John Phipps: Is it Time to Revive Set-Aside Programs for Agriculture?

08:52AM Jul 14, 2020
Hands and soil
John Phipps says until recently, the idea of reviving ways to idle acres was looking less unthinkable. With growing crop supplies, the revival of a set-aside program is now entering the conversation again.
( AgWeb )

From Marlene Albin in south-central Nebraska:

“My question is why can’t we go back to the farm set aside programs we had had in the 70’s (maybe before that)? If the government is giving farmers a MFP payment, and a COVID-19 payment (maybe), why not pay instead to set aside acres?  That would help solve the over-production problem, which in turn will raise the commodity prices, and also give the land a rest. We started farming in 1970 the set aside was good for us beginning farmers at that time.”

Thanks for writing and for a question I have been anticipating ever since corn surpluses began to explode. Please send an address for a mug.

Until recently, the idea of reviving ways to idle acres was looking less unthinkable. Our market experts have better insights, but to my surprise, we have gotten used to 2+ billion bushel carryovers. There are still serious concerns about demand, but disappearing 5 million acres of corn had a positive impact on markets, along with many of us looking at hot, dry weather for the foreseeable future. With their newly-discovered ability to make payments to farmers without Congressional action, and with the election looming, I think the administration will keep using the tool they have – payments based on some hard-to-follow mathematical logic funded by CCC debt issuance.

Reviving supply control measures like set-asides seems to be an obvious solution, especially compared to ad hoc payments like MFPs and CFAPs. Those subsidies do nothing to tackle the commodity surplus problem and may even make it worse. But set-asides are bitterly resisted by the rest of the ag value chain, like seed companies and livestock producers, along with virtually every other input supplier or buyer of ag products. Moreover, I was getting started about the same time, and don’t remember set-asides being a big factor in my survival. The only positive was it did reduce production but usually not by as much as the set-aside, since the lowest yielding acres were the first to be left unplanted. It was also a cumbersome and confusing process that I don’t think the current USDA apparatus could support without increases in budget and personnel.

That said, if we wind up with a corn carryover above 3 billion bushels, we could be talking more about a set-aside farm program.


USFR 071120 - Customer Support