Posted March 10, 2015
The new
farm programs for grain and oilseed farmers will pay them up to $7 billion
annually over the next few years, according to an Agri-Pulse available here.
Politico also published an article available here.
The Congressional
Budget Office and the University of Missouri's Food
and Agriculture Policy Research Institute (FAPRI) that provides analysis to
the congressional agriculture committees prepared the forecasts.
Corn
growers will receive the lion's share of payments, due to the sharp decline in
market prices over the past two years.
CBO
projects that total payments to corn and soybean producers from Agricultural Risk
Coverage alone will be $3.37 billion in fiscal 2017, according to Politico.
With corn
and soybeans enjoying record prices while the rest of the country struggled
under the Great Recession, the House and Senate Agriculture Committees developed
two substitute programs more sensitive to real needs and market changes.
ARC had an
early-in, early-out approach, intended to buy time for a farmer to adjust to
markets falling. The second program, Price Loss Coverage or PLC, followed the
more traditional target price approach, slower to trigger but then defining a
more permanent floor for producers.
Farmers have until the end of this month to sign up for one of the programs, according to Agri-Pulse.
Sixty
percent of wheat growers nationwide are expected to choose PLC, while most
soybean growers will choose ARC.
After
2018, ARC payments will decline dramatically as the five-year moving average
begins to reflect the drop in commodity prices. FAPRI economists estimate that
ARC payments will drop from $3.1 billion in fiscal 2018 to $1.8 billion in 2019
and then to $1.2 billion the following year.
For more information on commodity programs, please visit the
National Agricultural Law Center’s website here.
