Emergency Agricultural Response Act of 1998

Summary: Emergency Agricultural Response Act of 1998 - Amends the Agricultural Act of 1970 to authorize the use of disaster reserve authority to augment crop insurance benefits for producers affected by multiple year crop losses.  Appropriates funds subject to presidential emergency budget designation. 
(Sec. 3) Amends the Agricultural Market Transition Act to revise marketing assistance loan rates for:  (1) wheat; (2) feed grains (corn); (3) upland cotton; (4) extra long staple cotton; (5) rice; and (6) oilseeds.  Authorizes six-month loan extensions. 
(Sec. 5) Repeals the temporary suspension of the farmer owned reserve program. 
(Sec. 6) Directs the Secretary of Agriculture to build and manage a reserve stock of a loan commodity whenever such commodity's prices fall below 75 percent of its marketing assistance loan rate. 
(Sec. 7) Authorizes the Secretary to transfer specified Department of Agriculture funds to the Farm Service Agency in order to improve local and area Agency services. 
(Sec. 8) Amends the Food Security Act of 1985 to direct the Secretary to carry out a three-year conservation reserve for certain diseased croplands. 
(Sec. 9) Sets forth specified crop insurance rules for disaster- designated counties. 
(Sec. 10) Amends the Consolidated Farm and Rural Development Act to increase FY 1999 budget authority and appropriations for direct loan, loan guarantee, and interest rate reduction programs.

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Emergency 
Agricultural Response Act of 1998''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Use of disaster reserve authority to provide disaster 
                            assistance to certain producers.
Sec. 3. Increase in loan rates for marketing assistance loans for 
                            certain crops.
Sec. 4. Extension of marketing assistance loans.
Sec. 5. Reinstatement of farmer-owned reserve program.
Sec. 6. Strategic food reserve of loan commodities.
Sec. 7. Improved delivery of Farm Service Agency services at local and 
                            area level.
Sec. 8. Temporary conservation reserve to respond to disease 
                            infestations.
Sec. 9. Special crop insurance rules for counties subject to disaster 
                            declaration.
Sec. 10. Doubling of budget authority and appropriations for direct 
                            loan, loan guarantee, and interest rate 
                            reduction programs for fiscal year 1999.

SEC. 2. USE OF DISASTER RESERVE AUTHORITY TO PROVIDE DISASTER 
              ASSISTANCE TO CERTAIN PRODUCERS.

    (a) Provision of Assistance.--Section 813(a) of the Agricultural 
Act of 1970 (7 U.S.C. 1427a(a)) is amended by adding at the end the 
following:
    ``The Secretary shall use funds appropriated for the purposes of 
this section to make cash payments to agricultural producers to augment 
crop insurance benefits for the purpose of alleviating distress caused 
by multiple year crop losses.''
    (b) Appropriations.--There is hereby appropriated, out of any money 
in the Treasury not otherwise appropriated, $1,200,000,000 for the 
reserve established under section 813 of the Agricultural Act of 1970 
(7 U.S.C. 1427a).
    (c) Designation of Emergency.--The amount appropriated under 
subsection (b) shall be available only to the extent that the President 
submits to Congress an official budget request for a specific dollar 
amount that includes designation of the entire amount of the request as 
an emergency requirement for the purposes of the Balanced Budget and 
Emergency Deficit Control Act of 1985 (2 U.S.C. 900 et seq.). The 
entire amount of the funds is designated by Congress as an emergency 
requirement under section 251(b)(2)(A) of the Balanced Budget and 
Emergency Deficit Control Act of 1985 (2 U.S.C. 901(b)(2)(A)).

SEC. 3. INCREASE IN LOAN RATES FOR MARKETING ASSISTANCE LOANS FOR 
              CERTAIN CROPS.

    (a) Wheat.--Subsection (a) of section 132 of the Agricultural 
Market Transition Act (7 U.S.C. 7232) is amended by striking paragraph 
(1) and inserting the following new paragraph:
            ``(1) Loan rate.--Subject to paragraph (2), the loan rate 
        for a marketing assistance loan under section 131 for wheat 
        shall be equal to the greater of--
                    ``(A) 85 percent of the simple average price 
                received by producers of wheat, as determined by the 
                Secretary, during the marketing years for the 
                immediately preceding 5 crops of wheat, excluding the 
                year in which the average price was the highest and the 
                year in which the average price was the lowest in the 
                period; and
                    ``(B) 85 percent of the simple average price 
                received by producers of wheat, as determined by the 
                Secretary, during the 1994 through 1998 marketing 
                years, excluding the year in which the average price 
                was the highest and the year in which the average price 
                was the lowest in the period.''.
    (b) Feed Grains.--Subsection (b) of such section is amended by 
striking paragraph (1) and inserting the following new paragraph:
            ``(1) Loan rate for corn.--Subject to paragraph (2), the 
        loan rate for a marketing assistance loan under section 131 for 
        corn shall be equal to the greater of--
                    ``(A) 85 percent of the simple average price 
                received by producers of corn, as determined by the 
                Secretary, during the marketing years for the 
                immediately preceding 5 crops of corn, excluding the 
                year in which the average price was the highest and the 
                year in which the average price was the lowest in the 
                period; and
                    ``(B) 85 percent of the simple average price 
                received by producers of corn, as determined by the 
                Secretary, during the 1994 through 1998 marketing 
                years, excluding the year in which the average price 
was the highest and the year in which the average price was the lowest 
in the period.''.
    (c) Upland Cotton.--Subsection (c)(2) of such section is amended by 
striking ``or more than $0.5192 per pound''.
    (d) Extra Long Staple Cotton.--Subsection (d) of such section is 
amended to read as follows:
    ``(d) Extra Long Staple Cotton.--The loan rate for a marketing 
assistance loan under section 131 for extra long staple cotton shall be 
equal to the greater of--
            ``(1) 85 percent of the simple average price received by 
        producers of extra long staple cotton, as determined by the 
        Secretary, during 3 years of the 5-year period ending July 31 
        of the year preceding the year in which the crop is planted, 
        excluding the year in which the average price was the highest 
        and the year in which the average price was the lowest in the 
        period; and
            ``(2) 85 percent of the simple average price received by 
        producers of extra long staple cotton, as determined by the 
        Secretary, during the 1994 through 1998 marketing years, 
        excluding the year in which the average price was the highest 
        and the year in which the average price was the lowest in the 
        period.''.
    (e) Rice.--Subsection (e) of such section is amended to read as 
follows:
    ``(e) Rice.--The loan rate for a marketing assistance loan under 
section 131 for rice shall be equal to the greater of--
            ``(1) 85 percent of the simple average price received by 
        producers of rice, as determined by the Secretary, during the 
        marketing years for the immediately preceding 5 crops of rice, 
        excluding the year in which the average price was the highest 
        and the year in which the average price was the lowest in the 
        period; and
            ``(2) 85 percent of the simple average price received by 
        producers of rice, as determined by the Secretary, during the 
        1994 through 1998 marketing years, excluding the year in which 
        the average price was the highest and the year in which the 
        average price was the lowest in the period; and
            ``(3) $6.50 per hundredweight.''.
    (f) Oilseeds.--Subsection (f) of such section is amended by 
striking paragraphs (1) and (2) and inserting the following new 
paragraphs:
            ``(1) Soybeans.--The loan rate for a marketing assistance 
        loan under section 131 for soybeans shall be equal to the 
        greater of--
                    ``(A) 85 percent of the simple average price 
                received by producers of soybeans, as determined by the 
                Secretary, during the marketing years for the 
                immediately preceding 5 crops of soybeans, excluding 
                the year in which the average price was the highest and 
                the year in which the average price was the lowest in 
                the period; and
                    ``(B) 85 percent of the simple average price 
                received by producers of soybeans, as determined by the 
                Secretary, during the 1994 through 1998 marketing 
                years, excluding the year in which the average price 
                was the highest and the year in which the average price 
                was the lowest in the period.
            ``(2) Sunflower seed, canola, rapeseed, safflower, mustard 
        seed, and flaxseed.--The loan rate for a marketing assistance 
        loan under section 131 for sunflower seed, canola, rapeseed, 
        safflower, mustard seed, and flaxseed, individually, shall be 
        equal to the greater of--
                    ``(A) 85 percent of the simple average price 
                received by producers of such oilseed, as determined by 
                the Secretary, during the marketing years for the 
                immediately preceding 5 crops of such oilseed, 
                excluding the year in which the average price was the 
                highest and the year in which the average price was the 
                lowest in the period; and
                    ``(B) 85 percent of the simple average price 
                received by producers of such oilseed, as determined by 
                the Secretary, during the 1994 through 1998 marketing 
                years, excluding the year in which the average price 
                was the highest and the year in which the average price 
                was the lowest in the period.''.

SEC. 4. EXTENSION OF MARKETING ASSISTANCE LOANS.

    Section 133 of the Agricultural Market Transition Act (7 U.S.C. 
7233) is amended by striking subsection (c) and inserting the 
following:
    ``(c) Extension.--The Secretary may extend the term of marketing 
assistance loans made to producers under this subtitle for any loan 
commodity for a 6-month period if the Secretary determines that the 
extension will promote the orderly delivery of the loan commodity, 
materially reduce program costs to the Government, or result in a 
significant improvement in income for producers.''.

SEC. 5. REINSTATEMENT OF FARMER-OWNED RESERVE PROGRAM.

    Section 171(b)(1) of the Agricultural Market Transition Act (7 
U.S.C. 7301(b)(1)) is amended by striking subparagraph (E).

SEC. 6. STRATEGIC FOOD RESERVE OF LOAN COMMODITIES.

    Subtitle C of the Agricultural Market Transition Act (7 U.S.C. 7231 
et seq.) is amended by adding at the end the following new section:

``SEC. 138. STRATEGIC FOOD RESERVE.

    ``(a) Reserve Required.--The Secretary shall build a reserve stock 
of a loan commodity whenever prices for that commodity fall below 75 
percent of the loan rate for marketing assistance loans for that 
commodity.
    ``(b) Methods of Acquisition.--Loan commodities for inclusion in 
the reserve may be acquired--
            ``(1) through purchases--
                    ``(A) from producers; or
                    ``(B) in the market, if the Secretary determines 
                that the purchases will not unduly disrupt the market; 
                or
            ``(2) by designation by the Secretary of stocks of loan 
        commodities of the Commodity Credit Corporation.
    ``(c) Release of Eligible Commodities.--The Secretary may release 
stocks of a loan commodity in the reserve only when there is such a 
domestic shortage of the loan commodity that--
            ``(1) widespread concern exists about the supply of 
        affordable food for residents of the United States; and
            ``(2) prices for the commodity exceed 200 percent of the 
        loan rate for marketing assistance loans for the commodity.
    ``(d) Administration.--To the maximum extent practicable consistent 
with the fulfillment of the purposes of this section and the effective 
and efficient administration of this section, the Secretary shall use 
the usual and customary channels, facilities, arrangements, and 
practices of trade and commerce to release stocks of a loan commodity 
maintained in the reserve. The Secretary shall administer the release 
of stocks from the reserve so as to ensure that the prices received by 
agricultural producers of that commodity are not depressed as a result 
of the release.
    ``(e) Limitation on Total Quantity Acquired.--The Secretary may not 
acquire for inclusion in the reserve more than 25 percent of the 
average annual production of a loan commodity.
    ``(f) Management of Commodities.--The Secretary shall provide--
            ``(1) for the management of loan commodities in the 
        reserve, including the selection of storage locations; and
            ``(2) for the periodic rotation or replacement of stocks of 
        loan commodities in the reserve to avoid spoilage and 
        deterioration of the commodities.
    ``(g) Use of Commodity Credit Corporation.--The funds, facilities, 
and authorities of the Commodity Credit Corporation shall be used by 
the Secretary in carrying out this section, except that any restriction 
applicable to the acquisition, storage, or disposition of commodities 
owned or controlled by the Commodity Credit Corporation shall not 
apply.''.

SEC. 7. IMPROVED DELIVERY OF FARM SERVICE AGENCY SERVICES AT LOCAL AND 
              AREA LEVEL.

    (a) Transfer of Funds for Fiscal Year 1999.--To ensure the prompt 
response of the Farm Service Agency during fiscal year 1999 to requests 
submitted by producers, the Secretary of Agriculture may transfer to 
the Farm Service Agency from other appropriations or funds available to 
the agencies or corporations of the Department of Agriculture an amount 
equal to not more than 25 percent of the operating budget for that 
fiscal year of local and area offices of the Farm Service Agency. 
Amounts transferred under this subsection may be used only for 
activities at local and area offices of the Farm Service Agency.
    (b) Subsequent Years.--The Secretary of Agriculture shall include 
in the materials submitted to Congress in support of the budget request 
for the Department of Agriculture for each fiscal year a certification 
that the amount requested for the operation of local and area offices 
of the Farm Service Agency will be sufficient to meet the expected 
needs of agricultural producers for services.

SEC. 8. TEMPORARY CONSERVATION RESERVE TO RESPOND TO DISEASE 
              INFESTATIONS.

    Subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 
3801 et seq.) is amended by inserting after section 1256 the following 
new section:

``SEC. 1257. THREE-YEAR CONSERVATION RESERVE FOR DISEASED CROPLANDS.

    ``(a) Reserve Required.--Using the authority provided in subchapter 
B, the Secretary shall formulate and carry out the enrollment of lands 
described in subsection (b) in a conservation reserve program through 
the use of contracts to assist owners and operators of such lands to 
combat plant diseases that have devastated the lands.
    ``(b) Eligible Lands.--The Secretary shall include in the program 
only those croplands that have been devastated by a plant disease for 
which effective responses are reasonably anticipated within four years, 
but are otherwise suitable for the production of crops or livestock.
    ``(c) Term of Contract.--A contract under this section shall have a 
term of three years.''.

SEC. 9. SPECIAL CROP INSURANCE RULES FOR COUNTIES SUBJECT TO DISASTER 
              DECLARATION.

    (a) Multi-Peril Crop Insurance.--For purposes of administering the 
Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) for producers 
operating in a county described in subsection (c), the Secretary of 
Agriculture may not--
            (1) include the producer in any nonstandard classification 
        list on account of the inclusion of the county in a designated 
        disaster area; or
            (2) determine, without the consent of the producer, the 
        actual production history of the producer using production 
        records of any crop year during which the county was included 
        in a designated disaster area.
    (b) Exception.--Subsection (a) shall not apply to a disaster that 
the Secretary of Agriculture determines is a reoccurring, frequent, and 
well-known risk of farming in the locale, and the risks cannot 
reasonably be expected to be controlled or eliminated by crop 
protection efforts within a 7-year period.
    (c) Covered Counties.--This section applies with respect to a 
county that is included in whole or in part in a designated disaster 
area.
    (d) Designated Disaster Area Defined.--In this section, the term 
``designated disaster area'' means an area--
            (1) covered by a Presidential declaration of major disaster 
        issued under section 401 of the Robert T. Stafford Disaster 
        Relief and Emergency Assistance Act (42 U.S.C. 5170) on account 
        of damaging weather or a related condition in the area; or
            (2) determined to be a disaster area by the Secretary of 
        Agriculture under subpart A of part 1945 of title 7, Code of 
        Federal Regulations, on account of damaging weather or a 
        related condition in the area.
    (e) Effective Date.--This section shall apply beginning with the 
1999 crop year for each commodity that is grown in a covered county and 
for which multi-peril crop insurance is generally available in the 
United States.

SEC. 10. DOUBLING OF BUDGET AUTHORITY AND APPROPRIATIONS FOR DIRECT 
              LOAN, LOAN GUARANTEE, AND INTEREST RATE REDUCTION 
              PROGRAMS FOR FISCAL YEAR 1999.

    (a) Budget Authority.--
            (1) Direct loan and loan guarantee programs.--Section 
        346(b)(1)(D) of the Consolidated Farm and Rural Development Act 
        (7 U.S.C. 1994(b)(1)(D)) is amended by striking 
        ``$3,325,000,000'', ``$585,000,000'', ``$85,000,000'', 
        ``$500,000,000'', $2,740,000,000'', ``$690,000,000'', and 
        ``$2,050,000,000'' and inserting ``$6,650,000'', 
        ``$1,170,000,000'', ``$170,000,000'', ``$1,000,000,000'', 
        ``$5,480,000,000'', ``$1,380,000,000'', and ``$4,100,000,000'', 
        respectively.
            (2) Interest rate reduction program.--Section 351 of such 
        Act (7 U.S.C. 1999) is amended--
                    (A) in subsection (c), by striking ``4'' and 
                inserting ``8''; and
                    (B) in subsection (e)(2), by striking 
                ``$490,000,000'' and inserting ``$980,000,000''.
    (b) Appropriations.--Out of any money in the Treasury not otherwise 
appropriated, there are appropriated for the fiscal year ending 
September 30, 1999:
            (1) For gross obligations for the principal amount of 
        direct and guaranteed loans as authorized by sections 308 and 
        309 of the Consolidated Farm and Rural Development Act, to be 
        available from funds in the Agricultural Credit Insurance Fund, 
        as follows:
                    (A) Farm ownership loans, $1,021,298,000, of which 
                $850,000,000 shall be for guaranteed loans.
                    (B) Operating loans, $3,576,756,000, of which 
                $1,985,812,000 shall be for unsubsidized guaranteed 
                loans and $470,000,000 shall be for subsidized 
                guaranteed loans.
            (2) For the cost of direct and guaranteed loans, including 
        the cost of modifying loans as defined in section 502 of the 
        Congressional Budget Act of 1974, as follows:
                    (A) Farm ownership loans, $39,160,000, of which 
                $13,516,000 shall be for guaranteed loans.
                    (B) Operating loans, $140,674,000, of which 
                $23,036,000 shall be for unsubsidized guaranteed loans 
                and $41,078,000 shall be for subsidized guaranteed 
                loans.