect to 
        which shipments from the United States are otherwise restricted 
        by law.''.
  (c) Sole Discretion.--Subsection (b) of such section is amended by 
inserting ``sole'' before ``discretion''.
  (d) Market Development.--Subsection (e)(1) of such section is 
amended--
          (1) by striking ``and'' and inserting ``the''; and
          (2) by inserting before the period the following: ``, and any 
        additional amount that may be required to assist in the 
        development of world markets for United States dairy 
        products''.
  (e) Maximum Allowable Amounts.--Such section is further amended by 
adding at the end the following:
  ``(f) Required Funding.--The Commodity Credit Corporation shall in 
each year use money and commodities for the program under this section 
in the maximum amount consistent with the obligations of the United 
States as a member of the World Trade Organization, minus the amount 
expended under section 1163 of this Act (7 U.S.C. 1731 note) during 
that year. However, the Commodity Credit Corporation may not exceed the 
limitations specified in subsection (c)(3) on the volume of allowable 
dairy product exports.''.

SEC. 204. DAIRY PROMOTION PROGRAM.

  (a) Expansion to Cover Dairy Products Imported into the United 
States.--Section 110(b) of the Dairy Production Stabilization Act of 
1983 (7 U.S.C. 4501(b)) is amended by inserting after ``commercial 
use'' the following: ``and dairy products imported into the United 
States''.
  (b) Definitions.--
          (1) Milk.--Subsection (d) of section 111 of such Act (7 
        U.S.C. 4502) is amended by inserting before the semicolon the 
        following: ``or cow's milk imported into the United States in 
        the form of dairy products intended for consumption in the 
        United States''.
          (2) Dairy products.--Subsection (e) of such section is 
        amended by inserting before the semicolon the following: ``and 
        casein (except casein imported under sections 3501.90.20 
        (casein glue) and 3501.90.50 (other) of the Harmonized Tariff 
        Schedule)''.
          (3) Research.--Subsection (j) of such section is amended by 
        inserting before the semicolon the following: ``or to reduce 
        the costs associated with processing or marketing those 
        products''.
          (4) United states.--Subsection (l) of such section is amended 
        to read as follows:
          ``(l) the term `United States' means the several States and 
        the District of Columbia;''.
          (5) Importers and exporters.--Such section is further 
        amended--
                  (A) in subsection (k), by striking ``and'' at the end 
                of such subsection; and
                  (B) by adding at the end the following new 
                subsections:
          ``(m) the term `importer' means the first person to take 
        title to dairy products imported into the United States for 
        domestic consumption; and
          ``(n) the term `exporter' means any person who exports dairy 
        products from the United States.''.
  (c) Membership of Board.--Section 113(b) of such Act (7 U.S.C. 
4504(b)) is amended--
          (1) in the first sentence, by striking ``thirty-six members'' 
        and inserting ``38 members, including one representative of 
        importers and one representative of exporters to be appointed 
        by the Secretary'';
          (2) in the second sentence, by striking ``Members'' and 
        inserting ``The remaining members''; and
          (3) in the third sentence, by striking ``United States'' and 
        inserting ``United States, including Alaska and Hawaii''.
  (d) Assessment.--Section 113(g) of such Act (7 U.S.C. 4504(g)) is 
amended--
  (1) by inserting ``(1)'' after ``(g)''; and
  (2) by adding at the end the following new paragraph:
  ``(2) The order shall provide that each importer of dairy products 
intended for consumption in the United States shall remit to the Board, 
in the manner prescribed by the order, an assessment equal to 1.2 cents 
per pound of total milk solids contained in the imported dairy 
products, or 15 cents per hundredweight of milk contained in the 
imported dairy products, whichever is less. If an importer can 
establish that it is participating in active, ongoing qualified State 
or regional dairy product promotion or nutrition programs intended to 
increase the consumption of milk and dairy products, the importer shall 
receive credit in determining the assessment due from that importer for 
contributions to such programs of up to .8 cents per pound of total 
milk solids contained in the imported dairy products, or 10 cents per 
hundredweight of milk contained in the imported dairy products, 
whichever is less. The assessment collected under this paragraph shall 
be used for the purpose specified in paragraph (1).''.
  (e) Records.--Section 113(k) of such Act (7 U.S.C. 4504(k)) is 
amended in the first sentence by inserting after ``commercial use,'' 
the following: ``each importer of dairy products,''.
  (f) Termination or Suspension of Order.--Section 116(b) of such Act 
(7 U.S.C. 4507(b)) is amended--
          (1) by inserting ``and importers'' after ``producers'' each 
        place it appears;
          (2) by striking ``who, during a representative period (as 
        determined by the Secretary), have been engaged in the 
        production of milk for commercial use''; and
          (3) by adding at the end the following new sentences: ``A 
        producer shall be eligible to vote in the referendum if the 
        producer, during a representative period (as determined by the 
        Secretary), has been engaged in the production of milk for 
        commercial use. An importer shall be eligible to vote in the 
        referendum if the importer, during a representative period (as 
        determined by the Secretary), has been engaged in the 
        importation of dairy products into the United States intended 
        for consumption in the United States.''.
  (g) Promotion in international markets.--Section 113(e) of such Act 
(7 U.S.C. 4504(e)) is amended by adding at the end the following new 
sentence: ``For each of the fiscal years 1996 through 2000, the Board's 
budget shall provide for the expenditure of not less than 10 percent of 
the anticipated revenues available to the Board to develop 
international markets for, and to promote within such markets, the 
consumption of dairy products produced in the United States from milk 
produced in the United States.''.
  (h) Implementation of Amendments.--
          (1) Implementation process.--To implement the amendments made 
        by this section, the Secretary of Agriculture shall issue an 
        amended dairy products promotion and research order under 
        section 112 of the Dairy Production Stabilization Act of 1983 
        (7 U.S.C. 4503) reflecting such amendments, and no other 
        changes, in the order in existence on the date of the enactment 
        of this Act.
          (2) Proposal of amended order.--Not later than 60 days after 
        the date of the enactment of this Act, the Secretary shall 
        publish a proposed dairy products promotion and research order 
        reflecting the amendments made by this section. The Secretary 
        shall provide notice and an opportunity for public comment on 
        the proposed order.
          (3) Issuance of amended order.--After notice and opportunity 
        for public comment are provided in accordance with paragraph 
        (2), the Secretary shall issue a final dairy products promotion 
        and research order, taking into consideration the comments 
        received and including in the order such provisions as are 
        necessary to ensure that the order is in conformity with the 
        amendments made by this section.
          (3) Issuance of amended order.--After notice and opportunity 
        for public comment are provided in accordance with paragraph 
        (2), the Secretary shall issue a final dairy products promotion 
        and research order, taking into consideration the comments 
        received and including in the order such provisions as are 
        necessary to ensure that the order is in conformity with the 
        amendments made by this section.
          (4) Effective date.--The final dairy products promotion and 
        research order shall be issued and become effective not later 
        than 120 days after publication of the proposed order.
  (i) Referendum on Amendments.--Not later than 36 months after the 
issuance of the dairy products promotion and research order reflecting 
the amendments made by this section, the Secretary of Agriculture shall 
conduct a referendum under section 115 of the Dairy Production 
Stabilization Act of 1983 (7 U.S.C. 4506) for the sole purpose of 
determining whether the requirements of such amendments shall be 
continued. The Secretary shall conduct the referendum among persons who 
have been producers or importers (as defined in section 111 of such Act 
(7 U.S.C. 4502)) during a representative period as determined by the 
Secretary. The requirements of such amendments shall be continued only 
if the Secretary determines that such requirements have been approved 
by not less than a majority of the persons voting in the referendum. If 
continuation of the amendments is not approved, the Secretary shall 
issue a new order, within six months after the announcement of the 
results of the referendum, that is identical to the order in effect on 
the date of the enactment of this Act. The new order shall become 
effective upon issuance and shall not be subject to referendum for 
approval.

SEC. 205. FLUID MILK STANDARDS UNDER MILK MARKETING ORDERS.

  (a) Nature of Standards.--Each marketing order issued with respect to 
milk and its products under section 8c of the Agricultural Adjustment 
Act (7 U.S.C. 608c), reenacted with amendments by the Agricultural 
Marketing Agreement Act of 1937, shall contain terms and conditions to 
provide that all dispositions of fluid milk products containing milk of 
the highest use classification covered by such orders shall comply with 
the following requirements:
          (1) In the case of milk marketed as whole milk, not less than 
        12.05 percent total milk solids consisting of not less than 8.8 
        percent milk solids not fat and not less than 3.25 percent milk 
        fat.
          (2) In the case of milk marketed as 2 percent (or lowfat) 
        milk, not less than 12 percent total milk solids consisting of 
        not less than 10 percent milk solids not fat and not less than 
        2 percent milk fat.
          (3) In the case of milk marketed as 1 percent (or light) 
        milk, not less than 12 percent total milk solids consisting of 
        not less than 11 percent milk solids not fat and not less than 
        1 percent milk fat.
          (4) In the case of milk marketed as skim (or nonfat) milk, 
        not less than 9 percent total milk solids consisting of not 
        less than 9 percent milk solids not fat and not more than .25 
        percent milk fat.
  (b) Violations.--A violation of the requirements specified in 
subsection (a) shall be subject to the penalties provided in section 
8c(14) of the Agricultural Adjustment Act (7 U.S.C. 608c(14)), 
reenacted with amendments by the Agricultural Marketing Agreement Act 
of 1937.
  (c) Effective Date.--The requirements imposed by this section shall 
apply to fluid milk marketed on and after the first day of the first 
month beginning not less than 30 days after the date of the enactment 
of this Act.

SEC. 206. MANUFACTURING ALLOWANCE.

  (a) Maximum Allowances Established.--No State shall provide for a 
manufacturing allowance for the processing of milk in excess of--
          (1) in the case of milk manufactured into butter, butter oil, 
        nonfat dry milk, or whole dry milk--
                  (A) $1.65 per hundredweight of milk, for milk 
                marketed during the 2-year period beginning on the 
                effective date of this section; and
                  (B) such allowance per hundredweight of milk as the 
                Secretary of Agriculture may establish under section 
                221(b)(3), for milk marketed after the end of such 
                period; and
          (2) in the case of milk manufactured into cheese and whey--
                  (A) $1.80 per hundredweight of milk, for milk 
                marketed during the 2-year period beginning on the 
                effective date of this section; and
                  (B) such allowance per hundredweight of milk as the 
                Secretary may establish under section 221(b)(3), for 
                milk marketed after the end of such period.
  (b) Yields.--In converting the weight of milk to dairy products 
during the two-year period beginning on the effective date of this 
section, the Secretary shall use the following yields with respect to a 
hundred pounds of milk:
          (1) Butter: 4.2 pounds.
          (2) Nonfat dry milk: 8.613 pounds.
          (3) 40 pound block cheddar cheese: 10.169 pounds.
          (4) Whey cream butter: .27 pounds.
  (c) Sources of Product Price Values.--In determining the 
manufacturing allowance applicable in a State during the 2-year period 
beginning on the effective date of this section, the Secretary shall 
use the following sources for product price values:
          (1) For butter, Chicago Mercantile Exchange Grade AA butter.
          (2) For nonfat dry milk, California Manufacturing Plants 
        Extra Grade and Grade A nonfat dry milk.
          (3) For cheese, National (Green Bay) Cheese Exchange 40 pound 
        block cheddar cheese.
          (4) For whey cream butter, Chicago Mercantile Exchange Grade 
        B butter.
  (d) Manufacturing Allowance Defined.--In this section, the term 
``manufacturing allowance'' means--
          (1) the amount by which the product price value of butter and 
        nonfat dry milk manufactured from a hundred pounds of milk 
        containing 3.5 pounds of milk fat and 8.7 pounds of milk solids 
        not fat exceeds the class price for the milk used to produce 
        those products; or
          (2) an amount by which the product price value of cheese and 
        whey manufactured from a hundred pounds of milk containing 3.6 
        pounds of milk fat and 8.7 pounds of milk solids not fat 
        exceeds the class price for the milk used to produce those 
        products.
  (e) Effect of Violation.--If the Secretary determines that a State 
has in effect a manufacturing allowance that exceeds the manufacturing 
allowance authorized in subsection (a), the Secretary shall suspend, 
until such time as the State complies with such subsection--
          (1) purchases under section 201 of cheddar cheese produced in 
        that State; and
          (2) disbursements from the Class IV equalization pool under 
        section 208 to milk marketing orders operating in that State 
        with respect to milk produced in that State.
  (f) Conforming Suspension and Repeal.--
          (1) Suspension and repeal.--During the 2-year period 
        beginning on the effective date of this section, the 
        requirements of section 102 of the Food, Agriculture, 
        Conservation, and Trade Act of 1990 (7 U.S.C. 1446e-1) shall 
        not apply. Effective on the first day after the end of such 
        period, such section is repealed.
          (2) Exception.--Notwithstanding paragraph (1), in the event 
        that an injunction or other order of a court prohibits or 
        impairs the implementation of this section or the activities of 
        the Secretary under this section, the Secretary shall use the 
        authorities provided by section 102 of the Food, Agriculture, 
        Conservation, and Trade Act of 1990 (7 U.S.C. 1446e-1) until 
        such time as the injunction or other court order is lifted.
  (g) Effective Date; Implementation.--This section shall take effect 
on the first day of the first month beginning not less than 30 days 
after the date of the enactment of this Act. After such effective date, 
the Secretary may exercise the authority provided to the Secretary 
under this section without regard to the issuance of regulations 
intended to carry out this section.

SEC. 207. ESTABLISHMENT OF TEMPORARY CLASS I PRICE AND TEMPORARY CLASS 
                    I EQUALIZATION POOLS.

  (a) Temporary Pricing for Milk of the Highest Use Classification 
(Class I Milk).--
          (1) Establishment of minimum price.--During the 2-year period 
        beginning on the effective date of this section, the minimum 
        price for milk of the highest use classification marketed under 
        a 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, shall not be 
        less than the sum of--
                  (A) $12.87 per hundredweight; and
                  (B) the aggregate adjustment in effect under clauses 
                (1) and (2) of the second sentence of paragraph (5)(A) 
                of such section on December 31, 1995, for milk of the 
                highest use classification in that order.
          (2) Addition to minimum price.--If the basic formula price 
        for milk exceeds $12.87 per hundredweight in any month during 
        the 2-year period beginning on the effective date of this 
        section, the positive difference between the basic formula 
        price and $12.87 shall be added to the price for milk of the 
        highest use classification marketed under a marketing order 
        issued under such section 8c in the second month following the 
        month in which the difference occurred.
          (3) Effect on other use classifications.--This subsection 
        shall not affect the calculation of the basic formula price 
        used to determine the price for milk of use classifications 
        other than the highest use classification.
  (b) Class I Equalization Pools.--
          (1) Collections.--During the 2-year period beginning on the 
        effective date of this section, the Secretary of Agriculture 
        shall collect, on a monthly basis, from each marketing order 
        issued with respect to milk and its products under section 8c 
        of the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted 
        with amendments by the Agricultural Marketing Agreement Act of 
        1937, and from the comparable milk marketing order issued by 
        the State of California, an amount equal to the product of--
                  (A) $0.80 per hundredweight; and
                  (B) the total hundredweights of all milk of the 
                highest use classification marketed under the order for 
                the month.
          (2) Disbursements.--The Secretary shall pay, on a monthly 
        basis, to each marketing order referred to in paragraph (1) an 
        amount equal to the product of--
                  (A) the total collection under paragraph (1) for the 
                month; and
                  (B) the ratio of the total hundredweights of all milk 
                marketed for the month under that order to all milk 
                marketed for the month under all such orders.
          (3) Effect on blend prices.--Producer blend prices under a 
        milk marketing order shall be adjusted to account for 
        collections made under paragraph (1) and disbursements made 
        under paragraph (2).
  (c) Enforcement.--
          (1) In general.--Amounts for which a milk marketing order are 
        responsible under subsection (b) shall be determined on a 
        monthly basis and shall be collected and remitted to the 
        Secretary in the manner prescribed by the Secretary.
          (2) Penalties.--If any person fails to remit the amount 
        required in subsection (b) or fails to comply with such 
        requirements for recordkeeping or otherwise as are required by 
        the Secretary to carry out this section, the person shall be 
        liable to the Secretary for a civil penalty up to an amount 
        determined by multiplying--
                  (A) the quantity of milk involved in the violation; 
                by
                  (B) the support rate for milk in effect at the time 
                of the violation under section 201.
          (3) Enforcement.--The Secretary may enforce this section in 
        the courts of the United States.
  (d) Conforming Repeal.--Section 8c(5)(A) of the Agricultural 
Adjustment Act (7 U.S.C. 608c(5)(A)), reenacted with amendments by the 
Agricultural Marketing Agreement Act of 1937, is amended by striking 
out the sentence beginning ``Throughout the 2-year period'' and all 
that follows through the end of the subparagraph.
  (e) Effective Date.--Except as provided in subsection (f), this 
section shall take effect on the first day of the first month beginning 
not less than 30 days after the date of the enactment of this Act.
  (f) Implementation.--Not later than the effective date of this 
section, the Secretary shall amend Federal milk marketing orders 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, to effectuate the requirements of this section. The amendments 
shall not be--
          (1) subject to a referendum under subsection (17) or (19) of 
        such section among milk producers to determine whether issuance 
        of such order is approved or favored by milk producers;
          (2) preconditioned on the existence of a marketing agreement 
        among handlers under subsection (8) of such section and section 
        8b of such Act (7 U.S.C. 608b);
          (3) subject to rulemaking under title 5, United States Code; 
        or
          (4) subject to review or approval by other executive 
        agencies.

SEC. 208. ESTABLISHMENT OF TEMPORARY CLASS IV PRICE AND TEMPORARY CLASS 
                    IV EQUALIZATION POOL.

  (a) Temporary Classification of Class IV Milk.--
          (1) Classification.--For purposes of classifying milk in 
        accordance with the form in which or the purpose for which it 
        is used, the Secretary of Agriculture shall designate all milk 
        marketed in the 48 contiguous States of the United States and 
        used to produce butter, butter oil, nonfat dry milk, or dry 
        whole milk as Class IV milk. The Secretary may include other 
        products of milk, except cheese, within the Class IV 
        classification if the Secretary determines that inclusion of 
        the product would be fair and equitable.
          (2) Use of classification.--Each marketing order issued with 
        respect to milk and its products under section 8c of the 
        Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with 
        amendments by the Agricultural Marketing Agreement Act of 1937, 
        and each comparable State milk marketing order, shall use the 
        classification required by paragraph (1) in lieu of any other 
        classification, such as Class III-A milk, to properly classify 
        milk used to produce butter, butter oil, nonfat dry milk, or 
        dry whole milk.
  (b) Establishment of Class IV Pool.--The Secretary shall establish a 
Class IV pool for the purpose of making collections and disbursements 
related to milk classified as Class IV milk under subsection (a). The 
Class IV pool shall apply to milk covered by a milk marketing order 
referred to in subsection (a) and unregulated milk.
  (c) Establishment of Monthly Class IV Price.--For the purpose of 
determining whether the Secretary will make collections and 
disbursements under the Class IV equalization pool, the Secretary shall 
establish, on a monthly basis, a price for dairy products manufactured 
from Class IV milk on a 3.5 percent butterfat basis. In determining 
that price, the Secretary shall calculate the amount equal to--
          (1) the sum of--
                  (A) the product of the Western States Extra Grade and 
                Grade A price per pound for nonfat dry milk and 8.613; 
                and
                  (B) the product of the Chicago Mercantile Exchange 
                Grade AA price per pound for butter and 4.2; less
          (2) a manufacturing allowance equal to $1.65 per 
        hundredweight of milk.
  (d) Operation of Class IV Equalization Pool.--
          (1) Application of subsection.--This subsection shall apply 
        in any month in which the support price for milk under section 
        201, adjusted to 3.5 percent butterfat, exceeds the Class IV 
        price established under subsection (c).
          (2) Collection.--In any month in which the Class IV 
        equalization pool is in operation under paragraph (1), each 
        milk marketing order referred to in subsection (a) and each 
        handler of unregulated milk shall pay into the Class IV 
        equalization pool an amount equal to the product of--
                  (A) the total hundredweights of Class IV milk used to 
                manufacture dairy products during that month under all 
                such orders and by all such handlers;
                  (B) 50 percent of the amount by which the support 
                price for milk under section 201, adjusted to 3.5 
                percent butterfat, exceeded the Class IV price 
                determined under subsection (c) for that month; and
                  (C) the ratio of the total hundredweights of all milk 
                marketed during that month under that order or by that 
                handler to the total hundredweights of all milk 
                marketed for that month under all such orders and by 
                all such handlers.
          (3) Disbursements.--In any month in which the Class IV 
        equalization pool is in operation under paragraph (1), each 
        milk marketing order referred to in subsection (a) in which 
        products were manufactured from Class IV milk during that month 
        and each handler of unregulated milk that manufactured products 
        from Class IV milk during that month shall receive from the 
        Class IV equalization pool an amount equal to the product of--
                  (A) the total collection under paragraph (2) for the 
                month; and
                  (B) the ratio of the total hundredweights of Class IV 
                milk manufactured into dairy products during that month 
                under that order or by that handler to the total 
                hundredweights of Class IV milk manufactured into dairy 
                products during that month under all such orders and by 
                all such handlers.
          (4) Effect on blend prices.--Producer blend prices under a 
        milk marketing order referred to in subsection (a) shall be 
        adjusted to account for collections under paragraph (2) and 
        disbursements under paragraph (3).
  (e) Enforcement.--
          (1) In general.--Amounts for which a milk marketing order or 
        handler are responsible under subsection (b) shall be 
        determined on a monthly basis and shall be collected and 
        remitted to the Secretary in the manner prescribed by the 
        Secretary.
          (2) Penalties.--If any person fails to remit the amount 
        required in subsection (c) or fails to comply with such 
        requirements for recordkeeping or otherwise as are required by 
        the Secretary to carry out this section, the person shall be 
        liable to the Secretary for a civil penalty up to an amount 
        determined by multiplying--
                  (A) the quantity of milk involved in the violation; 
                by
                  (B) the support rate for milk in effect at the time 
                of the violation under section 201.
          (3) Enforcement.--The Secretary may enforce this section in 
        the courts of the United States.
  (f) Effective Date.--Except as provided in subsection (g), this 
section shall--
          (1) take effect on the first day of the first month beginning 
        not less than 30 days after the date of the enactment of this 
        Act; and
          (2) apply during the 2-year period beginning on such 
        effective date.
  (g) Implementation.--Not later than the start of the effective date 
of this section, the Secretary shall amend Federal milk marketing 
orders 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, to effectuate the requirements of this section. 
The amendments shall not be--
          (1) subject a referendum under subsection (17) or (19) of 
        such section among milk producers to determine whether issuance 
        of such order is approved or favored by milk producers;
          (2) preconditioned on the existence of a marketing agreement 
        among handlers under subsection (8) of such section and section 
        8b of such Act (7 U.S.C. 608b);
          (3) subject to rulemaking under title 5, United States Code; 
        or
          (4) subject to review or approval by other executive 
        agencies.

SEC. 209. AUTHORITY FOR ESTABLISHMENT OF STANDBY POOLS.

  (a) Authority to Establish.--As soon as possible after the effective 
date of this section, the Secretary of Agriculture shall publish in the 
Federal Register an invitation for interested persons to submit 
proposals for the establishment within Federal milk marketing orders 
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, of standby pools to facilitate the movement of 
milk over long distances during periods of shortage through the sharing 
of proceeds from sales of milk of the highest use classification due to 
producers under the order with producers shipping to plants regulated 
by another order to provide a reserve supply of milk in the other 
market.
  (b) Approval or Termination of Participation in Standby Pool.--Order 
provisions under this section shall not become effective in any 
marketing order unless such provisions are approved by producers in the 
manner provided for the approval of marketing orders under section 8c 
of the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with 
amendments by the Agricultural Marketing Agreement Act of 1937, but 
separately from other order provisions. Standby pool provisions 
approved under this section in an order may be disapproved separately 
by producers or terminated separately by the Secretary under section 
8c(16)(B) of such Act. Such disapproval or termination shall not be 
considered to be a disapproval or termination of the other terms of 
that order.
  (c) Effective Date.--This section shall take effect on the first day 
of the first month beginning not less than 30 days after the date of 
the enactment of this Act.

          Subtitle B--Reform of Federal Milk Marketing Orders

SEC. 221. ISSUANCE OR AMENDMENT OF FEDERAL MILK MARKETING ORDERS TO 
                    IMPLEMENT CERTAIN REFORMS.

  (a) Issuance of Amended Orders.--Subject to the time limits specified 
in section 222, the Secretary of Agriculture shall issue new or amended 
marketing orders with respect to milk and its products under section 8c 
of the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with 
amendments by the Agricultural Marketing Agreement Act of 1937, to 
effectuate the requirements of subsection (b). The orders shall take 
effect on the date the orders are issued and shall supersede all other 
marketing orders and any other statutes, rules, and regulations that 
are applicable to the pricing and marketing of milk and its products in 
effect immediately before that date, whether under the authority of 
section 8c of such Act or a State or local law.
  (b) Reform Requirements.--The Secretary shall reform the Federal milk 
marketing order system under subsection (a) to accomplish the following 
purposes:
          (1) Consolidation of Federal milk marketing orders into not 
        less than 8 nor more than 13 orders, which shall also include 
        those areas of the 48 contiguous States not covered by a 
        Federal milk marketing order on the date of the enactment of 
        this Act. One of the new Federal milk marketing orders shall 
        only cover the State of California. A new or amended order 
        shall have the right to blend order receipts to address unique 
        issues to that order such as a preexisting State quota system.
          (2) Implementation of uniform multiple component pricing for 
        milk used in manufactured dairy products.
          (3) Establishment of class prices for milk used to produce 
        cheese, nonfat dry milk, and butter based on national product 
        prices, less a manufacturing allowance. The resulting prices 
        shall not vary regionally, except to reflect variances in 
        transportation and reasonable operating costs, if any, of 
        efficient processing plants in different geographical areas.
  (c) Status of Producer Handlers.--In amending Federal milk marketing 
orders under this section, the Secretary shall ensure that the legal 
status of producer handlers of milk under the Agricultural Adjustment 
Act (7 U.S.C. 601 et seq.), reenacted with amendments by the 
Agricultural Marketing Agreement Act of 1937, shall be the same after 
the amendments made by this section take effect as it was before the 
effective date of the amendments.

SEC. 222. REFORM PROCESS.

  (a) Process.--In preparation for the issuance of the new or amended 
Federal milk marketing orders required under section 221, the Secretary 
of Agriculture shall comply with the following expedited procedural 
requirements:
          (1) Not later than 165 days after the date of the enactment 
        of this Act, the Secretary shall issue proposed amendments or 
        new milk marketing orders to effectuate the reform requirements 
        specified in such section.
          (2) The Secretary shall provide for a 75-day comment period 
        on the proposed amendments or orders issued under paragraph 
        (1).
          (3) Not later than 120 days after the end of the comment 
        period provided under paragraph (2), the Secretary shall 
        publish in the Federal Register a final administrative decision 
        regarding the issuance or amendment of Federal milk marketing 
        orders to effectuate the reform requirements specified in such 
        section.
  (b) Referendum and Marketing Agreement.--After the issuance of the 
new or amended Federal milk marketing orders under section 221, the 
Secretary may conduct a referendum in the manner provided in section 
8c(16)(B) of the Agricultural Adjustment Act (7 U.S.C. 608c(16)(B)), 
reenacted with amendments by the Agricultural Marketing Agreement Act 
of 1937, with respect to each order to determine whether milk producers 
subject to the order favor the termination of the order.
  (c) Application of Administrative Procedures Act.--The issuance of 
the new or amended Federal milk marketing orders required under section 
221 shall not be subject to rulemaking under title 5, United States 
Code.
  (d) Review and Approval.--The action of the Secretary under section 
221 shall not be subject to review or approval by any other executive 
agency.

SEC. 223. EFFECT OF FAILURE TO COMPLY WITH REFORM PROCESS REQUIREMENTS.

  (a) Failure to Timely Issue or Amend Orders.--If, before the end of 
the 1-year period beginning on the date of the enactment of this Act, 
the Secretary of Agriculture does not issue new or amended Federal milk 
marketing orders under section 8c of the Agricultural Adjustment Act (7 
U.S.C. 608c), reenacted with amendments by the Agricultural Marketing 
Agreement Act of 1937, to effectuate the requirements of section 
221(b), then the Secretary may not assess or collect assessments from 
milk producers or handlers under such section 8c for marketing order 
administration and services provided under such section after the end 
of that period. The Secretary may not reduce the level of services 
provided under such section on account of the prohibition against 
assessments, but shall rather cover the cost of marketing order 
administration and services through funds available for the 
Agricultural Marketing Service of the Department of Agriculture.
  (b) Failure to Timely Implement Orders.--Unless the Secretary 
certifies to Congress before the end of the 2-year period beginning on 
the date of the enactment of this Act that all of the Federal marketing 
order reforms required by section 221(b) have been fully implemented, 
then, effective at the end of that period--
          (1) the Secretary shall immediately cease all price support 
        activities under section 201;
          (2) the Secretary shall immediately terminate all Federal 
        milk marketing orders under section 8c of the Agricultural 
        Adjustment Act (7 U.S.C. 608c), reenacted with amendments by 
        the Agricultural Marketing Agreement Act of 1937, and may not 
        issue any further order under such Act with respect to milk;
          (3) the Commodity Credit Corporation shall immediately cease 
        to operate the dairy export incentive program under section 153 
        of the Food Security Act of 1985 (15 U.S.C. 713a-14);
          (4) the Secretary and the National Processor Advertising and 
        Promotion Board shall immediately cease all activities under 
        the Fluid Milk Promotion Act of 1990 (7 U.S.C. 6401 et seq.); 
        and
          (5) the Secretary and the National Dairy Promotion and 
        Research Board shall immediately cease all activities under the 
        Dairy Production Stabilization Act of 1983 (7 U.S.C. 4501 et 
        seq.).
  (c) Effect of Court Order.--The actions authorized by this section 
are intended to ensure the timely publication and implementation of new 
and amended Federal milk marketing orders 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 the event that 
the Secretary is enjoined or otherwise restrained by a court order from 
publishing or implementing the reform requirements specified by section 
221, the length of time for which that injunction or other restraining 
order is effective shall be added to the time limitations specified in 
subsections (a) and (b) thereby extending those time limitations by a 
period of time equal to the period of time for which the injunction or 
other restraining order is effective.

                        TITLE III--CONSERVATION

SEC. 301. CONSERVATION.

  (a) Funding.--Subtitle E of title XII of the Food Security Act of 
1985 (16 U.S.C. 3841 et seq.) is amended to read as follows:

                         ``Subtitle E--Funding

``SEC. 1241. FUNDING.

  ``(a) Mandatory Expenses.--For each of fiscal years 1996 through 
2002, the Secretary shall use the funds of the Commodity Credit 
Corporation to carry out the programs authorized by--
          ``(1) subchapter B of chapter 1 of subtitle D (including 
        contracts extended by the Secretary pursuant to section 1437 of 
        the Food, Agriculture, Conservation, and Trade Act of 1990 
        (Public Law 101-624; 16 U.S.C. 3831 note));
          ``(2) subchapter C of chapter 1 of subtitle D; and
          ``(3) chapter 4 of subtitle D.
  ``(b) Livestock Environmental Assistance Program.--For each of fiscal 
years 1996 through 2002, $100,000,000 of the funds of the Commodity 
Credit Corporation shall be available for providing technical 
assistance, cost-sharing payments, and incentive payments for practices 
relating to livestock production under the livestock environmental 
assistance program under chapter 4 of subtitle D.''.
  (b) Livestock Environmental Assistance Program.--Subtitle D of title 
XII of the Food Security Act of 1985 (16 U.S.C. 3830 et seq.) is 
amended by adding at the end the following:

        ``CHAPTER 4--LIVESTOCK ENVIRONMENTAL ASSISTANCE PROGRAM

``SEC. 1240. DEFINITIONS.

  ``In this chapter:
          ``(1) Land management practice.--The term `land management 
        practice' means a site-specific nutrient or manure management, 
        irrigation management, tillage or residue management, grazing 
        management, or other land management practice that the 
        Secretary determines is needed to protect, in the most cost 
        effective manner, water, soil, or related resources from 
        degradation due to livestock production.
          ``(2) Large confined livestock operation.--The term `large 
        confined livestock operation' means an operation that--
                  ``(A) is a confined animal feeding operation; and
                  ``(B) has more than--
                          ``(i) 55 mature dairy cattle;
                          ``(ii) 10,000 beef cattle;
                          ``(iii) 30,000 laying hens or broilers (if 
                        the facility has continuous overflow watering);
                          ``(iv) 100,000 laying hens or broilers (if 
                        the facility has a liquid manure system);
                          ``(v) 55,000 turkeys;
                          ``(vi) 15,000 swine; or
                          ``(vii) 10,000 sheep or lambs.
          ``(3) Livestock.--The term `livestock' means dairy cows, beef 
        cattle, laying hens, broilers, turkeys, swine, sheep, lambs, 
        and such other animals as determined by the Secretary.
          ``(4) Operator.--The term `operator' means a person who is 
        engaged in livestock production (as defined by the Secretary).
          ``(5) Structural practice.--The term `structural practice' 
        means the establishment of an animal waste management facility, 
        terrace, grassed waterway, contour grass strip, filterstrip, or 
        other structural practice that the Secretary determines is 
        needed to protect, in the most cost effective manner, water, 
        soil, or related resources from degradation due to livestock 
        production.

``SEC. 1240A. ESTABLISHMENT AND ADMINISTRATION OF LIVESTOCK 
                    ENVIRONMENTAL ASSISTANCE PROGRAM.

  ``(a) Establishment.--
          ``(1) In general.--During the 1996 through 2002 fiscal years, 
        the Secretary shall provide technical assistance, cost-sharing 
        payments, and incentive payments to operators who enter into 
        contracts with the Secretary, through a livestock environmental 
        assistance program.
          ``(2) Eligible practices.--
                  ``(A) Structural practices.--An operator who 
                implements a structural practice shall be eligible for 
                technical assistance or cost-sharing payments, or both.
                  ``(B) Land management practices.--An operator who 
                performs a land management practice shall be eligible 
                for technical assistance or incentive payments, or 
                both.
          ``(3) Eligible land.--Assistance under this chapter may be 
        provided with respect to land that is used for livestock 
        production and on which a serious threat to water, soil, or 
        related resources exists, as determined by the Secretary, by 
        reason of the soil types, terrain, climatic, soil, topographic, 
        flood, or saline characteristics, or other factors or natural 
        hazards.
          ``(4) Selection criteria.--In providing technical assistance, 
        cost-sharing payments, and incentive payments to operators in a 
        region, watershed, or conservation priority area in which an 
        agricultural operation is located, the Secretary shall 
        consider--
                  ``(A) the significance of the water, soil, and 
                related natural resource problems; and
                  ``(B) the maximization of environmental benefits per 
                dollar expended.
  ``(b) Application and Term.--
          ``(1) In general.--A contract between an operator and the 
        Secretary under this chapter may--
                  ``(A) apply to 1 or more structural practices or 1 or 
                more land management practices, or both; and
                  ``(B) have a term of not less than 5, nor more than 
                10 years, as determined appropriate by the Secretary, 
                depending on the practice or practices that are the 
                basis of the contract.
          ``(2) Duties of operators and secretary.--To receive cost-
        sharing or incentive payments, or technical assistance, 
        participating operators shall comply with all terms and 
        conditions of the contract and a plan, as established by the 
        Secretary.
  ``(c) Structural Practices.--
          ``(1) Competitive offer.--The Secretary shall administer a 
        competitive offer system for operators proposing to receive 
        cost-sharing payments in exchange for the implementation of 1 
        or more structural practices by the operator. The competitive 
        offer system shall consist of--
                  ``(A) the submission of a competitive offer by the 
                operator in such manner as the Secretary may prescribe; 
                and
                  ``(B) evaluation of the offer in light of the 
                selection criteria established under subsection (a)(4) 
                and the projected cost of the proposal, as determined 
                by the Secretary.
          ``(2) Concurrence of owner.--If the operator making an offer 
        to implement a structural practice is a tenant of the land 
        involved in agricultural production, for the offer to be 
        acceptable, the operator shall obtain the concurrence of the 
        owner of the land with respect to the offer.
  ``(d) Land Management Practices.--The Secretary shall establish an 
application and evaluation process for awarding technical assistance or 
incentive payments, or both, to an operator in exchange for the 
performance of 1 or more land management practices by the operator.
  ``(e) Cost-Sharing, Incentive Payments, and Technical Assistance.--
          ``(1) Cost-sharing payments.--
                  ``(A) In general.--The Federal share of cost-sharing 
                payments to an operator proposing to implement 1 or 
                more structural practices shall not be greater than 75 
                percent of the projected cost of each practice, as 
                determined by the Secretary, taking into consideration 
                any payment received by the operator from a State or 
                local government.
                  ``(B) Limitation.--An operator of a large confined 
                livestock operation shall not be eligible for cost-
                sharing payments to construct an animal waste 
                management facility.
                  ``(C) Other payments.--An operator shall not be 
                eligible for cost-sharing payments for structural 
                practices on eligible land under this chapter if the 
                operator receives cost-sharing payments or other 
                benefits for the same land under chapter 1, 2, or 3.
          ``(2) Incentive payments.--The Secretary shall make incentive 
        payments in an amount and at a rate determined by the Secretary 
        to be necessary to encourage an operator to perform 1 or more 
        land management practices.
          ``(3) Technical assistance.--
                  ``(A) Funding.--The Secretary shall allocate funding 
                under this chapter for the provision of technical 
                assistance according to the purpose and projected cost 
                for which the technical assistance is provided for a 
                fiscal year. The allocated amount may vary according to 
                the type of expertise required, quantity of time 
                involved, and other factors as determined appropriate 
                by the Secretary. Funding shall not exceed the 
                projected cost to the Secretary of the technical 
                assistance provided for a fiscal year.
                  ``(B) Other authorities.--The receipt of technical 
                assistance under this chapter shall not affect the 
                eligibility of the operator to receive technical 
                assistance under other authorities of law available to 
                the Secretary.
  ``(f) Limitation on Payments.--
          ``(1) In general.--The total amount of cost-sharing and 
        incentive payments paid to a person under this chapter may not 
        exceed--
                  ``(A) $10,000 for any fiscal year; or
                  ``(B) $50,000 for any multiyear contract.
          ``(2) Regulations.--The Secretary shall issue regulations 
        that are consistent with section 1001 for the purpose of--
                  ``(A) defining the term `person' as used in paragraph 
                (1); and
                  ``(B) prescribing such rules as the Secretary 
                determines necessary to ensure a fair and reasonable 
                application of the limitations established under this 
                subsection.
  ``(g) Regulations.--Not later than 180 days after the effective date 
of this subsection, the Secretary shall issue regulations to implement 
the livestock environmental assistance program established under this 
chapter.''.
  (c) Conforming Program Changes.--
          (1) Wetlands reserve program.--
                  (A) In general.--Section 1237 of the Food Security 
                Act of 1985 (16 U.S.C. 3837) is amended--
                          (i) in subsection (b)(2)--
                                  (I) by striking ``not less'' and 
                                inserting ``not more''; and
                                  (II) by striking ``2000'' and 
                                inserting ``2002''; and
                          (ii) in subsection (c), by striking ``2000'' 
                        and inserting ``2002''.
                  (B) Length of easement.--Section 1237A(e) of the Food 
                Security Act of 1985 (16 U.S.C. 3837a(e)) is amended by 
                striking paragraph (2) and inserting the following:
          ``(2) shall be for 15 years, but in no case shall be a 
        permanent easement.''.
          (2) Conservation reserve program.--Section 1231(d) of the 
        Food Security Act of 1985 (16 U.S.C. 3831(d)) is amended by 
        striking ``total of'' and all that follows through the period 
        at the end of the subsection and inserting ``total of 
        36,400,000 acres.''. Section 725 of the Agriculture, Rural 
        Development, Food and Drug Administration, and Related Agencies 
        Appropriations Act, 1996 (Public Law 104-37; 109 Stat. 332), is 
        amended by striking the proviso relating to enrollment of new 
        acres in 1997.

          TITLE IV--AGRICULTURAL PROMOTION AND EXPORT PROGRAMS

SEC. 401. MARKET PROMOTION PROGRAM.

  Effective as of October 1, 1995, section 211(c)(1) of the 
Agricultural Trade Act of 1978 (7 U.S.C. 5641(c)(1)) is amended--
          (1) by striking ``and'' after ``1991 through 1993,''; and
          (2) by striking ``through 1997,'' and inserting ``through 
        1995, and not more than $100,000,000 for each of fiscal years 
        1996 through 2002,''.

SEC. 402. EXPORT ENHANCEMENT PROGRAM.

  Effective as of October 1, 1995, section 301(e)(1) of the 
Agricultural Trade Act of 1978 (7 U.S.C. 5651(e)(1)) is amended to read 
as follows:
          ``(1) In general.--The Commodity Credit Corporation shall 
        make available to carry out the program established under this 
        section not more than--
                  ``(A) $350,000,000 for fiscal year 1996;
                  ``(B) $350,000,000 for fiscal year 1997;
                  ``(C) $500,000,000 for fiscal year 1998;
                  ``(D) $550,000,000 for fiscal year 1999;
                  ``(E) $579,000,000 for fiscal year 2000;
                  ``(F) $478,000,000 for fiscal year 2001; and
                  ``(G) $478,000,000 for fiscal year 2002.''.

                         TITLE V--MISCELLANEOUS

SEC. 501. CROP INSURANCE.

  (a) Catastrophic Risk Protection.--Section 508(b) of the Federal Crop 
Insurance Act (7 U.S.C. 1508(b)) is amended--
          (1) in paragraph (4), by adding at the end the following:
                  ``(C) Delivery of coverage.--
                          ``(i) In general.--In full consultation with 
                        approved insurance providers, the Secretary may 
                        continue to offer catastrophic risk protection 
                        in a State (or a portion of a State) through 
                        local offices of the Department if the 
                        Secretary determines that there is an 
                        insufficient number of approved insurance 
                        providers operating in the State or portion to 
                        adequately provide catastrophic risk protection 
                        coverage to producers.
                          ``(ii) Coverage by approved insurance 
                        providers.--To the extent that catastrophic 
                        risk protection coverage by approved insurance 
                        providers is sufficiently available in a State 
                        as determined by the Secretary, only approved 
                        insurance providers may provide the coverage in 
                        the State.
                          ``(iii) Current policies.--Subject to clause 
                        (ii), all catastrophic risk protection policies 
                        written by local offices of the Department 
                        shall be transferred (including all fees 
                        collected for the crop year in which the 
                        approved insurance provider will assume the 
                        policies) to the approved insurance provider 
                        for performance of all sales, service, and loss 
                        adjustment functions.''; and
          (2) in paragraph (7), by striking subparagraph (A) and 
        inserting the following:
                  ``(A) In general.--Effective for the spring-planted 
                1996 and subsequent crops, to be eligible for any 
                payment or loan under title I of the Agricultural 
                Market Transition Act or the Agricultural Adjustment 
                Act of 1938 (7 U.S.C. 1281 et seq.), for the 
                conservation reserve program, or for any benefit 
                described in section 371 of the Consolidated Farm and 
                Rural Development Act (7 U.S.C. 2008f), a person 
                shall--
                          ``(i) obtain at least the catastrophic level 
                        of insurance for each crop of economic 
                        significance in which the person has an 
                        interest; or
                          ``(ii) provide a written waiver to the 
                        Secretary that waives any eligibility for 
                        emergency crop loss assistance in connection 
                        with the crop.''.
  (b) Coverage of Seed Crops.--Section 519(a)(2)(B) of the Act (7 
U.S.C. 1519(a)(2)(B)) is amended by inserting ``seed crops,'' after 
``turfgrass sod,''.

SEC. 502. COLLECTION AND USE OF AGRICULTURAL QUARANTINE AND INSPECTION 
                    FEES.

  Subsection (a) of section 2509 of the Food, Agriculture, 
Conservation, and Trade Act of 1990 (21 U.S.C. 136a) is amended to read 
as follows:
  ``(a) Quarantine and Inspection Fees.--
          ``(1) Fees authorized.--The Secretary of Agriculture may 
        prescribe and collect fees sufficient--
                  ``(A) to cover the cost of providing agricultural 
                quarantine and inspection services in connection with 
                the arrival at a port in the customs territory of the 
                United States, or the preclearance or preinspection at 
                a site outside the customs territory of the United 
                States, of an international passenger, commercial 
                vessel, commercial aircraft, commercial truck, or 
                railroad car;
                  ``(B) to cover the cost of administering this 
                subsection; and
                  ``(C) through fiscal year 2002, to maintain a 
                reasonable balance in the Agricultural Quarantine 
                Inspection User Fee Account established under paragraph 
                (5).
          ``(2) Limitation.--In setting the fees under paragraph (1), 
        the Secretary shall ensure that the amount of the fees are 
        commensurate with the costs of agricultural quarantine and 
        inspection services with respect to the class of persons or 
        entities paying the fees. The costs of the services with 
        respect to passengers as a class includes the costs of related 
        inspections of the aircraft or other vehicle.
          ``(3) Status of fees.--Fees collected under this subsection 
        by any person on behalf of the Secretary are held in trust for 
        the United States and shall be remitted to the Secretary in 
        such manner and at such times as the Secretary may prescribe.
          ``(4) Late payment penalties.--If a person subject to a fee 
        under this subsection fails to pay the fee when due, the 
        Secretary shall assess a late payment penalty, and the overdue 
        fees shall accrue interest, as required by section 3717 of 
        title 31, United States Code.
          ``(5) Agricultural quarantine inspection user fee account.--
                  ``(A) Establishment.--There is established in the 
                Treasury of the United States a no-year fund, to be 
                known as the `Agricultural Quarantine Inspection User 
                Fee Account', which shall contain all of the fees 
                collected under this subsection and late payment 
                penalties and interest charges collected under 
                paragraph (4) through fiscal year 2002.
                  ``(B) Use of account.--For each of the fiscal years 
                1996 through 2002, funds in the Agricultural Quarantine 
                Inspection User Fee Account shall be available, in such 
                amounts as are provided in advance in appropriations 
                Acts, to cover the costs associated with the provision 
                of agricultural quarantine and inspection services and 
                the administration of this subsection. Amounts made 
                available under this subparagraph shall be available 
                until expended.
                  ``(C) Excess fees.--Fees and other amounts collected 
                under this subsection in any of the fiscal years 1996 
                through 2002 in excess of $100,000,000 shall be 
                available for the purposes specified in subparagraph 
                (B) until expended, without further appropriation.
          ``(6) Use of amounts collected after fiscal year 2002.--After 
        September 30, 2002, the unobligated balance in the Agricultural 
        Quarantine Inspection User Fee Account and fees and other 
        amounts collected under this subsection shall be credited to 
        the Department of Agriculture accounts that incur the costs 
        associated with the provision of agricultural quarantine and 
        inspection services and the administration of this subsection. 
        The fees and other amounts shall remain available to the 
        Secretary until expended without fiscal year limitation.
          ``(7) Staff years.--The number of full-time equivalent 
        positions in the Department of Agriculture attributable to the 
        provision of agricultural quarantine and inspection services 
        and the administration of this subsection shall not be counted 
        toward the limitation on the total number of full-time 
        equivalent positions in all agencies specified in section 5(b) 
        of the Federal Workforce Restructuring Act of 1994 (Public Law 
        103-226; 5 U.S.C. 3101 note) or other limitation on the total 
        number of full-time equivalent positions.''.

SEC. 503. COMMODITY CREDIT CORPORATION INTEREST RATE.

  Notwithstanding any other provision of law, the monthly Commodity 
Credit Corporation interest rate applicable to loans provided for 
agricultural commodities by the Corporation shall be 100 basis points 
greater than the rate determined under the applicable interest rate 
formula in effect on October 1, 1995.

SEC. 504. ESTABLISHMENT OF OFFICE OF RISK MANAGEMENT.

  (a) Establishment.--The Department of Agriculture Reorganization Act 
of 1994 is amended by inserting after section 226 (7 U.S.C. 6932) the 
following new section:

``SEC. 226A. OFFICE OF RISK MANAGEMENT.

  ``(a) Establishment.--Subject to subsection (e), the Secretary shall 
establish and maintain in the Department an independent Office of Risk 
Management.
  ``(b) Functions of the Office of Risk Management.--The Office of Risk 
Management shall have jurisdiction over the following functions:
          ``(1) Supervision of the Federal Crop Insurance Corporation.
          ``(2) Administration and oversight of all aspects, including 
        delivery through local offices of the Department, of all 
        programs authorized under the Federal Crop Insurance Act (7 
        U.S.C. 1501 et seq.).
          ``(3) Any pilot or other programs involving revenue 
        insurance, risk management savings accounts, or the use of the 
        futures market to manage risk and support farm income that may 
        be established under the Federal Crop Insurance Act or other 
        law.
          ``(4) Such other functions as the Secretary considers 
        appropriate.
  ``(c) Administrator.--
          ``(1) The Office of Risk Management shall be headed by an 
        Administrator who shall be appointed by the Secretary.
          ``(2) The Administrator of the Office of Risk Management 
        shall also serve as Manager of the Federal Crop Insurance 
        Corporation.
  ``(d) Resources.--
          ``(1) Functional coordination.--Certain functions of the 
        Office of Risk Management, such as human resources, public 
        affairs, and legislative affairs, may be provided by a 
        consolidation of such functions under the Under Secretary of 
        Agriculture for Farm and Foreign Agricultural Services.
          ``(2) Minimum provisions.--Notwithstanding paragraph (1) or 
        any other provision of law or order of the Secretary, the 
        Secretary shall provide the Office of Risk Management with 
        human and capital resources sufficient for the Office to carry 
        out its functions in a timely and efficient manner.''.
  (b) Fiscal Year 1996 Funding.--Not less than $88,500,000 of the 
appropriation provided for the salaries and expenses of the 
Consolidated Farm Services Agency in the Agricultural, Rural 
Development, Food and Drug Administration, and Related Agencies 
Appropriations Act, 1996 shall be available for the salaries and 
expenses of the Office of Risk Management established under subsection 
(a).
  (c) Conforming Amendment.--Section 226(b) of the Act (7 U.S.C. 
6932(b)) is amended by striking paragraph (2).

SEC. 505. BUSINESS INTERRUPTION INSURANCE PROGRAM.

  (a) Establishment of Program.--Not later than December 31, 1996, the 
Secretary of Agriculture shall implement a program (to be known as the 
``Business Interruption Insurance Program''), under which the producer 
of a contract commodity could elect to obtain revenue insurance 
coverage to ensure that the producer receives an indemnity payment if 
the producer suffers a loss of revenue. The nature and extent of the 
program and the manner of determining the amount of an indemnity 
payment shall be established by the Secretary.
  (b) Report on Progress and Proposed Expansion.--Not later than 
January 1, 1998, the Secretary shall submit to the Commission on 21st 
Century Production Agriculture the data and results of the program 
through October 1, 1997. In addition, the Secretary shall submit 
information and recommendations to the Commission with respect to the 
program that will serve as the basis for the Secretary to offer revenue 
insurance to agricultural producers, at one or more levels of coverage, 
that--
          (1) is in addition to, or in lieu of, catastrophic and higher 
        levels of crop insurance;
          (2) is offered through reinsurance arrangements with private 
        insurance companies;
          (3) is actuarially sound; and
          (4) requires the payment of premiums and administrative fees 
        by participating producers.
  (c) Contract Commodity Defined.--In this section, the term ``contract 
commodity'' means a crop of wheat, corn, grain sorghum, oats, barley, 
upland cotton, or rice.

SEC. 506. CONTINUATION OF OPTIONS PILOT PROGRAM.

  During the 1996 through 2002 crop years, the Secretary of Agriculture 
may continue to conduct the options pilot program authorized by the 
Options Pilot Program Act of 1990 (subtitle E of title XI of Public Law 
101-624; 104 Stat. 3518; 7 U.S.C. 1421 note). To the extent that the 
Secretary decides to continue the options pilot program, the Secretary 
shall modify the terms and conditions of the pilot program to reflect 
the changes to law made by this Act.

      TITLE VI--COMMISSION ON 21ST CENTURY PRODUCTION AGRICULTURE

SEC. 601. ESTABLISHMENT.

  There is hereby established a commission to be known as the 
``Commission on 21st Century Production Agriculture'' (in this title 
referred to as the ``Commission'').

SEC. 602. COMPOSITION.

  (a) Membership and Appointment.--The Commission shall be composed of 
11 members, appointed as follows:
          (1) Three members shall be appointed by the President.
          (2) Four members shall be appointed by the Chairman of the 
        Committee on Agriculture of the House of Representatives in 
        consultation with the ranking minority member of the Committee.
          (3) Four members shall be appointed by the Chairman of the 
        Committee on Agriculture, Nutrition, and Forestry of the Senate 
        in consultation with the ranking minority member of the 
        Committee.
  (b) Qualifications.--At least one of the members appointed under each 
of the paragraphs (1), (2), and (3) of subsection (a) shall be an 
individual who is primarily involved in production agriculture. All 
other members of the Commission shall be appointed from among 
individuals having knowledge and experience in agricultural production, 
marketing, finance, or trade.
  (c) Term of Members; Vacancies.--Members of the Commission shall be 
appointed for the life of the Commission. A vacancy on the Commission 
shall not affect its powers, but shall be filled in the same manner as 
the original appointment was made.
  (d) Time for Appointment; First Meeting.--The members of the 
Commission shall be appointed not later than October 1, 1997. The 
Commission shall convene its first meeting to carry out its duties 
under this Act 30 days after six members of the Commission have been 
appointed.
  (e) Chairman.--The chairman of the Commission shall be designated 
jointly by the Chairman of the Committee on Agriculture of the House of 
Representatives and the Chairman of the Committee on Agriculture, 
Nutrition, and Forestry of the Senate from among the members of the 
Commission.

SEC. 603. COMPREHENSIVE REVIEW OF PAST AND FUTURE OF PRODUCTION 
                    AGRICULTURE.

  (a) Initial Review.--The Commission shall conduct a comprehensive 
review of changes in the condition of production agriculture in the 
United States since the date of the enactment of this Act and the 
extent to which such changes are the result of the amendments made by 
this Act. The review shall include the following:
          (1) An assessment of the initial success of production 
        flexibility contracts under section 103 in supporting the 
        economic viability of farming in the United States.
          (2) An assessment of the food security situation in the 
        United States in the areas of trade, consumer prices, 
        international competitiveness of United States production 
        agriculture, food supplies, and humanitarian relief.
          (3) An assessment of the changes in farmland values and 
        agricultural producer incomes since the date of the enactment 
        of this Act.
          (4) An assessment of the extent to which regulatory relief 
        for agricultural producers has been enacted and implemented, 
        including the application of cost/benefit principles in the 
        issuance of agricultural regulations.
          (5) An assessment of the extent to which tax relief for 
        agricultural producers has been enacted in the form of capital 
        gains tax reductions, estate tax exemptions, and mechanisms to 
        average tax loads over high and low income years.
          (6) An assessment of the effect of any Government 
        interference in agricultural export markets, such as the 
        imposition of trade embargoes, and the degree of implementation 
        and success of international trade agreements.
          (7) An assessment of the likely affect of the sale, lease, or 
        transfer of farm poundage quota for peanuts across State lines.
  (b) Subsequent Review.--The Commission shall conduct a comprehensive 
review of the future of production agriculture in the United States and 
the appropriate role of the Federal Government in support of production 
agriculture. The review shall include the following:
          (1) An assessment of changes in the condition of production 
        agriculture in the United States since the initial review 
        conducted under subsection (a).
          (2) Identification of the appropriate future relationship of 
        the Federal Government with production agriculture after 2002.
          (3) An assessment of the personnel and infrastructure 
        requirements of the Department of Agriculture necessary to 
        support the future relationship of the Federal Government with 
        production agriculture.
  (c) Recommendations.--In carrying out the subsequent review under 
subsection (b), the Commission shall develop specific recommendations 
for legislation to achieve the appropriate future relationship of the 
Federal Government with production agriculture identified under 
subsection (a)(2).

SEC. 604. REPORTS.

  (a) Report on Initial Review.--Not later than June 1, 1998, the 
Commission shall submit to the President, the Committee on Agriculture 
of the House of Representatives, and the Committee on Agriculture, 
Nutrition, and Forestry of the Senate a report containing the results 
of the initial review conducted under section 603(a).
  (b) Report on Subsequent Review.--Not later than January 1, 2001, the 
Commission shall submit to the President and the congressional 
committees specified in subsection (a) a report containing the results 
of the subsequent review conducted under section 603(b).

SEC. 605. POWERS.

  (a) Hearings.--The Commission may, for the purpose of carrying out 
this Act, conduct such hearings, sit and act at such times, take such 
testimony, and receive such evidence, as the Commission considers 
appropriate.
  (b) Assistance From Other Agencies.--The Commission may secure 
directly from any department or agency of the Federal Government such 
information as may be necessary for the Commission to carry out its 
duties under this Act. Upon request of the chairman of the Commission, 
the head of the department or agency shall, to the extent permitted by 
law, furnish such information to the Commission.
  (c) Mail.--The Commission may use the United States mails in the same 
manner and under the same conditions as the departments and agencies of 
the Federal Government.
  (d) Assistance From Secretary.--The Secretary of Agriculture shall 
provide to the Commission appropriate office space and such reasonable 
administrative and support services as the Commission may request.

SEC. 606. COMMISSION PROCEDURES.

  (a) Meetings.--The Commission shall meet on a regular basis (as 
determined by the chairman) and at the call of the chairman or a 
majority of its members.
  (b) Quorum.--A majority of the members of the Commission shall 
constitute a quorum for the transaction of business.

SEC. 607. PERSONNEL MATTERS.

  (a) Compensation.--Each member of the Commission shall serve without 
compensation, but shall be allowed travel expenses including per diem 
in lieu of subsistence, as authorized by section 5703 of title 5, 
United States Code, when engaged in the performance of Commission 
duties.
  (b) Staff.--The Commission shall appoint a staff director, who shall 
be paid at a rate not to exceed the maximum rate of basic pay under 
section 5376 of title 5, United States Code, and such professional and 
clerical personnel as may be reasonable and necessary to enable the 
Commission to carry out its duties under this Act without regard to the 
provisions of title 5, United States Code, governing appointments in 
the competitive service, and without regard to the provisions of 
chapter 51 and subchapter III of chapter 53 of such title, or any other 
provision of law, relating to the number, classification, and General 
Schedule rates. No employee appointed under this subsection (other than 
the staff director) may be compensated at a rate to exceed the maximum 
rate applicable to level GS-15 of the General Schedule.
  (c) Detailed Personnel.--Upon request of the chairman of the 
Commission, the head of any department or agency of the Federal 
Government is authorized to detail, without reimbursement, any 
personnel of such department or agency to the Commission to assist the 
Commission in carrying out its duties under this section. The detail of 
any such personnel may not result in the interruption or loss of civil 
service status or privilege of such personnel.

SEC. 608. TERMINATION OF COMMISSION.

  The Commission shall terminate upon submission of the final report 
required by section 604.

              TITLE VII--EXTENSION OF CERTAIN AUTHORITIES

SEC. 701. EXTENSION OF AUTHORITY UNDER PUBLIC LAW 480.

  Section 408 of the Agricultural Trade Development and Assistance Act 
of 1954 (7 U.S.C. 1736b) is amended by striking ``1995'' and inserting 
``1996''.

SEC. 702. EXTENSION OF FOOD FOR PROGRESS PROGRAM.

  Section 1110 of the Food Security Act of 1985 (7 U.S.C. 1736o), also 
known as the Food for Progress Act of 1985, is amended--
          (1) in subsection (k), by striking ``1995'' and inserting 
        ``1996''; and
          (2) in subsection (l), by striking ``1995'' and inserting 
        ``1996''.

                           Brief Explanation

    H.R. 2854, the ``Agricultural Market Transition Act'', as 
amended in Committee, will substantially reduce projected 
agriculture spending for farm commodity programs over the 
period, fiscal years 1996 through 2002.
    It is substantially similar to title I of H.R. 2491, that 
was cited as the ``Agricultural Reconciliation Act of 1995''. 
This bill is designed to reform U.S. agricultural policy to 
perhaps the greatest extent since the 1930's. The bill also 
substantially conforms to the reconciliation instructions as 
they relate to farm programs as directed to the Committee on 
Agriculture in House Concurrent Resolution 67, the Current 
Resolution on the Budget--Fiscal Year 1996. The provisions in 
the bill recognize the realities of a post-GATT and NAFTA world 
trade environment within which U.S. farmers and producers must 
compete as we approach the 21st Century.

                            Purpose and Need

            title i--agricultural market transition program

Summary

    The reforms accomplished by H.R. 2854 will help transition 
U.S. agricultural producers into a new era of a market-oriented 
Federal farm policy while simultaneously providing fixed, 
declining payments over seven years in order to minimize the 
economic distortions resulting from the change away from the 
New Deal Era Federal farm programs. These reforms in Federal 
farm program policy in this title also have substantial 
savings. It is understood that the December 1995 baseline was 
used by the Congressional Budget Office in preparing the 
estimates for this bill, including the savings that could be 
achieved from Federal farm programs over the fiscal years 1996 
through 2002; however, that estimate was not available at the 
time this report was being prepared and the estimate itself, 
while substantial, appears elsewhere in this report as noted in 
the table of contents.

Background

    Since the last time Federal commodity programs were 
addressed in a farm bill (1990) or in a reconciliation bill 
(1993), major changes in world trade policy, domestic budget 
policy, and commodity producer opinion require a 
reconsideration of Federal commodity policy.
    For the last ten years, congressional farm policy actions 
have been driven by budget reductions. The 1995 debate over 
Federal farm programs has re-affirmed the Federal budget as the 
driving force for agricultural program policy. Modifications 
made to the original farm programs since their inception have 
revolved around two main goals: further restricting supply in 
order to alleviate the overproduction which the programs 
encourage; and decreasing Federal expenditures by limiting the 
amount of production which is covered by Federal subsidies. 
These two factors have combined in a way which has made current 
Federal commodity programs less effective, both as a means of 
increasing farm income and as a means to manage production, 
with each successive modification. There have been several 
recent situations where producers, who received an advance 
deficiency payment based on U.S.D.A. estimated low prices, have 
had a poor harvest and were required to repay the advance 
because the nation-wide effect of the poor harvest was to drive 
up the market price of the commodity beyond the point at which 
current programs make a payment. This has placed many producers 
in a difficult position. Even though prices were high, their 
income is down because they have no crop to market and the 
government assistance they had previously received must be paid 
back.
    Government outlays under current programs are the highest 
when prices are lowest (and hence when harvests are the best). 
This has had the effect of encouraging production based on 
potential government benefits, not on market prices. This 
incentive, when combined with the government's authority to 
idle acreage (which is the only means that current programs 
contain for limiting budget outlays) results in a situation in 
which producers have an incentive to produce the maximum amount 
of commodities while the government restricts the acres that 
can be planted, thereby encouraging the over-use of fertilizers 
and pesticides in order to get the most production from the 
acres the government is allowing the farmer to plant that year. 
This environmentally-questionable incentives created by current 
programs have also resulted in Congress authorizing greater and 
greater bureaucratic controls on producers over the last ten 
years in order to minimize environmental damage by requiring 
conservation compliance plans, compliance with wetlands 
protection provisions, and compliance with many other land-use 
statutes. It would be hard to imagine a program which creates 
more inconsistent incentives than the existing commodity 
programs.
    The new majority in the 104th Congress is committed to 
balancing the budget. With the passage of the first Budget 
Resolution in June, the House Committee on Agriculture, despite 
having cut over $50 billion in budget authority in recent 
years, was directed in H. Con. Res. 67, the FY 1996 Budget 
Resolution to achieve $13.4 billion in savings from Federal 
farm programs over the next seven fiscal years. Admittedly, 
reducing Federal spending by that amount will impact farmers. 
However, some economists predict that a balanced budget will 
lead to a 1.5 percent reduction in interest rates. Agriculture 
is a major user of credit, with over $140 billion borrowed in 
short and long term debt, and would benefit from such a result. 
If interest rates decline by 1.5 percent, a balanced budget 
could lead to an interest rate savings for U.S. agricultural 
producers exceeding $15 billion over the next 7 years.
    Following 19 hearings on Federal farm program policy by the 
Subcommittee on General Farm Commodities and the full Committee 
on Agriculture, the call from throughout the United States was 
clear: agricultural producers wanted more planting flexibility, 
more certainty with respect to Federal assistance, and less 
Federal regulatory burden. The combination of these factors led 
to the following conclusions: (1) the U.S. production 
agriculture industry needed to become more market-oriented, 
both domestically and internationally; (2) the industry could 
not become more market-oriented with a continued Federal 
involvement that simply extended the current supply-management 
policies of the past; and (3) the required budget cuts would 
not provide adequate funding levels to allow the existing 
Federal programs to function properly in a post-GATT and NAFTA 
world-oriented market.

Rationale

    Analyzing the above-mentioned conclusions in conjunction 
with a review of the current Federal commodity price support 
and production adjustment programs resulted in several 
observations about agricultural policy.
    First, current Federal farm programs are based on the 60 
year old New Deal principle of utilizing supply management in 
order to raise commodity prices and farm income. When the 
Federal farm programs were first created, the government relied 
on a system of quotas and allotments to control supply. 
However, over the last 20 years the primary justification for 
the programs has been that producers receive Federal assistance 
in return for setting aside (idling). That assistance was 
largely in the form of deficiency payments to compensate 
producers for market prices or loan levels that fell below a 
Congressionally mandated target price for their production. 
Additionally, when Federal commodity programs were set up, 
world markets were not a major factor in determining 
agricultural policy. This approach, while perhaps appropriate 
in the 1930's, ignores the realities of a post-GATT and NAFTA 
world.
    Second, current programs no longer achieve their original 
goals and have collapsed as an effective way to deliver 
assistance to producers. Worldwide agricultural competition 
usurps foreign markets when the United States reduces 
production. With respect to wheat, for example, world demand, 
when combined with the United States' supply control approach 
of idling acreage (including acreage idled under the 
Conservation Reserve Program), has tightened U.S. supplies so 
much that there have been no set-asides for five years and 
there are not expected to be any in the foreseeable future, 
which eliminates the supply management policy justification for 
the present policy.
    Third, preserving the current Federal farm program 
structure with Budget Committee instructions that require 
substantial spending cuts will leave producers with an 
ineffective and counter-productive agricultural policy. The 
resulting system would be an emasculated remnant of an out-of-
date 1930's-era program which no longer serves the people it 
was originally intended to benefit. While further modifications 
of current Federal commodity programs may accomplish required 
budget savings, ten years of budget cuts has changed the 
fundamental nature of farm programs to the extent they have 
inhibited farm production and producer earning potential.

Good policy for the future

    Retaining the present policy would be a mistake when other 
methods can achieve the goals of providing U.S. producers with 
increased planting flexibility and less regulatory burden while 
at the same time allowing for greater earnings from the 
marketplace and reducing the budgetary exposure to the Federal 
Government.
    The changes in Federal agricultural policy reflected in 
H.R. 2854 are good policy for the future of production 
agriculture in the United States. The most severe critics of 
current farm programs, including the New York Times, the 
Washington Post, the Economist, and a host of regional 
newspapers, have hailed the concept incorporated in this bill 
as the most significant reform in agricultural policy since the 
New Deal in the 1930's. Congressional critics that have urged 
reform of the farm programs have also indicated that the 
approach in this bill embodies the type of reform necessary to 
transition agriculture into a market-oriented industry. Nearly 
every agricultural economist who has commented on the substance 
of what this bill does has supported its concept of structure, 
its probable effect on producers, and the agricultural sector.

Commodity program reforms

    Title I of this bill replaces the commodity price support 
and production adjustment programs of the 1970's through 1990's 
with a seven-year production flexibility contract payment for 
eligible owners and operators and a nonrecourse marketing 
assistance loan program for eligible producers. Contract 
participants will receive seven annual market transition 
payments in exchange for maintaining compliance with their 
respective conservation plans and applicable wetlands 
protection provisions. Producers utilizing the marketing 
assistance loan will get the benefit of a nonrecourse loan at 
harvest time so that they will not have to sell commodities at 
a time when market prices are historically low in order to 
maintain a positive cash flow. Additionally, contract payments 
are limited to $40,000 limitation under the three-entity rule 
as contained in amended provisions of section 1001 through 
1001C of the Food Security Act of 1985. In addition a $75,000 
limitation is provided for marketing loan gains and loan 
deficiency payments using the standards of the three entity 
rule. The Secretary is also directed to implement adequate 
safeguards to protect the interests of operators who are 
tenants and sharecroppers.
    From a GATT perspective, the termination of the commodity 
price support programs will make U.S. commodities immediately 
more competitive on the world market by removing the distorting 
effect that current programs have maintained. This is 
significant because, at the current time, world commodity 
supplies are relatively tight and estimates indicate that, at 
best, this situation will remain for quite some time.
    With respect to domestic farm policy, H.R. 2854 
accomplishes several goals. First, it accomplishes a large 
amount of deregulation by freeing farmers up to farm for the 
market and not the government program. By removing government 
production controls on land use, the bill effectively 
eliminates the number one complaint of producers about the 
programs: bureaucratic red tape and government interference. 
Complaints about endless waits at the county office should end. 
Hassles over field sizes and whether the right crop was planted 
to the correct amount of acres should be a thing of the past. 
People concerned about the environment will be pleased that the 
government no longer forces the planting of surplus crops and 
monoculture agriculture. Producers who want to introduce a 
rotation on their farm for agronomic reasons should be free to 
do so within the restrictions in current programs.
    Secondly, H.R. 2854 provides U.S. producers with a 
guaranteed payment for the next seven years, because it 
establishes a contract between the Federal government and the 
producer. When compared to the alternative of further modifying 
existing programs, it results in the optimum producer net 
income over the next seven years and protects the producer from 
further budget cuts should there be further budget 
reconciliation bills in the future. The guarantee of a fixed 
(albeit declining) payment for seven years will provide the 
predictability that producers have wanted and will provide 
certainty to lenders as a basis for extending credit to 
production agriculture. The current situation in which prices 
are above the target price as a result of poor crops (producers 
do not get a payment or are forced to repay advanced payments), 
and therefore have less income should be corrected under H.R. 
2854. Without a crop to market, producers cannot benefit from 
the higher prices, and instead of getting help when they need 
it most, the current system cuts off their deficiency payments 
and demands that they repay advance deficiency payments.
    This bill insures that whatever government financial 
assistance is available will be delivered, regardless of the 
circumstances, because the producer signs a contract with the 
Federal Government for the next seven years. Just as producers 
will need to look to the market for planting and marketing 
signals, H.R. 2854 will require producers to manage their 
finances to compensate for price swings. It may be true that 
when prices are high, producers will receive a full market 
transition payment under this legislation, but it is equally 
true that if prices decline, farmers will receive no more than 
the fixed market transition payment. That means the individual 
producer must manage all income, both market and government, to 
account for weather and price fluctuations.
    Third, this measure also encourages market orientation. 
Producers can plant or idle all their acres at their 
discretion, with a significant reduction in the restrictions on 
what can be planted. Producers will have to make commodity 
planting decisions in response to commodity markets instead of 
decisions based on deficiency payment rates and crop acreage 
bases. Decoupling Federal payments from production (a process 
which began in 1985 when payment yields were frozen) would end 
any pressure from the government in choosing crops to plant. 
Under H.R. 2854, all production incentives should come from the 
marketplace and not government programs. Additionally, as long 
as producers maintain compliance with their applicable 
conservation plans, they are free to choose to plant no crop at 
all, which will benefit soil and water quality in marginal 
areas, as well as benefiting wildlife.
    Fourth, H.R. 2854 recognizes that the benefits from current 
programs have, to some extent, been incorporated into the value 
of agricultural land. By abolishing the link between production 
and benefits, but doing so in a manner which provides a seven-
year transition period, the economic distortions caused by 
existing programs can be removed in a manner that causes the 
least amount of disruption and harm to rural America. For that 
reason the production flexibility contract payment has been 
aptly named as a market transition payment.

Peanuts and sugar

    The Committee also commenced hearings and received 
testimony from over 100 witnesses in the areas of the United 
States where peanuts and sugar beets, sugar cane, and corn are 
grown, as well as in Washington, D.C., to discuss reform of the 
peanut and sugar programs. The outcomes of these hearings led 
the Committee to outline reform criteria with the goal of 
revising the current peanut and sugar programs to make them 
more market-oriented and operate at no cost to the Federal 
Government, while still providing a safety net for producers. 
These reforms are contained in sections 106 and 107 of Title I.
            Peanuts
    According to the United States Department of Agriculture 
(USDA), net peanut government program expenditures for fiscal 
year 1995 are estimated to be $85.6 million. USDA projects an 
annual cost of $76 million per year for fiscal years 1996-2000 
if current program provisions were retained. The changes in 
section 106 would eliminate the costs of the program through 
the elimination of the national poundage quota and 
undermarketing provisions which would allow additional peanuts 
to receive the quota price support rate. This will allow the 
Secretary to set the national poundage quota at a level that 
satisfies the estimated domestic consumption and prevent 
additional peanuts from entering quota pools at the higher 
quota support rate. Additional provisions allow the Secretary 
of Agriculture to increase the marketing assessment as needed 
to assure that the peanut program is not costly to the 
government.
    With respect to price support, section 106 would freeze the 
support loan rate for quota peanuts at $610 per ton for the 
1996 through 2002 crops. This is a reduction from the current 
loan rate of $678 per ton, and is approximately commensurate to 
a price support level based on current cost of production. 
Current law provides that the price support level may only 
increase based on cost of production, up to 5% over the support 
rate for the preceding year. If the previous years' quota price 
support rates were allowed to increase or decrease 5% per year, 
today's price support level would be approximately $608.64.
    Among other changes, section 106 would also instruct the 
Secretary to decrease the quota support rate by 5 percent to 
any producer who receives an offer at quota price or higher 
from a commercial buyer and the government but opts to sell to 
the government. This provision is intended to provide an 
incentive to producers to sell peanuts to the market rather 
than to the government.
    Section 106 would also prioritize the method of covering 
losses in area quota pools. Losses would first be covered by 
offsetting proceeds due any producer with losses incurred by 
the transfer of additional peanuts to a quota loan pool under 
section 358-1(b)(8) of the Agricultural Adjustment Act of 1938, 
then by offsetting individual producer gains and losses, then 
by buy-back gains within an area, then by use of the marketing 
assessment attributable to the producer, then with area cross 
compliance provisions (including buy-back gains in other 
areas). The Secretary of Agriculture would also be given the 
authority to increase the marketing assessment on growers in a 
pool to cover any further losses, with a provision directing 
any unused assessment funds to be returned to the Treasury.
    With respect to the sale, lease, and transfer of quota, 
several changes are made. Currently, quota can only be sold or 
leased to another owner or operator in the fall or after the 
normal planting season within the same county. Section 106 
would allow full sale, lease or transfer of quota to any county 
within a State either in the spring or fall, while maintaining 
the fall transfer required of at least 90 percent of a farm's 
quota having been planted during the previous growing season. A 
temporary quota allocation, equal to a producer's seed use, is 
also provided, while seed use is no longer part of the 
Secretary's national poundage quota estimate. Disaster transfer 
provisions are modified to limit disaster transfers to no more 
than 25% of a farm's quota, at 70% of the quota support rate. 
The Committee also proposes a review of the feasibility of 
quota transfer of across state lines under the purview of the 
Commission on 21st Century Production Agriculture.
    In addition, the Committee's recommendation would tighten 
the eligibility of those who own quota by mandating that, 
beginning with the 1997 marketing year, public entities and 
non-resident quota holders who are not producers are no longer 
eligible to own quota. Any quota held by such entities at the 
end of the 1996 marketing year would be reallocated within each 
State.
            Sugar
    Modifications to the sugar program in section 107 would 
increase revenue to the Treasury through an increased marketing 
assessment from 1.1% in 1996 to 1.375% in 1997 through 2003 of 
the loan rate for raw cane sugar and from 1.1794% to 1.47425% 
of the loan rate for beet sugar. Provisions in current law 
mandating that the program operate at no net cost to the 
Treasury would be maintained, and a forfeiture penalty of 
1 cents/lb would be imposed on any processor who forfeits sugar 
to the government.
    Sugar beet and sugar cane loan rates are frozen at 
18 cents/lb for raw cane sugar and 22.9 cents/lb for refined 
beet sugar. However, loan rates are required to be reduced if 
the Secretary determines that negotiated reductions in export 
subsidies and domestic subsidies provided for sugar of the 
European Union and other major sugar growing countries in the 
aggregate exceed the commitments made as part of the Uruguay 
Round Agreement.
    With respect to marketing allotments, the Committee's 
recommendation would allow full and unrestrained production of 
sugar in the United States through elimination of marketing 
allotments.
    The Committee also proposes a consistent increase of 
imports through the establishment of a loan modification 
threshold which is triggered when tariff rate quota imports 
exceed 1,500,000 short tons raw value. Under this provision, 
recourse loans to processors are made available up to the 
threshold level and would be converted into nonrecourse loans 
if imports rise above the threshold level.

                            Title II--Dairy

Summary

    Subtitle II reforms Federal dairy policy in three stages.
    First, there are legislative reforms which are implemented 
immediately: (1) the dairy price support program is altered by 
removing butter and nonfat dry milk from support; (2) the 
budget assessment on producers is eliminated, (3) a recourse 
loan program for processors of cheddar cheese, butter, and 
nonfat dry milk is established; (4) the Dairy Export Incentive 
Program (DEIP) is reauthorized through September 30, 2002, and 
fully funded to the limits permitted by the Uruguay Round of 
the GATT; and (5) the producer assessment for promotion under 
the Dairy Production Stabilization Act of 1983 is extended to 
imported products.
    Secondly, administrative reform of the Federal milk 
marketing order program will occur at the end of two years. In 
the upcoming two years, the Secretary will: (1) consolidate 
Federal orders and other milk producing areas in the 
continental 48 states into not less than 8 nor more than 13 
orders; (2) implement uniform multiple component pricing for 
milk used to produce manufactured dairy products; and (3) 
establish class prices for milk used to produce cheese nonfat 
dry milk, and butter based on national product prices less a 
make allowance (which shall not vary regionally except to 
reflect variances in transportation and reasonable operating 
costs, if any, of efficient processing plants in different 
geographic areas).
    Thirdly, there are temporary changes in Federal dairy 
programs that will occur during the two-year transition period 
between the date of enactment of the Act and the implementation 
date of the administrative reforms: (1) a maximum manufacturing 
allowance which a state may provide for milk used to 
manufacture certain dairy products during that two-year period 
is set; (2) a floor is placed on the minimum price for Class I 
(fluid) milk and a Class I equalization pool is set up to more 
equitably share Class I revenues nationally during the two-year 
transition period; and (3) a Class IV price is created for milk 
used to produce butter, butter oil, nonfat dry milk, and whole 
milk, and a Class IV equalization pool is created to equitably 
share among all producers 50 percent of any negative difference 
between the support price for milk used to produce cheese and 
the Class IV price.
    The combined impact of these changes saves $454 million, or 
approximately 21%, of spending on Federal dairy programs 
projected by CBO over the next seven fiscal years.

Background

    Since the last time Federal dairy programs were addressed 
in a farm bill (1990) or in reconciliation (1993), major 
changes in world trade policy, domestic budget policy, and 
dairy producer opinion require us to reconsider Federal dairy 
policy.
    Every Federal dairy program was created subsequent to 
Section 22 and premised upon the ability of Section 22 to stop 
foreign dairy products at our border. As of July 1, 1995, 
Section 22 was limited in its applicability by the 
implementation legislation for the Uruguay Round of the GATT.
    With the passage of the First Budget Resolution in June, 
the House Agriculture Committee was required to achieve $13.4 
billion in savings on Federal farm programs over the next seven 
fiscal years. As a commodity, dairy needed to come up with 
between $400 and $500 million of that amount.
    Following ten hearings on dairy issues by the Subcommittee 
on Livestock, Dairy and Poultry, including field hearings in 
California, Florida, Minnesota, New York, and Wisconsin, the 
mandate from dairy farmers to end budget reconciliation 
assessments immediately became overwhelming. The elimination of 
assessments would decrease funding available for Federal dairy 
programs by approximately $250 million annually.
    The combination of these events led to the following 
conclusions: (1) the U.S. dairy industry needed to become more 
market-oriented, domestically and internationally; (2) the 
industry could not become more market-oriented without a level 
playing field at home; (3) the industry needed tools to become, 
and remain, competitive in the world market; and (4) there was 
inadequate funding to retain and maintain existing Federal 
dairy programs.
    A review of Federal dairy programs (i.e., dairy price 
supports, Federal milk marketing orders, and the Dairy Export 
Incentive Program (DEIP)) produce the following conclusions.
    First, since the support price was decreased to $10.10/cwt 
in the 1990 Farm Bill, the dairy price support program has been 
largely inactive. For example, in the last 12 months, the 
Commodity Credit Corporation (CCC) has not purchased any cheese 
and only purchased 26 million pounds of butter and 27 million 
pounds of nonfat dry milk. By contrast, a decade ago the CCC 
purchased 293 million pounds of butter, 591 million pounds of 
cheese, and 827 million pounds of nonfat dry milk during the 
same 12 months period. At the end of 1995, we had no butter, no 
cheese, and only 14 million pounds of nonfat dry milk in 
government storage.
    Secondly, existing Federal milk marketing orders act as an 
impediment to a level playing field domestically. The U.S. 
dairy industry cannot hope to be competitive in the world 
market if our domestic marketing system produces competitive 
advantages and disadvantages at home unrelated to market 
indicators and other economic conditions. The Congressional 
Budget Office projects that Class I differentials, fixed by 
statute in 1985, will add an average of $134 million annually 
to the cost of the dairy price support program in the next five 
fiscal years by creating artificial incentives to produce milk 
in regions with sufficient Class I supplies of milk. Studies of 
Federal milk marketing orders by the General Accounting Office 
in 1988 and 1995 have produced similar conclusions.
    Thirdly, the inactivity of the dairy price support program 
and the low levels of government-stored dairy products are 
directly related to the success of the DEIP program. Dairy 
economists across the nation uniformly agree that the DEIP 
program has added between $.50/cwt to $1.00/cwt to producer 
prices in each of the last five years.

Rationale

    With these conclusions in mind, the following changes in 
Federal dairy policy are accomplished in this legislation which 
have a cumulative reconciliation savings of $454 million 
estimated by the Congressional Budget Office.
    Subtitle A of Title II extends the price support program of 
milk by authorizing the Secretary to continue removing excess 
cheddar cheese from the commercial market through December 31, 
2002 in section 201. However, the authority of the Secretary to 
support the price of milk through purchases of excess butter 
and nonfat dry milk is eliminated.
    From a GATT perspective, removing butter and nonfat dry 
milk from support will make those commodities immediately 
competitive on the world market. This is significant because, 
by the end of the decade, 17 percent of the world market for 
nonfat dry milk and 31 percent of the world market for butter 
will have opened up due to reductions in subsidized exports 
under the Uruguay Round.
    Removing butter and nonfat dry milk from support and 
reducing the support price for milk used to produce cheese from 
its current level of $10.35/hundredweight of $9.85/
hundredweight in the year 2001 permits the immediate 
elimination of the budget assessment on producers (currently at 
10 cents/hundredweight).
    The recourse loan program created under section 202 will 
allow processors of cheddar cheese, butter and nonfat dry milk 
to place their product under a recourse loan with the CCC at 90 
percent of the average market value for that product during the 
previous three months. Loans will be at CCC interest rates and 
will come due at the end of the fiscal year (September 30), but 
can be extended into the upcoming fiscal year.
    Section 203 further enables the United States to become, 
and remain, a player in the world dairy market of the 21st 
Century. The DEIP program is reauthorized through September 30, 
2002 and fully funded to the limits permitted under the Uruguay 
Round in each fiscal year.
    Section 204 also assists the industry in becoming more 
market-oriented by requiring that at least 10 percent of the 
budget of the National Dairy Promotion and Research Board be 
allocated to international market development annually, and by 
extending the producer promotion assessment under the Dairy 
Production Stabilization Act of 1983 to imported dairy 
products, thereby enhancing available funding for the Board's 
promotion activities.
    Subtitle B of Title II requires the Secretary of 
Agriculture to implement significant reforms in Federal milk 
marketing orders within two years including the consolidation 
of existing Federal orders and areas currently outside of 
Federal orders into not less than 8 nor more than 13 orders 
(with California as a separate order within that system and 
with each order authorized to blend order proceeds as necessary 
to address issues unique to that order such as pre-existing 
state quota programs), uniform component pricing for milk used 
to produce manufactured dairy products, and class prices for 
milk used to produce cheese, nonfat dry milk, and butter based 
on national product prices less a make allowance (which shall 
not vary regionally except to reflect variances in 
transportation and reasonable operating costs, if any, of 
efficient processing plants in difference geographic areas).
    Expedited comprehensive administrative reform under 
sections 221 and 222 will assure a level playing field 
domestically among producers at the end of two years and will 
further insure that the dairy industry will respond to market 
signals rather than decade-old fixed differentials which 
provide artificial incentives to produce milk in some areas of 
the country.
    In the interim two years, sections 206, 207 and 208 will 
also provide greater equity between producers and processors in 
different regions of the country by setting a reasonable 
maximum state manufacturing allowance, creating a minimum price 
floor for Class I milk and sharing $.80/hundredweight of Class 
I proceeds nationally, and establishing a Class IV price for 
butter, butter oil, nonfat dry milk, and whole dry milk and 
sharing among all producers 50 percent of any negative 
difference between the support price for milk used to produce 
cheese and that Class IV price.
    During this time, net income to producers in all regions of 
the country is projected to increase as a result of the 
foregoing changes in Federal dairy policy, thereby 
accomplishing all three goals of a modern Federal dairy 
policy--international competitiveness, a level domestic playing 
field, and enhanced producer income.

                        Title III--Conservation

    The changes in title III are designed to improve and add to 
the existing conservation programs that have been successful in 
the past, while addressing pressing problems facing 
agricultural producers today.
    Title III creates a new program, the Livestock 
Environmental Assistance Program (LEAP). LEAP has been added to 
title XII of the Food Security Act of 1985, to assist farmers, 
ranchers, dairy and livestock producers in dealing with the 
many environmental challenges with respect to soil and water 
quality that they face, largely because of other Federal 
mandates such as the Clean Water Act. The program is 
established to help eligible producers improve environmental 
problems such as water quality by providing technical and cost-
share assistance in implementing structural and management 
practices to protect water, soil and related resources from the 
degradation associated with livestock production. The program 
is authorized at $100 million annually through 2002.
    Title III modifies the Wetlands Reserve Program (WRP) by 
replacing permanent easement authority with 15-year easement 
authority. This change saves $384 million by lowering the costs 
of acquiring easements, yet it will not affect the future 
success of this program because of the overall changes in both 
the Federal involvement in agriculture and the public attitude 
toward wetlands today. The previous incentive to get drain or 
fill of wetlands, both by the Army Corps of Engineers and the 
U.S. Department of Agriculture, is simply not present today. 
Also, the entire country now realizes that wetlands serve a 
vital purpose in supporting wildlife and improving water 
quality. The WRP will continue to allow USDA to provide 
incentives to help people return acreage into wetlands.
    Title III also modifies the Conservation Reserve Program 
(CRP) by permanently capping overall enrollment at 36.4 million 
acres. As of the date of enactment, the Committee will ratify 
four years of Appropriations Committee policy by capping the 
CRP at the current acreage of 36.4 million acres.
    The Committee strongly supports maintaining a strong and 
viable CRP that maximizes, to the extent practicable, the 
ability of producers to utilize the program to protect 
environmentally sensitive lands, conserve natural resources, 
and make rational farm or land management decisions.

          title iv--agricultural promotion and export programs

Marketing Promotion Programs

    The Agricultural Trade Act of 1978 provides that a minimum 
of $200 million for fiscal years 1991 through 1993 and $110 
million for fiscal years 1994 through 1997 of CCC funds or 
commodities be made available to carry out the Marketing 
Promotion Programs. Section 401 of this bill provides that not 
more than $100 million of CCC funds or commodities could be 
made available to carry out the Marketing Promotion Programs 
for fiscal years 1996 through 2002.

Export Enhancement Program

    Section 301 of the Agricultural Trade Act of 1978 provides 
that a minimum of $500 million in Commodity Credit Corporation 
funds or commodities be made available each of fiscal years 
1991 through 2001 to carry out the Export Enhancement Program. 
Section 402 of this bill provides that the Commodity Credit 
Corporation shall provide not more than $350 million in fiscal 
years 1996 and 1997, $500 million in fiscal year 1998, $550 
million in fiscal year 1999, $579 million in fiscal year 2000, 
and $478 million in fiscal years 2001 and 2002 to carry out the 
Export Enhancement Program.

                         Title V--Miscellaneous

    The Federal Crop Insurance reform Act of 1994 (Reform Act), 
contained in Title I of P.L. 103-354, made significant changes 
in the multi-peril crop insurance (MPCI) program as well as 
ending, for all practical purposes, ad hoc Federal assistance 
to farmers for crop failures. Two controversial and complex 
provisions of the new law have caused consternation and 
irritation among agricultural producers, and that, in turn, has 
made MPCI a less attractive product for many farmers.
    A principal provisions of the Reform Act required any 
agricultural producer who is a farm commodity program or 
Conservation Reserve Program participant or who is receiving a 
loan or loan guarantee through the U.S. Department of 
Agriculture (USDA) to purchase a MPCI policy to insure against 
at least a catastrophic crop loss (CAT), i.e., for a crop loss 
of 50 percent loss in yield, on an individual or area yield 
basis. To obtain CAT coverage, producers pay an administrative 
fee for each crop produced in a county. Because of USDA's 
implementation of the Reform Act, each landlord who receives a 
program payment (shared tenancy) is required to pay the $50 
fee. This link between farm program participation and crop 
insurance caused a great deal of confusion and irritation among 
producers because of the inequities in USDA implementation. For 
example, an owner-operator growing only wheat on a section of 
land in a single county could purchase CAT coverage for a 
single $50 fee, while multiple owners with a tenant farming in 
more than one county were required to pay multiple fees.
    One particularly egregious case that came to light involved 
nine different landlords and their tenants who farmed three 
different crops in three counties. Each of the owners was 
required to pay three fees for each crop in each of the three 
counties, resulting a substantial amount of dollars in fees for 
insurance on a minimal number of acres.
    A second provision that caused undue confusion involved the 
delivery system implemented by the Consolidated Farm Service 
Agency (CFSA) within USDA. Because each agricultural producer 
could be required to purchase at least the CAT insurance 
policy, Congress allowed CFSA local offices to sell CAT 
coverage in those areas of the country where private insurance 
agents were not available or not readily available. As 
implemented, however, CFSA became an instant competitor with 
insurance agents around the country. Because the new MPCI 
program was late in clearing Congress and even later in getting 
into the field, local CFSA personnel obviously were confused 
during the initial start-up of the new program. This confusion 
was spread throughout farm country during this past spring and 
harmed a program that already was disliked and unused by a 
majority of producers in almost every part of the country.
    It also has come to the Committee's attention that the 
assistant administrator for risk management who is the FCIC 
manager and responsible for its day-to-day operations also has 
become totally absorbed by CFSA administrators to the extent 
that risk management and crop insurance are being run as if 
they were just another farm program, in other words, not in an 
actuarially-sound manner. Under any policy scenario, Federal 
farm price and income support programs are in transition, 
making it vitally important that our agricultural producers 
have sound risk management programs they can use the price and 
yield protection and marketing assistance without undue USDA 
intervention. Creating an independent agency and then subsuming 
the congressional policy objective of providing new risk 
management techniques, including MPCI offered generally through 
a private delivery system, within the scope of traditional, 50-
year old New Deal policies does not make sense. Congress 
clearly set new policy and structural changes at the new CFSA, 
and thus far, CFSA has ignored many of those policy objectives.
    Amendments included in title V of H.R. 2854 change both the 
mandatory link of MPCI and USDA farm and credit programs so 
that producers not wanting to purchase CAT coverage could do so 
by waiving the right to any possible crop disaster assistance 
for the crop year in which CAT coverage had been offered by the 
FCIC but not purchased by the producer. This saves $180 million 
over the seven-year period.
    Additional amendments provide for a totally private 
delivery system in areas determined by the secretary to be 
adequately served by private insurance providers.
    Other amendments included in the budgetary provisions 
establish a fully independent Office of Risk Management with an 
administrator who will manage the FCIC as well as assume other 
risk management responsibilities enumerated by the amendments. 
The Secretary of Agriculture is directed to (shall) appoint the 
Administrator of the Office of Risk Management.
    Within the next year, the Secretary is directed to 
establish a business interruption insurance program that will 
allow producers to utilize a revenue-insurance based approach 
to risk management in lieu of, or in addition to, crop 
insurance.
    Title V would also give the Secretary discretion to 
continue to operate the Options Pilot Program, which was 
established by the Food, Agriculture, Conservation, and Trade 
Act of 1990 (the 1990 Act). By giving the Secretary authority 
to modify the program in order to reflect changes to the 
commodity programs made by this bill, USDA will continue to 
have the ability to offer farmers, on a pilot basis, the use of 
futures markets an another tool in managing risk.
    Finally, Title V amends section 2509 of the 1900 Act to fix 
a problem with the Agricultural Quarantine Inspection (AQI) 
user fee account. The 1990 Act authorized user fees for AQI 
inspection activities, including inspections of aircraft, 
vessels, trucks, railcars, and airline passenger baggage 
arriving in the U.S. from foreign countries. When this 
authority was originally proposed by USDA's Animal and Plant 
Health Inspection Service (APHIS), the method of collection, 
which was specified in the draft legislation, would have 
allowed airlines to collect the fees through the passenger 
ticketing process, with the fees being deposited into a 
dedicated U.S. Treasury account from which USDA would be 
reimbursed on a quarterly basis. This method would have been 
consistent with the collection processes of the U.S. Customs 
Service and the Immigration and Naturalization Service and 
would not have subjected the fees to the appropriation process. 
However, as passed, expenditure of the fees is subject to the 
appropriation process. This was done apparently because the 
Congressional Budget Office would not credit budget savings 
that are achieved through the assessment of user fees are 
subject to appropriation, so that the Agriculture Committee 
could ensure that the savings would be reflected in their 
budget process.
    Unfortunately, this method of collection and disbursement 
has created some problems. The process of requesting quarterly 
disbursements from the treasury is cumbersome, and the request 
for disbursement does not guarantee that the funds will be 
provided. An additional problem is the fact that the AQI 
program remains subject to staff-year limitations, even though 
passengers and airlines are now paying for the service. Staff 
year ceilings are set by the Office of Management and Budget, 
and because this process is separate from the budget process, 
the staff ceilings are not always consistent with the budget. 
This means that, in any given year, there may be adequate 
funding but inadequate staff levels, or adequate staff levels 
but inadequate funding.
    The amendment to the AQI program in title V would correct 
these problems. First through fiscal year 2002, APHIS would be 
able to access fees collected beyond the appropriated amount 
after the yearly appropriation bills are passed. Second, 
beginning in fiscal year 2003, the AQI user fee account truly 
becomes a user fee account, not subject to any appropriation. 
Finally, the staff-year limitation problem would also be 
remedied by exempting APHIS staff years used for AQI activities 
from the Federal Workforce Restructuring Act of 1994. These 
changes will ensure that the AQI program will function as a 
user fee program is supposed to function, and that APHIS will 
have the ability to have the necessary number of employees 
engaged in AQI activities.

      title vi--commission on 21st century production agriculture

    The changes in Federal farm policy made in the preceding 
subtitles are a dramatic departure from current farm commodity 
programs. Many of those involved in production agriculture from 
the farmer to the economist, to rural lenders, and especially 
to those with an economic interest in current programs, are 
concerned that a change of the magnitude described in the 
preceding titles coupled with less Federal subsidy dollars will 
adversely affect not only the U.S. agricultural industry, but 
also rural America. While the dramatic changes proposed for the 
Federal Government's involvement in agriculture as prescribed 
by H.R. 2854, are in fact a recognition of the changing rural 
and urban landscape of America, an examination of the changes 
wrought by these policy changes and what farm policies are 
needed for the 21st Century farm sector is in order.
    When the present Federal programs for agriculture were 
adopted, the nation was in the darkest depths of the Great 
Depression of the 1930's. Not everyone believed the Federal 
Government should get involved in agriculture. Indeed, the 
original Agricultural Adjustment Act of 1933 was declared 
unconstitutional by the Supreme Court. But a consensus was 
reached and the United States Government embarked upon a course 
of substantial involvement in agriculture. The present programs 
were claimed to be created out of political and economic 
necessity, because the nation was largely rural and the 
majority of the population lived on farms or rural areas.
    In the intervening 60 years, the United States has been 
transformed into a largely urban society with less than 2 
million citizens on farms. There is evidence that Federal farm 
programs may have eased the transition from a rural society to 
an urban society. While the U.S. is now largely an urban 
population, nearly 20 percent of the Gross National Product can 
be attributed to agriculture if the entire sector is 
considered, i.e., from the farm to the manufacturing, 
distribution, and input infrastructure involved in modern 
agriculture's miracle of productivity.
    The United States is blessed with a very valuable asset: 
fertile land, with adequate moisture, growing season, and 
dedicated users of such land that make it the envy of the 
world. The challenge for the United States as we enter the 21st 
Century is how do we wisely use our very valuable natural 
resource: agriculture. The present system of agricultural price 
supports and supply control programs have come under increasing 
attack by economists, environmentalists, and farmers as being 
inadequate for modern agriculture. The Agricultural Market 
Transition Act is meant to be a transition policy for U.S. 
agriculture. but a transition to what?
    Over the 7 years of the transition contract, the Congress 
hopes a national debate can take place as to what should be the 
Federal involvement in production agriculture in the 21st 
Century. Should it be a system of direct price supports found 
in the present system? Should it be some type of income support 
mechanism that provides some means of income or revenue 
protection given the nature of production agriculture, which is 
subject to the vagaries of weather, pestilence, and geo-
political market disruptions. Should the Federal involvement in 
production agriculture be limited to only foreign market 
development and research that enhances U.S. agriculture's 
relative competitive position? Or can many of the goals 
necessary to have a healthy food and fiber sector be 
accomplished through Federal tax policy?
    To stimulate substantial debate and provide answers to 
these questions, title VI establishes a Commission on 21st 
Century Production Agriculture, which is designed to give 
future Congresses and Presidents and others information and 
feedback to gauge the effectiveness of the changes made by this 
legislation, and also to recommend further appropriate Federal 
policy and involvement in production agriculture. The 
Commission is to conduct a ``look-back'' (how successful is 
Agricultural Market Transition Act) and a ``look-to-the-
future'' that recommends new or different policies for 21st 
Century agriculture.
    This commission, comprised of 11 members to be appointed by 
the President and the Chairmen of the House and Senate 
Agriculture Committees in consultation with their Ranking 
Minority Members, will conduct a comprehensive review of 
changes in the condition of the agricultural sector, taking 
into account land values, regulatory and taxation burdens, 
export markets, and progress under international trade 
agreements. The Commission will also make an assessment of 
changes in production agriculture, identify the appropriate 
future relationship between the Federal Government and 
production agriculture after 2002, and assess the future 
personnel and administrative needs of USDA. Not later than June 
1, 1998, the Commission is to report its interim findings with 
respect to its comprehensive review of the condition of the 
agricultural sector. Not later than January 1, 2001, the 
commission shall submit its final report concerning its 
assessments and determinations regarding the future role of the 
Federal Government in farm policy.

              title vii--extension of certain authorities

    Provisions of the Agricultural Trade Development and 
Assistance Act of 1954, incorporating the Food for Peace 
program, and the Food for Progress Act of 1985, that authorize 
the U.S. Department of Agriculture (USDA) and the Agency for 
International Development (AID) to enter into new agreements 
with other governments, private voluntary organizations, and 
international organizations to finance and provide food 
assistance expired in 1995. Title VII of the bill extends this 
authority through 1996.
    Both USDA and AID will have the authority through 1996 to 
enter into agreements under the Food for Peace and Food for 
Progress programs to provide assistance under Title I of the 
Food for Peace program, Title II (non-emergency) of the Food 
for Peace program, operational support for private voluntary 
organizations and cooperatives, Title III of the Food for Peace 
program, the Farmer-to-Farmer program, and the Food for 
Progress program. Authority to enter into agreements under 
Title II (emergency) of the Food for Peace program was not 
affected, since the Act includes adequate authority to provide 
emergency assistance through the Food for Peace program.

                      Section-by-Section Analysis

Section 1--Short title; table of contents

               The ``AGRICULTURAL MARKET TRANSITION ACT''

            title 1--agricultural market transition program

Section 101. Purpose

    The main purpose of this title is to authorize the use or 
binding production flexibility contracts between the United 
States and agricultural producers to support farming certainty 
and flexibility while ensuring continued compliance with farm 
conservation compliance plans and wetland protection 
requirements.

Section 102. Definitions

    This section contains definitions of terms used throughout 
Title I. ``Contract commodity'' includes wheat, corn, grain 
sorghum, barley, oats, upland cotton, and rice; ``contract 
acreage'' means one or more crop acreage bases established 
under title V of the Agricultural Act of 1949 that would have 
been in effect for the 1996 crop; and ``loan commodity'' means 
each contract commodity plus extra long staple cotton and 
oilseeds.

Section 103. Production flexibility contracts

    Section 103(a), in paragraph (1), authorizes the Secretary 
to enter into 7-year production flexibility contracts between 
1996 and 2002 with eligible owners and operators on a farm 
containing eligible farmland. In exchange for annual payments 
under the contract, the owner or operator must agree to comply 
with the applicable conservation plan for the farm, the wetland 
protection requirements of title XII of the Food Security Act 
of 1985, and the planting flexibility requirements of 
subsection (j).
    Section 103(a), in paragraph (2), describes eligible owners 
and operators, that include:
          (A) an owner who assumes all risk of producing a 
        crop;
          (B) an owner who shares in the risk of producing a 
        crop;
          (C) an operator with a share-rent lease regardless of 
        the length of such lease if the owner also enters into 
        the contract;
          (D) an operator with a cash rent lease that expires 
        on or after September 30, 2002, in which case the 
        consent of the owner is not required;
          (E) an operator with a cash rent lease that expires 
        before September 30, 2002, and the owner consents to 
        the contract;
          (F) an owner with a cash rent lease, but only if the 
        operator declines to enter into a contract, in which 
        case payments under the contract will not begin until 
        the fiscal year following the year in which the lease 
        expires; and
          (G) an owner or operator described in (A) through (F) 
        regardless of whether the owner or operator purchased 
        catastrophic risk protection for a fall-planted 1996 
        crop under section 508(b) of the Federal Crop Insurance 
        Act.
    Section 103(a), in paragraph (3), instructs the Secretary 
to provide adequate safeguards to protect the interests of 
operators who are tenants and sharecroppers.
    Section 103(b), in paragraph (1), provides that the 
deadline for entering into a contract is April 15, 1996, except 
that owners and operators on farms which contain acreage 
enrolled in the Conservation Reserve Program (``CRP'') may 
enter into a contract upon the expiration of the CRP contract.
    Section 103(b), in paragraph (2), provides that the 
contracts shall begin with the 1996 crop year and extend 
through the 2002 crop year.
    Section 103(b), in paragraph (3), provides that, at the 
time a contract is signed, the Secretary shall estimate the 
anticipated payments that will be made under the contract for 
at least the first fiscal year.
    Section 103(c) describes eligible farmland, which is land 
that contains a crop acreage base, at least of portion of which 
was enrolled in the acreage reduction programs authorized for a 
crop of rice, upland cotton, feed grains, or wheat and which 
has served as the basis for deficiency payments in at least one 
of the 1991 through 1995 crop years. With respect to contracts 
for acreage enrolled in the CRP, such contract acreage must 
have crop acreage base attributable to it.
    Section 103(d) establishes the payment dates under the 
contracts as September 30 of each of the fiscal years 1996 
through 2002, and provides that an owner or operator may opt to 
receive half of each annual payment on December 15 of each 
fiscal year 1997-2002. For the 1996 fiscal year, an owner or 
operator may elect to receive half of the payment not later 
than June 15.
    Section 103(e), in paragraph (1), establishes spending 
limits of:
          (A) $5,570,000,000 for FY 1996;
          (B) $5,385,000,000 for FY 1997;
          (C) $5,800,000,000 for FY 1998;
          (D) $5,603,000,000 for FY 1999;
          (E) $5,130,000,000 for FY 2000;
          (F) $4,130,000,000 for FY 2001; and
          (G) $4,008,000,000 for FY 2002.
    Section 103(e), in paragraph (2), allocates the fiscal year 
amounts among the contract commodities as follows:
          (A) Wheat, 26.26 percent;
          (B) corn, 46.22 percent;
          (C) grain sorghum, 5.11 percent;
          (D) barley, 2.16 percent;
          (E) oats, 0.15 percent;
          (F) upland cotton, 11.63 percent; and
          (G) rice, 8.47 percent.
    Section 103(e), in paragraph (3), directs the Secretary to 
adjust the amounts allocated in paragraph (2) for a particular 
fiscal year by:
          (A) adding producer repayments of deficiency payments 
        received during that fiscal year under section 
        114(a)(2) of the Agricultural Act of 1949 (as then in 
        effect);
          (B) adding contract payments withheld at the request 
        of producers, during the preceding fiscal year as an 
        offset against repayments of deficiency payments 
        otherwise required under section 114(a)(2) of the 
        Agricultural Act of 1949 (as then in effect);
          (C) adding contract payments which are refunded 
        during the preceding fiscal year under section 103(h) 
        (of this Act) for the commodity; and
          (D) subtract an amount equal to the amount, if any, 
        necessary during that fiscal year to satisfy payment 
        requirements for the commodity under section 103B, 
        105B, or 107B of the Agricultural Act of 1949 (as then 
        in effect prior to the amendment made by section 
        109(b)(2)) for the 1994 and 1995 crop years.
    Section 103(e), in paragraph (4), provides for an 
additional adjustment to the amounts allocated for each 
contract commodity in order to cover any final payments 
required under sections 101B of the Agricultural Act of 1949 
(as then in effect) for the 1994 and 1995 crop years. As soon 
as the Secretary determines these amounts, it will be deducted 
evenly from the amounts allocated for each contract commodity 
over the remaining fiscal year allocations.
    Section 103(f) provides the method for determining payments 
under a particular contract:
          Paragraph (1) establishes the process for determining 
        the payment quantity of a contract commodity, which is 
        the product of 85 percent of the contract acreage and 
        the farm program payment yield for the commodity.
          Paragraph (2) provides that the payment quantity of 
        each contract commodity covered by all contracts for 
        each fiscal year shall equal the sum of all the payment 
        quantities under paragraph (1).
          Paragraph (3) provides that the annual payment rate 
        for a contract commodity shall be the amount made 
        available under 103(e) for the commodity divided by the 
        total payment quantity under paragraph (2).
          Paragraph (4) provides that the payment amount to be 
        paid under a contract on a commodity shall be equal to 
        the product of the payment quantity determined under 
        paragraph (1) and the payment rate determined under 
        paragraph (3).
          Paragraph (5) provides that the provisions of section 
        8(g) of the Soil Conservation and Domestic Allotment 
        Act relating to assignment of payments shall apply to 
        contract payments under the subsection, and requires 
        that the owner, operator, or assignee notify the 
        Secretary of such assignment.
          Paragraph (6) directs the Secretary to allow for the 
        sharing of payments among owners and operators in a 
        fair and equitable manner.
    Section 103(g) provides that the total amount of payments 
under a contract during any fiscal year may not exceed the 
payment limitation established under sections 1001 through 
1001C of the Food Security Act of 1985.
    Section 103(h), in paragraph (1), authorizes the Secretary 
to terminate a contract if an owner or operator violates the 
farm's conservation compliance plan, wetland protection 
requirements, or planting flexibility provisions. Upon 
termination, the owner or operator forfeits future payments and 
must refund payment with interest as determined by the 
Secretary received on each farm in which the owner or operator 
contracted for payments during the period of the violation.
    Section 103(h), in paragraph (2), provides that, if the 
Secretary determines that the nature of the violation does not 
warrant termination of the contract as provided in paragraph 
(1), the Secretary may--
          (A) require a partial refund with interest for the 
        period of the violation; or
          (B) adjust future contract payments proportionate to 
        the severity of the violation.
    Section 103(h), in paragraph (3), prohibits the Secretary 
from requiring repayments from an owner or operator if farmland 
which is subject to the contract is foreclosed upon and the 
Secretary determines that forgiving such repayment is 
appropriate in order to provide fair and equitable treatment. 
This authority does not void the responsibilities of such owner 
or operator if the owner or operator continues or resumes 
control or operation of the property subject to the contract, 
and in effect resumes contract over the contract.
    Section 103(h), in paragraph (4), provides that a 
determination by the Secretary under this subsection shall be 
considered as an adverse decision for purposes of 
administrative review.
    Section 103(i), in paragraph (1), provides for rules for 
transfers of land subject to a contract. Upon a transfer, a 
contract is automatically terminated unless the transferee 
agrees to assume all obligations under the contract. A 
transferee may request modifications to a contract before 
assuming it, if the Secretary approves and the modifications 
are consistent with the objectives of this section as 
determined by the Secretary.
    Section 103(i), in paragraph (2), authorizes the Secretary 
to issue regulations regarding contract payments in instances 
in which an owner or operator dies, becomes incompetent, or is 
otherwise unable to receive a contract payment.
    Section 103(j) establishes planting flexibility provisions 
on land subject to a contract.
    Paragraph (1) provides that, subject to the limitations in 
paragraph (2), any commodity or crop may be planted on contract 
acreage.
    Paragraph (2), in subparagraph (A), provides that, with 
respect to contract acreage beyond 15 percent, haying and 
grazing shall be permitted except during any consecutive 5-
month period designated by the State Committee established 
under section 8(b) of the Soil Conservation and Domestic 
Allotment Act between April 1 and October 31st of each year, 
unless waived by the Secretary because of a natural disaster. 
Contract acreage on which contract commodities are planted for 
harvest may be hayed or grazed at any time without limitation.
    Paragraph (2), in subparagraph (B), provides that alfalfa 
may be grown on contract acreage beyond 15 percent without any 
restriction, except that the quantity of acreage eligible for a 
contract payment shall be reduced proportionately for each acre 
beyond 15 percent.
    Paragraph (2), in subparagraph (C), provides that the 
planting of fruits and vegetables shall be prohibited on 
contract acreage, except in any region in which there is a 
history of double-cropping, as determined by the Secretary. 
This prohibition does not apply to lentils, mung beans, and dry 
peas.

Section 104. Nonrecourse marketing assistance loans and loan deficiency 
        payments

    Section 104(a), in paragraph (1), directs the Secretary to 
make nonrecourse marketing assistance loans available to 
eligible producers on a farm for loan commodities for each of 
the 1996 through 2002 crops of such commodities under terms and 
conditions prescribed by the Secretary at rates established 
under section 104(b).
    Section 104(a), in paragraph (2), provides that the amount 
of production eligible for a marketing assistance loan includes 
all production of a loan commodity produced by a producer who 
has entered into a contract, and any production of extra long 
staple cotton and oilseeds.
    Section 104(a), in paragraph (3), provides for recourse 
loans for high moisture corn and grain sorghum for the 1996 
through 2002 crops, available to producers who normally harvest 
all or a portion of their corn or grain sorghum in a high 
moisture state, provided that they present adequate 
documentation to the Secretary regarding the amount harvested.
    Section 104(b), in paragraph (1), provides that the loan 
rate for wheat is not less than 85 percent of the 5-year 
Olympic average, with a maximum of $2.58 per bushel, and the 
Secretary has authority to further decrease the loan rate in a 
particular year based on supply-use ratios.
    Section 104(b), in paragraph (2), provides that the loan 
rate for corn shall be not less than 85 percent of the 5-year 
Olympic average, with a maximum of $1.89 per bushel, and the 
Secretary has authority to further reduce the loan rate in a 
particular year based on supply-use ratios. Loan rates for 
other feed grains are to be set at rates which are fair and 
reasonable in relation to the rate for corn based on feeding 
value.
    Section 104(b), in paragraph (3), provides that the loan 
for upland cotton shall be not less than the lower of either:
          (i) 85 percent of the average U.S. spot market price 
        during the preceding 5 marketing years, excluding the 
        highest and lowest-price years, or
          (ii) 90 percent of the average price of the 5 lowest 
        priced growths quoted for Northern Europe during a 
        specified period, adjusted downward to account for 
        differences between the Northern Europe and U.S. spot 
        market prices.
However, in any case, the loan rate shall not be less than 
$0.50 per pound nor more than $0.5192 per pound.
    Section 104(b), in paragraph (4), provides that the loan 
rate for extra long staple cotton shall be not less than 85 
percent of the 5-year Olympic average, with a maximum of 
$0.7965 per pound.
    Section 104(b), in paragraph (5), provides that the loan 
rate for rice shall be $6.50 per hundredweight.
    Section 104(b), in paragraph (6), provides that the loan 
rate for oilseeds: soybeans are $4.92 per bushel, sunflower 
seed, canola, rapeseed, safflower, mustard seed, and flaxseed 
are $0.087 per pound; and other oilseeds are set at a level 
that is fair and reasonable in relation to the loan rate 
available for soybeans other than cottonseed (not to be less 
the rate for soybeans on a per pound basis).
    Section 104(c) provides that the term of a loan shall be 
nine months, except that a loan for upland or extra long staple 
cotton be ten months, starting on the first day of the first 
month after the month in which the loan is made. The Secretary 
may not extend loans.
    Section 104(d) establishes repayment provisions for loan 
commodities.
    Paragraph (1) provides that, in general, the repayment rate 
for marketing assistance loan (other than extra long staple 
cotton) is the lesser of:
          (A) the loan rate; or
          (B) the prevailing world market price (adjusted to 
        U.S. quality and location), as determined by the 
        Secretary.
    Paragraph (2) provides that, with respect to wheat, feed 
grains, and oilseeds, the repayment rate shall be set by the 
Secretary at such level as will:
          (A) minimize potential loan forfeitures;
          (B) minimize the accumulation of stocks of the 
        commodities by the Federal Government;
          (C) minimize the cost incurred by the Federal 
        Government in storing the commodities; and
          (D) allow the commodities produced in the United 
        States to be marketed freely and competitively, both 
        domestically and internationally.
    Paragraph (3) sets the repayment rate for extra long staple 
cotton at the loan rate plus interest.
    Paragraph (4) instructs the Secretary to prescribe by 
regulation a formula to determine the prevailing world market 
price and a mechanism to periodically announce the prevailing 
world market price.
    Paragraph (5) provides upland cotton prevailing world 
market price adjustment authority based on the Northern Europe 
price differential, with further adjustment authority based on 
the U.S. export share, current cotton exports and sales, and 
other data determined by the Secretary to be relevant. Such 
adjustments may not exceed the difference between the average 
U.S. price and the northern Europe price.
    Section 104(e) directs the Secretary to make loan 
deficiency payments to producers who forego obtaining a loan 
under subsection (a) in an amount equal to the difference 
between the loan rate for a commodity and the level at which it 
may be repaid. However, there is no authority for loan 
deficiency payments for extra long staple cotton.
    Section 104(f) provides special marketing loan provisions 
for upland cotton.
    Paragraph (1) provides authority for cotton user marketing 
certificates (commonly referred to as ``Step 2''), under which 
certificates (which may be redeemed for CCC-owned commodities) 
or cash payments must be made available to first handlers of 
cotton whenever the prevailing market price (adjusted for U.S. 
quality and location) is below the current loan repayment rate. 
The values of the certificates (or the amount of the payment) 
is based on the difference between the adjusted world price and 
the loan repayment level. The Secretary is required to make 
payments, either in cash or marketing certificates, to domestic 
users and exporters for documented purchases whenever (i) the 
weekly U.S. Northern Europe price exceeds the Northern Europe 
price by more than 1.25 cents per pound for a consecutive four-
week period; and (ii) the adjusted world market price does not 
exceed 130 percent of the loan rate. However, no payments will 
be issued if, for the preceding consecutive 10-week period, the 
weekly U.S. Northern Europe price, adjusted for the value of 
any certificates or payments issued, exceeds the Northern 
Europe price be more than 1.25 cents per pound. The value of 
the certificates (or the amount of the payments) is the 
difference between the two prices, minus 1.25 cents, per pound. 
Total expenditures for Step 2 payments are limited to 
$701,000,000 during fiscal years 1996 through 2002.
    Paragraph (2) extends special import quota provisions 
(commonly known as ``Step 3'') which requires that a special 
import quota be opened if, for a consecutive 10-week period, 
the U.S. Northern Europe price, adjusted for the value of any 
payments issued under Step 2, exceeds the Northern Europe Price 
by more than 1.25 cents per pound. The amount of the quota is 
equal to 1 week's domestic mill consumption. Importers have 90 
days to purchase and 180 days to enter the cotton into the U.S. 
after the quota is announced, and quota periods can overlap.
    Section 104(g) extends the limited global quota provisions, 
which direct the President to carry out an upland cotton import 
quota program whenever the Secretary determines and announces 
that the average price in designated U.S. spot markets for a 
month, as determined by the Secretary, exceeded 130 percent of 
such average price for the last 36 months. The quantity of this 
import quota is equal to 21 days of domestic mill consumption, 
but this quota cannot overlap with any quota announced under 
section 104(f).
    Section 104(h) provides general authority for the Secretary 
to use the Commodity Credit Corporation (``CCC'') and other 
means available to carry out the loans authorized by this 
section, and directs the Secretary to get adequate processor 
assurances that producers will get loan program benefits 
whenever a loan program includes payments to processors.
    Section 104(i) gives the Secretary general authority to 
make appropriate adjustments in loan levels based on grade, 
type, quality, location, and other factors.
    Section 104(j) provides that, in general, a producer is not 
personally liable for any deficiency rising from the sale of 
collateral securing a nonrecourse loan. However, exceptions are 
provided for quality or quantity deficiencies, failure to 
properly care or maintain collateral, or a failure to deliver a 
commodity. This section also provides that any security 
interest obtained by CCC in sugarcane or sugarbeets as a result 
of a security agreement by a processor shall be superior to all 
common law and statutory liens in favor of producers.
    Section 104(k) provides authority for CCC to sell any 
inventory commodities at any price that the Secretary 
determines will maximize returns to CCC, except that this 
authority does not apply to sales:
          (A) for new or byproduct uses;
          (B) of peanuts or oilseeds (if used for oil);
          (C) for seed if the sale will not impair a loan 
        program;
          (D) of deteriorated-quality commodities that are in 
        danger of spoiling;
          (E) for the purpose of establishing a claim arising 
        out of a fraudulent or other wrongful act pursuant to a 
        contract;
          (F) for export; or
          (G) for other than a primary use.
The Secretary is also authorized to make CCC-owned commodities 
available in any Presidential disaster area.

Section 105. Payment limitation

    Section 105(a) amends section 1001 of the Food Security Act 
of 1985 to provide that the total amount of contract payments 
to a person under section 103 of this Act may not exceed 
$40,000 during any fiscal year, and that the total annual 
amount of marketing loan gains or loan deficiency payments to a 
person for loan commodities under section 104 of this Act may 
not exceed $75,000.
    Section 105(b) makes necessary conforming changes to the 
Food Security Act of 1985.

Section 106. Peanut program

    Section 106(a) provides nonrecourse loans to quota peanut 
producers at $610 per ton, and directs the Secretary to reduce 
the loan rate by 5 percent to any producer who had an offer 
from a handler to purchase quota peanuts, for delivery within 
the same county or a contiguous county, at a price equal to or 
greater than the applicable quota support rate, for the peanuts 
that were subject to the offer.
    Section 106(b) provides nonrecourse loans to producers of 
additional peanuts at such rates as the Secretary finds 
appropriate.
    Section 106(c) directs the Secretary to make price support 
loans available through area marketing associations via 
warehouse storage loans, where appropriate, and provides that 
administrative costs by an area marketing association shall be 
included in such loans. The Secretary is directed to require 
area marketing associations to establish and maintain pools for 
quota peanuts, with separate pools for New Mexico Valencia 
peanuts, and that net gains from each pool shall be distributed 
only to producers in the pool.
    Section 106(d) provides that losses in quota pools shall be 
covered using the following sources in the following order or 
priority:
          (1) gains on transfers of peanuts from additional 
        loan pools;
          (2) gains from domestic and export edible use sales 
        of additional peanuts from additional pools;
          (3) buy-back gains within the area;
          (4) marketing assessment funds collected from growers 
        under subsection (g) (except funds attributable to 
        handlers) with any unused assessment funds being 
        transferred to the Treasury;
          (5) gains or profits from quota pools in other 
        production areas (not including separate type pools 
        established for Valencia peanuts produced in New 
        Mexico) and then buy-back gains in other areas; and
          (6) an increase in the marketing assessment for such 
        quota pool.
    Section 106(e) provides that the Secretary may not make 
loans available for quota peanuts for any crop of quota peanuts 
for which producers have disapproved the poundage quota.
    Section 106(f) directs the Secretary to continue to promote 
quality improvement of peanuts.
    Section 106(g) provides that first handlers (initial 
purchasers of peanuts) and producers pay a marketing assessment 
to CCC on all peanuts sold equal to 1.2 percent of the national 
average loan rate, with first handlers paying .60 percent in 
1996 and .65 percent in 1997 through 2002.
    Section 106(h) provides that subsections (a) through (f) 
are applicable to the 1996 through 2002 crops of peanuts.
    Section 106(i), in paragraph (1), amends the peanut quota 
provisions contained in part VI of subtitle B of title III of 
the Agricultural Adjustment Act of 1938 (the ``1938 Act'') by 
extending such provisions through the 2002 marketing year.
    Section 106(i), in paragraph (2), amends section 358-
1(b)(1) and 358-1(b)(2) of the 1983 Act to provide eligibility 
provisions for farm poundage quota. Beginning with the 1997 
marketing year, farms: (i) owned or controlled by 
municipalities, airport authorities, schools, colleges, 
refuges, and other public entities; or (2) owned or controlled 
by a person who is not a producer and resides in another State; 
will no longer be allocated any farm poundage quota by the 
Secretary, and any farm poundage quota held by such entities at 
the end of the 1996 marketing year shall be allocated to other 
farms in a State.
    Section 106(i), in paragraph (3), amends section 358-
1(a)(1) of the 1938 Act by eliminating the 1,350,000 ton 
minimum national poundage quota.
    Section 106(i), in paragraph (4), amends section 358-
1(b)(2) of the 1938 Act by deleting the current subparagraph 
(B) relating to allocation of increased quota in Texas and 
inserting a new subparagraph (B) authorizing temporary 
increases in quota based on seed use. Amended section 358-
1(b)(2), in subparagraph (B), provides that, for the 1996 
through 2002 marketing years, a temporary quota allocation for 
the marketing year only in which the crop is planted, equal to 
the number of pounds of seed peanuts planted for the farm that 
shall be made to the producers for the 1996 through 2002 
marketing years, in addition to the normal farm poundage quota 
established under section 358-1. Subparagraph (B) also provides 
that there is no change in the requirement regarding the use of 
quota and additional peanuts established by section 359a(b) of 
the 1938 Act. Also, subsection (a)(1) of such section no longer 
includes ``seed'' in the estimate of domestic edible use by the 
Secretary.
    Section 106(i), in paragraph (5), amends section 358b(a)(1) 
of the 1938 Act relating to farm poundage quota transfer. 
Amended section 358b(a)(1) allows farm poundage quota to be 
sold or leased, either before or after the normal planting 
season, to any other owner or operator of a farm in the same 
State. Current provisions requiring 90 percent of a farm's 
basic quota to be planted or considered planted before a fall 
(or after the normal planting season) transfer is allowed are 
maintained.
    Section 106(i), in paragraph (6), eliminated 
undermarketings by deleting paragraphs (8) and (9) of section 
358-1(b) of the 1938 Act, with necessary conforming changes to 
other sections.
    Section 106(i), in paragraph (7), adds a new paragraph (8) 
to amended section 358-1(b) of the 1938 Act which authorizes 
the transfer of additional peanuts from a farm to a quota loan 
pool in cases in which quota poundage was not harvested and 
marketed because of drought, flood, or any other natural 
disaster, except that the such peanuts shall be supported at 70 
percent of the quota support rate, and such transfer shall not 
exceed 25 percent of the total farm quota pounds.

Section 107. Sugar program

    Section 107(a) sets the loan rate for domestically grown 
sugarcane at 18 cents per pound for raw cane sugar.
    Section 107(b) sets the loan rate for domestically grown 
sugar beets at 22.9 cents per pound for refined beet sugar.
    Section 107(c) requires the Secretary to reduce the loan 
rate specified in subsections (a) and (b) if the Secretary 
determines that negotiated reductions in export subsidies 
provided for sugar of the European Union and other major sugar 
exporting countries in the aggregate exceed the commitments 
made as part of the Agreement on Agriculture. It also provides 
that the Secretary shall not reduce the loan rate under 
subsections (a) and (b) below a rate that provides domestic 
sugar an equal measure of support to that provided by the 
European, Union and other sugar exporting countries based on 
the provisions of Agreement on Agriculture, section 101(d)(2) 
of the Uruguay Round Agreements Act.
    Section 107(d) provides that loan terms are the earlier of 
9 months, or the end of a fiscal year, with supplemental loan 
authority (up to a total on nine months) for loans maturing at 
the end of a fiscal year.
    Section 107(e) provides for the Secretary to carry out the 
section through the use of recourse loans for sugar. However, 
it also provides that during any fiscal year in which the 
tariff rate quota (TRQ) for imports of sugar into the U.S. is 
set, or increased to, a level that exceeds 1,500,000 short tons 
raw value, the Secretary is directed to carry out this section 
by marking nonrecourse loans (previously made recourse loans 
are to be modified by the Secretary into nonrecourse loans). If 
the Secretary is required to make nonrecourse loans (or modify 
recourse loans) under this subsection during a fiscal year, the 
Secretary is to obtain from processors adequate assurances that 
such processors will provide appropriate minimum payments to 
producers as set by the Secretary.
    Section 107(f) requires first processors of raw cane sugar 
to remit to CCC nonrefundable marketing assessment for each 
pound of raw cane sugar equal to 1.1 percent of the loan rate 
for fiscal year 1996 (1.375 percent for 1997 through 2003) 
while first processors of sugar beets are to remit to CCC a 
marketing assessment of 1.1794 percent for fiscal year 1996 
(1.47425 percent for 1997 through 2003), on all marketings. 
Assessments are to be collected on a monthly basis, except that 
any inventory which has not been marketed by September 30 of a 
fiscal year shall be assessed at that point, except that the 
latter sugar shall not be assessed later when it is marketed. 
Any person who fails to remit the assessment is liable for a 
penalty based on the quantity of the sugar involved in the 
violation times the applicable loan rate at the time of 
violation.
    Section 107(g) provides for an additional penalty (1 cent 
per pound on cane sugar, pro rata on beet sugar) to be assessed 
on the forfeiture of any sugar pledged as collateral for a 
loan.
    Section 107(h) requires processors and refiners to report 
such information to the Secretary as is required in order to 
administer the program. A penalty applies for failure to report 
and the Secretary is required to make monthly reports on 
pertinent sugar production, imports, distribution, and stock 
levels.
    Section 107(i) repeals marketing allotments for sugar, 
contained in Part VII of subtitle B of title III of the 1938 
Act.
    Section 107(j) provides that this section is applicable to 
the 1996 through 2002 crops of sugar beets and sugarcane.

Section 108. Administration

    Section 108 directs the Secretary to use CCC to carry out 
this title, and prohibits the Secretary from using any CCC 
funds for the salaries or expenses of any officer or employee 
of USDA. It also provides authority to issue necessary 
regulations, and provides that determinations made by the 
Secretary under this title are final.

Section 109. Elimination of permanent price support authority

    Section 109 repeals the Agricultural Act of 1949 (certain 
necessary sections are transferred to the 1938 Act), and makes 
required conforming amendments.

Section 110.--Effect of amendments

    Section 110 provides that the amendments made by this Act 
shall not affect the authority of the Secretary to carry out 
the 1991 through 1995 production adjustment programs in effect 
before this Act.

                            title ii--dairy

Section 201.--Milk Price Support Program

    Section 201 continues the current authority of the 
Secretary of Agriculture to support the price of milk produced 
in the 48 contiguous states through the purchase of excess 
cheddar cheese from the commercial market through December 31, 
2002. However, beginning on the first day of the first month 
not less than 30 days after the enactment of this Act, the 
Secretary will no longer be authorized to support the price of 
milk through the price of milk through the purchase of excess 
butter and nonfat dry milk from the commercial market.
    It also establishes the support price for a hundredweight 
(cwt) of milk containing 3.67 percent butterfat at not less 
than $10.35 during calendar year 1996, not less than $10.25 
during calendar year 1997, not less than $10.15 during calendar 
year 1998, not less than $10.05 during calendar year 1999, not 
less than $9.95 during calendar year 2000, and not less than 
$9.85 during calendar year 2001 and thereafter.
    Section 201 does not provide authority for the Secretary to 
assess producers to pay for any portion of the support program 
for milk (the current budget assessment is repealed with the 
rest of Section 204 of the Agricultural Act of 1949 by section 
109(b)(2)). However, the Secretary is authorized to refund the 
budget assessments collected from a dairy producer in calendar 
year 1995 or calendar year 1996 if that producer can establish 
that he or she did not increase marketings of milk in that 
calendar year when compared to the preceding calendar year.
    The authority of the Secretary to transfer milk products 
purchased under the support program to the military and 
veterans hospitals is continued. However, the CCC is to be 
reimbursed for all costs associated in making those products 
available to the military and veterans hospitals.

Section 202.--Recourse loans for commercial processors of dairy 
        products.

    Section 202 authorizes the Secretary to make recourse loans 
available to commercial processors of cheddar cheese, butter 
and nonfat dry milk dairy products to assist those processors 
in assuring price stability for the dairy industry. Loans are 
to be made available at 90% of the market price and at 
established CCC interest rates. Loans may not extend beyond the 
end of the fiscal year in which they are made, except that the 
Secretary may extend a loan for an additional period not to 
exceed the next fiscal year.

Section 203.--Dairy export incentive program

    Section 203 extends the Dairy Export Incentive Program 
(DEIP) through December 31, 2002. The Secretary is directed to 
use DEIP at the maximum volume and funding levels permitted by 
the Uruguay Round. The Secretary is given sole discretion over 
DEIP and authorized to take market development into 
consideration, in addition to the difference between domestic 
and world prices, in establishing payment rates under DEIP.
    In making these changes, it is the intent of the Committee 
that the DEIP program be run in the most efficient and cost-
effective manner possible. USDA should, therefore, take all 
appropriate steps to implement these amendments by issuing or 
revising its DEIP regulations as soon as practicable. The 
Committee would further note that the recent ``start and stop'' 
approach to operating DEIP has undermined its effectiveness 
and, as a result, the Committee strongly encourages USDA to 
have any other program revisions along with the amendments made 
by this Act fully implemented by July 1, 1996.

Section 204.--Dairy promotion program

    Section 204 extends the research and promotion assessment 
(15 cents/hundredweight) under the Dairy Production 
Stabilization Act of 1983 to dairy components, derivatives, and 
products imported into the United States, including casein 
(except casein imported under sections 3501.90.20 [casein glue] 
and 3501.90.50 [other] of the harmonized Tariff Schedule, at 
the rate of 1.2 cents per pound of total milk solids in those 
products. The National Dairy Promotion and Research Board is 
expanded from 36 to 38 members to include an importer of dairy 
products into and an exporter of dairy products from the United 
States.
    The Dairy Production Stabilization Act of 1983 is amended 
to require that the budget of the National Dairy Promotion and 
Research Board during each of the fiscal years from 1996 and 
2000 shall provide for the expenditure of not less than 10 
percent of anticipated revenues available to the Board on the 
development of international markets for, and the promotion 
within such markets of, U.S. dairy products.
    The Secretary shall publish a proposed order reflecting 
these amendments to the Dairy Production Stabilization Act 
within 60 days of enactment and provide notice and an 
opportunity for comment. After consideration of any comments 
received on the proposed order, a final order shall be issued 
and become effective not later than 120 days after publication 
of the proposed order. Within 36 months after the issuance of a 
final order, the Secretary shall conduct a referendum for the 
sole purpose of determining whether the requirement of the 
amendments will be continued. The amendments will be continued 
if approved by a majority of those persons voting in the 
referendum. If the amendments are not approved, the old order 
shall be reinstated.

Section 205.--Fluid milk standards under milk marketing orders

    Section 205 establishes minimum standards for fluid milk 
within Federal milk marketing orders as follows: for whole 
milk--not less than 8.8 percent milk solids not fat and not 
less than 3.25 percent milk fat; for 2 percent (lowfat) milk--
not less than 10 percent solids not fat and not less than 2 
percent milk fat; for 1 percent (light) milk--not less than 11 
percent milk solids not fat and not less than 1 percent milk 
fat; and for skim (nonfat) milk--not less than 9 percent milk 
solids and not more than .25 percent milk fat.
    The quality standards established by Section 205 for 
Federal milk marketing orders are equivalent to those currently 
in existence in California. By adopting these standards in all 
Federal milk marketing orders, the committee expects that the 
California state standards will remain in effect as well during 
the two-year period following the enactment of this Act.

Section 206.--Manufacturing allowance

    Section 206 sets the maximum manufacturing allowance 
(``make allowance'') which a state may provide for milk 
manufactured into butter, butter oil, nonfat dry milk, and 
whole dry milk at $1.65/hundredweight of milk, and for milk 
manufactured into cheese and whey of $1.80/hundredweight of 
milk during the two-year period beginning on the effective date 
of this section. Subsequent to that two-year period, the 
manufacturing allowance will be that amount determined by the 
Secretary under authority granted to the Secretary in section 
221(b)(3).
    Any state which provides for a higher make allowance for 
cheese than that provided by this section may not sell surplus 
cheese to the Commodity Credit Corporation (CCC) under the 
price support program. Any state which provides for a higher 
make allowance for butter and nonfat dry milk than that 
provided by this section may not receive disbursements from the 
Class IV equalization pool under section 208.
    Section 206 also suspends Section 102 of the 1990 Farm bill 
during the two-year transition period unless an injunction or 
other court order prohibits or impairs the implementation of 
this section of the Act. Section 102 is then repealed at the 
end of the two-year transition period.
    The Secretary is authorized to implement and enforce this 
section without the issuance of regulations. Section 206 is 
effective on the first day of the first month beginning not 
less than 30 days after the date of the enactment of this Act.
    In adopting section 206, the Committee intends only to 
establish a yardstick which the Secretary can use in 
determining whether a state may participate in the Class IV 
equalization pool or sell cheese to the CCC. It is not the 
Committee's intent to dictate changes in a state's pricing 
formula, but rather to bring about some measure of uniformity 
in the effective make allowances of processors under Federal 
orders and those subject to state orders using the yields and 
prices specified in section 206.
    Therefore, in the case of the State of California, it is 
the intent of the Committee that the $1.80/hundredweight and 
the $1.65/hundredweight make allowances set during the two-year 
transition period by section 206 have the effect of lowering 
California's manufacturing allowances for cheese, butter, and 
nonfat dry milk by $.15/hundredweight, notwithstanding other 
adjustments made by the pricing formulas in the California 
order from their current levels. However, nothing in this 
section prevents the State of California from altering its own 
formulas in a way that would decrease its state make allowances 
for cheese, butter, and nonfat dry milk by more than $.15/
hundredweight.

Section 207. Establishment of temporary Class I price and temporary 
        Class I equalization pool

    Section 207 makes temporary changes in the pricing and 
pooling of milk of the highest use classification (i.e., Class 
I or ``fluid'' milk) for a period of two years beginning on the 
first day of the first month not less than 30 days after 
enactment of the Act.
    During this two-year ``transition'' period, this section 
creates a price floor for milk of the highest use 
classification (Class I milk) in a Federal milk marketing order 
of not less than $12.87/hundredweight plus the Class I 
differential in effect for that order on December 31, 1995. In 
the event that the Basic Formula Price exceeds $12.87/
hundredweight in any month during that two-year period of time, 
the difference between the Basic Formula Price and $12.87 shall 
be added to the Class I price in every Federal milk marketing 
order in the second month following the month in which that 
difference occurred.
    The section also creates a Class I equalization pool during 
this two-year period to more equitably share fluid milk 
revenues nationwide. Every month during the two-year period, 
each Federal milk marketing order and the California state 
order must pay into the pool an amount equal to $.80/
hundredweight times the number of hundredweight of Class I milk 
marketing in that order during the month. Similarly, every 
month during the two-year period, each of these orders will 
receive back from the Class I equalization pool an amount equal 
to the total monthly receipts in the pool times the ratio of 
the total milk marketed in that order during the month to the 
total milk marketed in all of those orders during the month.
    The amendments required by Section 207 are not subject to a 
producer referendum, to the rulemaking requirements of title 5 
of the U.S. Code, or to the review or approval of other 
executive agencies.

Section 208. Establishment of a temporary Class IV price and a 
        temporary Class IV equalization pool

    Section 208 makes temporary changes in the pricing and 
pooling of milk used to produce butter, butter oil, nonfat dry 
milk, and whole dry milk for a period of two years beginning on 
the first day of the first month not less than 30 days after 
enactment of the Act.
    During this two-year ``transition'' period, this section 
establishes a ``Class IV'' price for milk used to manufacture 
these products. The section also creates a Class IV 
equalization pool the two-year ``transition'' period that is 
activated any month in which the Class IV price determined by 
the Secretary is less than the support price for milk used to 
manufacture cheese under section 201 (adjusted to 3.5 percent 
butterfat).
    The Class IV pool is intended to create a more equitable 
sharing of any difference between the support price for milk 
used in cheese and the Class IV price for milk among all 
producers. In any month where the support price (adjusted to 
3.5 percent butterfat) exceeds the Class IV price determined by 
the Secretary, the Class IV equalization pool will collect from 
each milk marketing order (Federal and state) or handler (in 
the case of unregulated milk) its proportionate share (the 
ratio of the total milk marketed under that order or by handler 
to the total milk marketed under all orders and by all handlers 
during that month) of 50 percent of that difference times the 
total Class IV milk marketed during that month. The Class IV 
pool will, then, disburse to an order or handler which marketed 
Class IV milk during that month its proportionate share of 
total collections (the ratio of Class IV milk marketed under 
that order or by that handler to the total Class IV milk 
marketed under all orders and by all handlers during that 
month).
    The amendments required by Section 208 are not subject to a 
producer referendum, to the rulemaking requirements of title 5 
of the U.S. Code, or to the review or approval of other 
executive agencies.

Section 209. Authority for establishment of standby pools

    Section 209 authorizes the Secretary to invite proposals 
for the establishment of standby pools to facilitate the 
movement of milk over long distances. Participation in standby 
pools must be approved order-by-order as a separate order item.

Section 221. Issuance or amendment of Federal milk marketing orders to 
        implement certain reforms

    Section 221 requires the Secretary to issue new or amended 
milk marketing orders, which shall supersede any other 
statutes, rules or regulations applicable to the pricing and 
marketing of milk and its products. The new or amended orders 
will accomplish the following reforms: (1) consolidation of 
existing Federal orders and other areas within the 48 
contiguous states not covered by Federal orders into not more 
than 8 to 13 orders, with the State of California as one of 
those orders and with each order authorized to blend order 
proceeds as necessary to address issues unique to that order 
such as pre-existing state quota programs; (2) implementation 
of uniform multiple component pricing for milk used in 
manufactured dairy products; and (3) establishing class prices 
for milk used to produce cheese, nonfat dry milk, and butter 
based on national product prices less a manufacturing allowance 
(which shall not vary regionally except to reflect variances in 
transportation and reasonable operating costs, if any, of 
efficient processing plants in different geographical areas). 
The section further provides that these changes are not to 
affect the current status of producer handlers.
    When the Secretary utilizes the authority granted under 
this section to reform and consolidate Federal milk marketing 
orders, the Committee expects that the Secretary will 
accomplish that task with a goal of maximizing dairy producer 
net income.
    With respect to the blending of pool proceeds in a new or 
amended order which encompasses the entire geographic area of a 
single state and no other area, it is the intent of the 
Committee that the Secretary may use a milk pooling system 
within that State in lieu of Federal authorities to blend pool 
proceeds and manage any quota payment differential plan in 
operation in that State.
    In implementing a program of multiple component pricing, 
the Secretary should apportion the total value of milk paid to 
producers based upon the milk's composition of butterfat, 
protein, and other solids.
    The Committee also notes that the Secretary already has the 
authority to implement multiple component pricing on any class 
of milk in any Federal milk marketing order pursuant to section 
112 of the Food, Agriculture, Conservation, and Trade Act of 
1990. Section 221(b) simply requires that the new or amended 
orders created by this section will include uniform multiple 
component pricing for milk used in manufactured dairy products. 
The Committee expects the Secretary to similarly include 
multiple component pricing for milk used in fluid milk products 
when requested to do so, and following approval, by producers 
in any Federal milk marketing order.
    Section 221(b) also requires the Secretary to establish 
class prices for milk based on national product prices less a 
manufacturing allowance. When establishing whether reasonable 
operating costs vary between efficient processing plants in 
different geographic regions, it is expected that the Secretary 
will audit, using uniform procedures, a significant 
representative sample of such plants in each region.

Section 222. Reform process

    Section 222 provides an expedited process for the issuance 
of new or amended orders under section 221: (1) the Secretary 
has a limit of not more than 165 days after enactment to 
propose amendments or new orders; (2) a comment period of not 
more than 75 days is established for the proposed amendments or 
new orders; and (3) the Secretary has not more than 120 days 
after the close of the comment period to publish a final 
administrative decision.
    The section provides for a referendum in each new or 
amended order as soon as the Secretary's decision is 
implemented to determine whether the producers wish to 
terminate the order. Actions taken by the Secretary under 
sections 221 and 222 are not subject to the rulemaking 
requirements of title 5 of the U.S. Code and are not subject to 
review or approval by any other executive agency.

Section 223. Effect of failure to comply with reform process 
        requirements

    Section 223 provides that, in the event that the Secretary 
does not publish a final administrative decision reforming 
Federal milk marketing orders within one year of the date of 
enactment of the Act, the Secretary's authority to assess 
producers and handlers for order administration and services is 
terminated. However, those services must continue and be 
financed out of funds available to the Agricultural Marketing 
Service.
    The section further provides that, unless the Secretary 
certifies to Congress within two years of the date of enactment 
of the Act that all of the Federal milk marketing order reforms 
required by section 221 are fully implemented, all Federal 
price support activity, milk marketing orders, Dairy Export 
Incentive Program activities, and promotion activities under 
both the producer and fluid processor promotion programs will 
cease immediately.
    In the event that the Secretary is enjoined or otherwise 
restrained by a court order from publishing or implementing the 
reform requirements specified by section 221, the length of 
time for which that injunction or other restraining order is 
effective shall be added to the time limitations specified in 
subsections (a) and (b) thereby extending those time 
limitations by a period of time equal to the period of time for 
which the injunction or other restraining order is effective.

                        title III--conservation

Section 301. Conservation

    Section 301(a) amends Subtitle E of title XII of the Food 
Security Act of 1985 to provide mandatory funding for the 
fiscal years 1996 through 2002 for the Conservation Reserve 
Program, the Wetlands Reserve Program, and $100,000,000 per 
year for the Livestock Environmental Assistance Program created 
by this title.
    Section 301(b) amends Subtitle D of title XII of the Food 
Security Act of 1985 by adding a new Chapter 4, which creates 
the Livestock Environmental Assistance Program.
    Authorized through 2002, LEAP is authorized to provide 
technical assistance and cost-share and incentive payments to 
livestock producers who undertake land management or structural 
practices, funded through direct spending of $100,000,000 each 
fiscal year, with directions to the Secretary in how to develop 
priority areas with respect to spending. The Secretary is 
authorized to enter into contracts (up to ten years) to carry 
out this program. Operators of large confined livestock 
operations are ineligible to receive cost-share assistance for 
animal waste management facilities.
    Section 301(c), in paragraph (1), replaces permanent 
easement authority in the Wetlands Reserve Program with 15-year 
easement authority by amending section 1237 of the Food 
Security Act of 1985.
    Section 301(c), in paragraph (2), modifies the Conservation 
Reserve Program (section 1235 of the Food Security Act of 1985) 
by limiting total acreage enrollment to 36,400,000 acres.

          title iv--agricultural promotion and export programs

Section 401.--Market Promotion Program

    Section 401 authorizes $100,000,000 annually for fiscal 
years 1996 through 2002 for the Market Promotion Program 
authorized by the Agricultural Trade Act of 1978.

Section 402. Export Enhancement Program

    Section 402 amends the section 301(e)(1) of the 
Agricultural Trade Act of 1978 to limit the amount of the CCC 
funds available for the Export Enhancement Program as follows: 
$350,000,000 for fiscal years 1996 and 1997; $500,000,000 for 
fiscal year 1998; $550,000,000 for fiscal year 1999; 
$579,000,000 for fiscal year 2000; and $478,000,000 for fiscal 
years 2001 and 2002.

                         title v--miscellaneous

Section 501. Crop insurance

    Section 501(a) amends section 508(b)(4) of the Federal Crop 
Insurance Act to provide that the Secretary may only continue 
to offer catastrophic risk protection through local USDA 
offices if the Secretary determines that the number of approved 
insurance providers operating in a State is insufficient to 
adequately provide catastrophic risk protection coverage to 
producers. If coverage availability in a State is adequate, 
only approved insurance providers may provide coverage. This 
section also provides that, effective with spring-planted 1996 
and subsequent crops, catastrophic coverage is not required for 
federal farm program benefits of producers sign a written 
waiver with the Secretary that waives any eligibility for 
emergency crop loss assistance.
    Section 501(b) amends section 519(a)(2)(B) of the Federal 
Crop Insurance Act to specify that seed crops are eligible for 
coverage.

Section 502. Collection and use of agricultural quarantine and 
        inspection fees

    Section 502 amends the agricultural quarantine and 
inspection fees provisions in section 2509 of the Food, 
Agriculture, Conservation, and Trade Act of 1990 to provide 
that, for the fiscal years 1996 through 2002, funds in the user 
fee account in excess of appropriated amounts shall be 
available until expended. Beginning with fiscal year 2003, 
funds in the user fee account shall be available without fiscal 
year limitation.

Section 503. Commodity Credit Corporation interest rate

    Section 503 provides that the interest rate charged by CCC 
on loans for agricultural commodities shall be 100 basis points 
greater than rate established by the formula in effect on 
October 1, 1995.

Section 504. Establishment of the Office of Risk Management

    Section 504 amends the Department of Agriculture 
Reorganization Act of 1994 by inserting after section 226 a new 
section 226A.
    New section 226A(a) directs the Secretary to establish and 
maintain an independent Office of Risk Management within the 
Department.
    New section 226A(b) provides that such office shall have 
jurisdiction over:
          (1) the supervision of FCIC;
          (2) administration and oversight of all programs 
        authorized by the Federal Crop Insurance Act;
          (3) any pilot or other programs involving revenue 
        insurance, risk management, or the use of the futures 
        market to manage risk and support farm income; and
          (4) such other functions as the Secretary considers 
        appropriate.
    New section 226A(c) provides that the office shall be 
headed by an Administrator who shall be appointed by the 
Secretary, and that the Administrator shall also serve as the 
Manager of FCIC.
    New section 226A(d), in paragraph (1), authorizes the Under 
Secretary of Agriculture for Farm and Foreign Agricultural 
Services to consolidate the human resources, public affairs, 
and legislative affairs functions of the Office of Risk 
Management.
    New section 226A(d), in paragraph (2), directs the 
Secretary to provide resources to the Office of Risk Management 
sufficient to enable the Office to carry out its functions in a 
timely and efficient manner.
    New section 226A(d), in paragraph (3), provides that fiscal 
year 1996 funding is established at not less than $88,500,000, 
to be taken from the appropriation for the salaries and 
expenses of the Consolidated Farm Services Agency.

Section 505. Business Interruption Insurance Program

            Subsection (a). Establishment of program
    Subsection (a) directs the Secretary to establish a 
business interruption insurance program that allows a producer 
of a program crop to obtain revenue insurance coverage in case 
of loss of revenue. The Secretary is authorized to determine 
the nature and extent of such a program.
            Subsection (b). Report on progress and proposed expansion
    Subsection (b) provides that the Secretary must submit data 
to the Commission on 21st Century Production Agriculture 
established under Subtitle E by January 1, 1998, regarding the 
results of the program and make recommendations about how to 
best offer a revenue insurance program in the future.
            Subsection (c). Contract commodity defined
    Subsection (c) defines program crop to mean wheat, corn, 
grain sorghums, oats, barley, upland cotton, or rice.

Section 506. Continuation of Options Pilot Program

    Section 506 provides that, during the 1996 through 2002 
crop years, the Secretary may continue to conduct the options 
pilot program authorized by the Options Pilot Program Act of 
1990 (Subtitle E of title XI of Public Law 101--624), with the 
Secretary having authority to make such modifications to the 
terms and conditions of the program as are necessary to reflect 
the changes to law made by this Act.

      title vi--commission on 21st century production agriculture

Section 601. Establishment

    This section establishes a commission to be known as the 
``Commission on 21st Century Production Agriculture.''

Section 602. Composition

            Subsection (a). Membership and appointment
    Subsection (a) of this section requires that the Commission 
be composed of eleven members: three members appointed by the 
President; four members appointed by the Chairman of the 
Committee on Agriculture of the House of Representatives (in 
consultation with the ranking minority member); and four 
members appointed by the Chairman of the Committee on 
Agriculture, Nutrition, and Forestry of the Senate (in 
consultation with the ranking minority member).
            Subsection (b). Qualifications
    Subsection (b) establishes the qualifications required of 
the persons appointed to the Commission. At least one member 
appointed by each the President, the Chairman of the Committee 
on Agriculture of the House of Representatives, and the 
Chairman of the Committee on Agriculture, Nutrition, and 
Forestry of the Senate shall be an individual who is primarily 
involved in production agriculture. All other members appointed 
to the Commission must have knowledge and experience in 
agriculture production, marketing, finance, or trade.
            Subsection (c). Term of members; vacancies
    Subsection (c) requires that the appointment to the 
Commission be for the life of the Commission. It also directs 
that a vacancy on the Commission shall not affect the 
Commission's power and shall be filled in the same manner as 
the original appointment.
            Subsection (d). Time for appointment; first meeting
    Subsection (d) requires that the members of the Commission 
be appointed no later than October 1, 1997 and that the 
Commission convene its first meeting 30 days after six members 
of the Commission have been appointed.
            Subsection (e). Chairman
    Subsection (e) requires that the chairman of the Commission 
be designated jointly by the Chairman of the Committee on 
Agriculture of the House of Representatives and the Chairman of 
the Committee on Agriculture, Nutrition, and Forestry of the 
Senate from among the members of the Commission.

Section 603. Comprehensive review of past and future of production 
        agriculture

            Subsection (a). Initial review
    Subsection (a) of this section requires the Commission to 
conduct a comprehensive review of changes in the condition of 
production agriculture in the United States subsequent to the 
date of enactment of this Act and the extent to which such 
changes are the result of the changes made by this Act. This 
review shall include: (1) the assessment of the initial success 
of market transition contracts in supporting the economic 
viability of farming in the United States: (2) the assessment 
of the food security situation in the United States in the 
areas of trade, consumer prices, international competitiveness 
of United States production agriculture, food supplies, and 
humanitarian relief; (3) an assessment of the changes in farm 
land values and agricultural producer incomes; (4) an 
assessment of the regulatory relief for agricultural producers 
that has been enacted and implemented, including the 
application of cost/benefit principles in the issuance of 
agricultural regulations; (5) an assessment of the tax relief 
for agricultural producers that has been enacted in the form of 
capital gains tax reductions, estate tax exemptions, and 
mechanisms to average tax loads over high and low-income years; 
(6) an assessment of the effect of any Government interference 
in agricultural export markets, such as the imposition of trade 
embargoes, and the degree of implementation and success of 
international trade agreements; and (7) the assessment of the 
likely effect of the sale, lease, or transfer of farm poundage 
quota for peanuts across State lines.
            Subsection (b). Subsequent review
    Subsection (b) requires the Commission to conduct a 
comprehensive review of the future of production agriculture in 
the United States and the appropriate role of the Federal 
Government in support of production agriculture. This review 
shall include: (1) an assessment of changes in the condition of 
production agriculture in the United States since the initial 
review under subsection (a); (2) an identification of the 
appropriate future relationship of the Federal Government with 
production agriculture after 2002; and (3) an assessment of the 
manpower and infrastructure requirements of the Department of 
Agriculture necessary to support the future relationship of the 
Federal Government with production agriculture.
            Subsection (c). Recommendations
    Subsection (c) requires that the Commission develop 
specific recommendations for legislation to achieve the 
appropriate future relationship of the Federal Government with 
production agriculture identified under subsection (a)(2).

Section 604. Reports

            Subsection (a). Report on initial review
    Subsection (a) of this section requires that by June 1, 
1998, the Commission submit a report containing the results of 
the initial review to the President, the Committee on 
Agriculture of the House of Representatives, and the Committee 
on Agriculture, Nutrition, and Forestry of the Senate.
            Subsection (b). Report on subsequent review
    Subsection (b) requires that not later than January 1, 
2001, the Commission submit a report containing the results of 
the subsequent review conducted under section 1503(b) to the 
President, the Committee on Agriculture of the House of 
Representatives, and the Committee on Agriculture, Nutrition, 
and Forestry of the Senate.

Seciton 605. Powers

            Subsection (a). Hearings
    Subsection (a) of this section authorizes the Commission to 
conduct hearings, take testimony, receive evidence, and act in 
a manner the Commission considers appropriate to carry out the 
purposes of this Act.
            Subsection (b). Assistance from other agencies
    Subsection (b) authorizes the Commission to secure directly 
from any department or agency of the Federal Government any 
information necessary to carry out its duties under this title. 
The head of such department or agency shall furnish information 
requested by the chairman of the Commission, to the extent 
permitted by law.
            Subsection (c). Mail
    Subsection (c) authorizes the Commission to use the United 
States mails in the same manner and under the same conditions 
as the departments and agencies of the Federal Government.
            Subsection (d). Assistance from Secretary
    Subsection (d) requires that the Secretary of Agriculture 
shall provide appropriate office space and reasonable 
administrative and support services available to the 
Commission.

Section 606. Commission procedures

            Subsection (a). Meetings
    Subsection (a) of this section requires that the Commission 
meet on a regular basis. The frequency of such meeting shall be 
determined by the chairman or a majority of its members. 
Additionally, the Commission must meet upon the call of the 
chairman or a majority of the members.
            Subsection (b). Quorum
    Subsection (b) provides that a majority of the members of 
the Commission must be present to produce a quorum for 
transacting the business of the Commission.

Section 607. Personnel matters

            Subsection (a). Compensation
    Subsection (a) of this section provides that members of the 
Commission serve without compensation, but are allowed travel 
expenses when engaged in the performance of Commission duties, 
including a per diem in lieu of subsistence, as authorized by 
section 5703 of title 5, United States Code.
            Subsection (b). Staff
    Subsection (b) provides that the Commission shall appoint a 
staff director. The staff director's basic rate of pay shall 
not exceed that rate provided for under section 5376 of title 
5, United States Code. The Commission may appoint such 
professional and clerical personnel as may be reasonable and 
necessary to enable the Commission to carry out its duties 
without regard to the provisions governing appointments in the 
competitive service, title 5, United States Code, and 
provisions relating to the number, classification, and General 
Schedule rates in chapter 51 and subchapter III of chapter 53 
of title 5 or any other provision of law. No employee appointed 
by the Commission (other than the staff director) may be 
compensated at a rate exceeding the maximum rate applicable to 
level 15 of the General Schedule.
            Subsection (c). Detailed personnel
    Subsection (c) authorizes the head of any department or 
agency of the Federal Government to detail, without 
reimbursement, any personnel of such department or agency to 
the Commission to assist the Commission in carrying out its 
duties. The detail of any such personnel may not result in the 
interruption or loss of civil service status or privilege of 
such personnel.

Section 608. Termination of Commission

    This section provides that the Commission shall terminate 
upon the issuance of its final report required by section 1504.

              title vii--extension of certain authorities

Section 701. Extension of authority under Public Law 480

    This section amends section 408 of the Agricultural Trade 
and Development Assistance Act of 1954 to extend the authority 
to enter into agreements through calendar year 1996.

Section 702. Extension of Food for Progress

    This section amends section 1110 of the Food Security Act 
of 1985 to extend the Food For Progress Program through 
calendar year 1996 and to extend additional assistance in the 
administration of food assistance programs through fiscal year 
1996.

                        Committee Consideration

    The Committee on Agriculture met, pursuant to notice, on 
January 30, 1996, a quorum being present, to consider the bill 
H.R. 2854, the ``Agricultural Market Transition Act''.
    The Chairman called the meeting to order at 2:20 p.m. and 
stated that a copy of an Amendment in the Nature of a 
Substitute and section-by-section analysis to H.R. 2854 was 
available to each Member at his place on the rostrum.
    Thereafter, the Chairman stressed the need to enact a farm 
program as expeditiously as possible as the delay in reaching 
balanced budget package had created problems in agriculture 
which would require special action to resolve. The Chairman 
acknowledged that the permanent law of the Agriculture Act of 
1949 is now in place and if it takes effect, it would be very 
costly and highly disruptive for farmers. The Chairman noted 
that some Members had discussed a two-year extension of the 
1990 Farm Bill, but that agriculture had already lost $7.8 
billion in available funding in the December baseline update 
and that, if current law were to be extended for two years, the 
next farm bill debate would occur after further baseline 
updates had lost another $5 to $6 billion for agriculture. The 
Chairman further stated that a simple extension would prevent 
the deregulation and reform of agriculture policy that was 
achieved in the Balanced Budget Act in H.R. 2854.
    All Members were given permission to insert their 
statements for the record as the Chairman wished to expedite 
consideration of the bill.
    The Chairman made a presentation to Chairman Emeritus de la 
Garza for his past contributions to the Committee and noted 
that he had announced his retirement after this term.
    Without objection, the Chairman laid before the Committee 
the Amendment in the Nature of a Substitute to H.R. 2854 and 
stated that the Amendment would be considered as original text 
for purposes of amendment by title.
    Mr. Dooley was then recognized on behalf of himself, Mr. 
Pomeroy, and Mr. Johnson of South Dakota, to offer a Pomeroy-
Dooley-Johnson En Bloc Amendment to the Substitute that 
provides:
          forgiveness of unearned advance deficiency payments 
        for those producers who had a 35% or greater loss in 
        crop yields in 1995;
          a payment to producers equal to 50% of the payments 
        that would be made under the production flexibility 
        contracts;
          a marketing assistance loan set at 90% of the 5 year 
        olympic average for wheat, feed grains, cotton, rice 
        and oilseeds that would continue as permanent law 
        beyond crop year 2002, with no Findley loan rate 
        adjustment authority for wheat and feed grains;
          retaining the Farmer Owned Reserve;
          $2.5 billion to be allocated to the Crop Insurance 
        Fund;
          deleting the caps on the Export Enhancement Program 
        and the Market Promotion Program funding levels;
          $2.5 billion for research, education, and extension 
        activities;
          $2.5 billion for conservation and rural development 
        activities;
          an additional $150 million per year to the amount 
        available for the Livestock Environmental Assistance 
        Program over the next seven years; and
          authority to make new enrollments in the Conservation 
        Reserve Program.
  Discussion occurred and by a recorded vote 18 yeas to 27 
nays, the En Bloc Amendment was not adopted. See Roll Call Vote 
#1.
    Mr. Johnson then offered and explained an amendment 
regarding loan rates for marketing assistance loans for 
soybeans and other oilseeds that would have provided that such 
loans be set at not less than 90% of the average price received 
during the 5 previous marketing years, excluding the highest 
and lowest. Discussion occurred and by a recorded vote of 20 
yeas to 26 nays, the amendment was not adopted. See Roll Call 
Vote #2.
    Mr. Minge was then recognized to offer and explain an 
amendment to strike all of Title I except for the sugar and 
peanut sections and to replace it with marketing loans for 
certain commodities with a loan rate of 100% of the average 
price with a cap of $175,000 for such loans. Discussion 
occurred and by a recorded vote of 8 yeas to 36 nays, the 
amendment was not adopted. See Roll Call Vote #3.
    Mr. Stenholm was then recognized to offer and explain an 
amendment relating to production flexibility contracts 
exemption from provisions of Budget Act sequestration actions. 
Discussion occurred and without objection the amendment was 
withdrawn.
    Mrs. Clayton offered and explained an amendment regarding 
investment for agriculture and rural America which would create 
a new title VII that provided for $3.5 of funds out of the 
Commodity Credit Corporation for a variety of rural development 
activities, conservation, and research. Discussion occurred and 
by a recorded vote of 20 yeas to 27 nays, the amendment was not 
adopted. See Roll Call Vote #4.
    Mr. Stenholm was recognized to offer and explain an 
amendment regarding the peanut title. The amendment would--
          increase the quota support rate to $640;
          delete the provision that requires a 5 percent 
        reduction in loans to producers who reject offers from 
        handlers.
          change the priority method for covering losses in 
        area pools;
          change the ineligibility provisions for owning quota 
        to include an actively engaged standard instead of out-
        of-state residency; and
          change the quota transfer provisions to limit 
        transfers to States with more than 10,000 tons of 
        quota, with an overall 30 percent limit.
Mr. Stenholm requested that his amendment be divided into a 
series of amendments. Discussion occurred on the first 
amendment which would delete the provision that requires a 5 
percent reduction in loans to producers who reject offers from 
handlers. By a recorded vote of 17 yeas to 30 nays, the 
amendment was not adopted. See Roll Call Vote #5. Further 
discussion occurred, and Mr. Stenholm withdrew the remainder of 
his amendments without objection.
    Mr. Minge was then recognized to offer and explained an 
amendment which would eliminate the Secretary's authority to 
reduce loan rates for wheat and feed grains based on stocks to 
use ratios (also known as the Findley adjustment provision). 
Discussion occurred and by a voice vote, the amendment was not 
adopted.
    At this point, Mr. Minge then offered and explain an 
amendment that provided a person with ``adjusted gross income'' 
in excess of $100,000 or more from off-farm sources would not 
be eligible for production flexibility contract payments. 
Discussion occurred and by a voice vote, the amendment was not 
adopted.
    Mr. Volkmer was recognized to offer and explain an 
amendment that would amend the payment limitation provisions in 
section 1001, 1001A, 1001B, and 1001C of the Food Security Act 
of 1985 by: striking the ``three-entity rule''; requiring that 
payments to corporations or other entities be directly 
attributed to individual owners in proportion to their interest 
in the entity; and using Social Security numbers to track 
payments. Discussion occurred and by a voice vote, the 
amendment was not adopted.
    Mr. Peterson was then recognized to offer and explain an 
amendment which would eliminate the optional contract 
terminations under the Conservation Reserve Program. Discussion 
occurred and by a voice the vote, the amendment was adopted.
    Mr. Farr then offered and explained an amendment concerning 
farmland protection and federal cost sharing for acquisition of 
farmland protection easements. Discussion occurred, and the 
Chairman requested that Mr. Farr withdraw his amendment, but 
that his rights would be protected to offer the amendment with 
the Committee when it considered further farm bill legislation 
this Spring. Without objection, Mr. Farr withdrew his 
amendment.
    Mr. Minge was recognized to offer and explain an amendment 
concerning eligible lands for enrollment in the Conservation 
Reserve Program. Discussion occurred and the Chairman expressed 
his desire for this type of amendment to be taken up later this 
Spring in further farm bill consideration. Without objection, 
Mr. Minge withdrew his amendment.
    Mr. Canady was then recognized to offer and explain an 
amendment on behalf of himself, Mrs. Thurman, and Mr. Foley 
which would subject imported tomatoes to the same packing 
requirements as those imposed on the domestic industry. 
Discussion occurred with the Chairman noting that the Committee 
on Agriculture and the Committee on Ways and Means share 
jurisdiction over this issue. Mr. Canady, without objection, 
withdrew the amendment.
    Mr. Johnson was recognized to offer and explain an 
amendment which would establish a Commission on Concentration 
in the Livestock Industry. The Chairman noted that this issue 
was also one which shared jurisdiction by both the Agriculture 
Committee and the Judiciary Committee. Discussion occurred and 
without objection, the amendment was withdrawn.
    Mr. Emerson was then recognized to offer and explain an 
amendment on behalf of himself, Mr. Roberts, and Mr. Condit to 
extend the authority of the Secretary of Agriculture and the 
Administrator of the Agency for International Development to 
enter into agreements and provide assistance under the Food for 
Peace Program and the Food for Progress programs through year 
1996. Discussion occurred and by a voice vote the amendment was 
adopted.
    Mr. Emerson then moved that the Amendment in the Nature of 
a Substitute to H.R. 2854, as amended, be adopted and favorably 
reported to the House. By a recorded vote of 29 yeas to 17 
nays, and in the presence of a quorum, H.R. 2854, as amended, 
was ordered favorably reported to the House. See Roll Call Vote 
#6.
    Mr. Volkmer indicated that there would be Minority Views 
and objected to a waiver of the three-day rule, but did 
indicate to make every effort to have the views as quickly as 
possible.
    Without objection, Mr. Barrett asked unanimous consent to 
be recorded as a yea vote of favorably reporting the bill to 
the House.
    Mr. Emerson then made a motion to authorize the Chairman to 
offer such motions as may be necessary in the House to go to 
conference with the Senate on H.R. 2854 or a similar Senate 
bill. Without objection the motion was agreed to.
    The Chairman then thanked the Members and adjourned the 
meeting subject to the call of the Chair.

                             rollcall votes

    In compliance with clause 2(l)(2)(B) of rule XI of the 
House of Representatives, the Committee sets forth the record 
of the following rollcall votes taken with respect to H.R. 
2854:

Rollcall No. 1

    Summary: Pomeroy-Dooley-Johnson En Bloc Amendment.
    Offered By: Mr. Dooley.
    Results: Failed by rollcall vote: 18 yeas/27 nays/4 not 
voting.
    Yeas: Cong. de la Garza, Cong. Brown, Cong. Rose, Cong. 
Stenholm, Cong. Volkmer, Cong. Johnson, Cong. Dooley, Cong. 
Clayton, Cong. Minge, Cong. Hilliard, Cong. Pomeroy, Cong. 
Holden, Cong. Baesler, Cong. Thurman, Cong. Bishop, Cong. Farr, 
Cong. Pastor, and Cong. Baldacci.
    Nays: Cong. Emerson, Cong. Gunderson, Cong. Combest, Cong. 
Allard, Cong. Barrett, Cong. Ewing, Cong. Doolittle, Cong. 
Goodlatte, Cong. Pombo, Cong. Canady, Cong. Smith, Cong. 
Everett, Cong. Lucas, Cong. Lewis, Cong. Baker, Cong. Crapo, 
Cong. Calvert, Cong. Chenoweth, Cong. Hostettler, Cong. Bryant, 
Cong. Latham, Cong. Cooley, Cong. Foley, Cong. Chambliss, Cong. 
LaHood, Cong. Peterson, and Cong. Roberts, Chairman.
    Not voting: Cong. Boehner, Cong. Condit, and Cong. 
McKinney, Cong. Thompson.

Rollcall No. 2

    Summary: Amendment concerning loan rates for marketing 
assistance loans for soybeans and other oilseeds.
    Offered By: Mr. Johnson.
    Results: Failed by a rollcall vote: 20 yeas/26 nays/3 not 
voting.
    Yeas: Cong. de la Garza, Cong. Brown, Cong. Rose, Cong. 
Stenholm, Cong. Volkmer, Cong. Johnson, Cong. Condit, Cong. 
Peterson, Cong. Dooley, Cong. Clayton, Cong. Minge, Cong. 
Hilliard, Cong. Pomeroy, Cong. Holden, Cong. Baesler, Cong. 
Thurman, Cong. Bishop, Cong. Farr, Cong. Pastor, and Cong. 
Baldacci.
    Nays: Cong. Emerson, Cong. Gunderson, Cong. Combest, Cong. 
Allard, Cong. Barrett, Cong. Ewing, Cong. Doolittle, Cong. 
Goodlatte, Cong. Pombo, Cong. Canady, Cong. Smith, Cong. 
Everett, Cong. Lucas, Cong. Lewis, Cong. Baker, Cong. Crapo, 
Cong. Calvert, Cong. Chenoweth, Cong. Hostettler, Cong. Bryant, 
Cong. Latham, Cong. Cooley, Cong. Foley, Cong. Chambliss, Cong. 
LaHood, and Cong. Roberts, Chairman.
    Not voting: Cong. Boehner, Cong. McKinney, and Cong. 
Thompson.

Rollcall No. 3

    Summary: Amendment to strike all of title I, Agricultural 
Market Transition Programs, except for those provisions 
concerning sugar and peanuts and to replace with marketing 
loans for certain commodities.
    Offered By: Mr. Minge.
    Results: Failed by a rollcall vote: 8 yeas/36 nays/5 not 
voting.
    Yeas: Cong. Volkmer, Cong. Johnson, Cong. Peterson, Cong. 
Clayton, Cong. Minge, Cong. Hilliard, Cong. Pomeroy, and Cong. 
Holden.
    Nays: Cong. Emerson, Cong. Gunderson, Cong. Combest, Cong. 
Allard, Cong. Barrett, Cong. Ewing, Cong. Doolittle, Cong. 
Goodlatte, Cong. Pombo, Cong. Canady, Cong. Smith, Cong. 
Everett, Cong. Lucas, Cong. Lewis, Cong. Baker, Cong. Crapo, 
Cong. Calvert, Cong. Chenoweth, Cong. Hostettler, Cong. Bryant, 
Cong. Latham, Cong. Cooley, Cong. Foley, Cong. Chambliss, Cong. 
LaHood, Cong. de la Garza, Cong. Rose, Cong. Stenholm, Cong. 
Dooley, Cong. Baesler, Cong. Thurman, Cong. Bishop, Cong. Farr, 
Cong. Pastor, Cong. Baldacci, and Cong. Roberts, Chairman.
    Not voting: Cong. Boehner, Cong. Brown, Cong. Condit, Cong. 
McKinney, and Cong. Thompson.

Rollcall No. 4

    Summary: Amendment to create a new title VII that provided 
for $3.5 billion of funds out of the CCC for a variety of rural 
development type activities.
    Offered By: Mrs. Clayton.
    Results: Failed by a rollcall vote: 20 yeas/27 nays/2 not 
voting.
    Yeas: Cong. de la Garza, Cong. Brown, Cong. Rose, Cong. 
Stenholm, Cong. Volkmer, Cong. Johnson, Cong. Peterson, Cong. 
Dooley, Cong. Clayton, Cong. Minge, Cong. Hilliard, Cong. 
Pomeroy, Cong. Holden, Cong. Baesler, Cong. Thurman, Cong. 
Bishop, Cong. Thompson, Cong. Farr, Cong. Pastor, and Cong. 
Baldacci.
    Nays: Cong. Emerson, Cong. Gunderson, Cong. Combest, Cong. 
Allard, Cong. Barrett, Cong. Boehner, Cong. Ewing, Cong. 
Doolittle, Cong. Goodlatte, Cong. Pombo, Cong. Canady, Cong. 
Smith, Cong. Everett, Cong. Lucas, Cong. Lewis, Cong. Baker, 
Cong. Crapo, Cong. Calvert, Cong. Chenoweth, Cong. Hostettler, 
Cong. Bryant, Cong. Latham, Cong. Cooley, Cong. Foley, Cong. 
Chambliss, Cong. LaHood, and Cong. Roberts, Chairman.
    Not voting: Cong. Condit and Cong. McKinney.

Rollcall No. 5

    Summary: Amendment to the Peanut Title.
    Offered By: Mr. Stenholm.
    Results: Failed by a rollcall vote: 17 yeas/30 nays/2 not 
voting.
    Yeas: Cong. de la Garza, Cong. Brown, Cong. Rose, Cong. 
Stenholm, Cong. Volkmer, Cong. Johnson, Cong. Peterson, Cong. 
Clayton, Cong. Hilliard, Cong. Pomeroy, Cong. Baesler, Cong. 
Thurman, Cong. Thompson, Cong. Farr, Cong. Pastor, and Cong. 
Baldacci.
    Nays: Cong. Emerson, Cong. Gunderson, Cong. Combest, Cong. 
Allard, Cong. Barrett, Cong. Boehner, Cong. Ewing, Cong. 
Doolittle, Cong. Goodlatte, Cong. Pombo, Cong. Canady, Cong. 
Smith, Cong. Everett, Cong. Lucas, Cong. Lewis, Cong. Baker, 
Cong. Crapo, Cong. Calvert, Cong. Chenoweth, Cong. Hostettler, 
Cong. Bryant, Cong. Latham, Cong. Cooley, Cong. Foley, Cong. 
Chambliss, Cong. LaHood, Cong. Dooley, Cong. Holden, Cong. 
Bishop, and Cong. Roberts, Chairman.
    Not voting: Cong. Condit and Cong. McKinney.

Rollcall No. 6

    Summary: Final Passage on the Amendment in the Nature of a 
Substitute to H.R. 2854, as amended.
    Offered By: Mr. Roberts.
    Results: Adopted by a rollcall vote: 29 yeas/17 nays/3 not 
voting.
    Yeas: Cong. Emerson, Cong. Gunderson, Cong. Combest, Cong. 
Allard, Cong. Barrett, Cong. Boehner, Cong. Ewing, Cong. 
Goodlatte, Cong. Pombo, Cong. Canady, Cong. Smith, Cong. 
Everett, Cong. Lucas, Cong. Lewis, Cong. Baker, Cong. Crapo, 
Cong. Calvert, Cong. Chenoweth, Cong. Hostettler, Cong. Bryant, 
Cong. Latham, Cong. Cooley, Cong. Foley, Cong. Chambliss, Cong. 
LaHood, Cong. Condit, Cong. Peterson, Cong. Bishop, and Cong. 
Roberts, Chairman.
    Nays: Cong. de la Garza, Cong. Brown, Cong. Stenholm, Cong. 
Volkmer, Cong. Johnson, Cong. Dooley, Cong. Clayton, Cong. 
Minge, Cong. Hilliard, Cong. Pomeroy, Cong. Holden, Cong. 
Baesler, Cong. Thurman, Cong. Thompson, Cong. Farr, Cong. 
Pastor, and Cong. Baldacci.
    Not voting: Cong. Doolittle, Cong. Rose, and Cong. 
McKinney.

                        Administration Position

    The views of the Administration on H.R. 2854, as amended, 
to modify the operation of certain agricultural programs, was 
not received prior to the filing of this report.
    However, the views of the Administration on H.R. 2854 prior 
to Committee consideration are set forth in the following 
letter to the Chairman of the Committee on Agriculture:

                         Department of Agriculture,
                                   Office of the Secretary,
                                  Washington, DC, January 30, 1996.
Hon. Pat Roberts,
Chairman, Committee on Agriculture,
House of Representatives, Longworth House Office Building, Washington, 
        DC.
    Dear Mr. Chairman: This is in response to your request for 
the Department of Agriculture's comments on H.R. 2854, a bill 
``To modify the operation of certain agricultural programs.''
    The Administration recognizes the need for legislation to 
reauthorize the farm programs, either through an extension of 
existing legislation or a new bill acceptable to the 
Administration. However, the Department does not support 
enactment of this legislation in its present form.
    H.R. 2854, the ``Agricultural Market Transition Act,'' 
provides some positive features. The Clinton Administration has 
long supported the concept of increased planting flexibility so 
farmers can plant for the market, not for the Government. This 
bill also ensures a set level of funding to rural America.
    This Administration is committed to developing agricultural 
policy legislation that fulfills three basic principles in 
order to enhance the economic opportunities and environment for 
farmers and other residents of rural America: (1) preservation 
of a responsible safety net for farmers; (2) promotion of 
exports and maintenance of a vibrant rural economy; and (3) 
protection and enhancement of the rural environment. We 
continue to have serious concerns regarding H.R. 2854's ability 
to satisfy these principles.
    H.R. 2854 contains essentially the same provisions, with 
minor revisions, as the Agricultural Reconciliation Act of 
1995, which I recommended that President Clinton veto. We 
recommend supplementing farm income through a countercyclical 
program of income support payments, so that help is provided 
where there is the most need. We do not believe that producers 
should be provided a windfall when prices are strong, as H.R. 
2854 does.
    We do understand that some farmers may not benefit from 
high market prices because of low yields and little production. 
That is why we continue to support maintaining the linkage 
between crop insurance and program participation, with 
necessary modifications to reduce paperwork requirements. H.R. 
2854 undoes the crop insurance reforms that Congress enacted, 
just one year ago, with widespread bipartisan support.
    H.R. 2854 caps the level of marketing loans for wheat and 
feed grains. Enhancing these loan rates, and removing the caps, 
would help strengthen the safety net for farmers.
    We are in general agreement with the elimination of 
authority for commodity acreage reduction programs. However, 
given the unpredictability of agricultural production, we 
believe that there should be standby authority to implement 
supply controls as a last resort when supply and demand are 
critically out of balance.
    One essential component of a safety net for American 
agriculture is the existence of permanent authority to carry 
out commodity programs beyond the year 2002. H.R. 2854 repeals 
current permanent authority. We would recommend permanent 
authority for programs after the expiration of the provisions 
of H.R. 2854.
    We believe that, instead of providing producers windfall 
gains, resources must be directed to those needs that will make 
agriculture strong and ensure a vibrant rural economy. We 
strongly support providing adequate support for priorities in 
conservation, research, rural development, export 
opportunities, and innovative partnerships with farmers to 
share agriculture's risks. The Administration's ``Fund for 
Rural America'' proposal would accomplish this goal.
    There are a number of other provisions affecting 
conservation programs which the Department believes should be 
modified. We generally agree with capping Conservation Reserve 
Program (CRP) enrollment at 36.4 million acres, and providing 
authority for early termination of CRP contracts. However, we 
strongly recommend also providing authority for the Department 
to enroll new acres in the CRP so that additional 
environmentally valuable or fragile cropland can be retired 
from production. We do not support the 60-day notice of early 
release without restrictions. The Secretary of Agriculture 
should be given authority to establish reasonable limits on 
what land now enrolled in CRP contracts should be subject to 
early release, including the authority to deny requests from 
producers for termination of their CRP contracts.
    We support the concept of the Livestock Environmental 
Assistance Program (LEAP). However, this program could be 
enhanced considerably if eligibility were expanded to include 
the Environmental Quality Incentives Program (EQIP). Such 
expansion in eligibility should also be accompanied by an 
increase in funding authority. We also recommend that the size 
limitations be eliminated so that the Secretary of Agriculture 
would have more administrative flexibility in determining 
eligibility for assistance.
    We also support the change in use of Commodity Credit 
Corporation (CCC) funds for conservation programs. It is 
important that adequate funding for CRP be assured, which H.R. 
2854 accomplishes. We note, however, that subsections (a) and 
(c) of section 201 of the bill would amend section 1241 of the 
Food Security Act of 1985 in a conflicting manner. Subsection 
(a) would allow the use of CCC funds for CRP, the Wetland 
Reserve Program (WRP), and LEAP without the need for annual 
appropriations. Subsection (c), however, would require annual 
appropriations to CCC for WRP and LEAP.
    The Department does not support the elimination of 
authority for permanent easements for WRP. In some cases, 
restoring lands, like bottomland hardwoods, to full wetland 
functions and values may require longer time periods. We 
believe landowners should have the option of obtaining 
permanent and 30-year easements.
    The funding levels for the Export Enhancement Program (EEP) 
under H.R. 2854 are $1.58 billion below the U.S. subsidy value 
commitments under the Uruguay Round Agreement. The adoption of 
H.R. 2854 would greatly limit the ability of the Department to 
assist U.S. agricultural exports in years with high levels of 
accumulated stocks, within the allowable limits of the Uruguay 
Round Agreement. The funding reductions for EEP from allowable 
limits occur for fiscal years 1996 through 1999, whereas the 
authorized levels for EEP in fiscal years 2000 through 2002 are 
the same as the U.S. Uruguay Round Agreement commitments.
    Likewise, H.R. 2854 establishes a ceiling on funding for 
the Market Promotion Program (MPP) from the current level of 
$110 million to $100 million. The MPP is the Department's major 
export assistance program for processed and high value 
agricultural products. The Department opposes the establishment 
of a spending ceiling in H.R. 2854 for both the EEP and the 
MPP.
    The Department supports section 402 of the bill, which 
positively affects the Agricultural Quarantine and Inspection 
program by ensuring it provides industry with the level of 
service it is paying for. We understand that the Committee has 
addressed the Pay-As-You-Go issue through its internal budget 
process.
    The Department also supports elimination of the honey 
program.
    H.R. 2854 also contains other provisions with which the 
Department has concerns. We do not support elimination of the 
Emergency Livestock Assistance Program. Instead, we recommend 
maintaining the program, but denying eligibility when 
qualifying losses are covered by crop insurance. The Department 
also recommends that the Farmer-owned Reserve be maintained, 
but with additional reforms designed to maintain stable grain 
markets. Also, we believe that the prohibition of using CCC 
funds for salaries and expenses, if not combined with an 
increase in USDA's discretionary funding, could adversely 
affect the Department's ability to efficiently administer 
agricultural programs in a timely manner.
    H.R. 2854 still fails to address some important areas. In 
particular, there are no provisions to reauthorize dairy 
legislation. Many reforms in conservation programs, such as 
more farmer-friendly procedures for conservation compliance 
violations, are also not addressed. And, research funding and 
policies are absent from the bill.
    Because of the fundamental change in program structure, 
implementation of this bill would pose many significant 
hurdles. The requirement to have producers sign a 7-year Market 
Transition Contract by April 15, 1996, is becoming more 
impractical with the passage of time without a farm bill. Many 
producers who lease land are very concerned about the ability 
to obtain agreement with their landlords for a 7-year contract.
    The Office of Management and Budget advises that there is 
no objection to the presentation of this report from the 
standpoint of the Administration's program.
            Sincerely,
                                           Dan Glickman, Secretary.

          Budget Act Compliance (Section 308 and Section 403)

    The provisions of clause 2(l)(3)(B) of rule XI of the Rules 
of the House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974 (relating to estimates of new 
budget authority, new spending authority, or new credit 
authority, or increased or decreased revenues or tax 
expenditures) are not considered applicable. The estimate and 
comparison required to be prepared by the Director of the 
Congressional Budget Office under clause 2(l)(C)(3) of rule XI 
of the Rules of the House of Representatives and section 403 of 
the Congressional Budget Act of 1974 submitted to the Committee 
prior to the filing of this report are as follows:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, January 31, 1996.
Hon. Pat Roberts,
Chairman, Committee on Agriculture,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office (CBO) 
has reviewed H.R. 2854, a bill to modify the operation of 
certain agricultural programs, as ordered reported by the House 
Committee on Agriculture on January 30, 1996. This estimate is 
based on language provided by committee staff on January 31, 
1996.
    We estimate that enacting H.R. 2824 would reduce federal 
outlays over the 1996-2002 period by changing selected 
commodity, conservation, and export programs. Relative to the 
baseline underlying the Fiscal Year 1996 Budget Resolution, we 
estimate cumulative savings in federal agriculture spending of 
$12.8 billion over the 1996-2002 period. Under the assumptions 
of the updated CBO baseline completed in December 1995, 
reflecting more current conditions in agricultural markets, we 
estimate cumulative savings of $5.4 billion over the same 
period. These amounts would be reductions in direct spending; 
therefore, pay-as-you-go procedures would apply to the bill.
    In preparing this estimate, we assumed that the bill will 
be enacted by April 1, 1996; the estimate could change if the 
bill is enacted later.
    Attachment 1 provides our estimate of the bill's impact on 
the federal budget. Table 1 is a summary of the estimated 
effects on spending by the Commodity Credit Corporation (CCC) 
under the two different sets of assumptions. Under budget 
resolution assumptions, baseline spending by the CCC totals 
$56.6 billion over the seven-year period. The bill would reduce 
those outlays by an estimated $11.8 billion. Under December 
baseline assumptions, CCC spending totals $48.7 billion over 
seven years, and estimated savings from enacting the bill would 
be $4.4 billion.
    Table 2 details the estimated effects of major provisions 
relative to the budget resolution baseline, while Table 3 shows 
the estimated effects relative to CBO's December 1995 baseline.
    CBO has determined that enacting H.R. 2854 would impose 
private sector mandates as defined in Public Law 104-4, and 
Attachment 2 provides our analysis of those mandates.
    H.R. 2854 contains no intergovernmental mandates, as 
defined in Public Law 104-4, that impose any significant costs 
on state, local, or tribal governments. The bill would, 
however, result in reduced federal payments to state, local, 
and tribal governments that own farm land and receive subsidy 
payments. Public entities would no longer receive any price 
support payments under the peanut program as a result of this 
bill. Further, they would bear a small share of the cuts in 
other farm programs. CBO has not completed an estimate of the 
impact of these changes on state, local, and tribal 
governments.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are David Hull, 
Craig Jagger, and Victoria Heid, Roger Hitchner, and, for 
intergovernmental impacts, Marjorie Miller.
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).
    Attachments.

 REPLACEMENT FOR TABLE 1, INCORPORATING AMENDMENTS PROVIDED ON FEBRUARY 2, 1996--ESTIMATED EFFECTS OF H.R. 2854 
                                    ON THE COMMODITY CREDIT CORPORATION (CCC)                                   
                                    [In millions of dollars, by fiscal year]                                    
----------------------------------------------------------------------------------------------------------------
                                                                                                       1996-2002
                                  1996      1997      1998      1999      2000      2001      2002       total  
----------------------------------------------------------------------------------------------------------------
                              ESTIMATES RELATIVE TO THE BUDGET RESOLUTION BASELINE                              
                                                                                                                
Spending Under Current Law:                                                                                     
    Estimated budget authority     8,891     8,736     8,614     8,402     8,193     7,830     7,737      58,403
    Estimated outlays.........     8,612     8,515     8,372     8,157     7,928     7,561     7,468      56,612
Proposed Changes:                                                                                               
    Estimated budget authority      -682    -1,646    -1,280    -1,392    -1,570    -2,495    -2,589     -11,654
    Estimated outlays.........      -759    -1,664    -1,294    -1,401    -1,576    -2,498    -2,590     -11,782
Spending Under H.R. 2854:                                                                                       
    Estimated budget authority     8,209     7,090     7,334     7,010     6,623     5,335     5,148      46,749
    Estimated outlays.........     7,853     6,851     7,078     6,756     6,352     5,063     4,878      44,830
                                                                                                                
                              ESTIMATES RELATIVE TO THE CBO DECEMBER 1995 BASELINE                              
                                                                                                                
Spending Under Current Law:                                                                                     
    Estimated budget authority     4,069     5,852     8,216     8,445     8,085     7,911     7,882      50,459
    Estimated outlays.........     3,790     5,631     7,073     8,200     7,820     7,642     7,613      18,668
Proposed Changes:                                                                                               
    Estimated budget authority     3,219     1,128      -831    -1,368    -1,414    -2,388    -2,648      -4,302
    Estimated outlays.........     3,142     1,110      -845    -1,377    -1,420    -2,391    -2,649      -4,430
Spending Under H.R. 2854:                                                                                       
    Estimated budget authority     7,288     6,980     7,385     7,077     6,671     5,523     5,234      46,157
    Estimated outlays.........     6,932     6,741     7,128     6,823     6,400     5,251     4,964      44,238
----------------------------------------------------------------------------------------------------------------
Note.--Includes spending for programs covered by the CCC Fund account, plus the export guarantee liquidating and
  subsidy accounts. Program changes in the bill that have an estimated budgetary impact but are excluded from   
  this table are those dealing with crop insurance, seed disaster, Agricultural Quarantine Inspection Fund, the 
  Wetlands Reserve Program (WRP) and the Conservation Reserve Program (CRP). Provisions in the bill make it     
  unclear whether the CRP and WRP should continue outside of, or be moved into, the CCC.                        


 REPLACEMENT FOR TABLE 2, INCORPORATING AMENDMENTS PROVIDED ON FEBRUARY 2, 1996--ESTIMATED BUDGETARY EFFECTS OF 
                     H.R. 2854, RELATIVE TO THE FISCAL YEAR 1996 BUDGET RESOLUTION BASELINE                     
                                    [In millions of dollars, by fiscal year]                                    
----------------------------------------------------------------------------------------------------------------
                                                                                                       1996-2002
                                  1996      1997      1998      1999      2000      2001      2002       total  
----------------------------------------------------------------------------------------------------------------
                                           CHANGES IN DIRECT SPENDING                                           
                                                                                                                
Freedom to Farm contracts in                                                                                    
 lieu of deficiency payments:                                                                                   
    Estimated budget authority      -595      -848      -851      -984    -1,241    -2,045    -2,036      -8,600
    Estimated outlays.........      -595      -848      -851      -984    -1,241    -2,045    -2,036      -8,600
Cap crop price-support loan                                                                                     
 rates:                                                                                                         
    Estimated budget authority       -16        85        35       -70       -49       -55       -38        -108
    Estimated outlays.........       -16        85        35       -70       -49       -55       -38        -108
Cap seven-year cotton Step-2                                                                                    
 payments at $701 million:                                                                                      
    Estimated budget authority  ........         1         2         2         2       -69      -116        -178
    Estimated outlays.........  ........         1         2         2         2       -69      -116        -178
End cotton 8-month loan                                                                                         
 extension:                                                                                                     
    Estimated budget authority  ........       -55        -5        -5        -5        -2         0         -72
    Estimated outlays.........  ........       -55        -5        -5        -5        -2         0         -72
Prohibit use of CCC funds for                                                                                   
 administrative expenses:                                                                                       
    Estimated budget authority       -27      -177       -42       -40       -41       -41       -41        -409
    Estimated outlays.........       -27      -177       -42       -40       -41       -41       -41        -409
Reform peanut program:                                                                                          
    Estimated budget authority  ........       -95       -69       -69       -67       -68       -66        -434
    Estimated outlays.........  ........       -95       -69       -69       -67       -68       -66        -434
Reform sugar program                                                                                            
 (increased assessments):                                                                                       
    Estimated budget authority  ........        -8        -8        -8        -9        -9        -9         -51
    Estimated outlays.........  ........        -8        -8        -8        -9        -9        -9         -51
End emergency feed assistance                                                                                   
 programs:                                                                                                      
    Estimated budget authority       -40       -80       -80       -80       -80       -80       -80        -520
    Estimated outlays.........       -40       -80       -80       -80       -80       -80       -80        -520
End honey program:                                                                                              
    Estimated budget authority  ........  ........  ........        -1        -2  ........  ........          -3
    Estimated outlays.........  ........  ........  ........        -1        -2  ........  ........          -3
End Farmer-Owned Reserve:                                                                                       
    Estimated budget authority  ........       -18       -18       -18       -18       -18       -18        -108
    Estimated outlays.........  ........       -18       -18       -18       -18       -18       -18        -108
Livestock Environmental                                                                                         
 Assistance Program:                                                                                            
    Estimated budget authority       100       100       100       100       100       100       100         700
    Estimated outlays.........        23        82        86        91        94        97        99         572
Dairy Program changes:                                                                                          
    Estimated budget authority        72        29       -13       -39      -110      -158      -235        -454
    Estimated outlays.........        72        29       -13       -39      -110      -158      -235        -454
Limit CRP to 36.4 million                                                                                       
 acres:                                                                                                         
    Estimated budget authority  ........       -41      -118      -109      -102      -100       -99        -569
    Estimated outlays.........  ........       -41      -118      -109      -102      -100       -99        -569
Cap WRP acreage and limit                                                                                       
 easements:                                                                                                     
    Estimated budget authority       -24       -66       -66       -66       -66        54        54        -180
    Estimated outlays.........        -3       -47       -90       -94       -92       -74        13        -387
Reduce Market Promotion                                                                                         
 Program spending:                                                                                              
    Estimated budget authority        -1        -8       -10       -10       -10       -10       -10         -59
    Estimated outlays.........        -1        -8       -10       -10       -10       -10       -10         -59
Cap Export Enhancement Program                                                                                  
 spending:                                                                                                      
    Estimated budget authority      -165      -532      -281      -130         0         0         0      -1,108
    Estimated outlays.........      -165      -532      -281      -130         0         0         0      -1,108
End mandatory crop insurance                                                                                    
 catastrophic coverage:                                                                                         
    Estimated budget authority        -5       -27       -28       -28       -29       -29       -29        -175
    Estimated outlays.........        -2       -13       -28       -28       -29       -29       -29        -158
Provide disaster assistance                                                                                     
 for seed crops:                                                                                                
    Estimated budget authority         7         7         7         7         7         7         7          49
    Estimated outlays.........         3         7         7         7         7         7         7          45
Direct access to Agricultural                                                                                   
 Quarantine Inspection Fund:                                                                                    
    Estimated budget authority         8         9        10        10        13        17        21          88
    Estimated outlays.........         8         9        10        10        13        17        21          88
Increase CCC commodity loan                                                                                     
 interest rate:                                                                                                 
    Estimated budget authority       -10       -40       -40       -40       -40       -40       -40        -250
    Estimated outlays.........       -10       -40       -40       -40       -40       -40       -40        -250
Total Changes in Direct                                                                                         
 Spending:                                                                                                      
    Estimated budget authority      -696    -1,764    -1,475    -1,578    -1,747    -2,546    -2,635     -12,441
    Estimated outlays.........      -753    -1,749    -1,513    -1,615    -1,779    -2,677    -2,677    -12,763 
----------------------------------------------------------------------------------------------------------------
Notes.--1. H.R. 2854 was ordered reported on January 30, 1996, by the House Committee on Agriculture. CBO based 
  initial estimates on the bill as introduced, with information from committee staff on amendments adopted. This
  replacement table was based on additional technical staff amendments received on February 2, 1996.            
2. This bill would also affect sending subject to appropriations but CBO has not completed an estimate of       
  potential changes in discretionary spending that might result from enacting the bill.                         


 REPLACEMENT FOR TABLE 3, INCORPORATING AMENDMENTS PROVIDED ON FEBRUARY 2, 1996--ESTIMATED BUDGETARY EFFECTS OF 
                              H.R. 2854, RELATIVE TO THE CBO DECEMBER 1995 BASELINE                             
                                    [In millions of dollars, by fiscal year]                                    
----------------------------------------------------------------------------------------------------------------
                                                                                                       1996-2002
                                  1996      1997      1998      1999      2000      2001      2002       total  
----------------------------------------------------------------------------------------------------------------
                                           CHANGES IN DIRECT SPENDING                                           
                                                                                                                
Freedom to Farm contracts in                                                                                    
 lieu of deficiency payments:                                                                                   
    Estimated budget authority     3,149     1,907      -165      -779    -1,098    -1,955    -2,072      -1,013
    Estimated outlays.........     3,149     1,907      -165      -779    -1,098    -1,955    -2,072      -1,013
Marketing loan cost effects of                                                                                  
 planting provisions:                                                                                           
    Estimated budget authority        -6        13         1       208       269       229       128         842
    Estimated outlays.........        -6        13         1       208       269       229       128         842
Cap crop price-support loan                                                                                     
 rates:                                                                                                         
    Estimated budget authority        -5      -177      -192      -422      -250      -249      -149      -1,444
    Estimated outlays.........        -5      -177      -192      -422      -250      -249      -149      -1,444
Cap seven-year cotton Step-2                                                                                    
 payments at $701 million:                                                                                      
    Estimated budget authority  ........  ........         1         1         1         1       -88         -84
    Estimated outlays.........  ........  ........         1         1         1         1       -88         -84
End cotton 8-month loan                                                                                         
 extension:                                                                                                     
    Estimated budget authority  ........       -55        -5        -5        -5        -5        -2         -77
    Estimated outlays.........  ........       -55        -5        -5        -5        -5        -2         -77
Prohibit use of CCC funds for                                                                                   
 administrative expenses:                                                                                       
    Estimated budget authority       -27      -177       -42       -40       -41       -41       -41        -409
    Estimated outlays.........       -27      -177       -42       -40       -41       -41       -41        -409
Reform peanut program:                                                                                          
    Estimated budget authority  ........       -85       -67       -61       -66       -62       -71        -412
    Estimated outlays.........  ........       -85       -67       -61       -66       -62       -71        -412
Reform sugar program                                                                                            
 (increased assessments):                                                                                       
    Estimated budget authority  ........        -8        -8        -8        -9        -9        -9         -51
    Estimated outlays.........  ........        -8        -8        -8        -9        -9        -9         -51
End emergency feed assistance                                                                                   
 programs:                                                                                                      
    Estimated budget authority       -40       -80       -80       -80       -80       -80       -80        -520
    Estimated outlays.........       -40       -80       -80       -80       -80       -80       -80        -520
End honey program:                                                                                              
    Estimated budget authority  ........        -1  ........        -1        -1        -1        -1          -5
    Estimated outlays.........  ........        -1  ........        -1        -1        -1        -1          -5
End Farmer-Owned Reserve:                                                                                       
    Estimated budget authority  ........  ........        -9       -18       -18       -18       -18         -81
    Estimated outlays.........  ........  ........        -9       -18       -18       -18       -18         -81
Dairy Program changes:                                                                                          
    Estimated budget authority        59         0       -34       -83      -166      -248      -295        -767
    Estimated outlays.........        59         0       -34       -83      -166      -248      -295        -767
Livestock Environmental                                                                                         
 Assistance Program:                                                                                            
    Estimated budget authority       100       100       100       100       100       100       100         700
    Estimated outlays.........        23        82        86        91        94        97        99         572
Limit CRP to 36.4 million                                                                                       
 acres:                                                                                                         
    Estimated budget authority  ........       -41      -119      -111      -103      -102      -101        -577
    Estimated outlays.........  ........       -41      -119      -111      -103      -102      -101        -577
Cap WRP acreage and limit                                                                                       
 easements:                                                                                                     
    Estimated budget authority       -24       -66       -66       -66       -66        54        54        -180
    Estimated outlays.........        -3       -47       -90       -94       -92       -74        13        -387
Reduce Market Promotion                                                                                         
 Program spending:                                                                                              
    Estimated budget authority        -1        -8       -10       -10       -10       -10       -10         -59
    Estimated outlays.........        -1        -8       -10       -10       -10       -10       -10         -59
Cap Export Enhancement Program                                                                                  
 spending:                                                                                                      
    Estimated budget authority  ........      -261      -281      -130         0         0         0        -672
    Estimated outlays.........  ........      -261      -281      -130         0         0         0        -672
End mandatory crop insurance                                                                                    
 catastrophic coverage:                                                                                         
    Estimated budget authority        -5       -27       -28       -28       -29       -29       -29        -175
    Estimated outlays.........        -2       -13       -28       -28       -29       -29       -29        -158
Provide disaster assistance                                                                                     
 for seed crops:                                                                                                
    Estimated budget authority         7         7         7         7         7         7         7          49
    Estimated outlays.........         3         7         7         7         7         7         7          45
Direct access to Agricultural                                                                                   
 Quarantine Inspection Fund:                                                                                    
    Estimated budget authority        14        15        16        16        19        23        27         130
    Estimated outlays.........        14        15        16        16        19        23        27         130
Increase CCC commodity loan                                                                                     
 interest rate:                                                                                                 
    Estimated budget authority       -10       -40       -40       -40       -40       -40       -40        -250
    Estimated outlays.........       -10       -40       -40       -40       -40       -40       -40        -250
Total Changes in Direct                                                                                         
 Spending:                                                                                                      
    Estimated budget authority     3,211     1,016    -1,021    -1,550    -1,586    -2,435    -2,690      -5,055
    Estimated outlays.........     3,154     1,031    -1,059    -1,587    -1,618    -2,566    -2,732      -5,377
----------------------------------------------------------------------------------------------------------------
Notes.--1. H.R. 2854 was ordered reported on January 30, 1996, by the House Committee on Agriculture. CBO based 
  initial estimates on the bill as introduced, with information from committee staff on amendments adopted. This
  replacement table was based on additional technical staff amendments received on February 2, 1996.            
2. This bill would also affect spending subject to appropriations but CBO has not completed an estimate of      
  potential changes in discretionary spending that might result from enacting the bill.                         

    congressional budget office estimate of costs of private sector 
                                mandates

    1. Bill number: H.R. 2854.
    2. Bill title: Agricultural Market Transition Act.
    3. Bill status: As ordered reported by the House Committee 
on Agriculture on January 30, 1996.
    4. Bill purpose: This bill would reauthorize and reform 
federal programs supporting prices and incomes of producers of 
certain grains, peanuts, sugar, cotton, and dairy products. The 
bill would also affect conservation, export promotion, and 
agricultural insurance programs.
    5. Private sector mandates contained in bill: This bill 
would impose new fees on sugar producers and importers of dairy 
products. It also contains requirements that would increase the 
costs of processing and handling milk and reduce the net 
returns of some producers of milk.
    6. Estimated direct cost to the private sector: CBO 
estimates the direct costs of the private sector mandates 
identified in this bill would exceed $800 million annually for 
the next two years and $400 million annually thereafter. The 
most costly mandate would require that milk sold for fluid uses 
contain greater amounts of nonfat solids than currently 
required. Private sector mandates identified by CBO are 
described below. Estimated costs of mandates to the private 
sector are included when possible. The bill would affect 
businesses and consumers in many ways other than through the 
mandates it contains. Estimates described below are of the 
direct costs of mandates only, not of the more general effects 
on the private sector.

Title I--Agricultural Market Transition Program

    Section 107 would increase marketing assessments on the 
processors of sugar cane and sugar beets. The marketing 
assessment on sugar cane would increase from 1.1 percent of the 
nonrecourse loan rate to 1.375 percent beginning in 1997. The 
marketing assessment on sugar beets would increase from 1.1794 
percent of the nonrecourse loan rate to 1.47425, also beginning 
in 1997. CBO estimates that processors of sugar cane and sugar 
beets would pay an additional $8 million annually during the 
1997-1999 period and an additional $9 million each year 
thereafter. Some of this increase would be passed on to users 
of sugar and sugar-containing products in the United States.

Title II--Dairy

    Section 204 would extend a dairy promotion assessment to 
imports of dairy products. Importers would be required to pay 
1.2 cents per pound of total milk solids contained in the 
imported product (or 15 cent per hundredweight of milk 
contained in the product, whichever is less) to a fund 
administered by the Dairy Promotion Board. These funds are used 
mainly to promote consumption of milk and milk products. The 
annual cost of importers is estimated to be less than $5 
million.
    Section 205 would increase the minimum level of nonfat 
solids required in fluid milk products. The current federal 
standard for nonfat solids in milk is 8.25 percent by weight. 
This section would increase this standard to 8.8 percent for 
whole milk, 10 percent for low-fat (or ``2 percent'') milk, 11 
percent for light (or ``1 percent'') milk, and 9 percent for 
nonfat or skim milk. The standards now in force are typically 
exceeded, but average levels of nonfat solids fall short of the 
proposed standards in all areas of the country except 
California. The state of California imposes standards similar 
to those in this bill. Increasing the amount of nonfat solids 
in fluid milk products raises costs for handlers and processors 
of fluid milk because they must buy additional solids and pay 
higher processing costs. CBO estimates that the annual cost of 
the new standards would be between $400 million and $600 
million. Most analysts believe that the bulk of such costs 
would be passed on to consumers in higher prices for fluid 
milk.
    Section 207 would establish a minimum price that handlers 
and processors of milk must pay producers for milk used in 
fluid products (Class I milk). The minimum price would be in 
effect for two years. Under current law, the minimum price paid 
for Class I milk varies monthly, and is determined as a fixed 
differential from the price paid for milk used primarily for 
cheese (the Basic Formula Price). The Basic Formula Price and, 
thus the Class I price, moves up and down with changes in 
market conditions. The new minimum price would not affect milk 
prices now, but would prevent downward movements that would 
very likely occur during the two-year period that the provision 
would be in effect. CBO estimates that this provision would 
increase costs for handlers and processors over the next two 
years. Annual additional costs could range between $400 million 
and $500 million during this period. Most such costs would be 
passed on to consumers in higher prices for fluid milk.
    Section 207 also creates a temporary national Class I pool 
that would redistribute money from dairy producers in areas 
where there is a relatively high Class I use of milk to areas 
where there is a relatively low Class I use. Class I includes 
fluid uses of milk, Class II includes soft products (ice cream 
and yogurt), and Class III/III-A includes hard products 
(cheese, butter, and dry milk). An example of an area with high 
Class I use is the Southeast, where Class I use may exceed 75 
percent of milk produced in the region. This contrasts with the 
Upper Midwest where less than 20 percent of milk is used for 
fluid purposes.
    This section would require that $0.80 per hundredweight of 
milk used for Class I uses be collected each month (through the 
system of federal marketing orders that regulate milk prices). 
This amount of money, which could total $400 million annually, 
would then be redistributed to dairy producers (again through 
their marketing orders) according to their share of total 
production. This mandate would have no net cost to dairy 
producers as a group. It would have a net cost to producers in 
areas with relatively high Class I use of milk and a net 
benefit to producers in areas with relatively low Class I use.
    Section 208 would define a new class of milk (Class IV--
milk used in butter, butter oil, and dry milk). It would also 
create a temporary national pool that would redistribute money 
from dairy producers in areas with low Class IV use to areas 
with high Class IV use. The amount collected and redistributed 
would depend on market prices of nonfat dry milk and butter. 
CBO has not estimated the amount of funds involved. Like the 
Class I pool discussed above, however, there is no net cost of 
this provision to dairy producers as a whole, though producers 
in some areas would pay and producers in other areas would 
benefit.
    7. Previous CBO estimate: None
    8. Estimate prepared by: Roger Hitchner and Jean Wooster.
    9. Estimate approved by: Jan Acton, Assistant Director for 
Natural Resources and Commerce.

                     Inflationary Impact Statement

    Pursuant to class (2)(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee estimates that 
enactment of H.R. 2854, as amended, will have no inflationary 
impact on the national economy.

                          oversight statement

    No summary of oversight findings and recommendations made 
by the Committee on Government Reform and Oversight under 
clause 2(l)(3)(D) of rule XI of the Rules of the House of 
Representatives was available to the Committee with reference 
to the subject matter specifically addressed by H.R. 2854, as 
amended.
    No specific oversight activities other than the hearings 
detailed in this report were conducted by the Committee within 
the definition of clause 2(b)(1) of rule X of the Rules of the 
House of Representatives.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

                       FOOD SECURITY ACT OF 1985

          * * * * * * *

                             TITLE I--DAIRY

          * * * * * * *

                       Subtitle E--Miscellaneous

          * * * * * * *

                     dairy export incentive program

  Sec. 153. (a) During the period beginning 60 days after the 
date of enactment of this Act and ending on December 31, [2001] 
2002, the Commodity Credit Corporation shall establish and 
operate an export incentive program as described in this 
section for dairy products under section 5 of the Commodity 
Credit Corporation Charter Act.
  (b) The program established under subsection (a) shall 
provide for the Corporation to make payments, on a bid basis, 
to an entity that sells for export United States dairy 
products. The Secretary shall have sole discretion to accept or 
reject bids under such criteria as the Secretary deems 
appropriate.
  (c) The program shall be operated under such rules and 
regulations issued by the Secretary as the Secretary deems 
necessary to ensure, among other things, that--
          (1) payments may be made under the program only on 
        the quantity of dairy products sold by an entity for 
        export in any year that is in addition to, and not in 
        place of, any export sales of dairy products that the 
        entity would otherwise make in the absence of the 
        program; [and]
          (2) to the extent practicable, dairy products sold 
        for export under the program will not displace 
        commercial export sales of United States dairy products 
        by other exporters[.]; and
          (3) the maximum volume of dairy product exports 
        allowable consistent with the obligations of the United 
        States as a member of the World Trade Organization are 
        exported under the program each year (minus the volume 
        sold under section 1163 of this Act (7 U.S.C. 1731 
        note) during that year), except to the extent that the 
        export of such a volume under the program would, in the 
        judgment of the Secretary, exceed the limitations on 
        the value set forth in subsection (f); and
          (4) payments may be made under the program for 
        exports to any destination in the world for the purpose 
        of market development, except a destination in a 
        country with respect to which shipments from the United 
        States are otherwise restricted by law.
          * * * * * * *
  (e)(1) The payments made under the program shall be made at a 
rate or rates established or approved by the Secretary, taking 
into consideration, among other things the type of product to 
be exported, the domestic price of dairy products, [and] the 
world price of the dairy products, and any additional amount 
that may be required to assist in the development of world 
markets for United States dairy products.
  (2) Any such rate established or approved by the Secretary 
shall be published in the Federal Register or publicly 
announced through other appropriate means, and shall be at a 
level or levels as will encourage the exportation of United 
States dairy products by entities.
  (f) Required Funding.--The Commodity Credit Corporation shall 
in each year use money and commodities for the program under 
this section in the maximum amount consistent with the 
obligations of the United States as a member of the World Trade 
Organization, minus the amount expended under section 1163 of 
this Act (7 U.S.C. 1731 note) during that year. However, the 
Commodity Credit Corporation may not exceed the limitations 
specified in subsection (c)(3) on the volume of allowable dairy 
product exports.
          * * * * * * *

                 TITLE X--GENERAL COMMODITY PROVISIONS

          * * * * * * *

             Subtitle A--Miscellaneous Commodity Provisions

          * * * * * * *

                          PAYMENT LIMITATIONS

  Sec. 1001. Notwithstanding any other provision of law:
  [(1)(A) Subject to sections 1001A through 1001C for each of 
the 1987 through 1997 crops, the total amount of deficiency 
payments (excluding any deficiency payments described in 
paragraph (2)(B)(iv) of this section) and land diversion 
payments that a person shall be entitled to receive under one 
or more of the annual programs established under the 
Agricultural Act of 1949 (7 U.S.C. 1421 et seq.) for wheat, 
feed grains, upland cotton, extra long staple cotton, and rice 
may not exceed $50,000.
  [(B) Subject to sections 1001A through 1001C for each of the 
1991 through 1997 crops, the total amount of payments specified 
in clauses (iii), (iv), and (v) of paragraph (2)(B) that a 
person shall be entitled to receive under one or more of the 
annual programs established under the Agricultural Act of 1949 
(7 U.S.C. 1421 et seq.) for wheat, feed grains, upland cotton, 
rice, and oilseeds (as defined in section 205(a) of the 
Agricultural Act of 1949) may not exceed $75,000.
  [(2)(A) Subject to sections 1001A through 1001C for each of 
the 1991 through 1997 crops, the total amount of payments set 
forth in subparagraph (B) that a person shall be entitled to 
receive under one or more of the annual programs established 
under the Agricultural Act of 1949 for wheat, feed grains, 
upland cotton, extra long staple cotton, rice, and other 
commodities, when combined with payments for such crop 
described in paragraph (1), shall not exceed $250,000.
  [(B) As used in subparagraph (A), the term ``payments'' 
means--
          [(i) any part of any payment that is determined by 
        the Secretary of Agriculture to represent compensation 
        for resource adjustment (excluding land diversion 
        payments) or public access for recreation;
          [(ii) any disaster payment under one or more of the 
        annual programs for a commodity established under the 
        Agricultural Act of 1949;
          [(iii) any gain realized by a producer from repaying 
        a loan for a crop of any commodity (other than honey) 
        at a lower level than the original loan level 
        established under the Agricultural Act of 1949;
          [(iv) any deficiency payment received for a crop of 
        wheat or feed grains under section 107B(c)(1) or 
        105B(c)(1), respectively, of the Agricultural Act of 
        1949 as the result of a reduction of the loan level for 
        such crop under section 107B(a)(3) or 105B(a)(3) of 
        such Act;
          [(v) any loan deficiency payment received for a crop 
        of wheat, feed grains, upland cotton, rice, or oilseeds 
        under section 107B(b), 105B(b), 103B(b), 101B(b), or 
        205(e), respectively, of the Agricultural Act of 1949; 
        and
          [(vi) any inventory reduction payment received for a 
        crop of wheat, feed grains, upland cotton, or rice 
        under section 107B(f), 105B(f), 103B(f), or 101B(f), 
        respectively, of the Agricultural Act of 1949.
Such term shall not include loans or purchases, except as 
specifically provided for in this paragraph.
  [(C) No certificate redeemable for stocks of a commodity held 
by the Commodity Credit Corporation may be redeemed for honey 
held by the Corporation.
  [(3) Notwithstanding the foregoing provisions of this 
section, if the Secretary of Agriculture determines that any of 
the limitations provided for in paragraph (2) will result in a 
substantial increase in the number or dollar amount of loan 
forfeitures for a crop of a commodity, will substantially 
reduce the acreage taken out of production under an acreage 
reduction program for a crop of a commodity, or will cause the 
market prices for a crop of a commodity to fall substantially 
below the effective loan rate for the crop, the Secretary shall 
adjust upward such limitation, under such terms and conditions 
as the Secretary determines appropriate, as necessary to 
eliminate such adverse effect on the program involved.
  [(4) If the Secretary determines that the total amount of 
payments that will be earned by any person under the program in 
effect for any crop will be reduced under this section, any 
acreage requirement established under a set-aside or acreage 
limitation program for the farm or farms on which such person 
will be sharing in payments earned under such program shall be 
adjusted to such extent and in such manner as the Secretary 
determines will be fair and reasonable in relation to the 
amount of the payment reduction.]
          (1) Limitation on payments under production 
        flexibility contracts.--The total amount of contract 
        payments made under section 103 of the Agricultural 
        Market Transition Act to a person under 1 or more 
        production flexibility contracts entered into under the 
        section during any fiscal year may not exceed $40,000.
          (2) Limitation on marketing loan gains and loan 
        deficiency payments.--For each of the 1996 through 2002 
        crops of loan commodities, the total amount of payments 
        specified in paragraph (3) that a person shall be 
        entitled to receive under section 104 of the 
        Agricultural Market Transition Act for one or more loan 
        commodities may not exceed $75,000.
          (3) Description of payments subject to limitation.--
        The payments referred to in paragraph (2) are the 
        following:
                  (A) Any gain realized by a producer from 
                repaying a marketing assistance loan for a crop 
                of any loan commodity at a lower level than the 
                original loan rate established for the loan 
                commodity under section 104(b) of the 
                Agricultural Market Transition Act.
                  (B) Any loan deficiency payment received for 
                a loan commodity under section 104(e) of the 
                Act.
          (4) Definitions.--In this title, the terms ``contract 
        payment'' and ``loan commodity'' have the meaning given 
        those terms in section 102 of the Agricultural Market 
        Transition Act.
          * * * * * * *

SEC. 1001A. PREVENTION OF CREATION OF ENTITIES TO QUALIFY AS SEPARATE 
                    PERSONS; PAYMENTS LIMITED TO ACTIVE FARMERS.

  (a) Prevention of Creation of Entities To Qualify as Separate 
Persons.--For the purposes of preventing the use of multiple 
legal entities to avoid the effective application of the 
payment limitations under section 1001:
          (1) In general.--A person (as defined in section 
        1001(5)(B)(i)) that receives farm program payments (as 
        described in paragraphs (1) and (2) of this section as 
        being subject to limitation) for a crop year [under the 
        Agricultural Act of 1949 (7 U.S.C. 1421 et seq.)] may 
        not also hold, directly or indirectly, substantial 
        beneficial interests in more than two entities (as 
        defined in section 1001(5)(B)(i)(II)) engaged in farm 
        operations that also receive such payments as separate 
        persons, for the purposes of the application of the 
        limitations under section 1001. A person that does not 
        receive such payments for a crop year may not hold, 
        directly or indirectly, substantial beneficial 
        interests in more than three entities that receive such 
        payments as separate persons, for the purposes of the 
        application of the limitations under section 1001.
          * * * * * * *
  (b) Payments Limited to Active Farmers.--
          (1) In general.--To be separately eligible for farm 
        program payments (as described in paragraphs (1) and 
        (2) of section 1001 as being subject to limitation) 
        [under the Agricultural Act of 1949] with respect to a 
        particular farming operation (whether in the person's 
        own right or as a partner in a general partnership, a 
        grantor of a revocable trust, a participant in a joint 
        venture, or a participant in a similar entity (as 
        determined by the Secretary) that is the producer of 
        the crops involved), a person must be an individual or 
        entity described in section 1001(5)(B)(i) and actively 
        engaged in farming with respect to such operation, as 
        provided under paragraphs (2), (3), and (4).
          * * * * * * *

SEC. 1001C. FOREIGN PERSONS MADE INELIGIBLE FOR PROGRAM BENEFITS.

  Notwithstanding any other provision of law:
  (a) In General.--[For each of the 1991 through 1997 crops, 
any] Any person who is not a citizen of the United States or an 
alien lawfully admitted into the United States for permanent 
residence under the Immigration and Nationality Act (8 U.S.C. 
1101 et seq.) shall be ineligible to receive any type of 
[production adjustment payments, price support program loans, 
payments, or benefits made available under the Agricultural Act 
of 1949 (7 U.S.C. 1421 et seq.),] loans or payments made 
available under title I of the Agricultural Market Transition 
Act, the Commodity Credit Corporation Charter Act (15 U.S.C. 
714 et seq.), or subtitle D of title XII of the Food Security 
Act of 1985 (16 U.S.C. 3831 et seq.), or under any contract 
entered into under title XII [during the 1989 through 1997 crop 
years], with respect to any commodity produced, or land set 
aside from production, on a farm that is owned or operated by 
such person, unless such person is an individual who is 
providing land, capital, and a substantial amount of personal 
labor in the production of crops on such farm.
          * * * * * * *

                            TITLE XI--TRADE

     Subtitle A--Public Law 480 and Use of Surplus Commodities in 
                         International Programs

          * * * * * * *
  Sec. 1110. (a)  * * *
          * * * * * * *
  (k) This section shall be effective during the period 
beginning October 1, 1985, and ending December 31, [1995] 1996.
  (l)(1) To enhance the development of private sector 
agriculture in countries receiving assistance under this 
section the President may, in each of the fiscal years 1991 
through [1995] 1996, use in addition to any amounts or 
commodities otherwise made available under this section for 
such activities, not to exceed $10,000,000 of Commodity Credit 
Corporation funds (or commodities of an equal value owned by 
the Corporation), to provide assistance in the administration, 
sale, and monitoring of food assistance programs to strengthen 
private sector agriculture in recipient countries.
          * * * * * * *

                        TITLE XII--CONSERVATION

          * * * * * * *

        Subtitle D--Agricultural Resources Conservation Program

     CHAPTER 1--ENVIRONMENTAL CONSERVATION ACREAGE RESERVE PROGRAM

          * * * * * * *

                   Subchapter B--Conservation Reserve

SEC. 1231. CONSERVATION RESERVE.

  (a)  * * *
          * * * * * * *
  (d) Maximum Enrollment.--The Secretary shall enter into 
contracts under this section to place in the conservation 
reserve a [total of 38,000,000 acres during the 1986 through 
1995 calendar years. In enrolling such acres, the Secretary 
shall reserve 1 million acres for enrollment under this section 
in the 1995 calendar year.] total of 36,400,000 acres.
          * * * * * * *

                 Subchapter C--Wetlands Reserve Program

SEC. 1237. WETLANDS RESERVE PROGRAM.

  (a)  * * *
  (b) Minimum Enrollment.--The Secretary shall enroll into the 
wetlands reserve program--
          (1)  * * *
          (2) a total of [not less] not more than 975,000 acres 
        during the 1991 through [2000] 2002 calendar years.
  (c) Eligibility.--For purposes of enrolling land in the 
wetland reserve established under this subchapter during the 
1991 through [2000] 2002 calendar years, land shall be eligible 
to be placed into such reserve if the Secretary, in 
consultation with the Secretary of the Interior at the local 
level, determines that--
          (1)  * * *
          * * * * * * *

SEC. 1237A. EASEMENTS.

  (a)  * * *
          * * * * * * *
  (e) Type and Length of Easement.--A conservation easement 
granted under this section--
          (1) shall be in a recordable form; and
          [(2) shall be for 30 years, permanent, or the maximum 
        duration allowed under applicable State laws.]
          (2) shall be for 15 years, but in no case shall be a 
        permanent easement.
          * * * * * * *

         CHAPTER 4--LIVESTOCK ENVIRONMENTAL ASSISTANCE PROGRAM

SEC. 1240. DEFINITIONS.

  In this chapter:
          (1) Land management practice.--The term ``land 
        management practice'' means a site-specific nutrient or 
        manure management, irrigation management, tillage or 
        residue management, grazing management, or other land 
        management practice that the Secretary determines is 
        needed to protect, in the most cost effective manner, 
        water, soil, or related resources from degradation due 
        to livestock production.
          (2) Large confined livestock operation.--The term 
        ``large confined livestock operation'' means an 
        operation that--
                  (A) is a confined animal feeding operation; 
                and
                  (B) has more than--
                          (i) 55 mature dairy cattle;
                          (ii) 10,000 beef cattle;
                          (iii) 30,000 laying hens or broilers 
                        (if the facility has continuous 
                        overflow watering);
                          (iv) 100,000 laying hens or broilers 
                        (if the facility has a liquid manure 
                        system);
                          (v) 55,000 turkeys;
                          (vi) 15,000 swine; or
                          (vii) 10,000 sheep or lambs.
          (3) Livestock.--The term ``livestock'' means dairy 
        cows, beef cattle, laying hens, broilers, turkeys, 
        swine, sheep, lambs, and such other animals as 
        determined by the Secretary.
          (4) Operator.--The term ``operator'' means a person 
        who is engaged in livestock production (as defined by 
        the Secretary).
          (5) Structural practice.--The term ``structural 
        practice'' means the establishment of an animal waste 
        management facility, terrace, grassed waterway, contour 
        grass strip, filterstrip, or other structural practice 
        that the Secretary determines is needed to protect, in 
        the most cost effective manner, water, soil, or related 
        resources from degradation due to livestock production.

SEC. 1240A. ESTABLISHMENT AND ADMINISTRATION OF LIVESTOCK ENVIRONMENTAL 
                    ASSISTANCE PROGRAM.

  (a) Establishment.--
          (1) In general.--During the 1996 through 2002 fiscal 
        years, the Secretary shall provide technical 
        assistance, cost-sharing payments, and incentive 
        payments to operators who enter into contracts with the 
        Secretary, through a livestock environmental assistance 
        program.
          (2) Eligible practices.--
                  (A) Structural practices.--An operator who 
                implements a structural practice shall be 
                eligible for technical assistance or cost-
                sharing payments, or both.
                  (B) Land management practices.--An operator 
                who performs a land management practice shall 
                be eligible for technical assistance or 
                incentive payments, or both.
          (3) Eligible land.--Assistance under this chapter may 
        be provided with respect to land that is used for 
        livestock production and on which a serious threat to 
        water, soil, or related resources exists, as determined 
        by the Secretary, by reason of the soil types, terrain, 
        climatic, soil, topographic, flood, or saline 
        characteristics, or other factors or natural hazards.
          (4) Selection criteria.--In providing technical 
        assistance, cost-sharing payments, and incentive 
        payments to operators in a region, watershed, or 
        conservation priority area in which an agricultural 
        operation is located, the Secretary shall consider--
                  (A) the significance of the water, soil, and 
                related natural resource problems; and
                  (B) the maximization of environmental 
                benefits per dollar expended.
  (b) Application and Term.--
          (1) In general.--A contract between an operator and 
        the Secretary under this chapter may--
                  (A) apply to 1 or more structural practices 
                or 1 or more land management practices, or 
                both; and
                  (B) have a term of not less than 5, nor more 
                than 10, years, as determined appropriate by 
                the Secretary, depending on the practice or 
                practices that are the basis of the contract.
          (2) Duties of operators and secretary.--To receive 
        cost-sharing or incentive payments, or technical 
        assistance, participating operators shall comply with 
        all terms and conditions of the contract and a plan, as 
        established by the Secretary.
  (c) Structural Practices.--
          (1) Competitive offer.--The Secretary shall 
        administer a competitive offer system for operators 
        proposing to receive cost-sharing payments in exchange 
        for the implementation of 1 or more structural 
        practices by the operator. The competitive offer system 
        shall consist of--
                  (A) the submission of a competitive offer by 
                the operator in such manner as the Secretary 
                may prescribe; and
                  (B) evaluation of the offer in light of the 
                selection criteria established under subsection 
                (a)(4) and the projected cost of the proposal, 
                as determined by the Secretary.
          (2) Concurrence of owner.--If the operator making an 
        offer to implement a structural practice is a tenant of 
        the land involved in agricultural production, for the 
        offer to be acceptable, the operator shall obtain the 
        concurrence of the owner of the land with respect to 
        the offer.
  (d) Land Management Practices.--The Secretary shall establish 
an application and evaluation process for awarding technical 
assistance or incentive payments, or both, to an operator in 
exchange for the performance of 1 or more land management 
practices by the operator.
  (e) Cost-Sharing, Incentive Payments, and Technical 
Assistance.--
          (1) Cost-sharing payments.--
                  (A) In general.--The Federal share of cost-
                sharing payments to an operator proposing to 
                implement 1 or more structural practices shall 
                not be greater than 75 percent of the projected 
                cost of each practice, as determined by the 
                Secretary, taking into consideration any 
                payment received by the operator from a State 
                or local government.
                  (B) Limitation.--An operator of a large 
                confined livestock operation shall not be 
                eligible for cost-sharing payments to construct 
                an animal waste management facility.
                  (C) Other payments.--An operator shall not be 
                eligible for cost-sharing payments for 
                structural practices on eligible land under 
                this chapter if the operator receives cost-
                sharing payments or other benefits for the same 
                land under chapter 1, 2, or 3.
          (2) Incentive payments.--The Secretary shall make 
        incentive payments in an amount and at a rate 
        determined by the Secretary to be necessary to 
        encourage an operator to perform 1 or more land 
        management practices.
          (3) Technical assistance.--
                  (A) Funding.--The Secretary shall allocate 
                funding under this chapter for the provision of 
                technical assistance according to the purpose 
                and projected cost for which the technical 
                assistance is provided for a fiscal year. The 
                allocated amount may vary according to the type 
                of expertise required, quantity of time 
                involved, and other factors as determined 
                appropriate by the Secretary. Funding shall not 
                exceed the projected cost to the Secretary of 
                the technical assistance provided for a fiscal 
                year.
                  (B) Other authorities.--The receipt of 
                technical assistance under this chapter shall 
                not affect the eligibility of the operator to 
                receive technical assistance under other 
                authorities of law available to the Secretary.
  (f) Limitation on Payments.--
          (1) In general.--The total amount of cost-sharing and 
        incentive payments paid to a person under this chapter 
        may not exceed--
                  (A) $10,000 for any fiscal year; or
                  (B) $50,000 for any multiyear contract.
          (2) Regulations.--The Secretary shall issue 
        regulations that are consistent with section 1001 for 
        the purpose of--
                  (A) defining the term ``person'' as used in 
                paragraph (1); and
                  (B) prescribing such rules as the Secretary 
                determines necessary to ensure a fair and 
                reasonable application of the limitations 
                established under this subsection.
  (g) Regulations.--Not later than 180 days after the effective 
date of this subsection, the Secretary shall issue regulations 
to implement the livestock environmental assistance program 
established under this chapter.

                      [Subtitle E--Administration

                  [USE OF COMMODITY CREDIT CORPORATION

  [Sec. 1241. (a)(1) During each of the fiscal years ending 
September 30, 1986, and September 30, 1987, the Secretary shall 
use the facilities, services, authorities, and funds of the 
Commodity Credit Corporation to carry out subtitle D.
  [(2) During the fiscal year ending September 30, 1988, and 
each fiscal year thereafter, the Secretary may use the 
facilities, services, authorities, and funds of the Commodity 
Credit Corporation to carry out subtitle D, except that the 
Secretary may not use funds of the Corporation for such purpose 
unless the Corporation has received funds to cover such 
expenditures from appropriations made to carry out this 
subtitle.
  [(b) The authority provided by subtitles (A) through (E) 
shall be in addition to, and not in place of, other authority 
granted to the Secretary and the Commodity Credit Corporation.

                         [USE OF OTHER AGENCIES

  [Sec. 1242. (a) In carrying out subtitles B, C, and D, the 
Secretary shall use the services of local, county, and State 
committees established under section 8(b) of the Soil 
Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)).
  [(b)(1) In carrying out subtitle D, the Secretary may utilize 
the services of the Soil Conservation Service and the Forest 
Service, the Fish and Wildlife Service, State forestry 
agencies, State fish and game agencies, land-grant colleges, 
local, county, and State committees established under section 
8(b) of the Soil Conservation and Domestic Allotment Act (16 
U.S.C. 590h), soil and water conservation districts, and other 
appropriate agencies.
  [(2) In carrying out subtitle D at the State and county 
levels, the Secretary shall consult with, to the extent 
practicable, the Fish and Wildlife Service, State forestry 
agencies, State fish and game agencies, land-grant colleges, 
soil-conservation districts, and other appropriate agencies.

                            [ADMINISTRATION

  [Sec. 1243. (a) The Secretary shall establish, by regulation, 
an appeal procedure under which a person who is adversely 
affected by any determination made under subtitles A through E 
may seek review of such determination.
  [(b) Ineligibility under section 1211 or 1212 of a tenant or 
sharecropper for benefits shall not cause a landlord to be 
ineligible for benefits for which the landlord would otherwise 
be eligible with respect to commodities produced on lands other 
than those operated by the tenant or sharecropper.
  [(c) In carrying out subtitles B through E, the Secretary 
shall provide adequate safeguards to protect the interests of 
tenants and sharecroppers, including provision for sharing, on 
a fair and equitable basis, in payments under the program 
established by subtitle D.
  [(d) In making determinations under this title and in 
conducting appeals from any determination made under this 
title, the Secretary shall act as expeditiously as possible but 
shall provide adequate safeguards to protect the interests of 
the persons involved in such determination.
  [(e) The Secretary shall maintain data concerning the number 
and status of appeals pending in excess of 120 days or resolved 
under this title.
  [(f)(1) The Secretary shall not enroll more than a total of 
25 percent of the cropland in any county into the Environmental 
Conservation Acreage Reserve Program under chapter 1 and the 
Environmental Easement Program under chapter 3, and not more 
than 10 percent of such cropland may be subject to an easement 
acquired under those chapters. The Secretary may exceed these 
limitations in a county to the extent that the Secretary 
determines that--
          [(A) such action would not adversely affect the local 
        economy of such county; and
          [(B) producers in such county are having difficulties 
        complying with conservation plans or other 
        environmental requirements.
  [(2) The limitations established under this subsection shall 
not apply to cropland that is subject to an easement under 
chapter 1 or chapter 3 that is used for the establishment of 
shelterbelts and windbreaks.
  [(3) In making a determination under this subsection, the 
Secretary shall not require the written consent of a member of 
Congress.

                              [REGULATIONS

  [Sec. 1244. Not later than 180 days after the date of 
enactment of this Act, the Secretary shall issue such 
regulations as the Secretary determines are necessary to carry 
out subtitles A through E, including regulations that--
          [(1) define the term ``person'';
          [(2) govern the determination of persons who shall be 
        ineligible for program benefits under subtitles B and 
        C, so as to ensure a fair and reasonable determination 
        of ineligibility; and
          [(3) protect the interests of landlords, tenants, and 
        sharecroppers.

[SEC. 1245. AUTHORIZATION OF APPROPRIATIONS.

  [(a) Environmental Conservation Acreage Reserve Program and 
Water Quality Incentive Program.--There is authorized to be 
appropriated without fiscal year limitation such sums as may be 
necessary to carry out chapters 1 and 2 of subtitle D. Amounts 
available to carry out subtitle D before the date of enactment 
of this section shall remain available to carry out such 
chapters.
  [(b) Other Conservation Matters.--In addition to subsection 
(a), there is authorized to be appropriated without fiscal year 
limitation such sums as may be necessary to carry out subtitles 
A through G, other than chapters 1 and 2 of subtitle D.

[SEC. 1246. MONITORING AND EVALUATION.

  [(a) In General.--Not later than June 30, 1993, the Secretary 
shall prepare and submit, to the Committee on Agriculture of 
the House of Representatives and the Committee on Agriculture, 
Nutrition, and Forestry of the Senate, a comprehensive report 
that evaluates, in accordance with subsection (b), the programs 
and policies established and operated under this title.
  [(b) Requirements.--In conducting the evaluations required 
under subsection (a), the Secretary shall--
          [(1) assess the progress made toward the national 
        objective of nondegradation of the soil resources 
        through the implementation of the relevant provisions 
        of this title, identify obstacles to the attainment of 
        such goal, and recommend ways in which to overcome such 
        obstacles;
          [(2) perform on-site evaluations of 5 percent, or 
        such reasonable amount as necessary to produce a 
        statistically valid survey, of all affected acreage 
        of--
                  [(A) conservation practices on highly 
                erodible lands;
                  [(B) estimates of erosion reductions that may 
                result from the implementation of conservation 
                plans; and
                  [(C) the technical adequacy and feasibility 
                of such plans;
          [(3) collect data concerning the social and economic 
        impacts, violations, appeals, and such other matters 
        under this title as the Secretary determines to be 
        necessary to assess the overall impact of this title, 
        which data collection shall not impose an additional 
        recordkeeping or reporting requirement on the producer; 
        and
          [(4) assess the contribution toward the national 
        objectives of wetlands preservation, wildlife and 
        waterfowl habitat improvement, and water quality 
        improvement through the implementation of the relevant 
        provisions of this title, identify obstacles to 
        furthering progress toward such objectives, and 
        recommend ways in which to overcome such obstacles.

[SEC. 1247. ASSISTANCE FOR CONTROL OF THE SPREAD OF WEEDS AND PESTS.

  [(a) In General.--The Secretary, in consultation with State 
experiment stations, the Administrator of the Extension 
Service, the Chief of the Soil Conservation Service, and State 
pest and weed control boards, shall make available to owners 
and operators of land that is subject to a contract under 
subtitle D, weed and pest control technical information and 
materials that--
          [(1) address common weed and pest problems and 
        programs to control weeds and pests found on acreage 
        enrolled in the conservation reserve; and
          [(2) are otherwise consistent with maintaining the 
        conservation and environmental objectives of the 
        conservation reserve.
  [(b) Conservation Measure.--At the Secretary's discretion, 
the control of insect pests on conservation reserve acreage 
that is most likely to incur a crop pest infestation that 
adversely affects surrounding commercial land may be considered 
a conservation measure or practice for the purposes of section 
1234(b).]

                          Subtitle E--Funding

SEC. 1241. FUNDING.

  (a) Mandatory Expenses.--For each of fiscal years 1996 
through 2002, the Secretary shall use the funds of the 
Commodity Credit Corporation to carry out the programs 
authorized by--
          (1) subchapter B of chapter 1 of subtitle D 
        (including contracts extended by the Secretary pursuant 
        to section 1437 of the Food, Agriculture, Conservation, 
        and Trade Act of 1990 (Public Law 101-624; 16 U.S.C. 
        3831 note));
          (2) subchapter C of chapter 1 of subtitle D; and
          (3) chapter 4 of subtitle D.
  (b) Livestock Environmental Assistance Program.--For each of 
fiscal years 1996 through 2002, $100,000,000 of the funds of 
the Commodity Credit Corporation shall be available for 
providing technical assistance, cost-sharing payments, and 
incentive payments for practices relating to livestock 
production under the livestock environmental assistance program 
under chapter 4 of subtitle D.
          * * * * * * *
                              ----------                              


                  AGRICULTURAL ADJUSTMENT ACT OF 1938

          * * * * * * *

   TITLE III--LOANS, PARITY PAYMENTS, CONSUMER SAFEGUARDS, MARKETING 
                   QUOTAS, AND MARKETING CERTIFICATES

   Subtitle A--Definitions, Parity Payments, and Consumer Safeguards

                              DEFINITIONS

  Sec. 301. (a) * * *
  (b) Definitions Applicable to One or More Commodities.--For 
the purposes of this title--
          (1) * * *
          * * * * * * *
          (18) The word ``peanuts'' for the purposes of this 
        Act shall mean all peanuts produced, excluding any 
        peanuts which it is established by the producer or 
        otherwise, in accordance with regulations of the 
        Secretary, were not picked or threshed either before or 
        after marketing from the farm, or were marketed by the 
        producer before drying or removal of moisture from such 
        peanuts either by natural or artificial means for 
        consumption exclusively as boiled peanuts.
          * * * * * * *


                  international emergency food reserve


  Sec. 305. The President is encouraged to enter into 
negotiations with other nations to develop an international 
system of food reserves to provide for humanitarian food relief 
needs and to establish and maintain a food reserve, as a 
contribution of the United States toward the development of 
such a system, to be made available in the event of food 
emergencies in foreign countries. The reserves shall be known 
as the International Emergency Food Reserve.
          * * * * * * *

                      Subtitle B--Marketing Quotas

                   PART I--MARKETING QUOTAS--TOBACCO

          * * * * * * *
  Sec. 315. Notwithstanding any of the provisions of section 
101 of this Act: (a) For the 1960 crop of any kind of tobacco 
for which marketing quotas are in effect, or for which 
marketing quotas are not disapproved by producers, the support 
level in cents per pound shall be the level at which the 1959 
crop of such kind of tobacco was supported, or if marketing 
quotas were disapproved for the 1959 crop of such kind of 
tobacco, the level at which the 1959 crop of such kind of 
tobacco would have been supported if marketing quotas had been 
in effect. (b) For the 1961 crop and each subsequent crop of 
any kind of tobacco for which marketing quotas are in effect, 
or for which marketing quotas are not disapproved by producers, 
the support level in cents per pound shall be determined by 
adjusting the support level for the 1959 crop of such kind of 
tobacco, or if marketing quotas were disapproved for the 1959 
crop of such kind of tobacco, the level at which the 1959 crop 
of such kind of tobacco would have been supported if marketing 
quotas had been in effect, by multiplying such support level 
for the 1959 crop by the ratio of (i) the average of the index 
of prices paid by farmers, including wage rates, interest, and 
taxes, as defined in section 301(a)(1)(C) of the Agricultural 
Adjustment Act of 1938, as amended, for the three calendar 
years immediately preceding the calendar year in which the 
marketing year begins for the crop for which the support level 
is being determined to (ii) the average index of such prices 
paid by farmers, including wage rates, interest, and taxes for 
the calendar year 1959.
  (c) If acreage poundage or poundage farm marketing quotas are 
in effect under section 317 or 319 of the Agricultural 
Adjustment Act of 1938, as amended, (1) price support shall not 
be made available on tobacco marketed in excess of 103 per 
centum of the marketing quota (after adjustments) for the farm 
on which such tobacco was produced, and (2) for the purpose of 
price-support eligibility, tobacco carried over from one 
marketing year to another shall, when marketed, be considered 
tobacco of the then current crop.
  (d) Notwithstanding the provisions of section 403, if the 
Secretary determines that the supply of any grade of any kind 
of tobacco of a crop for which marketing quotas are in effect 
or are not disapproved by producers will likely be excessive, 
the Secretary, after prior consultation with the association 
through which price support for the grade and kind of tobacco 
is made available to producers, may reduce the support rate 
which would otherwise be established for such grade of tobacco 
after taking into consideration the effect such reduction may 
have on the supply and price of other grades of other kinds of 
quota tobacco: Provided, That the weighted average of the 
support rates for all eligible grades of such kind of tobacco 
shall, after such reduction, reflect not less than (1) 65 per 
centum of the increase in the support level for such kind of 
tobacco which would otherwise be established under this 
section, if the support level therefor is higher than the 
support level for the preceding crop, or (2) the support level 
for such kind of tobacco established under this section, if the 
support level therefor is not higher than the support level for 
the preceding crop. In determining whether the supply of any 
grade of any kind of tobacco of a crop will be excessive, the 
Secretary shall take into consideration the domestic supply, 
including domestic inventories, the amount of such tobacco 
pledged as security for price support loans, and anticipated 
domestic and export demand, based on the maturity, uniformity 
and stalk position of such tobacco.
  (f) Notwithstanding the foregoing provisions of this 
section--
          (1) For the 1984 crop of Flue-cured tobacco, the 
        support level shall be the level in cents per pound at 
        which the 1982 crop was supported.
          (2) For the 1985 crop of Flue-cured tobacco, the 
        support level shall be the level in cents per pound at 
        which the 1982 crop was supported, plus or minus, 
        respectively, the amount by which (A) the support level 
        for the 1985 crop, as determined under subsection (b), 
        is greater or less than (B) the support level for the 
        1984 crop, as determined under subsection (b), as that 
        difference may be adjusted by the Secretary under 
        subsection (d) if the support level under clause (A) is 
        greater than the support level under clause (B), except 
        that the support level for the 1985 crop shall be the 
        level in cents per pound at which the 1982 crop was 
        supported if the support level as determined under 
        subsection (b) for the 1985 crop would not be more than 
        5 per centum greater than the support level as 
        determined under subsection (b) for the 1984 crop.
          (3) For the 1984 crop of any kind of tobacco (other 
        than Flue-cured tobacco) for which marketing quotas are 
        in effect or are not disapproved by producers and for 
        the 1985 crop of any kind of tobacco (other than Flue-
        cured and Burley tobacco) for which marketing quotas 
        are in effect or are not disapproved by producers, the 
        Secretary shall establish the support level at such 
        level as will not narrow the normal price support 
        differential between Flue-cured tobacco and such other 
        kind of tobacco. Before establishing the support level 
        under this paragraph for any such kind of tobacco the 
        Secretary shall publish in the Federal Register a 
        notice of the level the Secretary proposes to establish 
        and give an opportunity for the public to comment on 
        the proposal. In determining the level to be 
        established under this paragraph for a particular kind 
        of tobacco, the Secretary shall take into consideration 
        the cost of producing such kind of tobacco, the supply 
        and demand conditions for such kind of tobacco, the 
        comments received in response to the public notice of 
        the proposal, and such other relevant factors as the 
        Secretary determines appropriate.
          (4) For the 1985 and 1986 crops of Burley tobacco, 
        the support level shall be $1.488 per pound.
          (5) For the 1986 crop of Flue-cured tobacco, the 
        support level shall be $1.438 per pound.
          (6)(A) Except as provided in subparagraph (B), for 
        the 1986 and each subsequent crop of any kind of 
        tobacco (other than Flue-cured and Burley tobacco) for 
        which marketing quotas are in effect or are not 
        disapproved by producers, the support level shall be 
        the level in cents per pound at which the immediately 
        preceding crop was supported, plus or minus, 
        respectively, the amount by which--
                  (i) the support level for the crop for which 
                the determination is being made, as determined 
                under subsection (b); is greater or less than
                  (ii) the support level for the immediately 
                preceding crop, as determined under subsection 
                (b),
        as that difference may be adjusted by the Secretary 
        under subsection (d) if the support level under clause 
        (i) is greater than the support level under clause 
        (ii).
          (B) Notwithstanding subparagraph (A) and subsection 
        (d), if requested by the board of directors of an 
        association through which price support for the 
        respective kind of tobacco specified in subparagraph 
        (A) is made available to producers, the Secretary may 
        reduce the support level for such kind of tobacco to 
        the extent requested by the association to more 
        accurately reflect the market value and improve the 
        marketability of such tobacco.
          (7)(A) For the 1987 and each subsequent crop of Flue-
        cured and Burley tobacco for which marketing quotas are 
        in effect or are not disapproved by producers, the 
        support level shall be the level in cents per pound at 
        which the immediately preceding crop was supported, 
        plus or minus, respectively, an adjustment of not less 
        than 65 percent nor more than 100 percent of the total, 
        as determined by the Secretary after taking into 
        consideration the supply of the kind of tobacco 
        involved in relation to demand, of--
                  (i) 66.7 percent of the amount by which--
                          (I) the average price received by 
                        producers for Flue-cured and Burley 
                        tobacco, respectively, on the United 
                        States auction markets, as determined 
                        by the Secretary, during the 5 
                        marketing years immediately preceding 
                        the marketing year for which the 
                        determination is being made, excluding 
                        the year in which the average price was 
                        the highest and the year in which the 
                        average price was the lowest in such 
                        period, is greater or less than
                          (II) the average price received by 
                        producers for Flue-cured and Burley 
                        tobacco, respectively, on the United 
                        States auction markets, as determined 
                        by the Secretary, during the 5 
                        marketing years immediately preceding 
                        the marketing year prior to the 
                        marketing year for which the 
                        determination is being made, excluding 
                        the year in which the average price was 
                        the highest and the year in which the 
                        average price was the lowest in such 
                        period; and
                  (ii) 33.3 percent of the change, expressed as 
                a cost per pound of tobacco, in the index of 
                prices paid by tobacco producers from January 1 
                to December 31 of the calendar year immediately 
                preceding the year in which the determination 
                is made.
          (B) For purposes of subparagraph (A)--
                  (i) the average market price for Burley 
                tobacco for the 1985 marketing year shall be 
                reduced by $0.039 per pound;
                  (ii) the average market price for Burley 
                tobacco for the 1984 and each prior applicable 
                marketing year shall be reduced by $0.30 per 
                pound;
                  (iii) the average market price for Flue-cured 
                tobacco for the 1985 marketing year shall be 
                reduced by $0.25 per pound;
                  (iv) the average market price for Flue-cured 
                tobacco for the 1984 and each prior applicable 
                marketing year shall be reduced by $0.30 per 
                pound; and
                  (v) the index of prices paid by tobacco 
                producers shall include items representing 
                general, variable costs of producing tobacco, 
                as determined by the Secretary, but shall not 
                include the cost of land, risk, overhead, 
                management, purchase or leasing of quotas, 
                marketing contributions or assessments, and 
                other costs not directly related to the 
                production of tobacco.
          (8)(A) Notwithstanding any other provision of this 
        subsection, in the case of each of the 1988 and 1989 
        crops of any kind of tobacco, the Secretary shall 
        reduce the support level for such crop by an amount 
        equal to 1.4 percent of the level otherwise established 
        under this subsection. Any such reduction shall not be 
        taken into consideration in determining the support 
        level for a subsequent crop of tobacco.
          (B) In lieu of making any such reduction, the 
        Secretary may impose assessments on the producers and 
        purchasers in an amount sufficient to realize a 
        reduction in outlays equal to the amount that would 
        have been achieved as a result of the reduction 
        required under subparagraph (A). Such assessments shall 
        not apply to purchasers if it is judicially determined 
        that the imposition of the purchaser assessment will 
        adversely affect the contracts entered into under 
        section 1109 of the Consolidated Omnibus Budget 
        Reconciliation Act of 1986 (7 U.S.C. 1445-3).
  (g)(1) Effective only for each of the 1994 through 1998 crops 
of tobacco for which price support is made available under this 
Act, each producer and purchaser of such tobacco, and each 
importer of the same kind of tobacco, shall remit to the 
Commodity Credit Corporation a nonrefundable marketing 
assessment in an amount equal to--
                  (A) in the case of a producer or purchaser of 
                domestic tobacco, .5 percent of the national 
                price support level for each such crop; and
                  (B) in the case of an importer of tobacco, 1 
                percent of the national support price for the 
                same kind of tobacco;
        as provided for in this section.
  (2) Such producer, purchaser, and importer assessments shall 
be--
          (A) collected in the same manner as provided for in 
        section 106A(d)(2) or 106B(d)(3), as applicable; and
          (B) enforced in the same manner as provided in 
        section 106A(h) or 106B(j), as applicable.
  (3) The Secretary may enforce this subsection in the courts 
of the United States.


   producer contributions and purchaser assessments for no net cost 
                              tobacco fund


  Sec. 315A. (a) As used in the section--
          (1) the term ``association'' means a producer-owned 
        cooperative marketing association which has entered 
        into a loan agreement with the Corporation to make 
        price support available to producers;
          (2) the term ``Corporation'' means the Commodity 
        Credit Corporation, an agency and instrumentality of 
        the United States within the Department of Agriculture 
        through which the Secretary makes price support 
        available to producers;
          (3) the term ``Fund'' means the capital account to be 
        established within each association, which account 
        shall be known as the ``No Net Cost Tobacco Fund'';
          (4) the term ``to market'' means to dispose of quota 
        tobacco by voluntary or involuntary sale, barter, 
        exchange, gift inter vivos, or consigning the tobacco 
        to an association for a price support advance;
          (5) the term ``net gains'' means the amount by which 
        total proceeds obtained from the sale by an association 
        of a crop of quota tobacco pledged to the Corporation 
        for price support loan exceeds the principal amount of 
        the price support loan made by the Corporation to the 
        association on such crop, plus interest and charges;
          (6) the term ``purchaser'' means any person who 
        purchases in the United States, either directly or 
        indirectly for the account of such person or another 
        person, Flue-cured or Burley quota tobacco; and
          (7) the term ``quota tobacco'' means any kind of 
        tobacco for which marketing quotas are in effect or for 
        which marketing quotas are not disapproved by 
        producers.
  (b) The Secretary may carry out the tobacco price support 
program through the Corporation and shall, except as otherwise 
provided by this section, continue to make price support 
available to producers through loans to associations that, 
under agreements with the Corporation, agree to make loan 
advances to producers.
  (c) Each association shall establish within the association a 
Fund. The Fund shall be comprised of amounts contributed by 
producer-members or paid by or on behalf of purchasers and 
importers as provided in subsection (d).
  (d) The Secretary shall--
          (1) require--
                  (A) that--
                          (i) as a condition of eligibility for 
                        price support, each producer of each 
                        kind of quota tobacco shall agree, with 
                        respect to all such kind of quota 
                        tobacco marketed by the producer from a 
                        farm, to contribute to the appropriate 
                        association, for deposit in the 
                        association's Fund, an amount 
                        determined from time to time by the 
                        association with the approval of the 
                        Secretary;
                          (ii) each purchaser of Flue-cured and 
                        Burley quota tobacco shall pay to the 
                        appropriate association, for deposit in 
                        the Fund of the association, an 
                        assessment, in an amount determined 
                        from time to time by the association 
                        with the approval of the Secretary, 
                        with respect to purchases of all such 
                        kind of tobacco marketed by a producer 
                        from a farm (including purchases of 
                        such tobacco from the 1986 and 
                        subsequent crops from the association); 
                        and
                          (iii) each importer of Flue-cured or 
                        Burley tobacco shall pay to the 
                        appropriate association, for deposit in 
                        the Fund of the association, an 
                        assessment, in an amount that is equal 
                        to the product obtained by 
                        multiplying--
                                  (I) the number of pounds of 
                                tobacco that is imported by the 
                                importer; by
                                  (II) the sum of the amount of 
                                per pound producer 
                                contributions and purchaser 
                                assessments that are payable by 
                                domestic producers and 
                                purchasers of Flue-cured and 
                                Burley tobacco under clauses 
                                (i) and (ii); and
                  (B) that, upon making a contribution under 
                subparagraph (A)--
                          (i) in the case of quota tobacco 
                        marketed other than by consignment to 
                        an association for a price support 
                        advance, the producer shall receive 
                        from the association capital stock or, 
                        if the association does not issue such 
                        stock, a capital certificate having a 
                        par value or face amount, respectively, 
                        equal to the contribution; and
                          (ii) in the case of quota tobacco 
                        consigned by the producer to an 
                        association for a price support 
                        advance, the producer shall receive 
                        from the association a qualified per 
                        unit retain certificate, as defined in 
                        section 1388(h) of the Internal Revenue 
                        Code, having a face amount equal to the 
                        amount of the contribution and 
                        representing an interest in the 
                        association's Fund.
        The amount of producer contributions and purchaser 
        assessments shall be determined in such a manner that 
        producers and purchasers share equally, to the maximum 
        extent practicable, in maintaining the Fund of an 
        association. In making such determination with respect 
        to the assessment of a purchaser, only 1985 and 
        subsequent crops of Flue-cured and Burley quota tobacco 
        shall be taken into account. The Secretary shall 
        approve the amount of the contributions and assessments 
        determined by an association from time to time under 
        this paragraph only if the Secretary determines that 
        such amount will result in accumulation of a Fund 
        adequate to reimburse the Corporation for any net 
        losses which the Corporation may sustain under its loan 
        agreements with the association, based on reasonable 
        estimates of the amounts which the Corporation will 
        lend to the association under such agreements and the 
        proceeds which will be realized from the sales of 
        tobacco which are pledged to the Corporation by the 
        association as security for loans;
          (2) require that any producer contribution or 
        purchaser or importer assessment due under paragraph 
        (1) shall be collected--
                  (A) from the person who acquired the tobacco 
                involved from the producer, except that if the 
                tobacco is marketed by sale, an amount equal to 
                the producer contribution may be deducted by 
                the purchaser from the price paid to such 
                producer;
                  (B) if the tobacco involved is marketed by a 
                producer through a warehouseman or agent, from 
                such warehouseman or agent, who may--
                          (i) deduct an amount equal to the 
                        producer contribution from the price 
                        paid to the producer; and
                          (ii) add an amount equal to the 
                        purchaser assessment to the price paid 
                        by the purchaser;
                  (C) if the tobacco involved is marketed by a 
                producer directly to any person outside the 
                United States, from the producer, who may add 
                an amount equal to the purchaser assessment to 
                the price paid by the purchaser; and
                  (D) if the tobacco involved is imported by an 
                importer, from the importer.
          (3) require that the Fund established by each 
        association shall be kept and maintained separate from 
        all other accounts of the association and shall be used 
        exclusively, as prescribed by the Secretary, for the 
        purpose of ensuring, insofar as practicable, that the 
        Corporation, under its loan agreements with the 
        association with respect to 1982 and subsequent crops 
        of quota tobacco, will suffer no net losses (including, 
        but not limited to, recovery of the amount of loans 
        extended to cover the overhead costs of the 
        association), after any net gains are applied to net 
        losses of the corporation under paragraph (5): 
        Provided, That, notwithstanding any other provision of 
        law, use by the association of moneys in the Fund, 
        including interest and other earnings, for the purposes 
        of reducing the association's outstanding indebtedness 
        to the Corporation associated with 1982 and subsequent 
        crops of quota tobacco and making loan advances to 
        producers is authorized, and use of such moneys for any 
        other purposes that will be mutually beneficial to 
        producers and purchasers who contribute or pay to the 
        Fund and to the Corporation, shall, if approved by the 
        Secretary, be considered an appropriate use of the 
        Fund;
          (4) permit an association to invest the monies in the 
        Fund in such manner as the Secretary may approve, and 
        require that the interest or other earnings on such 
        investment shall become a part of the Fund;
          (5) require that loan agreements between the 
        Corporation and the association provide that the 
        Corporation shall retain the net gains from each of the 
        1982 and subsequent crops of tobacco pledged by the 
        association as security for price support loans, and 
        that such net gains will be used for the purpose of (A) 
        offsetting any losses sustained by the Corporation 
        under its loan agreements with the association for any 
        of the 1982 and subsequent crops of loan tobacco, or 
        (B) reducing the outstanding balance of any price 
        support loan made by the Corporation to the association 
        under such agreements for 1982 and subsequent crops of 
        tobacco, or for both such purposes;
          (6); and
          (7) effective for the 1986 and subsequent crops of 
        quota tobacco, provide, in loan agreements between the 
        Corporation and an association, that if the Secretary 
        determines that the amount in the Fund or the net gains 
        referred to in paragraph (5) exceeds the amounts 
        necessary for the purposes specified in this section, 
        the association, with the approval of the Secretary, 
        may suspend the payment and collection of contributions 
        and assessments under this section on terms and 
        conditions established by the association, with the 
        approval of the Secretary.
  (e) If any association which has entered into a loan 
agreement with the Corporation with respect to 1982 or 
subsequent crops of quota tobacco fails or refuses to comply 
with the provisions of this section, the regulations issued by 
the Secretary thereunder, or the terms of such agreement, the 
Secretary may terminate such agreement or provide that no 
additional loan funds may be made available thereunder to the 
association. In such event, the Secretary shall make price 
support available to producers of the kind or kinds of tobacco, 
the price of which had been supported through loans to such 
association, through such other means as are authorized by this 
Act or the Commodity Credit Corporation Charter Act.
  (f) If, under subsection (e), a loan agreement with an 
association is terminated, or if an association having a loan 
agreement with the Corporation is dissolved, merges with 
another association, or otherwise ceases to operate, the Fund 
or the net gains referred to in subsection (d)(5) shall be 
applied or disposed of in such manner as the Secretary may 
approve or prescribe, except that they shall, to the extent 
necessary, first be applied or used for the purposes therefor 
prescribed in this section.
  (g) The Secretary shall issue regulations necessary to carry 
out the provisions of this section.
  (h)(1)(A) Each person who fails to collect any contribution 
or assessment as required by subsection (d)(2) and remit such 
contribution or assessment to the association, at such time and 
in such manner as may be prescribed by the Secretary, shall be 
liable, in addition to any amount due, to a marketing penalty 
at a rate equal to 75 percent of the average market price 
(calculated to the nearest whole cent) for the kind of tobacco 
involved for the immediately preceding year on the quantity of 
tobacco as to which the failure occurs.
  (B) Each importer who fails to pay to the association an 
assessment as required by subsection (d)(2) at such time and in 
such manner as may be prescribed by the Secretary, shall be 
liable, in addition to any amount due, for a marketing penalty 
at a rate equal to 75 percent of the average market price 
(calculated to the nearest whole cent) for the respective kind 
of tobacco for the immediately preceding year on the quantity 
of tobacco as to which the failure occurs.
  (C) The Secretary may reduce any such marketing penalty in 
such amount as the Secretary determines equitable in any case 
in which the Secretary determines that the failure was 
unintentional or without knowledge on the part of the person 
concerned.st
  (D) Any penalty provided for under this paragraph shall be 
assessed by the Secretary after notice and opportunity for a 
hearing.
  (2)(A) Any person against whom a penalty is assessed under 
this subsection may obtain review of such penalty in an 
appropriate district court of the United States by filing a 
civil action in such court not later than 30 days after such 
penalty is imposed.
  (B) The Secretary shall promptly file in such court a 
certified copy of the record on which the penalty is based.
  (3) The district courts of the United States shall have 
jurisdiction to review and enforce any penalty imposed under 
this subsection.
  (4) An amount equivalent to any penalty collected by the 
Secretary under this subsection shall be transmitted by the 
Secretary to the appropriate association, for deposit in the 
Fund of such association.
  (5) The remedies provided in this subsection shall be in 
addition to, and not exclusive of, other remedies that may be 
available.


          marketing assessments to no net cost tobacco account


  Sec. 315B. (a) As used in this section--
          (1) the term ``association'' means a producer-owned 
        cooperative marketing association which has entered 
        into a loan agreement with the Corporation to make 
        price support available to producers of a kind of 
        tobacco;
          (2) the term ``Account'' means an account established 
        by and in the Corporation for an association, which 
        account shall be known as the ``No Net Cost Tobacco 
        Account'';
          (3) the term ``to market'' means to dispose of 
        tobacco by voluntary or involuntary sale, barter, 
        exchange, gift inter vivos, or consigning the tobacco 
        to an association for a price support advance;
          (4) the term ``net gains'' means the amount by which 
        total proceeds obtained from the sale by an association 
        of a crop of a kind of tobacco pledged to the 
        Corporation for price support loan exceeds the 
        principal amount of the price support loan made by the 
        Corporation to the association on such crop, plus 
        interest and charges;
          (5) the term ``tobacco'' means any kind of tobacco as 
        defined in section 301(b)(15) of the Agricultural 
        Adjustment Act of 1938, for which marketing quotas are 
        in effect or for which marketing quotas are not 
        disapproved by producers;
          (6) the term ``area'', when used in connection with 
        an association, means the general geographical area in 
        which farms of the producer-members of such association 
        are located, as determined by the Secretary;
          (7) the term ``Corporation'' shall have the meaning 
        given to it in section 106A(a)(2); and
          (8) the term ``purchaser'' means any person who 
        purchases in the United States, either directly or 
        indirectly for the account of such person or another 
        person, Flue-cured or Burley quota tobacco.
  (b) Notwithstanding section 106A, the Secretary shall, upon 
the request of any association, and may, if the Secretary 
determines, after consultation with such association, that the 
accumulation of the No Net Cost Tobacco Fund for such 
association under section 106A is, and is likely to remain, 
inadequate to reimburse the Corporation for net losses which 
the Corporation sustains under its loan agreement with such 
association--
          (1) continue to make price support available to 
        producers through such association in accordance with 
        loan agreements entered into between the Corporation 
        and such association; and
          (2) establish and maintain in accordance with this 
        section a No Net Cost Tobacco Account for such 
        association in lieu of the No Net Cost Tobacco Fund 
        established within such association under section 106A.
  (c)(1) Any Account established for an association under 
subsection (b)(2) shall be established within the Corporation 
and shall be comprised of amounts paid by producers, 
purchasers, and importers under subsection (d).
  (2) Upon the establishment of an Account for an association, 
any amount in the No Net Cost Tobacco Fund established within 
such association under section 106A shall be applied or 
disposed of in such manner as the Secretary may approve or 
prescribe, except that such amount shall, to the extent 
necessary, first be applied or used for the purposes therefor 
prescribed in such section.
  (d)(1)(A) If an Account is established for an association 
under subsection (b)(2), then the Secretary shall require (in 
lieu of any requirement under section 106A(d)(1)) that each 
producer of the kind of tobacco involved whose farm is within 
such association's area shall, as a condition of eligibility 
for price support, agree, with respect to all of such kind of 
tobacco marketed by the producer from the farm, to pay to the 
Corporation, for deposit in such association's Account, 
marketing assessments as determined under paragraph (2) and 
collected under paragraph (3).
  (B) The Secretary shall also require (in lieu of any 
requirement under section 106A(d)(1)) that each purchaser of 
Flue-cured and Burley quota tobacco shall pay to the 
Corporation, for deposit in the Account of such association, an 
assessment, as determined under paragraph (2) and collected 
under paragraph (3), with respect to purchases of all such kind 
of tobacco marketed by a producer from a farm (including 
purchases of such tobacco from the 1986 and subsequent crops 
from the association).
  (C) The Secretary shall also require (in lieu of any 
requirement under section 106A(d)(1)) that each importer of 
Flue-cured and Burley tobacco shall pay to the Corporation, for 
deposit in the Account of the association, an assessment, as 
determined under paragraph (2) and collected under paragraph 
(3), with respect to purchases of all such kinds of tobacco 
imported by the importer.
  (2)(A) For purposes of paragraph (1), the Secretary shall 
determine and adjust from time to time, in consultation with 
such association, the amount of the marketing assessment which 
shall be imposed, as a condition of eligibility for price 
support, on each pound of the kind of tobacco involved marketed 
by a producer from a farm within such association's area and 
the amount of the assessment to be paid by purchasers of 
tobacco. The amount of the assessment to be paid by producers 
and purchasers shall be determined in such a manner that 
producers and purchasers share equally, to the maximum extent 
practicable, in maintaining the Account of an association. In 
making such determination with respect to the assessment of a 
purchaser, only 1985 and subsequent crops of Flue-cured and 
Burley quota tobacco shall be taken into account. The amount of 
the assessment shall be equal to an amount which, when 
collected, will result in an accumulation of an Account for 
such association adequate to reimburse the Corporation for any 
net losses which the Corporation may sustain under its loan 
agreements with such association, based on reasonable estimates 
of the amounts which the Corporation will lend to such 
association under such agreements and the proceeds which will 
be realized from the sales of the kind of tobacco involved 
which are pledged to the Corporation by such association as 
security for loans. Notwithstanding the foregoing provisions of 
this paragraph, the amount of any assessment that is determined 
by the Secretary for the 1986 and subsequent crops of Burley 
quota tobacco shall be determined without regard to any net 
losses that the Corporation may sustain under the loan 
agreements of the Corporation with such association with 
respect to the 1983 crop of such tobacco.
  (B) With respect to the 1985 crop of Burley tobacco, for the 
purposes of paragraph (1), the marketing assesment shall not be 
more than 4 cents per pound.
  (C) The amount of the assessment to be paid by importers 
shall be an amount that is equal to the product obtained by 
multiplying--
          (i) the number of pounds of tobacco that is imported 
        by the importer; by
          (ii) the sum of the amount of per pound producer and 
        purchaser assessments that are payable by domestic 
        producers and purchasers of the respective kind of 
        tobacco under this paragraph.
  (3)(A) Except as provided in subparagraphs (B) and (C), any 
assessment to be paid by a producer or a purchaser under 
paragraph (1) shall be collected from the person who acquired 
the tobacco involved from such producer, except that if the 
tobacco is marketed by sale, an amount equal to the producer 
assessment may be deducted by the purchaser from the price paid 
to such producer.
  (B) If tobacco of the kind for which an Account is 
established is marketed by a producer through a warehouseman or 
agent, both the producer and the purchaser assessment shall be 
collected from such warehouseman or agent, who may--
          (i) deduct an amount equal to the producer assessment 
        from the price paid to the producer; and
          (ii) add an amount equal to the purchaser assessment 
        to the price paid by the purchaser.
  (C) If tobacco of the kind for which an Account is 
established is marketed by a producer directly to any person 
outside the United States, both the producer and the purchaser 
assessment shall be collected from the producer, who may add an 
amount equal to the purchaser assessment to the price paid by 
the purchaser.
  (D) If Flue-cured or Burley tobacco is imported by an 
importer, any importer assessment required by subsection (d) 
shall be collected from the importer.
  (e) Amounts deposited in an Account established for an 
association shall be used by the Secretary for the purpose of 
ensuring, insofar as practicable, that the Corporation under 
its loan agreements with such association will suffer, with 
respect to the crop involved, no net losses (including, but not 
limited to, recovery of the amount of loans extended to cover 
the overhead costs of the association), after any net gains are 
applied to net losses of the Corporation pursuant to subsection 
(h).
  (f) The Secretary shall provide, in any loan agreement 
between the Corporation and an association for which an Account 
has been established under subsection (b)(2), that if the 
Secretary determines that the amount in such Account or the net 
gains referred to in subsection (h) exceed the amounts 
necessary for the purposes of this section, then the Secretary, 
in consultation with such association, may suspend the payment 
and collection of marketing assessments under this section upon 
terms and conditions established by the Secretary.
  (g) With respect to any association for which an Account is 
established under subsection (b)(2), if a loan agreement 
between the Corporation and such association is terminated, if 
such association is dissolved or merges with another 
association that has entered into a loan agreement with the 
Corporation to make price support available to producers of the 
kind of tobacco involved, or if such Account terminates by 
operation of law, then amounts in such Account and the net 
gains referred to in subsection (h) shall be applied to or 
disposed of in such manner as the Secretary may prescribe, 
except that they shall, to the extent necessary, first be 
applied to or used for the purposes therefor prescribed in this 
section.
  (h) The provisions of section 106A(d)(5) relating to net 
gains shall apply to any loan agreement between an association 
and the Corporation entered into upon or after the 
establishment of an Account for such association under 
subsection (b)(2).
  (i) The Secretary shall issue regulations necessary to carry 
out the provisions of this section.
  (j)(1)(A) Each person who fails to collect any assessment as 
required by subsection (d)(3) and remit such assessment to the 
Corporation, at such time and in such manner as may be 
prescribed by the Secretary, shall be liable, in addition to 
any amount due, to a marketing penalty at a rate equal to 75 
percent of the average market price (calculated to the nearest 
whole cent) for the kind of tobacco involved for the 
immediately preceding year on the quantity of tobacco as to 
which the failure occurs.
  (B) Each importer who fails to pay to the Corporation an 
assessment as required by subsection (d) at such time and in 
such manner as may be prescribed by the Secretary, shall be 
liable, in addition to any amount due, to a marketing penalty 
at a rate equal to 75 percent of the average market price 
(calculated to the nearest whole cent) for the respective kind 
of tobacco for the immediately preceding year on the quantity 
of tobacco as to which the failure occurs.
  (C) The Secretary may reduce any such marketing penalty in 
such amount as the Secretary determines equitable in any case 
in which the Secretary determines that the failure was 
unintentional or without knowledge on the part of the person 
concerned.
  (D) Any penalty provided for under this paragraph shall be 
assessed by the Secretary after notice and opportunity for a 
hearing.
  (2)(A) Any person against whom a penalty is assessed under 
this subsection may obtain review of such penalty in an 
appropriate district court of the United States by filing a 
civil action in such court not later than 30 days after such 
penalty is imposed.
  (B) The Secretary shall promptly file in such court a 
certified copy of the record on which the penalty is based.
  (3) The district courts of the United States shall have 
jurisdiction to review and enforce any penalty imposed under 
this subsection.
  (4) An amount equivalent to any penalty collected by the 
Secretary under this subsection shall be transmitted by the 
Secretary to the Corporation, for deposit in the Account of the 
appropriate association.
  (5) The remedies provided in this subsection shall be in 
addition to, and not exclusive of, other remedies that may be 
available.

                   [PART II--ACREAGE ALLOTMENTS--CORN

                  [ADJUSTMENT OF FARM MARKETING QUOTAS

  [Sec. 326. (a) Whenever in any county or other area the 
Secretary finds that the actual production of corn plus the 
amount of corn stored under seal in such county or other area 
is less than the normal production of the marketing percentage 
of the farm acreage allotment in such county or other area, the 
Secretary shall terminate farm marketing quotas for corn in 
such county or other area.
  [(b) Whenever, upon any farm, the actual production of the 
acreage of corn is less than the normal production of the 
marketing percentage of the farm acreage allotment, there may 
be marketed, without penalty, from such farm an amount of corn 
from the corn stored under seal pursuant to section 324 which, 
together with the actual production of the then current crop, 
will equal the normal production of the marketing percentage of 
the farm acreage allotment.
  [(c) Whenever, in any marketing year, marketing quotas are 
not in effect with respect to the crop of corn produced in the 
calendar year in which such marketing year begins, all 
marketing quotas applicable to previous crops of corn shall be 
terminated.

                [NONESTABLISHMENT OF ACREAGE ALLOTMENTS

  [Sec. 330. Notwithstanding any other provision of law, 
acreage allotments and a commercial corn-producing area shall 
not be established for the 1959 and subsequent crops of corn.

                   [PART III--MARKETING QUOTAS--WHEAT

                         [LEGISLATIVE FINDINGS

  [Sec. 331. Wheat is a basic source of food for the Nation, is 
produced throughout the United States by more than a million 
farmers, is sold on the country-wide market and, as wheat or 
flour, flows almost entirely through instrumentalities of 
interstate and foreign commerce from producers to consumers.
  [Abnormally excessive and abnormally deficient supplies of 
wheat on the country-wide market acutely and directly affect, 
burden, and obstruct interstate and foreign commerce. 
Abnormally excessive supplies overtax the facilities of 
interstate and foreign transportation, congest terminal markets 
and milling centers in the flow of wheat from producers to 
consumers, depress the price of wheat in interstate and foreign 
commerce and otherwise disrupt the orderly marketing of such 
commodity in such commerce. Abnormally deficient supplies 
result in an inadequate flow of wheat and its products in 
interstate and foreign commerce with consequent injurious 
effects to the instrumentalities of such commerce and with 
excessive increases in the prices of wheat and its products in 
interstate and foreign commerce.
  [It is in the interest of the general welfare that interstate 
and foreign commerce in wheat and its products be protected 
from such burdensome surpluses and distressing shortages, and 
that a supply of wheat be maintained which is adequate to meet 
domestic consumption and export requirements in years of 
drought, flood, and other adverse conditions as well as in 
years of plenty, and that the soil resources of the Nation be 
not wasted in the production of such burdensome surpluses. Such 
surpluses result in disastrously low prices of wheat and other 
grains to wheat producers, destroy the purchasing power of 
grain producers for industrial products, and reduce the value 
of the agricultural assets supporting the national credit 
structure. Such shortages of wheat result in unreasonably high 
prices of flour and bread to consumers and loss of market 
outlets by wheat producers.
  [The conditions affecting the production and marketing of 
wheat are such that, without Federal assistance, farmers, 
individually or in cooperation, cannot effectively prevent the 
recurrence of such surpluses and shortages and the burdens on 
interstate and foreign commerce resulting therefrom, maintain 
normal supplies of wheat, or provide for the orderly marketing 
thereof in interstate and foreign commerce.
  [Wheat which is planted and not disposed of prior to the date 
prescribed by the Secretary for the disposal of excess acres of 
wheat is an addition to the total supply of wheat and has a 
direct effect on the price of wheat in interstate and foreign 
commerce and may also affect the supply and price of livestock 
and livestock products. In the circumstances, wheat not 
disposed of prior to such date must be considered in the same 
manner as mechanically harvested wheat in order to achieve the 
policy of the Act.
  [The diversion of substantial acreages from wheat to the 
production of commodities which are in surplus supply or which 
will be in surplus supply if they are permitted to be grown on 
the diverted acreage would burden, obstruct, and adversely 
affect interstate and foreign commerce in such commodities, and 
would adversely affect the prices of such commodities in 
interstate and foreign commerce. Small changes in the supply of 
a commodity could create a sufficient surplus to affect 
seriously the price of such commodity in interstate and foreign 
commerce. Large changes in the supply of such commodity could 
have a more acute effect on the price of the commodity in 
interstate and foreign commerce and, also, could overtax the 
handling, processing, and transportation facilities through 
which the flow of interstate and foreign commerce in such 
commodity is directed. Such adverse effects caused by 
overproduction in one year could further result in a deficient 
supply of the commodity in the succeeding year, causing 
excessive increases in the price of the commodity in interstate 
and foreign commerce in such year. It is, therefore, necessary 
to prevent acreage diverted from the production of wheat to be 
used to produce commodities which are in surplus supply or 
which will be in surplus supply if they are permitted to be 
grown on the diverted acreage.
  [The provisions of this part affording a cooperative plan to 
wheat producers are necessary in order to minimize recurring 
surpluses and shortages of wheat in interstate and foreign 
commerce, to provide for the maintenance of adequate reserve 
supplies thereof, to provide for an adequate and orderly flow 
of wheat and its products in interstate and foreign commerce at 
prices which are fair and reasonable to farmers and consumers, 
and to prevent acreage diverted from the production of wheat 
from adversely affecting other commodities in interstate and 
foreign commerce.

               [PROCLAMATIONS OF SUPPLIES AND ALLOTMENTS

  [Sec. 332. (a) Whenever prior to April 15 in any calendar 
year the Secretary determines that the total supply of wheat in 
the marketing year beginning in the next succeeding calendar 
year will, in the absence of a marketing quota program, likely 
be excessive, the Secretary shall proclaim that a national 
marketing quota for wheat shall be in effect for such marketing 
year and for either the following marketing year or the 
following two marketing years, if the Secretary determines and 
declares in such proclamation that a two- or three-year 
marketing quota program is necessary to effectuate the policy 
of the Act.
  [(b) If a national marketing quota for wheat has been 
proclaimed for any marketing year, the Secretary shall 
determine and proclaim the amount of the national marketing 
quota for such marketing year not earlier than January 1 or 
later than April 15 of the calendar year preceding the year in 
which such marketing year begins. The amount of the national 
marketing quota for wheat for any marketing year shall be an 
amount of wheat which the Secretary estimates (i) will be 
utilized during such marketing year for human consumption in 
the United States as food, food products, and beverages, 
composed wholly or partly of wheat, (ii) will be utilized 
during such marketing year in the United States for seed, (iii) 
will be exported either in the form of wheat or products 
thereof and (iv) will be utilized during such marketing year in 
the United States as livestock (including poultry) feed, 
excluding the estimated quantity of wheat which will be 
utilized for such purpose as a result of the substitution of 
wheat for feed grains under section 328 of the Food and 
Agriculture Act of 1962; less (A) an amount of wheat equal to 
the estimated imports of wheat into the United States during 
such marketing year and, (B) if the stocks of wheat owned by 
the Commodity Credit Corporation are determined by the 
Secretary to be excessive, an amount of wheat determined by the 
Secretary to be a desirable reduction in such marketing year in 
such stocks to achieve the policy of the Act: Provided, That if 
the Secretary determines that the total stocks of wheat in the 
Nation are insufficient to assure an adequate carryover for the 
next succeeding marketing year, the national marketing quota 
otherwise determined shall be increased by the amount the 
Secretary determines to be necessary to assure an adequate 
carryover: And provided further, That the national marketing 
quota for wheat for any marketing year shall be not less than 
one billion bushels.
  [(c) If after the proclamation of a national marketing quota 
for wheat for any marketing year, the Secretary has reason to 
believe that, because of a national emergency or because of a 
material increase in the demand for wheat, the national 
marketing quota should be terminated or the amount thereof 
increased, he shall cause an immediate investigation to be made 
to determine whether such action is necessary in order to meet 
such emergency or increase in the demand for wheat. If on the 
basis of such investigation, the Secretary finds that such 
action is necessary, he shall immediately proclaim such finding 
and the amount of any such increase found by him to be 
necessary and thereupon such national marketing quota shall be 
so increased or terminated. In case any national marketing 
quota is increased under this subsection, the Secretary shall 
provide for such increase by increasing acreage allotments 
established under this part by a uniform percentage.
  [(d) Notwithstanding any other provision of this Act, the 
Secretary shall not proclaim a national marketing quota for the 
crops of wheat planted for harvest in the calendar years 1966 
through 1970, and farm marketing quotas shall not be in effect 
for such crops of wheat.

                      [NATIONAL ACREAGE ALLOTMENT

  [Sec. 333. The Secretary shall proclaim a national acreage 
allotment for each crop of wheat. The amount of the national 
acreage allotment for any crop of wheat shall be the number of 
acres which the Secretary determines on the basis of the 
projected national yield and expected underplantings (acreage 
other than that not harvested because of program incentives) of 
farm acreage allotments will produce an amount of wheat equal 
to the national marketing quota for wheat for the marketing 
year for such crop, or if a national marketing quota was not 
proclaimed, the quota which would have been determined if one 
had been proclaimed.

              [APPORTIONMENT OF NATIONAL ACREAGE ALLOTMENT

  [Sec. 334. (a) The national allotment for wheat, less a 
reserve of not to exceed 1 per centum thereof for apportionment 
as provided in this subsection and less the special acreage 
reserve provided for in this subsection, shall be apportioned 
by the Secretary among the States on the basis of the preceding 
year's allotment for each such State, including all amounts 
allotted to the State and including for 1967 the increased 
acreage in the State allotted for 1966 under section 335, 
adjusted to the extent deemed necessary by the Secretary to 
establish a fair and equitable apportionment base for each 
State, taking into consideration established crop rotation 
practices, estimated decrease in farm allotments because of 
loss of history, and other relevant factors. The reserve 
acreage set aside herein for apportionment by the Secretary 
shall be used (1) to make allotments to counties in addition to 
the county allotments made under subsection (b) of this 
section, on the basis of the relative needs of counties for 
additional allotments because of reclamation and other new 
areas coming into production of wheat, or (2) to increase the 
allotment for any county, in which wheat is the principal crop 
produced, on the basis of its relative need for such increase 
if the average ratio of wheat acreage allotment to cropland on 
old wheat farms in such county is less by at least 20 per 
centum than such average ratio on old wheat farms in an 
adjoining county or counties in which wheat is the principal 
grain crop produced or if there is a definable contiguous area 
consisting of at least 10 per centum of the cropland acreage in 
such county in which the average ratio of wheat acreage 
allotment to cropland on old wheat farms is less by at least 20 
per centum than such average ratio on the remaining old wheat 
farms in such county, provided that such low ratio of wheat 
acreage allotment to cropland is due to the shift prior to 1951 
from wheat to one or more alternative income-producing crops 
which, because of plant disease or sustained loss of markets, 
may no longer be produced at a fair profit and there is no 
other alternative income-producing crop suitable for production 
in the area or county. The increase in the county allotment 
under clause (2) of the preceding sentence shall be used to 
increase allotments for old wheat farms in the affected area to 
make such allotments comparable with those on similar farms in 
the adjoining areas or counties but the average ratio of 
increased allotments to cropland on such farms shall not exceed 
the average ratio of wheat acreage allotment to cropland on old 
wheat farms in the adjoining areas or counties. There also 
shall be made available a special acreage reserve of not in 
excess of one million acres as determined by the Secretary to 
be desirable for the purposes hereof which shall be in addition 
to the national acreage reserve provided for in this 
subsection. Such special acreage reserve shall be made 
available to the States to make additional allotments to 
counties on the basis of the relative needs of counties, as 
determined by the Secretary, for additional allotments to make 
adjustments in the allotments on old wheat farms (that is, 
farms on which wheat has been seeded or regarded as seeded to 
one or more of the, three crops immediately preceding the crop 
for which the allotment is established) on which the ratio of 
wheat acreage allotment to cropland on the farm is less than 
one-half the average ratio of wheat acreage allotment to 
cropland on old wheat farms in the county. Such adjustments 
shall not provide an allotment for any farm which would result 
in an allotment-cropland ratio for the farm in excess of one-
half of such county average ratio and the total of such 
adjustments in any county shall not exceed the acreage made 
available therefor in the county. Such apportionment from the 
special acreage reserve shall be made only to counties where 
wheat is a major income-producing crop, only to farms on which 
there is limited opportunity for production of an alternative 
income-producing crop, and only if an efficient farming 
operation on the farm requires the allotment of additional 
acreage from the special acreage reserve. For the purposes of 
making adjustments hereunder the cropland on the farm shall not 
include any land developed as cropland subsequent to the 1963 
crop year.
  [(b) The State acreage allotment for wheat, less a reserve of 
not to exceed 3 per centum thereof for apportionment as 
provided in subsection (c) of this section, shall be 
apportioned by the Secretary among the counties in the State, 
on the basis of the preceding year's wheat allotment in each 
such county, including for 1967, the increased acreage in the 
county allotted for 1966 pursuant to section 335, adjusted to 
the extent deemed necessary by the Secretary in order to 
establish a fair and equitable apportionment base for each 
county, taking into consideration established crop rotation 
practices, estimated decrease in farm allotments because of 
loss of history, and other relevant factors.
  [(c)(1) The allotment to the county shall be apportioned by 
the Secretary, through the local committees, among the farms 
within the county on the basis of past acreage of wheat, 
tillable acres, crop rotation practices, type of soil, and 
topography: Not more than 3 per centum of the State allotment 
shall be apportioned to farms on which wheat has not been 
planted during any of the three marketing years immediately 
preceding the marketing year in which the allotment is made. 
For the purpose of establishing farm acreage allotments--(i) 
the past acreage of wheat on any farm for 1958 or 1965 shall be 
the base acreage determined for the farm under the regulations 
issued by the Secretary for determining 1958 or 1965 farm wheat 
acreage allotments; (ii) if subsequent to the determination of 
such base acreage the 1958 or 1965 wheat acreage allotment for 
the farm is increased through administrative, review, or court 
proceedings, the 1958 or 1965 farm base acreage shall be 
increased in the same proportion; and (iii) the past acreage of 
wheat for 1959 and any subsequent year except 1965 shall be the 
wheat acreage on the farm which is not in excess of the farm 
wheat acreage allotment, plus, in the case of any farm which is 
in compliance with its farm wheat acreage allotment, the 
acreage diverted under such wheat allotment programs: Provided, 
That for 1959 and subsequent years in the case of any farm on 
which the entire amount of the farm marketing excess is 
delivered to the Secretary or stored in accordance with 
applicable regulations to avoid or postpone payment of the 
penalty, the past acreage of wheat for the year in which such 
farm marketing excess is so delivered or stored shall be the 
farm base acreage of wheat determined for the farm under the 
regulations issued by the Secretary for determining farm wheat 
acreage allotments for such year, but if any part of the amount 
of wheat so stored is later depleted and penalty becomes due by 
reason of such depletion for the purpose of establishing farm 
wheat acreage allotments subsequent to such depletion the past 
acreage of wheat or the farm for the year in which the excess 
was produced shall be reduced to the farm wheat acreage 
allotment for such year.
  [(2) Notwithstanding any other provision of law, each old or 
new farm acreage allotment for the 1962 crop of wheat as 
determined on the basis of a minimum national acreage allotment 
of fifty million acres shall be reduced by 10 per centum. In 
the event notices of farm acreage allotments for the 1962 crop 
of wheat have been mailed to farm operators prior to the 
effective date of this subparagraph (2), new notices showing 
the required reduction shall be mailed to farm operators as 
soon as practicable.
  [(3) Notwithstanding the provisions of paragraph (1) of this 
subsection, the past acreage of wheat for 1967 and any 
subsequent year shall be the acreage of wheat planted, plus the 
acreage regarded as planted, for harvest as grain on the farm 
which is not in excess of the farm acreage allotment.
  [(4) Notwithstanding any other provision of this subsection 
(c), the farm acreage allotment for the 1967 and any subsequent 
crop of wheat shall be established for each old farm by 
apportioning the county wheat acreage allotment among farms in 
the county on which wheat has been planted, or is considered to 
have been planted, for harvest as grain in any one of the three 
years immediately preceding the year for which allotments are 
determined on the past acreage of wheat and the farm acreage 
allotment for the year immediately preceding the year for which 
the allotment is being established, adjusted as hereinafter 
provided. For purposes of this paragraph, the acreage allotment 
for the immediately preceding year may be adjusted to reflect 
established crop rotation practices, may be adjusted downward 
to reflect a reduction in the tillable acreage on the farm, and 
may be adjusted upward to reflect such other factors as the 
Secretary determines should be considered for the purpose of 
establishing a fair and equitable allotment: Provided, That (i) 
for the purposes of computing the allotment for any year, the 
acreage allotment for the farm for the immediately preceding 
year shall be decreased by 7 per centum if for the year 
immediately preceding the year for which such reduction is made 
neither a voluntary diversion program nor a voluntary 
certificate program was in effect and there was noncompliance 
with the farm acreage allotment for such year; (ii) for 
purposes of clause (i) any farm on which the entire amount of 
farm marketing excess is delivered to the Secretary, stored, or 
adjusted to zero in accordance with applicable regulations to 
avoid or postpone payment of the penalty when farm marketing 
quotas are in effect, shall be considered in compliance with 
the allotment, but if any part of the amount of wheat so stored 
is later depleted and penalty becomes due by reason of such 
depletion, the allotment for such farm next computed after 
determination of such depletion shall be reduced by reducing 
the allotment for the immediately preceding year by 7 per 
centum and (iii) for purposes of clause (i) if the Secretary 
determines that the reduction in the allotment does not provide 
fair and equitable treatment to producers on farms following 
special crop rotation practices, he may modify such reduction 
in the allotment as he determines to be necessary' to provide 
fair and equitable treatment to such producers.
  [(g) Notwithstanding any other provision of law, no acreage 
in the commercial wheat producing area seeded to wheat for 
harvest as grain in 1958 or thereafter except 1965 in excess of 
acreage allotments shall be considered in establishing future 
State and county acreage allotments. The planting on a farm in 
the commercial wheat producing area of wheat of the 1958 or any 
subsequent crop for which no farm wheat acreage allotment was 
established shall not make the farm eligible for an allotment 
as an old farm pursuant to the first sentence of subsection (c) 
of this section nor shall such farm by reason of such planting 
be considered ineligible for an allotment as a new farm under 
the second sentence of such subsection.
  [(i) If with respect to any crop of wheat, the Secretary 
finds that the acreage allotments of farms producing any type 
of wheat are inadequate to provide for the production of a 
sufficient quantity of such type of wheat to satisfy the demand 
therefor, the wheat acreage allotment for such crop for each 
farm located in a county designated by the Secretary as a 
county which (1) is capable of producing such type of wheat, 
and (2) has produced such type of wheat for commercial food 
products during one or more of the five years immediately 
preceding the year in which such crop is harvested, shall be 
increased by such uniform percentage as he deems necessary to 
provide for such quantity. No increase shall be made under this 
subsection in the wheat acreage allotment of any farm for any 
crop if any wheat other than such type of wheat is planted on 
such farm for such crop. Any increases in wheat acreage 
allotments authorized by this subsection shall be in addition 
to the National, State, and county wheat acreage allotments, 
and such increases shall not be considered in establishing 
future State, county, and farm allotments. The provisions of 
paragraph (6) of Public Law 74, Seventy-seventh Congress (7 
U.S.C. 1340(6)), and section 326(b) of this Act, relating to 
the reduction of the storage amount of wheat shall apply to the 
allotment for the farm established without regard to this 
subsection and not to the increased allotment under this 
subsection. The land use provisions of section 339 shall not be 
applicable to any farm receiving an increased allotment under 
this subsection and the producers on such farms shall not be 
required to comply with such provisions as a condition of 
eligibility for price support.
  [(j) Notwithstanding any other provision of this Act, the 
Secretary shall increase the acreage allotments for the 1970 
and subsequent crops of wheat for privately owned farms in the 
irrigable portion of the area known as the Tulelake division of 
the Klamath project of California located in Modoc and Siskiyou 
Counties, California, as defined by the United States 
Department of the Interior, Bureau of Reclamation, and 
hereinafter referred to as the area. The increase for the area 
for each such crop shall be determined by adding, to the extent 
applications are made therefor, to the total allotments 
established for privately owned farms in the area for the 
particular crop without regard to this subsection (hereinafter 
referred to as the original allotments) an acreage sufficient 
to make available for each such crop a total allotment of 
twelve thousand acres for the area. The additional allotments 
made available by this subsection shall be in addition to the 
National, State, and county allotments otherwise established 
under this section, and the acreage planted to wheat pursuant 
to such increases in allotments shall not be taken into account 
in establishing future State, county, and farm acreage 
allotments except as may be desirable in providing increases in 
allotments for subsequent years under this subsection for the 
production of Durum wheat. The Secretary shall apportion the 
additional allotment acreage made available under this 
subsection between Modoc and Siskiyou Counties on the basis of 
the relative needs for additional allotments for the portion of 
the area in each county. The Secretary shall allot such 
additional acreage to individual farms in the area for which 
applications for increased acreages are made on the basis of 
tillable acres, crop rotation practices, type of soil and 
topography, and the original allotment for the farm, if any. 
The increase in the wheat acreage allotment for any farm under 
this subsection (1) shall not be taken into account in 
computing the farm wheat marketing allocation under section 
379b, and (2) shall be conditioned upon the production of Durum 
wheat on the original allotment and on the increased acreage. 
The producers on a farm receiving an increased allotment under 
this subsection shall not be eligible for diversion payments 
under section 339.
  [(k) Notwithstanding any other provision of this Act, if the 
Secretary determines that because of a natural disaster a 
portion of the farm wheat acreage allotments in a county cannot 
be timely planted or replanted, he may authorize the transfer 
of all or a part of the wheat acreage allotment for any farm in 
the county so affected to another farm in the county or in an 
adjoining county on which one or more of the producers on the 
farm from which the transfer is to be made will be engaged in 
the production of wheat and will share in the proceeds thereof 
in accordance with such regulations as the Secretary may 
prescribe. Any farm allotment transferred under this subsection 
shall be deemed to be planted on the farm which it was 
transferred for the purposes of acreage history credits under 
this Act.

                            [COMMERCIAL AREA

  [Sec. 334a. If the acreage allotment for any State for any 
crop of wheat is twenty five thousand acres or less, the 
Secretary, in order to promote efficient administration of this 
Act and the Agricultural Act of 1949, may designate such State 
as outside the commercial wheat producing area for the 
marketing year for such crop. If such State is so designated, 
acreage allotments for such crop and marketing quotas for the 
marketing year therefor shall not be applicable to any farm in 
such State. Acreage allotments in any State shall not be 
increased by reason of such designation.

                              [REFERENDUM

  [Sec. 336. If a national marketing quota for wheat for one, 
two or three marketing years is proclaimed, the Secretary 
shall, not later than August 1 of the calendar year in which 
such national marketing quota is proclaimed, conduct a 
referendum, by secret ballot, of farmers to determine whether 
they favor or oppose marketing quotas for the marketing year or 
years for which proclaimed. Any producer who has a farm acreage 
allotment shall be eligible to vote in any referendum held 
pursuant to this section, except that a producer who has a farm 
acreage allotment of less than fifteen acres shall not be 
eligible to vote unless the farm operator elected pursuant to 
section 335 to be subject to the farm marketing quota. The 
Secretary shall proclaim the results of any referendum held 
hereunder within thirty days after the date of such referendum 
and if the Secretary determines that more than one-third of the 
farmers voting in the referendum voted against marketing 
quotas, the Secretary shall proclaim that marketing quotas will 
not be in effect with respect to the crop of wheat produced for 
harvest in the calendar year following the calendar year in 
which the referendum is held. If the Secretary determines that 
two-thirds or more of the farmers voting in a referendum 
approve marketing quotas for a period of two or three marketing 
years, no referendum shall be held for the subsequent year or 
years of such period. Notwithstanding any other provision 
hereof the referendum with respect to the national marketing 
quota for wheat for the marketing year beginning June 1, 1986, 
may be conducted not later than thirty-one days after 
adjournment sine die of the first session of the Ninety-ninth 
Congress.

                          [TRANSFER OF QUOTAS

  [Sec. 338. Farm marketing quotas for wheat shall not be 
transferable, but, in accordance with regulations prescribed by 
the Secretary for such purpose, any farm marketing quota in 
excess of the supply of wheat for such farm for any marketing 
year may be allocated to other farms on which the acreage 
allotment has not been exceeded.

                               [LAND USE

  [Sec. 339. (a)(1) During any year in which marketing quotas 
for wheat are in effect, the producers on any farm (except a 
new farm receiving an allotment from the reserve for new farms) 
on which any crop is produced on acreage required to be 
diverted from the production of wheat shall be subject to a 
penalty on such crop, in addition to any marketing quota 
penalty applicable to such crops, as provided in this 
subsection unless (1) the crop is designated by the Secretary 
as one which is not in surplus supply and will not be in 
surplus supply if it is permitted to be grown on the diverted 
acreage, or as one the production of which will not 
substantially impair the purpose of the requirements of this 
section, or (2) no wheat is produced on the farm, and the 
producers have not filed an agreement or a statement of 
intention to participate in the payment program formulated 
pursuant to subsection (b) of this section. The acreage 
required to be diverted from the production of wheat on the 
farm shall be an acreage of cropland equal to the number of 
acres determined by multiplying the farm acreage allotment by 
the diversion factor determined by dividing the number of acres 
by which the national acreage allotment (less an acreage equal 
to the increased acreage allotment for 1966 pursuant to section 
335) is reduced below fifty-five million acres by the number of 
acres in the national acreage allotment (less an acreage equal 
to the increased acreage allotted for 1966 pursuant to section 
335). The actual production of any crop subject to penalty 
under this subsection shall be regarded as available for 
marketing and the penalty on such crop shall be computed on the 
actual acreage of such crop at the rate of 65 per centum of the 
parity price per bushel of wheat as of May 1 of the calendar 
year in which such crop is harvested, multiplied by the normal 
yield of wheat per acre established for the farm. Until the 
producers on any farm pay the penalty on such crop, the entire 
crop of wheat produced on the farm and any subsequent crop of 
wheat subject to marketing quotas in which the producer has an 
interest shall be subject to a lien in favor of the United 
States for the amount of the penalty. Each producer having an 
interest in the crop or crops on acreage diverted or required 
to be diverted from the production of wheat shall be jointly 
and severally liable for the entire amount of the penalty. The 
persons liable for the payment or collection of the penalty 
under this section shall be liable also for interest thereon at 
the rate of 6 per centum per annum from the date the penalty 
becomes due until the date of payment of such penalty.
  [(2) The Secretary may require that the acreage on any farm 
diverted from the production of wheat be land which was 
diverted from the production of wheat in the previous year, to 
the extent he determines that such requirement is necessary to 
effectuate the purposes of this subtitle.
  [(3) The Secretary may permit the diverted acreage to be 
grazed in accordance with regulations prescribed by the 
Secretary.
  [(g) The Secretary is authorized to promulgate such 
regulations as may be desirable to carry out the provisions of 
this section.

                   [PART IV--MARKETING QUOTAS--COTTON

                         [LEGISLATIVE FINDINGS

  [Sec. 341. American cotton is a basic source of clothing and 
industrial products used by every person in the United States 
and by substantial numbers of people in foreign countries. 
American cotton is sold on a world-wide market and moves from 
the places of production almost entirely in interstate and 
foreign commerce to processing establishments located 
throughout the world at places outside the State where the 
cotton is produced.
  [Fluctuations in supplies of cotton and the marketing of 
excessive supplies of cotton in interstate and foreign commerce 
disrupt the orderly marketing of cotton in such commerce with 
consequent injury to and destruction of such commerce. 
Excessive supplies of cotton directly and materially affect the 
volume of cotton moving in interstate and foreign commerce and 
cause disparity in prices of cotton and industrial products 
moving in interstate and foreign commerce with consequent 
diminution of the volume of such commerce in industrial 
products.
  [The conditions affecting the production and marketing of 
cotton are such that, without Federal assistance, farmers, 
individually or in cooperation, cannot effectively prevent the 
recurrence of excessive supplies of cotton and fluctuations in 
supplies, cannot prevent indiscriminate dumping of excessive 
supplies on the Nationwide and foreign markets, cannot maintain 
normal carryovers of cotton, and cannot provide for the orderly 
marketing of cotton in interstate and foreign commerce.
  [It is in the interest of the general welfare that interstate 
and foreign commerce in cotton be protected from the burdens 
caused by the marketing of excessive supplies of cotton in such 
commerce, that a supply of cotton be maintained which is 
adequate to meet domestic consumption and export requirements 
in years of drought, flood, and other adverse conditions as 
well as in years of plenty, and that the soil resources of the 
Nation be not wasted in the production of excessive supplies of 
cotton.
  [The provisions of this part affording a cooperative plan to 
cotton producers are necessary and appropriate to prevent the 
burdens on interstate and foreign commerce caused by the 
marketing in such commerce of excessive supplies, and to 
promote, foster, and maintain an orderly flow of an adequate 
supply of cotton in such commerce.

                       [NATIONAL MARKETING QUOTA

  [Sec. 342. Whenever during any calendar year the Secretary 
determines that the total supply of cotton for the marketing 
year beginning in such calendar year will exceed the normal 
supply for such marketing year, the Secretary shall proclaim 
such fact and a national marketing quota shall be in effect for 
the crop of cotton produced in the next calendar year. The 
Secretary shall also determine and specify in such proclamation 
the amount of the national marketing quota in terms of the 
number of bales of cotton (standard bales of five hundred 
pounds gross weight) adequate, together with (1) the estimated 
carryover at the beginning of the marketing year which begins 
in the next calendar year and (2) the estimated imports during 
such marketing year, to make available a normal supply of 
cotton: Provided, That beginning with the 1961 crop, the 
national marketing quota shall be not less than a number of 
bales equal to the estimated domestic consumption and estimated 
exports (less estimated imports) for the marketing year for 
which the quota is proclaimed, except that the Secretary shall 
make such adjustments in the amount of such quota as he 
determines necessary after taking into consideration the 
estimated stocks of cotton in the United States (including the 
qualities of such stocks) and stocks in foreign countries which 
would be available for the marketing year for which the quota 
is being proclaimed if no adjustment of such quota is made 
hereunder, to assure the maintenance of adequate but not 
excessive stocks in the United States to provide a continuous 
and stable supply of the different qualities of cotton needed 
in the United States and in foreign cotton consuming countries, 
and for purposes of national security but the Secretary, in 
making such adjustments, may not reduce the national marketing 
quota or any year below (i) one million bales less than the 
estimated domestic consumption and estimated exports for the 
marketing year for which such quota is being proclaimed, or 
(ii) ten million bales, whichever is larger. Such proclamation 
shall be made not later than October 15 of the calendar year in 
which such determination is made. Notwithstanding any other 
provision of this Act, the national marketing quota for upland 
cotton for 1959 and subsequent years shall be not less than the 
number of bales required to provide a national acreage 
allotment for each such year of sixteen million acres.
  [Sec. 342a. The Secretary shall, not later than November 15, 
of the calendar years 1970 through 1976, proclaim a national 
cotton production goal for the 1971 and subsequent crops of 
upland cotton. The national cotton production goal for any year 
shall be the number of bales of upland cotton (standard bales 
of four hundred and eighty pounds net weight) equal to the 
estimated domestic consumption and estimated exports for the 
marketing year beginning in the calendar year for which such 
national cotton production goal is proclaimed, plus an 
allowance of not less than 5 per centum of such estimated 
consumption and estimated exports for market expansion except 
that the Secretary shall make such adjustments in the amount of 
such production goal as he determines necessary after taking 
into consideration the estimated stocks of upland cotton in the 
United States (including the qualities of such stocks) and 
stocks in foreign countries, which would be available for the 
marketing year, to assure the maintenance of adequate but not 
excessive carryover stocks in the United States (not less than 
50 per centum of the average offtake for the three preceding 
marketing years) to provide a continuous and stable supply of 
the different qualities of upland cotton needed in the United 
States and in foreign cotton consuming countries and, in 
addition, to provide an adequate reserve for purposes of 
national security.

                              [REFERENDUM

  [Sec. 343. Not later than December 15 following the issuance 
of the marketing quota proclamation provided for in section 
342, the Secretary shall conduct a referendum, by secret 
ballot, of farmers engaged in the production of cotton in the 
calendar year in which the referendum is held, to determine 
whether such farmers are in favor of or opposed to the quota so 
proclaimed: Provided, That If more than one third of the 
farmers voting in the referendum oppose the national marketing 
quota, such quota shall become ineffective upon proclamation of 
the results of the referendum. The Secretary shall proclaim the 
results of any referendum held hereunder within thirty days 
after the date of such referendum. Notwithstanding any other 
provision hereof the referendum with respect to the national 
marketing quota for cotton for the marketing year beginning 
August 1, 1986, may be conducted not later than thirty-one days 
after adjournment sine die of the first session of the Ninety-
ninth Congress.

                          [ACREAGE ALLOTMENTS

  [Sec. 344. (a) Whenever a national marketing quota is 
proclaimed under section 342, the Secretary shall determine and 
proclaim a national acreage allotment for the crop of cotton to 
be produced in the next calendar year. The national acreage 
allotment for cotton shall be that acreage, based upon the 
national average yield per acre of cotton for the four years 
immediately preceding the calendar year in which the national 
marketing quota is proclaimed, required to make available from 
such crop an amount of cotton equal to the national marketing 
quota.
  [(b) The national acreage allotment for cotton for 1953 and 
subsequent years shall be apportioned to the States on the 
basis of the acreage planted to cotton (including the acreages 
regarded as having been planted to cotton under the provisions 
of Public Law 12, Seventy-ninth Congress) during the five 
calendar years immediately preceding the calendar year in which 
the national marketing quota is proclaimed, with adjustments 
for abnormal weather conditions during such period: Provided, 
That there is hereby established a national acreage reserve 
consisting of three hundred and ten thousand acres which shall 
be in addition to the national acreage allotment; and such 
reserve shall be apportioned to the States on the basis of 
their needs for additional acreage for establishing minimum 
farm allotments under subsection (f)(1), as determined by the 
Secretary without regard to State and count acreage reserves 
(except that the amount apportioned to Nevada sell be one 
thousand acres). For the 1960 and succeeding crops of cotton, 
the needs of States (other than Nevada) for such additional 
acreage for such purpose may be estimated by the Secretary, 
after taking into consideration such needs as determined or 
estimated for the preceding crop of cotton and the size of the 
national acreage allotment for such crop. The additional 
acreage so apportioned to the State shall be apportioned to the 
counties on the basis of the needs of the counties for such 
additional acreage for such purpose, and added to the county 
acreage allotment for apportionment to farms pursuant to 
subsection (f) of this section (except that no part of such 
additional acreage shall be used to increase the county reserve 
above 15 per centum of the county allotment determined without 
regard to such additional acreage). Additional acreage 
apportioned to a State for any year under the foregoing proviso 
shall not be taken into account in establishing future State 
acreage allotments. Needs for additional acreage under the 
foregoing provisions and under the last provision in subsection 
(e) shall be determined or estimated as though allotments were 
first computed without regard to subsection (f)(1).
  [(e) The State acreage allotment for cotton shall be 
apportioned to counties on the same basis as to years and 
conditions as is applicable to the State under subsections (b), 
(c), and (d) of this section: Provided, That the State 
committee may reserve not to exceed 10 per centum of its State 
acreage allotment (15 per centum if the State's 1948 planted 
acreage was in excess of one million acres and less than half 
its 1943 allotment) which shall be used to make adjustments in 
county allotments for trends in acreage, for counties adversely 
affected by abnormal conditions affecting plantings, or for 
small or new farms, or to correct inequities in farm allotments 
and to prevent hardship: Provided further, That if the 
additional acreage allocated to a State under the proviso in 
subsection (b) is less than the requirements as determined or 
estimated by the Secretary for establishing minimum farm 
allotments for the State under subsection (f)(1), the acreage 
reserved under this subsection shall not be less than the 
smaller of (1) the remaining acreage so determined or estimated 
to be required for establishing minimum farm allotments or (2) 
3 per centum of the State acreage allotment; and the acreage 
which is required to be reserved under this proviso shall be 
allocated to counties on the basis of their needs for 
additional acreage for establishing minimum farm allotments 
under subsection (f)(1), and added to the county acreage 
allotment for apportionment to farms pursuant to subsection (f) 
of this section (except that no part of such additional acreage 
shall be used to increase the county reserve above 15 per 
centum of the county allotment determined without regard to 
such additional acreages).
  [(f) The county acreage allotment, less not to exceed the 
percentage provided for in paragraph (3) of this subsection 
shall be apportioned to farms on which cotton has been planted 
(or regarded as having been planted under the provisions of 
Public Law 12, Seventy-ninth Congress) in any one of the three 
years immediately preceding the year for which such allotment 
is determined on the following basis:
          [(1) Insofar as such acreage is available, there 
        shall be allotted the smaller of the following: (A) ten 
        acres; or (B) the acreage allotment established for the 
        farm for the 1958 crop.
          [(2) The remainder shall be allotted to farms other 
        than farms to which an allotment has been made under 
        paragraph (1)(B) so that the allotment to each farm 
        under this paragraph together with the amount of the 
        allotment to such farm under paragraph (1)(A) shall be 
        a prescribed percentage (which percentage shall be the 
        same for all such farms in the county or administrative 
        areas) of the acreage, during the preceding year, on 
        the farm which is tilled annually or in regular 
        rotation, excluding from such acreages the acres 
        devoted to the production of sugar cane for sugar, 
        sugar beets for sugar, wheat, tobacco, or rice for 
        market; peanuts picked and threshed; wheat or rice or 
        feeding to livestock for market; or lands determined to 
        be voted primarily to orchards or vineyards, and 
        nonirrigated lands in irrigated area: Provided, 
        however, That if a farm would be allotted under this 
        paragraph an acreage together with the amount of the 
        allotment to such farm under paragraph (1)(A) in excess 
        of the largest acreage planted (and regarded as planted 
        under Public Law 12, Seventy-ninth Congress) to cotton 
        during any of the preceding three years, the acreage 
        allotment for such farm shall not exceed such largest 
        acreage so planted (and regarded as planted under 
        Public Law 12, Seventy-ninth Congress) in any such 
        year.
          [(3) The county committee may reserve not in excess 
        of 15 per centum of the county allotment which, in 
        addition to the acreage made available under the 
        proviso in subsection (e), shall be used for (A) 
        establishing allotments for farms on which cotton was 
        not planted (or regarded as planted under Public Law 
        12, Seventy-ninth Congress) during any of the three 
        calendar years immediately preceding the year for which 
        the allotment is made, on the basis of land, labor, and 
        equipment available for the production of cotton, crop 
        rotation practices, and the soil and other physical 
        facilities affecting the production of cotton; and (B) 
        making adjustments of the farm acreage allotments 
        established under paragraphs (1) and (2) of this 
        subsection so as to establish allotments which are fair 
        and reasonable in relation to the factors set forth in 
        this paragraph and abnormal conditions of production on 
        such farms, or in making adjustments in farm acreage 
        allotments to correct inequities and to prevent 
        hardship: Provided, That not less than 20 percent of 
        the acreage reserved under this subsection shall, to 
        the extent required, be allotted upon such basis as the 
        Secretary deems fair and reasonable to farms (other 
        than farms to which an allotment has been made under 
        subsection (f)(1)(B), if any, to which an allotment of 
        not exceeding fifteen acres may be made under other 
        provisions of this subsection.
          [(6) Notwithstanding the provisions of paragraph (2) 
        of this subsection, if the county committee recommends 
        such action and the Secretary determines that such 
        action will result in a more equitable distribution of 
        the county allotment among farms in the county, the 
        remainder of the county acreage allotment (after making 
        allotments as provided in paragraph (1) of this 
        subsection) shall be allotted to farms other than farms 
        to which an allotment has been made under paragraph 
        (1)(B) of this subsection so that the allotment to each 
        farm under this paragraph together with the amount of 
        the allotment of such farm under paragraph (1)(A) of 
        this subsection shall be a prescribed percentage (which 
        percentage shall be the same for all such farms in the 
        county) of the average acreage planted to cotton on the 
        farm during the three years immediately preceding the 
        year for which such allotment is determined, adjusted 
        as may be necessary for abnormal conditions affecting 
        plantings during such three year period: Provided, That 
        the county committee may in its discretion limit any 
        farm acreage allotment established under the provisions 
        of this paragraph for any year to an acreage not in 
        excess of 50 per centum of the cropland on the farm, as 
        determined pursuant to the provisions of paragraph (2) 
        of this subsection: Provided further, That any part of 
        the county acreage allotment not apportioned under this 
        paragraph by reason of the initial application of such 
        50 per centum limitation shall be added to the county 
        acreage reserve under paragraph (3) of this subsection 
        and shall be available for the purposes specified 
        therein. If the county acreage allotment is apportioned 
        among the farms of the county in accordance with the 
        provisions of this paragraph, the acreage reserved 
        under paragraph (3) of this subsection may be used to 
        make adjustments so as to establish allotments which 
        are fair and reasonable to farms receiving allotments 
        under this paragraph in relation to the factors set 
        forth in paragraph (3).
          [(7)(A) In the event that any farm acreage allotment 
        is less than that prescribed by paragraph (1), such 
        acreage allotment shall be increased to the acreage 
        prescribed by paragraph (1). The additional acreage 
        required to be allotted to farms under this paragraph 
        shall be in addition to the county, State, and national 
        acreage allotments and the production from such acreage 
        shall be in addition to the national marketing quota.
          [(B) Notwithstanding any other provision of law--
                  [(i) the acreage by which any farm acreage 
                allotment for 1959 or any subsequent crop 
                established under paragraph (1) exceeds the 
                acreage which would have been allotted to such 
                farm if its allotment had been computed on the 
                basis of the same percentage factor applied to 
                other farms in the county under paragraph (2), 
                (6), or (8) shall not be taken into account in 
                establishing the acreage allotment for such 
                farm for any crop for which acreage is allotted 
                to such farm under paragraph (2), (6), or (8); 
                and acreage shall be allotted under paragraph 
                (2), (6), or (8) to farms which did not receive 
                1958 crop allotments in excess of ten acres if 
                and only if the Secretary determines (after 
                considering the allotments to other farms in 
                the county for such crop compared with their 
                1958 allotments and other relevant factors) 
                that equity and justice require the allotment 
                of additional acreage to such farm under 
                paragraph (2), (6), or (8),
                  [(ii) the acreage by which any county acreage 
                allotment for 1959 or any subsequent crop is 
                increased from the national or State reserve on 
                the basis of its needs for additional acreage 
                for establishing minimum farm allotments shall 
                not be taken into account in establishing 
                future county acreage allotments, and
                  [(iii) the additional acreage allotted 
                pursuant to subparagraph (A) of this paragraph 
                (7) shall not be taken into account in 
                establishing future State, county, or farm 
                acreage allotments.
          [(8) Notwithstanding the foregoing provisions of 
        paragraphs (2) and (6) of this subsection, the 
        Secretary shall, if allotments were in effect the 
        preceding year, provide for the county acreage 
        allotment for the 1959 and succeeding crops of cotton, 
        less the acreage reserved under paragraph (3) of this 
        subsection, to be apportioned to farms on which cotton 
        has been planted in any one of the three years 
        immediately preceding the year for which such allotment 
        is determined, on the basis of the farm acreage 
        allotment for the year immediately preceding the year 
        for which such apportionment is made, adjusted as may 
        be necessary (i) for any change in the acreage of 
        cropland available for the production of cotton, or 
        (ii) to meet the requirements of any provision (other 
        than those contained in paragraphs (2) and (6)) with 
        respect to the counting of acreage for history 
        purposes: Provided, That, beginning with allotments 
        established for the 1961 crop of cotton, if the acreage 
        actually planted (or regarded as planted under the Soil 
        Bank Act, the Great Plains program, and the release and 
        reapportionment provisions of subsection (m)(2) of this 
        section) to cotton on the farm in the preceding year 
        was less than 75 per centum of the farm allotment for 
        such year or, in the case of a farm which qualified for 
        price support on the crop produced in such year under 
        section 103(b) of the Agricultural Act of 1949, as 
        amended, 75 per centum of the farm domestic allotment 
        established under section 350 for such year, whichever 
        is smaller, in lieu of using such allotment as the farm 
        base as provided in this paragraph, the base shall be 
        the average of (1) the cotton acreage for the farm for 
        the preceding year as determined for purposes of this 
        proviso and (2) the allotment established for the farm 
        pursuant to the provisions of this subsection (f) for 
        such preceding year; and the 1958 allotment used for 
        establishing the minimum farm allotment under paragraph 
        (1) of this subsection (f) shall be adjusted to the 
        average acreage so determined. The base for a farm 
        shall not be adjusted as provided in this paragraph if 
        the county committee determines that failure to plant 
        at least 75 per centum of the farm allotment was due to 
        conditions beyond the control of producers on the farm. 
        The Secretary shall establish limitations to prevent 
        allocations of allotment to farms not affected by the 
        foregoing proviso, which would be excessive on the 
        basis of the cropland, past cotton acreage, allotments 
        for other commodities, and good soil conservation 
        practices on such farms.
  [(g) Notwithstanding the foregoing provisions of this 
section--
          [(1) State, county, and farm acreage allotments and 
        yields for cotton shall be established in conformity 
        with Public Law 28, Eighty-first Congress.
          [(2) In apportioning the county allotment among the 
        farms within the county, the Secretary, through the 
        local committees, shall take into consideration 
        different conditions within separate administrative 
        areas within a county if any exist, including types, 
        kinds, and productivity of the soil so as to prevent 
        discrimination among the administrative areas of the 
        county.
  [(i) Notwithstanding any other provision of this Act, any 
acreage planted to cotton in excess of the farm acreage 
allotment shall not be taken into account in establishing 
State, county, and farm acreage allotments. Notwithstanding any 
other provision of this Act, beginning with the 1960 crop the 
planting of cotton on a farm in any of the immediately 
preceding three years that allotments were in effect but no 
allotment was established for such farm for any year of such 
three year period shall not make the farm eligible for an 
allotment as an old farm under subsection (f) of this section: 
Provided, however, That by reason of such planting the farm 
need not be considered as ineligible for a new farm allotment 
under subsection (f)(3) of this section.
  [(j) Notwithstanding any other provision of this Act, State 
and county committees shall make available for inspection by 
owners or operators of farms receiving cotton acreage 
allotments all records pertaining to cotton acreage allotments 
and marketing quotas.
  [(k) Notwithstanding any other provision of this section 
except subsection (g)(1), there shall be allotted to each State 
for which an allotment is made under this section not less than 
the smaller of (A) four thousand acres or (B) the highest 
acreage planted to cotton in any one of the three calendar 
years immediately preceding the year for which the allotment is 
made.
  [(m) Notwithstanding any other provision of law--
          [(1) (Applicable only to 1954 crop of cotton.)
          [(2) Any part of any farm cotton acreage allotment on 
        which cotton will not be planted and which is 
        voluntarily surrendered to the county committee shall 
        be deducted from the allotment to such farm and may be 
        reapportioned by the county committee to other farms in 
        the same county receiving allotments in amounts 
        determined by the county committee to be fair and 
        reasonable on the basis of past acreage of cotton, 
        land, labor, equipment available for the production of 
        cotton, crop rotation practices, and soil and other 
        physical facilities affecting the production of cotton. 
        If all of the allotted acreage voluntarily surrendered 
        is not needed in the county, the county committee may 
        surrender the excess acreage to the State committee to 
        be used for the same purposes as the State acreage 
        reserve under subsection (e) of this section. Any 
        allotment released under this provision shall be 
        regarded for the purposes of establishing future 
        allotments as having been planted on the farm and in 
        the county where the release was made rather than on 
        the farm and in the county to which the allotment was 
        transferred, except that this shall not operate to make 
        the farm from which the allotment was transferred 
        eligible for an allotment as having cotton planted 
        thereon during the three-year base period: Provided, 
        That notwithstanding any other provisions of law, any 
        part of any farm acreage allotment may be permanently 
        released in writing to the county committee by the 
        owner and operator of the farm, and reapportioned as 
        provided herein. Acreage released under this paragraph 
        shall be credited to the State in determining future 
        allotments. The provisions of this paragraph shall 
        apply also to extra long staple cotton covered by 
        section 341 of this Act.
  [(n) Notwithstanding any other provision of this Act, if the 
Secretary determines for any year that because of a natural 
disaster a portion of the farm cotton acreage allotments in a 
county cannot be timely planted or replanted in such year, he 
may authorize for such year the transfer of all or part of the 
cotton acreage allotment for any farm in the county so affected 
to another farm in the county or in an adjoining county on 
which one or more of the producers on the farm from which the 
transfer is to be made will be engaged in the production of 
cotton and will share in the proceeds thereof, in accordance 
with such regulations as the Secretary may prescribe. Any farm 
allotment transferred under this paragraph shall be deemed to 
be released acreage for the purpose of acreage history credits 
under section 344(f)(8), 344(m)(2), and 377 of this Act: 
Provided, That, notwithstanding the provisions of section 
344(m)(2) of this Act, the transfer of any farm allotment under 
this subsection for any year shall operate to make the farm 
from which the allotment was transferred eligible for an 
allotment as having cotton planted thereon during the three-
year base period.

     [SALES, LEASE AND TRANSFER OF UPLAND COTTON ACREAGE ALLOTMENTS

  [Sec. 344a. (a) Notwithstanding any other provision of law, 
the Secretary, if he determines that it will not impair the 
effective operation of the program involved, (1) may permit the 
owner and operator of any farm for which a cotton acreage 
allotment is established to sell or lease all or any part or 
the right to all or any part of such allotment (excluding that 
part of the allotment which the Secretary determines was 
apportioned to the farm from the national acreage reserve) to 
any other owner or operator of a farm for transfer to such 
farm; (2) may permit the owner of a farm to transfer all or any 
part of such allotment to any other farm owned or controlled by 
him: Provided, That the authority granted under this section 
may be exercised for the calendar years 1966 through 1970, but 
all transfers hereunder shall be for such period of years as 
the parties thereto may agree.
  [(b) Transfers under this section shall be subject to the 
following conditions: (i) no allotment shall be transferred to 
a farm in another State or to a person for use in another 
State; (ii) no farm allotment may be sold or leased for 
transfer to a farm in another county unless the producers of 
cotton in the county from which transfer is being made have 
voted in a referendum within three years of the date of such 
transfer, by a two-thirds majority of the producers 
participating in such referendum, to permit the transfer of 
allotments to farms outside the county, which referendum, 
insofar as practicable, shall be held in conjunction with the 
marketing quota referendum for the commodity; (iii) no transfer 
of an allotment from a farm subject to a mortgage or other lien 
shall be permitted unless the transfer is agreed to by the 
lien-holder; (iv) no sale of a farm allotment shall be 
permitted if any sale of cotton allotment to the same farm has 
been made within the three immediately preceding crop years; 
(v) the total cotton allotment for any farm to which allotment 
is transferred by sale or lease shall not exceed the farm 
acreage allotment (excluding reapportioned acreage) established 
for such farm for 1965 by more than one hundred acres; (vi) the 
cotton in excess of the remaining acreage allotment on the farm 
shall be planted on any farm from which the allotment (or part 
of an allotment) is sold for a period of five years following 
such sale, nor shall any cotton in excess of the remaining 
acreage allotment on the farm be planted on any farm from which 
the allotment (or part of an allotment) is leased during the 
period of such lease, and the producer on such farm shall so 
agree as a condition precedent to the Secretary's approval of 
any such sale or lease; and (vii) no transfer of allotment 
shall be effective until a record thereof is filed with the 
county committee of the county to which such transfer is made 
and such committee determines that the transfer complies with 
the provisions of this section. Such record may be filed with 
such committee only during the period beginning June 1 and 
ending December 31.
  [(c) The transfer of an allotment shall have the effect of 
transferring also the acreage history, farm base, and marketing 
quota attributable to such allotment and if the transfer is 
made prior to the determination of the allotment for any year 
the transfer shall include the right of the owner or operator 
to have an allotment determined for the farm for such year: 
Provided, That in the case of a transfer by lease, the amount 
of the allotment shall be considered for purposes of 
determining allotments after the expiration of the lease to 
have been planted on the farm from which such allotment is 
transferred.
  [(d) The land in the farm from which the entire cotton 
allotment and acreage history have been transferred shall not 
be eligible for a new farm cotton allotment during the five 
years following the year in which such transfer is made.
  [(e) The transfer of a portion of a farm allotment which was 
established under minimum farm allotment provisions for cotton 
or which operates to bring the farm within the minimum farm 
allotment provision for cotton shall cause the minimum farm 
allotment or base to be reduced to an amount equal to the 
allotment remaining on the farm after such transfer.
  [(f) The Secretary shall prescribe regulations for the 
administration of this section, which shall include provisions 
for adjusting the size of the allotment transferred if the farm 
to which the allotment is transferred has a substantially 
higher yield per acre and such other terms and conditions as he 
deems necessary.
  [(g) If the sale or lease occurs during a period in which the 
farm is covered by a conservation reserve contract, cropland 
conversion agreement, cropland adjustment agreement, or other 
similar land utilization agreement, the rates of payment 
provided for in the contract or agreement of the farm from 
which the transfer is made shall be subject to an appropriate 
adjustment, but no adjustment shall be made in the contract or 
agreement of the farm to which the allotment is transferred.
  [(h) The Secretary shall by regulations authorize the 
exchange between farms in the same county, or between farms in 
adjoining counties within a State, of cotton acreage allotment 
for rice acreage allotment. Any such exchange shall be made on 
the basis of application filed with the county committee by the 
owners and operators of the farms, and the transfer of 
allotment between the farms shall include transfer of the 
related acreage history for the commodity. The exchange shall 
be acre for acre or on such other basis as the Secretary 
determines is fair and reasonable, taking into consideration 
the comparative productivity of the soil for the farms involved 
and other relevant factors. No farm from which the entire 
cotton or rice allotment has been transferred shall be eligible 
for an allotment of cotton or rice as a new farm within a 
period of five crop years after the date of such exchange.
  [(i) The provisions of this section relating to cotton shall 
apply only to upland cotton.

                         [FARM MARKETING QUOTAS

  [Sec. 345. The farm marketing quota for any crop of cotton 
shall be the actual production of the acreage planted to cotton 
on the farm less the farm marketing excess. The farm marketing 
excess shall be the normal production of that acreage planted 
to cotton on the farm which is in excess of the farm acreage 
allotment: Provided, That such farm marketing excess shall not 
be larger than the amount by which the actual production of 
cotton on the farm exceeds the normal production of the farm 
acreage allotment, if the producer establishes such actual 
production to the satisfaction of the Secretary.

                   [PENALTIES; EXPORT MARKET ACREAGE

  [Sec. 346. (a) Whenever farm marketing quotas are in effect 
with respect to any crop of cotton the producer shall be 
subject to a penalty on the farm marketing excess at a rate per 
pound equal to 50 per centum of the parity price per pound for 
cotton as of June 15 of the calendar year in which such crop is 
produced.
  [(b) The farm marketing excess of cotton shall be regarded as 
available for marketing and the amount of penalty shall be 
computed upon the normal production of the acreage on the farm 
planted to cotton in excess of the farm acreage allotment. If a 
downward adjustment in the amount of the farm marketing excess 
is made pursuant to the proviso in section 345, the difference 
between the amount of the penalty computed upon the farm 
marketing excess before such adjustment and as computed upon 
the adjusted farm marketing excess shall be returned to or 
allowed the producer.
  [(c) The person liable for payment or collection of the 
penalty shall be liable also for interest thereon at the rate 
of 6 per centum per annum from the date the penalty becomes due 
until the date of payment of such penalty.
  [(d) Until the penalty on the farm marketing excess is paid, 
all cotton produced on the farm and marketed by the producers 
shall be subject to the penalty provided by this section and a 
lien on the entire crop of cotton produced on the farm shall be 
in effect in favor of the United States.

                    [PART V--MARKETING QUOTAS--RICE

                         [LEGISLATIVE FINDINGS

  [Sec. 351. (a) The marketing of rice constitutes one of the 
great basic industries of the United States with ramifying 
activities which directly affect interstate and foreign 
commerce at every point, and stable conditions therein are 
necessary to the general welfare. Rice produced for market is 
sold on a Nation-wide market, and, with its products, moves 
almost wholly in interstate and foreign commerce from the 
producer to the ultimate consumer. The farmers producing such 
commodity are subject in their operations to uncontrollable 
natural causes, in many cases such farmers carry on their 
farming operations on borrowed money or leased lands, and are 
not so situated as to be able to organize effectively, as can 
labor and industry, through unions and corporations enjoying 
Government sanction and protection for joint economic action. 
For these reasons, among others, the farmers are unable without 
Federal assistance to control effectively the orderly marketing 
of such commodity with the result that abnormally excessive 
supplies thereof are produced and dumped indiscriminately on 
the Nation-wide market.
  [(b) The disorderly marketing of such abnormally excessive 
supplies affects, burdens, and obstructs interstate and foreign 
commerce by (1) materially affecting the volume of such 
commodity marketed therein, (2) disrupting the orderly 
marketing of such commodity therein, (3) reducing the prices 
for such commodity with consequent injury and destruction of 
such commerce in such commodity, and (4) causing a disparity 
between the prices for such commodity in interstate and foreign 
commerce and industrial products therein, with a consequent 
diminution of the volume of interstate and foreign commerce in 
industrial products.
  [(c) Whenever an abnormally excessive supply of rice exists, 
the marketing of such commodity by the producers thereof 
directly and substantially affects interstate and foreign 
commerce in such commodity and its products, and the operation 
of the provisions of this part becomes necessary and 
appropriate in order to promote, foster, and maintain an 
orderly flow of such supply in interstate and foreign 
commerce.]

                   PART VI--MARKETING QUOTAS--PEANUTS

          * * * * * * *

                           [MARKETING QUOTAS

  [Sec. 358. (a) Between July 1 and December 1 of each calendar 
year the Secretary shall proclaim the amount of the national 
marketing quota for peanuts for the crop produced in the next 
succeeding calendar year in terms of the total quantity of 
peanuts which will make available for marketing a supply of 
peanuts from the crop with respect to which the quota is 
proclaimed equal to the average quantity of peanuts harvested 
for nuts during the five years immediately preceding the year 
in which such quota is proclaimed, adjusted for current trends 
and prospective demand conditions, and the quota so proclaimed 
shall be in effect with respect to such crop. The national 
marketing quota for peanuts for any year shall be converted to 
a national acreage allotment by dividing such quota by the 
normal yield per acre of peanuts for the United States 
determined by the Secretary on the basis of the average yield 
per acre of peanuts in the five years preceding the year in 
which the quota is proclaimed, with such adjustments as may be 
found necessary to correct for trends in yields and for 
abnormal conditions of production affecting yields in such five 
years: Provided, That the national marketing quota established 
for the crop produced in the calendar year 1941 shall be a 
quantity of peanuts sufficient to provide a national acreage 
allotment of not less than one million six hundred and ten 
thousand acres, and that the national marketing quota 
established for any subsequent year shall be a quantity of 
peanuts sufficient to provide a national acreage allotment of 
not less than that established for the crop produced in the 
calendar year 1941.
  [(b) Not later than December 15 of each calendar year the 
Secretary shall conduct a referendum of farmers engaged in the 
production of peanuts in the calendar year in which the 
referendum is held to determine whether such farmers are in 
favor of or opposed to marketing quotas with respect to the 
crops of peanuts produced in the three calendar years 
immediately following the year in which the referendum is held, 
except that, if as many as two-thirds of the farmers voting in 
any referendum vote in favor of marketing quotas, no referendum 
shall be held with respect to quotas for the second and third 
years of the period. The Secretary shall proclaim the results 
of the referendum within thirty days after the date on which it 
is held, and, if more than one-third of the farmers voting in 
the referendum vote against marketing quotas, the Secretary 
also shall proclaim that marketing quotas will not be in effect 
with respect to the crop of peanuts produced in the calendar 
year immediately following the calendar year in which the 
referendum is held. Notwithstanding any other provision hereof, 
the referendum with respect to marketing quotas for the crops 
of peanuts produced in the 1986, 1987, and 1988 calendar years 
may be conducted not later than thirty-one days after 
adjournment sine die of the first session of the Ninety-ninth 
Congress.
  [(c)(1) The national acreage allotment for 1951, less the 
acreage to be allotted to new farms under subsection (f) of 
this section, shall be apportioned among the States on the 
basis of the larger of the following for each State: (a) The 
acreage allotted to the State as its share of the 1950 national 
acreage allotment of two million one hundred thousand acres, or 
(b) the State's share of two million one hundred thousand acres 
apportioned, to States on the basis of the average acreage 
harvested for nuts in each State in the five years 1945-49: 
Provided, That any allotment so determined for any State which 
is less than the 1951 State allotment announced by the 
Secretary prior to the enactment of this Act shall be increased 
to such announced allotment and the acreage required for such 
increases shall be in addition to the 1951 national acreage 
allotment and shall be considered in determining State acreage 
allotments in future years. For any year subsequent to 1951, 
the national acreage allotment for that year, shall be 
apportioned among the States on the basis of their share of the 
national acreage allotment for the most recent year in which 
such apportionment was made:
  [(2) Notwithstanding any other provision of law, if the 
Secretary of Agriculture determines, on the basis of the 
average yield per acre of peanuts by types during the preceding 
five years, adjusted for trends in yields and abnormal 
conditions of production affecting yields in such five years, 
that the supply of any type or types of peanuts for any 
marketing year, beginning with the 1951-52 marketing year, will 
be insufficient to meet the estimated demand for cleaning and 
shelling purposes at prices at which the Commodity Credit 
Corporation may sell for such purposes peanuts owned or 
controlled by it, the State allotments for those States 
producing such type or types of peanuts shall be increased to 
the extent determined by the Secretary to be required to meet 
such demand but the allotment for any State may not be 
increased under this provision above the 1947 harvested acreage 
of peanuts for such State. The total increase so determined 
shall be apportioned among such States for distribution among 
farms producing peanuts of such type or types on the basis of 
the average acreage of peanuts of such type or types in the 
three years immediately preceding the year for which the 
allotments are being determined. The additional acreage so 
required shall be in addition to the national acreage 
allotment, the production from such acreage shall be in 
addition to the national marketing quota, and the increase in 
acreage allotted under this provision shall not be considered 
in establishing future State, county, or farm acreage 
allotments.
  [(d) The Secretary shall provide for the apportionment of the 
State acreage allotment for any State, less the acreage to be 
allotted to new farms under subsection (f) of this section, 
through local committees among farms on which peanuts were 
grown in any of the three years immediately preceding the year 
for which such allotment is determined. The State acreage 
allotment for 1952 and any subsequent year shall be apportioned 
among farms on which peanuts were produced in any one of the 3 
calendar years immediately preceding the year for which such 
apportionment is made, on the basis of the following: Past 
acreage of peanuts, taking into consideration the acreage 
allotments previously established for the farm; abnormal 
conditions affecting acreage; land, labor, and equipment 
available for the production of peanuts; crop-rotation 
practices; and soil and other physical factors affecting the 
production of peanuts. Any acreage of peanuts harvested in 
excess of the allotted acreage for any farm for any year shall 
not be considered in the establishment of the allotment for the 
farm in succeeding years. The amount of the marketing quota for 
each farm shall be the actual production of the farm-acreage 
allotment, and no peanuts shall be marketed under the quota for 
any farm other than peanuts actually produced on the farm.
  [(e) Notwithstanding the foregoing provisions of this 
section, the Secretary may, if the State committee recommends 
such action and the Secretary determines that such action will 
facilitate the effective administration of the provisions of 
the Act, provide for the apportionment of the State acreage 
allotment for 1952 and any subsequent year among the counties 
in the State on the basis of the past acreage of peanuts 
harvested for nuts (excluding acreage in excess of farm 
allotments) in the county during the five years immediately 
preceding the year in which such apportionment is made, with 
such adjustments as are deemed necessary for abnormal 
conditions affecting acreage, for trends in acreage, and for 
additional allotments for types of peanuts in short supply 
under the provisions of subsection (c). The county acreage 
allotment shall be apportioned among farms on the basis of the 
factors set forth in subsection (d) of this section.
  [(f) Not more than 1 per centum of the State acreage 
allotment shall be apportioned among farms in the State on 
which peanuts are to be produced during the calendar year for 
which the allotment is made but on which peanuts were not 
produced during any one of the past three years, on the basis 
of the following: Past peanut-producing experience by the 
producers; land, labor, and equipment available for the 
production of peanuts; crop-rotation practices; and soil and 
other physical factors affecting the production of peanuts.
  [(g) Any part of the acreage allotted to individual farms 
under the provisions of this section on which peanuts will not 
be produced and which is voluntarily surrendered to the county 
committee shall be deducted from the allotments to such farms 
and may be reapportioned by the county committee to other farms 
in the same county receiving allotments, in amounts determined 
by the county committee to be fair and reasonable on the basis 
of land, labor, and equipment available for the production of 
peanuts, crop-rotation practices, and soil and other physical 
factors affecting the production of peanuts. Any transfer of 
allotments under this provision shall not operate to reduce the 
allotment for any subsequent year for the farm from which 
acreage is transferred, except as the farm becomes ineligible 
for an allotment by failure to produce peanuts during a three-
year period, and any such transfer shall not operate to 
increase the allotment for any subsequent year for the farm to 
which the acreage is transferred: [Provided, That, 
notwithstanding any other provisions of this Act, any part of 
any farm acreage allotment may be permanently released in 
writing to the county committee by the owner and operator of 
the farm, and reapportioned as provided herein.
  [(i) The production of peanuts on a farm in 1959 or any 
subsequent year for which no farm acreage allotment was 
established shall not make the farm eligible for an allotment 
as an old farm under subsection (d) of this section: Provided, 
however, That by reason of such production the farm need not be 
considered as ineligible for a new farm allotment under 
subsection (f) of this section, but such production shall not 
be deemed past experience in the production of peanuts for any 
producer on the farm.
  [(j) Notwithstanding any other provision of this Act, if the 
Secretary determines for 1976 or a subsequent year that because 
of a natural disaster a portion of the farm peanut acreage 
allotments in a county cannot be timely planted or replanted in 
such year, he may authorize for such year the transfer of all 
or a part of the peanut acreage allotments for any farm in the 
county so affected to another farm in the county or in an 
adjoining county in the same or an adjoining State on which one 
or more of the producers on the farm from which the transfer is 
to be made will be engaged in the production of peanuts and 
will share in the proceeds thereof, in accordance with such 
regulations as the Secretary may prescribe. Any farm allotment 
transferred under this subsection shall be deemed to be 
released acreage for the purpose of acreage history credits 
under subsection (g) of this section and section 377 of this 
Act: Provided, That notwithstanding the provisions of 
subsection (g) of this section, the transfer of any farm 
allotment under this subsection shall operate to make the farm 
from which the allotment was transferred eligible for an 
allotment as having peanuts planted thereon during the three-
year base period.]

SEC. 358-1. NATIONAL POUNDAGE QUOTAS AND ACREAGE ALLOTMENTS FOR [1991 
                    THROUGH 1997 CROPS OF] PEANUTS.

  (a) National Poundage Quotas.--
          (1) Establishment.--The national poundage quota for 
        peanuts for each [of the 1991 through 1997 marketing 
        years] marketing year shall be established by the 
        Secretary at a level that is equal to the quantity of 
        peanuts (in tons) that the Secretary estimates will be 
        devoted in each such marketing year to [domestic 
        edible, seed,] domestic edible use and related uses. 
        [Notwithstanding any other provision of this paragraph, 
        the national poundage quota for a marketing year shall 
        not be less than 1,350,000 tons.]
          (2) Announcement.--The national poundage quota for a 
        marketing year shall be announced by the Secretary not 
        later than December 15 preceding the marketing year.
          (3) Apportionment among states.--The national 
        poundage quota established under paragraph (1) shall be 
        apportioned among the States so that the poundage quota 
        allocated to each State shall be equal to the 
        percentage of the national poundage quota allocated to 
        farms in the State for [1990] 1990, for the 1991 
        through 1995 marketing years, and 1995, for the 1996 
        through 2002 marketing years.
  (b) Farm Poundage Quotas.--
          (1) In general.--
                  (A) Establishment.--A farm poundage quota for 
                [each of the 1991 through 1997 marketing years] 
                each marketing year shall be established--
                          (i) for each farm that had a farm 
                        poundage quota for peanuts for the 1990 
                        marketing year, in the case of the 1991 
                        through 1995 marketing years, and the 
                        1995 marketing year, in the case of the 
                        1996 through 2002 marketing years;
          * * * * * * *
                  (B) Quantity.--The farm poundage quota for 
                each [of the 1991 through 1997 marketing years] 
                marketing year for each farm described in 
                subparagraph (A)(i) shall be the same as the 
                farm poundage quota for the farm for the 
                immediately preceding marketing year, as 
                adjusted under paragraph (2), but not 
                [including--
                          [(i) any increases for 
                        undermarketings from previous years; or
                          [(ii) any increases resulting from 
                        the allocation of quotas voluntarily 
                        released for 1 year under paragraph 
                        (7).] including any increases resulting 
                        from the allocation of quotas 
                        voluntarily released for 1 year under 
                        paragraph (7).
                The farm poundage quota, if any, for each of 
                the 1991 through 1997 marketing years for each 
                farm described in subparagraph (A)(ii) shall be 
                equal to the quantity of peanuts allocated to 
                the farm for the year under paragraph (2).
                  (C) Transfers.--For purposes of this 
                subsection, if the farm poundage quota, or any 
                part thereof, is permanently transferred in 
                accordance with section 358a or 358b, the 
                receiving farm shall be considered as 
                possessing the farm poundage quota (or portion 
                thereof) of the transferring farm for all 
                subsequent marketing years.
                  (D) Certain farms ineligible to hold quota.--
                Effective beginning with the 1997 marketing 
                year, the Secretary shall no longer establish 
                farm poundage quotas under subparagraph (A) for 
                farms--
                          (i) owned or controlled by 
                        municipalities, airport authorities, 
                        schools, colleges, refuges, and other 
                        public entities (not including 
                        universities for research purposes); or
                          (ii) owned or controlled by a person 
                        who is not a producer and resides in 
                        another State.
          (2) Adjustments.--
                  (A) Allocation of increased quota 
                generally.--Except as provided in [subparagraph 
                (B) and subject to] subparagraph (D), if the 
                poundage quota apportioned to a State under 
                subsection (a)(3) for any [of the 1991 through 
                1997 marketing years] marketing year is 
                increased over the poundage quota apportioned 
                to farms in the State for the immediately 
                preceding marketing year, the increase shall be 
                allocated proportionately, based on farm 
                production history for peanuts for the 3 
                immediately preceding years, among--
                          (i) all farms in the State for each 
                        of which a farm poundage quota was 
                        established for the marketing year 
                        immediately preceding the marketing 
                        year for which the allocation is being 
                        made; and
                          (ii) all other farms in the State on 
                        each of which peanuts were produced in 
                        at least 2 of the 3 immediately 
                        preceding crop years, as determined by 
                        the Secretary.
                  [(B) Allocation of increased quota in 
                texas.--
                          [(i) In general.--In Texas, and 
                        subject to terms and conditions 
                        prescribed by the Secretary, beginning 
                        with the 1991 marketing year, 33 
                        percent of the increased quota referred 
                        to in subparagraph (A) shall be 
                        allocated to farms having poundage 
                        quotas for the 1990 marketing year in 
                        any county in which the production of 
                        additional peanuts exceeded the total 
                        quota allocated to the county for the 
                        1989 marketing year.
                          [(ii) Basis for allocation to 
                        counties.--The allocation of the quota 
                        to eligible counties shall be based on 
                        the total production of additional 
                        peanuts in the respective counties for 
                        the 1988 crop, except that the total 
                        quota allocated to any county under 
                        this subparagraph and paragraph (6)(C) 
                        shall not be increased by more than 100 
                        percent of the basic quota assigned to 
                        the county for the 1989 marketing year 
                        if that county had more than 10,000 
                        tons of quota for the 1989 marketing 
                        year.
                          [(iii) Allocation to other 
                        counties.--If the total quota for any 
                        such county is so increased by 100 
                        percent, all of the remaining quota 
                        percentage set aside under this 
                        subparagraph shall be allocated to 
                        farms in other counties otherwise 
                        meeting the requirements of this 
                        subparagraph.
                          [(iv) Allocation to eligible farms.--
                        The percentage of increased quota in 
                        any county shall be allocated under 
                        this subparagraph only to quota farms 
                        from which additional peanuts were 
                        delivered under contract with handlers 
                        for the marketing year immediately 
                        preceding the marketing year for which 
                        the allocation is being made. The 
                        percentage of the increased quota in 
                        each county shall be allocated among 
                        the eligible farms in the county on the 
                        following basis:
                                  [(I) Factor.--A factor shall 
                                be established for each such 
                                eligible farm by dividing the 
                                quantity of additional peanuts 
                                contracted and delivered to 
                                handlers from the farm by the 
                                total remaining peanuts 
                                produced on the farm for the 
                                marketing year immediately 
                                preceding the marketing year 
                                for which the allocation is 
                                being made.
                                  [(II) Allocation.--Each such 
                                eligible farm shall be 
                                allocated the percentage of the 
                                increased quota for the county 
                                as its factor bears to the 
                                total of the factors for all 
                                eligible farms in the county.
                          [(v) Remaining percentage.--In Texas, 
                        the remaining 67 percent of the 
                        increased quota referred to in 
                        subparagraph (A) shall be allocated to 
                        farms in the State in accordance with 
                        subparagraph (A).]
                  (B) Temporary quota allocation.--
                          (i) Allocation related to seed 
                        peanuts.--Temporary allocation of quota 
                        pounds for the marketing year only in 
                        which the crop is planted shall be made 
                        to producers for each of the 1996 
                        through 2002 marketing years as 
                        provided in this subparagraph.
                          (ii) Quantity.--The temporary quota 
                        allocation shall be equal to the pounds 
                        of seed peanuts planted on the farm, as 
                        may be adjusted under regulations 
                        prescribed by the Secretary.
                          (iii) Additional quota.--The 
                        temporary allocation of quota pounds 
                        under this paragraph shall be in 
                        addition to the farm poundage quota 
                        otherwise established under this 
                        subsection and shall be credited, for 
                        the applicable marketing year only, in 
                        total to the producer of the peanuts on 
                        the farm in a manner prescribed by the 
                        Secretary.
                          (iv) Effect of other requirements.--
                        Nothing in this section alters or 
                        changes the requirements regarding the 
                        use of quota and additional peanuts 
                        established by section 358e(b).
                  (C) Decrease.--If the poundage quota 
                apportioned to a State under subsection (a)(3) 
                for any [of the 1991 through 1997 marketing 
                years] marketing year is decreased from the 
                poundage quota apportioned to farms in the 
                State under subsection (a)(3) for the 
                immediately preceding marketing year, the 
                decrease shall be allocated among all the farms 
                in the State for each of which a farm poundage 
                quota was established for the marketing year 
                immediately preceding the marketing year for 
                which the allocation is being made.
          * * * * * * *
                  (E) Transfer of quota from ineligible 
                farms.--Any farm poundage quota held at the end 
                of the 1996 marketing year by a farm described 
                in paragraph (1)(D) shall be allocated to other 
                farms in the same State on such basis as the 
                Secretary may by regulation prescribe.
          (3) Quota not produced.--
                  (A) In general.--Insofar as practicable and 
                on such fair and equitable basis as the 
                Secretary may by regulation prescribe, the farm 
                poundage quota established for a farm for any 
                [of the 1991 through 1997 marketing years] 
                marketing year shall be reduced to the extent 
                that the Secretary determines that the farm 
                poundage quota established for the farm for any 
                2 of the 3 marketing years preceding the 
                marketing year for which the determination is 
                being made was not produced, or considered 
                produced, on the farm.
                  (B) Exclusions.--For the purposes of this 
                paragraph, the farm poundage quota for any such 
                preceding marketing year shall not [include--
                          [(i) any increases for undermarketing 
                        of quota peanuts from previous years; 
                        or
                          [(ii) any increase resulting from the 
                        allocation of quotas voluntarily 
                        released for 1 year under paragraph 
                        (7).] include any increase resulting 
                        from the allocation of quotas 
                        voluntarily released for 1 year under 
                        paragraph (7).
          * * * * * * *
          [(8) Increase for undermarketings in previous 
        marketing years.--
                  [(A) In general.--Except as provided in 
                subparagraph (B), the farm poundage quota for a 
                farm for any marketing year shall be increased 
                by the number of pounds by which the total 
                marketings of quota peanuts from the farm 
                during previous marketing years (excluding any 
                marketing year before the marketing year for 
                the 1989 crop) were less than the total amount 
                of applicable farm poundage quotas 
                (disregarding adjustments for undermarketings 
                from previous marketing years) for the 
                marketing years.
                  [(B) Quota not produced.--For purposes of 
                subparagraph (A), no increase for 
                undermarketings in previous marketing years 
                shall be made to the poundage quota for any 
                farm to the extent that the poundage quota for 
                the farm for the marketing year was reduced 
                under paragraph (3) for failure to produce.
                  [(C) National poundage quota.--Any increases 
                in farm poundage quotas under this paragraph 
                shall not be counted against the national 
                poundage quota for the marketing year involved.
                  [(D) Transfer of additional peanuts.--Any 
                increase in the farm poundage quota for a farm 
                for a marketing year under this paragraph may 
                be used during the marketing year by the 
                transfer of additional peanuts produced on the 
                farm to the quota loan pool for pricing 
                purposes on such basis as the Secretary shall 
                by regulation prescribe.
          [(9) Limit on increases for undermarketings.--
        Notwithstanding the foregoing provisions of this 
        subsection, if the total of all increases in individual 
        farm poundage quotas under paragraph (8) exceeds 10 
        percent of the national poundage quota for the 
        marketing year in which the increases shall be 
        applicable, the Secretary shall adjust the increases so 
        that the total of all the increases does not exceed 10 
        percent of the national poundage quota.]
          (8) Disaster transfers.--
                  (A) In general.--Except as provided in 
                subparagraph (B), additional peanuts produced 
                on a farm from which the quota poundage was not 
                harvested and marketed because of drought, 
                flood, or any other natural disaster, or any 
                other condition beyond the control of the 
                producer, may be transferred to the quota loan 
                pool for pricing purposes on such basis as the 
                Secretary shall by regulation provide.
                  (B) Limitation.--The poundage of peanuts 
                transferred under subparagraph (A) shall not 
                exceed the difference between--
                          (i) the total quantity of peanuts 
                        meeting quality requirements for 
                        domestic edible use, as determined by 
                        the Secretary, marketed from the farm; 
                        and
                          (ii) the total farm poundage quota, 
                        excluding quota pounds transferred to 
                        the farm in the fall.
                  (C) Support rate.--Peanuts transferred under 
                this paragraph shall be supported at 70 percent 
                of the quota support rate for the marketing 
                years in which the transfers occur. The 
                transfers for a farm shall not exceed 25 
                percent of the total farm quota pounds, 
                excluding pounds transferred in the fall.
          * * * * * * *
  (e) Definitions.--For the purposes of this part and title I 
of the Agricultural Act of 1949 (7 U.S.C. 1441 et seq.):
          (1) * * *
          * * * * * * *
          (3) Domestic edible use.--The term ``domestic edible 
        use'' means use for milling to produce domestic food 
        peanuts (other than those described in paragraph (2)) 
        [and seed and use on a farm], except that the Secretary 
        may exempt from this definition seeds of peanuts that 
        are used to produce peanuts excluded under section 
        358d(c), are unique strains, and are not commercially 
        available.
          * * * * * * *
  (f) Crops.--Notwithstanding any other provision of law, this 
section shall be effective only for the 1991 through [1997] 
2002 crops of peanuts.

         [SALE, LEASE AND TRANSFER OF PEANUT ACREAGE ALLOTMENTS

  [Sec. 358a. (a) Notwithstanding any other provision of law 
for the 1968 and succeeding crop years, the Secretary, if he 
determines that it will not impair the effective operation of 
the peanut marketing quota or price support program, (1) may 
permit the owner and operator of any farm for which a peanut 
acreage allotment is established under this Act to sell or 
lease all or any part or the right to all or any part of such 
allotment to any other owner or operator of a farm in the same 
county for transfer to such farm; and (2) may permit the owner 
of a farm to transfer all or any part of such allotment to any 
other farm owned or controlled by him.
  [(b) Transfers under this section shall be subject to the 
following conditions: (1) no allotment shall be transferred to 
a farm in another county; (2) no transfer of an allotment from 
a farm subject to a mortgage or other lien shall be permitted 
unless the transfer is agreed to by the lienholders; (3) no 
sale of a farm allotment from a farm shall be permitted if any 
sale of allotment to the same farm has been made within the 
three immediately preceding crop years; (4) no transfer of 
allotment shall be effective until a record thereof is filed 
with the county committee of the county in which such transfer 
is made and such committee determines that the transfer 
complies with the provisions of this section; and (5) if the 
normal yield established by the county committee for the farm 
to which the allotment is transferred does not exceed the 
normal yield established by the county committee for the farm 
from which the allotment is transferred by more than 10 per 
centum, the lease or sale and transfer shall be approved acre 
for acre, but if the normal yield for the farm to which the 
allotment is transferred exceeds the normal yield for the farm 
from which the allotment is transferred by more than 10 per 
centum, the county committee shall make a downward adjustment 
in the amount of the acreage allotment transferred by 
multiplying the normal yield established for the farm from 
which the allotment is transferred by the acreage being 
transferred and dividing the result by the normal yield 
established for the farm to which the allotment is transferred: 
Provided, That in the event an allotment is transferred to a 
farm which at the time of such transfer is not irrigated, but 
within five years subsequent to such transfer is placed under 
irrigation, the Secretary shall also make an annual downward 
adjustment in the allotment so transferred by multiplying the 
normal yield established for the farm from which the allotment 
is transferred by the acreage being transferred and dividing 
the result by the actual yield for the previous year, adjusted 
for abnormal weather conditions, on the farm to which the 
allotment is transferred: Provided further, That, 
notwithstanding any other provision of this Act, the adjustment 
made in any peanut allotment because of the transfer to a 
higher producing farm shall not reduce or increase the size of 
any future National or State allotment and an acreage equal to 
the total of all such adjustment shall not be allotted to any 
other farms.
  [(c) The transfer of an allotment shall have the effect of 
transferring also the acreage history and marketing quota 
attributable to such allotment and if the transfer is made 
prior to the determination of the allotment for any year the 
transfer shall include the right of the owner or operator to 
have an allotment determined for the farm for such year: 
Provided, That in the case of a transfer by lease the amount of 
the allotment shall be considered, for the purpose of 
determining allotments after the expiration of the lease, to 
have been planted on the farm from which such allotment is 
transferred.
  [(d) The land in the farm from which the entire peanut 
allotment has been transferred shall not be eligible for a new 
farm peanut allotment during the five years following the year 
in which such transfer is made.
  [(e) Any lease may be made for such term of years not to 
exceed five as the parties thereto agree, and on such other 
terms and conditions except as otherwise provided in this 
section as the parties thereto agree.
  [(f) The lease of any part of a peanut acreage allotment 
determined for a farm shall not affect the allotment for the 
farm from which such allotment is transferred or the farm to 
which it is transferred, except with respect to the crop year 
or years specified in the lease. The amount of the acreage 
allotment which is leased from a farm shall be considered for 
purposes of determining future allotments to have been planted 
to peanuts on the farm from which such allotment is leased and 
the production pursuant to the lease shall not be taken into 
account in establishing allotments for subsequent years for the 
farm to which such allotment is leased. The lessor shall be 
considered to have been engaged in the production of peanuts 
for purposes of eligibility to vote in the referendum.
  [(g) The Secretary shall prescribe regulations for the 
administration of this section which may include reasonable 
limitation on the size of the resulting allotments on farms to 
which transfers are made and such other terms and conditions as 
he deems necessary, but the total peanut allotment transferred 
to any farm by sale or lease shall not exceed fifty acres.
  [(h) If the sale or transfer occur during a period in which 
the farm is covered by a conservation reserve contract, 
cropland conversion agreement, or other similar land 
utilization agreement the rates of payment provided for in the 
contract or agreement of the farm from which the transfer is 
made shall be subject to an appropriate adjustment, but no 
adjustment shall be made in the contract or agreement of the 
farm to which the transfer is made.]

SEC. 358b. SALE, LEASE, OR TRANSFER OF FARM POUNDAGE QUOTA FOR [1991 
                    THROUGH 1995 CROPS OF] PEANUTS.

  (a) In General.--
          (1) Authority.--Subject to such terms[, conditions, 
        or limitations] and conditions as the Secretary may 
        prescribe, the owner, or operator with the permission 
        of the owner, of any farm for which a farm poundage 
        quota has been established under this Act may sell or 
        lease all or any part of the poundage quota [(including 
        any applicable under marketings)] to any other owner or 
        operator of a farm within the same county for transfer 
        to the farm, except that [any such lease] any such sale 
        or lease of poundage quota [(including any applicable 
        under marketings)] may be entered into [in the fall or 
        after the normal planting season--
                  [(A) if not less than 90 percent of the basic 
                quota (the farm quota exclusive of 
                undermarketings and temporary quota transfers), 
                plus any poundage quota transferred to the farm 
                under this subsection, has been planted or 
                considered planted on the farm from which the 
                quota is to be leased; and
                  [(B) under such terms and conditions as the 
                Secretary may by regulation prescribe.] in the 
                spring (or before the normal planting season) 
                or in the fall (or after the normal planting 
                season) with the owner or operator of a farm 
                located within any county in the same State. In 
                the case of a fall transfer or a transfer after 
                the normal planting season, the transfer may be 
                made only if not less than 90 percent of the 
                basic quota (the farm quota exclusive of 
                temporary quota transfers), plus any poundage 
                quota transferred to the farm under this 
                subsection, has been planted or considered 
                planted on the farm from which the quota is to 
                be leased.
        In the case of a fall transfer or a transfer after the 
        normal planting season by a cash lessee, the landowner 
        shall not be required to sign the transfer 
        authorization. A fall transfer or a transfer after the 
        normal planting season may be made not later than 72 
        hours after the peanuts that are the subject of the 
        transfer are inspected and graded.
          (2) Transfers to other self-owned farms.--The owner 
        or operator of a farm may transfer all or any part of 
        the farm poundage quota [(including any applicable 
        under marketings)] to any other farm owned or 
        controlled by the owner or operator that is in the same 
        county or in a county contiguous to the county in the 
        same State and that had a farm poundage quota for the 
        preceding year's crop. Any farm poundage quota 
        transferred under this paragraph shall not result in 
        any reduction in the farm poundage quota for the 
        transferring farm if the transferred quota is produced 
        or considered produced on the receiving farm.
          (3) Transfers in states with small quotas.--
        Notwithstanding paragraphs (1) and (2), in the case of 
        any State for which the poundage quota allocated to the 
        State was less than 10,000 tons for the preceding 
        year's crop, all or any part of a farm poundage quota 
        [(including any applicable undermarketings)] may be 
        transferred by sale or lease or otherwise from a farm 
        in one county to a farm in another county in the same 
        State.
  (c) Crops.--Notwithstanding any other provision of law, this 
section shall be effective only for the 1991 through [1995] 
2002 crops of peanuts.

SEC. 358c. EXPERIMENTAL AND RESEARCH PROGRAMS FOR PEANUTS.

  (a) * * *
          * * * * * * *
  (d) Crops.--Notwithstanding any other provision of law, this 
section shall be effective only for the 1991 through [1995] 
2002 crops of peanuts.

                          [MARKETING PENALTIES

  [Sec. 358d. (a) The marketing of any peanuts in excess of the 
marketing quota for the farm on which such peanuts are 
produced, or the marketing of peanuts from any farm for which 
no acreage allotment was determined, shall be subject to a 
penalty at a rate equal to 75 per centum of the price support 
for peanuts for the marketing year (August 1-July 31). Such 
penalty shall be paid by the person who buys or otherwise 
acquires the peanuts from the producer, or if the peanuts are 
marketed by the producer through an agent, the penalty shall be 
paid by such agent, and such person or agent may deduct an 
amount equivalent to the penalty from the price paid to the 
producer. The Secretary may require collection of the penalty 
upon a portion of each lot of peanuts marketed from the farm 
equal to the proportion which the acreage of peanuts in excess 
of the farm-acreage allotment is of the total acreage of 
peanuts on the farm. If the person required to collect the 
penalty fails to collect such penalty, such person and all 
persons entitled to share in the peanuts marketed from the farm 
or the proceeds thereof shall be jointly and severally liable 
for the amount of the penalty. All funds collected pursuant to 
this section shall be deposited in a special deposit account 
with the Treasurer of the United States and such amounts as are 
determined, in accordance with regulations prescribed by the 
Secretary, to be penalties incurred shall be transferred to the 
general fund of the Treasury of the United States. Amounts 
collected in excess of determined penalties shall be paid to 
such producers as the Secretary determines, in accordance with 
regulations prescribed by him, bore the burden of the payment 
of the amount collected. Such special account shall be 
administered by the Secretary and the basis for, the amount of 
and the producer entitled to receive a payment from such 
account, when determined in accordance with regulations 
prescribed by the Secretary, shall be final and conclusive. 
Peanuts produced in a calendar year in which marketing quotas 
are in effect for the marketing year beginning therein shall be 
subject to such quotas even though the peanuts are marketed 
prior to the date on which such marketing year begins. If any 
producer falsely identifies or fails to account for the 
disposition of any peanuts, an amount of peanuts equal to the 
normal yield of the number of acres harvested in excess of the 
farm acreage allotment shall be deemed to have been marketed in 
excess of the marketing quota for the farm, and the penalty in 
respect thereof shall be paid and remitted by the producer. If 
any amount of peanuts produced on one farm is falsely 
identified by a representation that such peanuts were produced 
on another farm, the acreage allotments next established for 
both such farms shall be reduced by that percentage which such 
amount was of the respective farm marketing quotas, except that 
such reduction for any such farm shall not be made if the 
Secretary through the local committees finds that no person 
connected with such farm caused, aided, or acquiesced in such 
marketing; and if proof of the disposition of any amount of 
peanuts is not furnished as required by the Secretary, the 
acreage allotment next established for the farm on which such 
peanuts are produced shall be reduced by a percentage similarly 
computed. Notwithstanding any other provisions of this title, 
no refund of any penalty shall be made because of peanuts kept 
on the farm for seed or for home consumption.
  [(b) The provisions of this part shall not apply, beginning 
with the 1959 crop, to peanuts produced on any farm on which 
the acreage harvested for nuts is one acre or less provided the 
producers who share in the peanuts produced on such farm do not 
share in the peanuts produced on any other farm. If the 
producers who share in the peanuts produced on a farm on which 
the acreage harvested for nuts is one acre or less also share 
in the peanuts produced on other farm(s) the peanuts produced 
on such farm on acreage in excess of the allotment, if any, 
determined for the farm shall be considered as excess acreage 
and the marketing penalties provided by subsection (a) shall 
apply.
  [(c) The word ``peanuts'' for the purposes of this Act shall 
mean all peanuts produced, excluding any peanuts which it is 
established by the producer or otherwise, in accordance with 
regulations of the Secretary, were not picked or threshed 
either before or after marketing from the farm, or were 
marketed by the producer before drying or removal of moisture 
from such peanuts either by natural or artificial means for 
consumption exclusively as boiled peanuts.
  [(d) The person liable for payment or collection of the 
penalty provided by this section shall be liable also for 
interest thereon at the rate of 6 per centum per annum from the 
date the penalty becomes due until the date of payment of such 
penalty.
  [(e) Until the amount of the penalty provided by this section 
is paid, a lien on the crop of peanuts with respect to which 
such penalty is incurred, and on any subsequent crop of peanuts 
subject to marketing quotas in which the person liable for 
payment of the penalty has an interest shall be in effect in 
favor of the United States.]

SEC. 358e. MARKETING PENALTIES AND DISPOSITION OF ADDITIONAL PEANUTS 
                    [FOR 1991 THROUGH 1997 CROPS OF PEANUTS].

  (a) * * *
          * * * * * * *
  (i) Crops.--Notwithstanding any other provision of law, this 
section shall be effective only for the 1991 through [1997] 
2002 crops of peanuts.

      [PART VII--MARKETING QUOTAS--SUGAR AND CRYSTALLINE FRUCTOSE

[SEC. 359a. INFORMATION REPORTING.

  [(a) Duty of Processors, Refiners and Manufacturers To 
Report.--
          [(1) Processors and refiners.--All sugarcane 
        processors, cane sugar refiners, and sugar beet 
        processors shall furnish the Secretary, on a monthly 
        basis, such information as the Secretary may require to 
        administer sugar programs, including the quantity of 
        purchases of sugarcane, sugar beets, and sugar, and 
        production, importation, distribution, and stock levels 
        of sugar.
          [(2) Manufacturers of crystalline fructose.--All 
        manufacturers of crystalline fructose from corn 
        (hereafter in this part referred to as ``crystalline 
        fructose'') shall furnish the Secretary, on a monthly 
        basis, such information as the Secretary may require 
        with respect to the manufacturer's distribution of 
        crystalline fructose.
  [(b) Duty of Producers To Report.--The Secretary may require 
a producer of sugarcane or sugar beets to report, in the manner 
prescribed by the Secretary, the producer's sugarcane or sugar 
beet yields and acres planted to sugarcane or sugar beets, 
respectively.
  [(c) Penalty.--Any person willfully failing or refusing to 
furnish the information, or furnishing willfully any false 
information, shall be subject to a civil penalty of not more 
than $10,000 for each such violation.
  [(d) Monthly Reports.--Taking into consideration the 
information received under subsection (a), the Secretary shall 
publish on a monthly basis composite data on production, 
imports, distribution, and stock levels of sugar and composite 
data on distributions of crystalline fructose.

[SEC. 359b. MARKETING ALLOTMENTS FOR SUGAR AND CRYSTALLINE FRUCTOSE.

  [(a) Sugar Estimates.--
          [(1) In general.--Before the beginning of each of the 
        fiscal years 1992 through 1998, the Secretary shall 
        estimate--
                  [(A) the quantity of sugar that will be 
                consumed in the United States during the fiscal 
                year (other than sugar imported for the 
                production of polyhydric alcohol or to be 
                refined and reexported in refined form or in 
                sugar containing products) and the quantity of 
                sugar that would provide for reasonable 
                carryover stocks;
                  [(B) the quantity of sugar that will be 
                available from carry-in stocks or from 
                domestically-produced sugarcane and sugar beets 
                for consumption in the United States during the 
                year; and
                  [(C) the quantity of sugar that will be 
                imported for consumption in the United States 
                during the year (other than sugar imported for 
                the production of polyhydric alcohol or to be 
                refined and reexported in a refined form or in 
                sugar containing products), based on the 
                difference between--
                          [(i) the sum of the quantity of 
                        estimated consumption and reasonable 
                        carryover stocks; and
                          [(ii) the quantity of sugar estimated 
                        to be available from domestically-
                        produced sugarcane and sugar beets and 
                        from carry-in stocks.
          [(2) Quarterly reestimates.--The Secretary shall make 
        quarterly reestimates of sugar consumption, stocks, 
        production, and imports for a fiscal year no later than 
        the beginning of each of the second through fourth 
        quarters of the fiscal year.
  [(b) Sugar Allotments.--
          [(1) In general.--For any fiscal year in which the 
        Secretary estimates, under subsection (a)(1)(C), that 
        imports of sugar for consumption in the United States 
        (other than sugar imported for the production of 
        polyhydric alcohol or to be refined and reexported in 
        refined form or in sugar containing products) will be 
        less than 1,250,000 short tons, raw value, the 
        Secretary shall establish for that year appropriate 
        allotments under section 359c for the marketing by 
        processors of sugar processed from domestically-
        produced sugarcane and sugar beets, at a level that the 
        Secretary estimates will result in imports of sugar of 
        not less than 1,250,000 short tons, raw value, for that 
        year.
          [(2) Products.--The Secretary may include sugar 
        products, whose majority content is sucrose or 
        crystalline fructose for human consumption, derived 
        from sugarcane, sugar beets, molasses or sugar in the 
        allotments under paragraph (1) if the Secretary 
        determines it to be appropriate for purposes of this 
        part.
  [(c) Crystalline Fructose Allotments.--For any fiscal year in 
which the Secretary establishes allotments for the marketing of 
sugar under section 359c, the Secretary shall establish for 
that year appropriate allotments for the marketing by 
manufacturers of crystalline fructose manufactured from corn, 
at a total level not to exceed the equivalent of 200,000 tons 
of sugar, raw value, during the fiscal year, in a manner that 
is fair, efficient, and equitable to manufacturers.
  [(d) Prohibitions.--
          [(1) In general.--During any fiscal year or portion 
        thereof for which marketing allotments have been 
        established, no processor of sugar beets or sugarcane 
        shall market a quantity of sugar in excess of the 
        allocation established for such processor, except to 
        enable another processor to fulfill an allocation 
        established for such other processor or to facilitate 
        the exportation of such sugar.
          [(2) Crystalline fructose.--At any time crystalline 
        fructose allotments are in effect for manufacturers 
        under subsection (c), no manufacturer may market 
        crystalline fructose in excess of the manufacturer's 
        allotment. No restrictions or allotments shall be 
        established on the marketings of any liquid fructose 
        produced from corn.
          [(3) Civil penalty.--Any processor who knowingly 
        violates paragraph (1) or manufacturer who knowingly 
        violates paragraph (2) shall be liable to the Commodity 
        Credit Corporation for a civil penalty in an amount 
        equal to 3 times the United States market value, at the 
        time of the commission of the violation, of that 
        quantity of sugar or crystalline fructose involved in 
        the violation.
          [(4) Definition of market.--For purposes of this 
        part, the term ``market'' shall mean to sell or 
        otherwise dispose of in commerce in the United States 
        (including, with respect to any integrated processor 
        and refiner, the movement of raw cane sugar into the 
        refining process).

[SEC. 359c. ESTABLISHMENT OF MARKETING ALLOTMENTS.

  [(a) In General.--The Secretary shall establish marketing 
allotments for sugar for any fiscal year in which the 
allotments are required under section 359b(b) in accordance 
with this section.
  [(b) Overall Allotment Quantity.--
          [(1) In general.--The Secretary shall establish the 
        overall quantity of sugar to be allotted for the fiscal 
        year (hereafter in this part referred to as the 
        ``overall allotment quantity'') by deducting from the 
        sum of the estimated sugar consumption and reasonable 
        carryover stocks (at the end of the fiscal year) for 
        the fiscal year, as determined under section 359b(a)--
                  [(A) 1,250,000 short tons, raw value; and
                  [(B) carry-in stocks of sugar, including 
                sugar in Commodity Credit Corporation 
                inventory.
          [(2) Adjustment.--The Secretary shall adjust the 
        overall allotment quantity to the maximum extent 
        practicable to avoid the forfeiture of sugar to the 
        Commodity Credit Corporation.
  [(c) Allotment.--The overall allotment quantity for the 
fiscal year shall be allotted among--
          [(1) sugar derived from sugar beets; and
          [(2) sugar derived from sugarcane.
  [(d) Percentage Factors.--
          [(1) In general.--The Secretary shall establish 
        percentage factors for the overall beet sugar and cane 
        sugar allotments applicable for a fiscal year. The 
        Secretary shall establish the percentage factors in a 
        fair and equitable manner on the basis of past 
        marketings of sugar (considering for such purposes the 
        marketings of sugar processed from sugarcane and sugar 
        beets of any or all of the 1985 through 1989 crops), 
        processing and refining capacity, and the ability of 
        processors to market the sugar covered under the 
        allotments.
          [(2) Publication.--The Secretary shall publish these 
        percentage factors in the Federal Register, along with 
        a description of the Secretary's reasons for 
        establishing the factors, as provided in section 
        359h(c).
  [(e) Marketing Allotment.--The marketing allotment for sugar 
derived from sugarcane and the marketing allotment for sugar 
derived from sugar beets for a fiscal year, in each case, shall 
be a quantity equal to the product of multiplying the overall 
allotment quantity for the fiscal year by the percentage factor 
established by the Secretary under subsection (d)(1) for the 
allotment.
  [(f) State Cane Sugar Allotments.--The allotment for sugar 
derived from sugarcane shall be further allotted, among the 5 
States in the United States in which sugarcane is produced, in 
a fair and equitable manner on the basis of past marketings of 
sugar (considering for such purposes the average of marketings 
of sugar processed from sugarcane in the 2 highest years of 
production from each State from the 1985 through 1989 crops), 
processing capacity, and the ability of processors to market 
the sugar covered under the allotments.
  [(g) Adjustment of Marketing Allotments.--
          [(1) In general.--The Secretary shall, based on 
        reestimates under section 359b(a)(2)--
                  [(A) adjust upward or downward marketing 
                allotments established under subsections (a) 
                through (f) in a fair and equitable manner;
                  [(B) establish marketing allotments for the 
                fiscal year or any portion of such fiscal year; 
                or
                  [(C) suspend the allotments,
        as the Secretary determines appropriate, to reflect 
        changes in estimated sugar consumption, stocks, 
        production, or imports.
          [(2) Allocation to processors.--In the case of any 
        increase or decrease in an allotment, each allocation 
        to a processor of the allotment under section 359d, and 
        each proportionate share established with respect to 
        the allotment under section 359f(b), shall be increased 
        or decreased by the same percentage that the allotment 
        is increased or decreased.
          [(3) Reductions.--Whenever a marketing allotment for 
        a fiscal year is required to be reduced during the 
        fiscal year under this subsection, if the quantity of 
        sugar marketed, including sugar pledged as collateral 
        for a price support loan under section 206 of the 
        Agricultural Act of 1949 (7 U.S.C. 1446g), for the 
        fiscal year at the time of the reduction by any 
        individual processor covered by the allotment exceeds 
        the processor's reduced allocation, the allocation of 
        an allotment, if any, next established for the 
        processor shall be reduced by the quantity of the 
        excess sugar marketed.
  [(h) Filling Cane Sugar and Beet Sugar Allotments.--Each 
marketing allotment for cane sugar established under this 
section may only be filled with sugar processed from 
domestically grown sugarcane, and each marketing allotment for 
beet sugar established under this section may only be filled 
with sugar processed from domestically grown sugar beets.

[SEC. 359d. ALLOCATION OF MARKETING ALLOTMENTS.

  [(a) In General.--
          [(1) Allocation to processors.--Whenever marketing 
        allotments are established for a fiscal year under 
        section 359c, in order to afford all interested persons 
        an equitable opportunity to market sugar under an 
        allotment, the Secretary shall allocate each such 
        allotment among the processors covered by the 
        allotment.
          [(2) Hearing and notice.--
                  [(A) Cane sugar.--The Secretary shall make 
                allocations for cane sugar after a hearing, if 
                requested by interested parties, and on such 
                notice as the Secretary by regulation may 
                prescribe, in such manner and in such 
                quantities as to provide a fair, efficient, and 
                equitable distribution of the allocations by 
                taking into consideration processing capacity, 
                past marketings of sugar, and the ability of 
                each processor to market sugar covered by that 
                portion of the allotment allocated. Each such 
                allocation shall be subject to adjustment under 
                section 359c(g).
                  [(B) Beet sugar.--The Secretary shall make 
                allocations for beet sugar after a hearing, if 
                requested by interested parties, and on such 
                notice as the Secretary by regulation may 
                prescribe, in such manner and in such 
                quantities as to provide a fair, efficient, and 
                equitable distribution of the allocations by 
                taking into consideration processing capacity, 
                past marketings of sugar (considering for the 
                purposes the marketings of sugar processed from 
                sugar beets of any or all of the 1985 through 
                1989 crops), and the ability of each processor 
                to market sugar covered by that portion of the 
                allotment allocated. Each such allocation shall 
                be subject to adjustment under section 359c(g).
  [(b) Filling Cane Sugar Allotments.--Except as otherwise 
provided in section 359e, a State cane sugar allotment 
established under section 359c(f) for a fiscal year may be 
filled only with sugar processed from sugarcane grown in the 
State covered by the allotment.

[SEC. 359e. REASSIGNMENT OF DEFICITS.

  [(a) Estimates of Deficits.--At any time allotments are in 
effect under this part, the Secretary, from time to time, shall 
determine whether (in view of then-current inventories of 
sugar, the estimated production of sugar and expected 
marketings, and other pertinent factors) any processor of 
sugarcane will be unable to market the sugar covered by the 
portion of the State cane sugar allotment allocated to the 
processor and whether any processor of sugar beets will be 
unable to market sugar covered by the portion of the beet sugar 
allotment allocated to the processor.
  [(b) Reassignment of Deficits.--
          [(1) Cane sugar.--If the Secretary determines that 
        any sugarcane processor who has been allocated a share 
        of a State cane sugar allotment will be unable to 
        market the processor's allocation of the State's 
        allotment for the fiscal year--
                  [(A) the Secretary first shall reassign the 
                estimated quantity of the deficit to the 
                allocations for other processors within that 
                State, depending on the capacity of each other 
                processor to fill the portion of the deficit to 
                be assigned to it and taking into account the 
                interests of producers served by the 
                processors;
                  [(B) if after the reassignments the deficit 
                cannot be completely eliminated, the Secretary 
                shall reassign the estimated quantity of the 
                deficit proportionately to the allotments for 
                other cane sugar States, depending on the 
                capacity of each other State to fill the 
                portion of the deficit to be assigned to it, 
                with the reassigned quantity to each State to 
                be allocated among processors in that State in 
                proportion to the allocations of the 
                processors; and
                  [(C) if after the reassignments, the deficit 
                cannot be completely eliminated, the Secretary 
                shall reassign the remainder to imports.
          [(2) Beet sugar.--If the Secretary determines that a 
        sugar beet processor who has been allocated a share of 
        the beet sugar allotment will be unable to market that 
        allocation--
                  [(A) the Secretary first shall reassign the 
                estimated quantity of the deficit to the 
                allotments for other sugar beet processors, 
                depending on the capacity of each other 
                processor to fill the portion of the deficit to 
                be assigned to it and taking into account the 
                interests of producers served by the 
                processors; and
                  [(B) if after the reassignments, the deficit 
                cannot be completely eliminated, the Secretary 
                shall reassign the remainder to imports.
          [(3) Corresponding increase.--The allocation of each 
        processor receiving a reassigned quantity of an 
        allotment under this subsection for a fiscal year shall 
        be increased to reflect the reassignment.

[SEC. 359f. PROVISIONS APPLICABLE TO PRODUCERS.

  [(a) Processor Assurances.--Whenever allotments for a fiscal 
year are allocated to processors under section 359d, the 
Secretary shall obtain from the processors such assurances as 
the Secretary considers adequate that the allocation will be 
shared among producers served by the processor in a fair and 
equitable manner that adequately reflects producers' production 
histories. Any dispute between a processor and a producer, or 
group of producers, with respect to the sharing of the 
processor's allocation shall be resolved through arbitration by 
the Secretary on the request of either party.
  [(b) Proportionate Shares of Certain Allotments.--
          [(1) In general.--
                  [(A) States affected.--In any case in which a 
                State allotment is established under section 
                359c(f) and there are in excess of 250 
                sugarcane producers in the State (other than 
                Puerto Rico), the Secretary shall make a 
                determination under subparagraph (B).
                  [(B) Determination.--The Secretary shall 
                determine, for each State allotment described 
                in subparagraph (A), whether the production of 
                sugarcane, in the absence of proportionate 
                shares, will be greater than the quantity 
                needed to enable processors to fill the 
                allotment and provide a normal carryover 
                inventory of sugar.
          [(2) Establishment of proportionate shares.--If the 
        Secretary determines under paragraph (1) that the 
        quantity of sugarcane produced by producers in the area 
        covered by a State allotment for a fiscal year will be 
        in excess of the quantity needed to enable processors 
        to fill the allotment for the fiscal year and provide a 
        normal carryover inventory of sugar, the Secretary 
        shall establish a proportionate share for each 
        sugarcane-producing farm that limits the acreage of 
        sugarcane that may be harvested on the farm for sugar 
        or seed during the fiscal year the allotment is in 
        effect as provided in this subsection. Each such 
        proportionate share shall be subject to adjustment 
        under paragraph (7) and section 359c(g).
          [(3) Method of determining.--For purposes of 
        determining proportionate shares for any crop of 
        sugarcane:
                  [(A) The Secretary shall establish the 
                State's per-acre yield goal for a crop of 
                sugarcane at a level (not less than the average 
                per-acre yield in the State for the preceding 5 
                years, as determined by the Secretary) that 
                will ensure an adequate net return per pound to 
                producers in the State, taking into 
                consideration any available production research 
                data that the Secretary considers relevant.
                  [(B) The Secretary shall adjust the per-acre 
                yield goal by the average recovery rate of 
                sugar produced from sugarcane by processors in 
                the State.
                  [(C) The Secretary shall convert the State 
                allotment for the fiscal year involved into a 
                State acreage allotment for the crop by 
                dividing the State allotment by the per-acre 
                yield goal for the State, as established under 
                subparagraph (A) and as further adjusted under 
                subparagraph (B).
                  [(D) The Secretary shall establish a uniform 
                reduction percentage for the crop by dividing 
                the State acreage allotment, as determined for 
                the crop under subparagraph (C), by the sum of 
                all adjusted acreage bases in the State, as 
                determined by the Secretary.
                  [(E) The uniform reduction percentage for the 
                crop, as determined under subparagraph (D), 
                shall be applied to the acreage base for each 
                sugarcane-producing farm in the State to 
                determine the farm's proportionate share of 
                sugarcane acreage that may be harvested for 
                sugar or seed.
          [(4) Acreage base.--For purposes of this subsection, 
        the acreage base for each sugarcane-producing farm 
        shall be determined by the Secretary, as follows:
                  [(A) The acreage base for any farm shall be 
                the number of acres that is equal to the 
                average of the acreage planted and considered 
                planted for harvest for sugar or seed on the 
                farm in each of the 5 crop years preceding the 
                fiscal year the proportionate share will be in 
                effect.
                  [(B) Acreage planted to sugarcane that 
                producers on a farm were unable to harvest to 
                sugarcane for sugar or seed because of drought, 
                flood, other natural disaster, or other 
                condition beyond the control of the producers 
                may be considered as harvested for the 
                production of sugar or seed for purposes of 
                this paragraph.
          [(5) Violation.--
                  [(A) In general.--Whenever proportionate 
                shares are in effect in a State for a crop of 
                sugarcane, producers on a farm shall not 
                knowingly harvest, or allow to be harvested, 
                for sugar or seed an acreage of sugarcane in 
                excess of the farm's proportionate share for 
                the fiscal year, or otherwise violate 
                proportionate share regulations issued by the 
                Secretary under section 359h(a).
                  [(B) Determination of violation.--No producer 
                shall be considered to have violated 
                subparagraph (A) unless the processor of the 
                sugarcane harvested by such producer from 
                acreage in excess of the proportionate share of 
                the farm markets an amount of sugar that 
                exceeds the allocation of such processor for a 
                fiscal year.
                  [(C) Civil penalty.--Any producer on a farm 
                who violates subparagraph (A) by knowingly 
                harvesting, or allowing to be harvested, an 
                acreage of sugarcane in excess of the farm's 
                proportionate share shall be liable to the 
                Commodity Credit Corporation for a civil 
                penalty equal to one and one-half times the 
                United States market value of the quantity of 
                sugar that is marketed by the processor of such 
                sugarcane in excess of the allocation of such 
                processor for the fiscal year. The Secretary 
                shall prorate penalties imposed under this 
                subparagraph in a fair and equitable manner 
                among all the producers of sugarcane harvested 
                from excess acreage that is acquired by such 
                processor.
          [(6) Waiver.--Notwithstanding the preceding 
        subparagraph, the Secretary may authorize the county 
        and State committees established under section 8(b) of 
        the Soil Conservation and Domestic Allotment Act (16 
        U.S.C. 590h(b)) to waive or modify deadlines and other 
        proportionate share requirements in cases in which 
        lateness or failure to meet the other requirements does 
        not affect adversely the operation of proportionate 
        shares.
          [(7) Adjustments.--Whenever the Secretary determines 
        that, because of a natural disaster or other condition 
        beyond the control of producers that adversely affects 
        a crop of sugarcane subject to proportionate shares, 
        the amount of sugarcane produced by producers subject 
        to the proportionate shares will not be sufficient to 
        enable processors in the State to meet the State's cane 
        sugar allotment and provide a normal carryover 
        inventory of sugar, the Secretary may uniformly allow 
        producers to harvest an amount of sugarcane in excess 
        of their proportionate share, or suspend proportionate 
        shares entirely, as necessary to enable processors to 
        meet the State allotment and provide a normal carryover 
        inventory of sugar.

[SEC. 359g. SPECIAL RULES.

  [(a) Transfer of Acreage Base History.--For the purpose of 
establishing proportionate shares for sugarcane farms under 
section 359f, the Secretary, on application of any producer, 
with the written consent of all owners of a farm, may transfer 
the acreage base history of the farm to any other parcels of 
land of the applicant.
  [(b) Preservation of Acreage Base History.--If for reasons 
beyond the control of a producer on a farm, the producer is 
unable to harvest an acreage of sugarcane for sugar or seed 
with respect to all or a portion of the proportionate share 
established for the farm under section 359f, the Secretary, on 
the application of the producer and with the written consent of 
all owners of the farm, may preserve for a period of not more 
than 3 consecutive years the acreage base history of the farm 
to the extent of the proportionate share involved. The 
Secretary may permit the proportionate share to be 
redistributed to other farms, but no acreage base history for 
purposes of establishing acreage bases shall accrue to the 
other farms by virtue of the redistribution of the 
proportionate share.
  [(c) Revisions of Allocations and Proportionate Shares.--The 
Secretary, after such notice as the Secretary by regulation may 
prescribe, may revise or amend any allocation of a marketing 
allotment under section 359d, or any proportionate share 
established for a farm under section 359f, on the same basis as 
the initial allocation or proportionate share was required to 
be established.

[SEC. 359h. REGULATIONS; VIOLATIONS; PUBLICATION OF SECRETARY'S 
                    DETERMINATIONS; JURISDICTION OF THE COURTS; UNITED 
                    STATES ATTORNEYS.

  [(a) Regulations.--The Secretary or the Commodity Credit 
Corporation, as appropriate, shall issue such regulations as 
may be necessary to carry out the authority vested in the 
Secretary in administering this part.
  [(b) Violation.--Any person knowingly violating any 
regulation of the Secretary issued under subsection (a) shall 
be subject to a civil penalty of not more than $5,000 for each 
violation.
  [(c) Publication in Federal Register.--Each determination 
issued by the Secretary to establish, adjust, or suspend 
allotments under this part shall be promptly published in the 
Federal Register and shall be accompanied by a statement of the 
reasons for the determination.
  [(d) Jurisdiction of Courts; United States Attorneys.--
          [(1) Jurisdiction of courts.--The several district 
        courts of the United States are vested with 
        jurisdiction specifically to enforce, and to prevent 
        and restrain any person from violating, this part or 
        any regulation issued thereunder.
          [(2) United states attorneys.--Whenever the Secretary 
        shall so request, it shall be the duty of the several 
        United States attorneys, in their respective districts, 
        to institute proceedings to enforce the remedies and to 
        collect the penalties provided for in this part. The 
        Secretary may elect not to refer to a United States 
        attorney any violation of this part or regulation when 
        the Secretary determines that the administration and 
        enforcement of this part would be adequately served by 
        written notice or warning to any person committing the 
        violation.
  [(e) Nonexclusivity of Remedies.--The remedies and penalties 
provided for in this part shall be in addition to, and not 
exclusive of, any remedies or penalties existing at law or in 
equity.

[SEC. 359i. APPEALS.

  [(a) In General.--An appeal may be taken to the Secretary 
from any decision under section 359d establishing allocations 
of marketing allotments, or under section 359f, by any person 
adversely affected by reason of any such decision.
  [(b) Procedure.--
          [(1) Notice of appeal.--Any such appeal shall be 
        taken by filing with the Secretary, within 20 days 
        after the decision complained of is effective, notice 
        in writing of the appeal and a statement of the reasons 
        therefor. Unless a later date is specified by the 
        Secretary as part of the Secretary's decision, the 
        decision complained of shall be considered to be 
        effective as of the date on which announcement of the 
        decision is made. The Secretary shall deliver a copy of 
        any notice of appeal to each person shown by the 
        records of the Secretary to be adversely affected by 
        reason of the decision appealed, and shall at all times 
        thereafter permit any such person to inspect and make 
        copies of appellant's reasons for the appeal and shall 
        on application permit the person to intervene in the 
        appeal.
          [(2) Hearing.--The Secretary shall provide each 
        appellant an opportunity for a hearing before an 
        administrative law judge in accordance with sections 
        554 and 556 of title 5, United States Code. The 
        expenses for conducting the hearing shall be reimbursed 
        by the Commodity Credit Corporation.

[SEC. 359j. ADMINISTRATION.

  [(a) Use of Certain Agencies.--In carrying out this part, the 
Secretary may use the services of local committees of sugar 
beet or sugarcane producers, sugarcane processors, or sugar 
beet processors, State and county committees established under 
section 8(b) of the Soil Conservation and Domestic Allotment 
Act (16 U.S.C. 590h(b)), and the departments and agencies of 
the United States Government.
  [(b) Use of Commodity Credit Corporation.--The Secretary 
shall use the services, facilities, funds, and authorities of 
the Commodity Credit Corporation to carry out sections 359a 
through 359i.
  [(c) Definition of United States and State.--Notwithstanding 
section 301, for purposes of this part, the terms ``United 
States'' and ``State'' means the 50 States, the District of 
Columbia, and the Commonwealth of Puerto Rico.]

                 Subtitle C--Administrative Provisions

                PART I--PUBLICATION AND REVIEW OF QUOTAS

                          APPLICATION OF PART

  Sec. 361. This part shall apply to the publication and review 
of farm marketing quotas established for tobacco[, corn, wheat, 
cotton, peanuts, and rice, established] under subtitle B.

             PART II--ADJUSTMENT OF QUOTAS AND ENFORCEMENT

                     GENERAL ADJUSTMENTS OF QUOTAS

  Sec. 371. (a) If at any time the Secretary has reason to 
believe that in the case of [cotton, rice, peanuts, or] tobacco 
the operation of farm marketing quotas in effect will cause the 
amount of such commodity which is free of marketing 
restrictions to be less than the normal supply for the 
marketing year for the commodity then current, he shall cause 
an immediate investigation to be made with respect thereto. In 
the course of such investigation due notice and opportunity for 
hearing shall be given to interested persons. If upon the basis 
of such investigation the Secretary finds the existence of such 
fact, he shall proclaim the same forthwith. He shall also in 
such proclamation specify such increase in, or termination of, 
existing quotas as he finds, on the basis of such 
investigation, is necessary to make the amount of such 
commodity which is free of marketing restrictions equal to the 
normal supply.
  (b) If the Secretary has reason to believe that, because of a 
national emergency or because of a material increase in export 
demand, any national marketing quota or acreage allotment for 
[cotton, rice, peanuts or] tobacco should be increased or 
terminated, he shall cause an immediate investigation to be 
made to determine whether the increase or termination is 
necessary to meet such emergency or increase in export demand. 
If, on the basis of such investigation, the Secretary finds 
that such increase or termination is necessary, he shall 
immediately proclaim such finding (and if he finds an increase 
is necessary, the amount of the increase found by him to be 
necessary) and thereupon such quota or allotment shall be 
increased, or shall terminate, as the case may be.

                [Subtitle D--Wheat Marketing Allocation

                         [LEGISLATIVE FINDINGS

  [Sec. 379a. Wheat, in addition to being a basic food, is one 
of the great export crops of American agriculture and its 
production for domestic consumption and for export is necessary 
to the maintenance of a sound national economy and to the 
general welfare. The movement of wheat from producer to 
consumer, in the form of the commodity or any of the products 
thereof, is preponderantly in interstate and foreign commerce. 
Unreasonably low prices of wheat to producers impair their 
purchasing power for nonagricultural products and place them in 
a position of serious disparity with other industrial groups. 
The conditions affecting the production of wheat are such that 
without Federal assistance, producers cannot effectively 
prevent disastrously low prices for wheat. It is necessary, in 
order to assist wheat producers in obtaining fair prices, to 
regulate the price of wheat used for domestic food and for 
exports in the manner provided in this subtitle.

                      [WHEAT MARKETING ALLOCATION

  [Sec. 379b. During any marketing year for which a marketing 
quota is in effect for wheat, beginning with the marketing year 
for the 1964 crop, a wheat marketing allocation program shall 
be in effect as provided in this subtitle. Whenever a wheat 
marketing allocation program is in effect for any marketing 
year the Secretary shall determine (1) the wheat marketing 
allocation for such year which shall be the amount of wheat 
which in determining the national marketing quota for such 
marketing year he estimated would be used during such year for 
food products for consumption in the United States, and that 
portion of the amount of wheat which in determining such quota 
he estimated would be exported in the form of wheat or products 
thereof during the marketing year on which the Secretary 
determines that marketing certificates shall be issued to 
producers in order to achieve, insofar as practicable, the 
price and income objectives of this subtitle, and (2) the 
national allocation percentage which shall be the percentage 
which the national marketing allocation is of the national 
marketing quota. Each farm shall receive a wheat marketing 
allocation for such marketing year equal to the number of 
bushels obtained by multiplying the number of acres in the farm 
acreage allotment for wheat by the projected farm yield, and 
multiplying the resulting number of bushels by the national 
allocation percentage. If a noncommercial wheat-production area 
is established for any marketing year, farms in such area shall 
be given wheat marketing allocations which are determined by 
the Secretary to be fair and reasonable in relation to the 
wheat marketing allocation given producers in the commercial 
wheat-producing area.

                        [MARKETING CERTIFICATES

  [Sec. 379c. (a) The Secretary shall provide for the issuance 
of wheat marketing certificates for each marketing year for 
which a wheat marketing allocation program is in effect for the 
purpose of enabling producers on any farm with respect to which 
certificates are issued to receive, in addition to the other 
proceeds from the sale of wheat, an amount equal to the value 
of such certificates. The wheat marketing certificates issued 
with respect to any farm for any marketing year shall be in the 
amount of the farm wheat marketing allocation for such year, 
but not to exceed (i) the actual acreage of wheat planted on 
the farm for harvest in the calendar year in which the 
marketing year begins multiplied by the normal yield of wheat 
for the farm, plus (ii) the amount of wheat stored under 
section 379c(b) or to avoid or postpone a marketing quota 
penalty, which is released from storage during the marketing 
year on account of underplanting or underproduction, and if 
this limitation operates to reduce the amount of wheat 
marketing certificates which would otherwise be issued with 
respect to the farm, such reduction shall be made first from 
the amount of export certificates which would otherwise be 
issued. The Secretary shall provide for the sharing of wheat 
marketing certificates among producers on the farm on the basis 
of their respective shares in the wheat crop produced on the 
farm, or the proceeds therefrom; except that in any case in 
which the Secretary determines that such basis would not be 
fair and equitable, the Secretary shall provide for such 
sharing on such other basis as he may determine to be fair and 
equitable. The Secretary shall, in accordance with such 
regulation as he may prescribe, provide for the issuance of 
domestic marketing certificates for the portion of the wheat 
marketing allocation representing wheat used for food products 
for consumption in the United States. The Secretary shall also 
provide for the issuance of export marketing certificates to 
eligible producers at the end of the marketing year on a pro 
rata basis. For such purposes, the value per bushel of export 
marketing certificates shall be an average of the total net 
proceeds from the sale of export marketing certificates during 
the marketing year after deducting the total amount of wheat 
export subsidies paid to exporters. An acreage on the farm 
which the Secretary finds was not planted to wheat for harvest 
in 1965 because of drought, flood, or other natural disaster 
shall be deemed by the Secretary to be an actual acreage of 
wheat planted for harvest for purposes of this subsection, 
provided such acreage is not subsequently planted to any other 
price supported crop for 1965. An acreage on the farm not 
planted to wheat because of drought, flood, or other natural 
disaster shall be deemed to be an actual acreage of wheat 
planted for harvest for purposes of this subsection provided 
such acreage is not subsequently planted to any crop for which 
there are marketing quotas or voluntary adjustment programs in 
effect. Producers on any farm who have planted not less than 90 
per centum of the acreage of wheat required to be planted in 
order to earn the full amount of marketing certificates for 
which the farm is eligible shall be deemed to have planted the 
entire acreage required to be planted for that purpose.
  [(b) No producer shall be eligible to receive wheat marketing 
certificates with respect to any farm for any marketing year in 
which a marketing quota penalty is assessed for any commodity 
on such farm or in which the farm has not complied with the 
land-use requirements of section 339 to the extent prescribed 
by the Secretary, or in which, except as the Secretary may by 
regulation prescribe, the producer exceeds the farm acreage 
allotment on any other farm for any commodity in which he has 
an interest as a producer. No producer shall be deemed to have 
exceeded a farm acreage allotment for wheat if the entire 
amount of the farm marketing excess is delivered to the 
Secretary or stored in accordance with applicable regulations 
to avoid or postpone payment of the penalty. No producer shall 
be deemed to have exceeded the farm acreage allotment for wheat 
on any other farm if such farm is exempt from the farm market 
quota for such crop under section 335. Any wheat delivered to 
the Secretary hereunder shall become the property of the United 
States and shall be disposed of by the Secretary for relief 
purposes in the United States or in foreign countries or in 
such other manner as he shall determine will divert it from the 
normal channels of trade and commerce. Notwithstanding any 
other provision of this Act, the Secretary may provide that a 
producer shall not be eligible to receive marketing 
certificates, or may adjust the amount of marketing 
certificates to be received by the producer, with respect to 
any farm for any year in which a variety of wheat is planted on 
the farm which has been determined by the Secretary, after 
consultation with State Agricultural Experiment Stations, 
agronomists, cereal chemists and other qualified technicians, 
to have undesirable milling or baking qualities and has made 
public announcement thereof.
  [(c) The Secretary shall determine and proclaim for each 
marketing year the face value per bushel of wheat marketing 
certificates. The face value per bushel of domestic 
certificates shall be the amount by which the level of price 
support for wheat accompanied by domestic certificates exceeds 
the level of price support for wheat not accompanied by 
certificates (noncertificate wheat).
  [(d) Marketing certificates and transfers thereof shall be 
represented by such documents, marketing cards, records, 
accounts, certifications, or other statements or forms as the 
Secretary may prescribe.
  [(e) In any case in which the failure of a producer to comply 
fully with the term and conditions of the programs formulated 
under this Act preclude the issuance of marketing certificates, 
the Secretary may, nevertheless, issue such certificates in 
such amounts as he determines to be equitable in relation to 
the seriousness of the default.

                        [MARKETING RESTRICTIONS

  [Sec. 379d. (a) Marketing certificates shall be transferable 
only in accordance with regulations prescribed by the 
Secretary. Any unused certificates legally held by any person 
shall be purchased by Commodity Credit Corporation if tendered 
to the Corporation for purchase in accordance with regulations 
prescribed by the Secretary.
  [(b) During any marketing year for which a wheat marketing 
allocation program is in effect, (i) all persons engaged in the 
processing of wheat into food products shall, prior to 
marketing any such food product or removing such food product 
for sale or consumption, acquire domestic marketing 
certificates equivalent to the number of bushels of wheat 
contained in such product and (ii) all persons exporting wheat 
shall, prior to such export, acquire export market certificates 
equivalent to the number of bushels so exported. The cost of 
the export marketing certificates per bushel to the exporter 
shall be that amount determined by the Secretary on a daily 
basis which would make United States wheat and wheat flour 
generally competitive in the world market, avoid disruption of 
world market prices, and fulfill the international obligations 
of the United States. The Secretary may exempt from the 
requirements of this subsection wheat exported for donation 
abroad and other noncommercial exports of wheat, wheat 
processed for use on the farm where grown, wheat produced by a 
State or agency thereof and processed for use by the State or 
agency thereof wheat processed for donation, and wheat 
processed for uses determined by the Secretary to be 
noncommercial. Such exemptions may be made applicable with 
respect to any wheat processed or exported beginning July 1, 
1964. There shall be exempt from the requirements of this 
subsection beverage distilled from wheat prior to July 1, 1964. 
A beverage distilled from wheat after July 1, 1964, shall be 
deemed to be removed for sale or consumption at the time it is 
placed in barrels for aging except that upon the giving of a 
bond as prescribed by the Secretary, the purchase of and 
payment for such marketing certificates as may be required may 
be deferred until such beverage is bottled for sale. Wheat 
shipped to a Canadian port for storage in bond, or storage 
under a similar arrangement, and subsequent exportation shall 
be deemed to have been exported for purposes of this subsection 
when it is exported from the Canadian port. Marketing 
certificates shall be valid to cover only sales or removals for 
sale or consumption or exportations made during the marketing 
year with respect to which they are issued, and after being 
once used to cover a sale or removal for sale or consumption or 
export of a food product or an export of wheat shall be void 
and shall be disposed of in accordance with regulations 
prescribed by the Secretary. Notwithstanding the foregoing 
provisions hereof the Secretary may require marketing 
certificates issued for any marketing year to be acquired to 
cover sales, removals or exportations made on or after the date 
during the calendar year in which wheat harvested in such 
calendar year begins to be marketed as determined by the 
Secretary even though such wheat is marketed prior to the 
beginning of the marketing year, and marketing certificates for 
such marketing year shall be valid to cover sales, removals, or 
exportations made on or after the date so determined by the 
Secretary. Whenever the face value per bushel of domestic 
marketing certificates for a marketing year is different from 
the face value of domestic marketing certificates for the 
preceding marketing year, the Secretary may require marketing 
certificates issued for the preceding marketing year to be 
acquired to cover all wheat processed into food products during 
such preceding marketing year even though the food product may 
be marketed or removed for sale or consumption after the end of 
the marketing year. Notwithstanding the foregoing, the 
Secretary is authorized, to temporarily suspend the requirement 
for export marketing certificates for the period beginning July 
1, 1971, and ending June 30, 1974.
  [(c) Upon the giving of a bond or other undertaking 
satisfactory to the Secretary to secure the purchase of and 
payment for such marketing certificates as may be required, and 
subject to such regulations as he may prescribe, any person 
required to have marketing certificates in order to market or 
export a commodity may be permitted to market any such 
commodity without having first acquired marketing certificates.
  [(d) As used in this subtitle, the term ``food products'' 
means flour (excluding flour second clears not used for human 
consumption as determined by the Secretary), semolina, farina, 
bulgur, beverage, and any other product composed wholly or 
partly of wheat which the Secretary may determine to be a food 
product. The Secretary may at his election administer the 
exemption for wheat processed into flour second clears through 
refunds either to processors of such wheat or to the users of 
such clears. For the purpose of such refunds, the wheat 
equivalent of flour second clears may be determined on the 
basis of conversion factors authorized by section 379f of the 
Agricultural Adjustment Act of 1938, even though certificates 
had been surrendered on the basis of the weight of the wheat.

       [ASSISTANCE IN PURCHASE AND SALE OF MARKETING CERTIFICATES

  [Sec. 379e. For the purpose of facilitating the purchase and 
sale of marketing certificates, the Commodity Credit 
Corporation is authorized to issue, buy, and sell marketing 
certificates in accordance with regulations prescribed by the 
Secretary. Such regulations may authorize the Corporation to 
issue and sell certificates in excess of the quantity of 
certificates which it purchases. Such regulations may authorize 
the Corporation in the sale of marketing certificates to 
charge, in addition to the face value thereof an amount 
determined by the Secretary to be appropriate to cover 
estimated administrative costs in connection with the purchase 
and sale of the certificates and estimated interest incurred on 
funds of the Corporation invested in certificates purchased by 
it. Notwithstanding any other provision of this Act, Commodity 
Credit Corporation shall sell marketing certificates for the 
marketing years for the 1966 through the 1970 wheat crops to 
persons engaged in the processing of food products at the face 
value thereof less any amount which price support for wheat 
accompanied by domestic certificates exceeds $2 per bushel. 
Notwithstanding any other provision of this Act, Commodity 
Credit Corporation shall sell marketing certificates for the 
marketing years for the 1971, 1972, and 1973 crops of wheat to 
persons engaged in the processing of food products but in 
determining the cost to processors the face value shall be 75 
cents per bushel.

                          [CONVERSION FACTORS

  [Sec. 379f. The Secretary shall establish conversion factors 
which shall be used to determine the amount of wheat contained 
in any food product. The conversion factor for any such food 
product shall be determined upon the basis of the weight of 
wheat used in the manufacture of such product.

                  [AUTHORITY TO FACILITATE TRANSITION

  [Sec. 379g. (a) The Secretary is authorized to take such 
action as he determines to be necessary to facilitate the 
transition from the program currently in effect to the program 
provided for in this subtitle. Notwithstanding any other 
provision of this subtitle, such authority shall include, but 
shall not be limited, to the authority to exempt all or a 
portion of the wheat or food products made therefrom in the 
channels of trade on the effective date of the program under 
this subtitle from the marketing restrictions in subsection (b) 
of section 379d, or to sell certificates to persons owning such 
wheat or food products at such prices as the Secretary may 
determine. Any such certificate shall be issued by Commodity 
Credit Corporation.
  [(b) Whenever the face value per bushel of domestic marketing 
certificates for a marketing year is substantially different 
from the face value of domestic marketing certificates for the 
preceding marketing year, the Secretary is authorized to take 
such action as he determines necessary to facilitate the 
transition between marketing years. Notwithstanding any other 
provision of this subtitle, such authority shall include, but 
shall not be limited to, the authority to sell certificates to 
persons engaged in the processing of wheat into food products 
covering such quantities of wheat, at such prices, and under 
such terms and conditions as the Secretary may by regulation 
provide. Any such certificate shall be issued by Commodity 
Credit Corporation.
  [(c) The Secretary is authorized to take such action as he 
determines to be necessary to facilitate the transition from 
the certificate program provided for under section 379d to a 
program under which no certificates are required. 
Notwithstanding any other provision of law, such authority 
shall include, but shall not be limited to the authority to 
exempt all or a portion of wheat or food products made 
therefrom in the channels of trade on July 1, 1973, from the 
marketing restrictions in subsection (b) of section 379d, or to 
sell certificates to persons owning such wheat or food products 
made therefrom at such price and under such terms and 
conditions as the Secretary may determine. Any such certificate 
shall be issued by the Commodity Credit Corporation. Nothing 
herein shall authorize the Secretary to require certificates on 
wheat processed after June 30, 1973.

                          [REPORTS AND RECORDS

  [Sec. 379h. This section shall apply to processors of wheat, 
warehousemen and exporters of wheat and food products, and all 
persons purchasing, selling, or otherwise dealing in wheat 
marketing certificates. Any such person shall, from time to 
time on request of the Secretary, report to the Secretary such 
information and keep such records as the Secretary finds to be 
necessary to enable him to carry out the provisions of this 
subtitle. Such information shall be reported and such records 
shall be kept in such manner as the Secretary shall prescribe. 
For the purpose of ascertaining the correctness of any report 
made or record kept, or of obtaining information required to be 
furnished in any report, but not so furnished, the Secretary is 
hereby authorized to examine such books, papers, records, 
accounts, correspondence, contracts, documents, and memorandums 
as he has reason to believe are relevant and are within the 
control of such person.

                               [PENALTIES

  [Sec. 379i. (a) Any person who knowingly violates or attempts 
to violate or who knowingly participates or aids in the 
violation of any of the provisions of subsection (b) of section 
379d of this Act shall forfeit to the United States a sum equal 
to two times the face value of the marketing certificates 
involved in such violation. Such forfeiture shall be 
recoverable in a civil action brought in the name of the United 
States.
  [(b) Any person, except a producer in his capacity as a 
producer, who knowingly violates or attempts to violate or who 
knowingly participates or aids in the violation of any of the 
provision of this subtitle, or of any regulation, governing the 
acquisition, disposition, or handling of marketing certificates 
or who knowingly fails to make any report or keep any record as 
required by section 379h shall be deemed guilty of a 
misdemeanor and upon conviction thereof shall be subject to a 
fine of not more than $5,000 for each violation.
  [(c) Any person who, in his capacity as a producer, knowingly 
violates or attempts to violate or participates or aids in the 
violation of any provision of this subtitle, or of any 
regulation governing the acquisition, disposition, or handling 
of marketing certificates or fails to make any report or keep 
any record as required by section 379h shall, (i) forfeit any 
right to receive marketing certificates, in whole or in part as 
the Secretary may determine, with respect to the farm or farms 
and for the marketing year with respect to which any such act 
or default is committed, or (ii), if such marketing 
certificates have already been issued, pay to the Secretary, 
upon demand, the amount of the face value of such certificates, 
or such part thereof as the Secretary may determine. Such 
determination by the Secretary with respect to the amount of 
such marketing certificates to be forfeited or the amount to be 
paid by such producer shall take into consideration the 
circumstances relating to the act or default committed and the 
seriousness of such act or default.
  [(d) Any persons who falsely makes, issues, alters, forges, 
or counterfeits any marketing certificate, or with fraudulent 
intent possesses, transfers, or uses any such falsely made, 
issued, altered, forged, or counterfeited marketing 
certificate, shall be deemed guilty of a felony and upon 
conviction thereof shall be subject to a fine of not more than 
$10,000 or imprisonment of not more than ten years, or both.

                              [REGULATIONS

  [Sec. 379j. The Secretary shall prescribe such regulations as 
may be necessary to carry out the provisions of this subtitle 
including but not limited to regulations governing the 
acquisition, disposition, or handling of marketing 
certificates.]
          * * * * * * *

        Subtitle F--Miscellaneous Provisions and Appropriations

                         PART I--MISCELLANEOUS

          * * * * * * *
  Sec. 390A. The Secretary, in carrying out programs under 
section 32 of Public Law Numbered 320, Seventy-fourth Congress, 
approved August 24, 1935, as amended, and section 6 of the 
National School Lunch Act may utilize the services and 
facilities of the Commodity Credit Corporation (including but 
not limited to procurement by contract), and make advance 
payments to it.
  Sec. 390B. (a) In order to prevent the waste of commodities 
whether in private stocks or acquired through price-support 
operations by the Commodity Credit Corporation before they can 
be disposed of in normal domestic channels without impairment 
of the price-support program or sold abroad at competitive 
world prices, the Commodity Credit Corporation is authorized, 
on such terms and under such regulations as the Secretary may 
deem in the public interest: (1) upon application, to make such 
commodities available to any Federal agency for use in making 
payment for commodities not produced in the United States; (2) 
to barter or exchange such commodities for strategic or other 
materials as authorized by law; (3) in the case of food 
commodities to donate such commodities to the Bureau of Indian 
Affairs and to such State, Federal, or private agency or 
agencies as may be designated by the proper State or Federal 
authority and approved by the Secretary, for use in the United 
States in nonprofit school-lunch programs, in nonprofit summer 
camps for children, in the assistance of needy persons, and in 
charitable institutions, including hospitals and facilities, to 
the extent that they serve needy persons (including infants and 
children). In the case of (3) the Secretary shall obtain such 
assurance as he deems necessary that the recipients thereof 
will not diminish their normal expenditures for food by reason 
of such donation. In order to facilitate the appropriate 
disposal of such commodities, the Secretary may from time to 
time estimate and announce the quantity of such commodities 
which he anticipates will become available for distribution 
under (3). The Commodity Credit Corporation may pay, with 
respect to commodities disposed of under this subsection, 
reprocessing, packaging, transporting, handling, and other 
charges accruing up to the time of their delivery to a Federal 
agency or to the designated State or private agency. In 
addition, in the case of food commodities disposed of under 
this subsection, the Commodity Credit Corporation may pay the 
cost of processing such commodities into a form suitable for 
home or institutional use, such processing to be accomplished 
through private trade facilities to the greatest extent 
possible. For the purpose of this subsection the terms 
``State'' and ``United States'' include the District of 
Columbia and any Territory or possession of the United States.
  Dairy products acquired by the Commodity Credit Corporation 
through price support operations may, insofar as they can be 
used in the United States in nonprofit school lunch and other 
nonprofit child feeding programs, in the assistance of needy 
persons, and in charitable institutions, including hospitals, 
to the extent that needy persons are served, be donated for any 
such use prior to any other use or disposition. Notwithstanding 
any other provision of law, such dairy products may be donated 
for distribution to needy households in the United States and 
to meet the needs of persons receiving nutrition assistance 
under the Older Americans Act of 1965.
  (b)(1) The Secretary, subject to the requirements of 
paragraph (10), may furnish eligible commodities for carrying 
out programs of assistance in developing countries and friendly 
countries under titles II and III of the Agricultural Trade 
Development and Assistance Act of 1954 and under the Food for 
Progress Act of 1985, as approved by the Secretary, and for 
such purposes as are approved by the Secretary. To ensure that 
the furnishing of commodities under this subsection is 
coordinated with and complements other United States foreign 
assistance, assistance under this subsection shall be 
coordinated through the mechanism designated by the President 
to coordinate assistance under the Agricultural Trade 
Development and Assistance Act of 1954.
  (2) As used in this subsection, the term ``eligible 
commodities'' means--
          (A) dairy products, wheat, rice, feed grains, and 
        oilseeds acquired by the Commodity Credit Corporation 
        through price support operations, and the products 
        thereof, that the Secretary determines meet the 
        criteria specified in subsection (a); and
          (B) such other edible agricultural commodities as may 
        be acquired by the Secretary or the Commodity Credit 
        Corporation in the normal course of operations and that 
        are available for disposition under this subsection, 
        except that no such commodities may be acquired for the 
        purpose of their use under this subsection.
  (3)(A) Commodities may not be made available for disposition 
under this subsection in amounts that (i) will, in any way, 
reduce the amounts of commodities that traditionally are made 
available through donations to domestic feeding programs or 
agencies, or (ii) will prevent the Secretary from fulfilling 
any agreement entered into by the Secretary under a payment-in-
kind program under this Act or other Acts administered by the 
Secretary.
  (B)(i) The requirements of section 403(a) of the Agricultural 
Trade Development and Assistance Act of 1954 shall apply with 
respect to commodities furnished under this subsection. 
Commodities may not be furnished for disposition to any country 
under this subsection except on determinations by the Secretary 
that--
          (I) the receiving country has the absorptive capacity 
        to use the commodities efficiently and effectively; and
          (II) such disposition of the commodities will not 
        interfere with usual marketings of the United States, 
        nor disrupt world prices of agricultural commodities 
        and normal patterns of commercial trade with developing 
        countries.
  (ii) The requirement for safeguarding usual marketings of the 
United States shall not be used to prevent the furnishing under 
this subsection of any eligible commodity for use in countries 
that--
          (I) have not traditionally purchased the commodity 
        from the United States; or
          (II) do not have adequate financial resources to 
        acquire the commodity from the United States through 
        commercial sources or through concessional sales 
        arrangements.
  (C) The Secretary shall take reasonable precautions to ensure 
that--
          (i) commodities furnished under this subsection will 
        not displace or interfere with sales that otherwise 
        might be made; and
          (ii) sales or barter under paragraph (7) will not 
        unduly disrupt world prices of agricultural commodities 
        nor normal patterns of commercial trade with friendly 
        countries.
  (D) If eligible commodities are made available under this 
subsection to a friendly country, nonprofit and voluntary 
agencies and cooperatives shall also be eligible to receive 
commodities for food aid programs in the country.
  (4) Agreements may be entered into under this subsection to 
provide eligible commodities in installments over an extended 
period of time. In agreements with recipients of eligible 
commodities under this subsection (including nonprofit and 
voluntary agencies or cooperatives), subject to the 
availability of commodities each fiscal year, the Secretary, on 
request, shall approve multiyear agreements to make 
agricultural commodities available for distribution or sale by 
the recipients if the agreements otherwise meet the 
requirements of this subsection.
  (5)(A) Section 406 of the Agricultural Trade Development and 
Assistance Act of 1954 shall apply to the commodities furnished 
under this subsection.
  (B) The Commodity Credit Corporation may pay the processing 
and domestic handling costs incurred, as authorized under this 
subsection, in the form of eligible commodities, as defined in 
paragraph (2)(A), if the Secretary determines that such in-kind 
payment will not disrupt domestic markets.
  (6) The cost of commodities furnished under this subsection, 
and expenses incurred under section 406 of the Agricultural 
Trade Development and Assistance Act of 1954 in connection with 
those commodities, shall be in addition to the level of 
assistance programmed under that Act and shall not be 
considered expenditures for international affairs and finance.
  (7) Eligible commodities furnished under this subsection may 
be sold or bartered only with the approval of the Secretary and 
solely as follows:
          (A) Sales and barter that are incidental to the 
        donation of the commodities or products.
          (B) Sales and barter to finance the distribution, 
        handling, and processing costs of the donated 
        commodities or products in the importing country or in 
        a country through which such commodities or products 
        must be transshipped, or other activities in the 
        importing country that are consistent with providing 
        food assistance to needy people.
          (C) Sales and barter of commodities and products 
        furnished to intergovernmental agencies or 
        organizations, insofar as they are consistent with 
        normal programming procedures in the distribution of 
        commodities by those agencies or organizations.
          (D)(i) Sales of commodities and products furnished to 
        nonprofit and voluntary agencies, or cooperatives, for 
        food assistance under agreements that provide for the 
        use, by the agency or cooperative, of foreign currency 
        proceeds generated from such sale of commodities or 
        products for the purposes established in clause (ii) of 
        this subparagraph.
          (ii) Foreign currencies generated from partial or 
        full sales or barter of commodities by a nonprofit and 
        voluntary agency or cooperative shall be used--
                  (I) to transport, store, distribute, and 
                otherwise enhance the effectiveness of the use 
                of commodities and the products thereof donated 
                under this section; and
                  (II) to implement income generating, 
                community development, health, nutrition, 
                cooperative development, agricultural  
                programs,  and  other  developmental 
                activities.
        In addition, foreign currency proceeds generated in 
        Poland may also be used by governmental and 
        nongovernmental agencies or cooperatives for eligible 
        activities approved by the joint commission established 
        pursuant to section 2226 of the American Aid to Poland 
        Act of 1988 and by the United States chief of 
        diplomatic mission in Poland that would improve the 
        quality of life of the Polish people and would 
        strengthen and support the activities of governmental 
        or private, nongovernmental independent institutions in 
        Poland. Activities eligible under the preceding 
        sentence include--
                  (I) any project undertaken in Poland under 
                the auspices of the Charitable Commission of 
                the Polish Catholic Episcopate for the benefit 
                of handicapped or orphaned children;
                  (II) any project for the reconstruction, 
                renovation, or maintenance of the Research 
                Center on Jewish History and Culture of the 
                Jagiellonian University of Krakow, Poland, 
                established for the study of events related to 
                the Holocaust in Poland;
                  (III) any other project or activity which 
                strengthens and supports private and 
                independent sectors of the Polish economy, 
                especially independent farming and agriculture; 
                and
                  (IV) the Polish Catholic Episcopate's Rural 
                Water Supply Foundation.
          (iii) Except as otherwise provided in clause (v), 
        such agreements, taken together for each fiscal year, 
        shall provide for sales of commodities and products for 
        foreign currency proceeds in amounts that are, in the 
        aggregate, not less than 10 percent of the aggregate 
        value of all commodities and products furnished, or the 
        minimum tonnage required, whichever is greater, for 
        carrying out programs of assistance under this 
        subsection in such fiscal year. The minimum allocation 
        requirements of this clause apply with respect to 
        commodities and products made available under this 
        subsection for carrying out programs of assistance 
        under titles II and III of the Agricultural Trade 
        Development and Assistance Act of 1954, and not with 
        respect to commodities and products made available to 
        carry out the Food for Progress Act of 1985.
          (iv) Foreign currency proceeds generated from the 
        sale of commodities or products under this subparagraph 
        shall be expended within the country of origin within 
        one year of acquisition of such currency, except that 
        the Secretary may permit the use of such proceeds (I) 
        in countries other than the country of origin as 
        necessary to expedite the transportation of commodities 
        and products furnished under this subsection, (II) 
        after one year of acquisition as appropriate to achieve 
        the purposes of clause (i), and (III) in a country 
        other than the country of origin, if such proceeds are 
        generated in a currency generally accepted in such 
        other country.
          (v) The provisions of clause (iii) of this 
        subparagraph establishing minimum annual allocations 
        for sales and use of proceeds shall not apply to the 
        extent that there have not been sufficient requests for 
        such sales and use of proceeds nor to the extent 
        required under paragraph (3).
          (E) Sales and barter to cover expenses incurred under 
        paragraph (5)(a).
          (F) The provisions of sections 403(i) and 407(c) of 
        the Agricultural Trade Development and Assistance Act 
        of 1954 shall apply to donations, sales and barters of 
        eligible commodities under this subsection.
No portion of the proceeds or services realized from sales or 
barter under this paragraph may be used to meet operating and 
overhead expenses, except as otherwise provided in subparagraph 
(C) and except for personnel and administrative costs incurred 
by local cooperatives.
  (8)(A) To the maximum extent practicable, expedited 
procedures shall be used in the implementation of this 
subsection.
  (B) The Secretary shall be responsible for regulations 
governing sales and barter, and the use of foreign currency 
proceeds, under paragraph (7) of this subsection that will 
provide reasonable safeguards to prevent the occurrence of 
abuses in the conduct of activities provided for in paragraph 
(7).
  (C)(i) If a proposal to make eligible commodities available 
under this subsection is submitted by a nonprofit and voluntary 
agency or cooperative with the concurrence of the appropriate 
United States Government field mission or if a proposal to make 
such commodities available to a nonprofit and voluntary agency 
or cooperative is submitted by the United States Government 
field mission, a decision on the proposal shall be provided 
within 45 days after receipt by the Agency for International 
Development office in Washington, D.C. The response shall 
detail the reasons for approval or denial of the proposal. If 
the proposal is denied, the response shall specify the 
conditions that would need to be met for the proposal to be 
approved.
  (ii) Not later than 30 days before the issuance of a final 
guideline issued to carry out this subsection, the Secretary 
shall--
          (I) provide notice of the proposed guideline to 
        nonprofit and voluntary agencies and cooperatives that 
        participate in programs under this subsection, and 
        other interested persons, that the proposed guideline 
        is available for review and comment;
          (II) make the proposed guideline available, on 
        request, to nonprofit and voluntary agencies, 
        cooperatives, and others; and
          (III) take any comments received into consideration 
        before the issuance of the final guideline.
  (iii) Not later than 15 days after receipt of a call forward 
from a field mission for commodities or products that meets the 
requirements of this subsection, the order for the purchase or 
the supply, from inventory, of such commodities or products 
shall be transmitted to the Commodity Credit Corporation.
  (9)(A) Each recipient of commodities and products approved 
for sale or barter under paragraph (7) shall report to the 
Secretary information with respect to the items required to be 
included in the Secretary's report pursuant to clauses (i) 
through (iv) of subparagraph (B). Reports pursuant to this 
subparagraph shall be submitted in accordance with regulations 
of the Secretary. Such regulations shall require at least one 
report annually, to be submitted not later than December 31 
following the end of the fiscal year in which the commodities 
and products are received; except that a report shall not be 
required with respect to fiscal year 1985.
  (B) Not later than February 15, 1987, and annually 
thereafter, the Secretary shall report to the Congress on sales 
and barter, and use of foreign currency proceeds, under 
paragraph (7) during the preceding fiscal year. Such report 
shall include information on--
          (i) the quantity of commodities furnished for such 
        sale or barter;
          (ii) the amount of funds (including dollar 
        equivalents for foreign currencies) and value of 
        services generated from such sales and barter in such 
        fiscal year;
          (iii) how such funds and services were used;
          (iv) the amount of foreign currency proceeds that 
        were used under agreements under subparagraph (D) of 
        paragraph (7) in such fiscal year, and the percentage 
        of the quantity of all commodities and products 
        furnished under this subsection in such fiscal year 
        such use represented;
          (v) the Secretary's best estimate of the amount of 
        foreign currency proceeds that will be used, under 
        agreements under subparagraph (D) of paragraph (7), in 
        the then current fiscal year and the next following 
        fiscal year (if all requests for such use are agreed 
        to), and the percentage that such estimated use 
        represents of the quantity of all commodities and 
        products that the Secretary estimates will be furnished 
        under this subsection in each such fiscal year;
          (vi) the effectiveness of such sales, barter, and use 
        during such fiscal year in facilitating the 
        distribution of commodities and products under this 
        subsection;
          (vii) the extent to which sales, barter, or uses--
                  (I) displace or interfere with commercial 
                sales of United States agricultural commodities 
                and products that otherwise would be made,
                  (II) affect usual marketings of the United 
                States,
                  (III) disrupt world prices of agricultural 
                commodities or normal patterns of trade with 
                friendly countries, or
                  (IV) discourage local production and 
                marketing of agricultural commodities in the 
                countries in which commodities and products are 
                distributed under this subsection; and
          (viii) the Secretary's recommendations, if any, for 
        changes to improve the conduct of sales, barter, or use 
        activities under paragraph (7).
  (10)(A) Subject to the limitations established under 
paragraph (3), the Secretary shall make available for 
disposition under this subsection in each of the fiscal years 
1988 through 1990 not less than the minimum quantities of 
eligible commodities specified in subparagraph (B).
  (B) The minimum quantity of eligible commodities that shall 
be made available for disposition under this subsection in each 
fiscal year shall be--
          (i) 500,000 metric tons of wheat, rice, feed grains, 
        and oilseeds from the Corporation's uncommitted stocks, 
        or an amount equal to 10 percent of the Corporation's 
        uncommitted stocks of wheat, rice, feed grains, and 
        oilseeds as of the end of such fiscal year (as 
        estimated by the Secretary), whichever is less; and
          (ii) 10 percent of the Corporation's uncommitted 
        stocks of dairy products, but not less than 150,000 
        metric tons of such products to the extent that 
        uncommitted stocks are available.
The Secretary shall make such estimation of expected year-end 
levels of the Corporation's uncommitted stocks prior to the 
beginning of the fiscal year or, in the case of fiscal year 
1986, prior to March 31, 1986. The Secretary's determination as 
to the amount of the Corporation's stocks that shall be made 
available for disposition under this subsection for such fiscal 
year shall be published in the Federal Register, along with a 
breakdown by kind of commodity and the quantity of each kind of 
commodity that shall be made available, before the beginning of 
such fiscal year or, in the case of fiscal year 1986, March 31, 
1986.
  (C) Of the aggregate amounts made available each fiscal year 
pursuant to both clauses (i) and (ii) of subparagraph (B), not 
less than 75,000 metric tons shall be made available to carry 
out the Food for Progress Act of 1985.
  (D)(i) The Secretary--
          (I) may waive the minimum quantity requirements of 
        subparagraphs (A) and (B) for a fiscal year to the 
        extent that the Secretary determines and reports to 
        Congress that there are not sufficient requests for 
        eligible commodities under this subsection for such 
        fiscal year, except that the waiver authority of this 
        subclause may not be used to waive the minimum quantity 
        requirement of subparagraph (C);
          (II) may waive the minimum quantity requirement of 
        subparagraph (C) in accordance with subsection (f)(2) 
        of the Food for Progress Act of 1985; and
          (III) may waive the minimum quantity requirements of 
        subparagraphs (A), (B), and (C) for a fiscal year, if 
        the Secretary determines that the restrictions on the 
        furnishing of commodities under paragraph (3) prevent 
        the making available of commodities in such quantities.
  (ii) For any fiscal year in which the minimum levels of 
uncommitted Commodity Credit Corporation stocks specified in 
subparagraph (B) are not made available and during which any 
requests for commodities under this subsection are rejected, 
the Secretary shall provide a detailed, written explanation to 
Congress, at the end of such fiscal year, of the reasons for 
the rejections of such requests.
  (11)(A) The Secretary may furnish eligible commodities under 
this subsection in connection with (i) concessional sales 
agreements entered into under title I of the Agricultural Trade 
Development and Assistance Act of 1954 or other statutes, or 
(ii) agricultural export bonus or promotion programs carried 
out under the Commodity Credit Corporation Charter Act or other 
statutes.
  (B) Eligible commodities may be furnished by the Secretary 
under this subsection in connection with agreements by 
recipient countries to acquire additional agricultural 
commodities from the United States through commercial 
arrangements.
  (C) The amount of any commodity furnished under subparagraphs 
(A) and (B) of this paragraph in any fiscal year shall not be 
considered for the purpose of determining whether the 
requirements of paragraph (10)(A) of this subsection have been 
met during such fiscal year.
  (12) There is authorized to be appropriated for fiscal year 
1988, in addition to any other funds authorized to be 
appropriated, $1,000,000 for technical assistance for the sale 
or barter of commodities under paragraph (7) to strengthen 
nonprofit private organizations and cooperatives in the 
Philippines.
  (c) To prevent the waste of dairy products acquired by the 
Commodity Credit Corporation through price support operations, 
the Corporation, on such terms and under such regulations as 
the Secretary may prescribe, shall carry out a two-year pilot 
program under which the Corporation shall barter or exchange 
such dairy products, to the extent they are available, for 
forty thousand metric tons (consisting of twenty thousand 
metric tons in each year of the pilot program) of ultra-high 
temperature processed fluid milk. Such barter or exchange shall 
be effected on the basis of competitive bids submitted by 
domestic processors. The processed milk acquired by the 
Corporation under this subsection shall be available for 
donation through foreign governments and public and nonprofit 
private humanitarian organizations for the assistance of needy 
persons outside the United States, and the Corporation may pay, 
with respect to such processed milk donated under this 
subsection, transporting, handling, and other charges, 
including the cost of overseas delivery. Any donations under 
this subsection shall be coordinated through the mechanism 
designated by the President to coordinate assistance under the 
Agricultural Trade Development and Assistance Act of 1954 and 
shall be in addition to the level of assistance programmed 
under that Act. The pilot program shall be implemented by the 
Corporation as soon as practicable after the enactment of the 
Agricultural Programs Adjustment Act of 1984 and shall be 
operated for a period of two years after its implementation. 
Upon completion of the pilot program, the Secretary shall 
submit a report to Congress on its operation.
          * * * * * * *

        [TITLE IV--COTTON POOL PARTICIPATION TRUST CERTIFICATES

  [Sec. 401. There is hereby authorized to be appropriated, 
from any moneys in the Treasury of the United States not 
otherwise appropriated, the sum of $1,800,000, or so much 
thereof as may be required by the Secretary to accomplish the 
purposes hereinafter declared and authorized. The Secretary of 
the Treasury is hereby authorized and directed to pay to, or 
upon the order of, the Secretary, such a part or all of the sum 
hereby authorized to be appropriated at the request of the 
Secretary.
  [Sec. 402. The Secretary is hereby authorized to draw from 
the Treasury of the United States any part or all of the sum 
hereby authorized to be appropriated, and to deposit same to 
his credit with the Treasurer of the United States, under 
special symbol number, to be available for disbursement for the 
purposes hereinafter stated.
  [Sec. 403. The Secretary is hereby authorized to make 
available, from the sum hereby authorized to be appropriated, 
to the manager of the cotton pool, such sum or sums as may be 
necessary to enable the manager to purchase, take up, and 
cancel, subject to the restrictions hereinafter reserved, pool 
participation trust certificates, form C-5-I, where such 
certificates shall be tendered to the manager, cotton pool, by 
the person or persons shown by the records of the Department to 
have been the lawful holder and owner thereof on May 1, 1937, 
the purchase price to be paid for the certificates so purchased 
to be at the rate of $1 per five-hundred-pound bale for every 
bale or fractional part thereof represented by the certificates 
C-5-I. The Secretary is further authorized to pay directly, or 
to advance to, the manager of the cotton pool, to enable him to 
pay costs and expenses incident to the purchase of certificates 
as aforesaid and any balance remaining to the credit of the 
Secretary, or the manager, cotton pool, not required for the 
purchase of these certificates in accordance with provisions of 
this Act, shall, at the expiration of the purchase period, be 
covered into the Treasury of the United States as miscellaneous 
receipts.
  [Sec. 404. The authority of the manager, cotton pool, to 
purchase and pay for certificates hereunder shall extend to and 
include the 31st day of July 1938: Provided, That after 
expiration of the said limit, the purchase may be consummated 
of any certificates tendered to the manager, cotton pool, on or 
before July 31, 1938, but where for any reason the purchase 
price shall not have been paid by the manager, cotton pool. The 
Secretary is authorized to promulgate such rules, regulations, 
and requirements as in his discretion are proper to effectuate 
the general purposes of this title, which purpose is here 
stated to be specifically to authorize the purchase of 
outstanding pool participation trust certificates, form C-5-I, 
for a purchase price to be determined at the rate of $1 per 
bale, or twenty one-hundredths cent per pound, for the cotton 
evidenced by the said certificates, provided such certificates 
be tendered by holders thereof in accordance with regulations 
prescribed by the Secretary not later than the 31st day of July 
1938, and provided such certificates may not be purchased from 
persons other than those shown by the records of the Department 
to have been holders thereof on or before the 1st day of May 
1937.
  [Sec. 405. The Secretary is authorized to continue in 
existence the 1933 cotton producers pool so long as may be 
required to effectuate the purposes of this title. All expenses 
incident to the accomplishment of purposes of this title may be 
paid from funds hereby authorized to be appropriated, for which 
purpose the fund hereby authorized to be appropriated shall be 
deemed as supplemental to such funds as are now to the credit 
of the Secretary, reserved for the purpose of defraying 
operating expenses of the pool.
  [Sec. 406. After expiration of the time limit herein 
established, the certificates then remaining outstanding and 
not theretofore tendered to the manager, cotton pool, for 
purchase, shall not be purchased and no obligation on account 
thereof shall exist.
  [Sec. 407. Nothing in this title shall be construed to 
authorize the manager, cotton pool, to pay the assignee or any 
holder of such cotton pool participation trust certificates, 
form C-5-I, transferred on or before May 1, 1937, as shown by 
the records of the Department of Agriculture, more than the 
purchase price paid by the assignee or holder of such 
certificate with interest at the rate of 4 per centum per annum 
from the date of purchase, provided the amount paid such 
assignee shall not exceed $1 per bale. Before making payment to 
any assignee, whose certificates were transferred on or before 
May 1, 1937, such assignee shall file with the manager, cotton 
pool, an affidavit showing the amount paid by him for such 
certificate and the date of such payment, and the manager, 
cotton pool, is authorized to make payment to such assignee 
based upon the facts stated in said affidavit as aforesaid.]
                              ----------                              


                        AGRICULTURAL ACT OF 1949

   AN ACT To provide assistance to the States in the establishment, 
maintenance, operation, and expansion of school-lunch programs, and for 
                            other purposes.

  Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, [That this 
Act may be cited as the ``Agricultural Act of 1949''.

                [TITLE I--BASIC AGRICULTURAL COMMODITIES

  [Sec. 101. The Secretary of Agriculture (hereinafter called 
the ``Secretary'') is authorized and directed to make available 
through loans, purchases, or other operations, price support to 
cooperators for any crop of any basic agricultural commodity, 
if producers have not disapproved marketing quotas for such 
crop, at a level not in excess of 90 per centum of the parity 
price of the commodity nor less than the level provided in 
subsections (a), (b), and (c) as follows:

  [(a) For tobacco (except as otherwise provided herein), corn, and 
    wheat, if the supply percentage as of the beginning of the marketing 
    year is:        The level of support shall be not less than the 
                    following percentage of the parity price:

    Not more than 102.........................................       90 
    More than 102 but not more than 104.......................       89 
    More than 104 but not more than 106.......................       88 
    More than 106 but not more than 108.......................       87 
    More than 108 but not more than 110.......................       86 
    More than 110 but not more than 112.......................       85 
    More than 112 but not more than 114.......................       84 
    More than 114 but not more than 116.......................       83 
    More than 116 but not more than 118.......................       82 
    More than 118 but not more than 120.......................       81 
    More than 120 but not more than 122.......................       80 
    More than 122 but not more than 124.......................       79 
    More than 124 but not more than 126.......................       78 
    More than 126 but not more than 128.......................       77 
    More than 128 but not more than 130.......................       76 
    More than 130.............................................       75 
                                                                        

For rice of the 1959 and 1960 crops, the level of support shall 
be not less than 75 per centum of the parity price. For rice of 
the 1961 crop the level of support shall be not less than 70 
per centum of the parity price. For the 1962 and subsequent 
crops of rice the level of support shall be not less than 65 
per centum of the parity price.

  [(b) For cotton and peanuts, if the supply percentage as of the 
    beginning of theThe level of support shall be not less than the 
                    following percentage of the parity price:

    More than 108.............................................       90 
    More than 108 but not more than 110.......................       89 
    More than 110 but not more than 112.......................       88 
    More than 112 but not more than 114.......................       87 
    More than 114 but not more than 116.......................       86 
    More than 116 but not more than 118.......................       85 
    More than 118 but not more than 120.......................       84 
    More than 120 but not more than 122.......................       83 
    More than 122 but not more than 124.......................       82 
    More than 124 but not more than 125.......................       81 
    More than 125 but not more than 126.......................       80 
    More than 126 but not more than 127.......................       79 
    More than 127 but not more than 128.......................       78 
    More than 128 but not more than 129.......................       77 
    More than 129 but not more than 130.......................       76 
    More than 130.............................................       75 
                                                                        

  [(c) For tobacco, if marketing quotas are in effect, the 
level of support shall be 90 per centum of the parity price.
  [(d) Notwithstanding the foregoing provisions of this 
section--
          [(3) the level of price support to cooperators for 
        any crop of a basic agricultural commodity, except 
        tobacco, for which marketing quotas have been 
        disapproved by producers shall be 50 per centum of the 
        parity price of such commodity; and no price support 
        shall be made available for any crop of tobacco for 
        which marketing quotas have been disapproved by 
        producers;
          [(5) price support may be made available to 
        noncooperators at such levels, not in excess of the 
        level of price support to cooperators, as the Secretary 
        determines will facilitate the effective operation of 
        the program.
          [(7) Where a State is designated under section 335(e) 
        of the Agricultural Adjustment Act of 1938, as amended, 
        as outside the commercial wheat-producing area for any 
        crop of wheat, the level of price support for wheat to 
        cooperators in such State for such crop of wheat shall 
        be 75 per centum of the level of price support to 
        cooperators in the commercial wheat-producing area.

[SEC. 101B. LOANS, PAYMENTS, AND ACREAGE REDUCTION PROGRAMS FOR THE 
                    1991 THROUGH 1995 CROPS OF RICE.

  [(a) Loans and Purchases.--
          [(1) In general.--Except as otherwise provided in 
        this subsection, the Secretary shall make available to 
        producers on a farm nonrecourse loans and purchases for 
        each of the 1991 through 1995 crops of rice produced on 
        the farm at a level that is not less than the higher 
        of--
                  [(A) 85 percent of the simple average price 
                received by producers, as determined by the 
                Secretary, during the marketing years for the 
                immediately preceding 5 crops of rice, 
                excluding the year in which the average price 
                was the highest and the year in which the 
                average price was the lowest in the period; or
                  [(B) $6.50 per hundredweight.
          [(2) Maximum reduction.--The loan level for any crop 
        of rice determined under paragraph (1) may not be 
        reduced by more than 5 percent from the level 
        determined for the preceding crop.
          [(3) Announcement of loan level and established 
        price.--The loan and purchase level and the established 
        price for each of the 1991 through 1995 crops of rice 
        shall be announced not later than January 31 of each 
        calendar year for the crop harvested in the calendar 
        year or, in the case of the 1991 crop, as soon as 
        practicable after the date of enactment of this 
        section.
          [(4) Term.--A loan made under this subsection shall 
        have a term of not more than 9 months beginning after 
        the month in which the application for the loan is 
        made.
          [(5) Marketing loan provisions.--
                  [(A) In general.--In order to ensure that a 
                competitive market position is maintained for 
                rice, the Secretary shall permit a producer to 
                repay a loan made under paragraph (1) for a 
                crop at a level that is the lesser of--
                          [(i) the loan level determined for 
                        the crop; or
                          [(ii) the higher of--
                                  [(I) the loan level 
                                determined for the crop 
                                multiplied by 70 percent; or
                                  [(II) the prevailing world 
                                market price for rice, as 
                                determined by the Secretary.
                  [(B) Prevailing world market price.--The 
                Secretary shall prescribe by regulation--
                          [(i) a formula to define the 
                        prevailing world market price for rice; 
                        and
                          [(ii) a mechanism by which the 
                        Secretary shall announce periodically 
                        the prevailing world market price for 
                        rice.
                  [(C) Producer purchase of marketing 
                certificates.--
                          [(i) In general.--As a condition of 
                        permitting a producer to repay a loan 
                        as provided in subparagraph (A), the 
                        Secretary may require a producer to 
                        purchase marketing certificates equal 
                        in value to an amount that does not 
                        exceed one-half the difference, as 
                        determined by the Secretary, between 
                        the amount of the loan obtained by the 
                        producer and the amount of the loan 
                        repayment.
                          [(ii) Redemption for rice or cash.--
                        The certificates shall be redeemable 
                        for agricultural commodities owned by 
                        the Commodity Credit Corporation valued 
                        at the prevailing market price, as 
                        determined by the Secretary or for 
                        cash, under such terms and conditions 
                        as the Secretary may prescribe.
                          [(iii) Redemption, marketing, or 
                        exchange.--The Commodity Credit 
                        Corporation, under regulations 
                        prescribed by the Secretary, shall 
                        assist any person receiving marketing 
                        certificates under this subparagraph in 
                        the redemption or marketing or exchange 
                        of the certificates at such times, in 
                        such manner, and at such price levels 
                        as the Secretary determines will best 
                        effectuate the purposes of the program 
                        established under this section.
                          [(iv) Charges.--If any such 
                        certificate is not presented for 
                        redemption or marketing within a 
                        reasonable number of days after 
                        issuance, as determined by the 
                        Secretary, reasonable costs of storage 
                        and other carrying charges, as 
                        determined by the Secretary, shall be 
                        deducted from the value of the 
                        certificate for the period beginning 
                        after the reasonable number of days and 
                        ending with the date of the 
                        presentation of the certificate to the 
                        Commodity Credit Corporation.
                          [(v) Designation of commodities and 
                        products.--Insofar as practicable, the 
                        Secretary shall permit owners of 
                        certificates to designate the 
                        commodities and the products thereof, 
                        including storage sites thereof, the 
                        owners would prefer to receive in 
                        exchange for certificates.
                          [(vi) Sales price restrictions.--
                        Notwithstanding any other provision of 
                        law, any price restrictions that may 
                        otherwise apply to the disposition of 
                        agricultural commodities by the 
                        Commodity Credit Corporation shall not 
                        apply to the redemption of certificates 
                        under this subparagraph.
                          [(vii) Displacement.--The Secretary 
                        shall take such measures as may be 
                        necessary to prevent the marketing or 
                        exchange of agricultural commodities 
                        and the products thereof for 
                        certificates under this subparagraph 
                        from adversely affecting the income of 
                        producers of the commodities or 
                        products.
                          [(viii) Transfers.--Under regulations 
                        prescribed by the Secretary, 
                        certificates issued under this 
                        subparagraph may be transferred to 
                        other persons approved by the 
                        Secretary.
                  [(D) Certificates to maintain 
                competitiveness.--
                          [(i) In general.--Notwithstanding any 
                        other provision of law, whenever, 
                        during the period beginning August 1, 
                        1991, and ending July 31, 1996, the 
                        prevailing world market price for a 
                        class of rice (adjusted to United 
                        States quality and location), as 
                        determined by the Secretary, is below 
                        the current loan repayment rate for 
                        that class of rice, to make United 
                        States rice competitive in world 
                        markets and to maintain and expand 
                        exports of rice produced in the United 
                        States, the Commodity Credit 
                        Corporation shall make payments, 
                        through the issuance of marketing 
                        certificates, to persons who have 
                        entered into an agreement with the 
                        Commodity Credit Corporation to 
                        participate in the program established 
                        under this subparagraph. The payments 
                        shall be made in such monetary amounts 
                        and subject to such terms and 
                        conditions as the Secretary determines 
                        will make rice produced in the United 
                        States available at competitive prices 
                        consistent with the purposes of this 
                        subparagraph.
                          [(ii) Value.--The value of each 
                        certificate issued under this 
                        subparagraph shall be based on the 
                        difference between--
                                  [(I) the loan repayment rate 
                                for the class of rice; and
                                  [(II) the prevailing world 
                                market price for the class of 
                                rice, as determined by the 
                                Secretary.
                          [(iii) Terms and conditions of 
                        certificates.--Marketing certificates 
                        issued under this subparagraph shall be 
                        subject to the same terms and 
                        conditions as certificates issued under 
                        subparagraph (C).
          [(6) Simple average price.--For purposes of this 
        section, the simple average price received by producers 
        for the immediately preceding marketing year shall be 
        based on the latest information available to the 
        Secretary at the time of the determination.
  [(b) Loan Deficiency Payments.--
          [(1) In general.--The Secretary shall, for each of 
        the 1991 through 1995 crops of rice, make payments 
        (hereafter in this section referred to as ``loan 
        deficiency payments'') available to producers who, 
        although eligible to obtain a loan or purchase 
        agreement under subsection (a), agree to forgo 
        obtaining the loan or agreement in return for payments 
        under this subsection.
          [(2) Computation.--A payment under this subsection 
        shall be computed by multiplying--
                  [(A) the loan payment rate; by
                  [(B) the quantity of rice the producer is 
                eligible to place under loan (or obtain a 
                purchase agreement) but for which the producer 
                forgoes obtaining the loan or agreement in 
                return for payments under this subsection.
          [(3) Loan payment rate.--For purposes of this 
        subsection, the loan payment rate shall be the amount 
        by which--
                  [(A) the loan level determined for the crop 
                under subsection (a); exceeds
                  [(B) the level at which a loan may be repaid 
                under subsection (a).
          [(4) Marketing certificates.--The Secretary may make 
        up to one-half the amount of a payment under this 
        subsection available in the form of marketing 
        certificates, subject to the terms and conditions 
        provided in subsection (a)(5)(C).
  [(c) Payments.--
          [(1) Deficiency payments.--
                  [(A) In general.--The Secretary shall make 
                available to producers payments (hereafter in 
                this section referred to as ``deficiency 
                payments'') for each of the 1991 through 1995 
                crops of rice in an amount computed by 
                multiplying--
                          [(i) the payment rate; by
                          [(ii) the payment acres for the crop; 
                        by
                          [(iii) the farm program payment yield 
                        established for the crop for the farm.
                  [(B) Payment rate.--
                          [(i) Payment rate for 1991 through 
                        1993 crops.--The payment rate for each 
                        of the 1991 through 1993 crops of rice 
                        shall be the amount by which the 
                        established price for the crop of rice 
                        exceeds the higher of--
                                  [(I) the national average 
                                market price received by 
                                producers during the first 5 
                                months of the marketing year 
                                for the crop, as determined by 
                                the Secretary; or
                                  [(II) the loan level 
                                determined for the crop.
                          [(ii) Payment rate of 1994 and 1995 
                        crops.--The payment rate for each of 
                        the 1994 and 1995 crops of rice shall 
                        be the amount by which the established 
                        price for the crop of rice exceeds the 
                        higher of--
                                  [(I) the lesser of--
                                          [(aa) the national 
                                        average market price 
                                        received by producers 
                                        during the calendar 
                                        year that contains the 
                                        first 5 months of the 
                                        marketing year for the 
                                        crop, as determined by 
                                        the Secretary; or
                                          [(bb) the national 
                                        average market price 
                                        received by producers 
                                        during the first 5 
                                        months of the marketing 
                                        year for the crop, as 
                                        determined by the 
                                        Secretary, plus an 
                                        appropriate amount that 
                                        is fair and equitable 
                                        in relation to wheat 
                                        and feed grains (as 
                                        determined by the 
                                        Secretary); or
                                  [(II) the loan level 
                                determined for the crop.
                          [(iii) Minimum established price.--
                        The established price for rice shall 
                        not be less than $10.71 per 
                        hundredweight for each of the 1991 
                        through 1995 crops.
                  [(C) Payment acres.--Payment acres for a crop 
                shall be the lesser of--
                          [(i) the number of acres planted to 
                        the crop for harvest within the 
                        permitted acreage; or
                          [(ii) 85 percent of the crop acreage 
                        base for the crop for the farm less the 
                        quantity of reduced acreage (as 
                        determined under subsection (e)(2)(D)).
                  [(D) 50/85 program.--
                          [(i) In general.--If an acreage 
                        limitation program under subsection 
                        (e)(2) is in effect for a crop of rice 
                        and the producers on a farm devote a 
                        portion of the maximum payment acres 
                        for rice as calculated under 
                        subparagraph (C)(ii) for equal to more 
                        than 8 percent for each of the 1991 
                        through 1993 crops, and 15 percent for 
                        each of the 1994 through 1997 crops 
                        (except as provided in clause (v)(II)), 
                        of such rice acreage of the farm for 
                        the crop to conservation uses (except 
                        as provided in subparagraph (E))--
                                  [(I) such portion of the 
                                maximum payment acres in excess 
                                of 8 percent for each of the 
                                1991 through 1993 crops, and 15 
                                percent for each of the 1994 
                                through 1997 crops (except as 
                                provided in clause (v)(II)), of 
                                such acreage devoted to 
                                conservation uses (except as 
                                provided in subparagraph (E)) 
                                shall be considered to be 
                                planted to rice for the purpose 
                                of determining the acreage on 
                                the farm required to be devoted 
                                to conservation uses in 
                                accordance with subsection 
                                (e)(2)(D); and
                                  [(II) the producers shall be 
                                eligible for payments under 
                                this paragraph with respect to 
                                such acreage, subject to the 
                                compliance of the producers 
                                with clause (ii).
                          [(ii) Minimum planting requirement.--
                        To be eligible for payments under 
                        clause (i), except as provided in 
                        clauses (iv) and (v), the producers on 
                        a farm must actually plant rice for 
                        harvest on at least 50 percent of the 
                        maximum payment acres for rice for the 
                        farm.
                          [(iii) Deficiency payments.--
                        Notwithstanding any other provision of 
                        this section, any producer who devotes 
                        a portion of the maximum payment acres 
                        for rice for the farm to conservation 
                        uses (or other uses as provided in 
                        subparagraph (E)) under this 
                        subparagraph shall receive deficiency 
                        payments on the acreage that is 
                        considered to be planted to rice and 
                        eligible for payments under this 
                        subparagraph for the crop at a per-
                        hundredweight rate established by the 
                        Secretary, except that the rate may not 
                        be established at less than the 
                        projected deficiency payment rate for 
                        the crop, as determined by the 
                        Secretary. Such projected payment rate 
                        for the crop shall be announced by the 
                        Secretary prior to the period during 
                        which rice producers may agree to 
                        participate in the program for the 
                        crop.
                          [(iv) Quarantines.--If a State or 
                        local agency has imposed in an area of 
                        a State or county a quarantine on the 
                        planting of rice for harvest on farms 
                        in the area, the State committee 
                        established under section 8(b) of the 
                        Soil Conservation and Domestic 
                        Allotment Act (16 U.S.C. 590h(b)) may 
                        recommend to the Secretary that 
                        payments be made under this paragraph, 
                        without regard to the requirement 
                        imposed under clause (ii), to producers 
                        in the area who were required to forgo 
                        the planting of rice for harvest on 
                        acreage to alleviate or eliminate the 
                        condition requiring the quarantine. If 
                        the Secretary determines that the 
                        condition exists, the Secretary may 
                        make payments under this paragraph to 
                        the producers. To be eligible for 
                        payments under this clause, the 
                        producers must devote the acreage to 
                        conservation uses (except as provided 
                        in subparagraph (E)).
                          [(v) Prevented planting and reduced 
                        yields.--
                                  [(I) 1991 through 1993 
                                crops.--In the case of each of 
                                the 1991 through 1993 crops of 
                                rice, if an acreage limitation 
                                program under subsection (e) is 
                                in effect for any crop of rice 
                                and if the Secretary determines 
                                that producers on a farm are 
                                prevented from planting the 
                                acreage intended for rice to 
                                rice because of drought, flood, 
                                or other natural disaster, or 
                                other condition beyond the 
                                control of the producers, the 
                                Secretary shall make available 
                                to such producers payments 
                                under this subparagraph without 
                                regard to the requirement 
                                imposed under clause (ii). To 
                                be eligible for payments under 
                                this clause, the producers must 
                                devote the acreage to 
                                conservation uses (except as 
                                provided in subparagraph (E)). 
                                Any such acreage shall be 
                                considered to be planted to 
                                rice.
                                  [(II) 1994 through 1997 
                                crops.--In the case of each of 
                                the 1994 through 1997 crops of 
                                rice, producers on a farm shall 
                                be eligible to receive 
                                deficiency payments as provided 
                                in clause (iii) without regard 
                                to clause (ii) if an acreage 
                                limitation program under 
                                subsection (e) is in effect for 
                                the crop and--
                                          [(aa) the producers 
                                        have been determined by 
                                        the Secretary (in 
                                        accordance with section 
                                        503(c)) to be prevented 
                                        from planting the crop 
                                        or have incurred a 
                                        reduced yield for the 
                                        crop (due to a natural 
                                        disaster) and the 
                                        producers elect to 
                                        devote a portion of the 
                                        maximum payment acres 
                                        for rice (as calculated 
                                        under subparagraph 
                                        (C)(ii)) equal to more 
                                        than 8 percent of the 
                                        rice acreage, to 
                                        conservation uses; or
                                          [(bb) the producers 
                                        elect to devote a 
                                        portion of the maximum 
                                        payment acres for rice 
                                        (as calculated under 
                                        subparagraph (C)(ii)) 
                                        equal to more than 8 
                                        percent of the rice 
                                        acreage, to alternative 
                                        crops as provided in 
                                        subparagraph (E).
                          [(vi) Crop acreage and payment 
                        yield.--The rice crop acreage base and 
                        rice farm program payment yield of the 
                        farm shall not be reduced due to the 
                        fact that a portion of the permitted 
                        rice acreage of the farm was devoted to 
                        conserving uses (except as provided in 
                        subparagraph (E)) under this 
                        subparagraph.
                          [(vii) Limitation.--Other than as 
                        provided in clauses (i) through (vi), 
                        payments may not be made under this 
                        paragraph for any crop on a greater 
                        acreage than the acreage actually 
                        planted to rice.
                          [(viii) Conservation use acreage 
                        under other programs.--Any acreage 
                        considered to be planted to rice in 
                        accordance with clauses (i) and (vi) 
                        may not also be designated as 
                        conservation use acreage for the 
                        purpose of fulfilling any provisions 
                        under any acreage limitation or land 
                        diversion program requiring that the 
                        producers devote a specified acreage to 
                        conservation uses.
                  [(E) Alternative crops.--
                          [(i) Industrial and other crops.--The 
                        Secretary may permit, subject to such 
                        terms and conditions as the Secretary 
                        may prescribe, all or any part of 
                        acreage otherwise required to be 
                        devoted to conservation uses as a 
                        condition of qualifying for payments 
                        under subparagraph (D) to be devoted to 
                        sweet sorghum, guar, castor beans, 
                        plantago ovato, triticale, rye, millet, 
                        mung beans, commodities for which no 
                        substantial domestic production or 
                        market exists but that could yield 
                        industrial raw material being imported, 
                        or likely to be imported, into the 
                        United States, or commodities grown for 
                        experimental purposes (including kenaf 
                        and milkweed), subject to the following 
                        sentence. The Secretary may permit the 
                        acreage to be devoted to the production 
                        only if the Secretary determines that--
                                  [(I) the production is not 
                                likely to increase the cost of 
                                the price support program; and
                                  [(II) the production is 
                                needed to provide an adequate 
                                supply of the commodity, or, in 
                                the case of commodities for 
                                which no substantial domestic 
                                production or market exists but 
                                that could yield industrial raw 
                                materials, the production is 
                                needed to encourage domestic 
                                manufacture of the raw material 
                                and could lead to increased 
                                industrial use of the raw 
                                material to the long-term 
                                benefit of United States 
                                industry.
                          [(ii) Sesame and crambe.--The 
                        Secretary shall permit, subject to such 
                        terms and conditions as the Secretary 
                        may prescribe, all or any part of 
                        acreage otherwise required to be 
                        devoted to conservation uses as a 
                        condition of qualifying for payments 
                        under subparagraph (D) to be devoted to 
                        sesame and crambe. In implementing this 
                        clause, if the Secretary determines 
                        that sesame or crambe are considered 
                        oilseeds under section 205, the 
                        Secretary shall provide that, in order 
                        to receive payments under subparagraph 
                        (D), the producers shall agree to forgo 
                        eligibility to receive a loan under 
                        section 205 for the crop of sesame or 
                        crambe produced on the farm.
          [(2) Crop insurance requirement.--A producer shall 
        obtain catastrophic risk protection insurance coverage 
        in accordance with section 427.
  [(d) Payment Yields.--The farm program payment yields for 
farms for each crop of rice shall be determined under title V.
  [(e) Acreage Reduction Programs.--
          [(1) In general.--
                  [(A) Establishment.--Notwithstanding any 
                other provision of this Act, if the Secretary 
                determines that the total supply of rice, in 
                the absence of an acreage limitation program, 
                will be excessive taking into account the need 
                for an adequate carry-over to maintain 
                reasonable and stable supplies and prices and 
                to meet a national emergency, the Secretary may 
                provide for any crop of rice an acreage 
                limitation program as described in paragraph 
                (2).
                  [(B) Agricultural resources conservation 
                program.--In making a determination under 
                subparagraph (A), the Secretary shall take into 
                consideration the number of acres placed in the 
                agricultural resources conservation program 
                established under subtitle D of title XII of 
                the Food Security Act of 1985 (16 U.S.C. 3831 
                et seq.).
                  [(C) Announcements.--
                          [(i) Preliminary announcement.--If 
                        the Secretary elects to implement an 
                        acreage limitation program for any crop 
                        year, the Secretary shall make a 
                        preliminary announcement of any such 
                        program not later than December 1 of 
                        the calendar year preceding the year in 
                        which the crop is harvested (or, for 
                        the 1992 crop, as soon as practicable 
                        after the date of enactment of this 
                        subparagraph). The preliminary 
                        announcement shall include, among other 
                        information determined necessary by the 
                        Secretary, an announcement of the 
                        uniform percentage reduction in the 
                        rice crop acreage base described in 
                        paragraph (2)(A).
                          [(ii) Final announcement.--Not later 
                        than January 31 of the calendar year in 
                        which the crop is harvested, the 
                        Secretary shall make a final 
                        announcement of the program. The 
                        announcement shall include, among other 
                        information determined necessary by the 
                        Secretary, an announcement of the 
                        uniform percentage reduction in the 
                        rice crop described in paragraph 
                        (2)(A).
                  [(D) Carry-over.--The Secretary shall carry 
                out an acreage limitation program described in 
                paragraph (2) for a crop of rice in a manner 
                that will result in carry-over stocks equal to 
                16.5 to 20 percent of the simple average of the 
                total disappearance of rice for each of the 3 
                marketing years preceding the year for which 
                the announcement is made. For the purpose of 
                this subparagraph, the term ``total 
                disappearance'' means all rice utilization, 
                including total domestic, total export, and 
                total residual disappearance.
          [(2) Acreage limitation program.--
                  [(A) Percentage reductions.--Except as 
                provided in paragraph (3), if a rice acreage 
                limitation program is announced under paragraph 
                (1), such limitation shall be achieved by 
                applying a uniform percentage reduction (from 0 
                to 35 percent) to the rice crop acreage base 
                for the crop for each rice-producing farm.
                  [(B) Compliance.--Except as provided in 
                section 504, producers who knowingly produce 
                rice in excess of the permitted rice acreage 
                for the farm, as established in accordance with 
                subparagraph (A), shall be ineligible for rice 
                loans, purchases, and payments with respect to 
                that farm.
                  [(C) Crop acreage bases.--Rice crop acreage 
                bases for each crop of rice shall be determined 
                under title V.
                  [(D) Acreage devoted to conservation uses.--A 
                number of acres on the farm shall be devoted to 
                conservation uses, in accordance with 
                regulations issued by the Secretary. Such 
                number shall be determined by multiplying the 
                rice crop acreage base by the percentage 
                reduction required by the Secretary. The number 
                of acres so determined is hereafter in this 
                subsection referred to as ``reduced acreage''. 
                The remaining acreage is hereafter in this 
                subsection referred to as ``permitted 
                acreage''. Permitted acreage may be adjusted by 
                the Secretary as provided in paragraph (3) and 
                in section 504.
                  [(E) Individual farm program acreage.--Except 
                as otherwise provided in subsection (c), the 
                individual farm program acreage shall be the 
                acreage planted on the farm to rice for harvest 
                within the permitted rice acreage for the farm 
                as established under this paragraph.
                  [(F) Planting designated crops on reduced 
                acreage.--
                          [(i) Definition of designated crop.--
                        As used in this subparagraph, the term 
                        ``designated crop'' means a crop 
                        defined in section 504(b)(1), excluding 
                        any program crop as defined in section 
                        502(3).
                          [(ii) In general.--Subject to clause 
                        (iii), the Secretary may permit 
                        producers on a farm to plant a 
                        designated crop on no more than one-
                        half of the reduced acreage on the 
                        farm.
                          [(iii) Limitations.--If the producers 
                        on a farm elect to plant a designated 
                        crop on reduced acreage under this 
                        subparagraph--
                                  [(I) the amount of the 
                                deficiency payment that the 
                                producers are otherwise 
                                eligible to receive under 
                                subsection (c) shall be 
                                reduced, for each acre (or 
                                portion thereof) that is 
                                planted to the designated crop, 
                                by an amount equal to the 
                                deficiency payment that would 
                                be made with respect to a 
                                number of acres of the crop 
                                that the Secretary considers 
                                appropriate, except that if the 
                                producers on the farm are 
                                participating in a program 
                                established for more than one 
                                program crop, the amount of the 
                                reduction shall be determined 
                                by prorating the reduction 
                                based on the acreage planted or 
                                considered planted on the farm 
                                to all of such program crops; 
                                and
                                  [(II) the Secretary shall 
                                ensure that reductions in 
                                deficiency payments under 
                                subclause (I) are sufficient to 
                                ensure that this subparagraph 
                                will result in no additional 
                                cost to the Commodity Credit 
                                Corporation.
          [(3) Targeted option payments.--
                  [(A) In general.--Notwithstanding any other 
                provision of this section, if the Secretary 
                implements an acreage limitation program with 
                respect to any of the 1991 through 1995 crops 
                of rice and announces an acreage limitation 
                percentage of 20 percent or less, the Secretary 
                may make available to producers on a farm who 
                do not receive payments under subsection 
                (c)(1)(D) for such crop on the farm, 
                adjustments in the level of deficiency payments 
                that would otherwise be made available to the 
                producers if the producers exercise the payment 
                options provided in this paragraph.
                  [(B) Payment options.--If the Secretary 
                elects to carry out this paragraph, the 
                Secretary shall make the payment options 
                specified in subparagraphs (C) and (D) 
                available to producers who agree to make 
                adjustments in the quantity of acreage diverted 
                from the production of rice under an acreage 
                limitation program in accordance with this 
                paragraph.
                  [(C) Increased acreage limitation option.--
                          [(i) Increase in established price.--
                        If the Secretary elects to carry out 
                        this paragraph, a producer shall be 
                        eligible to receive an increase in the 
                        established price for rice under clause 
                        (ii) if the producer agrees to an 
                        increase in the acreage limitation 
                        percentage to be applied to the 
                        producers' rice acreage base above the 
                        acreage limitation percentage announced 
                        by the Secretary.
                          [(ii) Method of calculation.--For the 
                        purposes of calculating deficiency 
                        payments to be made available to 
                        producers who participate in the 
                        program under this paragraph, the 
                        Secretary shall increase the 
                        established price for rice by an amount 
                        determined by the Secretary, but not 
                        less than 0.5 percent, nor more than 1 
                        percent, for each 1 percentage point 
                        increase in the acreage limitation 
                        percentage applied to the producers' 
                        rice acreage base.
                          [(iii) Limitation.--The acreage 
                        limitation percentage to be applied to 
                        the producers' rice acreage base shall 
                        not be increased by more than 5 
                        percentage points above the acreage 
                        limitation percentage announced by the 
                        Secretary.
                          [(iv) Adjustment for 
                        underplantings.--In determining the 
                        increased acreage limitation percentage 
                        that is applied to the producer's rice 
                        acreage base under this paragraph, the 
                        Secretary shall exclude an amount of 
                        acreage equal to the average difference 
                        between the producer's permitted rice 
                        acreage and the acreage actually 
                        planted (including acreage devoted to 
                        conserving uses under subsection 
                        (c)(1)(D)) to rice for harvest during 
                        the previous 2 years.
                  [(D) Decreased acreage limitation option.--
                          [(i) Decrease in acreage limitation 
                        requirement.--If the Secretary elects 
                        to carry out this paragraph, a producer 
                        shall be eligible to decrease the 
                        acreage limitation percentage 
                        applicable to the producers' rice 
                        acreage base (as announced by the 
                        Secretary) if the producer agrees to a 
                        decrease in the established price for 
                        rice under clause (ii) for the purpose 
                        of calculating deficiency payments to 
                        be made available to the producer.
                          [(ii) Method of calculation.--For the 
                        purposes of calculating deficiency 
                        payments to be made available to 
                        producers who choose the option set 
                        forth in this subparagraph, the 
                        Secretary shall decrease the 
                        established price for rice by an amount 
                        to be determined by the Secretary, but 
                        not less than 0.5 percent, nor more 
                        than 1 percent, for each 1 percentage 
                        point decrease in the acreage 
                        limitation percentage applied to the 
                        producers' rice acreage base.
                          [(iii) Limitation.--A producer may 
                        not choose to decrease the acreage 
                        limitation percentage applicable to the 
                        producers' rice acreage base under this 
                        paragraph by more than one-half of the 
                        announced acreage limitation 
                        percentage.
                  [(E) Participation and production effects.--
                Notwithstanding any other provision of this 
                paragraph, the Secretary shall, to the extent 
                practicable, ensure that the program provided 
                for in this paragraph does not have a 
                significant effect on program participation or 
                total production and shall be offered in such a 
                manner that the Secretary determines will 
                result in no additional budget outlays. The 
                Secretary shall provide an analysis of the 
                Secretary's determination to the Committee on 
                Agriculture of the House of Representatives and 
                the Committee on Agriculture, Nutrition, and 
                Forestry of the Senate.
          [(4) Administration.--
                  [(A) Protection from weeds and erosion.--The 
                regulations issued by the Secretary under 
                paragraph (2) with respect to acreage required 
                to be devoted to conservation uses shall assure 
                protection of the acreage from weeds and wind 
                and water erosion.
                  [(B) Annual or perennial cover.--
                          [(i) Required.--
                                  [(I) In general.--Except as 
                                provided in subclause (II) and 
                                paragraph (2), a producer who 
                                participates in an acreage 
                                reduction program established 
                                for a crop of rice under this 
                                subsection shall be required to 
                                plant to, or maintain as, an 
                                annual or perennial cover 50 
                                percent (or more at the option 
                                of the producer) of the acreage 
                                that is required to be removed 
                                from the production of rice, 
                                but not to exceed 5 percent (or 
                                more at the option of the 
                                producer) of the crop acreage 
                                base established for the crop.
                                  [(II) Arid areas.--Subclause 
                                (I) shall not apply with 
                                respect to arid areas 
                                (including summer fallow 
                                areas), as determined by the 
                                Secretary. If the Secretary 
                                determines any county in a 
                                State to be arid, the 
                                respective State committee 
                                established under section 8(b) 
                                of the Soil Conservation and 
                                Domestic Allotment Act (16 
                                U.S.C. 590h(b)) may designate 
                                any other county or counties or 
                                all of the State as arid for 
                                the purposes of this paragraph.
                                  [(III) Approval of cover 
                                crops and practices.--The State 
                                committee, after receiving 
                                recommendations from the county 
                                committees, shall approve 
                                appropriate crops planted or 
                                maintained as cover, including, 
                                as appropriate, annual or 
                                perennial native grasses and 
                                legumes or other vegetation. 
                                The State committee shall 
                                establish the final seeding 
                                date for the planting of the 
                                cover and shall approve 
                                appropriate cover crops or 
                                practices, after consulting the 
                                Soil Conservation Service State 
                                Conservationist regarding 
                                whether the crops or practices 
                                will sufficiently protect the 
                                land from weeds and wind and 
                                water erosion. After the 
                                Secretary establishes the State 
                                technical committee for the 
                                State pursuant to section 1261 
                                of the Food Security Act of 
                                1985 (16 U.S.C. 3861), the 
                                State committee shall consult 
                                with the technical committee 
                                (rather than the Soil 
                                Conservation Service State 
                                Conservationist) regarding 
                                whether the crops or practices 
                                will sufficiently protect the 
                                land from weeds and wind and 
                                water erosion.
                          [(ii) Multiyear program.--
                                  [(I) Cost-share assistance.--
                                If a producer elects to 
                                establish a perennial cover 
                                capable of improving water 
                                quality or wildlife habitat on 
                                the acreage, the Commodity 
                                Credit Corporation shall make 
                                available cost-share assistance 
                                for 25 percent of the approved 
                                cost of establishing the cover 
                                on not more than 50 percent of 
                                the acreage that is required to 
                                be diverted from production, 
                                but not to exceed 5 percent (or 
                                more, at the option of the 
                                producer) of the crop acreage 
                                base established for a crop.
                                  [(II) Agreement of 
                                producer.--If a producer elects 
                                to establish a perennial cover 
                                on the acreage under this 
                                subparagraph and receives cost-
                                share assistance from the 
                                Corporation with respect to the 
                                cover, the producer, under such 
                                terms and conditions as may be 
                                prescribed by the Secretary, 
                                taking into consideration 
                                guidelines established by the 
                                State technical committees 
                                established in subtitle G of 
                                title XII of the Food Security 
                                Act of 1985, shall agree to 
                                maintain the perennial cover 
                                for a minimum of 3 years.
                          [(iii) Conserving crops.--The 
                        Secretary may permit, subject to such 
                        terms and conditions as the Secretary 
                        may prescribe, all or any part of the 
                        acreage to be devoted to sweet sorghum, 
                        guar, sesame, castor beans, crambe, 
                        plantago ovato, triticale, rye, mung 
                        beans, milkweed, or other commodity, if 
                        the Secretary determines that the 
                        production is needed to provide an 
                        adequate supply of the commodities, is 
                        not likely to increase the cost of the 
                        price support program, and will not 
                        affect farm income adversely.
                  [(C) Haying and grazing.--
                          [(i) In general.--Except as provided 
                        in clause (ii), haying and grazing of 
                        reduced acreage, acreage devoted to a 
                        conservation use under subsection 
                        (c)(1)(D), and acreage diverted from 
                        production under a land diversion 
                        program established under this section 
                        shall be permitted, except during any 
                        consecutive 5-month period that is 
                        established by the State committee 
                        established under section 8(b) of the 
                        Soil Conservation and Domestic 
                        Allotment Act (16 U.S.C. 590h(b)) for a 
                        State. The 5-month period shall be 
                        established during the period beginning 
                        April 1, and ending October 31, of a 
                        year.
                          [(ii) Natural disasters.--In the case 
                        of a natural disaster, the Secretary 
                        may permit unlimited haying and grazing 
                        on the acreage. The Secretary may not 
                        exclude irrigated or irrigable acreage 
                        not planted in alfalfa when exercising 
                        the authority under this clause.
                  [(D) Water storage uses.--
                          [(i) In general.--The regulations 
                        issued by the Secretary under paragraph 
                        (2) with respect to acreage required to 
                        be devoted to conservation uses shall 
                        provide that land that has been 
                        converted to water storage uses shall 
                        be considered to be devoted to 
                        conservation uses if the land was 
                        devoted to wheat, feed grains, cotton, 
                        rice, or oilseeds in at least 3 of the 
                        immediately preceding 5 years. The land 
                        shall be considered to be devoted to 
                        conservation uses for the period that 
                        the land remains in water storage uses, 
                        but not to exceed 5 years subsequent to 
                        its conversion to water storage uses.
                          [(ii) Limitations.--Land converted to 
                        water storage uses for the purposes of 
                        this subparagraph may not be devoted to 
                        any commercial use, including 
                        commercial fish production. The water 
                        stored on the land may not be ground 
                        water. The farm on which the land is 
                        located must have been irrigated with 
                        ground water during at least 1 of the 
                        preceding 5 crop years.
          [(5) Land diversion program.--
                  [(A) In general.--The Secretary may make land 
                diversion payments to producers of rice, 
                whether or not an acreage limitation program 
                for rice is in effect, if the Secretary 
                determines that the land diversion payments are 
                necessary to assist in adjusting the total 
                national acreage of rice to desirable goals. 
                The land diversion payments shall be made to 
                producers who, to the extent prescribed by the 
                Secretary, devote to approved conservation uses 
                an acreage of cropland on the farm in 
                accordance with land diversion contracts 
                entered into by the Secretary with the 
                producers.
                  [(B) Amounts.--The amounts payable to 
                producers under land diversion contracts may be 
                determined through the submission of bids for 
                the contracts by producers in such manner as 
                the Secretary may prescribe or through such 
                other means as the Secretary determines 
                appropriate. In determining the acceptability 
                of contract offers, the Secretary shall take 
                into consideration the extent of the diversion 
                to be undertaken by the producers and the 
                productivity of the acreage diverted.
                  [(C) Limitation on diverted acreage.--The 
                Secretary shall limit the total acreage to be 
                diverted under agreements in any county or 
                local community so as not to affect adversely 
                the economy of the county or local community.
          [(6) Conservation practices.--
                  [(A) Wildlife food plots or habitat.--The 
                reduced acreage and additional diverted acreage 
                may be devoted to wildlife food plots or 
                wildlife habitat in conformity with standards 
                established by the Secretary in consultation 
                with wildlife agencies. The Secretary may pay 
                an appropriate share of the cost of practices 
                designed to carry out the purposes of this 
                subparagraph.
                  [(B) Public access.--The Secretary may 
                provide for an additional payment on the 
                acreage in an amount determined by the 
                Secretary to be appropriate in relation to the 
                benefit to the general public if the producer 
                agrees to permit, without other compensation, 
                access to all or such portion of the farm, as 
                the Secretary may prescribe, by the general 
                public, for hunting, trapping, fishing, and 
                hiking, subject to applicable State and Federal 
                regulations.
          [(7) Participation agreements.--
                  [(A) In general.--Producers on a farm 
                desiring to participate in the program 
                conducted under this subsection shall execute 
                an agreement with the Secretary providing for 
                the participation not later than such date as 
                the Secretary may prescribe.
                  [(B) Modification or termination.--The 
                Secretary may, by mutual agreement with 
                producers on a farm, modify or terminate any 
                such agreement if the Secretary determines the 
                action necessary because of an emergency 
                created by drought or other disaster or to 
                prevent or alleviate a shortage in the supply 
                of agricultural commodities. The Secretary may 
                modify the agreement under this subparagraph 
                for the purpose of alleviating a shortage in 
                the supply of agricultural commodities only if 
                there has been a significant change in the 
                estimated stocks of the commodity since the 
                Secretary announced the final terms and 
                conditions of the program for the crop of rice.
  [(f) Inventory Reduction Payments.--
          [(1) In general.--The Secretary may, for each of the 
        1991 through 1995 crops of rice, make payments 
        available to producers who meet the requirements of 
        this subsection.
          [(2) Form.--The payments may be made in the form of 
        marketing certificates.
          [(3) Payments.--
                  [(A) In general.--Payments under this 
                subsection shall be determined in the same 
                manner as provided in subsection (b).
                  [(B) Quantity of rice made available.--The 
                quantity of rice to be made available to a 
                producer under this subsection shall be equal 
                in value to the payments so determined under 
                this subsection.
          [(4) Eligibility.--A producer shall be eligible to 
        receive a payment under this subsection for a crop if 
        the producer--
                  [(A) agrees to forgo obtaining a loan or 
                purchase agreement under subsection (a);
                  [(B) agrees to forgo receiving payments under 
                subsection (c);
                  [(C) does not plant rice for harvest in 
                excess of the crop acreage base reduced by one-
                half of any acreage required to be diverted 
                from production under subsection (e); and
                  [(D) otherwise complies with this section.
  [(g) Equitable Relief.--
          [(1) Loans and payments.--If the failure of a 
        producer to comply fully with the terms and conditions 
        of the program conducted under this section precludes 
        the making of loans, purchases, and payments, the 
        Secretary may, nevertheless, make such loans, 
        purchases, and payments in such amounts as the 
        Secretary determines are equitable in relation to the 
        seriousness of the failure. The Secretary may consider 
        whether the producer made a good faith effort to comply 
        fully with the terms and conditions of the program in 
        determining whether equitable relief is warranted under 
        this paragraph.
          [(2) Deadlines and program requirements.--The 
        Secretary may authorize the county and State committees 
        established under section 8(b) of the Soil Conservation 
        and Domestic Allotment Act (16 U.S.C. 590h(b)) to waive 
        or modify deadlines and other program requirements in 
        cases in which lateness or failure to meet the other 
        requirements does not affect adversely the operation of 
        the program.
  [(h) Regulations.--The Secretary may issue such regulations 
as the Secretary determines necessary to carry out this 
section.
  [(i) Commodity Credit Corporation.--The Secretary shall carry 
out the program authorized by this section through the 
Commodity Credit Corporation.
  [(j) Assignment of Payments.--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 under this section.
  [(k) Sharing of Payments.--The Secretary shall provide for 
the sharing of payments made under this section for any farm 
among the producers on the farm on a fair and equitable basis.
  [(l) Tenants and Sharecroppers.--The Secretary shall provide 
adequate safeguards to protect the interests of tenants and 
sharecroppers.
  [(m) Cross-Compliance.--
          [(1) In general.--Compliance on a farm with the terms 
        and conditions of any other commodity program, or 
        compliance with crop acreage base requirements for any 
        other commodity, may not be required as a condition of 
        eligibility for loans, purchases, or payments under 
        this section.
          [(2) Compliance on other farms.--The Secretary may 
        not require producers on a farm, as a condition of 
        eligibility for loans, purchases, or payments under 
        this section for the farm, to comply with the terms and 
        conditions of the rice program with respect to any 
        other farm operated by the producers.
  [(n) Crops.--Notwithstanding any other provision of law, this 
section shall be effective only for the 1991 through 1995 crops 
of rice.
  [Sec. 103. (a) Notwithstanding the provisions of section 101 
of this Act, price support to cooperators for each crop of 
upland cotton, beginning with the 1961 crop, for which 
producers have not disapproved marketing quotas shall be at 
such level not more than 90 per centum of the parity price 
therefor nor less than the minimum level prescribed below as 
the Secretary determines appropriate after consideration of the 
factors specified in section 401(b) of this Act. For the 1961 
crop the minimum level shall be 70 per centum of the parity 
price therefor, and for each subsequent crop the minimum level 
shall be 65 per centum of the parity price therefore: Provided, 
That the price support for the 1964 crop shall be a national 
average support price which reflects 30 cents per pound for 
Middling one-inch cotton. Price support in the case of 
noncooperators and in case marketing quotas are disapproved 
shall be as provided in section 101(d)(3) and (5).
  [(b)(1) For purposes of this subsection, extra long staple 
cotton means cotton which is produced from pure strain 
varieties of the Barbadense species or any hybrid thereof, or 
other similar types of extra long staple cotton, designated by 
the Secretary, having characteristics needed for various end 
uses for which American 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 such varieties or 
types and which is ginned on a roller-type gin or, if 
authorized by the Secretary, ginned on another type gin for 
experimental purposes.
  [(2) The Secretary shall, upon presentation of warehouse 
receipts reflecting accrued storage charges of not more than 
sixty days, make available to producers nonrecourse loans for a 
term of ten months from the first day of the month in which the 
loan is made at a level which is not less than 85 percent of 
the simple average price received by producers of extra long 
staple cotton, as determined by the Secretary, during 3 years 
of the 5-year period ending July 31 in the year in which the 
loan level is announced, excluding the year in which the 
average price was the highest and the year in which the average 
price was the lowest in such period. If authorized by the 
Secretary, nonrecourse loans provided for in this subsection 
may, upon request of the producer during the tenth month of the 
loan period for the cotton, be made available for an additional 
term of eight months. The loan level for any crop of extra long 
staple cotton shall be determined and announced by the 
Secretary not later than December 1 of the calendar year 
preceding the marketing year for which such loan is to be 
effective and such level shall not thereafter be changed.
  [(3)(A) In addition, payments shall be made for each crop of 
extra long staple cotton to producers on each farm at a rate 
equal to the amount by which the higher of--
          [(i) the average market price received by farmers for 
        extra long staple cotton during the first eight months 
        of the marketing year for such crop, as determined by 
        the Secretary, or
          [(ii) the loan level determined under paragraph (2) 
        of this subsection for such crop,
is less than the established price per pound times, in each 
case, the farm program acreage for extra long staple cotton 
(determined in accordance with paragraph (5)(A), but in no 
event on a greater acreage than the acreage actually planted to 
extra long staple cotton for harvest), multiplied by the farm 
program payment yield for extra long staple cotton (determined 
in accordance with paragraph (4)).
  [(B) Except as provided in clause (ii), the established price 
for each crop of extra long staple cotton shall be 120 per 
centum of the loan level determined for such crop under 
paragraph (2) of this subsection.
  [(ii) In the case of each of the 1988 and 1989 crops of extra 
long staple cotton, the established price for each such crop 
shall be 118.3 percent of the loan level determined for such 
crop under paragraph (2).
  [(C) If the Secretary establishes an acreage limitation 
program for a crop of extra long staple cotton in accordance 
with paragraph (5)(A) and determines that deficiency payments 
will likely be made for such crop of extra long staple cotton 
under subparagraph (A) of this paragraph, the Secretary may 
make available advance deficiency payments for such crop to 
producers who agree to participate in the acreage limitation 
program. Such advance payments shall be made available to 
producers as soon as practicable after the producer files a 
notice of intention to participate in such acreage limitation 
program and in such amount as the Secretary determines 
appropriate to encourage adequate participation in such 
program, except that such amount shall not exceed an amount 
determined by multiplying (i) the estimated farm program 
acreage for the crop, by (ii) the farm program payment yield 
for the crop, by (iii) 50 per centum of the projected payment 
rate, as determined by the Secretary. In any case in which the 
deficiency payment payable to a producer for a crop, as finally 
determined by the Secretary under subparagraph (A) of this 
paragraph, is less than the amount paid to the producer as an 
advance deficiency payment under this paragraph, the producer 
shall refund an amount equal to the difference between the 
amount advanced and the amount finally determined by the 
Secretary to be payable to the producer. If the Secretary 
determines that no deficiency payments are due producers on a 
crop, the producer who received advanced payments on such crop 
shall refund such payments. If a producer fails to comply with 
the requirements under the acreage limitation program after 
obtaining an advance deficiency payment under this paragraph, 
the producer shall immediately repay the amount of the advance, 
plus interest thereon in such amount as the Secretary shall 
prescribe.
  [(4) The farm program payment yield for each crop of extra 
long staple cotton shall be determined on the basis of the 
actual yields per harvested acre on the farm for the preceding 
three years, except that the actual yields shall be adjusted by 
the Secretary for abnormal yields in any year caused by 
drought, flood, or other natural disaster, or other condition 
beyond the control of the producers. In case farm yield data 
for one or more years are unavailable or there was no 
production, the Secretary shall provide for appraisals to be 
made on the basis of actual yields and program payment yields 
for similar farms in the area for which data are available. 
Notwithstanding the foregoing provisions of this paragraph in 
the determination of yields, the Secretary shall take into 
account the actual yields proved by the producer, and neither 
such yields nor the farm program payment yield established on 
the basis of such yields shall be reduced under other 
provisions of this paragraph. If the Secretary determines it 
necessary, the Secretary may establish national, State, or 
county program payment yields on the basis of historical 
yields, as adjusted by the Secretary to correct for abnormal 
factors affecting such yields in the historical period, or, if 
such data are not available, on the Secretary's estimate of 
actual yields for the crop year involved. If national, State, 
or county program payment yields are established, the farm 
program payment yields shall balance to the national, State, or 
county program payment yields.
  [(5)(A)(i) Notwithstanding any other provision of this 
subsection, the Secretary may establish a limitation on the 
acreage planted to extra long staple cotton if the Secretary 
determines that the total supply of extra long staple cotton, 
in the absence of such limitation, will be excessive taking 
into account the need for an adequate carryover to maintain 
reasonable and stable prices and to meet a national emergency. 
Such limitation shall be achieved by applying a uniform 
percentage reduction (including a zero percentage reduction) to 
the acreage base for each extra long staple cotton-producing 
farm. Producers who knowingly produce extra long staple cotton 
in excess of the permitted acreage for the farm shall be 
ineligible for extra long staple cotton loans and payments with 
respect to that farm. The acreage base for any farm for the 
purpose of determining any reduction required to be made for 
any year as a result of a limitation under this subparagraph 
shall be the average acreage planted on the farm to extra long 
staple cotton for harvest in the three crop years immediately 
preceding the year prior to the year for which the 
determination is made. For the purpose of the preceding 
sentence, acreage planted to extra long staple cotton for 
harvest shall include any acreage which the producers were 
prevented from planting to extra long staple cotton or other 
nonconserving crops in lieu of extra long staple cotton because 
of drought, flood, or other natural disaster or other condition 
beyond the control of the producers. The Secretary may make 
adjustments to reflect established crop-rotation practices and 
to reflect such other factors as the Secretary determines 
should be considered in determining a fair and equitable base. 
There is hereby established for the 1984, 1985, and 1986 crops 
an acreage base reserve equal to 5 per centum of the total of 
the farm acreage bases established for the crop under the 
foregoing provisions of this subparagraph. Such reserve shall 
be in addition to the total of the farm acreage bases and shall 
be used by the county committees, in accordance with 
regulations of the Secretary, for making adjustments of farm 
acreage bases to correct inequities and prevent hardship, and 
for establishing bases for farms on which no extra long staple 
cotton was planted during the preceding four years. A number of 
acres on the farm determined by dividing (i) the product 
obtained by multiplying the number of acres required to be 
withdrawn from the production of extra long staple cotton times 
the number of acres actually planted to such commodity, by (ii) 
the number of acres authorized to be planted to such commodity 
under the limitation established by the Secretary, shall be 
devoted to conservation uses, in accordance with regulations 
issued by the Secretary, which will assure protection of such 
acreage from weeds and wind and water erosion. The number of 
acres so determined is hereafter in this subsection referred to 
as ``reduced acreage''. The Secretary may permit, subject to 
such terms and conditions as the Secretary may prescribe, all 
or any part of the reduced acreage to be devoted to sweet 
sorghum, hay and grazing, or the production of guar, sesame, 
safflower, sunflower, castor beans, mustard seed, crambe, 
plantago ovato, flaxseed, triticale, rye, or other commodity, 
if the Secretary determines that such production is needed to 
provide an adequate supply of such commodities, is not likely 
to increase the cost of the price support program, and will not 
affect farm income adversely. The individual farm program 
acreage shall be the actual acreage planted on the farm to 
extra long staple cotton for harvest within the permitted extra 
long staple cotton acreage for the farm as established under 
this paragraph.
    [(ii) Notwithstanding any other provision of this Act, the 
Secretary shall ensure, under such terms and conditions as may 
be prescribed by the Secretary, that the total of the crop 
acreage bases established on a farm which is enrolled in a 
production adjustment program for any commodity shall not be 
increased as a result of the application of the provisions set 
forth in paragraph (13)(C), as extended for the 1989 and 1990 
crop.
  [(B) The Secretary may make land diversion payments to 
producers of extra long staple cotton, whether or not an 
acreage limitation program for extra long staple cotton is in 
effect, if the Secretary determines that such land diversion 
payments are necessary to assist in adjusting the total 
national acreage of extra long staple cotton to desirable 
goals. Such land diversion payments shall be made to producers 
who, to the extent prescribed by the Secretary, devote to 
approved conservation uses an acreage of cropland on the farm 
in accordance with land diversion contracts entered into by the 
Secretary with such producers. The amounts payable to producers 
under land diversion contracts may be determined through the 
submission of bids for such contracts by producers in such 
manner as the Secretary may prescribe or through such other 
means as the Secretary determines appropriate. In determining 
the acceptability of contract offers, the Secretary shall take 
into consideration the extent of the diversion to be undertaken 
by the producers and the productivity of the acreage diverted. 
The Secretary shall limit the total acreage to be diverted 
under agreements in any county or local community so as not to 
affect adversely the economy of the county or local community.
  [(C) The reduced acreage and the diverted acreage may be 
devoted to wildlife food plots or wildlife habitat in 
conformity with standards established by the Secretary in 
consultation with wildlife agencies. The Secretary may pay an 
appropriate share of the cost of practices designed to carry 
out the purpose of the foregoing sentence. The Secretary may 
provide for an additional payment on such acreage in an amount 
determined by the Secretary to be appropriate in relation to 
the benefit to the general public if the producer agrees to 
permit, without other compensation, access to all or such 
portion of the farm, as the Secretary may prescribe, by the 
general public, for hunting, trapping, fishing, and hiking, 
subject to applicable State and Federal regulations.
  [(6) An operator of a farm desiring to participate in the 
program conducted under paragraph (5) shall execute an 
agreement with the Secretary providing for such participation 
not later than such date as the Secretary may prescribe. The 
Secretary may, by mutual agreement with the producers on the 
farm, terminate or modify any such agreement if the Secretary 
determines such action necessary because of an emergency 
created by drought or other disaster or to prevent or alleviate 
a shortage in the supply of agricultural commodities.
  [(7) The Secretary shall provide for the sharing of payments 
made under this subsection for any farm among the producers on 
the farm on a fair and equitable basis.
  [(8) The Secretary shall provide adequate safeguards to 
protect the interests of tenants and sharecroppers.
  [(9) If the failure of a producer to comply fully with the 
terms and conditions of the program formulated under this 
subsection precludes the making of loans and payments, the 
Secretary may, nevertheless, make such loans and payments in 
such amounts as the Secretary determines to be equitable in 
relation to the seriousness of the failure. The Secretary may 
authorize the county and State committees established under 
section 8(b) of the Soil Conservation and Domestic Allotment 
Act to waive or modify deadlines and other program requirements 
in cases in which lateness or failure to meet such other 
requirements does not affect adversely the operation of the 
program.
  [(10) The Secretary may issue such regulations as the 
Secretary determines necessary to carry out the provisions of 
this subsection.
  [(11) The Secretary shall carry out the program authorized by 
this subsection through the Commodity Credit Corporation.
  [(12) The provisions of subsection 8(g) of the Soil 
Conservation and Domestic Allotment Act (relating to assignment 
of payments) shall apply to payments made under this 
subsection.
  [(13)(A) Compliance on a farm with the terms and conditions 
of any other commodity program or compliance with crop acreage 
base requirements for any other commodity may not be required 
as a condition of eligibility for loans or payments under this 
section.
  [(B) The Secretary may not require producers on a farm, as a 
condition of eligibility for loans or payments under this 
section for the farm, to comply with the terms and conditions 
of the extra long staple cotton program with respect to any 
other farm operated by the producers.
  [(14) In order to encourage and assist producers in the 
orderly ginning and marketing of their extra long staple cotton 
production, the Secretary shall make recourse loans available 
to such producers on seed cotton in accordance with authority 
vested in the Secretary under the Commodity Credit Corporation 
Charter Act.
  [(15) References made in sections 402, 403, 406, 407, and 416 
to the terms ``support price'', ``level of support'', and 
``level of price support'' shall be considered to apply as well 
to the level of loans for extra long staple cotton under this 
subsection; and references to the terms ``price support'', 
``price support operations'', and ``price support program'' in 
such sections and in section 401(a) shall be considered as 
applying as well to the loan operations for extra long staple 
cotton under this subsection.
  [(16) Notwithstanding any other provision of law, this 
subsection shall not be applicable to the 1996 and subsequent 
crops of extra long staple cotton.

[SEC. 103B. LOANS, PAYMENTS, AND ACREAGE REDUCTION PROGRAMS FOR THE 
                    1991 THROUGH 1997 CROPS OF UPLAND COTTON.

  [(a) Loans.--
          [(1) In general.--Except as otherwise provided in 
        this subsection, the Secretary shall, on presentation 
        of warehouse receipts or other acceptable evidence of 
        title, as determined by the Secretary, reflecting 
        accrued storage charges of not more than 60 days, make 
        available for the 1991 through 1997 crops of upland 
        cotton to producers on a farm nonrecourse loans for 
        upland cotton produced on the farm for a term of 10 
        months from the first day of the month in which the 
        loan is made at such loan level, per pound, as will 
        reflect for the base quality of upland cotton, as 
        determined by the Secretary, at average location in the 
        United States a level that is not less than the smaller 
        of--
                  [(A) 85 percent of the average price 
                (weighted by market and month) of the base 
                quality of cotton as quoted in the designated 
                United States spot markets during 3 years of 
                the 5-year period ending July 31 in the year in 
                which the loan level is announced, excluding 
                the year in which the average price was the 
                highest and the year in which the average price 
                was the lowest in the period; or
                  [(B) 90 percent of the average, for the 15-
                week period beginning July 1 of the year in 
                which the loan level is announced, of the 5 
                lowest-priced growths of the growths quoted for 
                Middling one and three-thirty-seconds inch 
                cotton C.I.F. Northern Europe (adjusted 
                downward by the average difference during the 
                period April 15 through October 15 of the year 
                in which the loan is announced between the 
                average Northern European price quotation of 
                such quality of cotton and the market 
                quotations in the designated United States spot 
                markets for the base quality of upland cotton), 
                as determined by the Secretary.
          [(2) Adjustments to loan level.--
                  [(A) Limitation on decrease in loan level.--
                The loan level for any crop determined under 
                paragraph (1) may not be reduced by more than 5 
                percent from the level determined for the 
                preceding crop, and may not be reduced below 50 
                cents per pound.
                  [(B) Limitation on increase in loan level.--
                If for any crop the average Northern European 
                price determined under paragraph (1)(B) is less 
                than the average United States spot market 
                price determined under paragraph (1)(A), the 
                Secretary may increase the loan level to such 
                level as the Secretary may consider 
                appropriate, not in excess of the average 
                United States spot market price determined 
                under paragraph (1)(A).
          [(3) Announcement of loan level.--The loan level for 
        any crop of upland cotton shall be determined and 
        announced by the Secretary not later than November 1 of 
        the calendar year preceding the marketing year for 
        which the loan is to be effective or, in the case of 
        the 1991 crop, as soon as is practicable after November 
        28, 1990. The loan level shall not thereafter be 
        changed.
          [(4) Extension of loan period.--
                  [(A) In general.--Except as provided in 
                subparagraph (B), nonrecourse loans provided 
                for in this section shall, on request of the 
                producer during the 10th month of the loan 
                period for the cotton, be made available for an 
                additional term of 8 months.
                  [(B) Limitation.--A request to extend the 
                loan period shall not be approved in any month 
                in which the average price of the base quality 
                of upland cotton, as determined by the 
                Secretary, in the designated spot markets for 
                the preceding month exceeded 130 percent of the 
                average price of such base quality of cotton in 
                the designated United States spot markets for 
                the preceding 36-month period.
          [(5) Marketing loan provisions.--
                  [(A) In general.--If the Secretary determines 
                that the prevailing world market price for 
                upland cotton (adjusted to United States 
                quality and location) is below the loan level 
                determined under the foregoing provisions of 
                this subsection, in order to make United States 
                upland cotton competitive in world markets, the 
                Secretary shall permit a producer to repay a 
                loan made for any crop at--
                          [(i) a level that is the lesser of--
                                  [(I) the loan level 
                                determined for the crop; or
                                  [(II) the higher of--
                                          [(aa) the loan level 
                                        determined for the crop 
                                        multiplied by 70 
                                        percent; or
                                          [(bb) the prevailing 
                                        world market price for 
                                        upland cotton (adjusted 
                                        to United States 
                                        quality and location), 
                                        as determined by the 
                                        Secretary; or
                          [(ii) such other level (not in excess 
                        of the loan level determined for the 
                        crop nor less than 70 percent of such 
                        loan level) that the Secretary 
                        determines will--
                                  [(I) minimize potential loan 
                                forfeitures;
                                  [(II) minimize the 
                                accumulation of cotton stocks 
                                by the Federal Government;
                                  [(III) minimize the cost 
                                incurred by the Federal 
                                Government in storing cotton; 
                                and
                                  [(IV) allow cotton produced 
                                in the United States to be 
                                marketed freely and 
                                competitively, both 
                                domestically and 
                                internationally.
                  [(B) First handler marketing certificates.--
                          [(i) In general.--During the period 
                        beginning August 1, 1991, and ending 
                        July 31, 1998, if a program carried out 
                        under subparagraph (A) or subsection 
                        (b) fails to make United States upland 
                        cotton fully competitive in world 
                        markets and the prevailing world market 
                        price of upland cotton (adjusted to 
                        United States quality and location), as 
                        determined by the Secretary, is below 
                        the current loan repayment rate for 
                        upland cotton determined under 
                        subparagraph (A), to make United States 
                        upland cotton competitive in world 
                        markets and to maintain and expand 
                        domestic consumption and exports of 
                        upland cotton produced in the United 
                        States, the Secretary shall provide for 
                        the issuance of marketing certificates 
                        or cash payments in accordance with 
                        this subparagraph.
                          [(ii) Payments.--The Commodity Credit 
                        Corporation, under such regulations as 
                        the Secretary may prescribe, shall make 
                        payments, through the issuance of 
                        marketing certificates or cash 
                        payments, to first handlers of cotton 
                        (persons regularly engaged in buying or 
                        selling upland cotton) who have entered 
                        into an agreement with the Commodity 
                        Credit Corporation to participate in 
                        the program established under this 
                        subparagraph. The payments shall be 
                        made in such monetary amounts and 
                        subject to such terms and conditions as 
                        the Secretary determines will make 
                        upland cotton produced in the United 
                        States available at competitive prices, 
                        consistent with the purposes of this 
                        subparagraph.
                          [(iii) Value.--The value of each 
                        certificate or cash payment issued 
                        under clause (ii) shall be based on the 
                        difference between--
                                  [(I) the loan repayment rate 
                                for upland cotton; and
                                  [(II) the prevailing world 
                                market price of upland cotton 
                                (adjusted to United States 
                                quality and location), as 
                                determined by the Secretary.
                          [(iv) Redemption, marketing, or 
                        exchange.--The Commodity Credit 
                        Corporation, under regulations 
                        prescribed by the Secretary, may assist 
                        any person receiving marketing 
                        certificates under this subparagraph in 
                        the redemption of certificates for 
                        cash, or marketing or exchange of the 
                        certificates for agricultural 
                        commodities or products owned by the 
                        Commodity Credit Corporation, at such 
                        times, in such manner, and at such 
                        price levels as the Secretary 
                        determines will best effectuate the 
                        purposes of the program established 
                        under this subparagraph. Any price 
                        restrictions that may otherwise apply 
                        to the disposition of agricultural 
                        commodities by the Commodity Credit 
                        Corporation shall not apply to the 
                        redemption of certificates under this 
                        subparagraph.
                          [(v) Designation of commodities and 
                        products; charges.--Insofar as 
                        practicable, the Secretary shall permit 
                        owners of certificates to designate the 
                        commodities and the products thereof, 
                        including storage sites thereof, the 
                        owners would prefer to receive in 
                        exchange for certificates. If any 
                        certificate is not presented for 
                        redemption, marketing, or exchange 
                        within a reasonable number of days 
                        after the issuance of the certificate 
                        (as determined by the Secretary), 
                        reasonable costs of storage and other 
                        carrying charges, as determined by the 
                        Secretary, shall be deducted from the 
                        value of the certificate for the period 
                        beginning after the reasonable number 
                        of days and ending with the date of the 
                        presentation of the certificate to the 
                        Commodity Credit Corporation.
                          [(vi) Displacement.--The Secretary 
                        shall take such measures as may be 
                        necessary to prevent the marketing or 
                        exchange of agricultural commodities 
                        and products for certificates under 
                        this subsection from adversely 
                        affecting the income of producers of 
                        the commodities or products.
                          [(vii) Transfers.--Under regulations 
                        prescribed by the Secretary, 
                        certificates issued to cotton handlers 
                        under this subparagraph may be 
                        transferred to other handlers and 
                        persons approved by the Secretary.
                  [(C) Prevailing world market price.--
                          [(i) In general.--The Secretary shall 
                        prescribe by regulation--
                                  [(I) a formula to define the 
                                prevailing world market price 
                                for upland cotton (adjusted to 
                                United States quality and 
                                location); and
                                  [(II) a mechanism by which 
                                the Secretary shall announce 
                                periodically the prevailing 
                                world market price for upland 
                                cotton (adjusted to United 
                                States quality and location).
                          [(ii) Use.--The prevailing world 
                        market price for upland cotton 
                        (adjusted to United States quality and 
                        location) established under this 
                        subparagraph shall be used under 
                        subparagraphs (A), (B), and (E).
                  [(D) Adjustment of prevailing world market 
                price.--
                          [(i) In general.--During the period 
                        beginning August 1, 1991, and ending 
                        July 31, 1998, the prevailing world 
                        market price for upland cotton 
                        (adjusted to United States quality and 
                        location) established under 
                        subparagraph (C) shall be further 
                        adjusted if--
                                  [(I) the adjusted prevailing 
                                world market price is less than 
                                115 percent of the current crop 
                                year loan level for the base 
                                quality of upland cotton, as 
                                determined by the Secretary; 
                                and
                                  [(II) the Friday through 
                                Thursday average price 
                                quotation for the lowest-priced 
                                United States growth as quoted 
                                for Middling (M) one and three-
                                thirty seconds inch cotton 
                                delivered C.I.F. Northern 
                                Europe is greater than the 
                                Friday through Thursday average 
                                price of the five lowest-priced 
                                growths of upland cotton, as 
                                quoted for Middling (M) one and 
                                three-thirty seconds inch 
                                cotton, delivered C.I.F. 
                                Northern Europe (hereafter in 
                                this subsection referred to as 
                                the ``Northern Europe price'').
                          [(ii) Further adjustment.--Except as 
                        provided in clause (iii), the adjusted 
                        prevailing world market price shall be 
                        further adjusted on the basis of some 
                        or all of the following data, as 
                        available:
                                  [(I) The United States share 
                                of world exports.
                                  [(II) The current level of 
                                cotton export sales and cotton 
                                export shipments.
                                  [(III) Other data determined 
                                by the Secretary to be relevant 
                                in establishing an accurate 
                                prevailing world market price 
                                for upland cotton (adjusted to 
                                United States quality and 
                                location).
                          [(iii) Limitation on further 
                        adjustment.--The adjustment under 
                        clause (ii) may not exceed the 
                        difference between--
                                  [(I) the Friday through 
                                Thursday average price for the 
                                lowest-priced United States 
                                growth as quoted for Middling 
                                one and three-thirty seconds 
                                inch cotton delivered C.I.F. 
                                Northern Europe; and
                                  [(II) the Northern Europe 
                                price.
                  [(E) Cotton user marketing certificates.--
                          [(i) Issuance.--Subject to clause 
                        (iv), during the period beginning 
                        August 1, 1991, and ending July 31, 
                        1998, the Secretary shall issue 
                        marketing certificates or cash payments 
                        to domestic users and exporters for 
                        documented purchases by domestic users 
                        and sales for export by exporters made 
                        in the week following a consecutive 4-
                        week period in which--
                                  [(I) the Friday through 
                                Thursday average price 
                                quotation for the lowest-priced 
                                United States growth, as quoted 
                                for Middling (M) one and three-
                                thirty seconds inch cotton, 
                                delivered C.I.F. Northern 
                                Europe exceeds the Northern 
                                Europe price by more than 1.25 
                                cents per pound; and
                                  [(II) the prevailing world 
                                market price for upland cotton 
                                (adjusted to United States 
                                quality and location), 
                                established under subparagraph 
                                (C), does not exceed 130 
                                percent of the current crop 
                                year loan level for the base 
                                quality of upland cotton, as 
                                determined by the Secretary.
                          [(ii) Value.--The value of the 
                        marketing certificates or cash payments 
                        shall be based on the amount of the 
                        difference (reduced by 1.25 cents per 
                        pound) in such prices during the 4th 
                        week of the consecutive 4-week period 
                        multiplied by the quantity of upland 
                        cotton included in the documented 
                        sales.
                          [(iii) Administration.--Clauses (iv) 
                        through (vii) of subparagraph (B) shall 
                        apply to marketing certificates issued 
                        under this subparagraph. Any such 
                        certificates may be transferred to 
                        other persons in accordance with 
                        regulations issued by the Secretary.
                          [(iv) Exception.--The Secretary shall 
                        not issue marketing certificates or 
                        cash payments under clause (i) if, for 
                        the immediately preceding consecutive 
                        10-week period, the Friday through 
                        Thursday average price quotation for 
                        the lowest priced United States growth, 
                        as quoted for Middling (M) one and 
                        three-thirty seconds inch cotton, 
                        delivered C.I.F. Northern Europe, 
                        adjusted for the value of any 
                        certificate issued under this 
                        subparagraph, exceeds the Northern 
                        Europe price by more than 1.25 cents 
                        per pound.
                  [(F) Special import quota.--
                          [(i) Establishment.--The President 
                        shall, within 180 days after the date 
                        of enactment of the Uruguay Round 
                        Agreements Act, establish an import 
                        quota program which shall provide that, 
                        during the period beginning August 1991 
                        and ending July 31, 1998, whenever the 
                        Secretary determines and announces that 
                        for any consecutive 10-week period, the 
                        Friday through Thursday average price 
                        quotation for the lowest-priced United 
                        States growth, as quoted for Middling 
                        (M) one and three-thirty seconds inch 
                        cotton, delivered C.I.F. Northern 
                        Europe, adjusted for the value of any 
                        certificates issued under subparagraph 
                        (E), exceeds the Northern Europe price 
                        by more than 1.25 cents per pound, 
                        there shall immediately be in effect a 
                        special import quota.
                          [(ii) Quantity.--The quota shall be 
                        equal to 1 week's consumption of upland 
                        cotton by domestic mills at the 
                        seasonally adjusted average rate of the 
                        most recent 3 months for which data are 
                        available.
                          [(iii) Application.--The quota shall 
                        apply to upland cotton purchased not 
                        later than 90 days after the date of 
                        the Secretary's announcement under 
                        clause (i) and entered into the United 
                        States not later than 180 days after 
                        such date.
                          [(iv) Overlap.--A special quota 
                        period may be established that overlaps 
                        any existing quota period if required 
                        by clause (i), except that a special 
                        quota period may not be established 
                        under this paragraph if a quota period 
                        has been established under subsection 
                        (n).
                          [(v) Preferential tariff treatment.--
                        The quantity under a special import 
                        quota shall be considered to be an in-
                        quota quantity for purposes of section 
                        213(d) of the Caribbean Basin Economic 
                        Recovery Act (19 U.S.C. 2703(d)), 
                        section 204 of the Andean Trade 
                        Preference Act (19 U.S.C. 3203), 
                        section 503(d) of the Trade Act of 1974 
                        (19 U.S.C. 2463(d)), and General Note 
                        3(a)(iv) to the HTS.
                          [(vi) Definition.--As used in this 
                        subparagraph, the term ``special import 
                        quota'' means a quantity of imports 
                        that is not subject to the over-quota 
                        tariff rate of a tariff-rate quota.
          [(6) Recourse loans for seed cotton.--In order to 
        encourage and assist producers in the orderly ginning 
        and marketing of their production of upland cotton, the 
        Secretary shall make recourse loans available to such 
        producers on seed cotton in accordance with authority 
        vested in the Secretary under the Commodity Credit 
        Corporation Charter Act (15 U.S.C. 714 et seq.).
  [(b) Loan Deficiency Payments.--
          [(1) In general.--The Secretary shall, for each of 
        the 1991 through 1997 crops of upland cotton, make 
        payments (hereafter in this section referred to as 
        ``loan deficiency payments'') available to producers 
        who, although eligible to obtain a loan under 
        subsection (a), agree to forgo obtaining the loan in 
        return for payments under this subsection.
          [(2) Computation.--A payment under this subsection 
        shall be computed by multiplying--
                  [(A) the loan payment rate; by
                  [(B) the quantity of upland cotton the 
                producer is eligible to place under loan but 
                for which the producer forgoes obtaining the 
                loan in return for payments under this 
                subsection.
          [(3) Loan payment rate.--For purposes of this 
        subsection, the loan payment rate shall be the amount 
        by which--
                  [(A) the loan level determined for the crop 
                under subsection (a); exceeds
                  [(B) the level at which a loan may be repaid 
                under subsection (a).
          [(4) Marketing certificates.--The Secretary may make 
        up to one-half the amount of a payment under this 
        subsection available in the form of marketing 
        certificates, subject to the terms and conditions 
        provided in subsection (a)(5)(B).
  [(c) Payments.--
          [(1) Deficiency payments.--
                  [(A) In general.--The Secretary shall make 
                available to producers payments (hereafter in 
                this section referred to as ``deficiency 
                payments'') for each of the 1991 through 1997 
                crops of upland cotton in an amount computed by 
                multiplying--
                          [(i) the payment rate; by
                          [(ii) the payment acres for the crop; 
                        by
                          [(iii) the farm program payment yield 
                        established for the crop for the farm.
                  [(B) Payment rate.--
                          [(i) In general.--The payment rate 
                        for upland cotton shall be the amount 
                        by which the established price for the 
                        crop of upland cotton exceeds the 
                        higher of--
                                  [(I) the national average 
                                market price received by 
                                producers during the calendar 
                                year that includes the first 5 
                                months of the marketing year 
                                for the crop, as determined by 
                                the Secretary; or
                                  [(II) the loan level 
                                determined for the crop.
                          [(ii) Minimum established price.--The 
                        established price for upland cotton 
                        shall not be less than $0.729 per pound 
                        for each of the 1991 through 1997 
                        crops.
                  [(C) Payment acres.--Payment acres for a crop 
                shall be the lesser of--
                          [(i) the number of acres planted to 
                        the crop for harvest within the 
                        permitted acreage; or
                          [(ii) 85 percent of the crop acreage 
                        base for the crop for the farm less the 
                        quantity of reduced acreage (as 
                        determined under subsection (e)(2)(D)).
                  [(D) 50/85 program.--
                          [(i) In general.--If an acreage 
                        limitation program under subsection 
                        (e)(2) is in effect for a crop of 
                        upland cotton and the producers on a 
                        farm devote a portion of the maximum 
                        payment acres for upland cotton as 
                        calculated under subparagraph (C)(ii) 
                        of the farm equal to more than 8 
                        percent for each of the 1991 through 
                        1993 crops, and 15 percent for each of 
                        the 1994 through 1997 crops (except as 
                        provided in clause (v)(II)), of such 
                        upland cotton acreage of the farm for 
                        the crop to conservation uses (except 
                        as provided in subparagraph (E))--
                                  [(I) such portion of the 
                                maximum payment acres in excess 
                                of 8 percent for each of the 
                                1991 through 1993 crops, and 15 
                                percent for each of the 1994 
                                through 1997 crops (except as 
                                provided in clause (v)(II)), of 
                                such acreage devoted to 
                                conservation uses (except as 
                                provided in subparagraph (E)) 
                                shall be considered to be 
                                planted to upland cotton for 
                                the purpose of determining the 
                                acreage on the farm required to 
                                be devoted to conservation uses 
                                in accordance with subsection 
                                (e)(2)(D); and
                                  [(II) the producers shall be 
                                eligible for payments under 
                                this paragraph with respect to 
                                such acreage, subject to the 
                                compliance of the producers 
                                with clause (ii).
                          [(ii) Minimum planting requirement.--
                        To be eligible for payments under 
                        clause (i), except as provided in 
                        clauses (iv) and (v), the producers on 
                        a farm must actually plant upland 
                        cotton for harvest on at least 50 
                        percent of the maximum payment acres 
                        for cotton for the farm.
                          [(iii) Deficiency payments.--
                        Notwithstanding any other provision of 
                        this section, any producer who devotes 
                        a portion of the maximum payment acres 
                        for upland cotton for the farm to 
                        conservation uses (or other uses as 
                        provided in subparagraph (E)) under 
                        this subparagraph shall receive 
                        deficiency payments on the acreage that 
                        is considered to be planted to upland 
                        cotton and eligible for payments under 
                        this subparagraph for the crop at a 
                        per-pound rate established by the 
                        Secretary, except that the rate may not 
                        be established at less than the 
                        projected deficiency payment rate for 
                        the crop, as determined by the 
                        Secretary. Such projected payment rate 
                        for the crop shall be announced by the 
                        Secretary prior to the period during 
                        which upland cotton producers may agree 
                        to participate in the program for the 
                        crop.
                          [(iv) Quarantines.--If a State or 
                        local agency has imposed in an area of 
                        a State or county a quarantine on the 
                        planting of upland cotton for harvest 
                        on farms in the area, the State 
                        committee established under section 
                        8(b) of the Soil Conservation and 
                        Domestic Allotment Act (16 U.S.C. 
                        590h(b)) may recommend to the Secretary 
                        that payments be made under this 
                        paragraph, without regard to the 
                        requirement imposed under clause (ii), 
                        to producers in the area who were 
                        required to forgo the planting of 
                        upland cotton for harvest on acreage to 
                        alleviate or eliminate the condition 
                        requiring the quarantine. If the 
                        Secretary determines that the condition 
                        exists, the Secretary may make payments 
                        under this paragraph to the producers. 
                        To be eligible for payments under this 
                        clause, the producers must devote the 
                        acreage to conservation uses (except as 
                        provided in subparagraph (E)).
                          [(v) Prevented planting and reduced 
                        yields.--
                                  [(I) 1991 through 1993 
                                crops.--In the case of each of 
                                the 1991 through 1993 crops of 
                                upland cotton, if an acreage 
                                limitation program under 
                                subsection (e) is in effect for 
                                any crop of upland cotton and 
                                if the Secretary determines 
                                that producers on a farm are 
                                prevented from planting the 
                                acreage intended for upland 
                                cotton to upland cotton because 
                                of drought, flood, or other 
                                natural disaster, or other 
                                condition beyond the control of 
                                the producers, the Secretary 
                                shall make available to such 
                                producers payments under this 
                                subparagraph without regard to 
                                the requirement imposed under 
                                clause (ii). To be eligible for 
                                payments under this clause, the 
                                producers must devote the 
                                acreage to conservation uses 
                                (except as provided in 
                                subparagraph (E)). Any such 
                                acreage shall be considered to 
                                be planted to upland cotton.
                                  [(II) 1994 through 1997 
                                crops.--In the case of each of 
                                the 1994 through 1997 crops of 
                                upland cotton, producers on a 
                                farm shall be eligible to 
                                receive deficiency payments as 
                                provided in clause (iii) 
                                without regard to clause (ii) 
                                if an acreage limitation 
                                program under subsection (e) is 
                                in effect for the crop and--
                                          [(aa) the producers 
                                        have been determined by 
                                        the Secretary (in 
                                        accordance with section 
                                        503(c)) to be prevented 
                                        from planting the crop 
                                        or have incurred a 
                                        reduced yield for the 
                                        crop (due to a natural 
                                        disaster) and the 
                                        producers elect to 
                                        devote a portion of the 
                                        maximum payment acres 
                                        for upland cotton (as 
                                        calculated under 
                                        subparagraph (C)(ii)) 
                                        equal to more than 8 
                                        percent of the upland 
                                        cotton acreage, to 
                                        conservation uses; or
                                          [(bb) the producers 
                                        elect to devote a 
                                        portion of the maximum 
                                        payment acres for 
                                        upland cotton (as 
                                        calculated under 
                                        subparagraph (C)(ii)) 
                                        equal to more than 8 
                                        percent of the upland 
                                        cotton acreage, to 
                                        alternative crops as 
                                        provided in 
                                        subparagraph (E).
                          [(vi) Crop acreage and payment 
                        yield.--The upland cotton crop acreage 
                        base and upland cotton farm program 
                        payment yield of the farm shall not be 
                        reduced due to the fact that a portion 
                        of the permitted cotton acreage of the 
                        farm was devoted to conserving uses 
                        (except as provided in subparagraph 
                        (E)) under this subparagraph.
                          [(vii) Limitation.--Other than as 
                        provided in clauses (i) through (vi), 
                        payments may not be made under this 
                        paragraph for any crop on a greater 
                        acreage than the acreage actually 
                        planted to upland cotton.
                          [(viii) Conservation use acreage 
                        under other programs.--Any acreage 
                        considered to be planted to upland 
                        cotton in accordance with clauses (i) 
                        and (vi) may not also be designated as 
                        conservation use acreage for the 
                        purpose of fulfilling any provisions 
                        under any acreage limitation or land 
                        diversion program requiring that the 
                        producers devote a specified acreage to 
                        conservation uses.
                          [(ix) Black-eyed peas for donation.--
                        The Secretary may permit, under such 
                        terms and conditions as will ensure 
                        optimum producer participation, all or 
                        any part of the acreage required to be 
                        devoted to conservation uses as a 
                        condition for qualifying for payments 
                        under this subparagraph to be devoted 
                        to the production of black-eyed peas 
                        if--
                                  [(I) the producer agrees to 
                                donate the harvested peas from 
                                the acreage to a food bank, 
                                food pantry, or soup kitchen 
                                (as defined in paragraphs (3), 
                                (4), and (7) of section 110(b) 
                                of the Hunger Prevention Act of 
                                1988 (7 U.S.C. 612c note)) that 
                                is approved by the Secretary; 
                                and
                                  [(II) the Secretary finds 
                                that such action will not 
                                result in the disruption of 
                                normal channels of trade.
                  [(E) Alternative crops.--
                          [(i) Industrial and other crops.--The 
                        Secretary may permit, subject to such 
                        terms and conditions as the Secretary 
                        may prescribe, all or any part of 
                        acreage otherwise required to be 
                        devoted to conservation uses as a 
                        condition of qualifying for payments 
                        under subparagraph (D) to be devoted to 
                        sweet sorghum, guar, castor beans, 
                        plantago ovato, triticale, rye, millet, 
                        mung beans, commodities for which no 
                        substantial domestic production or 
                        market exists but that could yield 
                        industrial raw material being imported, 
                        or likely to be imported, into the 
                        United States, or commodities grown for 
                        experimental purposes (including kenaf 
                        and milkweed), subject to the following 
                        sentence. The Secretary may permit the 
                        acreage to be devoted to the production 
                        only if the Secretary determines that--
                                  [(I) the production is not 
                                likely to increase the cost of 
                                the price support program; and
                                  [(II) the production is 
                                needed to provide an adequate 
                                supply of the commodity, or, in 
                                the case of commodities for 
                                which no substantial domestic 
                                production or market exists but 
                                that could yield industrial raw 
                                materials, the production is 
                                needed to encourage domestic 
                                manufacture of the raw material 
                                and could lead to increased 
                                industrial use of the raw 
                                material to the long-term 
                                benefit of United States 
                                industry.
                          [(ii) Sesame and crambe.--The 
                        Secretary shall permit, subject to such 
                        terms and conditions as the Secretary 
                        may prescribe, all or any part of 
                        acreage otherwise required to be 
                        devoted to conservation uses as a 
                        condition of qualifying for payments 
                        under subparagraph (D) to be devoted to 
                        sesame and crambe. In implementing this 
                        clause, if the Secretary determines 
                        that sesame or crambe are considered 
                        oilseeds under section 205, the 
                        Secretary shall provide that, in order 
                        to receive payments under subparagraph 
                        (D), the producers shall agree to forgo 
                        eligibility to receive a loan under 
                        section 205 for the crop of sesame or 
                        crambe produced on the farm.
          [(2) Crop insurance requirement.--A producer shall 
        obtain catastrophic risk protection insurance coverage 
        in accordance with section 427.
  [(d) Payment Yields.--The farm program payment yields for 
farms for each crop of upland cotton shall be determined under 
title V.
  [(e) Acreage Reduction Programs.--
          [(1) In general.--
                  [(A) Establishment.--Notwithstanding any 
                other provision of this Act, if the Secretary 
                determines that the total supply of upland 
                cotton, in the absence of an acreage limitation 
                program, will be excessive taking into account 
                the need for an adequate carry-over to maintain 
                reasonable and stable supplies and prices and 
                to meet a national emergency, the Secretary may 
                provide for any crop of upland cotton an 
                acreage limitation program as described in 
                paragraph (2).
                  [(B) Agricultural resources conservation 
                program.--In making a determination under 
                subparagraph (A), the Secretary shall take into 
                consideration the number of acres placed in the 
                agricultural resources conservation program 
                established under subtitle D of title XII of 
                the Food Security Act of 1985 (16 U.S.C. 3831 
                et seq.).
                  [(C) Announcements.--
                          [(i) Preliminary announcement.--If 
                        the Secretary elects to implement an 
                        acreage limitation program for any crop 
                        year, the Secretary shall make a 
                        preliminary announcement of any such 
                        program not later than November 1 of 
                        the calendar year preceding the year in 
                        which the crop is harvested, except 
                        that in the case of the 1991 crop, the 
                        Secretary shall announce the program as 
                        soon as practicable after the date of 
                        enactment of this section. The 
                        announcement shall include, among other 
                        information determined necessary by the 
                        Secretary, an announcement of the 
                        uniform percentage reduction in the 
                        upland cotton crop acreage base 
                        described in paragraph (2)(A).
                          [(ii) Final announcement.--Not later 
                        than January 1 of the calendar year in 
                        which the crop is harvested, the 
                        Secretary shall make a final 
                        announcement of the program. The 
                        announcement shall include, among other 
                        information determined necessary by the 
                        Secretary, an announcement of the 
                        uniform percentage reduction in the 
                        upland cotton crop described in 
                        paragraph (2)(A).
                          [(iii) Optional programs in early 
                        planting areas.--The Secretary shall 
                        allow producers in early planting areas 
                        to elect to participate in the program 
                        on the terms of the acreage limitation 
                        program--
                                  [(I) first announced for the 
                                crop under clause (i); or
                                  [(II) as subsequently revised 
                                under clause (ii),
                        if the Secretary determines that the 
                        producers may be unfairly disadvantaged 
                        by the revision.
                  [(D) Desired carry-over.--The Secretary shall 
                carry out an acreage limitation program 
                described in paragraph (2) for a crop of upland 
                cotton in a manner that will result in a ratio 
                of carry-over to total disappearance of 30 
                percent for each of the 1991 through 1994 
                crops, 29\1/2\ percent for each of the 1995 and 
                1996 crops, and 29 percent for the 1997 crop, 
                based on the Secretary's most recent projection 
                of carry-over and total disappearance at the 
                time of announcement of the acreage limitation 
                program. For the purpose of this subparagraph, 
                the term ``total disappearance'' means all 
                upland cotton utilization, including total 
                domestic, total export, and total residual 
                disappearance.
          [(2) Acreage limitation program.--
                  [(A) Uniform percentage reduction.--Except as 
                provided in paragraph (3), if an upland cotton 
                acreage limitation program is announced under 
                paragraph (1), the limitation shall be achieved 
                by applying a uniform percentage reduction 
                (from 0 to 25 percent) to the upland cotton 
                crop acreage base for the crop for each upland 
                cotton-producing farm.
                  [(B) Compliance.--Except as provided in 
                section 504, producers who knowingly produce 
                upland cotton in excess of the permitted upland 
                cotton acreage for the farm, as established in 
                accordance with subparagraph (A), shall be 
                ineligible for upland cotton loans and payments 
                with respect to that farm.
                  [(C) Crop acreage bases.--Upland cotton crop 
                acreage bases for each crop of upland cotton 
                shall be determined under title V.
                  [(D) Acreage devoted to conservation uses.--A 
                number of acres on the farm shall be devoted to 
                conservation uses, in accordance with 
                regulations issued by the Secretary. Such 
                number shall be determined by multiplying the 
                upland cotton crop acreage base by the 
                percentage reduction required by the Secretary. 
                The number of acres so determined is hereafter 
                in this subsection referred to as ``reduced 
                acreage''. The remaining acreage is hereafter 
                in this subsection referred to as ``permitted 
                acreage''. Permitted acreage may be adjusted by 
                the Secretary as provided in paragraph (3) and 
                in section 504.
                  [(E) Individual farm program acreage.--Except 
                as otherwise provided in subsection (c), the 
                individual farm program acreage shall be the 
                acreage planted on the farm to upland cotton 
                for harvest within the permitted upland cotton 
                acreage for the farm as established under this 
                paragraph.
                  [(F) Planting designated crops on reduced 
                acreage.--
                          [(i) Definition of designated crop.--
                        As used in this subparagraph, the term 
                        ``designated crop'' means a crop 
                        defined in section 504(b)(1), excluding 
                        any program crop as defined in section 
                        502(3).
                          [(ii) In general.--Subject to clause 
                        (iii), the Secretary may permit 
                        producers on a farm to plant a 
                        designated crop on no more than one-
                        half of the reduced acreage on the 
                        farm.
                          [(iii) Limitations.--If the producers 
                        on a farm elect to plant a designated 
                        crop on reduced acreage under this 
                        subparagraph--
                                  [(I) the amount of the 
                                deficiency payment that the 
                                producers are otherwise 
                                eligible to receive under 
                                subsection (c) shall be 
                                reduced, for each acre (or 
                                portion thereof) that is 
                                planted to the designated crop, 
                                by an amount equal to the 
                                deficiency payment that would 
                                be made with respect to a 
                                number of acres of the crop 
                                that the Secretary considers 
                                appropriate, except that if the 
                                producers on the farm are 
                                participating in a program 
                                established for more than one 
                                program crop, the amount of the 
                                reduction shall be determined 
                                by prorating the reduction 
                                based on the acreage planted or 
                                considered planted on the farm 
                                to all of such program crops; 
                                and
                                  [(II) the Secretary shall 
                                ensure that reductions in 
                                deficiency payments under 
                                subclause (I) are sufficient to 
                                ensure that this subparagraph 
                                will result in no additional 
                                cost to the Commodity Credit 
                                Corporation.
                  [(G) Black-eyed peas for donation.--The 
                Secretary may permit, under such terms and 
                conditions as will ensure optimum producer 
                participation, producers on a farm to plant 
                black-eyed peas on not more than one-half of 
                the reduced acreage on the farm if--
                          [(i) the producer agrees to donate 
                        the harvested peas from such acreage to 
                        a food bank, food pantry, or soup 
                        kitchen (as defined in paragraphs (3), 
                        (4), and (7) of section 110(b) of the 
                        Hunger Prevention Act of 1988 (7 U.S.C. 
                        612c note)) that is approved by the 
                        Secretary; and
                          [(ii) the Secretary finds that such 
                        action will not result in the 
                        disruption of normal channels of trade.
          [(3) Targeted option payments.--
                  [(A) In general.--Notwithstanding any other 
                provision of this section, if the Secretary 
                implements an acreage limitation program with 
                respect to any of the 1991 through 1995 crops 
                of upland cotton, the Secretary may make 
                available to producers on a farm who do not 
                receive payments under subsection (c)(1)(D) for 
                such crop on the farm, adjustments in the level 
                of deficiency payments that would otherwise be 
                made available to the producers if the 
                producers exercise the payment options provided 
                in this paragraph.
                  [(B) Payment options.--If the Secretary 
                elects to carry out this paragraph, the 
                Secretary shall make the payment options 
                specified in subparagraphs (C) and (D) 
                available to producers who agree to make 
                adjustments in the quantity of acreage diverted 
                from the production of upland cotton under an 
                acreage limitation program in accordance with 
                this paragraph.
                  [(C) Increased acreage limitation option.--
                          [(i) Increase in established price.--
                        If the Secretary elects to carry out 
                        this paragraph, a producer shall be 
                        eligible to receive an increase in the 
                        established price for upland cotton 
                        under clause (ii) if the producer 
                        agrees to an increase in the acreage 
                        limitation percentage to be applied to 
                        the producers' upland cotton acreage 
                        base above the acreage limitation 
                        percentage announced by the Secretary.
                          [(ii) Method of calculation.--For the 
                        purposes of calculating deficiency 
                        payments to be made available to 
                        producers who participate in the 
                        program under this paragraph, the 
                        Secretary shall increase the 
                        established price for upland cotton by 
                        an amount determined by the Secretary, 
                        but not less than 0.5 percent, nor more 
                        than 1 percent, for each 1 percentage 
                        point increase in the acreage 
                        limitation percentage applied to the 
                        producers' upland cotton acreage base.
                          [(iii) Limitation.--The acreage 
                        limitation percentage to be applied to 
                        the producers' upland cotton acreage 
                        base shall not be increased by more 
                        than 10 percentage points above the 
                        acreage limitation percentage announced 
                        by the Secretary for the crop or above 
                        25 percent total for the crop.
                          [(iv) Adjustment for 
                        underplantings.--In determining the 
                        increased acreage limitation percentage 
                        that is applied to the producer's 
                        upland cotton base under this 
                        paragraph, the Secretary shall exclude 
                        an amount of acreage equal to the 
                        average difference between the 
                        producer's permitted upland cotton 
                        acreage and the acreage actually 
                        planted (including acreage devoted to 
                        conserving uses under subsection 
                        (c)(1)(D)) to upland cotton for harvest 
                        during the previous 2 years.
                  [(D) Decreased acreage limitation option.--
                          [(i) Decrease in acreage limitation 
                        requirement.--If the Secretary elects 
                        to carry out this paragraph, a producer 
                        shall be eligible to decrease the 
                        acreage limitation percentage 
                        applicable to the producers' upland 
                        cotton acreage base (as announced by 
                        the Secretary) if the producer agrees 
                        to a decrease in the established price 
                        for upland cotton under clause (ii) for 
                        the purpose of calculating deficiency 
                        payments to be made available to the 
                        producer.
                          [(ii) Method of calculation.--For the 
                        purposes of calculating deficiency 
                        payments to be made available to 
                        producers who choose the option set 
                        forth in this subparagraph, the 
                        Secretary shall decrease the 
                        established price for upland cotton by 
                        an amount to be determined by the 
                        Secretary, but not less than 0.5 
                        percent, nor more than 1 percent, for 
                        each 1 percentage point decrease in the 
                        acreage limitation percentage applied 
                        to the producers' upland cotton acreage 
                        base.
                          [(iii) Limitation.--A producer may 
                        not choose to decrease the acreage 
                        limitation percentage applicable to the 
                        producers' upland cotton acreage base 
                        under this paragraph by more than one-
                        half of the announced acreage 
                        limitation percentage.
                  [(E) Participation and production effects.--
                Notwithstanding any other provision of this 
                paragraph, the Secretary shall, to the extent 
                practicable, ensure that the program provided 
                for in this paragraph does not have a 
                significant effect on program participation or 
                total production and shall be offered in such a 
                manner that the Secretary determines will 
                result in no additional budget outlays. The 
                Secretary shall provide an analysis of the 
                Secretary's determination to the Committee on 
                Agriculture of the House of Representatives and 
                the Committee on Agriculture, Nutrition, and 
                Forestry of the Senate.
          [(4) Administration.--
                  [(A) Protection from weeds and erosion.--The 
                regulations issued by the Secretary under 
                paragraph (2) with respect to acreage required 
                to be devoted to conservation uses shall assure 
                protection of the acreage from weeds and wind 
                and water erosion.
                  [(B) Annual or perennial cover.--
                          [(i) Required.--
                                  [(I) In general.--Except as 
                                provided in subclause (II) and 
                                paragraph (2), a producer who 
                                participates in an acreage 
                                reduction program established 
                                for a crop of upland cotton 
                                under this subsection shall be 
                                required to plant to, or 
                                maintain as, an annual or 
                                perennial cover 50 percent (or 
                                more at the option of the 
                                producer) of the acreage that 
                                is required to be removed from 
                                the production of upland 
                                cotton, but not to exceed 5 
                                percent (or more at the option 
                                of the producer) of the crop 
                                acreage base established for 
                                the crop.
                                  [(II) Arid areas.--Subclause 
                                (I) shall not apply with 
                                respect to arid areas 
                                (including summer fallow 
                                areas), as determined by the 
                                Secretary. If the Secretary 
                                determines any county in a 
                                State to be arid, the 
                                respective State committee 
                                established under section 8(b) 
                                of the Soil Conservation and 
                                Domestic Allotment Act (16 
                                U.S.C. 590h(b)) may designate 
                                any other county or counties or 
                                all of the State as arid for 
                                the purposes of this paragraph.
                                  [(III) Approval of cover 
                                crops and practices.--The State 
                                committee, after receiving 
                                recommendations from the county 
                                committees, shall approve 
                                appropriate crops planted or 
                                maintained as cover, including, 
                                as appropriate, annual or 
                                perennial native grasses and 
                                legumes or other vegetation. 
                                The State committee shall 
                                establish the final seeding 
                                date for the planting of the 
                                cover and shall approve 
                                appropriate cover crops or 
                                practices, after consulting the 
                                Soil Conservation Service State 
                                Conservationist regarding 
                                whether the crops or practices 
                                will sufficiently protect the 
                                land from weeds and wind and 
                                water erosion. After the 
                                Secretary establishes the State 
                                technical committee for the 
                                State pursuant to section 1261 
                                of the Food Security Act of 
                                1985 (16 U.S.C. 3861), the 
                                State committee shall consult 
                                with the technical committee 
                                (rather than the Soil 
                                Conservation Service State 
                                Conservationist) regarding 
                                whether the crops or practices 
                                will sufficiently protect the 
                                land from weeds and wind and 
                                water erosion.
                          [(ii) Multiyear program.--
                                  [(I) Cost-share assistance.--
                                If a producer elects to 
                                establish a perennial cover 
                                capable of improving water 
                                quality or wildlife habitat on 
                                the acreage, the Commodity 
                                Credit Corporation shall make 
                                available cost-share assistance 
                                for 25 percent of the approved 
                                cost of establishing the cover 
                                on not more than 50 percent of 
                                the acreage that is required to 
                                be diverted from production, 
                                but not to exceed 5 percent (or 
                                more, at the option of the 
                                producer) of the crop acreage 
                                base established for a crop.
                                  [(II) Agreement of 
                                producer.--If a producer elects 
                                to establish a perennial cover 
                                on the acreage under this 
                                subparagraph and receives cost-
                                share assistance from the 
                                Corporation with respect to the 
                                cover, the producer, under such 
                                terms and conditions as may be 
                                prescribed by the Secretary, 
                                taking into consideration 
                                guidelines established by the 
                                State technical committees 
                                established in subtitle G of 
                                title XII of the Food Security 
                                Act of 1985, shall agree to 
                                maintain the perennial cover 
                                for a minimum of 3 years.
                          [(iii) Conserving crops.--The 
                        Secretary may permit, subject to such 
                        terms and conditions as the Secretary 
                        may prescribe, all or any part of the 
                        acreage to be devoted to sweet sorghum, 
                        guar, sesame, castor beans, crambe, 
                        plantago ovato, triticale, rye, mung 
                        beans, milkweed, or other commodity, if 
                        the Secretary determines that the 
                        production is needed to provide an 
                        adequate supply of the commodities, is 
                        not likely to increase the cost of the 
                        price support program, and will not 
                        affect farm income adversely.
                  [(C) Haying and grazing.--
                          [(i) In general.--Except as provided 
                        in clause (ii), haying and grazing of 
                        reduced acreage, acreage devoted to a 
                        conservation use under subsection 
                        (c)(1)(D), and acreage diverted from 
                        production under a land diversion 
                        program established under this section 
                        shall be permitted, except during any 
                        consecutive 5-month period that is 
                        established by the State committee 
                        established under section 8(b) of the 
                        Soil Conservation and Domestic 
                        Allotment Act (16 U.S.C. 590h(b)) for a 
                        State. The 5-month period shall be 
                        established during the period beginning 
                        April 1, and ending October 31, of a 
                        year.
                          [(ii) Natural disasters.--In the case 
                        of a natural disaster, the Secretary 
                        may permit unlimited haying and grazing 
                        on the acreage. The Secretary may not 
                        exclude irrigated or irrigable acreage 
                        not planted in alfalfa when exercising 
                        the authority under this clause.
                  [(D) Water storage uses.--
                          [(i) In general.--The regulations 
                        issued by the Secretary under paragraph 
                        (2) with respect to acreage required to 
                        be devoted to conservation uses shall 
                        provide that land that has been 
                        converted to water storage uses shall 
                        be considered to be devoted to 
                        conservation uses if the land was 
                        devoted to wheat, feed grains, cotton, 
                        rice, or oilseeds in at least 3 of the 
                        immediately preceding 5 years. The land 
                        shall be considered to be devoted to 
                        conservation uses for the period that 
                        the land remains in water storage uses, 
                        but not to exceed 5 years subsequent to 
                        its conversion to water storage uses.
                          [(ii) Limitations.--Land converted to 
                        water storage uses for the purposes of 
                        this subparagraph may not be devoted to 
                        any commercial use, including 
                        commercial fish production. The water 
                        stored on the land may not be ground 
                        water. The farm on which the land is 
                        located must have been irrigated with 
                        ground water during at least 1 of the 
                        preceding 5 crop years.
          [(5) Land diversion program.--
                  [(A) Payments.--
                          [(i) In general.--The Secretary may 
                        make land diversion payments to 
                        producers of upland cotton, whether or 
                        not an acreage limitation program for 
                        upland cotton is in effect, if the 
                        Secretary determines that the land 
                        diversion payments are necessary to 
                        assist in adjusting the total national 
                        acreage of upland cotton to desirable 
                        goals. The land diversion payments 
                        shall be made to producers who, to the 
                        extent prescribed by the Secretary, 
                        devote to approved conservation uses an 
                        acreage of cropland on the farm in 
                        accordance with land diversion 
                        contracts entered into by the Secretary 
                        with the producers.
                          [(ii) Excess carry-over.--If, at the 
                        time of final announcement of the 
                        acreage limitation program established 
                        under this subsection, the projected 
                        carry-over of upland cotton for the 
                        crop year is equal to or greater than 8 
                        million bales, the Secretary shall 
                        offer a paid land diversion program to 
                        producers of upland cotton. Payments to 
                        producers under such a program shall be 
                        determined by multiplying--
                                  [(I) the payment rate, of not 
                                less than 35 cents per pound of 
                                cotton, established by the 
                                Secretary; by
                                  [(II) the program payment 
                                yield established for the crop 
                                for the farm; by
                                  [(III) the number of 
                                permitted upland cotton acres 
                                diverted on the farm.
                  [(B) Bids for contracts.--The amounts payable 
                to producers under land diversion contracts may 
                be determined through the submission of bids 
                for the contracts by producers in such manner 
                as the Secretary may prescribe or through such 
                other means as the Secretary determines 
                appropriate. In determining the acceptability 
                of contract offers, the Secretary shall take 
                into consideration the extent of the diversion 
                to be undertaken by the producers and the 
                productivity of the acreage diverted.
                  [(C) Limitations on diverted acreage.--
                          [(i) Maximum acreage per farm, 
                        county, or community.--The Secretary 
                        shall limit the total acreage to be 
                        diverted under this paragraph--
                                  [(I) to not more than 15 
                                percent of the upland cotton 
                                crop acreage base for a farm; 
                                and
                                  [(II) under agreements in any 
                                county or local community so as 
                                not to affect adversely the 
                                economy of the county or local 
                                community.
                          [(ii) Lower participation levels.--
                        The Secretary may allow producers to 
                        participate in a land diversion program 
                        under this paragraph at a level lower 
                        than the maximum level announced by the 
                        Secretary, at the option of the 
                        producer, if the Secretary determines 
                        that it will increase participation in 
                        the program.
          [(6) Conservation practices.--
                  [(A) Wildlife food plots or habitat.--The 
                reduced acreage and additional diverted acreage 
                may be devoted to wildlife food plots or 
                wildlife habitat in conformity with standards 
                established by the Secretary in consultation 
                with wildlife agencies. The Secretary may pay 
                an appropriate share of the cost of practices 
                designed to carry out the purposes of this 
                subparagraph.
                  [(B) Public access.--The Secretary may 
                provide for an additional payment on the 
                acreage in an amount determined by the 
                Secretary to be appropriate in relation to the 
                benefit to the general public if the producer 
                agrees to permit, without other compensation, 
                access to all or such portion of the farm, as 
                the Secretary may prescribe, by the general 
                public, for hunting, trapping, fishing, and 
                hiking, subject to applicable State and Federal 
                regulations.
          [(7) Participation agreements.--
                  [(A) In general.--Producers on a farm 
                desiring to participate in the program 
                conducted under this subsection shall execute 
                an agreement with the Secretary providing for 
                the participation not later than such date as 
                the Secretary may prescribe.
                  [(B) Modification or termination.--The 
                Secretary may, by mutual agreement with 
                producers on a farm, modify or terminate any 
                such agreement if the Secretary determines the 
                action necessary because of an emergency 
                created by drought or other disaster or to 
                prevent or alleviate a shortage in the supply 
                of agricultural commodities. The Secretary may 
                modify the agreement under this subparagraph 
                for the purpose of alleviating a shortage in 
                the supply of agricultural commodities only if 
                there has been a significant change in the 
                estimated stocks of the commodity since the 
                Secretary announced the final terms and 
                conditions of the program for the crop of 
                upland cotton.
  [(f) Inventory Reduction Payments.--
          [(1) In general.--The Secretary may, for each of the 
        1991 through 1995 crops of upland cotton, make payments 
        available to producers who meet the requirements of 
        this subsection.
          [(2) Form.--The payments may be made in the form of 
        marketing certificates.
          [(3) Payments.--
                  [(A) In general.--Payments under this 
                subsection shall be determined in the same 
                manner as provided in subsection (b).
                  [(B) Quantity of cotton made available.--The 
                quantity of upland cotton to be made available 
                to a producer under this subsection shall be 
                equal in value to the payments so determined 
                under this subsection.
          [(4) Eligibility.--A producer shall be eligible to 
        receive a payment under this subsection for a crop if 
        the producer--
                  [(A) agrees to forgo obtaining a loan under 
                subsection (a);
                  [(B) agrees to forgo receiving payments under 
                subsection (c);
                  [(C) does not plant upland cotton for harvest 
                in excess of the crop acreage base reduced by 
                one-half of any acreage required to be diverted 
                from production under subsection (e); and
                  [(D) otherwise complies with this section.
  [(g) Equitable Relief.--
          [(1) Loans and payments.--If the failure of a 
        producer to comply fully with the terms and conditions 
        of the program conducted under this section precludes 
        the making of loans and payments, the Secretary may, 
        nevertheless, make such loans and payments in such 
        amounts as the Secretary determines are equitable in 
        relation to the seriousness of the failure. The 
        Secretary may consider whether the producer made a good 
        faith effort to comply fully with the terms and 
        conditions of the program in determining whether 
        equitable relief is warranted under this paragraph.
          [(2) Deadlines and program requirements.--The 
        Secretary may authorize the county and State committees 
        established under section 8(b) of the Soil Conservation 
        and Domestic Allotment Act (16 U.S.C. 590h(b)) to waive 
        or modify deadlines and other program requirements in 
        cases in which lateness or failure to meet such other 
        requirements does not affect adversely the operation of 
        the program.
  [(h) Regulations.--The Secretary may issue such regulations 
as the Secretary determines necessary to carry out this 
section.
  [(i) Commodity Credit Corporation.--The Secretary shall carry 
out the program authorized by this section through the 
Commodity Credit Corporation.
  [(j) Assignment of Payments.--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 under this section.
  [(k) Sharing of Payments.--The Secretary shall provide for 
the sharing of payments made under this section for any farm 
among the producers on the farm on a fair and equitable basis.
  [(l) Tenants and Sharecroppers.--The Secretary shall provide 
adequate safeguards to protect the interests of tenants and 
sharecroppers.
  [(m) Cross-Compliance.--
          [(1) In general.--Compliance on a farm with the terms 
        and conditions of any other commodity program, or 
        compliance with crop acreage base requirements for any 
        other commodity, may not be required as a condition of 
        eligibility for loans or payments under this section.
          [(2) Compliance on other farms.--The Secretary may 
        not require producers on a farm, as a condition of 
        eligibility for loans or payments under this section 
        for the farm, to comply with the terms and conditions 
        of the upland cotton program with respect to any other 
        farm operated by the producers.
  [(n) Limited Global Import Quota.--
          [(1) In general.--The President shall, within 180 
        days after the date of enactment of the Uruguay Round 
        Agreements Act, establish an import quota program which 
        shall provide that whenever the Secretary determines 
        and announces that the average price of the base 
        quality of upland cotton, as determined by the 
        Secretary, in the designated spot markets for a month 
        exceeded 130 percent of the average price of such 
        quality of cotton in such markets for the preceding 36 
        months, notwithstanding any other provision of law, 
        there shall immediately be in effect a limited global 
        import quota subject to the following conditions:
                  [(A) Quantity.--The quantity of the quota 
                shall be equal to 21 days of domestic mill 
                consumption of upland cotton at the seasonally 
                adjusted average rate of the most recent 3 
                months for which data are available.
                  [(B) Quantity if prior quota.--If a quota has 
                been established under this subsection during 
                the preceding 12 months, the quantity of the 
                quota next established under this subsection 
                shall be the smaller of 21 days of domestic 
                mill consumption calculated as set forth in 
                subparagraph (A) or the quantity required to 
                increase the supply to 130 percent of the 
                demand.
                  [(C) Preferential tariff treatment.--The 
                quantity under a limited global import quota 
                shall be considered to be an in-quota quantity 
                for purposes of section 213(d) of the Caribbean 
                Basin Economic Recovery Act (19 U.S.C. 
                2703(d)), section 204 of the Andean Trade 
                Preference Act (19 U.S.C. 3203), section 503(d) 
                of the Trade Act of 1974 (19 U.S.C. 2463(d)), 
                and General Note 3(a)(iv) to the HTS.
                  [(D) Definitions.--As used in subparagraph 
                (B):
                          [(i) Supply.--The term ``supply'' 
                        means, using the latest official data 
                        of the Bureau of the Census, the 
                        Department of Agriculture, and the 
                        Department of the Treasury--
                                  [(I) the carry-over of upland 
                                cotton at the beginning of the 
                                marketing year (adjusted to 
                                480-pound bales) in which the 
                                quota is established; plus
                                  [(II) production of the 
                                current crop; plus
                                  [(III) imports to the latest 
                                date available during the 
                                marketing year.
                          [(ii) Demand.--The term ``demand'' 
                        means--
                                  [(I) the average seasonally 
                                adjusted annual rate of 
                                domestic mill consumption in 
                                the most recent 3 months for 
                                which data are available; plus
                                  [(II) the larger of--
                                          [(aa) average exports 
                                        of upland cotton during 
                                        the preceding 6 
                                        marketing years; or
                                          [(bb) cumulative 
                                        exports of upland 
                                        cotton plus outstanding 
                                        export sales for the 
                                        marketing year in which 
                                        the quota is 
                                        established.
                          [(iii) Limited global import quota.--
                        As used in this subsection, the term 
                        ``limited global import quota'' means a 
                        quantity of imports that is not subject 
                        to the over-quota tariff rate of a 
                        tariff-rate quota.
                  [(D) 103B-47 Quota entry period.--When a 
                quota is established under this subsection, 
                cotton may be entered under the quota during 
                the 90-day period beginning on the date the 
                quota is established by the Secretary.
          [(2) No overlap.--Notwithstanding paragraph (1), a 
        quota period may not be established that overlaps an 
        existing quota period or a special quota period 
        established under subsection (a)(5)(F).
  [(o) Crops.--Notwithstanding any other provision of law, this 
section shall be effective only for the 1991 through 1997 crops 
of upland cotton.
  [Sec. 104.
  [(c) The Secretary of Agriculture is hereby authorized and 
directed to conduct a special cotton research program designed 
to reduce the cost of producing upland cotton in the United 
States at the earliest practicable date. There are hereby 
authorized to be appropriated such sums, not to exceed 
$10,000,000 annually, as may be necessary for the Secretary to 
carry out this special research program. The Secretary shall 
report annually to the Committee on Agriculture of the House of 
Representatives and to the Committee on Agriculture, Nutrition, 
and Forestry of the Senate with respect to the results of such 
research.
  [(d) In order to reduce cotton production costs, to prevent 
the movement of certain cotton plant insects to areas not now 
infested, and to enhance the quality of the environment, the 
Secretary is authorized and directed to carry out programs to 
destroy and eliminate cotton boll weevils in infested areas of 
the United States as provided herein and to carry out similar 
programs with respect to pink bollworms or any other major 
cotton insect if the Secretary determines that methods and 
systems have been developed to the point that success in 
eradication of such insects is assured. The Secretary shall 
carry out the eradication programs authorized by this 
subsection through the Commodity Credit Corporation. In 
carrying out insect eradication projects, the Secretary shall 
utilize the technical and related services of appropriate 
Federal, State, private agencies, and cotton organizations. 
Producers and landowners in an eradication zone, established by 
the Secretary, who are receiving benefits from any program 
administered by the United States Department of Agriculture, 
shall, as a condition of receiving or continuing any such 
benefits, participate in and cooperate with the eradication 
project, as specified in regulations of the Secretary.
  [The Secretary may issue such regulations as he deems 
necessary to enforce the provisions of this subsection with 
respect to achieving the compliance of producers and landowners 
who are not receiving benefits from any program administered by 
the United States Department of Agriculture. Any person who 
knowingly violates any such regulation promulgated by the 
Secretary under this subsection may be assessed a civil penalty 
of not to exceed $5,000 for each offense. No civil penalty 
shall be assessed unless the person shall have been given 
notice and opportunity for a hearing on such charge in the 
county, parish, or incorporated city of the residence of the 
person charged. In determining the amount of the penalty the 
Secretary shall consider the appropriateness of such penalty to 
the size of the business of the person charged, the effect on 
the person's ability to continue in business, and the gravity 
of the violation. Where special measures deemed essential to 
achievement of the eradication objective are taken by the 
project and result in a loss of production and income to the 
producer, the Secretary shall provide reasonable and equitable 
indemnification from funds available for the project, and also 
provide for appropriate protection of the allotment, acreage 
history, and average yield for the farm. The cost of the 
program in each eradication zone shall be determined, and 
cotton producers in the zone shall be required to pay up to 
one-half thereof, with the exact share in each zone area to be 
specified by the Secretary upon his finding that such share is 
reasonable and equitable based on population levels of the 
target insect and the degree of control measures normally 
required. Each producer's pro rata share shall be deducted from 
his cotton payment under this Act or otherwise collected, as 
provided in regulations of the Secretary. Insofar as 
practicable, cotton producers and other persons engaged in 
cotton production in the eradication zone shall be employed to 
participate in the work of the project in such zone. Funding of 
the program shall be terminated at such time as the Secretary 
determines and reports to the Congress that complete 
eradication of the insects for which programs are undertaken 
pursuant to this subsection has been accomplished. Funds in 
custody of agencies carrying out the program shall, upon 
termination of such program, be accounted for to the Secretary 
for appropriate disposition.
  [The Secretary is authorized to cooperate with the Government 
of Mexico in carrying out operations or measures in Mexico 
which he deems necessary and feasible to prevent the movement 
into the United States from Mexico of any insects eradicated 
under the provisions of this subsection. The measure and 
character of cooperation carried out under this subsection on 
the part of the United States and on the part of the Government 
of Mexico, including the expenditure or use of funds made 
available by the Secretary under this subsection, shall be such 
as may be prescribed by the Secretary. Arrangements for the 
cooperation authorized by this subsection shall be made through 
and in consultation with the Secretary of State. The Commodity 
Credit Corporation shall not make any expenditures for carrying 
out the purposes of this subsection unless the Corporation has 
received funds to cover such expenditures from appropriations 
made to carry out the purposes of this subsection. There are 
hereby authorized to be appropriated to the Commodity Credit 
Corporation such sums as the Congress may from time to time 
determine to be necessary to carry out the purposes of this 
subsection.
  [Sec. 105. (a) Notwithstanding the provisions of section 101 
of this Act, beginning with the 1964 crop, price support shall 
be made available to producers for each crop of corn at such 
level, not less than 50 per centum or more than 90 per centum 
of the parity price therefor, as the Secretary determines will 
not result in increasing Commodity Credit Corporation stocks of 
corn: Provided, That in the case of any crop for which an 
acreage diversion program is in effect for any crop for which 
an acreage diversion program is in effect for feed grains, the 
level of price support for corn of such crop shall be at such 
level not less than 65 per centum or more than 90 per centum of 
the parity price therefor as the Secretary determines necessary 
to achieve the acreage reduction goal established by him for 
the crop.
  [(b) Beginning with the 1959 crop, price support shall be 
made available to producers for each crop of oats, rye, barley, 
and grain sorghums at such level of the parity price therefor 
as the Secretary of Agriculture determines is fair and 
reasonable in relation to the level at which price support is 
made available for corn, taking into consideration the feeding 
value of such commodity in relation to corn, and the other 
factors set forth in section 401(b) hereof.

[SEC. 105B. LOANS, PAYMENTS, AND ACREAGE REDUCTION PROGRAMS FOR THE 
                    1991 THROUGH 1995 CROPS OF FEED GRAINS.

  [(a) Loans and Purchases.--
          [(1) In general.--Except as otherwise provided in 
        this subsection, the Secretary shall make available to 
        producers on a farm loans and purchases for each of the 
        1991 through 1995 crops of corn produced on the farm at 
        such level as the Secretary determines will encourage 
        the exportation of feed grains and not result in 
        excessive total stocks of feed grains after taking into 
        consideration the cost of producing corn, supply and 
        demand conditions, and world prices for corn.
          [(2) Minimum loan and purchase level.--Except as 
        provided in paragraphs (3) and (4), the loan and 
        purchase level determined under paragraph (1) shall not 
        be less than 85 percent of the simple average price 
        received by producers of corn, as determined by the 
        Secretary, during the marketing years for the 
        immediately preceding 5 crops of corn, excluding the 
        year in which the average price was the highest and the 
        year in which the average price was the lowest in such 
        period, except that the loan and purchase level for a 
        crop determined under this paragraph may not be reduced 
        by more than 5 percent from the level determined for 
        the preceding crop.
          [(3) Adjustments to support level.--
                  [(A) Stocks to use ratio.-- If the Secretary 
                estimates for any marketing year that the ratio 
                of ending stocks of corn to total use for the 
                marketing year will be--
                          [(i) equal to or greater than 25 
                        percent, the Secretary may reduce the 
                        loan and purchase level for corn for 
                        the corresponding crop by an amount not 
                        to exceed 10 percent in any year;
                          [(ii) less than 25 percent but not 
                        less than 12.5 percent, the Secretary 
                        may reduce the loan and purchase level 
                        for corn for the corresponding crop by 
                        an amount not to exceed 5 percent in 
                        any year; or
                          [(iii) less than 12.5 percent the 
                        Secretary may not reduce the loan and 
                        purchase level for corn for the 
                        corresponding crop.
                  [(B) Report to congress.--
                          [(i) In general.--If the Secretary 
                        adjusts the level of loans and 
                        purchases for corn under subparagraph 
                        (A), 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--
                                  [(I) certifying such 
                                adjustment as necessary to 
                                prevent the accumulation of 
                                stocks and to retain market 
                                share; and
                                  [(II) containing a 
                                description of the need for 
                                such adjustment.
                          [(ii) Effective date of adjustment.--
                        The adjustment shall become effective 
                        no earlier than 60 calendar days after 
                        the date of submission of the report to 
                        the Committees, except that in the case 
                        of the 1991 crop of feed grains, the 
                        adjustment shall become effective on 
                        the date of the submission of the 
                        report.
                  [(C) Competitive position.--Notwithstanding 
                subparagraph (A), if the Secretary determines, 
                not later than 60 days prior to the beginning 
                of a marketing year for a crop, that the 
                effective loan rate established for such crop 
                will not maintain a competitive market position 
                for corn, the Secretary may reduce the loan and 
                purchase level for corn for the marketing year 
                by an amount, in addition to any reduction 
                under subparagraph (A), not to exceed 10 
                percent in any year.
                  [(D) No effect on future years.--Any 
                reduction in the loan and purchase level for 
                corn under this paragraph shall not be 
                considered in determining the loan and purchase 
                level for corn for subsequent years.
                  [(E) Minimum loan rate.--Notwithstanding 
                subparagraph (A), the loan rate for corn shall 
                not be less than $1.76 per bushel, unless such 
                rate would exceed 80 percent of the 5-year 
                average market price determination.
          [(4) Marketing loan provisions.--
                  [(A) In general.--The Secretary may permit a 
                producer to repay a loan made under this 
                subsection for a crop at a level (except as 
                provided in subparagraph (C)) that is the 
                lesser of--
                          [(i) the loan level determined for 
                        the crop;
                          [(ii) the higher of--
                                  [(I) 70 percent of such 
                                level;
                                  [(II) if the loan level for a 
                                crop was reduced under 
                                paragraph (3), 70 percent of 
                                the loan level that would have 
                                been in effect but for the 
                                reduction under paragraph (3); 
                                or
                          [(iii) the prevailing world market 
                        price for feed grains (adjusted to 
                        United States quality and location), as 
                        determined by the Secretary.
                  [(B) Prevailing world market price.--If the 
                Secretary permits a producer to repay a loan in 
                accordance with subparagraph (A), the Secretary 
                shall prescribe by regulation--
                          [(i) a formula to determine the 
                        prevailing world market price for feed 
                        grains, adjusted to United States 
                        quality and location; and
                          [(ii) a mechanism by which the 
                        Secretary shall announce periodically 
                        the prevailing world market price for 
                        feed grains.
                  [(C) Alternative repayment rates.--For each 
                of the 1991 through 1995 crops of feed grains, 
                if the world market price for feed grains 
                (adjusted to United States quality and 
                location) as determined by the Secretary, is 
                less than the loan level determined for the 
                crop, the Secretary may permit a producer to 
                repay a loan made under this subsection for a 
                crop at such level (not in excess of the loan 
                level determined for the crop) as the Secretary 
                determines will--
                          [(i) minimize potential loan 
                        forfeitures;
                          [(ii) minimize the accumulation of 
                        feed grain stocks by the Federal 
                        Government;
                          [(iii) minimize the cost incurred by 
                        the Federal Government in storing feed 
                        grains; and
                          [(iv) allow feed grains produced in 
                        the United States to be marketed freely 
                        and competitively, both domestically 
                        and internationally.
          [(5) Simple average price.--For purposes of this 
        section, the simple average price received by producers 
        for the immediately preceding marketing year shall be 
        based on the latest information available to the 
        Secretary at the time of the determination.
          [(6) Other feed grains.--The Secretary shall make 
        available to producers loans and purchases for each of 
        the 1991 through 1995 crops of grain sorghums, barley, 
        oats, and rye, respectively, produced on the farm at 
        such level as the Secretary determines is fair and 
        reasonable in relation to the level that loans and 
        purchases are made available for corn, taking into 
        consideration the feeding value of the commodity in