The reference prices are actually higher in the new bill, but many farmers still aren’t happy with the Farm Bureau for supporting the end of direct payments, as politically untenable as the payments might have been.
“Basically, unless the wheels fall off, we’re not going to get anywhere near what the direct payments were,” said Kevin Haney, a Fulton County dairy farmer, said Thursday. “At this point, they’re talking about a Band-Aid for a slit throat.”
The other new program is called Agricultural Risk Coverage, which makes up a certain percentage of farm revenues if they fall below historic benchmarks, either for an individual farm operation, or for all the farms in a county. The program is meant to cover shallow losses – up to 10 percent – which wouldn’t normally be covered by crop insurance.
Taxpayers are expected to save about $16.6 billion over the next 10 years from the switch away from direct payments, a factor which weighed heavily the final passage of the bill.
Matt Erickson, an America Farm Bureau Federation economist, said the reference prices were negotiated, as part of the overall farm bill package.
“This was probably done with [Congressional Budget Office] constraints in place,” Erickson said, adding that every bill now has to be “scored,” to indicate what impact it will have on the national deficit.
“We have over $17.3 trillion in debt, and the budget impacts are real,” Erickson said. “This was a very difficult farm bill to get done.”
Farmers will have most of this year to decide which program — ARC or PLC — they’ll choose. The purpose of Thursday’s meetings, held in Rochester and Indianapolis, with a third meeting for southern Indiana farmers Friday, was to give farmers more information on the new programs.
Once a farmer chooses a program, he or she will be locked in for at least the next five years, adding a bit of pressure to the decision.