Crop insurance decisions will require careful analysis, specialists say

Some agricultural economists reportedly have been saying that most corn farmers should sign up for Agricultural Risk Coverage or ARC when they enroll in the new farm program.

“We have a number of economists nationwide who are saying corn growers and soybeans came up with the idea of ARC so every corn farmer ought to take ARC,” says Joe Outlaw, co-director of the Agricultural and Food Policy Center at Texas A&M university.

“My answer is every corn farmer ought to evaluate that for themselves because between the FAPRI (Food and Agricultural Policy Research Institute at the University of Missouri) Group and Texas A&M there isn’t anyone who has analyzed as much as we have.”

Dr. Outlaw and Dr. James Richardson, the other co-director of the Agricultural and Food Policy Center; Dr. Pat Westhoff, director of FAPRI, and other members of the two institutions have been working for nearly two years to compile a Farm Bill Decision Aid computer software tool that would help farmers decide among a number of options in the Agricultural Act of 2014, the new farm bill.

Besides Texas A&M and the University of Missouri, USDA has also provided support for a software decision aid at the University of Illinois, which supposedly is aimed more at Midwest corn and soybean growers.

Outlaw, Richard, Westhoff and others discussed the Texas A&M-Missouri Farm Bill Decision Aid attended by nearly 100 Extension specialists across the southeast U.S. at the Cook Convention Center in Memphis, Tenn.

“I don’t want to hurt anyone’s feelings, but frankly we have analyzed this situation more than anyone else and we – Texas A&M University or the University of Missouri – cannot tell you by looking at your data which way you should go,” says Outlaw.

The Farm Bill Decision Aid will include monthly commodity price information compiled by FAPRI for each of the major commodities covered by the farm bill. FAPRI provides baseline price forecasts each of the commodities for the next 10 years.

“if you look at the FAPRI price projections from January, which is about the time the farm bill was signed, and you look at the price projections Pat put up for FAPRI last month, you would have made different decisions over those time periods for different crops,” says Texas A&M’s Outlaw. “So this is an evolving situation.”

He said anyone who writes they know what farmers should do, “I think they’re doing a disservice because we really don’t know.”

Extension ag economists and farm program specialists who participated in the day-long training session will begin working with farmers on how to use the Farm Bill Decision Aid in the weeks head. When the Memphis session was held, the software’s programmers felt they needed a few more pieces of information to complete the tool. Those were expected to become available soon.

 

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