What is in this article?:
- Farm bills should be designed for times of low prices
- Reference price
- Farmers will operate under the 2008 law through 2013.
- DCP and ACRE remain intact, for now.
- More budget cuts are likely.
Among all the unanswered questions about the farm bill, one thing is certain: farmers will operate under the 2008 law through 2013. That means they get a direct payment on eligible crops.
Farmers have an opportunity to sign up for the direct and countercyclical payment (DCP) or the Average Crop Revenue Election (ACRE) program beginning Feb. 19. Signup for ACRE ends June 3, and DCP signup ends Aug. 2.
But a lot remains uncertain. For one, how much will budget cuts take from farm support programs?
Joe Outlaw, professor and Extension economist and co-director of the Texas A&M Agriculture Food and Policy Center (AFPC) at College Station, believes the direct payment level, after a round of expected March budget cuts, will be about 85 percent of what farmers get now.
He also thinks the farm bill that is currently not being discussed, but exists in both a Senate and House version, most likely will be the last of its kind. Future farm programs and the safety nets that have been part and parcel of farm law for decades will become insurance-based and the safety net will be smaller, “but manageable,” he says.
Outlaw discussed farm policy during both the grain and cotton commodity sessions of the Blackland Income Growth conference at Waco.
The farm bill extension Congress agreed on back in January, primarily to prevent milk prices from spiking, was passed “with language that did not come from the ag committees,” Outlaw says.
And many programs that were included in the 2008 bill have not been funded in the extension. They include organics, specialty crops, beginning farmer and rancher programs, Supplemental Revenue Assistance Payments (SURE), as well as funding for several bio-energy programs.
Farmers will need to take a close look at the ACRE program to see how it compares with DCP, Outlaw says. “We have a lot of questions about how it will work this time. Farmers should look at the lower level of payment with ACRE and evaluate the advantages. For cotton, with a support price of about 71 cents a pound, farmers need to consider the 20 percent loss of the direct payment with ACRE and ask if the ACRE benefits can make that up. We can help farmers determine the best option.”
The AFPC website, http://afpc.tamu.edu/, is a good starting point for assistance, but Outlaw says if farmers need further help, staff at the AFPC will walk them through the process of deciding best options for specific farms.
He has concern about across-the-board cuts in farm programs. “Policy decisions should help farmers stay in business,” he says. “There is no way to make producers better off by cutting billions of dollars out of support every year.”
Farm bills “are not developed for good times, like now when prices are good — we need to know how they will work when prices are low.”