The Aggregate Risk and Revenue Management program, or ARRM Farm Bill proposal has been introduced by a bipartisan group of farm state Senators including Senator John Thune, R-S.D. So far it's getting positive initial reaction among the agricultural community.
Thune says it builds on the Average Crop Revenue Election and the crop insurance program to provide a safety net in crop years where prices are low. However, he says it's less complicated and less restrictive than either ACRE or SURE.
"It does away with direct payments, it does away with counter-cyclical payments, and it sort of reforms the ACRE program and acts as a compliment to crop insurance," Thune said. "So for example if a farmer takes a crop insurance program, this would allow them to fill the gap between what crop insurance covers and what their 90% of revenue would be in any given year."
Thune says the ARRM program is also more responsive to the market because it uses crop reporting districts and planted acres to figure payments rather than base acres.
"It uses the crop insurance average price," Thune said. "We think it is a much more responsive way of dealing with this than some of the other programs. Some of the other programs use dated information, base acres as opposed to actual planted acres and this is more reflective of what prices are at the time as well."
Thune says the ARRM program is also picking up support in Congress because it's fiscally responsible.
"We know the budgetary constraints are going to put a lot of pressure on the Farm Bill debate this next year and that we're going to have to try and find ways to be more efficient and get more bang for the the buck," Thune says. "This saves about $20 billion off the baseline, and that doesn't include the permanent disaster program that doesn't have a baseline after 2012. We think it is a good approach in that it probably the most efficient way to provide a safety net for agriculture today."
Thune is co-sponsoring the bill with Senators Richard Lugar, R-Ind.,Dick Durbin, D-Ill., and Sherrod Brown, D-Ohio.