House Voting Procedures: Forms and Requirements

In the House, there are four forms of votes: voice vote, division vote, yea and nay (or roll call) vote, and recorded vote. In the Committee of the Whole, the forms are voice vote, division vote, and recorded vote. Members may vote in the House. Members, Delegates, and the Resident Commissioner may vote in the Committee of the Whole.

The Speaker counts division votes and determines if there is sufficient support for yea and nay votes and recorded votes. The Speaker also has the authority to postpone and cluster certain votes. Postponed votes occur within two legislative days.

Most questions are initially put to a voice vote. Representatives will call out "aye" or "no" when a question is first put by the Speaker or Speaker pro tempore. As Rule I, clause 6, states, the Speaker will say, "Those in favor [of the question], say 'Aye.'" Then the Speaker will ask: "Those opposed, say 'No.'" Following the response, the Speaker states that, in his or her opinion, "the ayes [or the noes] appear to have it." There is no record of how an individual Member votes on a voice vote.

Division votes are rare in current practice. Like a voice vote, this procedure does not provide a public record of how each Member voted. Rule XX, clause 1(a), states that if the Speaker is uncertain about the outcome of a voice vote, or if a Member demands a division, the House shall divide. "Those in favor of the question shall first rise from their seats to be counted," and then those who are opposed to the proposition shall stand to be counted. Only vote totals (95 for, 65 against, for instance) are announced in this method of voting.

Yay and nay votes provide a record of how each Member voted. These votes are taken by electronic device unless the computerized voting system malfunctions, in which case standby procedures outlined in Rule XX, clause 2(b), are used to conduct the votes.

The Constitution (Article I, Section 5) states that "the Yeas and Nays of the Members ... on any question" shall be obtained "at the Desire of one fifth of those present." Under this provision, it does not matter if a quorum of the House (218 Members when the House has no vacancies) is not present to conduct business, because any Member can say, "Mr. [or Madam] Speaker, on that vote, I demand the yeas and nays." If the demand is supported by one-fifth of those present, the Speaker will say that "the yeas and nays" are ordered.

Rule XX, clause 6, provides another type of yea and nay vote. If it is evident to a lawmaker that a quorum is not present in the chamber, he or she may object to a voice vote on that ground. Assuming the chair sustains the point of order, the chair will order a yea and nay vote. To make a quorum point of order, a Member says, "I object to the vote on the ground that a quorum is not present, and I make a point of order that a quorum is not present." The actual vote will then simultaneously determine both issues: the presence of a quorum and the vote on the pending question.

In addition, clause 10 of Rule XX states that the "yeas and nays shall be considered as ordered" on final passage of a limited number of measures or matters, such as concurrent budget resolutions. The Constitution requires that votes to override presidential vetoes shall be determined by the yeas and nays.

Recorded votes also identify how each Member voted and are taken by electronic device. Under Rule XX, clause 1(b), if any Member, Delegate, or Resident Commissioner "requests a recorded vote, and that request is supported by at least one-fifth of a quorum, such vote shall be taken by electronic device."

To obtain a recorded vote, a Member states, "Mr. [or Madam] Speaker, on that I demand a recorded vote." If at least one-fifth of a quorum of 218—or 44 Members—stand and support the request, then the recorded vote will be taken by electronic device. The distinction between recorded votes and the yeas and nays is the number of Members required to support each request: one-fifth of those present for the yeas and nays and one-fifth of a quorum (44 of 218) for recorded votes.

Three methods of voting are available in the Committee of the Whole: voice, division, and recorded. Yea and nay votes are not permitted.

Members, Delegates, and the Resident Commissioner have the right to vote in the Committee of the Whole. However, if the question is decided within the margin of votes cast by the Delegates and the Resident Commissioner, the committee shall rise and the Speaker shall put the question de novo (as if new) to the House.

Rule XVIII, clause 6(e) states that the "Chair shall order a recorded vote on a request supported by at least 25 Members, Delegates, and the Resident Commissioner." Thus, any Member, Delegate, or the Resident Commissioner may say, "I request a recorded vote," and, if 25 supporters (the Member who made the request can be part of the tally, too) rise and are counted by the chair, the recorded vote will occur by electronic device.

If few Members are present in the chamber, a lawmaker who plans to request a recorded vote will usually say, "Mr. [or Madam] Chair, I request a recorded vote and, pending that, I make a point of order that a quorum is not present." (A quorum in the Committee of the Whole is 100 Members, Delegates, and the Resident Commissioner.) Assuming that the point of order is sustained, the statement prompts a quorum call, and the Member who requested the recorded vote can ask 24 other colleagues to support his or her request as they come onto the floor.

When the Speaker or chair of the Committee of the Whole counts to determine sufficient support for yea and nay votes or recorded votes, the accuracy of the count is assumed and cannot be challenged. This assumption also applies to division votes and determining the presence of a quorum.

Under House Rule XX, clause 8, the Speaker has the authority to postpone and cluster certain votes. For most questions, postponed votes occur within two legislative days. A vote to agree to the Speaker's approval of the Journal, however, is to occur within the same legislative day.

Under Rule XX, clause 2(a), the minimum time for a vote by electronic device is 15 minutes in either the House or the Committee of the Whole. The 15-minute period is the minimum time allowed, rather than the maximum, for the conduct of a recorded vote. The chair has the discretion to hold the vote open longer.

The voting period for some votes may be shorter than 15 minutes under certain circumstances. The Speaker may reduce the voting time to not less than five minutes (Rule XX, clause 9) "on any question that follows another electronic vote or a report from the Committee of the Whole, if in the discretion of the Speaker Members would be afforded an adequate opportunity to vote." Certain votes in the Committee of the Whole may also be reduced to not less than two minutes, as noted in Rule XVIII, clause 6.


Agricultural Disaster Assistance

Summary: The U.S. Department of Agriculture (USDA) offers several programs to help farmers recover financially from natural disasters, including drought and floods. All the programs have permanent authorization, and one requires a federal disaster designation (the emergency loan program). Most programs receive mandatory funding amounts that are "such sums as necessary" and are not subject to annual discretionary appropriations.

Summary: The federal crop insurance program offers subsidized policies designed to protect crop producers from risks associated with adverse weather, as well as weather-related plant diseases and insect infestations and declines in commodity prices. Policies must be purchased prior to the planting season. Eligible commodities include most major crops and many specialty crops (including fruit, tree nut, vegetable, and nursery crops), as well as forage and pastureland for livestock producers. Producers who grow a crop that is currently ineligible for crop insurance may apply for the Noninsured Crop Disaster Assistance Program (NAP). NAP provides a catastrophic level of coverage, as well as options to purchase additional coverage. Similar to crop insurance, policies must be purchased prior to the planting season.

Summary: There are four permanently reauthorized disaster programs for livestock and trees. Producers do not pay a fee to participate, and advanced sign-up is not required. The programs are:

Summary: 1. the Livestock Indemnity Program (LIP), which provides payments to eligible livestock owners and contract growers at a rate of 75% of market value for livestock deaths in excess of normal mortality or sold at a reduced sale price caused by adverse weather, attacks by reintroduced wild animals, and disease; 2. the Livestock Forage Disaster Program (LFP), which makes payments to eligible livestock producers who have suffered grazing losses on drought-affected pasture or grazing land or on rangeland managed by a federal agency due to a qualifying fire; 3. the Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP), which provides payments to producers of livestock, honey bees, and farm-raised fish as compensation for losses due to disease, adverse weather, and feed or water shortages; and 4. the Tree Assistance Program (TAP), which makes payments to orchardists/nursery tree growers for losses in excess of 15% to replant trees, bushes, and vines damaged by natural disasters.

Summary: Separately, for all types of farms and ranches, when a county has been declared a disaster area by either the President or the Secretary of Agriculture, producers in that county may become eligible for low-interest emergency disaster loans.

Summary: USDA has several permanent disaster assistance programs designed to help producers repair damaged land following natural disasters. It also has authority to issue disaster payments to farmers with funds from "Section 32," or the Commodity Credit Corporation (CCC). Finally, USDA can use a variety of existing programs to address disaster issues as they arise, such as allowing emergency grazing on land enrolled in the Conservation Reserve Program.

Summary: The Agricultural Improvement Act of 2018 (P.L. 115-334) made a number of amendments to the permanent farm bill disaster assistance programs, NAP, and crop insurance, including changes to payment limits, definitions, eligibility, and coverage.

T he U.S. Department of Agriculture (USDA) offers several programs designed to help farmers and ranchers recover from the financial effects of natural disasters, including (1) federal crop insurance, (2) the Noninsured Crop Disaster Assistance Program (NAP), (3) livestock and fruit tree disaster programs, and (4) emergency disaster loans for both crop and livestock producers. All have permanent authorization, while the emergency loan program is the only one requiring a federal disaster designation (see Table 1 ). Most programs receive mandatory funding amounts of "such sums as necessary" and are not subject to annual discretionary appropriations. The Agricultural Improvement Act of 2018 (2018 farm bill, P.L. 115-334 ) made a number of amendments to these programs, generally to expand availability and support.

Prior to the creation of many of the permanently authorized programs at USDA, Congress had historically provided farmers and ranchers with ad hoc disaster assistance payments authorized through supplemental appropriations. Subsequently, policies shifted away from the temporary forms of assistance in favor of enacting more permanent forms of support. More recently, policies have shifted to supplement permanent programs with ad hoc assistance for select agriculture losses. The Bipartisan Budget Act of 2018 ( P.L. 115-123 ) amended existing disaster assistance programs and authorized $2.36 billion for production losses from hurricanes and wildfires in 2017 that were not covered by existing programs.

This report provides an overview of permanently authorized federal disaster assistance programs for agricultural losses as well as discretionary authority that USDA may use to provide assistance. Recent amendments in the 2018 farm bill and ad hoc assistance authorized by Congress in the Bipartisan Budget Act of 2018 are also discussed.

The federal crop insurance program is permanently authorized by the Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et seq. ), and is administered by USDA's Risk Management Agency (RMA). The program is designed to protect crop producers from risks associated with adverse weather, as well as weather-related plant diseases and insect infestations and declines in commodity prices.

Crop insurance is available for most major crops and many specialty crops (including fruit, tree nut, vegetable, and nursery crops), as well as forage and pastureland for livestock producers. A producer who chooses to purchase an insurance policy must do so by an administratively determined deadline date, which varies by crop and usually coincides with the planting season. Insurance products that protect against loss in revenue and profit margins are also available. Policies are typically available in major growing regions.

The federal crop insurance program was instituted in the 1930s and was subject to major legislative reforms in 1980 and again in 1994 and 2000. The Agriculture Risk Protection Act of 2000 ( P.L. 106-224 ) authorized new federal spending for the program primarily through more generous premium subsidies to help make the program more affordable to farmers and enhance farmer participation levels in an effort to preclude the need for ad hoc emergency disaster payments.

Under the current crop insurance program, a producer who grows an insurable crop selects a level of crop yield and price coverage and pays a premium that increases as the levels of yield and price coverage rise. However, all eligible producers can receive catastrophic (CAT) coverage without paying a premium. The premium for this portion of coverage is completely subsidized by the federal government. Under CAT coverage, participating producers can receive a payment equal to 55% of the estimated market price of the commodity on crop losses in excess of 50% of normal yield—referred to as 50/55 coverage.

Although eligible producers do not have to pay a premium for CAT coverage, they are required to pay upon enrollment a $655 administrative fee per covered crop for each county where they grow the crop. USDA can waive the fee for financial hardship cases. In addition to the administrative fee, producers can elect to pay a premium, which is partially subsidized by the government, to increase the 50/55 CAT coverage to any equivalent level of coverage between 50/100 and 85/100 (i.e., 85% of yield and 100% of the estimated market price) in increments of 5%. These higher levels of coverage are known as "buy up" coverage.

For many insurable commodities, an eligible producer can purchase revenue insurance. Under such a policy, a farmer could receive an indemnity payment when actual farm revenue for a crop falls below the target level of revenue, regardless of whether the shortfall in revenue was caused by poor production or low farm commodity prices. Insured producers are also eligible for reduced coverage if they are late or prevented from planting because of flooding.

The annual agriculture appropriations bill traditionally makes two separate appropriations for the federal crop insurance program. It provides discretionary funding for the salaries and expenses of the RMA. It also provides "such sums as are necessary" for the Federal Crop Insurance Corporation, which finances all other expenses of the program, including premium subsidies, indemnity payments, and reimbursements to the private insurance companies. The total cost of the program varies by year, primarily due to fluctuating levels of indemnity payments from changes in commodity prices, planting decisions, and weather conditions. Across all policies, the average premium subsidy was about 63% of total premiums in 2017. The federal government also subsidizes the costs of selling and servicing the policies (as delivery subsidies to Approved Insurance Providers) and absorbs underwriting losses (indemnities in excess of premiums received) in years when indemnities are high.

For a more detailed analysis of the federal crop insurance program, see CRS Report R45193, Federal Crop Insurance: Program Overview for the 115th Congress .

Noninsured Crop Disaster Assistance Program (NAP)

Producers who grow a crop that is currently ineligible for crop insurance may apply for NAP. NAP has permanent authority under Section 196 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333) and is administered by USDA's Farm Service Agency (FSA). It was first authorized under the Federal Crop Insurance Reform Act of 1994 ( P.L. 103-354 ). NAP is not subject to annual appropriations. Instead, it receives such sums as are necessary through USDA's Commodity Credit Corporation (CCC), which has a line of credit with the U.S. Treasury to fund an array of farm programs.

Eligible crops under NAP include any commercial crops grown for food, fiber, or livestock consumption for which there is no CAT coverage available under the federal crop insurance program, with limited exceptions. These crops include mushrooms, floriculture, ornamental nursery, Christmas trees, turfgrass sod, aquaculture, honey, maple sap, ginseng, and industrial crops used in manufacturing or grown as a feedstock for energy production, among others. Trees grown for wood, paper, or pulp products are not eligible. To be eligible for a NAP payment, a producer first must apply for coverage by the application closing date, which varies by crop but is generally about 30 days prior to the final planting date for an annual crop. Like CAT coverage under crop insurance, NAP applicants must also pay an administrative fee at the time of application. The NAP service fee is the lesser of $325 per crop or $825 per producer per administrative county, not to exceed a total of $1,950 for farms in multiple counties.

In order to receive a NAP payment, a producer must experience at least a 50% crop loss caused by a natural disaster or be prevented from planting more than 35% of intended crop acreage. For any losses in excess of the minimum loss threshold, a producer can receive 55% of the average market price for the covered commodity. Hence, NAP is similar to CAT coverage in that it pays 55% of the market price for losses in excess of 50% of normal historical production.

Additional coverage (referred to as buy-up coverage) may be purchased at 50% to 65% (in 5% increments) of established yield and 100% of average market price, contract price, or other premium price. The farmer-paid fee for additional coverage is 5.25% times the product of the selected coverage level and value of production (acreage times yield times average market price times the producer's share of the crop). Grazing land is not eligible for buy-up coverage.

A producer of a noninsured crop is subject to an annual payment limit of $125,000 per person for catastrophic coverage and $300,000 for buy-up coverage. A producer is ineligible under NAP if the producer's total adjusted gross income (AGI) exceeds $900,000. The total federal cost of NAP was $165 million in FY2014, $125 million in FY2015, $137 million in FY2016, $157 million in FY2017, and $164.3 million in FY2018.

Supplemental Agricultural Disaster Assistance Programs

Four agricultural disaster assistance programs are permanently authorized for livestock and fruit trees: (1) the Livestock Indemnity Program (LIP); (2) the Livestock Forage Disaster Program (LFP); (3) the Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP); and (4) the Tree Assistance Program (TAP). They operate nationwide and are administered by FSA. Producers do not pay fees to participate and can apply at their local FSA offices.

All programs receive "such sums as necessary" in mandatory funding via the CCC to reimburse eligible producers for their losses. Total payments vary each year based on eligible loss conditions. For FY2018, LFP payments totaled $487.5 million, LIP payments totaled $36.6 million, TAP payments totaled $11.3 million, and ELAP payments totaled $47 million. All payments are reduced by sequestration.

For individual producers, payments under LFP may not exceed $125,000 per year. There are no limits on the amount of payments received under LIP, ELAP, and TAP. To be eligible for a payment under any of these programs, a producer's total AGI cannot exceed $900,000.

LIP provides payments to eligible livestock owners and contract growers for livestock deaths in excess of normal mortality caused by an eligible loss condition (e.g., adverse weather, disease, or animal attack). Payments may also be made when the animal is injured as a direct result of an eligible loss condition but does not die and is sold at a reduced price. Eligible loss conditions may include (1) extreme or abnormal damaging weather that is not expected to occur during the loss period for which it occurred, (2) disease that is caused or transmitted by a vector and is not susceptible to control by vaccination, and (3) an attack by animals reintroduced into the wild by the federal government or protected by federal law. Eligibility is predicated on not only the occurrence of an eligible loss condition but direct causation to the death of the animal.

Eligible livestock include beef and dairy cattle, bison, hogs, chickens, ducks, geese, turkeys, sheep, goats, alpacas, deer, elk, emus, llamas, reindeer, caribou, and equine. The livestock must have been maintained for commercial use and not produced for reasons other than commercial use as part of a farming operation. The program excludes wild free-roaming animals, pets, and animals used for recreational purposes, such as hunting, roping, or for show. Poultry and swine are the only eligible livestock for contract growers.

The LIP payment rate is equal to 75% of the average fair market value of the deceased animal type. USDA publishes a payment rate for each type of livestock for each year (e.g., $983.90 per adult beef cow and $4.39 per duck in 2018). For eligible livestock contract growers, the payment rate is based on 75% of the national average input costs for the applicable livestock. For livestock sold at a reduced sale price, payments are calculated by multiplying the national payment rate for the livestock category minus the amount the owner received at sale times the owner's share.

LFP makes payments to eligible livestock producers who have suffered grazing losses on drought-affected pastureland (including cropland planted specifically for grazing), or on rangeland managed by a federal agency due to a qualifying fire.

Eligible producers must own, cash or share lease, or be a contract grower of covered livestock during the 60 calendar days before the beginning date of a qualifying drought or fire. They must also provide pastureland or grazing land for covered livestock that is either (a) physically located in a county affected by a qualifying drought during the normal grazing period for the county or (b) managed by a federal agency where grazing is not permitted due to fire.

Eligible livestock types are livestock that have been grazing on eligible grazing land or pastureland or would have been had a disaster not struck. These include alpacas, beef cattle, buffalo, beefalo, dairy cattle, sheep, deer, elk, emus, equine, goats, llamas, poultry, reindeer, and swine. Livestock must be maintained for commercial use as part of a farming operation. Livestock owned for noncommercial uses, or livestock that is in (or would have been in) feedlots, are excluded.

Payments are generally triggered by the drought intensity level for an individual county as published in the U.S. Drought Monitor, a federal report published each week. The number of monthly payments depends on the drought severity and length of time the county has been designated as such ( Table 2 ). For drought, the payment amount is equal to the number of monthly payments times 60% of estimated monthly feed cost. For producers who sold livestock because of drought conditions, the payment rate is equal to 80% of the estimated monthly feed cost.

ELAP provides payments to producers of livestock, honey bees, and farm-raised fish as compensation for losses due to disease, adverse weather, feed or water shortages, or other conditions (such as wildfires) that are not covered under LIP or LFP.

ELAP specifically provides assistance for the loss of honey bee colonies in excess of normal mortality. In order to meet the eligibility requirements for honey bee colony losses, they must be the direct result of an eligible adverse weather or loss condition such as colony collapse disorder, eligible winter storm, excessive wind, and flood. For livestock losses, ELAP covers four categories: (1) livestock death losses caused by an eligible loss condition, (2) livestock feed and grazing losses that are not due to drought or wildfires on federally managed lands, (3) losses resulting from the additional cost of transporting water to livestock due to an eligible drought, and (4) losses resulting from the additional cost associated with gathering livestock for inspection and treatment related to cattle tick fever.

TAP makes payments to qualifying orchardists and nursery tree growers to replant or rehabilitate trees, bushes, and vines damaged by natural disasters. Losses in crop production—as opposed to the tree, bush, or vine itself—are generally covered by federal crop insurance or NAP. Eligible trees, bushes, and vines are those from which an annual crop is produced for commercial purposes. Nursery trees include ornamental, fruit, nut, and Christmas trees produced for commercial sale. Trees used for pulp or timber are ineligible.

To be considered an eligible loss, the individual stand must have sustained a mortality loss or damage loss in excess of 15% after adjustment for normal mortality or damage. Normal mortality or damage is determined based on (a) each eligible disaster event, except for losses due to plant disease, or (b) for plant disease, the time period for which the stand is infected. Also, the loss could not have been prevented through reasonable and available measures.

For replacement, replanting, and/or rehabilitation of trees, bushes, or vines, the payment calculation is the lesser of (a) 65% of the actual cost of replanting (in excess of 15% mortality) and/or 50% of the actual cost of rehabilitation (in excess of 15% damage), or (b) the maximum eligible amount established for the practice by FSA. The total quantity of acres planted to trees, bushes, or vines for which a producer can receive TAP payments cannot exceed 1,000 acres annually.

When either the President or the Secretary of Agriculture declares a county a disaster area or quarantine area, agricultural producers in that county may become eligible for low-interest emergency disaster (EM) loans available through FSA. Producers in counties that are contiguous to a county with a disaster designation also become eligible for EM loans. EM loan funds may be used to help eligible farmers, ranchers, and aquaculture producers recover from production losses (when the producer suffers a significant loss of an annual crop) or from physical losses (such as repairing or replacing damaged or destroyed structures or equipment or for the replanting of permanent crops such as orchards). A qualified applicant can then borrow up to 100% of actual production or physical losses (not to exceed $500,000).

Once a county is declared eligible, an individual producer within the county (or a contiguous county) must also meet the following requirements for an EM loan: A producer must (1) be an established family farmer and a citizen or permanent resident of the United States; (2) experience a crop loss of more than 30% or a physical loss of livestock, livestock products, real estate, or property; and (3) be unable to obtain credit from a commercial lender but still show the potential to repay the loan, including having acceptable credit history and collateral to secure the loan. Applications must be received within eight months of the county's disaster designation date. Loans for nonreal-estate purposes must generally be repaid within seven years. Loans for physical losses to real estate have terms up to 20 years. Depending on the repayment ability of the producer and other circumstances, these terms can be extended to 20 years for nonreal-estate losses and up to 40 years for real estate losses.

The EM loan program is permanently authorized by Title III of the Consolidated Farm and Rural Development Act (P.L. 87-128), as amended, and is subject to annual appropriations. In FY2018, the program received $25.6 million of new loan authority. Unused funds are carried over and available in the next fiscal year. Therefore, the total loan authority can vary greatly depending on appropriated levels, annual use, and total carryover. In FY2019, the total loan authority is $99.5 million.

Also in counties with disaster designations, producers who have existing direct loans with FSA may be eligible for Disaster Set-Aside. If, as a result of disaster, a borrower is unable to pay all expenses and make loan payments that are coming due, up to one full year's payment can be moved to the end of the loan.

USDA also has several permanent disaster assistance programs that help producers repair damaged land following natural disasters. It also has authority to issue disaster payments to farmers with "Section 32" or "CCC" funds and can use a variety of existing programs to address disaster issues as they arise.

Emergency Agricultural Land Assistance Programs

Several USDA programs offer financial and technical assistance to producers to repair, restore, and mitigate damage by a natural disaster on private land.

The Emergency Conservation Program (ECP) and the Emergency Forest Restoration Program (EFRP) are administered by FSA. For both programs, FSA pays participants a percentage of the cost to restore the land to a productive state. ECP also funds water for livestock and installing water conserving measures during times of drought. EFRP was created to assist private forestland owners with losses caused by a natural disaster on nonindustrial private forest land. The Emergency Watershed Protection (EWP) program and the EWP floodplain easement program are administered by USDA's Natural Resources Conservation Service and the U.S. Forest Service. EWP assists sponsors, landowners, and operators in implementing emergency recovery measures for runoff retardation and erosion prevention to relieve imminent hazards to life and property created by a natural disaster. The EWP floodplain easement program is a mitigation program that pays for permanent easements on private land meant to safeguard lives and property from future floods and drought and the products of erosion.

For more information on these programs, see CRS Report R42854, Emergency Assistance for Agricultural Land Rehabilitation .

"Section 32" and "CCC" Funds for Farm Disaster Payments

USDA has discretionary authority to distribute emergency payments to farmers with "Section 32" and CCC funds. While both Section 32 and CCC have broad authority to support U.S. agriculture, the majority of their activities are required under various statutes, such as omnibus farm bills. Beginning in FY2012, annual appropriations acts limited USDA's discretionary use of CCC and Section 32. The FY2018 omnibus appropriation removed this limitation for CCC and allowed for limited carryover funding under Section 32 to be used pending congressional notification.

USDA's Section 32 program is funded by a permanent appropriation of 30% of the previous year's customs receipts, and funds are used for a variety of activities, including child nutrition programs, the purchase of commodities for domestic food programs, and farm disaster assistance. The statutory authority is Section 32 of the Agricultural Adjustment Act Amendment of 1935 (P.L. 74-320, 7 U.S.C. 612c). The authority to provide disaster assistance is attributed to clause 3 of Section 32, which provides that funds "shall be used to re-establish farmers' purchasing power by making payments in connections with the normal production." The FY2019 omnibus (§714, P.L. 116-6 ) limits clause 3 to carryover funding of no more than $350 million following a two-week advance notice to Congress. The CCC serves as the funding institution for carrying out federal farm support programs, such as commodity price support and production programs, conservation programs, disaster assistance, agricultural research, and bioenergy development. It is federally chartered by the CCC Charter Act of 1948 (P.L. 80-806), as amended. The authority to provide disaster assistance is attributed to Section 5 of the act (15 U.S.C. 714c), which, among other activities, authorizes the CCC to support the prices of agricultural commodities through loans, purchases, payments, and other operations.

In addition to implementing the disaster assistance programs discussed above, USDA can use authority under other existing programs to help producers recover from natural disasters. For example, in response to the major drought affecting a large part of the United States in recent years, USDA took a number of administrative actions to assist producers, including

extending emergency grazing and haying on Conservation Reserve Program (CRP) acres; reducing the emergency loan interest rate and making emergency loans available earlier in the season; targeting conservation assistance through the Environmental Quality Incentives Program for the most extreme and exceptional drought areas; additional funding helps farmers and ranchers implement conservation practices that conserve water resources, reduce wind erosion on drought-impacted fields, and improve livestock access to water (farmers and ranchers contribute about half the cost of implementing the practices); and directing Emergency Community Water Assistance Grants for rural water systems experiencing emergencies resulting from a significant decline in quantity or quality of drinking water.

Assistance to Prevent Spread of Animal Diseases

Under the Animal Health Protection Act (7 U.S.C. 8301, et seq. ), USDA is authorized to take protective actions against the spread of livestock disease, including seizing, treating, or destroying animals if USDA determines that an extraordinary emergency exists because of the presence of a pest or disease of livestock. As part of its animal health program, USDA's Animal and Plant Health Inspection Service compensates producers for animals that must be euthanized, for their disposition, and for infected materials that must also be destroyed. Funding is provided by annual appropriations or through the CCC for larger amounts. The most recent example of a large-scale outbreak that resulted in payments to producers was in 2015 and 2016 during outbreaks of highly pathogenic avian influenza affecting the U.S. poultry industry.

The 2018 farm bill amended the supplemental disaster assistance programs as well as NAP, crop insurance, and emergency loans. The following provides a summary of changes to select programs included in this report. For a more comprehensive review of amendments under the 2018 farm bill, see CRS Report R45525, The 2018 Farm Bill (P.L. 115-334): Summary and Side-by-Side Comparison .

The 2018 farm bill generally expands coverage under the federal crop insurance program, including for forage, grazing, and hemp. Amendments authorize catastrophic level coverage for insurance plans covering grazing crops and grasses. It also allows producers to purchase separate crop insurance policies for crops that can be both grazed and mechanically harvested on the same acres during the same growing season and to receive independent indemnities for each intended use. A number of amendments were also made related to hemp, including eligibility, post-harvest losses, and waivers that allow for the development of policies for hemp. For all crops, the administrative fee for catastrophic coverage was increased from $300 to $655 per crop per county.

The 2018 farm bill expands crop eligibility to include crops that may be covered by select forms of crop insurance but only under whole farm plans or weather index policies. It also amends the payment calculation to consider the producer's share of the crop, raises the service fees, and creates separate payment limits for catastrophic ($125,000/person) and buy-up ($300,000/person) coverage. Payments under buy-up coverage are also expanded to include other premium prices (e.g., local, organic, or direct market price), which may be higher than the average market price. The law makes buy-up coverage permanent and adds data collection and program coordination requirements.

Supplemental Agriculture Disaster Assistance Program Amendments

The 2018 farm bill expands payments for livestock losses caused by disease and for losses of unweaned livestock that occur before vaccination. The law also expands the definition of eligible producer to include Indian tribes or tribal organizations and increases replanting and rehabilitation payment rates for beginning and veteran orchardists. The law amends the limits on payments received under select disaster assistance programs: Of the four disaster assistance programs, only LFP is now subject to the $125,000/person payment limit.

Eligibility is expanded to allow borrowers who have received a debt write-down or restructuring of a farm loan (due to circumstances beyond the control of the borrower) to maintain eligibility for an emergency loan.

The U.S. farm policy mix that provides assistance to agricultural producers for damage and loss following a natural disaster continues to shift between permanent and temporary authorized support. The authorization of permanent disaster assistance programs in the 2008 and 2014 farm bills, as well as expanded crop insurance and NAP policies, were designed to reduce the need for ad hoc disaster assistance. Following enactment of the 2008 farm bill, Congress appropriated little in the way of supplemental disaster assistance for agriculture, most of which was for land rehabilitation efforts under EWP and ECP. This changed in 2018, when an active hurricane and wildfire season in 2017 resulted in the authorization of supplemental assistance in the Bipartisan Budget Act of 2018. In addition to the programmatic changes discussed in the " Supplemental Agricultural Disaster Assistance Programs " section of this report, the Bipartisan Budget Act of 2018 also authorized $2.36 billion for production losses not covered under NAP or crop insurance.

2017 Wildfires and Hurricanes Indemnity Program

On July 16, 2018, USDA announced the availability of the bulk of the 2018 Bipartisan Budget Act funding through the Wildfires and Hurricanes Indemnity Program (WHIP). Only crop, tree, bush, and vine losses from a wildfire or hurricane in 2017 are eligible for assistance under WHIP.

Payments to producers who purchased crop insurance or NAP coverage range from 70% to 95% of the expected value of the crop, depending on the level of coverage purchased. For producers who did not purchase crop insurance or NAP in advance of the natural disaster, payments under WHIP are limited to 65% of expected value of the crop. All payments are reduced by the value of the crop harvested, if any, and any insurance indemnity paid through crop insurance or NAP. All participants are required to purchase crop insurance or NAP for the next two years.

Payments are limited to $125,000 if less than 75% of the participant's AGI is from farming. If more than 75% of the participant's AGI is from farming, then payments are limited to a maximum of $900,000. USDA's initial announcement stated that only 50% of the participant's payment rate will be made up front, with additional payments possible depending on fund availability.

USDA used a portion of the 2018 Bipartisan Budget Act funding for a $340 million block grant to the state of Florida. Under the grant, the state is expected to assist the citrus industry with the cost of buying and planting replacement trees—including resetting and grove rehabilitation—and for repairing damage to irrigation systems, among other activities.

The Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), also provided supplemental assistance but through an existing program—TAP. The act authorized $15 million for payments to eligible pecan orchardists or pecan nursery tree growers for mortality losses incurred during calendar year 2017. The act lowers the mortality loss threshold under TAP to cover losses in excess of 7.5% but not more than 15%, adjusted for normal mortality. If losses exceeded 15%, then the loss is already eligible for TAP. If applications for these losses (i.e., between 7.5% and 15%) exceed the available $15 million, then payments would be proportionally reduced.


U.S. Farm Income Outlook for 2019

Summary: This report uses the U.S. Department of Agriculture's (USDA) farm income projections (as of March 6, 2019) and agricultural trade outlook update (as of February 21, 2019) to describe the U.S. farm economic outlook. According to USDA's Economic Research Service (ERS), national net farm income—a key indicator of U.S. farm well-being—is forecast at $69.4 billion in 2019, up $6.3 billion (+10%) from last year. The forecast rise in 2019 net farm income is the result of an increase in gross returns (up $8.5 billion or +2%)—including continued payments under the trade aid package announced by USDA in July 2018—partially offset by slightly higher production expenses (up $2.2 billion or +0.6%). Net farm income is calculated on an accrual basis. Net cash income (calculated on a cash-flow basis) is also projected higher in 2019 (+4.7%) to $95.7 billion.

Summary: The 2019 net farm income forecast is substantially below (-18%) the 10-year average of $84.8 billion (in nominal dollars)—primarily the result of the outlook for continued weak prices for most major crops. Commodity prices are under pressure from a record soybean and near-record corn harvest in 2018, diminished export prospects due to an ongoing trade dispute with China, and burdensome stocks.

Summary: Government payments are projected down nearly 17% from 2018 at $11.5 billion—due largely to lower market facilitation payments by USDA. Market facilitation payments to qualifying agricultural producers—in response to the U.S.-China trade dispute—were an estimated $5.2 billion in 2018 and are projected at $3.5 billion in 2019. Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) payments are also projected lower in 2019 ($1.7 billion) versus 2018 ($3.0 billion). Payments to dairy producers under the new Dairy Margin Coverage (DMC) program are projected up over 200% at $600 million, while payments under conservation and disaster assistance are projected up in 2019 at $4.3 billion (+8.6%) and $1.4 billion (+20%).

Summary: Since 2008, U.S. agricultural exports have accounted for a 20% share of U.S. farm and manufactured or processed agricultural sales. In 2018 total agricultural exports were estimated up 2% at $143.4 billion. However, abundant supplies in international markets, strong competition from major foreign competitors, and the ongoing U.S.-China trade dispute are expected to shift trade patterns and lower U.S. export prospects slightly (-1%) in 2019.

Summary: In addition to the outlook for slightly higher farm income, farm asset value is also projected up 1.5% from 2018 to $3.1 trillion. However, aggregate farm debt is projected record large at $426.7 billion—up 3.9% from 2018. Farm asset values reflect farm investors' and lenders' expectations about long-term profitability of farm sector investments. USDA farmland values are projected to rise 1.8% in 2019, similar to the increases of 1.9% in 2018 and 2.3% in 2017. Because they comprise such a significant portion of the U.S. farm sector's asset base (83%), change in farmland values is a critical barometer of the farm sector's financial performance. At the farm household level, average farm household incomes have been well above average U.S. household incomes since the late 1990s. However, that advantage has narrowed in recent years. In 2014, the average farm household income (including off-farm income sources) was about 77% higher than the average U.S. household income. In 2017 (the last year with comparable data), that advantage is expected to decline to 32%.

Summary: The outlook for below average net farm income and relatively weak prices for most major program crops signals the likelihood of continued relatively lean times ahead. The U.S. agricultural sector's well-being remains dependent on continued growth in domestic and foreign demand to sustain prices at current modest levels. In addition to commodity prices, the financial picture for the agricultural sector as a whole heading into 2019 will hinge on both domestic and international macroeconomic factors, including interest rates, economic growth, and consumer demand.

The U.S. farm sector is vast and varied. It encompasses production activities related to traditional field crops (such as corn, soybeans, wheat, and cotton) and livestock and poultry products (including meat, dairy, and eggs), as well as fruits, tree nuts, and vegetables. In addition, U.S. agricultural output includes greenhouse and nursery products, forest products, custom work, machine hire, and other farm-related activities. The intensity and economic importance of each of these activities, as well as their underlying market structure and production processes, vary regionally based on the agro-climatic setting, market conditions, and other factors. As a result, farm income and rural economic conditions may vary substantially across the United States.

Annual U.S. net farm income is the single most watched indicator of farm sector well-being, as it captures and reflects the entirety of economic activity across the range of production processes, input expenses, and marketing conditions that have prevailed during a specific time period. When national net farm income is reported together with a measure of the national farm debt-to-asset ratio, the two summary statistics provide a quick and widely referenced indicator of the economic well-being of the national farm economy.

In the first of three official U.S. farm income outlook releases scheduled for 2019, ERS projects that U.S. net farm income will rise slightly in 2019 to $69.4 billion, up $6.3 billion (+10%) from last year. Net cash income (calculated on a cash-flow basis) is also projected higher in 2019 (+4.7%) to $95.7 billion. However, the initial 2019 net farm income forecast is below (-18%) the 10-year average of $84.8 billion and represents continued agriculture-sector economic weakness since 2013's record high of $123.8 billion.

Substantial Uncertainties Underpin the Outlook

Abundant domestic and international supplies of grains and oilseeds suggest a fourth straight year of relatively weak commodity prices in 2018 ( Figure A-1 through Figure A-4 , and Table A-4 ). However, considerable uncertainty remains concerning whether the United States will achieve a resolution to its trade dispute with China and other major trading partners, what crops U.S. producers will decide to plant across the major growing regions of the United States ( Figure 3 ), whether farmers and ranchers will continue to expand livestock production ( Figure 8 ), what weather and growing conditions will prevail during the principal plant-growth season, and how domestic and international demand will evolve during the year.

Since the record highs of 2012 and 2013, net cash income and net farm income have fallen by 29% and 44%, respectively ( Figure 1 ), thus continuing a general downward trend in farm income since 2013—primarily the result of a significant decline in most farm commodity prices since 2013-2014. Cash receipts for most major field crops (feed grains, hay, and wheat), oilseeds ( Figure 12 ), and animal products (beef, pork, broilers, eggs, and milk— Figure 14 ), are projected at $381.5 billion in 2019 (+2.3%) but have declined since their highs in 2012 and 2014 as U.S. and global grain and oilseed stocks and animal herds have rebuilt. Government payments in 2019 are projected down (-17%) from 2018 at $11.5 billion—due largely to lower payments under both the Market Facilitation Program (MFP) and revenue-support programs ( Figure 16 ). Total production expenses for 2019 ( Figure 18 ), at $372 billion, are projected up slightly from 2018 (+0.6%), driven largely by feed, labor, and interest costs. Global demand for U.S. agricultural exports ( Figure 22 ) is projected at $141.5 billion in 2019, down 1% from 2018, due largely to a decline in sales to China. Farm asset values and debt levels are projected to reach record levels in 2019—asset values at $3.1 trillion (+1.5%) and farm debt at $427 billion (+3.9%)—pushing the projected debt-to-asset ratio up to 13.9%, the highest level since 2002 ( Figure 28 ).

Farm production choices in 2019 will largely be determined by producers' expectations for relative net returns from both the market and government programs across the various crops and livestock activities. Growing-season weather, yields, and harvest-time market prices are unknown early in the year when producers must lock in their production decisions for the year.

Heading into 2019, most of the major growing zones ( Figure 3 ) across the Corn Belt, Plain States, Delta, and Southeast are largely free of drought ( Figure 4 ). Some dryness persists primarily in the mountain states, the Pacific Northwest, and southern Texas.

Instead of dryness, excessive precipitation and early spring flooding present potential hindrances to the normal crop-choice and planting routines for 2019, particularly in the western Corn Belt ( Figure 5 ).

Large Corn and Soybean Crops Continue to Dominate Commodity Markets

Corn and soybeans are the two largest U.S. commercial crops in terms of both value and acreage. For the past several years, U.S. corn and soybean crops have experienced strong growth in both productivity and output, thus helping to build stockpiles at the end of the marketing year. This has been particularly true for soybeans, which have seen rapid growth in yield, acres planted, and stocks. This pattern reached a historic point in 2018 when, for the first time in history, U.S. soybean plantings (at 89.196 million acres) narrowly exceeded corn plantings (89.120 million acres). The record soybean plantings, coupled with the second-highest yields on record (51.6 bushels/acres), produced a record U.S. soybean harvest of 4.5 billion bushels and record ending stocks (900 million bushels) in 2018. The record harvest and abundant supply, coupled with the sudden loss of China as the principal buyer of U.S. soybeans in 2018, have pressured soybean farm prices lower (-8%) to a projected $8.60/bushel for the 2018/2019 marketing year—the lowest farm price since 2006 ( Figure 6 ).

Like soybeans, USDA estimated the second-highest corn yields on record in 2018 at 176.4 bushels/acre (just behind the previous year's record yield of 176.6 bushels/acre). As a result, the United States produced the third-largest corn harvest on record at 14.4 billion bushels. Despite the near-record production, USDA predicts that record large domestic usage (including for livestock feed, ethanol production, other industrial processing, and seed) plus large exports will result in a small reduction in corn ending stocks, a decline in the ending stocks-to-use ratio to 14.0% (down from 14.5%) and a slightly higher season average farm price of $3.55/bushel.

Both wheat and upland cotton farm prices are projected up slightly from 2017 despite relatively abundant stocks-to-use ratios, largely on the strength of international demand.

The corn and soybean crops provide important inputs for the domestic livestock, poultry, and biofuels sectors. In addition, the United States is traditionally one of the world's leading exporters of corn, soybeans, and soybean products—vegetable oil and meal. During the recent five-year period from 2013/2014 to 2017/2018, the United States exported 49% of its soybean production and 15% of its corn crop. As a result, the export outlook for these two crops is critical to both farm sector profitability and regional economic activity across large swaths of the United States as well as in international markets. However, a tariff-related trade dispute between the United States and several major trading partners (in particular, China) has cast uncertainty over the corn and soybean markets.

The trade dispute has resulted in lower purchases of U.S. agricultural products by China in 2018, with continued diminished prospects for 2019. China was the top export market for U.S. agricultural products in 2017 with $25.9 billion in purchases. With the realization of diminished Chinese purchases, USDA has revised downward its expected export value to China for 2018 to $20.5 billion and for 2019 to $13.6 billion. Similarly, USDA has lowered its U.S. soybean export forecast from its initial estimate of 2.3 billion bushels in May 2018 to 1.875 billion bushels in its March 8, 2019, World Agricultural Supply and Demand Estimates report. The marketing year for corn and soybeans extends through August 2019. Thus, these forecasts depend on whether the trade dispute continues unabated or how the terms of any resolution (if one were to occur) would impact trade in the remaining months of the marketing year in 2019.

The rapid expansion of U.S. soybean production has come largely at the expense of the wheat sector, which has been steadily losing acreage over the past several decades ( Figure 7 ). In 2017 U.S. wheat-planted acres were the lowest in over 100 years. Poor planting conditions in the fall of 2018 (for the 2019 winter wheat crop) across several states have resulted in the lowest estimated plantings outlook for winter wheat since 1909. The contraction in area is expected to support wheat prices and possibly lead to expanded spring wheat plantings in the Northern Plains in 2019.

USDA's February 2019 Cattle report reported that U.S. cattle herd expansion, which has been growing since 2015, has slowed markedly but is still projected to grow through 2019. Similarly, U.S. hog and poultry flocks have been growing and are expected to continue to expand in 2019. A key uncertainty for the meat-producing sector is whether demand will expand rapidly enough to absorb the continued growth in output or whether surplus production will begin to pressure prices lower. For 2019, expected production of beef (+1.6%), pork (+4.2%), broilers (+1.2%), and eggs (+2.3%) are projected to expand relatively robustly. This growth in protein production was preceded by strong growth rates in 2018: beef (+2.6%), pork (+2.9%), broilers (+2.2%), and eggs (+2.1%). USDA projects that combined domestic and export demand will continue to grow for red meat (+1.7%) and poultry (+0.9%) but at slower rates than projected meat production, thus contributing to the outlook for lower prices and profit margins for livestock in 2019.

The changing conditions for the U.S. livestock sector may be tracked by the evolution of the ratios of livestock output prices to feed costs ( Figure 10 ). A higher ratio suggests greater profitability for producers. The cattle-, hog-, and broiler-to-feed margins all moved upward in during 2014 but have exhibited volatility during the 2015-2018 period. The hog, cattle, and broiler sectors remain profitable. However, continued production growth of between 2% and 4% for red meat and poultry suggests that prices are vulnerable to weakness in demand. Both the milk- and hog-to-feed ratios fell during 2018, suggesting eroding profitability. While this result varies widely across the United States, many small or marginally profitable hog and milk producers face continued financial difficulties. In addition, both U.S. and global milk production are projected to continue growing in 2019. As a result, milk prices could come under further pressure in 2019, although USDA is currently projecting milk prices up slightly in 2019.

Background on the U.S. Cattle-Beef Sector

Record profitability among cow-calf producers in 2014, coupled with then-improved forage conditions, helped to trigger the beef cow herd expansion ( Figure 9 ). The continued cattle expansion through 2019—despite weakening profitability—is primarily the result of a lag in the biological response to the strong market price signals of late 2014. During the 2007-2014 period, high feed and forage prices plus widespread drought in the Southern Plains—the largest U.S. cattle production region—had resulted in an 8% contraction of the U.S. cattle inventory ( Figure 9 ). Reduced beef supplies led to higher producer and consumer prices, which in turn triggered the slow rebuilding phase in the cattle cycle that started in 2014 (see the price-to-feed ratio for steers and heifers, Figure 10 ). The resulting continued expansion of beef supplies pressured market prices lower in 2016. The lower price outlook is expected to persist through 2019 despite strong domestic and international demand across all meat categories—beef, pork, and poultry ( Table A-4 ).

Projected farm-sector revenue sources in 2019 include crop revenues (47% of sector revenues), livestock receipts (42%), government payments (3%), and other farm-related income (8%), including crop insurance indemnities, machine hire, and custom work. Total farm sector gross cash income for 2019 is projected to be up (+1.4%) to $427.5 billion, driven by increases in both crop (+2%) and livestock (+2.6%) receipts ( Figure 11 ). Cash receipts from direct government payments (-17%) and other farm-related income (-1.2) are down slightly from 2018.

Total crop sales peaked in 2012 at $231.6 billion when a nationwide drought pushed commodity prices to record or near-record levels. In 2019, crop sales are projected at $201.7 billion, up slightly from 2018 ( Figure 12 ). Projections for 2019 and percentage changes from 2018 include:

Feed crops—corn, barley, oats, sorghum, and hay: $58.8 billion (+4.0%); Oil crops—soybeans, peanuts, and other oilseeds: $39.5 billion (-6.6%); Fruits and nuts: $32.9 billion (+8.2%); Vegetables and melons: $18.6 billion (+0.9%); Food grains—wheat and rice: $12.4 billion (+6.2%); Cotton: $8.3 billion (+6.5%); and Other crops including tobacco, sugar, greenhouse, and nursery: $29.8 billion (+2%).

The livestock sector includes cattle, hogs, sheep, poultry and eggs, dairy, and other minor activities. Cash receipts for the livestock sector grew steadily from 2009 to 2014, when it peaked at a record $212.8 billion. However, the sector turned downward in 2015 (-11.0%) and again in 2016 (-14.1%), driven largely by projected year-over-year price declines across major livestock categories ( Table A-4 and Figure 14 ). In 2017, livestock sector cash receipts recovered with year-to-year growth of 8.1% to $176.0 billion. In 2018, cash receipts were nearly unchanged. In 2019, cash receipts are projected up 2.6% for the sector at $179.9 billion as cattle and dairy sales partially offset declines in hog and poultry. Projections for 2019 (and percentage changes from 2018) include:

Cattle and calf sales: $69.2 billion (+4.0%); Poultry and egg sales: $46.0 billion (-0.7%); Dairy sales, valued at $37.8 billion (+7.8%); Hog sales: $19.5 billion (-3.2%); and Miscellaneous livestock, valued at $7.4 billion (+2.7%).

Government payments include direct payments (decoupled payments based on historical planted acres), price-contingent payments (program outlays linked to market conditions), conservation payments (including the Conservation Reserve Program and other environmental-based outlays), ad hoc and emergency disaster assistance payments (including emergency supplemental crop and livestock disaster payments and market loss assistance payments for relief of low commodity prices), and other miscellaneous outlays (including market facilitation payments, cotton ginning cost-share, biomass crop assistance program, peanut quota buyout, milk income loss, tobacco transition, and other miscellaneous payments).

Total government payments of $11.5 billion still represent a relatively small share (3%) of projected gross cash income of $427.5 billion in 2019. In contrast, government payments are expected to represent 16% of the projected net farm income of $69.4 billion. However, the importance of government payments as a percentage of net farm income varies nationally by crop and livestock sector and by region.

Government payments in 2019 are projected down 16.8% from 2018 at $11.5 billion ( Figure 16 and Table A-4 ). Government payments in 2018 were inflated by unexpected payments of approximately $5.2 billion under the MFP initiated by USDA in response to the U.S.-China trade dispute. MFP payments to qualifying agricultural producers were estimated at $5.7 billion in 2018 and are projected at $3.5 billion in 2019, thus accounting for a year-to-year difference of -$2.2 billion. USDA ad hoc disaster assistance, at $1.4 billion, is projected up (+20.4%). MFP and ad hoc disaster assistance payments are expected to add $6.8 billion, or about 12%, to net farm income in 2018 and $4.9 billion, or about 8%, to net farm income in 2019.

Payments under the Agricultural Risk Coverage and Price Loss Coverage programs are projected lower in 2019 at $1.7 billion compared with an estimated $3.0 billion in 2018 (see "Price Contingent" in Figure 16 ). No payments are forecast under the marketing loan program in 2019, the same as in 2018, as program crop prices are expected to remain above most farm-bill loan rates through 2019. The new Dairy Margin Coverage program is expected to make $600 million in payments in 2019, up from $188 million under the previous milk Margin Protection Program (MPP) in 2018 (see next section for details).

Conservation programs include all conservation programs operated by USDA's Farm Service Agency and the Natural Resources Conservation Service that provide direct payments to producers. Estimated conservation payments of $4.3 billion are forecast for 2019, up slightly from $4.0 billion in 2018.

The 2018 farm bill (Agricultural Improvement Act of 2018, P.L. 115-334 ) made several changes to the previous MPP program, including a new name—the Dairy Margin Coverage (DMC) program—and expanded margin coverage choices from the original range of $4.00-$8.00 per hundredweight (cwt.). Under the 2018 farm bill, milk producers have the option of covering the milk-to-feed margin at a $9.50/cwt. threshold on the first 5 million pounds of milk coverage under the program.

The DMC margin differs from the USDA-reported milk-to-feed ratio shown in Figure 10 but reflects the same market forces. As of January 2019, the formula-based milk-to-feed margin used to determine government payments was below the newly instituted $9.50/cwt. threshold ( Figure 17 ), thus increasing the likelihood of DMC payments in 2019.

Total production expenses for 2019 for the U.S. agricultural sector are projected to be up slightly (+0.6%) from 2018 in nominal dollars at $372.0 billion ( Figure 18 ). Production expenses peaked in both nominal and inflation-adjusted dollars in 2014, then declined for two years before resuming their upward trend in nominal dollars in 2017.

But how have production expenses moved relative to revenues? A comparison of the indexes of prices paid (an indicator of expenses) versus prices received (an indicator of revenues) reveals that the prices received index generally declined from 2014 through 2016, rebounded in 2017, then declined again in 2018 ( Figure 19 ). Farm input prices (as reflected by the prices paid index) showed a similar pattern but with a much smaller decline from their 2014 peak, thus suggesting that farm sector profit margins have been squeezed since 2014.

Production expenses will affect crop and livestock farms differently. The principal expenses for livestock farms are feed costs, purchases of feeder animals and poultry, and hired labor. Feed costs, labor expenses, interest costs, and property taxes are all projected up in 2019 ( Figure 20 ). In contrast, fuel, land rent, and fertilizer costs are projected lower.

Renting or leasing land is a way for young or beginning farmers to enter agriculture without incurring debt associated with land purchases. It is also a means for existing farm operations to adjust production more quickly in response to changing market and production conditions while avoiding risks associated with land ownership. The share of rented farmland varies widely by region and production activity. However, for some farms it constitutes an important component of farm operating expenses. Since 2002, about 38% of agricultural land used in U.S. farming operations has been rented.

The majority of rented land in farms is rented from nonoperating landlords. Nationally in 2012, 30% of all land in farms was rented from someone other than a farm operator. Some farmland is rented from other farm operations—nationally about 8% of all land in farms in 2012 (the most recent year for which data are available)—and thus constitutes a source of income for some operator landlords. Total net rent to nonoperator landlords is projected to be down (-2.1%) at $14.3 billion in 2019.

Cash rental rates for 2019 are not yet available. Average cash rental rates for 2018 were up year-over-year ($138 per acre versus $136 in 2017). Although rental rates—which for 2019 were set the preceding fall of 2018 or in early spring of 2019—dipped in 2016, they still reflect the high crop prices and large net returns of the preceding several years, especially the 2011-2014 period ( Figure 21 ). The national rental rate for cropland peaked at $144 per acre in 2015.

U.S. agricultural exports have been a major contributor to farm income, especially since 2005. As a result, the downturn in those exports that started in 2015 ( Figure 22 ) deepened the downturn in farm income that had started in 2013 ( Figure 1 ).

USDA projects U.S. agricultural exports at $141.5 billion in FY2019, down slightly (-1%) from $143.4 billion in FY2018. Export data include processed and unprocessed agricultural products. This downturn masks larger country-level changes that have occurred as a result of ongoing trade disputes (as discussed below). In FY2019, U.S. agricultural imports are projected nearly unchanged at $127.0 billion, but the resultant agricultural trade surplus of $14.5 billion would be the lowest since 2007.

A substantial portion of the surge in U.S. agricultural exports that occurred between 2010 and 2014 was due to higher-priced grain and feed shipments, including record oilseed exports to China and growing animal product exports to East Asia. As commodity prices have leveled off, so too have export values (see the commodity price indexes in Figure A-1 and Figure A-2 ). In FY2017, the top three markets for U.S. agricultural exports were China, Canada, and Mexico, in that order. Together, these three countries accounted for 46% of total U.S. agricultural exports during the five-year period FY2014-FY2018 ( Figure 23 ). However, in FY2019 the combined share of U.S. exports taken by China, Canada, and Mexico is projected down to 42% largely due to sharply lower exports to China. The ordering of the top three markets is reordered to Canada, Mexico, and China, as China is projected to barely stay ahead of the European Union and Japan as a destination for U.S. agricultural exports. From FY2014 through FY2017, China imported an average of $26.2 billion of U.S. agricultural products. However, USDA forecasts China's imports of U.S. agricultural products to decline to $20.5 billion in FY2018 and to $13.6 billion in FY2019 as a result of the U.S.-China trade dispute. The fourth- and fifth-largest U.S. export markets are the European Union and Japan, which have accounted for a combined 17% of U.S. agricultural exports during the FY2014-FY2018 period. This same share is projected to continue in FY2019 ( Figure 23 ). These two markets have shown relatively limited growth in recent years when compared with the rest of the world.

The "Rest of World" (ROW) component of U.S. agricultural trade—South and Central America, the Middle East, Africa, and Southeast Asia—has shown strong import growth in recent years. ROW is expected to account for 41% of U.S. agricultural exports in FY2019. ROW import growth is being driven in part by both population and GDP growth but also from shifting trade patterns as some products previously targeting China have been diverted to new markets. Over the past four decades, U.S. agricultural exports have experienced fairly steady growth in shipments of high-value products—including horticultural products, livestock, poultry, and dairy. High-valued exports are forecast at $94.3 billion for a 66.6% share of U.S. agricultural exports in FY2019 ( Figure 24 ). In contrast, bulk commodity shipments (primarily wheat, rice, feed grains, soybeans, cotton, and unmanufactured tobacco) are forecast at a 33.4% share of total U.S. agricultural exports in FY2019 at $47.2 billion. This compares with an average share of over 60% during the 1970s and into the 1980s. As grain and oilseed prices decline, so will the bulk value share of U.S. exports.

U.S. Farm and Manufactured Agricultural Product Export Shares

The share of agricultural production (based on value) sold outside the country indicates the level of U.S. agriculture's dependence on foreign markets, as well as the overall market for U.S. agricultural products.

As a share of total farm and manufactured agricultural production, U.S. exports were estimated to account for 19.8% of the overall market for agricultural products from 2008 through 2016—the most recent data year for this calculation ( Figure 25 ). The export share of agricultural production varies by product category.

At the upper end of the range for export shares, the bulk food grain export share has varied between 50% and 80% since 2008, while the oilseed export share has ranged between 47% and 58%. The mid-spectrum range of export shares includes the export share for fruit and tree nuts, which has ranged from 37% to 45%, while meat products have ranged from 27% to 41%. At the low end of the spectrum, the export share of vegetable and melon sales has ranged from 15% to 18%, the dairy products export share from 9% to 24%, and the agricultural-based beverage export share between 7% and 13%.

The U.S. farm income and asset-value situation and outlook suggest a relatively stable financial position heading into 2019 for the agriculture sector as a whole—but with considerable uncertainty regarding the downward outlook for prices and market conditions for the sector and an increasing dependency on international markets to absorb domestic surpluses

Farm asset values—which reflect farm investors' and lenders' expectations about long-term profitability of farm sector investments—are projected to be up 1.5% in 2019 to a nominal $3.1 trillion ( Table A-3 ). In inflation-adjusted terms (using 2017 dollars), farm asset values peaked in 2014 ( Figure 26 ).

Nominally higher farm asset values are expected in 2019 due to higher real estate values (+1.8%), which offset a slight decrease in nonreal estate values (-0.1%). Real estate is projected to account for 83% of total farm sector asset value. Crop land values are closely linked to commodity prices. The leveling off of crop land values since 2015 reflects mixed forecasts for commodity prices (corn, soybeans, and cotton lower; wheat, rice, and livestock products higher) and the uncertainty associated with international commodity markets ( Figure 27 ). Total farm debt is forecast to rise to a record $426.7 billion in 2019 (+3.9%) ( Table A-3 ). Farm equity—or net worth, defined as asset value minus debt—is projected to be up slightly (+1.1%) at $2.7 trillion in 2019 ( Table A-3 ). The farm debt-to-asset ratio is forecast up in 2019 at 13.9%, the highest level since 2002 but still relatively low by historical standards ( Figure 28 ).

A farm can have both an on-farm and an off-farm component to its income statement and balance sheet of assets and debt. Thus, the well-being of farm operator households is not equivalent to the financial performance of the farm sector or of farm businesses because of the inclusion of nonfarm investments, jobs, and other links to the nonfarm economy.

Average farm household income (sum of on- and off-farm income) is projected at $115,588 in 2019 ( Table A-2 ), up 4.3% from 2018 and below the record of $134,164 in 2014. About 18% ($20,365) of total farm household income is from farm production activities, and the remaining 82% ($95,223) is earned off the farm (including financial investments). The share of farm income derived from off-farm sources had increased steadily for decades but peaked at about 95% in 2000 ( Figure 29 ).

Since the late 1990s, farm household incomes have surged ahead of average U.S. household incomes ( Figure 30 ). In 2017 (the last year for which comparable data were available), the average farm household income of $113,495 was about 32% higher than the average U.S. household income of $86,220 ( Table A-2 ).

Figure A-1 to Figure A-4 present USDA data on monthly farm prices received for several major farm commodities—corn, soybeans, wheat, upland cotton, rice, milk, cattle, hogs, and chickens. The data are presented in an indexed format where monthly price data for year 2010 = 100 to facilitate comparisons.

Table A-1 to Table A-3 present aggregate farm income variables that summarize the financial situation of U.S. agriculture. In addition, Table A-4 presents the annual average farm price received for several major commodities, including the USDA forecast for the 2018-2019 marketing year.


Changes to House Rules Affecting the Congressional Budget Process Included in H.Res. 6 (116th Congress)

Summary: On January 3, 2019, the House adopted Title I of H.Res. 6 , the standing rules for the House of Representatives for the 116 th Congress. In addition to the standing rules, H.Res. 6 included a separate order related to the consideration of appropriations bills. This report provides information on changes to both the standing rules and separate orders that might affect the consideration of budgetary legislation in the House of Representatives. These include the following:

Summary: Deleting language in Rule X added in the 115 th Congress providing for committees to include a review of authorizations for programs or agencies within their jurisdiction in their oversight plans. Deleting language in Rule XIII, previously adopted in the 114 th and 115 th Congresses, requiring that any budgetary estimates provided by the Congressional Budget Office (CBO) include, to the extent practicable, a macroeconomic impact analysis (often referred to as "dynamic scoring") as well as a requirement that any estimate provided to CBO by the Joint Committee on Taxation also include a macroeconomic impact analysis. Deleting language added to Rule XXI in the 104 th Congress requiring the vote of a three-fifths majority to approve a federal income tax rate increase as well as a requirement in Rule XX to automatically order the yeas and nays for a vote of the House on such measures. Establishing new language as Rule XXVIII providing for certain measures concerning the debt limit to automatically be engrossed and deemed to have been passed by the House. This measure would suspend the debt limit through the end of the budget year in the concurrent resolution on the budget (but not through the period covered by any outyears beyond the budget year). The engrossed measure would then be transmitted to the Senate for further action. This rule is similar to language that was previously part of House rules from the 96 th -107 th Congresses (known as the "Gephardt Rule"). Reestablishing a PAYGO requirement in the House, which had previously been in effect during the 110 th and 111 th Congresses. This PAYGO rule (Rule XXI, clause 10) replaces the CUTGO rule that was a part of Rule XXI between the 112 th and 115 th Congresses. The new rule prohibits the consideration of direct spending or revenue legislation that is projected to increase or cause a deficit in either of two time periods: (1) the period consisting of the current fiscal year, the budget year, and the four ensuing fiscal years following the budget year or (2) the 11-year period consisting of the current year, the budget year, and the ensuing nine fiscal years following the budget year. The rule applies to any bill, joint resolution, amendment, motion, or conference report that affects direct spending or revenues.

Summary: H.Res. 6 also included a separate order establishing a limit on advance appropriations, defined as applying to funding provided in FY2019 appropriations acts that are to become available in any fiscal year following FY2019.

Summary: In addition, several separate orders from previous congresses are not included in H.Res. 6 for the 116 th Congress. These include

Summary: language prohibiting House consideration of measures estimated by CBO as causing a net increase in spending in excess of $5 billion in any of the four 10-year periods beginning with the fiscal year 10 years after the current fiscal year, two points of order that previously supplemented the point of order in Section 302(f) of the Congressional Budget Act of 1974 as a means for enforcing 302(b) suballocations, language requiring that appropriations bills include a spending reduction account, and language allowing certain legislative amendments in appropriations bills (known as the "Holman Rule").

A t the beginning of each Congress, the House of Representatives must adopt rules to govern its proceedings. The House does this by readopting the rules of the previous Congress along with any changes that will apply in the new Congress. On January 3, 2019, the House considered and adopted H.Res. 5 , a resolution providing for the consideration of H.Res. 6 , including separate votes on each of the three titles comprising H.Res. 6 . Title I, the standing rules for the House of Representatives for the 116 th Congress, was adopted by a vote of 234-197 on January 3, 2019. In addition to the standing rules, H.Res. 6 includes several additional provisions, called separate orders, that also govern proceedings in the House. A number of the provisions adopted both as part of the standing rules of the House and as separate orders might affect the consideration of budgetary legislation. In many cases, these provisions are similar to provisions adopted in previous Congresses. This report provides information on changes to both the standing rules and separate orders that might affect the consideration of budgetary legislation in the House of Representatives during the 116 th Congress.

The 104 th Congress (1995-1996) added a provision to clause 2(d) of House Rule X that required that each standing committee adopt (by February 15 of the first session of a Congress) its own oversight plan for the Congress. H.Res. 5 (115 th Congress) added language specifically requesting that committees review authorizations for programs or agencies within their jurisdiction. This language was dropped from Rule X for the 116 th Congress.

Rules Change Related to Budget Estimates

A provision was added to House rules in the 105 th Congress that authorized the chair of the Committee on Ways and Means to request the Joint Committee on Taxation to prepare a dynamic estimate of revenue changes proposed in a measure designated by the majority leader as major tax legislation. In the 108 th Congress, this provision was modified to establish a point of order against the consideration of a measure reported from the Committee on Ways and Means to amend the Internal Revenue Code of 1986 unless the report included a macroeconomic impact analysis (often referred to as "dynamic scoring") or an explanation of why such an analysis was not calculable. In the 114 th Congress, this provision was supplanted by a requirement that any budgetary estimates provided by the Congressional Budget Office (CBO) include, to the extent practicable, a macroeconomic impact analysis as well as a requirement that any estimate provided to CBO by the Joint Committee on Taxation also include a macroeconomic impact analysis. This language was dropped from Rule XIII for the 116 th Congress.

Rule Change Related to the Passage of Certain Revenue Legislation

A provision was added to House rules in the 104 th Congress that required the vote of a three-fifths majority to approve a federal income tax rate increase. In the 105 th Congress, this provision was modified to clarify its application. This language was dropped from Rule XXI for the 116 th Congress.

In addition, a requirement in House Rule XX to automatically order the yeas and nays for a vote of the House on such measures was also dropped for the 116 th Congress.

Rule Change Related to the Consideration of Public Debt Legislation3

A limit on the public debt is fixed by law and may be changed or suspended by enactment of a bill or joint resolution. A former rule of the House (known as the ''Gephardt rule'' after Representative Richard Gephardt of Missouri) provided for a measure to amend the debt to automatically be engrossed and deemed to have been passed by the House by the same vote as the adoption by the House of a conference report on a concurrent resolution on the budget setting forth a level of the public debt different from the existing statutory limit, thereby avoiding the need for a separate vote on the debt limit. The engrossed measure would then be transmitted to the Senate for further action.

This rule was first added to the standing rules of the House as Rule XLIX by P.L. 96-78 , although it was renumbered as Rule XXVIII as part of the recodification of House rules in the 106 th Congress. In several instances in the 104 th -106 th Congresses the rule was suspended so that it did not provide for the automatic engrossment of legislation based on changes in the public debt in concurrent resolutions. The rule was repealed in the 107 th Congress, reinstated in the 108 th Congress, and repealed again in the 112 th Congress.

H.Res. 6 established a similar requirement as House Rule XXVIII. This new language provides for a measure to automatically be engrossed and deemed to have been passed by the House by the same vote as the adoption by the House of the concurrent resolution on the budget setting forth a level of the public debt different from the existing statutory limit. Rather than a specific level of debt, this measure would suspend the debt limit through the end of the budget year for the concurrent resolution on the budget (but not through the period covered by any outyears beyond the budget year). As with the earlier version of the rule, the engrossed measure would then be transmitted to the Senate for further action.

Rule Changes Related to the Consideration of Revenue and Direct Spending Legislation

H.Res. 6 reestablished a PAYGO requirement in the House, which had been in effect during the 110 th and 111 th Congresses. The new PAYGO rule (Rule XXI, clause 10) prohibits the consideration of direct spending or revenue legislation that is projected to increase or cause a deficit in either of two time periods: (1) the period consisting of the current fiscal year, the budget year, and the four ensuing fiscal years following the budget year or (2) the 11-year period consisting of the current year, the budget year, and the ensuing nine fiscal years following the budget year. The rule applies to any bill, joint resolution, amendment, motion, or conference report that affects direct spending or revenues.

The House PAYGO rule replaced the House CUTGO rule that was adopted by the House at beginning of the 112 th Congress and was in effect though the end of the 115 th Congress. The CUTGO rule prohibited the consideration of any legislation that would have the net effect of increasing direct spending over the same two time periods noted above.

Under the House PAYGO rule, one or more provisions in a measure may be exempted from the rule by being designating as an "emergency." Section (c) of the rule states that the exemption may apply to any legislative text designated as an emergency within a bill or joint resolution, an amendment made in order as original text by a resolution reported from the House Committee on Rules, a conference report, or an amendment between the Houses. The exemption does not apply to other amendments even if the amendment includes an emergency designation.

The House PAYGO rule also provides flexibility by allowing two measures that have been combined to "offset" one another so long as their net effect would comply with the rule. Specifically, Section (b) of the rule states that in the event that a resolution reported from the House Committee on Rules directs the Clerk of the House to add legislative text (that has already passed the House) as new matter to another piece of legislation, the legislative provisions can be evaluated together for compliance with the rule.

Prohibiting Consideration of Legislation Causing a Long-Term Increase inÂ Spending

Language prohibiting House consideration of legislation that would cause a long-term increase in spending was previously adopted by the House as a separate order in the 112 th and 115 th Congresses and adopted in budget resolutions in the 113 th Congress ( H.Con.Res. 96 ) and 114 th Congress ( S.Con.Res. 11 ). This language generally required CBO to estimate whether certain legislation would cause a net increase in spending in excess of $5 billion in any of the four 10-year periods beginning with the fiscal year 10 years after the current fiscal year and also prohibited the House from considering legislation that would cause such an increase. This language was not included in H.Res. 6 .

Rule Changes Related to the Consideration of Appropriations Legislation

Although budget authority for most federal programs is provided through annual appropriations actions that allow those funds to be obligated during the ensuing fiscal year, funding for certain programs is provided with a different period of availability. The term advance appropriations is applied to funds that will become available for obligation one or more fiscal years after the budget year covered by the appropriations act.

In recent years the House has adopted limits on the level of advance appropriations that may be provided as well as the programs or activities for which it may be provided. In some instances, these limits have been established in a budget resolution, as in S.Con.Res. 13 (111 th Congress) and S.Con.Res. 11 (114 th Congress). In other instances, the House has adopted the limit as a separate order as part of the resolution adopting the chamber's rules, as in H.Res. 5 (112 th Congress) and H.Res. 5 (115 th Congress).

In the 116 th Congress, a separate order prohibits advance appropriations that exceed (1) $28,852,000,000 for FY2020 in new budget authority for programs or activities identified in a list submitted to the Congressional Record by the chair of the Budget Committee under the heading "Accounts Identified for Advance Appropriations" and (2) $75,550,600,000 for FY2020 in new budget authority for programs and activities identified under the heading "Veterans Accounts Identified for Advance Appropriations." Advance appropriation is defined in the provision to apply to funding provided in FY2019 appropriations acts that are to become available in any fiscal year following FY2019.

A point of order under Section 302(f) of the Congressional Budget Act prohibits the consideration of measures or amendments that would cause the measure to exceed an allocation made pursuant to Section 302(a) or, in the case of appropriations bills, a suballocation pursuant to Section 302(b). In addition, as a consequence of this point of order, Members may offer amendments to increase the amount of budget authority in an appropriations bill only if it included budget authority less than the level of the applicable 302(b) suballocation, or if it was accompanied by one (or more) provisions that could serve as an offset.

This point of order was previously supplemented by a separate orderâfirst adopted during the 109 th Congress (2005-2006) as a freestanding resolution ( H.Res. 248 )âproviding that a motion that the Committee of the Whole rise and report an appropriations bill to the House is not in order if the bill, as amended, exceeds the applicable 302(b) suballocation. This provision was adopted as a separate order for the 110 th -115 th Congresses, but it is not applicable for the 116 th Congress.

The House also previously supplemented enforcement of 302(b) suballocations through language prohibiting amendments to general appropriations bills that would result in a net increase in the level of budget authority in the bill. This did not, however, prohibit amendments that would increase budget authority for an item in the bill if the amendment also included an equal or greater offset. This prohibition was adopted as a separate order in the 112 th , 113 th , and 114 th Congresses and as part of House Rule XXI for the 115 th Congress, but it is not applicable for the 116 th Congress.

This provision was previously included as a standing order for the 112 th -115 th Congresses. The order required that any general appropriations bill include a spending reduction account. This "account" was a provision in the last section of the bill to function as a temporary deposit box into which amendments could transfer budget authority and not be available as an offset for further amendments during consideration of that bill. This language was not included in Â  H.Res. 6 .

Allowing Certain Legislative Amendments: The Holman Rule

Although congressional rules establish a general division of responsibility under which questions of policy are kept separate from questions of funding, House rules provide for exceptions in certain circumstances. One such circumstance allows for the inclusion of legislative language in general appropriations bills or amendments thereto for "germane provisions that retrench expenditures by the reduction of amounts of money covered by the bill." This exception appears in clause 2(b) of House Rule XXI and is known as the "Holman rule" (after Representative William Holman of Indiana, who first proposed the exception in 1876).

In the 115 th Congress the House adopted a special order to provide that retrenchments of expenditures by a reduction of amounts of money covered by the bill shall be construed as applying to

any provision or amendment that retrenches expenditures byâ

(1) the reduction of amounts of money in the bill;

(2) the reduction of the number and salary of the officers of the United States; or

(3) the reduction of the compensation of any person paid out of the Treasury of the United States.

This language was initially adopted in H.Res. 5 (115 th Congress) to apply to the first session of the 115 th Congress. Its applicability was extended to the second session of the 115 th Congress by H.Res. 787 (115 th Congress), but this language is not applicable in the 116 th Congress .