What is in this article?:
- Producers expect direct payments to be eliminated and replaced by some form of revenue assurance program.
- Crop insurance will become a more integral part of their risk management plans.
- Details of proposals bear close scrutiny.
He said for farmers who buy only basic insurance coverage, “the revenue gap will be even larger. Crop insurance does a wonderful job.” Still, he said, “Texas will have a big acreage that’s not protected.”
Outlaw said a lot of proposals are being considered. “Almost every commodity group has a plan. The ag committee will develop its own.”
Most proposals under review “protect against shallow losses only. They will pay more frequently but not very large amounts. Most have a five-year moving Olympic average benchmark. Also, they include a hidden deductible (doesn’t consider past government payments in the benchmark).”
Outlaw said proposals offer different levels of buy-up coverage by crop and by region that will leave a coverage gap for some crops and in some areas.
“Most pay on planted acres and will be much more coupled than the current program. This will result in a baseline spending shift away from wheat, rice, cotton and grain sorghum.”
Commodity organizations would prefer to maintain something as close to the current farm program as possible, but understand that economic reality will spur significant changes.
Some organization representatives expressed concern about farm income being compromised and farm stability made more vulnerable without some minimal, specified pricing included in the farm bill.