As farmers worked hard to plant corn the middle of May, Congress was able to show some significant progress on the 2013 Farm Bill.
On May 14, the Senate Agriculture Committee approved a five-year Farm Bill. The bill would eliminate $5 billion in direct farm payments to farmers.
The Senate bill calls for a total of roughly $2.4 billion a year in cuts, while a House version passed May 15 would save $4 billion annually. The Senate Farm Bill:
•Eliminates direct payments. Farmers will no longer receive payments when prices are rising and support is not needed. Ending these subsidies and creating responsible risk management is a major shift in American farm policy
•Caps remaining risk management support at $50,000 per person
Ends farm payments to non-farmers. This bill closes the "management loophole," through which people who were not actually farming — in many cases not even setting foot on the farm — were designated as farm "managers" so they could receive farm payments
•Requires conservation compliance for crop insurance, which will protect both the farm safety net and the natural resources that our nation's farmers will need for generations to come
•Strengthens crop insurance and expands access so farmers are not wiped out by bad weather
•Includes disaster relief for producers hurt by drought, spring freeze, and other weather disasters
•Reforming farm programs, ending direct payments and implementing market-oriented programs to help farmers manage risk saves $16 billion dollars ($12 billion in the bill, $4 billion through sequestration)
Both the Senate Farm Bill and the House Farm Bill includes the Dairy Security Act which through its margin protection component, safeguards equity, which is valuable to bankers and ag lenders and encourages them to extend loans to producers.