If there is one thing to be said for the new farm bill — at whatever time it may finally be passed — it’s that it will be markedly different from predecessors, says Keith Coble.
Mainstay programs such as direct payments will be no more, while programs such as crop insurance will take on significantly more importance, he said at the annual meeting of the Mississippi Agricultural Economics Association at Mississippi State University.
Coble, who is Giles Distinguished Professor of Agricultural Economics at Mississippi State University, has been given the opportunity to work for several months as chief economist for the minority staff of the Senate Committee on Agriculture, Nutrition, and Forestry, which Thad Cochran, R-Miss., serves as ranking minority member.
“In both the Senate and House farm bills, traditional commodity programs are taking a big hit and crop insurance is getting a big bump up,” he says. “Spending on crop insurance surpassed spending for the commodity titles two years ago, and will be even bigger in the new legislation. Spending for conservation will be more than for the commodity titles.”
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Congressional Budget Office scoring puts crop insurance spending at $84 billion over 10 years, he says, while commodity programs are scored at $59 billion.
The nutrition title of the farm bill is scored at $764 billion for 10 years, although the House bill would trim that by nearly $40 billion.
And Coble says, with attempts to separate the commodity and nutrition titles into separate legislation going forward, smaller programs such as ag research, scored at $111 million — “basically pocket change in terms of an overall $972 billion farm bill — could face difficulty in getting funded.
“The reason we’ve bundled all these smaller programs together in the past is because it’s so hard to get enough votes to get them passed on a standalone basis. The research title isn’t controversial, but the question is, how do you get something small like that through Congress?
“We all know how important federal research dollars are to MSU and other land grant universities,” he says. “But, funding for the land grant system and data collection are not a given, and we shouldn’t assume they’re always going to be there.”
The nutrition title is “the big deal” in the current farm bill debate, he says, and “that’s where the big differences are between the two sides — $4 billion in the Senate bill and $39 billion in the House bill. Resolving this difference will be the first big step — finding a number that will pass both the House and Senate and be signed by the president.
"Our analysis, an October Food and Agricultural Policy Research Institute study, and a related study by Texas A&M suggest that the House and Senate Bills are likely to have very similar effects on ag sector income, prices, and acreage. I get the impression that many perceive the differences to be larger than they really are."
Passage of a veto-proof farm bill is difficult, Coble says.
With the move away from direct payments, risk management through programs like crop insurance “is now about the only justification for benefits to farmers,” he says. “The term ‘layering,’ for the new shallow loss programs that layer on top of conventional crop insurance, is a big deal now.”
The evolution of commodity programs and crop insurance is “fascinating,” Coble says. “But we also know not everything is insurable. There are things people want to insure, and there are a lot of feasibility studies on trying to insure things at the margin of insurability. The question is, can we come up with a better designs and data for insuring agriculture than in the past?”
There is a potential issue, he notes, in that “We’ve got very similar programs being delivered by the crop insurance industry and the Farm Services Agency. Among the question marks is whether farmers will prefer programs delivered by the FSA or by the crop insurance industry.”
In other areas of the legislation, Coble says, “There are some and different new pots of money. I think there will be continuing funding for specialty crop research — this will still be a big deal. Beginning farmer/rancher programs are also going to be a big deal. There is also mandatory funding for establishment of the Foundation for Food and Agricultural Research, an interesting concept being proposed in the Senate bill.