Steve Estes Jones County Extension Agent shared this with me. He said that he ...works with a committee of producers here in Jones county that provides on farm data to the AFPC for Farm Bill analysis. We are one of 12 counties in the state, and 66 in the nation that does this. The AFPC then analyzes the data and provides it to both the House and Senate Ag. Committees. In the report, you will find how each version would affect Jones county and other representative “farms” across the country. Here is the report summary: Economic Impacts of the Safety Net Provisions in the Senate (S. 954) and House (H.R. 2642) 2013 Farm Bills on AFPC’s Representative Crop Farms The Senate and House Farm Bill Proposals The US Senate and House farm bill packages both cover the 2014 - 2018 time period and are similar in a number of respects and different in others. The primary safety net provi- sions in the Senate bill are a shallow loss revenue protection plan called agriculture risk coverage (ARC). It is combined with a reference price triggered income support program named adverse market payments (AMP). There is also an ar- ea-wide supplemental crop insurance option referred to as the supplemental coverage option (SCO), and the stacked income protection plan for producers of upland cotton (STAX). The Senate ARC provisions allow producers to choose between coverage at the county level or individual producer level. This is described as a one-time irrevocable decision with the county option paying on more acres than the individual level coverage option. Both county and individual coverage ARC options are eligible for SCO coverage with a coverage band from 78% down to their individual insurance coverage level. In addition, the Senate farm bill package allows produc- ers to opt out of ARC completely. If they choose this option, producers would have AMP and the option of purchasing SCO coverage but with a wider SCO coverage band (from 90% percent down to their individual insurance coverage level rather than 78% down to their individual insurance coverage level). The House Title I provisions offer producers a choice of price or revenue based risk protection. With this election, producers have a choice of a shallow loss revenue protection plan called revenue loss coverage (RLC) or a price loss cov- erage (PLC). RLC is similar to the county ARC option in the Senate farm bill with the most notable difference being how each utilize reference prices. ARC uses reference prices in the actual revenue calculation where RLC replaces prices below the reference prices with the reference price in the benchmark revenue calculation. The Senate AMP provision included with either the county or producer level ARC coverage is similar to the counter- cyclical payment (CCP) program in the 2002 and 2008 Farm Bills. The main difference is payment trigger levels are based on 55 percent of the moving 5-year Olympic average of market prices for most covered commodities. The most important difference between PLC and the cur- rent CCP program is that the PLC option pays on planted acres with a whole farm base limitation rather than being paid on base acres. Producers choosing PLC have an option to update their payment yields to 90% of the average yield per planted acre for the 2008-2012 crop years. The crop insurance provisions in the House bill are similar to the Senate in that SCO and STAX are offered. However, the two bills offer significantly different coverage levels for SCO. Also, producers choosing the House RLC option would not be eligible for SCO coverage. SCO and STAX benefits are not limited in the Senate or House. Both the Senate and House allow cotton producers the choice between STAX and SCO coverage. Payment limitation provisions are similar in the Senate and House bills. The Senate bill has a $50,000 payment limi- tation on combined ARC and AMP benefits while the House farm bill package has a $50,000 combined limitation on PLC and RLC. Both the Senate and House combine non-farm and farm sources of adjusted gross income (AGI) to form one overall AGI limitation with the Senate at $750,000 and the House at $950,000. Scenarios Analyzed Both the Senate and House Farm Bill packages were ana- lyzed using the representative farms for the following scenarios: • Senate Farm Bill assuming individual level coverage selected in the ARC program along with AMP and SCO analyzed with FAPRI Senate baseline prices; • Senate Farm Bill assuming county level coverage selected in the ARC program along with AMP and SCO analyzed with FAPRI Senate baseline prices; AFPC Bottom Line is a periodic electronic publication of the Agricultural and Food Policy Center at Texas A&M University. It is intended to share recent AFPC research and public policy activities with our friends and partners in the agricultural community. Further distribution or the reprinting of articles is encouraged. For more information about AFPC or any article in AFPC Bottom Line please visit our website at afpc.tamu.edu or contact George Knapek, [email protected], (979) 845-5913. • Senate Farm Bill assuming AMP and SCO (with larger cov- erage band) analyzed with FAPRI Senate baseline prices; • House Farm Bill assuming revenue loss coverage (RLC) selected and analyzed with FAPRI House baseline prices; • House Farm Bill assuming price loss coverage (PLC) along with SCO and analyzed with FAPRI House base- line prices. Results AFPC’s 66 representative crop farms were used to analyze the Senate and House Farm Bill packages under Baseline price and declining price scenarios. The farm’s preference for one policy alternative over another was based on the alternative with the highest average net cash farm income (NCFI) over the life of the farm bill. This report considered the combined government support of commodity title programs (ARC, AMP, PLC, and RLC) with the SCO and STAX choices in the insurance titles. In addition, both AGI and individual payment limits were taken into consideration. Under current Baseline prices, more of the representative farms would prefer the county-based ARC program over the individual yield based ARC program in the Senate. Most of the representative farms would prefer the House PLC op- tion over the RLC option primarily due to RLC not having the SCO option. Overall, under baseline prices 43 of the 66 representative farms would prefer the most preferred House option over any Senate option. The results were very similar for the declining price sce- nario; however, more farms would choose individual-based ARC over county-based ARC. The substantial increase in PLC benefits offset the decline in SCO benefits and results in most farms still favoring the preferred House option over the preferred Senate option under the declining price scenario; however four more farms did prefer the Senate option under the low price scenario. The following conclusions can be drawn from the analysis: • All of the commodity title options provide some safety net support when prices are high. The House SCO alternative that has a wider payment band than the Senate SCO option provides significant support during high price periods much like the shallow loss plans. • The results for the Senate Individual and County based ARC option and the House RLC option are very similar. • SCO provides significantly less safety net support when prices are declining due to the reliance on cur- rent futures market prices in setting the benchmark. • Senate AGI limits would be more binding on the rep- resentative farms than House AGI limits and influence producer preferences. Read the full report at afpc.tamu.edu/ pubs/0/589/WP-13-03-Farm-Bill-Report.pdf The color represents the option with the highest average annual Title I government payments. The number represents the acreage of the AFPC representative farm. You can read the full report at the link below:
Posted on: Fri, 25 Oct 2013 14:40:46 +0000
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