Standard Operating Procedure for the Farm Bill

At this point producers really don't know what to expect from next farm legislation.

Published on: Jan 12, 2012

If the super committee had done what it was charged with doing, coming up with $1.2 trillion in spending cuts, University of Illinois Ag Policy Specialist Nick Paulson says the writing of the next farm bill would have been much easier.

"Now we are in a position that we really don't know what to expect in the farm bill," Paulson said. "The process will extend into this year and kind of go through a more standard procedure for that."

The standard-operating-procedure is for the divergent farm organizations to propose legislative changes that might benefit their particular type of farm and political leaning. Paulson says despite the differences there is some very clear direction for the future of the farm programs.

"The general themes out of that are that most of the commodity programs that we currently have are on the way out," Paulson said. "Specifically the direct payment program will probably be eliminated or significantly reduced. Kind of the shift or the direction that most proposals seem to be heading is going toward some kind of revenue based program as being kind of the commodity that will be available to grain producers."

Those revenue-based programs act to protect farmer income. Paulson says the proposals are distinctly divided. Some would like a deep loss program, while others want to cover losses that occur more frequently, or what is termed as a shallow income loss. The American Farm Bureau Federation put together a deep loss proposal.

"The revenue guarantee would be based on either county or crop reporting district yields and then using harvest insurance prices, the same type of harvest insurance prices used in insurance programs," Paulson said. "That would pay out when revenue fell below some percentage based on those yields and prices."

The shallow loss proposals, one from a group of Midwestern congressman and something similar from the National Corn Growers Association, would look similar to the current ACRE program, but limit payouts.

Congress should take up the farm bill this spring, and with the Presidential election coming in November if history is a guide, it will be completed by early summer.