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2013 Farm Bill. ISU Extension Farm Management In-service Nashua, Iowa May 20, 2013 Chad Hart Associate Professor/Crop Markets Specialist [email protected] 515-294-9911. Farm Bill Progress?. House and Senate have basically revived their packages from last year - PowerPoint PPT Presentation
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Extension and Outreach/Department of Economics
2013 Farm Bill
ISU Extension Farm Management In-serviceNashua, IowaMay 20, 2013
Chad HartAssociate Professor/Crop Markets Specialist
Extension and Outreach/Department of Economics
Farm Bill Progress?House and Senate have basically revived their
packages from last year
A couple of new wrinkles have been added to address specific crop concerns
Like last year, the key will be the floor vote in the House (which didn’t happen last year)
Extension and Outreach/Department of Economics
Ideas on the Next Farm BillLet’s look at the common features
Both versions of the farm bill eliminate direct payments, countercyclical payments, ACRE, and SURE
The marketing loan program would continue
Livestock disaster programs would be reestablished
Extension and Outreach/Department of Economics
Reference PricesSenate: 55% of 5-yr Olympic average MYA
price
House: Set by lawCorn $3.70Wheat $5.50Soybean $8.40
Corn $2.95
Wheat $3.62
Soybean $6.29
Extension and Outreach/Department of Economics
ARC or RLC instead of ACRERevenue-based support program
Revenues based on 5-year Olympic averages for yields and prices
Yields and prices have cups (T-yields and reference prices)
Extension and Outreach/Department of Economics
Revenue ProgramsSenate House
ARC-County ARC-Farm RLC
Payment acres
Planted and prevented
(up to Base)
Planted and prevented
(up to Base)
85% of Planted (up to Base)
Benchmark revenue
5-yr OA county yield * 5-yr OA MYA price
5-yr OA farm yield * 5-yr OA MYA price
5-yr OA county yield * 5-yr OA MYA price
Actual revenue
County yield * Max(MYA price or loan rate)
Farm yield * Max(MYA price or loan rate)
County yield * Max(midseason price or loan rate)
Revenue guarantee
88% of benchmark 88% of benchmark 85% of benchmark
Extension and Outreach/Department of Economics
Revenue ProgramsSenate House
ARC-County ARC-Farm RLC
Payment rate
Min(Guarantee – Actual revenue, 10% of benchmark)
Min(Guarantee – Actual revenue, 10% of benchmark)
Min(Guarantee – Actual revenue, 10% of benchmark)
Payment made on
80% of planted acres and 45% of prevented acres
65% of planted acres and 45% of prevented acres
Payment acres
Extension and Outreach/Department of Economics
AMP or PLC instead of CCPPrice-based support program
Reference prices establish targets
Works like CCP
Payment rate = Max(0, Reference price – Max(MYA price, Loan rate))
Extension and Outreach/Department of Economics
Price ProgramsSenate House
AMP RLC
Payment acres
85% of Base acres 85% of Planted
(up to Base)
Payment yield
CCP yields CCP yields w/ updating
Extension and Outreach/Department of Economics
Dairy Dairy Producer Margin Protection Program
Voluntary margin coverage, with the opportunity for supplemental coverage
Dairy Market Stabilization Program Managed supplies when margins fall
Packages are very similar across the House and Senate versions
Extension and Outreach/Department of Economics
Supplemental Coverage Option (SCO)An additional policy to cover “shallow losses”
Shallow loss = part of the deductible on the producer’s underlying crop insurance policy
SCO is county-level yield or revenue policy
Indemnities are paid when the county experiences losses greater than 10% of the expected yield or revenue level, but payments are not more than the original deductible
Extension and Outreach/Department of Economics
SCO Examples from Last Year’s Bills
Source: Congressional Research Service
Extension and Outreach/Department of Economics
Thank you for your time!
Any questions?
My web site:http://www.econ.iastate.edu/~chart/
Iowa Farm Outlook:http://www.econ.iastate.edu/ifo/
Ag Decision Maker:http://www.extension.iastate.edu/agdm/