U.S. farm groups and farm state lawmakers want higher reference prices in the upcoming farm bill. However, an environmental activist group, the Environmental Working Group (EWG), has raised concerns this would predominantly benefit a relatively small number of large cotton, rice and peanut growers, primarily located in the South.
EWG’s analysis suggests higher reference prices would primarily assist fewer than 6,000 growers, with a focus on those in the South. The organization released its analysis alongside an online summit on farm subsidies. During the summit, speakers called for stricter regulations on farm subsidies and taxpayer-subsidized crop insurance programs.
Cotton, rice, and peanut growers are more likely to enroll in the Price Loss Coverage (PLC) program, where payments are triggered when commodity prices fall below reference prices. On the other hand, corn and soybean farmers tend to favor the Agriculture Risk Coverage (ARC) program, which calculates payments based on annual crop revenue compared to the five-year average.
Of note: There are internal farm bill discussions about potentially reducing the premium subsidy for crop insurance, with some suggesting it should be lowered from 61 cents per dollar to 40 cents. Sign up for more from Pro Farmer.
