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 7: Does a farm have to have a loss to trigger payments?
Farms will not necessarily have to have a loss to receive program payments. For example, prices may be low enough to trigger target price payments but the farm may not have a revenue loss because yields are high enough to offset low prices. In a similar manner, if a revenue program is based on county revenue, county revenue may be low while farm revenue may not be low.
Having a farm loss condition in the program causes payments to go to only to farms that have losses. On the other hand, inclusion of a loss condition increases the complexity of the program.
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