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Farm Bill Reaches the Home Stretch

January 28, 2014
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The House could take up the compromise bill for a vote on Wednesday

By Boyce Thompson, AgWeb Editorial Director, and Jen Russell, AgWeb Managing Editor

House and Senate ag leaders, after reconciling differences over a 5-year farm bill this weekend, hope to gain swift passage of the bill this week.

That would be a huge step forward for the embattled farm bill, which appeared dead in the water last year. The compromise would generate about $23 billion in annual savings over 10 years, a compromise between the House- and Senate-passed versions.

The bill drew support from two critical House Republicans—House Speaker John A. Boehner (R-Ohio), who has voted against the last two farm bills, and Majority Leader Eric Cantor (R-Va.), who said the House would vote on the bill Wednesday.

"The environment we worked in—even though it took us two-and-a-half, three years—we have a really amazing bill here," said House Ag Committee Chairman Rep. Frank Lucas.

"Between the commodity title and disaster assistance and the dairy program, I think we’ve addressed every need in agriculture," added Sen. Debbie Stabenow, chairwoman of the Senate Ag Committee.

No Direct Payments, but Improved Crop Insurance

The bill, if passed, would end nearly 18 years of direct payments to farmers that cost $4 billion annually. That money would be used to create two new crop insurance programs: Agricultural Risk Coverage and Price Loss Coverage.

Agricultural Risk Coverage would provide early, temporary assistance to growers faced with steadily declining prices. Farmers would receive payments once prices fall 14 percentage points below an average for the previous five years. But the insurance only covers 76% to 86% of revenues.

Payments depend on whether farmers elect coverage based on county-level or farm-level yield results. Farmers who elect to target payments to countywide results would be paid 85% on those base acres. Farmers who tailor results to their own farm would only receive payments based on 65% of base acres.

Under Price Loss Coverage, payments would be triggered when prices fell below targets set by the federal government. Though payments would only be triggered later in a market downturn, they would provide growers with a more permanent floor to cover production costs.

The final language drew support from groups representing both soybean and corn growers.

National Corn Growers President Martin Barbre urged swift passage of the bill. "We’re especially pleased the legislation provides an adequate and flexible farm safety net as well as a strong federal crop insurance program," he said.

"Make no mistake, this bill represents a reform to the farm program," said American Soybean Association President Ray Gaesser. "It will make the programs on which we depend more relevant and more defensible, but it will also prevent those programs from distorting planting decisions and potentially impacting the marketplace."

The bill also makes enterprise units permanent, and allows farmers to purchase coverage for both irrigated and dryland crops. Growers will also have the option of purchasing a new Supplemental Coverage Option for additional price support.

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RELATED TOPICS: Policy, 2013 Farm Bill

 
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COMMENTS (6 Comments)

jimson weed
FG,

While I agree that the percentage issue favors the poorer producers and/or owners of more marginal soils, I do not think it is necessarily of nefarious intent. Rather, I think they just want to limit the workload of the local agencies. It is much easier for these local agencies to use county yields than farm specific yields. Also, I wonder if there is concern about the possibility of farmers using some fradulent accounting the boost their yields on certain farms (IE, shifting grain from one field to another, etc.)
7:57 AM Feb 5th
 
jimson weed
FG,

While I agree that the percentage issue favors the poorer producers and/or owners of more marginal soils, I do not think it is necessarily of nefarious intent. Rather, I think they just want to limit the workload of the local agencies. It is much easier for these local agencies to use county yields than farm specific yields. Also, I wonder if there is concern about the possibility of farmers using some fradulent accounting the boost their yields on certain farms (IE, shifting grain from one field to another, etc.)
7:57 AM Feb 5th
 
FG - cuba, IL
Farmers who elect to target payments to countywide results would be paid 85% on those base acres. Farmers who tailor results to their own farm would only receive payments based on 65% of base acres.

TRANSLATED: If you have poorer land you will do quite well, if you have better land , go to Hell.
4:52 PM Jan 28th
 
FG - cuba, IL
Farmers who elect to target payments to countywide results would be paid 85% on those base acres. Farmers who tailor results to their own farm would only receive payments based on 65% of base acres.

TRANSLATED: If you have poorer land you will do quite well, if you have better land , go to Hell.
4:52 PM Jan 28th
 
jimson weed
As an alfalfa producer, the dairy program looks solid. I wonder if it will spur overproduction? And whether the USDA has a plan for all of that milk if overproduction occurs? Perhaps they intend to send powdered milk to poor folks in third world countries. That's fine by me, as long as it isn't wasted. But they need a plan, because dairy farmers are going to take this ball and run.
4:49 PM Jan 28th
 
jimson weed
As an alfalfa producer, the dairy program looks solid. I wonder if it will spur overproduction? And whether the USDA has a plan for all of that milk if overproduction occurs? Perhaps they intend to send powdered milk to poor folks in third world countries. That's fine by me, as long as it isn't wasted. But they need a plan, because dairy farmers are going to take this ball and run.
4:49 PM Jan 28th
 



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