I 
110TH CONGRESS 
1ST SESSION H. R. 2720 
To amend the Farm Security and Rural Investment Act of 2002 to reform 
commodity programs and to increase nutrition, conservation, and energy 
programs of the Department of Agriculture, to reduce the national budg-
et deficit, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 14, 2007 
Mr. KIND (for himself, Mr. FLAKE, Mr. CROWLEY, Mr. REICHERT, Ms. 
BERKLEY, Mr. BLUMENAUER, Mr. KIRK, Mr. MCDERMOTT, Mr. PETRI, 
Mr. RYAN of Wisconsin, Mr. SHAYS, and Mr. SMITH of Washington) in-
troduced the following bill; which was referred to the Committee on Agri-
culture, and in addition to the Committees on Education and Labor, For-
eign Affairs, and Ways and Means, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions 
as fall within the jurisdiction of the committee concerned 
A BILL 
To amend the Farm Security and Rural Investment Act 
of 2002 to reform commodity programs and to increase 
nutrition, conservation, and energy programs of the De-
partment of Agriculture, to reduce the national budget 
deficit, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Food and Agriculture Risk Management for the 21st 
Century Act of 2007’’ or the ‘‘FARM 21 Act of 2007’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—RISK MANAGEMENT ACCOUNTS 
Sec. 101. Adjusted gross income limitation. 
Sec. 102. Risk management accounts. 
Sec. 103. Direct payments. 
Sec. 104. Counter-cyclical payments. 
Sec. 105. Dairy. 
Sec. 106. Repeal of other commodity programs. 
Sec. 107. Recourse loan program. 
Sec. 108. Crop insurance reimbursement rate. 
TITLE II—REALLOCATIONS 
Subtitle A—Conservation 
Sec. 201. Conservation. 
Subtitle B—Healthy Foods 
Sec. 221. Domestic Nutrition and Health. 
Subtitle C—McGovern-Dole 
Sec. 231. Reauthorization of McGovern-Dole International Food for Education 
and Child Nutrition Program. 
Subtitle D—Renewable Energy 
Sec. 241. Energy. 
Subtitle E—Rural Development 
Sec. 251. Rural development. 
Sec. 252. Rural entrepreneur and microenterprise assistance program. 
Sec. 253. Enhancing rural infrastructure. 
Subtitle F—Nutrition 
Sec. 261. Exclusion of combat-related military pay from countable income. 
Sec. 262. Strengthening the food purchasing power of low-income Americans. 
Sec. 263. Supporting working families with child care expenses. 
Sec. 264. Increasing the minimum benefit. 
Sec. 265. Exclusion of retirement accounts from countable financial resources. 
Sec. 266. Facilitating simplified reporting. 
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Sec. 267. Reauthorization of food stamp program and food distribution pro-
gram on Indian reservations, and the commodity supplemental 
food program. 
Sec. 268. Outreach grants. 
Sec. 269. Funds to States for improving and innovating program access and in-
tegrity. 
Sec. 270. Supporting State efforts during natural disasters. 
Sec. 271. Community food grants. 
Sec. 272. Expanding the use of food stamps at farmers’ markets. 
Sec. 273. Commodities for the emergency food assistance program. 
Sec. 274. Community food assistance and food bank infrastructure grants 
under the Food Stamp Act. 
Sec. 275. Food for the hungry transportation grant program. 
Subtitle G—Deficit Reduction 
Sec. 281. Deficit reduction. 
TITLE I—RISK MANAGEMENT 
ACCOUNTS 
SEC. 101. ADJUSTED GROSS INCOME LIMITATION. 
Section 1001D(b) of the Farm Security Act of 1985 
is amended by adding at the end the following new para-
graph: 
‘‘(3) FURTHER LIMITATIONS ON PAYMENTS.— 
After 2007, notwithstanding any other provision of 
law, an individual or entity shall not be eligible to 
receive any direct, counter-cyclical or transition pay-
ment under any provision of law administered by the 
Department of Agriculture if the average adjusted 
gross income of the individual or entity exceeds 
$200,000. For purposes of this paragraph,’’. 
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SEC. 102. RISK MANAGEMENT ACCOUNTS. 
(a) ACCOUNTS REQUIRED.—The Secretary shall offer 
to enter into a risk management account contract with an 
operator of a farm. 
(b) OPERATOR.—For the purposes of this section, an 
operator means an individual or entity that— 
(1) either— 
(A) during each of the preceding 5 taxable 
years, filed a schedule F of the Federal income 
tax returns or a comparable tax form related to 
the agricultural operations of the individual or 
entity, as approved by the Secretary; or 
(B) is a beginning farmer or rancher, as 
determined by the Secretary; and 
(2) earned— 
(A) at least $10,000 in average adjusted 
gross revenue for the preceding 5 taxable years; 
(B) less than such amount, but is a limited 
resource farmer or rancher, as determined by 
the Secretary; or 
(C) at least $10,000 in estimated income 
from all agricultural operations for the applica-
ble year, as determined by the Secretary, and is 
a beginning farmer or rancher under paragraph 
(1)(B). 
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(c) FARM.—For the purposes of this section, a farm 
is land used for production of crops, livestock and other 
agricultural products of which the operator has more than 
de-minimis control or ownership. 
(d) ADJUSTED GROSS REVENUE.—In this section, 
the term ‘‘adjusted gross revenue’’ means the adjusted 
gross income as determined by the Secretary, from the 
sale of agricultural crops grown, dairy products produced, 
and livestock raised as part of an agricultural operation— 
(1) by taking into account gross receipts from 
the sale of agricultural crops, eligible livestock and 
dairy products on the agricultural operation, includ-
ing insurance indemnities; 
(2) by including all farm payments paid by the 
Secretary or any other government entity for the ag-
ricultural operation related to agricultural crops, eli-
gible livestock and dairy products; 
(3) by deducting the cost or basis of livestock 
or other items purchased for resale, such as feeder 
livestock, on the agricultural operation; 
(4) by excluding revenues that do not arise 
from the sale of crops grown, dairy products pro-
duced or livestock raised on an agricultural oper-
ation, such as revenues associated with the pack-
aging, merchandising, marketing and reprocessing of 
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the agricultural product beyond that typically under-
taken by a producer of the crop, dairy products or 
livestock as determined by the Secretary; 
(5) by using with such adjustments, additions 
and additional documentation as the Secretary de-
termines is appropriate, information presented on— 
(A) a schedule F of the Federal income tax 
returns of the producer; or 
(B) a comparable tax form related to the 
agricultural operations of the producer, as ap-
proved by the Secretary. 
(e) AVERAGE ADJUSTED GROSS REVENUE.—In this 
section, the term ‘‘average adjusted gross revenue’’ 
means— 
(1) the rolling average of the adjusted gross 
revenue of a producer for each of the preceding 5 
taxable years; or 
(2) in the case of a beginning farmer or rancher 
or other agricultural operation that does not have 
adjusted gross revenue for each of the preceding 5 
taxable years, the estimated income of the agricul-
tural operation for the applicable year, as deter-
mined by the Secretary. 
(f) ESTABLISHMENT.—Any operator of a farm may 
establish a risk management account in the name of the 
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farm to be jointly administered by the Secretary and the 
Federal Retirement Thrift Investment Board. 
(g) VOLUNTARY CONTRIBUTIONS.—An operator of a 
farm may make voluntary contributions up to the limits 
specified in section 219(b)(5)(A) of the Internal Revenue 
Code of 1986. 
(h) WITHDRAWALS.—An operator who establishes an 
account may withdraw funds under following conditions 
and amounts: 
(1) In a year when the farm’s adjusted gross 
revenue is less than 95 percent of the five-year aver-
age adjusted gross revenue, the producer may with-
draw funds up to the amount of the difference. 
(2) Up to 10 percent of the account balance for 
investments in rural enterprises that contribute to 
the agricultural economy, as defined by the Sec-
retary, no more than once in any five-year period. 
(3) When withdrawals are necessary to protect 
the solvency of the farm, as determined by the Sec-
retary. 
(4) To purchase revenue or crop insurance. 
(i) LIMITATION.—Payments to an account created 
under this section shall be made in the interest of the 
farm. 
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(j) TAX TREATMENT.—Contributions shall not be 
subject to Federal income tax, except that withdrawals will 
be counted toward the gross income of the producer in 
the year withdrawn. 
(k) VIOLATIONS.—If an operator fails to meet the 
conditions established for a contribution to an account, the 
operator shall refund to the Secretary an amount equal 
to the contribution in any fiscal year in which a violation 
occurred. 
(l) SALE OR TRANSFER.—If an operator sells or 
transfers a farm, the operator may elect to— 
(1) transfer all or a portion of the account to 
another farm in which the operator has a controlling 
ownership interest or acquires a controlling owner-
ship interest within two years of the sale or transfer 
of the original agricultural operation; 
(2) transfer the account to the purchaser of the 
farm if the operator is not already a holder of a ac-
count; or 
(3) rollover the account into an Individual Re-
tirement Account pursuant to section 408 of the In-
ternal Revenue Code of 1986 of the operator, if the 
operator is a natural person, or, if the operator is 
an entity, into the accounts of any natural person 
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who has a substantial beneficial interest in the farm 
that is the subject of the account. 
(m) CONSERVATION COMPLIANCE.—Any operator 
and any holder of a beneficial interest in a farm subject 
to an account shall— 
(1) comply with applicable conservation require-
ments under subtitle B of title XII of the Food Se-
curity Act of 1985 (16 U.S.C. 3811 et seq.); and 
(2) comply with applicable wetland conservation 
requirements under subtitle C of title XII of that 
Act (16 U.S.C. 3821 et seq.). 
SEC. 103. DIRECT PAYMENTS. 
(a) IN GENERAL.—Section 1103 of the Farm Secu-
rity and Rural Investment Act of 2002 (7 U.S.C. 7913) 
is amended by striking ‘‘2007’’ each place it appears and 
inserting ‘‘2012’’. 
(b) REDUCTION IN DIRECT PAYMENT AMOUNTS.— 
Notwithstanding subsection (c) of section 1103 of the 
Farm Security and Rural Investment Act of 2002, pro-
ducers otherwise eligible for direct payments under such 
section shall receive— 
(1) 65 percent of their direct payment for fiscal 
year 2008; 
(2) 45 percent of their direct payment for fiscal 
year 2009; 
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(3) 25 percent of their direct payment for fiscal 
year 2010; 
(4) 20 percent of their direct payment for fiscal 
year 2011; and 
(5) 10 percent of their direct payment for fiscal 
years 2012 through 2014. 
(c) PAYMENT LIMIT.—Section 1001(b)(1) of the 
Food Security of 1985 (7 U.S.C. 1308) is amended by 
striking ‘‘$40,000’’ and insert ‘‘$30,000’’. 
(d) 
PLANTING
RESTRICTIONS.—Section 
1105(a)(1)(C) and section 1106 of the Farm Security and 
Rural Investment Act of 2002 (7 U.S.C. 7915(a)(1)(C), 
7916) are repealed. 
(e) ADDITIONAL ELIGIBILITY REQUIREMENT.—Sec-
tion 1103(a) of the Farm Security and Rural Investment 
Act of 2002 (7 U.S.C. 7913(a)) is amended by inserting 
at the end the following new sentence: ‘‘To be eligible to 
receive a direct payment under this section, a producer 
must be actively engaged in agriculture on the land for 
which the direct payment is paid, as determined by the 
Secretary.’’. 
(f) CONTRIBUTION TO ACCOUNT.—Section 1103 of 
the Farm Security and Rural Investment Act of 2002 is 
amended by adding at the end the following new sub-
section: 
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‘‘(d) CONTRIBUTIONS TO RISK MANAGEMENT AC-
COUNT.—50 percent of the direct payments of a producer 
in fiscal years 2008 and 2009 shall be deposited in the 
risk management account of the producer, 75 percent of 
the direct payments of a producer for fiscal years 2010 
and 2011 shall be deposited in the risk management ac-
count of the producer, and 100 percent of the direct pay-
ments of a producer for fiscal year 2012 shall be deposited 
in the risk management account of the producer.’’. 
(g) STEWARDSHIP.—Section 1103 of Farm Security 
and Rural Investment Act of 2002 is amended by inserting 
after subsection (d), as added by subsection (f), the fol-
lowing new subsection: 
‘‘(e) ENVIRONMENTAL STEWARDSHIP.—Direct pay-
ments shall be linked to environmental stewardship as fol-
lows: 
‘‘(1) The Secretary, acting through the Chief of 
the Natural Resources Conservation Service, shall 
develop an index of environmental performance, to 
be linked to management intensity and significant 
resource concerns, for the each of the crops provided 
a direct payment under this section. 
‘‘(2) To be eligible for a direct payment linked 
to stewardship, an individual or entity shall develop 
a plan that describes the level of stewardship to be 
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achieved and the conversation practices or measures 
to be implemented. The individual or entity shall 
certify environmental performance through a quali-
fied third-party. 
‘‘(3) Subject to the percentage restrictions on 
direct payment amounts imposed by section 102(b) 
of the Food and Agriculture Risk Management for 
the 21st Century Act of 2007, 85 percent of the 
available direct payment shall be provided so long as 
the agricultural producer meets the conservation re-
quirements of subtitles B and C of title XII of the 
Food Security Act of 1985 (16 U.S.C. 3811 et seq.). 
‘‘(4) Subject to the percentage restrictions on 
direct payment amounts imposed by section 102(b) 
of the Food and Agriculture Risk Management for 
the 21st Century Act of 2007, 90 percent of the 
available direct payment shall be provided so long as 
the agricultural producers meet the first level of en-
vironmental performance, as determined by the 
index of environmental performance. 
‘‘(5) Subject to the percentage restrictions on 
direct payment amounts imposed by section 102(b) 
of the Food and Agriculture Risk Management for 
the 21st Century Act of 2007, 95 percent of the 
available direct payment shall be provided so long as 
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