Monday, November 25, 2013
A Comprehensive Farm Bill Will Provide A Safety Net For Producers To Manage Risk
Washington--The USDA released a report on the benefits of passing a Farm Bill on Thursday.
The Farm Bill represents a key opportunity to further reform and improve farm programs to provide assistance to those that need it and to restore much needed disaster funding for livestock producers, while also providing deficit reduction for the American taxpayer.
While crop insurance is a critical component of the farm safety net, the Government's cost of providing crop insurance has increased dramatically over the past decade as the subsidies for crop insurance and the prices of commodities have increased.
In 2012, farmers paid about $4.3 billion to insure almost 282 million acres through the Federal crop insurance program.The Farm Bill also is an opportunity to reform adjusted gross income limit provisions to prevent producers that do not need assistance from receiving aid.
Due to Congressional inaction on the Farm Bill, some of the programs that could have helped mitigate the impacts of the severe drought conditions in 2012 and more recently during the South Dakota blizzard this past October are expired or currently have no funding – particularly safety net programs for livestock producers.
In 2012, had Congress acted to reauthorize the Farm Bill, the Livestock Forage Program (LFP) payments alone could have totaled between $500-$600 million, double the 2011 levels. A new Farm Bill would retroactively extend LFP payments to producers to cover those losses.
Continued delay of the Farm Bill not only leaves these producers on their own to cover their losses from the 2012 drought, but also renders essential programs unavailable to USDA in its work to provide assistance for new disasters, such as the October blizzard in South Dakota, Nebraska, North Dakota and Wyoming, which killed a large number of livestock.
Because Congress has not acted to reauthorize the Farm Bill, USDA is unable to assist producers and can only ask producers to keep accurate records for when a Farm Bill reauthorizes the LIP program. Lack of action on a Farm Bill ultimately would result in the U.S. reverting back to dairy policy from the New Deal era, leading to the potential for milk prices to double for domestic consumers. This also would carry significant cost for the federal government of at least $12 billion per year.
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