New report highlights economics of passing a farm bill
The Farm Bill represents a key opportunity to further reform and improve farm programs to provide assistance to those that need it and to restore much needed disaster funding for livestock producers, while also providing deficit reduction for the American taxpayer.
While crop insurance is a critical component of the farm safety net, the Government's cost of providing crop insurance has increased dramatically over the past decade as the subsidies for crop insurance and the prices of commodities have increased.
- In 2012, farmers paid about $4.3 billion to insure almost 282 million acres through the Federal crop insurance program.
- Elimination of direct farm subsidies, as proposed by the Administration, would save taxpayers $5 billion per year.
- The Farm Bill also is an opportunity to reform adjusted gross income limit provisions to prevent producers that do not need assistance from receiving aid.
Due to Congressional inaction on the Farm Bill, some of the programs that could have helped mitigate the impacts of the severe drought conditions in 2012 and more recently during the South Dakota blizzard this past October are expired or currently have no funding – particularly safety net programs for livestock producers.
- In 2012, had Congress acted to reauthorize the Farm Bill, the Livestock Forage Program (LFP) payments alone could have totaled between $500-$600 million, double the 2011 levels. A new Farm Bill would retroactively extend LFP payments to producers to cover those losses.
- Continued delay of the Farm Bill not only leaves these producers on their own to cover their losses from the 2012 drought, but also renders essential programs unavailable to USDA in its work to provide assistance for new disasters, such as the October blizzard in South Dakota, Nebraska, North Dakota and Wyoming, which killed a large number of livestock.
- Because Congress has not acted to reauthorize the Farm Bill, USDA is unable to assist producers and can only ask producers to keep accurate records for when a Farm Bill reauthorizes the LIP program.
Lack of action on a Farm Bill ultimately would result in the U.S. reverting back to dairy policy from the New Deal era, leading to the potential for milk prices to double for domestic consumers. This also would carry significant cost for the federal government of at least $12 billion per year.
A Comprehensive Farm Bill Will Enhance Conservation
- The future of food and fiber production in the U.S. depends upon the availability of productive farm and ranch land and abundance of healthy natural resources. Towards this end, the Farm Bill represents the nation's largest investment supporting the voluntary and successful conservation, restoration and management of America's working lands.
- Conservation compliance and sound conservation practices to commodity programs has been a successful tool in reducing soil erosion by more than 40 percent and preventing impairment of natural resources.
- A comprehensive Farm Bill will improve, simplify, and strengthen key land conservation, protection, and wildlife habitat enhancement. The Farm Bill authorizes or makes changes to:
- Working-land programs that provide technical and financial assistance to farmers who install or maintain conservation practices on land in production. These programs have enrolled 60 million acres of agricultural and non-industrial private forestland (through the Conservation Stewardship Program) and obligated nearly $1 billion in financial assistance for over 44,000 active and completed contracts (Environmental Quality Incentives Program).
- Comprehensive conservation and habitat programs that help farmers, ranchers and private landowners protect and conserve environmentally sensitive land and produce wildlife habitat from agricultural production in exchange for rental or easement payments.
- Agricultural land acquisition programs like the Farm and Ranch Lands Protection Program, which provide assistance to cooperating partners to purchase land rights, helping sustain the ranching and farming way of life and their surrounding rural communities.
- Linking crop insurance participation to conservation compliance, as supported by the Administration, could bring an additional 17 million acres into compliance practices, and ensure an additional 141 million acres remain in a conservation practices.
- A comprehensive Farm Bill also supports the restoration of our nation's forests and ecosystems, for example by authorizing critical forest management tools, and providing funding for local governments to install high-efficiency, biomass-fueled heating systems that reduce energy costs, support rural income and employment opportunities, and address the risks of severe wildfire.
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