Two members of the Senate Agriculture Committee filed a bill to require the USDA to use crop insurance data as its first choice in deciding whether farmers will get an Agriculture Risk Coverage (ARC) subsidy. Most corn, soybean and wheat growers are enrolled in the insurance-like ARC program but there are recurring complaints of wide variation in payment rates among adjoining counties.
Farm-state lawmakers could have a "quite large" baseline for crop subsidies, "even approaching $100 billion" over a decade, when they write the 2018 farm bill, says economist Carl Zulauf of Ohio State University. In a blog, Zulaug rebuts speculation, based on the decline in pay-out for the Agricultural Risk Coverage (ARC) subsidy, that the House and Senate Agriculture Committees could have a small amount of money available to confront an era of low commodity prices.
In preview of issues for the 2018 farm bill, the leaders of the two largest U.S. farm groups argued against cuts in farm subsidies as the agricultural sector endures years of low commodity prices and income that is a fraction of the record set in 2013 at the end of a seven-year boom.
Subsidy payments under the new Agricultural Risk Coverage program will vary by as much as $90 an acre among counties in the same state for 2014 crops, said economists Carl Zulauf of Ohio State and Gary Schnitkey of U-Illinois.
Told to choose between traditional subsidies and a new-era revenue subsidy, corn and soybean farmers overwhelming opted for the revenue plan, the government announced. Growers were expected to choose the Agriculture Risk Coverage plan, analysts said, because it will provide larger payments than traditional subsidies triggered by low prices over the life of the 2014 farm law.
Commodity prices are down sharply this year for major crops yet wheat and soybeans may not trigger subsidies under the new farm law, says economist Carl Zulauf of Ohio State University in a blog.
Economist Carl Zulauf of Ohio State University says crop subsidies of $30-$90 an acre are possible with record crops and farm-gate prices that average $3.60 a bushel, reports DTN.