ECONOMIC ANALYSIS OF THE U.S. HOUSE OF REPRESENTATIVES FARM BILL AND SENATE AGRICULTURE COMMITTEE FARM BILL PROPOSAL

This study analyzes two farm bill proposals that would replace the Federal Agricultural Improvement and Reform Act: the U.S. House of Representatives Bill H.R. 2646 and the Senate Agriculture Committee proposal. Both proposals try to incorporate the additional emergency federal funding that agriculture received in 1998 through 2001 into legislative language. Both proposals provide substantially higher net farm income than the continuation of the FAIR Act. Net farm income under the House bill is higher than under the Senate proposal given 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 estimates, the House bill 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