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‘‘(B) was not planted to another contract
commodity (other than a contract commodity
produced under an established practice of double
cropping).
‘‘(3) CONTRACT.—The term ‘contract’ means a
contract entered into under subtitle B.
‘‘(4) CONTRACT ACREAGE.—The term ‘contract
acreage’ means the contract acreage determined under
section 111(f).
‘‘(5) CONTRACT COMMODITY.—The term ‘contract
commodity’ means wheat, corn, grain sorghum, bar-
ley, oats, upland cotton, rice, and oilseeds.
‘‘(6) CONTRACT PAYMENT.—The term ‘contract
payment’ means a payment made under subtitle B
pursuant to a contract.
‘‘(7) DEPARTMENT.—The term ‘Department’
means the Department of Agriculture.
‘‘(8) EXTRA LONG STAPLE COTTON.—The term
‘extra long staple cotton’ means cotton that—
‘‘(A) is produced from pure strain varieties
of the Barbadense species or any hybrid thereof,
or other similar types of extra long staple cotton,
designated by the Secretary, having characteris-
tics needed for various end uses for which United
States upland cotton is not suitable and grown
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in irrigated cotton-growing regions of the United
States designated by the Secretary or other areas
designated by the Secretary as suitable for the
production of the varieties or types; and
‘‘(B) is ginned on a roller-type gin or, if
authorized by the Secretary, ginned on another
type gin for experimental purposes.
‘‘(9) LOAN COMMODITY.—The term ‘loan com-
modity’ means wheat, corn, grain sorghum, barley,
oats, upland cotton, extra long staple cotton, rice, oil-
seeds, wool, honey, dry peas, lentils, and chickpeas.
‘‘(10) OILSEED.—The term ‘oilseed’ means a
crop of soybeans, sunflower seed, rapeseed, canola, saf-
flower, flaxseed, mustard seed, and, if designated by
the Secretary, other oilseeds.
‘‘(11) PAYMENT
YIELD.—The term ‘payment
yield’ means a payment yield determined under sec-
tion 111(g).
‘‘(12) PRODUCER.—
‘‘(A) IN
GENERAL.—The term ‘producer’
means an owner, operator, landlord, tenant, or
sharecropper that—
‘‘(i) shares in the risk of producing a
crop; and
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‘‘(ii) is entitled to share in the crop
available for marketing from the farm, or
would have shared had the crop been pro-
duced.
‘‘(B) 
HYBRID
SEED.—In 
determining
whether a grower of hybrid seed is a producer,
the Secretary shall not take into consideration
the existence of a hybrid seed contract.
‘‘(13) SECRETARY.—The term ‘Secretary’ means
the Secretary of Agriculture.
‘‘(14) STATE.—The term ‘State’ means—
‘‘(A) a State;
‘‘(B) the District of Columbia;
‘‘(C) the Commonwealth of Puerto Rico; and
‘‘(D) any other territory or possession of the
United States.
‘‘(15) UNITED
STATES.—The term ‘United
States’, when used in a geographical sense, means all
of the States.’’.
Subtitle A—Direct and Counter-
Cyclical Payments
SEC. 111. DIRECT AND COUNTER-CYCLICAL PAYMENTS.
Sections 111 through 114 of the Federal Agriculture
Improvement and Reform Act of 1996 (7 U.S.C. 7211
through 7214) are amended to read as follows:
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‘‘SEC. 111. AUTHORIZATION FOR CONTRACTS.
‘‘(a) IN GENERAL.—The Secretary shall offer to enter
into a contract with an eligible owner or producer described
in subsection (b) on a farm containing eligible cropland
under which the eligible owner or producer will receive di-
rect payments and counter-cyclical payments under sec-
tions 113 and 114, respectively.
‘‘(b) ELIGIBLE OWNERS AND PRODUCERS.—
‘‘(1) IN GENERAL.—Subject to paragraphs (2)
and (3), an owner or producer on a farm shall be eli-
gible to enter into a contract.
‘‘(2) TENANTS.—
‘‘(A) SHARE-RENT
TENANTS.—A producer
on eligible cropland that is a tenant with a
share-rent lease of the eligible cropland, regard-
less of the length of the lease, shall be eligible to
enter into a contract, if the owner of the eligible
cropland enters into the same contract.
‘‘(B) CASH-RENT TENANTS.—
‘‘(i) CONTRACTS
WITH
LONG-TERM
LEASES.—A producer on eligible cropland
that cash rents the eligible cropland under
a lease expiring on or after the termination
of the contract shall be eligible to enter into
a contract.
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‘‘(ii) CONTRACTS
WITH
SHORT-TERM
LEASES.—
‘‘(I) IN
GENERAL.—A producer
that cash rents the eligible cropland
under a lease expiring before the termi-
nation of the contract shall be eligible
to enter into a contract.
‘‘(II) OWNER’S CONTRACT INTER-
EST.—The owner of the eligible crop-
land may also enter into the same con-
tract.
‘‘(III) CONSENT
OF
OWNER.—If
the producer elects to enroll less than
100 percent of the eligible cropland in
the contract, the consent of the owner
shall be required for a valid contract.
‘‘(3) CASH-RENT OWNERS.—
‘‘(A) IN
GENERAL.—An owner of eligible
cropland that cash rents the eligible cropland
under a lease term that expires before the end of
2006 crop year shall be eligible to enter into a
contract if the tenant declines to enter into the
contract.
‘‘(B) CONTRACT PAYMENTS.—In the case of
an owner covered by subparagraph (A), the Sec-
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retary shall not make contract payments to the
owner under the contract until the lease held by
the tenant terminates.
‘‘(c) COMPLIANCE WITH CERTAIN REQUIREMENTS.—
Under the terms of a contract, the owner or producer shall
agree, in exchange for annual contract payments—
‘‘(1) to comply with applicable highly erodible
land conservation requirements under subtitle B of
title XII of the Food Security Act of 1985 (16 U.S.C.
3811 et seq.);
‘‘(2) to comply with applicable wetland conserva-
tion requirements under subtitle C of title XII of that
Act (16 U.S.C. 3821 et seq.);
‘‘(3) to comply with the planting flexibility re-
quirements of section 118; and
‘‘(4) to use a quantity of land on the farm equal
to the contract acreage, for an agricultural or con-
serving use or related activity, and not for a non-
agricultural commercial or industrial use, as deter-
mined by the Secretary.
‘‘(d) PROTECTION OF INTERESTS OF CERTAIN PRO-
DUCERS.—
‘‘(1) TENANTS AND SHARECROPPERS.—In car-
rying out this subtitle, the Secretary shall provide
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adequate safeguards to protect the interests of tenants
and sharecroppers.
‘‘(2) SHARING
OF
PAYMENTS.—The Secretary
shall provide for the sharing of contract payments
among the eligible producers on a farm on a fair and
equitable basis.
‘‘(e) ELIGIBLE CROPLAND.—
‘‘(1) IN GENERAL.—Land shall be considered to
be cropland eligible for coverage under a contract only
if the land—
‘‘(A) has with respect to a contract
commodity—
‘‘(i) contract acreage attributable to the
land; and
‘‘(ii) a payment yield; or
‘‘(B) was subject to a conservation reserve
contract under section 1231 of the Food Security
Act of 1985 (16 U.S.C. 3831) with a term that
expired, or was voluntarily terminated, on or
after the date of enactment of this paragraph.
‘‘(2) QUANTITY
OF
ELIGIBLE
CROPLAND
COV-
ERED BY CONTRACT.—An eligible owner or producer
may enroll as contract acreage under this subtitle all
or a portion of the eligible cropland on the farm.
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‘‘(3) VOLUNTARY REDUCTION IN CONTRACT ACRE-
AGE.—An eligible owner or producer that enters into
a contract may subsequently reduce the quantity of
contract acreage covered by the contract.
‘‘(f) CONTRACT ACREAGE.—
‘‘(1) IN GENERAL.—Subject to subsection (h), for
the purpose of making direct payments and counter-
cyclical payments to eligible owners and producers on
a farm, the Secretary shall provide the eligible owners
and producers on the farm with an opportunity to
elect 1 of the following methods as the method by
which the contract acreages for the 2002 through 2006
crops of all contract commodities for a farm are de-
termined:
‘‘(A) The 4-year average of acreage planted
or considered planted to a contract commodity
for harvest, grazing, haying, silage, or other
similar purposes during each of the 1998 through
2001 crop years.
‘‘(B) The total of—
‘‘(i) the contract acreage (as defined in
section 102 (as in effect before the amend-
ment made by section 101 of the Agri-
culture, Conservation, and Rural Enhance-
ment Act of 2002)) that would have been
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used by the Secretary to calculate the pay-
ment for fiscal year 2002 under such section
102 for the contract commodity on the farm;
and
‘‘(ii) the 4-year average determined
under subparagraph (A) for each oilseed
produced on the farm.
‘‘(C) In the case of land described in section
112(a)(3), land with eligible base, as determined
by the Secretary.
‘‘(2) PREVENTION OF EXCESS CONTRACT ACRE-
AGES.—
‘‘(A) REQUIRED REDUCTION.—If the total of
the contract acreages for a farm, together with
the acreage described in subparagraph (C), ex-
ceeds the actual cropland acreage of the farm, the
Secretary shall reduce the quantity of contract
acreages for 1 or more contract commodities for
the farm or peanut acres as necessary so that the
total of the contract acreages and acreage de-
scribed in subparagraph (C) does not exceed the
actual cropland acreage of the farm.
‘‘(B) SELECTION OF ACRES.—The Secretary
shall give the eligible owners and producers on
the farm the opportunity to select the contract
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acreages or peanut acres against which the re-
duction will be made.
‘‘(C) OTHER
ACREAGE.—For purposes of
subparagraph (A), the Secretary shall include—
‘‘(i) any peanut acres for the farm
under chapter 3 of subtitle D;
‘‘(ii) any acreage on the farm enrolled
in the conservation reserve program or wet-
lands reserve program under chapter 1 of
subtitle D of title XII of the Food Security
Act of 1985 (16 U.S.C. 3830 et seq.); and
‘‘(iii) any other acreage on the farm
enrolled in a voluntary Federal conserva-
tion program under which production of
any agricultural commodity is prohibited.
‘‘(D) DOUBLE-CROPPED ACREAGE.—In ap-
plying subparagraph (A), the Secretary shall
take into account additional acreage as a result
of an established double-cropping history on a
farm, as determined by the Secretary.
‘‘(g) PAYMENT YIELDS.—
‘‘(1) IN
GENERAL.—Subject to paragraph (2)
and subsection (h), an eligible owner or producer that
has entered into a contract under this subtitle may
make a 1-time election to have the payment yield for
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a payment for each of the 2002 through 2006 crops
of all contract commodities for a farm be equal to—
‘‘(A) an amount that is the greater of—
‘‘(i) the average of the yield per har-
vested acre for the crop of the contract com-
modity for the farm for the 1998 through
2001 crop years, excluding—
‘‘(I) any crop year for which the
producers on the farm did not plant
the contract commodity; and
‘‘(II) at the option of the pro-
ducers on the farm, 1 additional crop
year; or
‘‘(ii) the farm program payment yield
described in subparagraph (B); or
‘‘(B) the farm program payment yield es-
tablished for the 1995 crop of a contract com-
modity under section 505 of the Agricultural Act
of 1949 (7 U.S.C. 1465), as adjusted by the Sec-
retary to account for any additional yield pay-
ments made with respect to that crop under sec-
tion 505(b)(2) of that Act.
‘‘(2) ASSIGNED YIELDS.—In the case of a farm
for which yield records are unavailable for a contract
commodity (including land of a farm that is devoted
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to an oilseed under a former conservation reserve con-
tract described in section 112(a)(3)), the Secretary
shall establish an appropriate payment yield for the
contract commodity on the farm taking in consider-
ation the payment yields applicable to the contract
commodity under paragraph (1) for similar farms in
the area, taking into consideration the yield election
for the farm under subsection (h).
‘‘(h) ELIGIBLE OWNER AND PRODUCER ELECTION OP-
TIONS.—
‘‘(1) IN GENERAL.—In making elections under
subsections (f) and (g), eligible owners and producers
on a farm shall elect to have—
‘‘(A)(i) contract acreage for the farm deter-
mined under subsection (f)(1)(A); and
‘‘(ii) payment yields determined under sub-
section (g)(1)(A); or
‘‘(B)(i) contract acreage for the farm deter-
mined under subsection (f)(1)(B); and
‘‘(ii) payment yields determined under—
‘‘(I) in the case of contract commod-
ities 
other 
than 
oilseeds, 
subsection
(g)(1)(B); and
‘‘(II) in the case of oilseeds, subsection
(g)(1)(A).
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‘‘(2) SINGLE ELECTION; TIME FOR ELECTION.—
‘‘(A) SINGLE ELECTION.—The eligible own-
ers and producers on a farm shall have 1 oppor-
tunity to make the election described in para-
graph (1).
‘‘(B) TIME FOR ELECTION.—Subject to sec-
tion 112(a)(3), not later than 180 days after the
date of enactment of this subsection, the eligible
owners and producers on a farm shall notify the
Secretary of the election made by the eligible
owners and producers on the farm under para-
graph (1).
‘‘(3) EFFECT OF FAILURE TO MAKE ELECTION.—
If the producers on a farm fail to make the election
under paragraph (1), or fail to timely notify the Sec-
retary of the selected option as required by paragraph
(2), the eligible owners and producers on the farm
shall be deemed to have made the election described in
paragraph (1)(B) for the purpose of determining the
contract acreages for all contract commodities on the
farm.
‘‘(4) APPLICATION OF ELECTION TO ALL CON-
TRACT
COMMODITIES.—The election made under
paragraph (1) or deemed to be made under paragraph
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(3) with respect to a farm shall apply to all of the
contract commodities produced on the farm.
‘‘SEC. 112. ELEMENTS OF CONTRACTS.
‘‘(a) TIME FOR CONTRACTING.—
‘‘(1) COMMENCEMENT.—To the extent prac-
ticable, the Secretary shall commence entering into
contracts not later than 45 days after the date of en-
actment of the Agriculture, Conservation, and Rural
Enhancement Act of 2002.
‘‘(2) DEADLINE.—Except as provided in para-
graph (3), the Secretary may not enter into a con-
tract after the date that is 180 days after the date of
enactment of that Act.
‘‘(3) CONSERVATION RESERVE LAND.—
‘‘(A) IN
GENERAL.—At the beginning of
each fiscal year, the Secretary shall allow an eli-
gible owner or producer on a farm covered by a
conservation reserve contract entered into under
section 1231 of the Food Security Act of 1985
(16 U.S.C. 3831) that terminated after the date
specified in paragraph (2) to enter into or ex-
pand a contract to cover the eligible cropland of
the farm that was subject to the former conserva-
tion reserve contract.
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‘‘(B) ELECTION.—For the fiscal year and
crop year for which a contract acreage adjust-
ment under subparagraph (A) is first made, the
eligible owners and producers on the farm shall
elect to receive—
‘‘(i) direct payments and counter-cycli-
cal payments under sections 113 and 114,
respectively, with respect to the acreage
added to the farm under this paragraph; or
‘‘(ii) a prorated payment under the
conservation reserve contract.
‘‘(b) DURATION OF CONTRACT.—
‘‘(1) BEGINNING DATE.—The term of a contract
shall begin with—
‘‘(A) the 2002 crop of a contract com-
modity; or
‘‘(B) in the case of acreage that was subject
to a conservation reserve contract described in
subsection (a)(3), the date the contract was en-
tered into or expanded to cover the acreage.
‘‘(2) ENDING DATE.—Subject to sections 116 and
117, the term of a contract shall extend through the
2006 crop, unless earlier terminated by the eligible
owners or producers on a farm.
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‘‘SEC. 113. DIRECT PAYMENTS.
‘‘(a) IN GENERAL.—For each of the 2002 through 2006
fiscal years, the Secretary shall make direct payments
available to eligible owners and producers on a farm that
have entered into a contract to receive payments under this
section.
‘‘(b) PAYMENT AMOUNT.—The amount of a direct pay-
ment to be paid to the eligible owners and producers on
a farm for a contract commodity for a fiscal year under
this section shall be obtained by multiplying—
‘‘(1) the payment rate for the contract com-
modity specified in subsection (c);
‘‘(2) the contract acreage attributable to the con-
tract commodity for the farm; and
‘‘(3) the payment yield for the contract com-
modity for the farm.
‘‘(c) PAYMENT RATE.—The payment rates used to
make direct payments with respect to contract commodities
for a fiscal year under this section are as follows:
‘‘(1) WHEAT.—In the case of wheat:
‘‘(A) For each of fiscal years 2002 and
2003, $0.450 per bushel.
‘‘(B) For each of fiscal years 2004 and
2005, $0.225 per bushel.
‘‘(C) For fiscal year 2006, $0.113 per bush-
el.
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‘‘(2) CORN.—In the case of corn:
‘‘(A) For each of fiscal years 2002 and
2003, $0.270 per bushel.
‘‘(B) For each of fiscal years 2004 and
2005, $0.135 per bushel.
‘‘(C) For fiscal year 2006, $0.068 per bush-
el.
‘‘(3) GRAIN SORGHUM.—In the case of grain sor-
ghum:
‘‘(A) For the 2002 fiscal year, $0.310 per
bushel.
‘‘(B) For the 2003 fiscal year, $0.270 per
bushel.
‘‘(C) For each of fiscal years 2004 and
2005, $0.135 per bushel.
‘‘(D) For fiscal year 2006, $0.068 per bush-
el.
‘‘(4) BARLEY.—In the case of barley:
‘‘(A) For each of fiscal years 2002 and
2003, $0.200 per bushel.
‘‘(B) For each of fiscal years 2004 and
2005, $0.100 per bushel.
‘‘(C) For fiscal year 2006, $0.050 per bush-
el.
‘‘(5) OATS.—In the case of oats:
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‘‘(A) For each of fiscal years 2002 and
2003, $0.050 per bushel.
‘‘(B) For each of fiscal years 2004 and
2005, $0.025 per bushel.
‘‘(C) For fiscal year 2006, $0.013 per bush-
el.
‘‘(6) UPLAND COTTON.—In the case of upland
cotton:
‘‘(A) For each of fiscal years 2002 and
2003, $0.130 per pound.
‘‘(B) For each of fiscal years 2004 and
2005, $0.065 per pound.
‘‘(C) For fiscal year 2006, $0.0325 per
pound.
‘‘(7) RICE.—In the case of rice:
‘‘(A) For each of fiscal years 2002 and
2003, $2.450 per hundredweight.
‘‘(B) For each of fiscal years 2004 and
2006, $2.40 per hundredweight.
‘‘(8) SOYBEANS.—In the case of soybeans:
‘‘(A) For each of fiscal years 2002 and
2003, $0.550 per bushel.
‘‘(B) For each of fiscal years 2004 and
2005, $0.275 per bushel.
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‘‘(C) For fiscal year 2006, $0.138 per bush-
el.
‘‘(9) OILSEEDS
(OTHER
THAN
SOYBEANS).—In
the case of oilseeds (other than soybeans):
‘‘(A) For each of fiscal years 2002 and
2003, $0.010 per pound.
‘‘(B) For each of fiscal years 2004 and
2005, $0.005 per pound.
‘‘(C) For fiscal year 2006, $0.0025 per
pound.
‘‘(d) TIME FOR PAYMENTS.—
‘‘(1) INITIAL PAYMENT.—At the option of the eli-
gible owners and producers on a farm, the Secretary
shall pay 50 percent of the direct payment for a crop
of a contract commodity for the eligible owners and
producers on the farm on or after December 1 of the
fiscal year, as determined by the Secretary.
‘‘(2) FINAL PAYMENT.—The Secretary shall pay
the final amount of the direct payment that is pay-
able to the eligible owners and producers on a farm
for a contract commodity under subsection (a) (less
the amount of any initial payment made to the pro-
ducers on the farm of the contract commodity under
paragraph (1)) not later than September 30 of the fis-
cal year, as determined by the Secretary.
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‘‘SEC. 114. COUNTER-CYCLICAL PAYMENTS.
‘‘(a) IN GENERAL.—For each of the 2002 through 2006
crop years, the Secretary shall make counter-cyclical pay-
ments to eligible owners and producers on a farm of each
contract commodity that have entered into a contract to re-
ceive payments under this section.
‘‘(b) PAYMENT AMOUNT.—The amount of the payments
made to eligible owners and producers on a farm for a crop
of a contract commodity under this section shall equal the
amount obtained by multiplying—
‘‘(1) the payment rate for the contract com-
modity specified in subsection (c);
‘‘(2) the contract acreage attributable to the con-
tract commodity for the farm; and
‘‘(3) the payment yield for the contract com-
modity for the farm.
‘‘(c) PAYMENT RATES.—
‘‘(1) IN GENERAL.—The payment rate for a crop
of a contract commodity under subsection (b)(1) shall
equal the difference between—
‘‘(A) the income protection price for the
contract commodity established under paragraph
(2); and
‘‘(B) the total of—
‘‘(i) the higher of—
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‘‘(I) the average price of the con-
tract commodity during the first 5
months of the marketing year of the
contract commodity, as determined by
the Secretary; and
‘‘(II) the loan rate for the crop of
the contract commodity under section
132; and
‘‘(ii) the direct payment for the con-
tract commodity under section 113 for the
fiscal year that precedes the date of a pay-
ment under this section.
‘‘(2) INCOME PROTECTION PRICES.—The income
protection prices for contract commodities under
paragraph (1)(A) are as follows:
‘‘(A) Wheat, $3.45 per bushel.
‘‘(B) Corn, $2.35 per bushel.
‘‘(C) Grain sorghum, $2.35 per bushel.
‘‘(D) Barley, $2.20 per bushel.
‘‘(E) Oats, $1.55 per bushel.
‘‘(F) Upland cotton, $0.680 per pound.
‘‘(G) Rice, $9.30 per hundredweight.
‘‘(H) Soybeans, $5.75 per bushel.
‘‘(I) Oilseeds (other than soybeans), $0.105
per pound.
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‘‘(d) TIME FOR PAYMENT.—The Secretary shall make
counter-cyclical payments for each of the 2002 through 2006
crop years not later than 190 days after the beginning of
marketing year for the crop of the contract commodity.’’.
SEC. 112. VIOLATIONS OF CONTRACTS.
Section 116 of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 7216) is amended—
(1) in the first sentence of subsection (a)—
(A) by striking ‘‘subsection (b)’’ and insert-
ing ‘‘subsections (b) and (e)’’; and
(B) by striking ‘‘section 111(a)’’ and insert-
ing ‘‘this subtitle’’;
(2) in subsection (b), by striking ‘‘If’’ and insert-
ing ‘‘Except as provided in subsection (e), if’’; and
(3) by adding at the end the following:
‘‘(e) PLANTING FLEXIBILITY.—In the case of a first
violation of section 118(b) by an eligible owner or producer
that has entered into a contract and that acted in good
faith, in lieu of terminating the contract under subsection
(a), the Secretary shall require a refund or reduce a future
contract payment under subsection (b) in an amount that
does not exceed twice the amount otherwise payable under
the contract on the number of acres involved in the viola-
tion.’’.
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SEC. 113. PLANTING FLEXIBILITY.
Section 118(b) of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 7218(b)) is amended—
(1) by striking paragraph (1) and inserting the
following:
‘‘(1) LIMITATIONS.—The planting of the fol-
lowing agricultural commodities shall be prohibited
on contract acreage:
‘‘(A) Fruits.
‘‘(B) Vegetables (other than lentils, mung
beans, dry peas, and chickpeas).
‘‘(C) In the case of the 2003 and subsequent
crops of an agricultural commodity, wild rice.’’;
and
(2) in paragraph (2)(C), by striking ‘‘1991
through 1995’’ and inserting ‘‘1996 through 2001’’.
SEC. 114. PILOT PROGRAM FOR FARM COUNTER-CYCLICAL
SAVINGS ACCOUNTS.
Subtitle B of title I of the Federal Agriculture Im-
provement and Reform Act of 1996 (7 U.S.C. 7211 et seq.)
is amended by adding at the end the following:
‘‘SEC. 119. PILOT PROGRAM FOR FARM COUNTER-CYCLICAL
SAVINGS ACCOUNTS.
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) ADJUSTED
GROSS
REVENUE.—The term
‘adjusted gross revenue’ means the adjusted gross in-
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come for all agricultural enterprises of a producer in
a 
year, 
excluding 
revenue 
earned 
from 
non-
agricultural 
sources, 
as 
determined 
by 
the
Secretary—
‘‘(A) by taking into account gross receipts
from the sale of crops and livestock on all agri-
cultural enterprises of the producer, including
insurance indemnities resulting from losses in
the agricultural enterprises;
‘‘(B) by including all farm payments paid
by the Secretary for all agricultural enterprises
of the producer, including any marketing loan
gains described in section 1001(3)(A) of the Food
Security Act of 1985 (7 U.S.C. 1308(3)(A));
‘‘(C) by deducting the cost or basis of live-
stock or other items purchased for resale, such as
feeder livestock, on all agricultural enterprises of
the producer; and
‘‘(D) as represented on—
‘‘(i) a schedule F of the Federal income
tax returns of the producer; or
‘‘(ii) a comparable tax form related to
the agricultural enterprises of the producer,
as approved by the Secretary.
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‘‘(2) AGRICULTURAL
ENTERPRISE.—The term
‘agricultural enterprise’ means the production and
marketing of all agricultural commodities (including
livestock but excluding tobacco) on a farm or ranch.
‘‘(3) AVERAGE ADJUSTED GROSS REVENUE.—The
term ‘average adjusted gross revenue’ means—
‘‘(A) the average of the adjusted gross rev-
enue of a producer for each of the preceding 5
taxable years; or
‘‘(B) in the case of a beginning farmer or
rancher or other producer that does not have ad-
justed gross revenue for each of the preceding 5
taxable years, the estimated income of the pro-
ducer that will be earned from all agricultural
enterprises for the applicable year, as determined
by the Secretary.
‘‘(4) PRODUCER.—The term ‘producer’ means an
individual or entity, as determined by the Secretary
for an applicable year, that—
‘‘(A) shares in the risk of producing, or pro-
vides a material contribution in producing, an
agricultural commodity for the applicable year;
‘‘(B) has a substantial beneficial interest in
the agricultural enterprise in which the agricul-
tural commodity is produced;
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‘‘(C)(i) during each of the preceding 5 tax-
able years, has filed—
‘‘(I) a schedule F of the Federal income
tax returns; or
‘‘(II) a comparable tax form related to
the agricultural enterprises of the indi-
vidual or entity, as approved by the Sec-
retary; or
‘‘(ii) is a beginning farmer or rancher or
other producer that does not have adjusted gross
revenue for each of the preceding 5 taxable years,
as determined by the Secretary; and
‘‘(D)(i) has earned at least $50,000 in aver-
age adjusted gross revenue over the preceding 5
taxable years;
‘‘(ii) is a limited resource farmer or ranch-
er, as determined by the Secretary; or
‘‘(iii) in the case of a beginning farmer or
rancher or other producer that does not have av-
erage adjusted gross revenue for the preceding 5
taxable years, has at least $50,000 in estimated
income from all agricultural enterprises for the
applicable year, as determined by the Secretary.
‘‘(b) ESTABLISHMENT.—For each of fiscal years 2003
through 2005, the Secretary shall establish a pilot program
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in 3 States (as determined by the Secretary) under which
a producer may establish a farm counter-cyclical savings
account in the name of the producer in a bank or financial
institution selected by the producer and approved by the
Secretary.
‘‘(c) CONTENT OF ACCOUNT.—A farm counter-cyclical
savings account shall consist of—
‘‘(1) contributions of the producer; and
‘‘(2) matching contributions of the Secretary.
‘‘(d) PRODUCER CONTRIBUTIONS.—A producer may
deposit such amounts in the account of the producer as the
producer considers appropriate.
‘‘(e) MATCHING CONTRIBUTIONS.—
‘‘(1) IN GENERAL.—Subject to paragraphs (2)
through (5), the Secretary shall provide a matching
contribution on the amount deposited by the producer
into the account.
‘‘(2) AMOUNT.—Subject to paragraph (3), the
amount of a matching contribution that the Secretary
shall provide under paragraph (1) shall be equal to
2 percent of the average adjusted gross revenue of the
producer.
‘‘(3) MAXIMUM CONTRIBUTIONS FOR INDIVIDUAL
PRODUCER.—The amount of matching contributions
that may be provided by the Secretary for an indi-
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vidual producer under this subsection shall not exceed
$5,000 for any applicable fiscal year.
‘‘(4) MAXIMUM CONTRIBUTIONS FOR ALL PRO-
DUCERS IN A STATE.—The total amount of matching
contributions that may be provided by the Secretary
for all producers in a State under this subsection
shall not exceed $4,000,000 for each of fiscal years
2003 through 2005.
‘‘(5) DATE
FOR
MATCHING
CONTRIBUTIONS.—
The Secretary shall provide the matching contribu-
tions required for a producer under paragraph (1) as
of the date that a majority of the covered commodities
grown by the producer are harvested.
‘‘(f) INTEREST.—Funds deposited into the account
may earn interest at the commercial rates provided by the
bank or financial institution in which the Account is estab-
lished.
‘‘(g) USE.—Funds credited to the account—
‘‘(1) shall be available for withdrawal by a pro-
ducer, in accordance with subsection (h); and
‘‘(2) may be used for purposes determined by the
producer.
‘‘(h) WITHDRAWAL.—
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‘‘(1) IN GENERAL.—Subject to paragraph (2), in
any year, a producer may withdraw funds from the
account in an amount that is equal to—
‘‘(A) 90 percent of average adjusted gross
revenue of the producer for the previous 5 years;
minus
‘‘(B) the adjusted gross revenue of the pro-
ducer in that year.
‘‘(2) RETIREMENT.—A producer that ceases to be
actively engaged in farming, as determined by the
Secretary—
‘‘(A) may withdraw the full balance from,
and close, the account; and
‘‘(B) may not establish another account.
‘‘(i) ADMINISTRATION.—The Secretary shall admin-
ister this section through the Farm Service Agency and
local, county, and area offices of the Department of Agri-
culture.’’.
Subtitle B—Nonrecourse Marketing
Assistance Loans and Loan Defi-
ciency Payments
SEC. 121. NONRECOURSE MARKETING ASSISTANCE LOANS
AND LOAN DEFICIENCY PAYMENTS.
(a) IN GENERAL.—Sections 131(a) and 137 of the Fed-
eral Agriculture Improvement and Reform Act of 1996 (7
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U.S.C. 7231(a), 7237) are amended by striking ‘‘2002’’ each
place it appears and inserting ‘‘2006’’.
(b) UPLAND COTTON.—Sections 134(e)(1), 136, and
136A(a) of the Federal Agriculture Improvement and Re-
form Act of 1996 (7 U.S.C. 7234(e)(1), 7236, 7236a(a)) are
amended by striking ‘‘2003’’ each place it appears and in-
serting ‘‘2007’’.
SEC. 122. ELIGIBLE PRODUCTION.
Section 131 of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 7231) is amended by
striking subsection (b) and inserting the following:
‘‘(b) ELIGIBLE PRODUCTION.—The producers on a
farm shall be eligible for a marketing loan under subsection
(a) for any quantity of a loan commodity produced on the
farm.’’.
SEC. 123. LOAN RATES.
(a) IN GENERAL.—Section 132 of the Federal Agri-
culture Improvement and Reform Act of 1996 (7 U.S.C.
7232) is amended to read as follows:
‘‘SEC. 132. LOAN RATES.
‘‘(a) IN GENERAL.—Subject to subsection (b), the loan
rate for a marketing assistance loan under section 131 for
a loan commodity shall be—
‘‘(1) in the case of wheat, $3.00 per bushel;
‘‘(2) in the case of corn, $2.08 per bushel;
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‘‘(3) in the case of grain sorghum, $2.08 per
bushel;
‘‘(4) in the case of barley, $2.00 per bushel;
‘‘(5) in the case of oats, $1.50 per bushel;
‘‘(6) in the case of upland cotton, $0.55 per
pound;
‘‘(7) in the case of extra long staple cotton,
$0.7965 per pound;
‘‘(8) in the case of rice, $6.50 per hundredweight;
‘‘(9) in the case of soybeans, $5.20 per bushel;
‘‘(10) in the case of oilseeds (other than soy-
beans), $0.095 per pound;
‘‘(11) in the case of graded wool, $1.00 per
pound;
‘‘(12) in the case of nongraded wool (including
unshorn pelts), $0.40 per pound;
‘‘(13) in the case of honey, $0.60 per pound;
‘‘(14) in the case of dry peas, $6.78 per hundred-
weight;
‘‘(15) in the case of lentils, $12.79 per hundred-
weight;
‘‘(16) in the case of large chickpeas, $17.44 per
hundredweight; and
‘‘(17) in the case of small chickpeas, $8.10 per
hundredweight.
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‘‘(b) ADJUSTMENTS.—
‘‘(1) IN GENERAL.—The Secretary may make ap-
propriate adjustments in the loan rates for any loan
commodity for differences in grade, type, quality, lo-
cation, and other factors.
‘‘(2) MANNER.—The adjustments under this sub-
section shall, to the maximum extent practicable, be
made in such manner that the average loan rate for
the loan commodity will, on the basis of the antici-
pated incidence of the factors described in paragraph
(1), be equal to the loan rate provided under this sec-
tion.’’.
(b) CONFORMING AMENDMENT.—Section 162 of the
Federal Agriculture Improvement and Reform Act of 1996
(7 U.S.C. 7282) is repealed.
SEC. 124. TERM OF LOANS.
Section 133 of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 7233) is amended to
read as follows:
‘‘SEC. 133. TERM OF LOANS.
‘‘In the case of each loan commodity, a marketing loan
under section 131 shall have a term of 9 months beginning
on the first day of the first month after the month in which
the loan is made.’’.
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SEC. 125. REPAYMENT OF LOANS.
Section 134(a) of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 7234(a)) is amended—
(1) by striking ‘‘wheat, corn, grain sorghum,
barley, oats, and oilseeds’’ and inserting ‘‘a loan com-
modity (other than upland cotton, rice, and extra
long staple cotton)’’; and
(2) in paragraph (2)—
(A) in subparagraph (C), by striking ‘‘and’’
at the end;
(B) in subparagraph (D), by striking the
period and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(E) minimize discrepancies in marketing
loan benefits across State boundaries and across
county boundaries.’’.
SEC. 126. LOAN DEFICIENCY PAYMENTS.
Section 135 of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 7235) is amended—
(1) by striking subsection (a) and inserting the
following:
‘‘(a) IN GENERAL.—The Secretary may make loan de-
ficiency payments available to producers on a farm that,
although eligible to obtain a marketing assistance loan
under section 131 with respect to a loan commodity, agree
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to forgo obtaining the loan for the loan commodity in return
for payments under this section.’’; and
(2) by striking subsections (e) and (f) and insert-
ing the following:
‘‘(e) BENEFICIAL INTEREST.—
‘‘(1) IN GENERAL.—A producer shall be eligible
for a payment for a loan commodity under this sec-
tion only if the producer has a beneficial interest in
the loan commodity, as determined by the Secretary.
‘‘(2) APPLICATION.—The Secretary shall make a
payment under this section to the producers on a
farm with respect to a quantity of a loan commodity
as of the earlier of—
‘‘(A) the date on which the producers on the
farm marketed or otherwise lost beneficial inter-
est in the loan commodity, as determined by the
Secretary; or
‘‘(B) the date the producers on the farm re-
quest the payment.
‘‘(3) 2001 CROP.—Notwithstanding paragraphs
(1) and (2), effective for the 2001 crop only, if a pro-
ducer eligible for a payment under this section loses
beneficial interest in the covered commodity, the pro-
ducer shall be eligible for the payment determined as
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of the date the producer lost beneficial interest in the
covered commodity, as determined by the Secretary.’’.
SEC. 127. PAYMENTS IN LIEU OF LOAN DEFICIENCY PAY-
MENTS FOR GRAZED ACREAGE.
(a) IN GENERAL.—Subtitle C of title I of the Federal
Agriculture Improvement and Reform Act of 1996 (7 U.S.C.
7231 et seq.) is amended by adding at the end the following:
‘‘SEC. 138. PAYMENTS IN LIEU OF LOAN DEFICIENCY PAY-
MENTS FOR GRAZED ACREAGE.
‘‘(a) IN GENERAL.—For each crop of wheat, grain sor-
ghum, barley, and oats, in the case of the producers on a
farm that would be eligible for a loan deficiency payment
under section 135 for wheat, grain sorghum, barley, or oats,
but that elects to use acreage planted to the wheat, grain
sorghum, barley, or oats for the grazing of livestock, the Sec-
retary shall make a payment to the producers on the farm
under this section if the producers on the farm enter into
an agreement with the Secretary to forgo any other har-
vesting of the wheat, grain sorghum, barley, or oats on the
acreage.
‘‘(b) PAYMENT AMOUNT.—The amount of a payment
made to the producers on a farm under this section shall
be equal to the amount obtained by multiplying—
‘‘(1) the loan deficiency payment rate deter-
mined under section 135(c) in effect, as of the date of
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the agreement, for the county in which the farm is lo-
cated; by
‘‘(2) 
the 
payment 
quantity 
obtained 
by
multiplying—
‘‘(A) the quantity of the grazed acreage on
the farm with respect to which the producers on
the farm elect to forgo harvesting of wheat, grain
sorghum, barley, or oats; and
‘‘(B) the payment yield for that contract
commodity on the farm.
‘‘(c) TIME, MANNER, AND AVAILABILITY
OF PAY-
MENT.—
‘‘(1) TIME AND MANNER.—A payment under this
section shall be made at the same time and in the
same manner as loan deficiency payments are made
under section 135.
‘‘(2) AVAILABILITY.—The Secretary shall estab-
lish an availability period for the payment authorized
by this section that is consistent with the availability
period for wheat, grain sorghum, barley, and oats es-
tablished by the Secretary for marketing assistance
loans authorized by this subtitle.
‘‘(d) PROHIBITION
ON CROP INSURANCE
OR NON-
INSURED CROP ASSISTANCE.—The producers on a farm
shall not be eligible for insurance under the Federal Crop
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Insurance Act (7 U.S.C. 1501 et seq.) or noninsured crop
assistance under section 196 with respect to a crop of wheat,
grain sorghum, barley, or oats planted on acreage that the
producers on the farm elect, in the agreement required by
subsection (a), to use for the grazing of livestock in lieu
of any other harvesting of the crop.’’.
SEC. 128. SPECIAL MARKETING LOAN PROVISIONS FOR UP-
LAND COTTON.
Section 136(a) of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 7236(a)) is amended by
adding at the end the following:
‘‘(4) APPLICATION OF THRESHOLD.—During the
period beginning on the date of this paragraph and
ending on July 31, 2003, the Secretary shall make the
calculations under paragraphs (1)(A) and (2) and
subsection (b)(1)(B) without regard to the 1.25 cent
threshold provided under those paragraphs and sub-
section.’’.
Subtitle C—Other Commodities
CHAPTER 1—DAIRY
SEC. 131. MILK PRICE SUPPORT PROGRAM.
Section 141 of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 7251) (as amended by
section 772(a) of Public Law 107–76) is amended in sub-
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sections (b)(5) and (h) by striking ‘‘May 31, 2002’’ each
place it appears and inserting ‘‘December 31, 2006’’.
SEC. 132. NATIONAL DAIRY PROGRAM.
The Federal Agriculture Improvement and Reform Act
of 1996 (as amended by section 772(b) of Public Law 107–
76) is amended by inserting after section 141 (7 U.S.C.
7251) the following:
‘‘SEC. 142. NATIONAL DAIRY PROGRAM.
‘‘(a) DAIRY MARKET LOSS ASSISTANCE PROGRAM.—
‘‘(1) DEFINITIONS.—In this subsection:
‘‘(A) AVERAGE PRICE OF MILK.—The term
‘average price of milk’ means the blending of the
prices of milk for use as fluid milk and in cheese,
ice cream, butter, and nonfat dry milk in the
marketing area where the milk was marketed, as
determined by the Secretary.
‘‘(B) 
PRODUCER.—The 
term 
‘producer’
means an individual or entity that directly or
indirectly (as determined by the Secretary)
shares in the risk of producing milk.
‘‘(2) PROGRAM.—Subject to paragraph (8), the
Secretary shall provide market loss assistance pay-
ments to producers on a dairy farm with respect to
the production of milk in a State other than a par-
ticipating State (as defined in subsection (b)(1)) that
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is marketed during the period beginning on December
1, 2001, and ending on September 30, 2005.
‘‘(3) AMOUNT.—Subject to paragraph (8), pay-
ments to a producer under this subsection shall be
calculated by multiplying—
‘‘(A) the payment quantity for the producer
during the applicable quarter established under
paragraph (4); by
‘‘(B) the payment rate established under
paragraph (5).
‘‘(4) PAYMENT QUANTITY.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the payment quantity for a producer
during the applicable quarter under this sub-
section shall be equal to the quantity of milk pro-
duced and marketed by the producer during the
quarter.
‘‘(B) LIMITATION.—The payment quantity
for a producer during the applicable fiscal year
under this subsection shall not exceed the milk
marketing base for the producer established
under subsection (c).
‘‘(5) PAYMENT RATE.—The payment rate for a
payment under this subsection shall be calculated by
multiplying (as determined by the Secretary)—
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‘‘(A) 40 percent; by
‘‘(B) the amount by which—
‘‘(i) the average price of milk during
the applicable quarter; is less than
‘‘(ii) the average price of milk for the
same quarter during each of the previous 5
years.
‘‘(6) REPORTING
OF
PRODUCTION.—The Sec-
retary may require producers that receive payments
under this subsection to report the quantity of milk
produced and marketed by the producer on the dairy
farm of the producer, in a manner determined by the
Secretary.
‘‘(7) TIMING OF PAYMENTS.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), payments made under this
subsection shall be made on a quarterly basis.
‘‘(B) PAYMENTS FOR FISCAL YEAR 2002.—
Payments under this subsection for fiscal year
2002 shall not be made before October 1, 2002.
‘‘(8) FUNDING.—The Secretary shall use not
more than $1,500,000,000 of funds of the Commodity
Credit Corporation to carry out this subsection.
‘‘(b) NORTHEAST DAIRY MARKET LOSS PAYMENTS.—
‘‘(1) DEFINITIONS.—In this subsection:
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‘‘(A) CLASS
I
MILK.—The term ‘Class I
milk’ means milk (including milk components)
classified as Class I milk under a Federal milk
marketing order.
‘‘(B) ELIGIBLE PRODUCTION.—The term ‘el-
igible production’ means milk produced by a
producer in a participating State.
‘‘(C) FEDERAL MILK MARKETING ORDER.—
The term ‘Federal milk marketing order’ means
an order issued under section 8c of the Agricul-
tural Adjustment Act (7 U.S.C. 608c), reenacted
with amendments by the Agricultural Marketing
Agreement Act of 1937.
‘‘(D) PARTICIPATING
STATE.—The term
‘participating State’ means Connecticut, Dela-
ware, Maine, Maryland, Massachusetts, New
Hampshire, New Jersey, New York, Pennsyl-
vania, Rhode Island, Vermont, and West Vir-
ginia.
‘‘(E) 
PRODUCER.—The 
term 
‘producer’
means an individual or entity that directly or
indirectly (as determined by the Secretary)—
‘‘(i) shares in the risk of producing
milk; and
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‘‘(ii) makes contributions (including
land, labor, management, equipment, or
capital) to the dairy farming operation of
the individual or entity that are at least
commensurate with the share of the indi-
vidual or entity of the proceeds of the oper-
ation.
‘‘(2) PAYMENTS.—Subject to paragraph (9), the
Secretary shall offer to enter into contracts with pro-
ducers on a dairy farm located in a participating
State under which the producers receive payments on
eligible production in exchange for compliance on the
farm with—
‘‘(A) applicable highly erodible land con-
servation requirements under subtitle B of title
XII of the Food Security Act of 1985 (16 U.S.C.
3811 et seq.); and
‘‘(B) applicable wetland conservation re-
quirements under subtitle C of title XII of that
Act (16 U.S.C. 3821 et seq.).
‘‘(3) AMOUNT.—Payments to a producer under
this subsection shall be calculated by multiplying (as
determined by the Secretary)—
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‘‘(A) the payment quantity for the producer
during the applicable month established under
paragraph (4);
‘‘(B) the amount equal to—
‘‘(i) $16.94 per hundredweight; less
‘‘(ii) the Class I milk price per hun-
dredweight in Boston under the applicable
Federal milk marketing order; by
‘‘(C) 45 percent.
‘‘(4) PAYMENT QUANTITY.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the payment quantity for a producer
during the applicable month under this sub-
section shall be equal to the quantity of milk pro-
duced and marketed by the producer during the
month.
‘‘(B) LIMITATION.—The payment quantity
for a producer during the applicable fiscal year
under this subsection shall not exceed the milk
marketing base for the producer established
under subsection (c).
‘‘(5) PAYMENTS.—A payment under a contract
under this subsection shall be made on a monthly
basis not later than 60 days after the last day of the
month for which the payment is made.
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‘‘(6) SIGNUP.—The Secretary shall offer to enter
into contracts under this subsection during the period
beginning on December 1, 2001, and ending on Sep-
tember 30, 2005.
‘‘(7) DURATION OF CONTRACT.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B) and paragraph (8), any con-
tract entered into by producers on a dairy farm
under this subsection shall cover eligible produc-
tion marketed by the producers on the dairy
farm during the period starting with the first
day of month the producers on the dairy farm
enter into the contract and ending on September
30, 2005.
‘‘(B) VIOLATIONS.—If a producer violates
the contract, the Secretary may—
‘‘(i) terminate the contract and allow
the producer to retain any payments re-
ceived under the contract; or
‘‘(ii) allow the contract to remain in
effect and require the producer to repay a
portion of the payments received under the
contract based on the severity of the viola-
tion.
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‘‘(8) TRANSITION
RULE.—In addition to any
payment that is otherwise available under this sub-
section, if the producers on a dairy farm enter into
a contract under this subsection by March 1, 2002,
the Secretary shall make a payment under this sub-
section on the quantity of eligible production of the
producer marketed during the period beginning on
December 1, 2001, and ending on January 1, 2002.
‘‘(9) FUNDING.—The Secretary shall use not
more than $500,000,000 of funds of the Commodity
Credit Corporation to carry out this subsection.
‘‘(c) MILK MARKETING BASE.—
‘‘(1) DEFINITION OF NEW PRODUCER.—In this
subsection, the term ‘new producer’ means a producer
of milk that did not have an interest in the produc-
tion of milk during any of 1999 through 2001 fiscal
years.
‘‘(2) ESTABLISHED PRODUCERS.—In the case of
a producer of milk other than a new producer, the
milk marketing base of a producer for a fiscal year
under this section shall be equal to the lesser of—
‘‘(A) the average quantity of milk marketed
for commercial use in which the producer has
had a direct or indirect interest during each of
the 1999 through 2001 fiscal years; or
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‘‘(B) 8,000,000 pounds.
‘‘(3) NEW PRODUCERS.—In the case of a new
producer, the milk marketing base of the new pro-
ducer under this section shall be equal to—
‘‘(A) during each of the first 3 fiscal years
of milk production by the new producer,
1,500,000 pounds; and
‘‘(B) during each subsequent year of milk
production, the lesser of—
‘‘(i) the average quantity of milk mar-
keted for commercial use in which the pro-
ducer has had a direct or indirect interest
during the first 3 years of milk production
by the new producer; or
‘‘(ii) 8,000,000 pounds.
‘‘(4) ADJUSTMENTS.—The Secretary may pro-
vide for the adjustment of any milk marketing base
of a producer under this subsection—
‘‘(A) if the production of milk used to deter-
mine the milk marketing base of the producer
has been adversely affected by damaging weather
or a related condition (as determined by the Sec-
retary); or
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‘‘(B) if the adjustment is necessary to pro-
vide fair and equitable treatment to tenants and
sharecroppers.
‘‘(5) TRANSFERS.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), a producer that is assigned a
milk marketing base under this subsection may
not transfer the base to any person.
‘‘(B) FAMILY MEMBERS.—A producer that
is assigned a milk marketing base under this
subsection may irrevocably transfer all or part of
the base to a family member of the producer.
‘‘(6) SCHEMES OR DEVICES.—If the Secretary
determines that any producer has adopted a scheme
or device to increase the milk marketing base of the
producer under this subsection, the producer shall be-
come ineligible for any milk marketing base under
this subsection.’’.
SEC. 133. DAIRY EXPORT INCENTIVE AND DAIRY INDEM-
NITY PROGRAMS.
(a) DAIRY EXPORT INCENTIVE PROGRAM.—Section
153(a) of the Food Security Act of 1985 (15 U.S.C. 713a–
14(a)) is amended by striking ‘‘2002’’ and inserting
‘‘2006’’.
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(b) DAIRY INDEMNITY PROGRAM.—Section 3 of Public
Law 90–484 (7 U.S.C. 450l) is amended by striking ‘‘1995’’
and inserting ‘‘2006’’.
SEC. 134. FLUID MILK PROMOTION.
(a) DEFINITION OF FLUID MILK PRODUCT.—Section
1999C of the Fluid Milk Promotion Act of 1990 (7 U.S.C.
6402) is amended by striking paragraph (3) and inserting
the following:
‘‘(3) FLUID
MILK
PRODUCT.—The term ‘fluid
milk product’ has the meaning given the term in—
‘‘(A) section 1000.15 of title 7, Code of Fed-
eral Regulations, subject to such amendments as
may be made by the Secretary; or
‘‘(B) any successor regulation.’’.
(b) DEFINITION OF FLUID MILK PROCESSOR.—Sec-
tion 1999C(4) of the Fluid Milk Promotion Act of 1990 (7
U.S.C. 6402(4)) is amended by striking ‘‘500,000 pounds
of fluid milk products in consumer-type packages per
month’’ and inserting ‘‘3,000,000 pounds of fluid milk
products in consumer-type packages per month (excluding
products delivered directly to the place of residence of a con-
sumer)’’.
(c) ELIMINATION OF ORDER TERMINATION DATE.—
Section 1999O of the Fluid Milk Promotion Act of 1990
(7 U.S.C. 6414) is amended—
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(1) by striking subsection (a); and
(2) by redesignating subsections (b) and (c) as
subsections (a) and (b), respectively.
SEC. 135. DAIRY PRODUCT MANDATORY REPORTING.
Section 272(1) of the Agricultural Marketing Act of
1946 (7 U.S.C. 1637a(1)) is amended—
(1) by striking ‘‘means manufactured dairy
products’’ and inserting ‘‘means—
‘‘(A) manufactured dairy products’’;
(2) by striking the period at the end and insert-
ing ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(B) substantially identical products des-
ignated by the Secretary.’’.
SEC. 136. FUNDING OF DAIRY PROMOTION AND RESEARCH
PROGRAM.
(a) DEFINITIONS.—Section 111 of the Dairy Produc-
tion Stabilization Act of 1983 (7 U.S.C. 4502) is
amended—
(1) in subsection (k), by striking ‘‘and’’ at the
end;
(2) in subsection (l), by striking the period at the
end and inserting a semicolon; and
(3) by adding at the end the following:
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‘‘(m) the term ‘imported dairy product’ means
any dairy product that is imported into the United
States, including a dairy product imported into the
United States in the form of—
‘‘(1) milk, cream, and fresh and dried dairy
products;
‘‘(2) butter and butterfat mixtures;
‘‘(3) cheese; and
‘‘(4) casein and mixtures;
‘‘(n) the term ‘importer’ means a person that
imports an imported dairy product into the United
States; and
‘‘(o) the term ‘Customs’ means the United States
Customs Service.’’.
(b) REPRESENTATION OF IMPORTERS ON BOARD.—
Section 113(b) of the Dairy Production Stabilization Act
of 1983 (7 U.S.C. 4504(b)) is amended—
(1) by inserting ‘‘NATIONAL DAIRY PROMOTION
AND RESEARCH BOARD.—’’ after ‘‘(b)’’;
(2) by designating the first through ninth sen-
tences as paragraphs (1) through (5) and paragraphs
(7) through (10), respectively, and indenting the
paragraphs appropriately;
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(3) in paragraph (2) (as so designated), by strik-
ing ‘‘Members’’ and inserting ‘‘Except as provided in
paragraph (6), the members’’; and
(4) by inserting after paragraph (5) (as so des-
ignated) the following:
‘‘(6) IMPORTERS.—
‘‘(A) 
REPRESENTATION.—The 
Secretary
shall appoint not more than 2 members who rep-
resent importers of dairy products and are sub-
ject to assessments under the order, to reflect the
proportion of domestic production and imports
supplying the United States market, as deter-
mined by the Secretary on the basis of the aver-
age volume of domestic production of dairy prod-
ucts in proportion to the average volume of im-
ports of dairy products in the United States dur-
ing the immediately preceding 3 years.
‘‘(B) 
ADDITIONAL
MEMBERS; 
NOMINA-
TIONS.—The members appointed under this
paragraph—
‘‘(i) shall be in addition to the total
number of members appointed under para-
graph (2); and
‘‘(ii) shall be appointed from nomina-
tions submitted by importers under such
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procedures as the Secretary determines to be
appropriate.’’.
(c) IMPORTER ASSESSMENT.—Section 113(g) of the
Dairy Production Stabilization Act of 1983 (7 U.S.C.
4504(g)) is amended—
(1) by inserting ‘‘ASSESSMENTS.—’’ after ‘‘(g)’’;
(2) by designating the first through fifth sen-
tences as paragraphs (1) through (5), respectively,
and indenting appropriately; and
(3) by adding at the end the following:
‘‘(6) IMPORTERS.—
‘‘(A) IN GENERAL.—The order shall provide
that each importer of imported dairy products
shall pay an assessment to the Board in the
manner prescribed by the order.
‘‘(B) TIME FOR PAYMENT.—
‘‘(i) IN GENERAL.—The assessment on
imported dairy products shall be—
‘‘(I) paid by the importer to Cus-
toms at the time of the entry of the
products into the United States; and
‘‘(II) remitted by Customs to the
Board.
‘‘(ii) TIME OF ENTRY.—For purposes
of this subparagraph, entry of the products
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into the United States shall be considered to
have occurred when a dairy product is re-
leased from custody of Customs and intro-
duced into the stream of commerce within
the United States.
‘‘(iii) IMPORTERS.—For purposes of
this subparagraph, an importer includes—
‘‘(I) a person that holds title to a
dairy product produced outside the
United States immediately on release
by Customs; and
‘‘(II) a person that acts on behalf
of other persons, as an agent, broker, or
consignee, to secure the release of a
dairy product from Customs and intro-
duce the released dairy product into
the stream of commerce.
‘‘(C) RATE.—The rate of assessment on im-
ported dairy products shall be determined in the
same manner as the rate of assessment per hun-
dredweight or the equivalent of milk.
‘‘(D) VALUE OF PRODUCTS.—For the pur-
pose of determining the assessment on imported
dairy products under subparagraph (C), the
value to be placed on imported dairy products
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shall be established by the Secretary in a fair
and equitable manner.
‘‘(E) USE OF ASSESSMENTS ON IMPORTED
DAIRY PRODUCTS.—Assessments collected on im-
ported dairy products shall not be used for for-
eign market promotion of United States dairy
products.’’.
(d) RECORDS.—Section 113(k) of the Dairy Produc-
tion Stabilization Act of 1983 (7 U.S.C. 4504(k)) is amend-
ed in the first sentence by striking ‘‘person receiving’’ and
inserting ‘‘importer of imported dairy products, each per-
son receiving’’.
(e) IMPORTER
ELIGIBILITY
TO
VOTE
IN
REF-
ERENDUM.—Section 116(b) of the Dairy Production Sta-
bilization Act of 1983 (7 U.S.C. 4507(b)) is amended—
(1) in the first sentence, by inserting ‘‘and im-
porters’’ after ‘‘producers’’ each place it appears; and
(2) in the second sentence, by inserting after
‘‘commercial use’’ the following: ‘‘and importers vot-
ing in the referendum (that have been engaged in the
importation of dairy products into the United States
during the applicable period, as determined by the
Secretary)’’.
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(f) CONFORMING AMENDMENTS.—Section 110(b) of the
Dairy Production Stabilization Act of 1983 (7 U.S.C.
4501(b)) is amended—
(1) in the first sentence—
(A) by inserting after ‘‘commercial use’’ the
following: ‘‘and on imported dairy products’’;
and
(B) by striking ‘‘products produced in the
United States.’’ and inserting ‘‘products.’’; and
(2) in the second sentence, by inserting after
‘‘produce milk’’ the following: ‘‘or the right of any
person to import dairy products’’.
SEC. 137. DAIRY STUDIES.
(a) IN GENERAL.—The Secretary of Agriculture shall
conduct—
(1) a study of the effects of terminating all Fed-
eral programs relating to price support and supply
management for milk and granting the consent of
Congress to cooperative efforts by States to manage
milk prices and supply; and
(2) a study of the effects of including in the
standard of identity for fluid milk a required min-
imum protein content that is commensurate with the
average nonfat solids content of bovine milk produced
in the United States.
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(b) REPORTS.—Not later than September 30, 2002, the
Secretary shall submit to the Committee on Agriculture of
House of Representatives and the Committee on Agri-
culture, Nutrition, and Forestry a report describing the re-
sults of each of the studies required under subsection (a).
CHAPTER 2—SUGAR
SEC. 141. SUGAR PROGRAM.
(a) LOAN RATE ADJUSTMENTS.—Section 156(c) of the
Federal Agriculture Improvement and Reform Act of 1996
(7 U.S.C. 7272(c)) is amended—
(1) by striking ‘‘REDUCTION IN LOAN RATES’’
and inserting ‘‘LOAN RATE ADJUSTMENTS’’; and
(2) in paragraph (1)—
(A) by striking ‘‘REDUCTION
REQUIRED’’
and inserting ‘‘IN GENERAL’’; and
(B) by striking ‘‘shall’’ and inserting
‘‘may’’.
(b) LOAN TYPE; PROCESSOR ASSURANCES.—Section
156(e) of the Federal Agriculture Improvement and Reform
Act of 1996 (7 U.S.C. 7272(e)) is amended—
(1) by striking paragraph (2) and inserting the
following:
‘‘(2) PROCESSOR ASSURANCES.—
‘‘(A) IN GENERAL.—The Secretary shall ob-
tain from each processor that receives a loan
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under this section such assurances as the Sec-
retary considers adequate to ensure that the
processor will provide payments to producers
that are proportional to the value of the loan re-
ceived by the processor for the sugar beets and
sugarcane delivered by producers to the proc-
essor.
‘‘(B) MINIMUM PAYMENTS.—
‘‘(i) IN
GENERAL.—Subject to clause
(ii), the Secretary may establish appro-
priate minimum payments for purposes of
this paragraph.
‘‘(ii) LIMITATION.—In the case of
sugar beets, the minimum payment estab-
lished under clause (i) shall not exceed the
rate of payment provided for under the ap-
plicable contract between a sugar beet pro-
ducer and a sugar beet processor.
‘‘(C) BANKRUPTCY
OR
INSOLVENCY
OF
PROCESSORS.—
‘‘(i) IN GENERAL.—The Secretary shall
use funds of the Commodity Credit Cor-
poration to pay a producer of sugar beets or
sugarcane loan benefits described in clause
(ii) if—
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‘‘(I) a processor that has entered
into a contract with the producer has
filed for bankruptcy protection or is
otherwise insolvent;
‘‘(II) the assurances under sub-
paragraph (A) are not adequate to en-
sure compliance with subparagraph
(A), as determined by the Secretary;
‘‘(III) the producer demands pay-
ments of loan benefits required under
this section from the processor; and
‘‘(IV) the Secretary determines
that the processor is unable to provide
the loan benefits required under this
section.
‘‘(ii) AMOUNT.—The amount of loan
benefits provided to a producer under clause
(i) shall be equal to—
‘‘(I) the maximum amount of loan
benefits the producer would have been
entitled to receive under this section
during the 30-day period beginning on
the final settlement date provided for
in the contract between the producer
and processor; less
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‘‘(II) any such benefits received by
the producer from the processor.
‘‘(iii) ADMINISTRATION.—On payment
to a producer under clause (i), the Sec-
retary shall—
‘‘(I) be subrogated to all claims of
the producer against the processor and
other persons responsible for non-
payment; and
‘‘(II) have authority to pursue
such claims as are necessary to recover
the benefits not paid to the producer by
the processor.’’; and
(2) by adding at the end the following:
‘‘(3) ADMINISTRATION.—The Secretary may not
impose or enforce any prenotification or similar ad-
ministrative requirement that has the effect of pre-
venting a processor from electing to forfeit the loan
collateral on the maturity of the loan.’’.
(c) TERMINATION OF MARKETING ASSESSMENT.—Ef-
fective October 1, 2001, section 156 of the Federal Agri-
culture Improvement and Reform Act of 1996 (7 U.S.C.
7272) is amended by striking subsection (f).
(d) TERMINATION OF FORFEITURE PENALTY.—Section
156 of the Federal Agriculture Improvement and Reform
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(3) in paragraph (5) (as redesignated by para-
graph (1)), by striking ‘‘paragraph (1)’’ and inserting
‘‘this subsection’’.
(h) SUBSTITUTABILITY OF SUGAR.—Section 156 of the
Federal Agriculture Improvement and Reform Act of 1996
(7 U.S.C. 7272) is amended—
(1) by redesignating subsection (i) as subsection
(j); and
(2) by inserting after subsection (h) the fol-
lowing:
‘‘(i) SUBSTITUTION OF REFINED SUGAR.—For pur-
poses of Additional U.S. Note 6 to chapter 17 of the Har-
monized Tariff Schedule of the United States and the reex-
port programs and polyhydric alcohol program adminis-
tered by the Foreign Agricultural Service of the Department
of Agriculture, all refined sugars (whether derived from
sugar beets or sugarcane) produced by cane sugar refineries
and beet sugar processors shall be fully substitutable for the
export of sugar under those programs.’’.
(i) CROPS.—Subsection (j) of section 156 of the Fed-
eral Agriculture Improvement and Reform Act of 1996 (7
U.S.C. 7272) (as redesignated by subsection (h)(1)) is
amended—
(1) by striking ‘‘(other than subsection (f))’’; and
(2) by striking ‘‘2002’’ and inserting ‘‘2006’’.
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‘‘SEC. 158B. PAYMENT YIELDS, PEANUT ACRES, AND PAY-
MENT ACRES FOR FARMS.
‘‘(a) PAYMENT YIELDS AND PAYMENT ACRES.—
‘‘(1) AVERAGE YIELD.—
‘‘(A) IN GENERAL.—The Secretary shall de-
termine, for each historical peanut producer, the
average yield for peanuts on all farms of the his-
torical peanut producer for the 1998 through
2001 crop years, excluding any crop year during
which the producers did not produce peanuts.
‘‘(B) ASSIGNED
YIELDS.—Except as pro-
vided in subparagraph (C), if, for any of the
crop years referred to in subparagraph (A) in
which peanuts were planted on a farm by the
historical peanut producer, the historical peanut
producer has satisfied the eligibility criteria es-
tablished to carry out section 1102 of the Agri-
culture, Rural Development, Food and Drug Ad-
ministration, and Related Agencies Appropria-
tions Act, 1999 (7 U.S.C. 1421 note; Public Law
105–277), the Secretary shall assign to the his-
torical peanut producer a yield for the farm for
the crop year equal to 65 percent of the average
yield for peanuts for the previous 5 crop years.
‘‘(C) SELECTION BY PRODUCER.—If a coun-
ty in which a historical peanut producer de-