S. 1626 – Reading Mode

112th CONGRESS

1st Session

S. 1626

IN THE SENATE OF THE UNITED STATES

September 23, 2011

Mr. Brown of Ohio (for himself, Mr. Thune, Mr. Durbin, and Mr. Lugar) introduced the following bill; which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry

A BILL

To amend the Food, Conservation, and Energy Act of 2008 to reform agricultural programs by establishing the aggregate risk and revenue management program.

Short title

This Act may be cited as the Aggregate Risk and Revenue Management Act of 2011 or the ARRM Act of 2011.

Aggregate risk and revenue management program

Section 1105 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8715) is amended to read as follows:

1105.

Aggregate risk and revenue management program

(a)

Definitions

In this section:

(1)

Alternative price

The term alternative price means an average of the price for each of the immediately preceding 4 years, as determined by the National Agricultural Statistics Service, for each crop for which the harvest price is unavailable.

(2)

ARRM

The term ARRM means the aggregate risk and revenue management program established under this section.

(3)

CRD

The term CRD means a crop reporting district, as determined by the National Agricultural Statistics Service.

(4)

Harvest price

The term harvest price means the harvest price determined by the Risk Management Agency.

(b)

Availability and election of alternative approach

(1)

Availability of aggregate risk and revenue management payments

With respect to all covered commodities and peanuts on a farm, during each of the 2013 through 2017 crop years, the Secretary shall give the operator, tenant, or sharecropper, as appropriate, on the farm an opportunity to make an annual election for all producers on the farm to receive aggregate risk and revenue management payments under this section for the crop year for which the election is made.

(2)

Limitations

(A)

In general

The total number of planted acres for which the producers on a farm may receive ARRM payments under this section shall be equal to the total number of acres planted to all covered commodities and peanuts on the farm.

(B)

Native sod

(i)

In general

Native sod (as defined in section 508(o)(1) of the Federal Crop Insurance Act (7 U.S.C. 1508(o)(1))) acreage that is tilled for the purpose of producing an annual crop after the date of enactment of the ARRM Act of 2011 shall not be considered acreage planted to the covered commodity or peanuts for harvest on a farm in a crop year for purposes of making ARRM payments under this section during the first 5 crop years of planting.

(ii)

Requirement

Ineligibility under clause (i) shall only apply to the actual acreage of native sod that was converted to crop production.

(3)

Election; time for election

(A)

In general

The Secretary shall provide notice to the operators, tenants, or sharecroppers, as appropriate regarding the opportunity to make each of the elections described in paragraph (1).

(B)

Notice requirements

The notice shall include—

(i)

notice of the opportunity of the operator, tenant, or sharecropper, as appropriate, on a farm to make the election; and

(ii)

information regarding the manner in which the election must be made and the time periods and manner in which notice of the election must be submitted to the Secretary.

(4)

Election deadline

Within the time period and in the manner prescribed pursuant to paragraph (3), the operator, tenant, or sharecropper, as appropriate, on a farm shall submit to the Secretary notice of an election made under paragraph (1).

(5)

Effect of failure to make election

If the operators, tenants, or sharecroppers, as appropriate, on a farm fail to make an election under paragraph (1) or fail to timely notify the Secretary of the election made, as required by paragraph (4), all of the producers on the farm shall be deemed to not have made the election described in paragraph (1), for the applicable crop years.

(c)

Payments required

(1)

In general

In the case of producers on a farm who make an election under subsection (b) to receive ARRM payments for any of the 2013 through 2017 crop years for all covered commodities and peanuts, the Secretary shall make ARRM payments available to the producers on a farm in accordance with this subsection.

(2)

ARRM payment

(A)

In general

Subject to paragraph (3), in the case of producers on a farm described in paragraph (1), the Secretary shall make ARRM payments available to the producers on a farm for each crop year if—

(i)

the actual CRD revenue for the crop year for the covered commodity or peanuts in the CRD determined under subsection (e); is less than

(ii)

the ARRM program guarantee for the crop year for the covered commodity or peanuts in the CRD determined under subsection (d).

(B)

Individual loss

The Secretary shall make ARRM payments available to the producers on a farm in a CRD for a crop year only if (as determined by the Secretary)—

(i)

the actual farm revenue for the crop year for the covered commodity or peanuts, as determined under subsection (g); is less than

(ii)

the farm ARRM revenue guarantee for the crop year for the covered commodity or peanuts, as determined under subsection (f).

(3)

Time for payments

In the case of each of the 2013 through 2017 crop years, the Secretary shall make ARRM payments beginning October 1, or as soon as practicable thereafter, after the date of determination of the harvest price for the covered commodity or peanuts.

(d)

ARRM program guarantee

(1)

CRD amount

(A)

In general

For purposes of subsection (c)(2)(A) and subject to subparagraphs (B) and (C), the ARRM program guarantee for a crop year for a covered commodity or peanuts in a CRD shall equal 90 percent of the CRD average revenue, as determined under subparagraph (B).

(B)

CRD average revenue

For purposes of subparagraph (A), the CRD average revenue shall be the average during the marketing years for the immediately preceding 5 crops of a covered commodity and peanuts, excluding the year in which the CRD revenue was the highest and the year in which the CRD revenue was the lowest in the period, of the product obtained by multiplying—

(i)

the CRD yield for the covered commodity or peanuts in a CRD determined under paragraph (2); and

(ii)

the harvest price or alternative price for the covered commodity or peanuts.

(C)

Minimum and maximum guarantee

The ARRM program guarantee for a crop year for a covered commodity or peanuts under subparagraph (A) shall not decrease or increase more than 10 percent from the guarantee for the preceding crop year.

(D)

Double-cropped acreage

Any crop subsequently planted on land determined for purposes of the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) to be prevented planted acreage shall not be included in calculating the ARRM program guarantee under subparagraph (A) or the actual farm revenue under subsection (g) unless the farm has a history of double-cropping and is located in a region in which double-cropping is an acceptable farming practice, as determined by the Secretary.

(2)

Assigned CRD yield

If the Secretary cannot establish the CRD yield for each planted acre for a crop year for a covered commodity or peanuts in a CRD in accordance with subparagraph (A) or if the yield determined under subparagraph (A) is an unrepresentative average yield for the CRD (as determined by the Secretary), the Secretary shall assign a CRD yield for each planted acre for the crop year for the covered commodity or peanuts in the CRD on the basis of—

(A)

previous average yields for a period of 5 crop years, excluding each of the crop years with the highest and lowest yields; or

(B)

CRD yields for planted acres for the crop year for the covered commodity or peanuts in similar CRDs.

(3)

CRDs with irrigated and nonirrigated land

In the case of a CRD in which at least 25 percent of the acreage planted to a covered commodity or peanuts in the CRD is irrigated and at least 25 percent of the acreage planted to the covered commodity or peanuts in the CRD is not irrigated, the Secretary shall calculate a separate ARRM program guarantee for the irrigated and nonirrigated areas of the CRD for the covered commodity or peanuts.

(e)

Actual CRD revenue

(1)

In general

For purposes of subsection (c)(2)(A), the amount of the actual CRD revenue for a crop year of a covered commodity or peanuts shall equal the product obtained by multiplying—

(A)

the actual CRD yield for each planted acre for the crop year for the covered commodity or peanuts determined under paragraph (2); and

(B)

the national average harvest price or alternative price received by producers for the crop year for the covered commodity or peanuts as determined by the Risk Management Agency.

(2)

Actual CRD yield

For purposes of paragraph (1)(A), the actual CRD yield for each planted acre for a crop year for a covered commodity or peanuts in a CRD shall equal (as determined by the Secretary)—

(A)

the quantity of the covered commodity or peanuts that is produced in the CRD during the crop year; divided by

(B)

the number of acres that are planted to the covered commodity or peanuts in the CRD during the crop year.

(f)

Farm ARRM revenue guarantee

(1)

In general

For purposes of subsection (c)(2)(B), the farm ARRM revenue guarantee for the crop year for a covered commodity or peanuts shall equal 90 percent of the average farm revenue as determined under paragraph (2).

(2)

Average farm revenue

The average farm revenue shall be equal to the sum obtained by adding—

(A)

the average during the marketing years for the immediately preceding 5 crops of a covered commodity and peanuts, excluding the year in which the farm revenue was the highest and the year in which the farm revenue was the lowest in the period, of the product obtained by multiplying—

(i)

the actual production history, as determined using production records and data of the Risk Management Agency; and

(ii)

the harvest price or alternative price for the covered commodity or peanuts in a CRD; and

(B)

the amount of the per acre crop insurance premium required to be paid by the producers on the farm for the applicable crop year for the covered commodity or peanuts on the farm.

(g)

Actual farm revenue

For purposes of subsection (c)(2)(B) and except as provided in subsection (d)(1)(C), the amount of the actual farm revenue for a crop year for a covered commodity or peanuts shall equal the amount determined by multiplying—

(1)

the actual yield for the covered commodity or peanuts of the producers on the farm; and

(2)

the national average harvest price or alternative price for the crop year for the covered commodity or peanuts.

(h)

Payment amount

If ARRM payments are required to be paid for any of the 2013 through 2017 crop years of a covered commodity or peanuts under this section, the amount of the ARRM payment to be paid to the producers on the farm for the crop year under this section shall be equal to the product obtained by multiplying—

(1)

the lesser of—

(A)

the difference between—

(i)

the ARRM program guarantee for the crop year for the covered commodity or peanuts in the CRD determined under subsection (d); and

(ii)

the actual CRD revenue from the crop year for the covered commodity or peanuts in the CRD determined under subsection (e); and

(B)

15 percent of the ARRM program guarantee for the crop year for the covered commodity or peanuts in the CRD determined under subsection (d);

(2)

85 percent of the acreage planted to the covered commodity or peanuts for harvest on the farm in the crop year; and

(3)

the quotient obtained by dividing—

(A)

the actual production history for the covered commodity or peanuts of the producers on the farm, as determined using production records and data of the Risk Management Agency; and

(B)

the assigned CRD yield for each planted acre for the crop year for the covered commodity or peanuts in a CRD, as determined under subsection (d)(2).

(i)

Crop reporting district assessment

The Secretary shall review CRDs in western States that have 7 or fewer CRDs to assess whether additional CRDs in the States are necessary.

Conforming amendments

(a)

Repeal of direct and counter-Cyclical payments for covered commodities and peanuts

(1)

In general

Sections 1103, 1104, 1303, and 1304 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8713, 8714, 8753, 8754) are repealed.

(2)

Application

The amendments made by paragraph (1) apply beginning with the 2013 crop year.

(b)

Period of effectiveness

Section 1109 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8719) is amended by striking 2012 and inserting 2017.

(c)

Suspension of permanent price support authority

Section 1602 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8782) is amended—

(1)

by striking through 2012 each place it appears and inserting through 2017; and

(2)

by striking December 31, 2012 each place it appears and inserting December 31, 2017.

(d)

Technical amendments

(1)

Section 1001 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8702) is amended by striking paragraph (1) and inserting the following:

(1)

Aggregate risk and revenue management payment

The term aggregate risk and revenue management payment means a payment made to producers on a farm under section 1105.

(2)

Section 1101(d)(1) of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8711(d)(1)) is amended by striking average crop revenue election and inserting aggregate risk and revenue management.

(3)

Section 1106 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8716) is amended by striking average crop revenue election each place it appears in subsections (a)(1), (b), and (e) and inserting aggregate risk and revenue management.

(4)

Section 1302(d)(1) of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8752(d)(1)) is amended by striking average crop revenue election and inserting aggregate risk and revenue management.

(5)

Section 1305 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8755) is amended by striking average crop revenue election each place it appears in subsections (a)(1), (b), and (e) and inserting aggregate risk and revenue management.

(6)

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

(A)

by striking ACRE each place it appears in the headings of subsections (b) and (c) and inserting ARRM;

(B)

by striking ACRE each place it appears in the headings of paragraph (3) of subsections (b) and (c) and inserting ARRM; and

(C)

by striking average crop revenue election each place it appears in subsections (b) and (c) and inserting aggregate risk and revenue management.

(7)

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

(A)

in subsection (b)(C)(i), by striking average crop revenue election and inserting aggregate risk and revenue management; and

(B)

in subsection (f), by striking 2012 and inserting 2017.