Farm Bill Proposals Offer ‘Evolutionary Change’ In Safety Net

Farm Bill

After analyzing 10 major proposals circulating for the 2012 Farm Bill as of October, an Ohio State University farm policy expert said the proposals reflect a striking commonality in the philosophical changes underlying the debate over federal farm programs.

“I’m not saying there aren’t differences, but if you look at the proposals in their entirety, there is a large amount of overlap,” said Carl Zulauf, a professor with the Department of Agricultural, Environmental and Development Economics and the Ohio Agricultural Research and Development Center. “If you focus on the differences, you miss what is a striking amount of similarities in the direction of policy change.”

Zulauf evaluated 10 Farm Bill proposals, looking at those similarities and differences using information from the Congressional Research Service and documents publicly released by the proposal’s author.

All but one of the proposals included a shallow loss component, addressed multiple-year risk, were oriented to revenue, discussed the need for coordination of the program with crop insurance, had an individual crop orientation, and required a loss for a farm to receive payments. Eight of the proposals had no fixed price or revenue benchmark; in other words, the benchmark changed with market conditions.

“As a group, the proposals represent a significant evolutionary change in the discussion of a risk management farm safety net,” he said, “a step that began with the introduction of the Average Crop Revenue Election (ACRE) program in the 2008 Farm Bill.”

The ACRE program was a concept rooted in Zulauf’s policy research at Ohio State, and advanced through the work of agricultural policy groups like the Ohio and National Corn Growers Associations, among others.

“As you look at the proposals as a group, you see what a significant departure these proposals are taking even relative to the debate over the 2008 Farm Bill,” Zulauf said. “In that debate you heard the word shallow loss, but it wasn’t very common. There was a big debate over the ACRE program being a revenue program instead of a price program.”

He stressed that the 2012 Farm Bill is far from written, and that the differences among the proposals are important.

One of the key differences among the proposals is what Zulauf referred to as the “siting” of the revenue program, namely should it be based at the farm level, at the country, at the crop reporting district, or at the state level.

“Another disagreement, though not as large as with the geographical site of the program, is the delivery of the revenue program,” he explained. “Three of the proposals would deliver the program through crop insurance, while six would use another approach.”

He also said that seven of the 10 proposals would do away with direct payments, and one of the proposals that would keep direct payments would reduce them by 50 percent.

While it might be easy to point to a tight federal budget as the key driver in the current Farm Bill debate, Zulauf said a narrow focus on cost ignores the importance of the underlying philosophical changes in the debate.

“Since at least the major changes in the 1996 Farm Bill, there has been a very intense discussion about what the objective of farm programs should be,” he said. “I would never say costs are not an important factor in this debate, but there is a really substantive debate going on about what is an appropriate, fair safety net for U.S. agriculture in the 21st century.”

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