Farmers Dismayed As New Farm Bill Dumps Direct Payments

by Rick Fahr  on Monday, Aug. 25, 2014 12:00 am  

Rick Crawford

The threatened end of cash subsidies to the nation’s row crop farmers dates back through at least the last two iterations of national agriculture policy legislation.

That threat became real, though, earlier this year when Congress passed the newest Farm Bill.

The measure eliminates direct payments, money doled out simply as a revenue enhancement based on a producer’s acreage.

In Arkansas, direct payments accounted for $244 million annually.

How will the state’s agriculture economy handle that fiscal blow?

“We don’t know yet, but if the prices go down any, Arkansas agriculture is going to be in trouble,” said Tony Schwarz, of Weiner, whose family has farmed Poinsett County land for generations. “If beans go to $10 a bushel and rice goes to $5, it’s going to be hard to pay out your crop loan. It really is.”

The bill, which governs agriculture policy on a multiyear basis, consists of several components. The federal food stamp program and other nutrition programs account for 80 percent of the legislation’s spending. Other components — “titles” in legislative language — deal with row-crop farming, regulations for livestock and poultry operations and conservation rules.

The Farm Bill is umbrella legislation but it does treat producers differently based on the crops they grow. Cotton farmers work under a different set of rules, for example, than rice growers.

In the give-and-take of negotiating the final bill, members of Congress agreed to replace direct payments with two programs designed to help farmers manage risk, while also enhancing crop insurance programs. Farmers can opt into one of the programs, or not, but they can only participate in one at a time for the duration of the five-year legislation.

Ben Noble, president of the Arkansas Rice Federation, predicted that the state’s farmers will likely choose to participate in the program that focuses on commodity pricing.

“Farmers have the option of opting into programs that best meet their specific needs with emphasis on price protection and yield protection,” Noble said. “Many row crop producers in Arkansas are expected to enroll in the Price Loss Coverage program that sets target pricing and pays farmers if prices fall. Many program options exist and farmers will likely rely on software under development that will assist them in analyzing the best approach for their specific farm.”

Farm advocates in the state note that the yield-loss program is more likely to benefit producers in Missouri, Iowa, Illinois and Indiana, where few row-crop acres have irrigation systems. Most Arkansas farmers irrigate their soybeans, corn and cotton crops.



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