The Farm Bill that was passed in February is the result of three and a half years of Congressional debate about what would provide the best safety net for agricultural producers going forward.
There were some major changes from the previous program. Joe Outlaw is a Texas A&M Agrilife economist.
“The support programs that help row crop farmers and ranchers, those programs are basically intact, but they’ve been recast in a different vein. In the past, we had some programs that helped if things went bad, meaning when prices or yields were bad, we had some programs that would kick in, but we also had a few programs, one in particular, called the direct payments, it would come regardless every year, and it was very well thought of in the regard of providing certainty.”
Outlaw spent a lot of time in Washington explaining what was in the new bill to congressmen.
“If you had the support coming from the government that was going to help you get production loans, you could show that as collateral for your loans. That is gone. When we go forward and we have any kind of disaster in the next farm bill, there’s none of that certainty support. It is all, everything is going to be contingent on having a loss, whether price loss, yield loss, or both.”
Most of the safety net in the new farm bill is provided through insurance programs and there has to be some kind of loss for there to be a payment.
“So in this country, while you can replace your house, you can never on the crop side, on the crop policies, you’re going to be getting a portion of it, and the highest portion you could ever get is eighty-five percent. So when you hear people say someone farms for the government, or there’s an insurance farmer, or however you want to call it, it couldn’t be farther from the truth. Nobody’s putting all this money in to put in a crop, and then they’re going to walk away hoping they get eighty-five percent of what they really needed to make money to make a profit.”