A SURE thing?

March 4, 2009 06:00 PM

Linda Smith, Top Producer Executive Editor
The 2008 farm bill places emphasis on helping farmers manage risk rather than supporting prices, says Carl Zulauf, Ohio State University ag economist. SURE is whole-crop disaster assistance, with payment tied to shortfalls in revenue.
To receive a SURE payment, three conditions must be met:.You must buy crop insurance or NAP noninsured crop assistance program) for all crops (for exceptions, see Zulauf's presentation). Your farm must be in or contiguous to a declared disaster county, or your farm must lose at least half its normal production due to disaster or adverse weather. Production of at least one economically significant crop (a crop that accounts for at least 5% of expected revenue) is reduced by at least 10% by the disaster.
Some potential implications, according to Zulauf, include: 
  1. It reduces the likelihood of ad hoc disaster legislation. 
  2. SURE provides incentive to buy 75% individual crop insurance and NAP. 
  3. Benefits are best in high-yield-variability areas. 
  4. SURE raises crop-rotation questions because it benefits single-crop farms most.

"Will farmers adopt more monoculture, or one-crop alternative-year rotations?” asks Zulauf. "Will farmers reduce smaller-acre crops, such as wheat in the Midwest?”

You can e-mail Linda Smith at lsmith@farmjournal.com.

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