The nearly $1 trillion farm bill is currently awaiting President Obama’s signature, but a Purdue Extension agricultural economist says there is much work to be done interpreting and finalizing the specifics of the law. Roman Keeney says one thing is clear with this farm bill. There will be an increase in farmer options.
“As expected, direct payments have been eliminated. That program no longer exists outside of the cotton, and farmers now have a suite of programs. They’ll have to make some decisions and they’ll have to make those decisions for a 5 year time frame. So they’re going to have to look at a lot of information about their farms and the different options and think about which policy options will pay them best over the next five years.”
He added a lot of the programs actually work like insurance, “so farmers will have that to rely on. Every year farmers, especially in the Midwest, make difficult and complicated decisions about which insurance products they’re going to buy, so they’ll have some familiarity going into the process just based off their experience with insurance.”
As part of the bill, farmers will now have the opportunity to choose between Agricultural Risk Coverage (ARC) or Price Loss Coverage (PLC), depending on which program best suits individual farms. Along with that decision will come options for varying degrees of crop insurance coverage and other supplemental programs to protect farmers from yield and revenue losses.
As USDA and others disseminate the specifics of the bill, Keeney encourages farmers to pay attention to that process.
“There will be ways for them to participate, and they will have to start engaging. If you’re impacted by the farm bill, you need to follow it and try to understand what your options are and how your decisions will be affected by this.”
Keeney says through all the time it took and changes made the farm bill looks a lot like it has in the past.
“We spent most of the money that we would normally spend. It’s going to cost about $95 billion a year. About 75 percent of that will be going to nutrition programs, about 15 percent for commodities and the rest spread out between conservation and other risk programs, specialty crops, and of course university research.”
Source: Purdue Ag Communications