II

106TH CONGRESS

1ST SESSION S. 1436

To amend the Agricultural Market Transition Act to provide support for

United States agricultural producers that is equal to the support provided

to agricultural producers by the European Union, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JULY 26, 1999

Mr. CONRAD introduced the following bill; which was read twice and referred

to the Committee on Agriculture, Nutrition, and Forestry

A BILL

To amend the Agricultural Market Transition Act to provide

support for United States agricultural producers that

is equal to the support provided to agricultural producers

by the European Union, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Farm Income and

5 Trade Equity Act of 1999’’.
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1 SEC. 2. TRANSITIONAL INTERNATIONAL MARKETING EQ2 UITY PAYMENTS.

3 Subtitle B of the Agricultural Market Transition Act

4 (7 U.S.C. 7211 et seq.) is amended by adding at the end

5 the following:

6 ‘‘SEC. 119. TRANSITIONAL INTERNATIONAL MARKETING EQ7 UITY PAYMENTS.

8 ‘‘(a) IN GENERAL.—Not later than September 30,

9 1999, an owner or producer subject to a contract that is

10 actively engaged in farming may make a 1-time election

11 for each of the 1999 and subsequent fiscal years to—

12 ‘‘(1) receive a payment for a loan commodity

13 under this section;

14 ‘‘(2) receive a marketing assistance loan for the

15 loan commodity based on the loan rate established

16 under section 132(g); and

17 ‘‘(3) forfeit contract payments and marketing

18 assistance loans payable under other provisions of

19 this subtitle and subtitle C.

20 ‘‘(b) PAYMENT AMOUNT.—Subject to subsection (f),

21 the amount of a payment made to an owner or producer

22 for a crop of a loan commodity under this section shall

23 be equal to the product obtained by multiplying—

24 ‘‘(1) the payment rate determined under sub25 section (c); by
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1 ‘‘(2) the acreage base for the crop determined

2 under subsection (d); by

3 ‘‘(3) the payment yield for the crop for the

4 farm determined under subsection (e).

5 ‘‘(c) PAYMENT RATE.—

6 ‘‘(1) WHEAT, FEED GRAINS, AND OILSEEDS.—

7 ‘‘(A) IN GENERAL.—The payment rate for

8 a crop of wheat, corn, barley, and oilseeds

9 under subsection (b)(1) shall be equal to the

10 difference between—

11 ‘‘(i) the European Union support level

12 for the crop determined under this para13 graph; and

14 ‘‘(ii) the loan rate for a marketing as15 sistance loan for the crop determined

16 under section 132(g).

17 ‘‘(B) EUROPEAN UNION SUPPORT

18 LEVEL.—The European support level for a crop

19 under subparagraph (A)(i) shall be equal to the

20 sum of—

21 ‘‘(i) the intervention price paid by the

22 European Union for the crop (in United

23 States dollars) determined under subpara24 graph (C); and
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1 ‘‘(ii) the amount of compensatory pay2 ments paid by the European Union for the

3 crop (in United States dollars) determined

4 under subparagraph (D).

5 ‘‘(C) INTERVENTION PRICE.—The inter6 vention price for a crop under subparagraph

7 (B)(i) shall be determined by—

8 ‘‘(i) multiplying—

9 ‘‘(I) the European intervention

10 price for the crop in euros per metric

11 ton; by

12 ‘‘(II) the average European13 United States exchange rate in dollars

14 per euro during the immediately pre15 ceding 12 months; and

16 ‘‘(ii) dividing the product obtained

17 under clause (i) by the number of bushels

18 per metric ton for the crop.

19 ‘‘(D) COMPENSATORY PAYMENTS.—The

20 amount of compensatory payments under sub21 paragraph (B)(ii) shall be determined by—

22 ‘‘(i) multiplying—

23 ‘‘(I) the amount of compensatory

24 payments made by the European
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1 Union for the crop in euros per metric

2 ton; by

3 ‘‘(II) the average European4 United States exchange rate in dollars

5 per euro during the immediately pre6 ceding 12 months; and

7 ‘‘(ii) dividing the product obtained

8 under clause (i) by the number of bushels

9 per metric ton for the crop.

10 ‘‘(E) OTHER FEED GRAINS.—The payment

11 rate for a crop of grain sorghum and oats, re12 spectively, under subsection (b)(1) shall be es13 tablished at such level as the Secretary deter14 mines is fair and reasonable in relation to the

15 payment rate for corn under this paragraph,

16 taking into consideration the feeding value of

17 the commodity in relation to corn.

18 ‘‘(2) COTTON AND RICE.—The payment rate for

19 a crop of upland cotton, extra long staple cotton,

20 and rice, respectively, under subsection (b)(1) shall

21 be established at such level as the Secretary deter22 mines is fair and reasonable in relation to the pay23 ment rate for wheat under this paragraph, taking

24 into consideration the historical price relationship
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1 between the commodity and wheat (as determined by

2 the Secretary).

3 ‘‘(3) ADJUSTMENT.—The Secretary may adjust

4 the payment rate for a crop of a loan commodity

5 under this subsection to provide support for owners

6 and producers at a level that is consistent with the

7 amount of compensatory payments made by the Eu8 ropean Union for the loan commodity.

9 ‘‘(d) ACREAGE BASE.—The acreage base for a crop

10 of a loan commodity under subsection (b)(2) shall be 85

11 percent of the contract acreage.

12 ‘‘(e) PAYMENT YIELD.—The payment yield for a crop

13 of a loan commodity under subsection (b)(3) shall be the

14 farm program payment yield.

15 ‘‘(f) MAXIMUM AMOUNT OF PAYMENTS AND LOAN

16 GAINS.—

17 ‘‘(1) LIMITATION ON PAYMENTS.—For any fis18 cal year, the total amount of payments made under

19 subsection (b)(1) to a person may not exceed

20 $40,000.

21 ‘‘(2) LIMITATION ON MARKETING LOAN

22 GAINS.—For any crop year, the total amount of any

23 gain realized by a person from repaying marketing

24 assistance loans under subsection (a)(2) for 1 or

25 more loan commodities at a lower level than the
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1 original loan rate established for the loan commod2 ities under section 132 (other than subsection (g))

3 shall be $75,000.

4 ‘‘(3) REGULATION.—

5 ‘‘(A) IN GENERAL.—The Secretary shall

6 promulgate a regulation—

7 ‘‘(i) defining the term ‘person’ for

8 purposes of this subsection that ensures, to

9 the maximum extent practicable, that indi10 viduals of the same family, entities under

11 the ownership or control of the same cor12 poration, or other related parties do not re13 ceive multiple payments or marketing as14 sistance loans under subsection (a); and

15 ‘‘(ii) prescribing such rules as the Sec16 retary determines are necessary to ensure

17 a fair and reasonable application of the

18 limitations established under this sub19 section.

20 ‘‘(B) RELATED PROVISIONS.—The regula21 tion shall be consistent with paragraphs (5)

22 through (7) of section 1001 of the Food Secu23 rity Act of 1985 (7 U.S.C. 1308).’’.
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1 SEC. 3. NONRECOURSE MARKETING ASSISTANCE LOANS.

2 Section 132 of the Agricultural Market Transition

3 Act (7 U.S.C. 7232) is amended by adding at the end the

4 following:

5 ‘‘(g) ALTERNATIVE LOAN RATE.—Subject to section

6 119(f), notwithstanding subsections (a) through (f), in the

7 case of an owner or producer described in section 119(a),

8 the loan rate for a crop of a loan commodity shall be 100

9 percent of the simple average price received by producers

10 of the loan commodity, as determined by the Secretary,

11 during the marketing years for the immediately preceding

12 5 crops of the loan commodity, excluding the year in which

13 the average price was the highest and the year in which

14 the average price was the lowest.’’.

15 SEC. 4. INCREASED AGRICULTURAL TRADE ASSISTANCE IN

16 RESPONSE TO DIRECT EXPORT SUBSIDIES BY

17 EUROPEAN UNION.

18 Section 301(e) of the Agricultural Trade Act of 1978

19 (7 U.S.C. 5651(e)) is amended—

20 (1) in paragraph (1)—

21 (A) by striking ‘‘The’’ and inserting ‘‘Sub22 ject to paragraph (3), the’’; and

23 (B) by striking subparagraph (E) and in24 serting the following:

25 ‘‘(E) $3,850,000,000 for fiscal year

26 2000;’’; and
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1 (2) by adding at the end the following:

2 ‘‘(3) RESPONSE TO DIRECT EXPORT SUBSIDIES

3 BY EUROPEAN UNION.—

4 ‘‘(A) CARRYOVER.—Amounts made avail5 able under subparagraphs (E) through (G) of

6 paragraph (1) shall remain available until ex7 pended.

8 ‘‘(B) MINIMUM FUNDING LEVELS.—Sub9 ject to paragraph (1) and subparagraphs (A)

10 and (C), for each of fiscal years 2000 through

11 2002, the Commodity Credit Corporation shall

12 make available to carry out the program estab13 lished under this section and the dairy export

14 incentive program established under section 153

15 of the Food Security Act of 1985 (15 U.S.C.

16 713a–14) an amount that is equal to the

17 amount the Secretary determines the European

18 Union will expend on direct export subsidies for

19 that fiscal year.

20 ‘‘(C) URUGUAY ROUND TRADE AGREE21 MENT LIMITATION.—For each of fiscal years

22 2000 through 2002, if the Commodity Credit

23 Corporation is unable to comply with subpara24 graph (B) as the result of a limitation imposed

25 by the Uruguay Round Trade Agreement on
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1 Agriculture, the Secretary shall increase the

2 amount of assistance made available to carry

3 out title I of the Agricultural Trade Develop4 ment and Assistance Act of 1954 (7 U.S.C.

5 1701 et seq.) by an amount that, when com6 bined with assistance made available by the

7 Corporation under subparagraph (B), is equal

8 to the amount that the Secretary determines

9 the European Union will expend on direct ex10 port subsidies for that fiscal year.’’.

11 SEC. 5. APPLICATION.

12 (a) IN GENERAL.—Except as provided in subsection

13 (b), this Act and the amendments made by this Act shall

14 apply beginning with the 1999 crop of a loan commodity

15 (as defined in section 102 of the Agricultural Market

16 Transition Act (7 U.S.C. 7202)).

17 (b) AGRICULTURAL TRADE ASSISTANCE.—The

18 amendments made by section 4 shall apply beginning with

19 fiscal year 2000.

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