What is in this article?:
- 7 Questions About the Farm Bill
- Question 2: Will the programs focus on across-year or on within-year protection?
- Question 3: Will the across-year programs focus on price or revenue protection?
- Question 4: Will the support levels for across-year programs react to changes in market conditions?
- Question 5: Will the program use historical or planted acres to indemnify producers?
- Question 6: How much overlap will be allowed between farm bill programs and crop insurance?
- Question 7: Does a farm have to have a loss to trigger payments?
Designs of the farm bill programs will largely answer the following seven questions. In some cases, these are contentious issues across regions and across crops. For example, some may want a revenue program while others desire a target price program. Hence, resolution of these issues likely will require compromise, perhaps leading to unclear answers. It is highly unlikely that any party to the farm bill negotiations will receive all their desired answers to the above questions and will therefore have to choose which of these questions are more important to them.
Question 6: How much overlap will be allowed between farm bill programs and crop insurance?
Crop insurance has become a large program that many farmers view as their primary risk management program. Given this emphasis, how will the farm bill programs complement crop insurance? Most insurance products purchased today are revenue products, making it potentially easier to minimize overlapping payments from crop insurance and multiple year revenue programs. Low prices can trigger payments by both crop insurance and target price programs, but historically this overlap in payments has not been addressed in designing target price programs.
On the other hand, overlapping payments by crop insurance and across-year revenue programs have been an integral part of the design discussion, both in the design of the ACRE program in the 2008 Farm Bill and in the design of the ARC and RLC programs in the 2012 Farm Bill drafts.