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A look at the 2014 Farm Bill

Published Feb. 12, 2014 | Discuss this article on Facebook
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A broad overview of programs impacting farmers in the 2014 Farm Bill

Commodity Title

Repeals four current commodity title programs:  Direct Payments; Counter-Cyclical Payments, the Average Crop Revenue Election (ACRE) program; and the Supplemental Revenue Assistance Payments (SURE).

For the 2014 through 2018 crop years, the producer must make a one-time irrevocable election to receive Agricultural Risk Coverage OR Price Loss Coverage.  If no choice is made, farm defaults to PLC.

Agricultural Risk Coverage (ARC)

ARC offers producers a choice of coverage based on county-wide or individual losses.

County-wide

·        County ARC payments occur when actual crop revenue is below the ARC revenue guarantee(based on Olympic average for 5 preceding years)  for a crop year

·        Payment acres for county are at 85% of base acres for each covered commodity

·        County ARC guarantee coverage is between 76% and 86% of benchmark

 Individual Farm

·        Payment acres for individual coverage are at 65% of base acres for each covered commodity.

·        Individual is the whole farm, not individual crop

 Price Loss Coverage (PLC)

  • Intent is to address deep, multi-year price losses and payments occur if average market price is less than crop’s reference price.
  • Payment acres are at 85% of base acres for each covered commodity
  • Reference prices:  wheat is $5.50/bushel;  corn is $3.70/bushel; soybean are $8.40/bushel
  •  Producers will be allowed to retain or reallocate their base acres.

Supplemental Agriculture Disaster Assistance is funded permanently and includes a Livestock Indemnity Program for livestock losses from adverse weather and the Livestock Forage Program for losses due to drought or fire.

Dairy – Repeals the Milk Income Loss Contract Program, the Dairy Product Price Support Program, the Dairy Export Incentive Program, and the Federal Milk Marketing Order Review.

Dairy Margin Protection Program is established

·        Voluntary program that pays the difference between the price of milk and the cost of feed in producing milk

·        Farmers selects preferred coverage between 25% and 90% of their prior production history

·        Producer selects margin threshold in 50 cent increments between $4 and $8. No premium is paid for $4, but premiums are paid for higher coverage levels.

·        Program is not limited based on size but premium schedules are optimized for small producers (

·        The program does not include a supply management provision.

·        Creates a new donation program when dairy margins are under $4 for two consecutive months. USDA could purchase dairy products for no more than 3 months or until margins rebound above $4.

·        Implementation scheduled for September, 2014

 

Marketing Loans and loan deficiency payment programs remain under the same repayment terms and loan rates remain the same.

Title 1 payments are limited to $125,000 for the individual and $250,000 for a farm married couple.

Conservation Title

Conservation compliance is required to receive crop insurance premium assistance.

Consolidates 23 duplicative and overlapping conservation programs into 13 programs.  Working land programs will continue to include the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP.)  The bill also maintains the Conservation Reserve Program (CRP) to remove highly erodible land from production.  A new program is created to allow for competitive grants to regional partners to support improved soil health on a larger scale.

Crop Insurance Title

Supplemental Coverage Option is created

·        Allows farm to purchase county-level insurance that covers part of the deductible of their individual crop insurance policy up to the difference between 86% and the level of the individual policy.

·        Cannot be used in conjunction with ARC, only with PLC

·        65% premium assistance is provided

·        Implementation is for 2015 crop year

Provides a definition of beginning farmers and ranchers and allows them to receive a premium assistance rate 10% higher than is what is otherwise available.

Makes the authority to continue the additional premium assistance for enterprise units permanent.

Allows for an adjustment in actual production history (APH) in which a producer may choose to exclude any year from the APH if the yield in that year is less than 50% of the ten year county average.

Prioritizes research into insurance policies that will increase participation by underserved commodities including specialty crops.

Requires Risk Management Agency to offer, by the 2015 reinsurance year, organic price elections for crop insurance products.

Nutrition Title

Maintains the Seniors Farmers’ Market and Nutrition Program and the purchase of fruits and vegetables for distribution to schools and service institutions. 

Benefits may be used for the purchase of community-supported agriculture (CSA) share programs.

Local farmers will have new access to marketing programs and ability to apply for grants aimed at making local food more profitable and sustainable.

Other Titles

The Farm Bill has 12 Titles in total including Energy, Trade, Credit, Research, Rural Development and Forestry.  Many additional, important programs can be found throughout the bill including full funding for Specialty Crop Block Grants, research in the fight against pests and diseases and research and marketing programs for biofuels.

 

Farm Bill by the Numbers – FY 2014-FY 2023

Total:  $1 trillion over 10 years

Saves $16.6 billion over 10 years

Commodity Programs – $44.4 billion over 10 years;  4.6% of bill

$14 billion less than existing law

Crop Insurance - $90 billion over 10 years;  9.4% of bill

$47 billion more than existing law

Government pays 62% of the premium

$7 billion over 10 year increase covers deductibles farmers pay before insurance kicks in

Conservation – $57.6 billion over 10 years;  6% of bill

$4 billion less than existing law

Trade - $3.5 billion over 10 years

Energy - $1.1 billion over 10 years

Nutrition - $756 billion over 10 years;  79.1% of bill

$8 billion less than existing law

$200 million increase to food banks



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