Arkansas Agriculture Edition 44 : Page 24

Policy Update Plan for Farm Bill Now Farmers encouraged to engage by Brandy Carroll t seems like yesterday we were in AFBF the thick of the battle that created the Agriculture Act of 2014, but it’s already time to do it again. The 2014 bill doesn’t expire until the end of 2018, but Congressional leaders are already talking about starting the hearings process early in 2017. Their reasoning is three-fold: start early in order to finish on time; the farm economy has changed dramatically since the 2014 bill was passed; and there are some complex problems with the 2014 bill that need to be addressed. The 2014 bill was written in a time of high commodity prices and large budget deficits. The redesigned bill cut $16.5 billion out of the baseline over 10 years. Of course, the farm bill is really a food bill, as nearly 80 percent of total expenses are for nutrition programs like SNAP (food stamps). Crop insurance accounts for the next largest piece American Farm Bureau President Zippy DuVall appointed 18 state of the pie at 9 percent, and conservation and and AFBF staff members to the Farm Bill Working Group last summer. commodity programs make up the rest at 6 Brandy Carroll (front row, third from the right) represents Arkansas. percent and 5 percent, respectively. Go to http://www.fb.org/issues/farm-bill/farm-bureau-farm-bill-The 2014 bill continued the trend of resources-in-depth/ to follow the group’s efforts. shifting funding to crop insurance. Farm-ers must share in the cost of premiums in order to participate. Thanks to increases in premium subsidy levels during the past few farm bills, 90 percent After losing a hard-fought battle in the World Trade Organization of eligible acres are now covered by some level of crop insurance. It’s with Brazil, cotton was eliminated from traditional commodity pro-these increases in subsidy levels and the related increases in outlays grams. However, cotton fiber is still eligible for marketing loans and that are targets for groups opposing farm programs. marketing loan gains. A risk management program called the Stacked Commodity programs under the 2014 bill moved away from di-Income Protection Program (STAX) was crafted to help cotton farm-rect payments in favor of giving farmers the choice between two risk ers manage risk. However, adoption of STAX has been slow, and the management programs. The shallow-loss Agriculture Risk Coverage cotton industry has gone back to the drawing board to find a more (ARC) program protects against revenue losses. And the Price Loss effective way to protect cotton farmers from market fluctuations. Coverage (PLC) program triggers when prices fall below a set refer-The Dairy Margin Protection Plan (MPP) is a voluntary risk man-ence price. It was a one-time program choice that locked farmers in agement program to indemnify producers when the national income through the end of the bill. over feed ratio falls below the selected coverage level. The program re-Farmers and Congressional leaders have already identified areas quires farmers pay premiums for coverage. MPP has collected nearly of the 2014 bill that aren’t working as intended. $100 million in farmer premiums and administrative fees during the Those choosing ARC also had to decide whether to use the first 18 months of the program. Indemnities and payments have been county crop yield or use their proven individual crop yield but cut approximately $12 million for the same time period. the percentage of their yield that was covered. More than 90 percent Since the farm bill was written, net farm income has declined $52 of farmers opting for ARC chose the county option. The program, billion annually according to USDA. At the same time, the farm bill however, has seen wide discrepancies in payment rates to farmers baseline has declined significantly. Now is the time for the farming across county lines. Many want a program redesign to make it more community to take a hard look at the present bill and prioritize its equitable and effective. needs for future programs. I 24 Arkansas Agriculture | ARKANSAS FARM BUREAU • WINTER 2017

Policy Update

Brandy Carroll


Plan for Farm Bill Now

Farmers encouraged to engage

It seems like yesterday we were in the thick of the battle that created the Agriculture Act of 2014, but it’s already time to do it again. The 2014 bill doesn’t expire until the end of 2018, but Congressional leaders are already talking about starting the hearings process early in 2017. Their reasoning is three-fold: start early in order to finish on time; the farm economy has changed dramatically since the 2014 bill was passed; and there are some complex problems with the 2014 bill that need to be addressed.

The 2014 bill was written in a time of high commodity prices and large budget deficits. The redesigned bill cut $16.5 billion out of the baseline over 10 years. Of course, the farm bill is really a food bill, as nearly 80 percent of total expenses are for nutrition programs like SNAP (food stamps). Crop insurance accounts for the next largest piece of the pie at 9 percent, and conservation and commodity programs make up the rest at 6 percent and 5 percent, respectively.

The 2014 bill continued the trend of shifting funding to crop insurance. Farmers must share in the cost of premiums in order to participate. Thanks to increases in premium subsidy levels during the past few farm bills, 90 percent of eligible acres are now covered by some level of crop insurance. It’s these increases in subsidy levels and the related increases in outlays that are targets for groups opposing farm programs.

Commodity programs under the 2014 bill moved away from direct payments in favor of giving farmers the choice between two risk management programs. The shallow-loss Agriculture Risk Coverage (ARC) program protects against revenue losses. And the Price Loss Coverage (PLC) program triggers when prices fall below a set reference price. It was a one-time program choice that locked farmers in through the end of the bill.

Farmers and Congressional leaders have already identified areas of the 2014 bill that aren’t working as intended.

Those choosing ARC also had to decide whether to use the county crop yield or use their proven individual crop yield but cut the percentage of their yield that was covered. More than 90 percent of farmers opting for ARC chose the county option. The program, however, has seen wide discrepancies in payment rates to farmers across county lines. Many want a program redesign to make it more equitable and effective.

After losing a hard-fought battle in the World Trade Organization with Brazil, cotton was eliminated from traditional commodity programs. However, cotton fiber is still eligible for marketing loans and marketing loan gains. A risk management program called the Stacked Income Protection Program (STAX) was crafted to help cotton farmers manage risk. However, adoption of STAX has been slow, and the cotton industry has gone back to the drawing board to find a more effective way to protect cotton farmers from market fluctuations.

The Dairy Margin Protection Plan (MPP) is a voluntary risk management program to indemnify producers when the national income over feed ratio falls below the selected coverage level. The program requires farmers pay premiums for coverage. MPP has collected nearly $100 million in farmer premiums and administrative fees during the first 18 months of the program. Indemnities and payments have been approximately $12 million for the same time period.

Since the farm bill was written, net farm income has declined $52 billion annually according to USDA. At the same time, the farm bill baseline has declined significantly. Now is the time for the farming community to take a hard look at the present bill and prioritize its needs for future programs.

Read the full article at http://epubs.democratprinting.com/article/Policy+Update/2706411/382695/article.html.

Previous Page  Next Page


Publication List
Using a screen reader? Click Here