With a resolution to the nation’s financial issues, Congress can return to other business, with conclusion of the Farm Bill at the top of the agenda for 2 million farmers and 18% of the U.S. GDP. Early indications are that the House and Senate members appointed to the Conference Committee will meet next week to begin reconciliation of the two separate proposals. Their staff members have been trying to familiarize themselves and their Members with the details, in preparation for the debate over farm policy, structure of the safety net, payment limitations, crop insurance conservation funding, and nutrition funding, which is the major part of the Farm Bill budget. If you want the details, they follow.
Following is a summary of the provisions taken from the analysis created by the Food and Agriculture Policy Research Institute (FAPRI) at the University of Missouri.
The Safety Net combinations:
With the demise of ACRE and the direct payment programs, the 2013 Farm Bill returns to a pair of programs in each of the two versions:
Senate: Adverse Market Payments (AMPs), the Agriculture Risk Coverage (ARC) program, and the Supplemental Coverage Option (SCO).
House: Price Loss Coverage (PLC), Revenue Loss Coverage (RLC) programs, as well as a slightly different version of SCO, in the House bill.
The Senate programs.
Adverse Market Payment establishes a reference price that is 55 percent of the 5-year Olympic average U.S. farm price. AMP payment yields are adjusted for 2009 to 2012 per planted acre. The program pays on 85% of those base acres. The payment is made about 12 months after the crop is harvested.
The Agriculture Risk Coverage program would make payments when per-acre revenues for a particular crop fall below a trigger level. Producers must choose between two options. One would make payments based on calculations that use county-level yields and the other would use farm-level yields. Those who choose the county-based option can receive payments on 80 percent of planted acres, while those who choose the farm-based option can receive payments on 65 percent of planted acres. Under either option, 45 percent of prevented planted acres are eligible for payment. Total acres are used, based on 2009 to 2012 acres on a farm. A benchmark payment rate of revenue is determined by multiplying a 5-year Olympic average of U.S. season-average market prices by a 5-year Olympic average of yields per planted acre. Payments are made a year after the harvest and cover losses between 12% and 22% of the benchmark. A producer can only get a maximum $50,000 revenue from the 2 payments, if they have an Adjusted Gross Income under $750,000.