Farm bill conference issues
Both the House and Senate farm bills replace the current milk safety net programs with a subsidized insurance program for the margin between milk prices and feed prices. The Senate bill has a provision that seeks to control the supply of milk when the margin declines below a specified value. The House bill does not contain a supply management provision. The bills also differ on the schedule of farm-paid insurance premiums, with the House bill's schedule being more favorable for smaller milk producers. The latter difference reflects long standing discussions over whether the proposed milk margin program favors large dairy farms.
Crop Insurance and Conservation Compliance
The Senate bill attaches conservation compliance to Federal crop insurance. To qualify for the federal subsidy on crop insurance, a farm must meet the highly erodible land, sodbuster, and wetland conservation provisions that are currently attached to Title 1 commodity programs. The House bill does not attach conservation compliance to Federal crop insurance. Issues that underpin this difference include consistency between Title 1 and crop insurance programs, whether this provision is needed when most, but not all, buyers of crop insurance are in Title 1 programs, and, more broadly, what should society reasonably expect from farms in return for subsidizing crop insurance premiums.
Crop Insurance Subsidy Limit
The Senate bill contains a 15 percentage point reduction in the crop insurance premium subsidy for entities with an average adjusted gross income exceeding $750,000, but delays implementation for 1 year pending a study to assess the impact this limit will have on the program, including premiums, as well as analysis of attempts to circumvent the limit. The House bill contains no such provision. This difference reflects an intense debate over whether insurance subsidy levels should be the same for small, medium, and large farms. In other words, should the public's subsidy level take into account the ability to pay for insurance based on the farm's ability to generate income?
Payment Limits on Title 1 Crop Safety Net Programs
The Senate and House bills limit marketing loan gains and price deficiency payments to $75,000 per payment entity and limit payments by other Title 1 crop programs to $50,000 per payment entity. The Senate bill has a separate payment limit that applies only to peanut program payments; the House bill does not have a separate payment limit for peanuts. Payments are denied to entities with an aggregate gross income (AGI) over 3 years that exceeds $750,000 in the Senate bill and $950,000 in the House bill. Differences exist between the two bills in the programs to which the AGI limit applies, with the House bill applying the limit to a broader range of programs, including conservation programs. Last, the Senate bill, but not the House bill, contains a provision that redefines active involvement in farming. This provision's objective is to tighten and more consistently enforce who is considered to be actively involved in farming. The existence of these payment limit differences reflect an on-going debate over whether public support to farms should be conditioned on a payment entity's level of income?
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