What is in this article?:
• Regardless of when the farm bill is finished, there will be a big shift from commodity program tools for managing risks to insurance tools.
• Insurance tools do not have a floor. It’s not a huge problem, but it’s different from what producers and lenders are accustomed to. There will be a huge role for educators.
While a new farm bill remains in limbo until at least after the November elections, some conclusions can be made — based on the current Senate and House versions — about how the final legislation might look.
“Regardless of when the farm bill is finished, there will be a big shift from commodity program tools for managing risks to insurance tools,” says Joe Outlaw, Texas A&M University Extension economist and co-director of the Agricultural Food and Policy Center.
“Insurance tools do not have a floor. It’s not a huge problem, but it’s different from what producers and lenders are accustomed to. There will be a huge role for educators.”
Outlaw, along with other economists, discussed the farm bill during the recent Southern Region Agricultural Outlook Conference, held Sept. 24-26 in Atlanta.
Prior to the 2008 farm bill expiring on Sept. 30, the House and Senate recessed, leaving several options.
During a lame-duck session after the election, both houses of Congress could consider a full, five-year bill; a three-month extension of the 2008 law; or a one-year extension of the 2008 law. The Senate has already passed its version of a new farm bill but the House’s version never came up for a floor vote.
(For complete coverage of 2012 farm bill developments, click here).
There definitely will be a big shift from commodity programs to insurance programs, says Outlaw. “I firmly believe we’ll have limitations on insurance. It doesn’t make sense to limit the payout, but I fully expect the subsidies to be cut back. It’s a challenging time. My expectation is that they will put the farm bill within some other bill, and it’ll be done sometime after the election. I don’t see it dragging out too much farther,” he says.
The version of the farm bill approved by the House Committee on Agriculture offers choices to producers, and Outlaw believes the final legislation will have that feature.