After looking at the latest USDA price projections for corn, wheat, and soybeans, and taking into account price patterns for the crops, five university economists say the Price Loss Coverage subsidy is a better choice for growers than the Agricultural Risk Coverage subsidy for corn and wheat grown this year.
For the first time since the 2014 farm bill was implemented, the USDA is giving farmers the option of changing enrollment between the insurance-like Agriculture Risk Coverage and the traditionally designed Price Loss Coverage subsidies.
Late this summer, growers will get their first chance in years to switch between the Agricultural Risk Coverage and Price Loss Coverage subsidies, Agriculture Secretary Sonny Perdue told lawmakers last week. During testimony at two hearings, Perdue also said the USDA would hold a "general" sign-up for the Conservation Reserve before the end of the year.
House Agriculture chairman Micheal Conaway says he tried to help every section of the country in his version of the 2018 farm bill, which was ratified by his fellow House Republicans but now is stalled by myriad House-Senate disputes. One of the House provisions, to give some but not all growers the opportunity to potentially increase their subsidy payments, "does not seem prudent," said four university economists.
Roughly 16 months ago, at their first hearing for the 2018 farm bill, Senate Agriculture chairman Pat Roberts and Sen. Debbie Stabenow agreed to write a bipartisan bill that would be enacted on time, a seemingly simple goal that has eluded Congress repeatedly. With a committee vote set for Wednesday on their 1,006-page bill, the two committee leaders say they are on the verge of a major bipartisan victory.
The second-largest U.S. farm group says the mammoth tax cut now pending in Congress could force cuts in farm subsidies, or possibly wipe them out, because of "pay-as-you-go" law. "That would be a disastrous trade," said president Roger Johnson of the National Farmers Union, taking a more skeptical view than many farm leaders of the impact of the proposed $1.5 trillion in cuts and associated changes to tax brackets and deductions.
In a novel step, cotton growers would be eligible for two different crop-subsidy programs under a provision in the USDA-FDA funding bill approved by the Senate Appropriations Committee. The provision designates cottonseed, harvested from the boll along with cotton fiber, as one of the "other oilseeds" that can collect Price Loss Coverage subsidies while USDA runs a separate, insurance-like subsidy program for cotton fiber.
Agriculture Secretary Tom Vilsack said he is looking at every factor, including trade rules and budgetary effects, in the cotton industry's request that he declare cottonseed oil eligible for the same subsidies offered to grains and soybeans.
Grain and oilseed growers will receive $4 billion in crop subsides due to low market prices for their 2014 crops, said the USDA. Payments are being sent to about half of the 1.7 million farmers who enrolled in the new Agriculture Risk Coverage program, intended to shield crop revenue from low prices and poor yields, or the traditionally styled Price Loss Coverage program, based on trigger prices.
Growers in the southern Plains and the mid-South express sticker shock at the price of the new Supplemental Coverage Option (SCO), created by the 2014 farm law to allow growers to boost their level of revenue protection, says DTN.