ECONOMIC ANALYSIS OF THE U.S. HOUSE OF REPRESENTATIVES FARM BILL, THE SENATE AGRICULTURE COMMITTEE FARM BILL PROPOSAL, AND THE AGRICULTURAL CONSERVATION RURAL ENHANCEMENT ACT OF 2001

This study analyzes three farm bill proposals that could replace the Federal Agricultural Improvement and Reform Act: The U.S. House of Representatives Bill H.R. 2646, the Senate Agriculture Committee Proposal, and the Agricultural Conservation Rural Enhancement (ACRE) Act. All proposals try to incorporate the additional emergency federal funding that agriculture received in 1998 through 2001 into legislative language. All proposals provide substantially higher net farm income than the continuation of the FAIR Act. The ACRE Act provides higher net farm income than either the House Bill or the Senate Proposal, however net farm income under the House Bill is higher than under the Senate Proposal given the Food and Agricultural Policy Research Institute's (FAPRI's) commodity price estimates. Regions of the state which produce row crops, corn, and oilseeds, would have higher net farm income under the Senate Proposal. If commodity prices increase faster than FAPRI's estimates, the ACRE Act should provide more support because more of the governmental support is in the form of direct payments. However, if prices lag behind FAPRI's estimates, the Senate Proposal should provide higher support because of the higher loan rates