The budget deficit and budget levels for ag spending are leading the discussion on this year’s authorization of farm programs, according to Mary Kay Thatcher, Senior Director, Congressional Relations, American Farm Bureau Federation. Thatcher made her comments on Sunday, January 8, during the annual convention of AFBF in Honolulu, Hawaii. But she cautioned her comments were only offered as background as voting delegates will decide Tuesday on official Farm Bureau policy.
She pointed out the failure of the so called “super committee’ to come up with cuts totally 2.7% of USDA budget means Congress will now decide. She also noted “it’s really more of a food bill than a farm bill. Three dollars of every $4 goes to for nutrition.” She explained that 9% of spending is for crop insurance, 7% for conservation, 7% for commodities and 76% for nutrition.
“The next farm bill will probably not include direct payments, ACRE or SURE programs but there will be higher target prices and crop insurance,” she continued. “Without direct payments, crop insurance is the most important safety net.”
She also pointed out Farm Bureau “is not excited about the shallow loss program” where the farmer is responsible for the first 13% of revenue loss. John Anderson, AFBF senior economist, added that the 2012 Farm Bill will likely address what are referred to as deep crop losses versus shallow losses. This would be done through the Systemic Risk Reduction Program, or SRRP, which Farm Bureau sent to Congress in October.
“SRRP integrates with crop insurance purchased to permit highly customized risk protection,” said Anderson.
AFBF’s SRRP would provide farmers “area-based coverage” that would be similar, but not identical to core-type policies offered today, but at a minimal charge to the farmer. County level yield data would be used for the area trigger, but where data is limited, a crop reporting district or other geographical region would be used.
One of the major differences between current policies and the SRRP is the price used to determine trigger levels would be based on a three-year average, or a five-year Olympic average, depending on budget considerations.
Proposed SRERP coverage levels would likely be in the 70-805 range, with the exact level of coverage determined by budgetary guidelines.