Farm Bill Details and Analysis

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Although the Senate Ag Committee’s farm bill draft is just that – a draft – it will certainly be the starting point for further negotiations in formulating the final bill. We gave the framework for the key new programs, but you can take a look at the full bill here (pdf).

For an overview and description of the bill, with a table comparing individual and county ARC and the Insurance Supplemental Coverage, the University of Illinois offers a look.

Also check out an interesting analysis of net payments by crop insurance and how they will influence the farm safety net debate by Carl Zulauf of Ohio State University.

Zulauf is writing an overview and some analysis of the bill for Ohio State. We’ll add a link as soon as he has completed it. “Should ARC come into existence, farmers will have to decide if they want to enroll in the individual or county ARC program,” he notes. “In addressing this question, a key point to consider will be whether, over the 2013-2017 crop years, they expect the greatest risk to be (1) low yield on their farm or (2) low market price. The individual farm ARC provides protection for yield losses on the individual farm. However, the county ARC has a higher coverage rate (75% vs. 60%). So the county ARC provides more protection for losses that occur due to yield losses over larger areas or because of low prices.”

He also points out that farmers will have to decide if they want to use the Supplemental Insurance Option to replace individual insurance with a combination of individual and country coverage through this new program. “The only observation I feel comfortable making at the present time is that this option could be an important tool to better allow a farmer to customize risk management to the risks his/her farm confronts,” he says.

For GAO’s study of the effects limiting individual crop insurance premium subsidies to the $40,000 maximum that applied to direct payments, see www.gao.gov/products/GAO-12-256

We will revisit the farm bill as it moves through the legislative process. Stay tuned!

 

Editor’s note: Richard Brock, Corn & Soybean Digest's marketing editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.

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