Q&A: This Is Not Your Father's Farm Bill

Farm bill Q&A covers crop insurance and conservation compliance

Published on: Feb 10, 2014

The new farm bill was finally passed by Congress and signed into law by President Obama on Friday. It has a number of new farm program provisions, including changes to the federal crop insurance offerings.

Even though the bill is now law, the process of finalizing the law's rules and regulations is far from complete. USDA officials are analyzing and interpreting what is in the bill, and will write the rules that determine how the new farm programs will be carried out.

Steve Johnson, an Iowa State University Extension farm management specialist, explains some of the elements in the law and answers a few frequently asked questions below.

Q: What are some of the biggest changes in the farm bill?

AGRICULTURAL ACT OF 2014: Farm bill Q&A covers crop insurance and conservation compliance.
AGRICULTURAL ACT OF 2014: Farm bill Q&A covers crop insurance and conservation compliance.

A: The $956 billion bill, which is a five-year farm bill, immediately eliminates direct payments for all commodities except cotton. Instead of direct payments, the new bill offers farmers an enhanced farm financial safety net that includes crop insurance revisions and higher base-price levels (the crop price at which farmers could claim payment for losses).

As part of the bill, farmers will now have the opportunity to choose between Agricultural Risk Coverage or Price Loss Coverage depending on which program best suits individual farms. Along with that decision are options for varying degrees of crop insurance coverage and other supplemental programs to protect farmers from yield and revenue loss.

One thing the new farm bill does is greatly increase the options a farmer has. Farmers will have several programs to choose and use. They'll have to make some decisions and make them for a five-year timeframe, the length of the new bill. Farmers will have to look at a lot of information about their farms and the different options and think about which farm program choices will pay the best return over the next five years.

Some of what will help farmers decide is their experience with crop insurance. Because farmers, especially in the Midwest, make complex decisions each year about crop coverage, they'll have some familiarity with the process, even with the new options. As USDA officials work through the rule writing, it's important for farmers and others affected by this new farm bill to keep a close eye on how the various components develop.

"Although we've been watching this farm bill develop for the past few years, we all need to realize this process is still on-going," says Johnson. "If you see how a regulation or a rule for a farm program may affect you adversely, you can participate and let USDA know. If you are impacted by the farm bill, you need to follow the rulemaking and try to understand what your options are and how your farm program decisions on your farm will be affected."