The Illinois Corn Growers Association continues to urge Congress for a “Farm Bill Now,” even while the probability of accomplishing a Farm Bill in 2012 seems up in the air. On the positive side, the Senate Ag Committee passed a Farm Bill that is workable for Illinois farmers and we continue to encourage the Senate to get that bill to the floor for a vote.
Last week, many Senators signed a letter to Senate leadership urging Senate action on the proposed Farm Bill. Thankfully, Senator Mark Kirk was on board and signed that letter, indicating his support for a “Farm Bill Now.” Senator Durbin did not sign the letter, as his leadership position meant that he would sign a letter to himself. Still, we are thankful for the support from Illinois’ newest Senator and we look forward to his continued action to move a Farm Bill through the Senate as soon as possible.
What did this latest Farm Bill proposal look like? It remains a revenue-based safety net just like the Average Crop Revenue Election (ACRE) from past years, but actually works better with crop insurance which is a plus. Different from the ACRE program, farmers can actually elect to use individual farm data OR county data for their program participation. In most cases, county data appears to have a better return for Illinois farmers, but the option is there for farmers to determine for themselves.
The Agricultural Risk Coverage (ARC) program uses an 89 percent benchmark of either county or farm revenue (depending on the farmer’s selection). Revenue is defined as 5 year Olympic average of yield (for the county or farm) times the 5 year Olympic average U.S. price for the first five months of the crop’s marketing year. The total payment will be 80 percent of eligible planted acres for a county election and 65 percent of eligible planted acres for a farm election with a 45 percent prevented planted acres payment.
The ARC also contains a Supplemental Coverage Option where a farmer can opt not to enroll in ARC, maintaining his/her crop insurance coverage, and if a loss of at least ten percent occurs, losses up to an individual’s deductable are covered.
This Farm Bill draft clearly moves the U.S. farm safety net in the direction of risk management, but because the decision involves the management of risk and because risk varies by crop, region, farm, and farmer, no universal recommendation can exist. The appropriate elections will vary by farm, so farmers must be prepared to learn as much as they can about their new options for the 2013 crop if a Farm Bill is passed in 2012.
The Bill must first be passed by both the House and Senate and signed by the President. Because of this, it is VERY likely that significant changes will occur to the developing bill. Regardless, Illinois Corn and all of agriculture understands that any Farm Bill passed in 2012 is likely to be more favorable to the Illinois farmer than any Farm Bill passed in 2013 so we press on, urging action now.
Tomorrow, May 16, Dr. Gary Schnitkey from the University of Illinois and expert on federal farm programs will testify at the U.S. House of Representative Subcommittee on General Farm Commodities and Risk Management in pursuit of this goal. His testimony will focus on the fact that a program basing its payments on revenue can provide coverage that works very effectively with current crop insurance options.
If you are interested in watching Dr. Schnitkey’s testimony, click here for the hearing which begins at 9 am central.