Wednesday, January 29, 2014

Farm Bill ends 'direct payments' and sets limits, but not what reformers wanted

The five-year Farm Bill, which passed the House Wednesday by a vote of 251-166, and now heads to the Senate, ends direct payments to farmers, whether they farm or not, that cost around $4.5 billion a year, reports The Associated Press. However, "Reformers came away frustrated by the bill’s failure to rein in crop insurance subsidies and impose a more meaningful cap on what any single farm can receive in government aid," David Rogers reports for Politico.

The bill includes "stricter limits on how much money an individual farmer can receive—$125,000 annually on all payments and loans, when some were previously unrestricted," the AP reports. "The agreement is less strict than either the House or Senate bills, which had put limits on how much a farmer could receive from individual programs. Language that would limit how many people in a farm operation may receive such payments was also passed by both chambers but taken out of the compromise bill, which would kick the issue to the Agriculture Department."

The bill also includes "a new revenue insurance subsidy that would pay farmers in the event of 'shallow losses' or revenue losses incurred before their paid crop insurance kicks in. That program might kick in sooner than previously thought as some crop prices have dropped in recent months," AP reports. Also, "a separate subsidy program would trigger payments when crop prices drop. This is similar to current subsidies, though the new programs would kick in sooner, especially for cotton and rice, the crops that depend the most on the direct payments that would be phased out. Producers would have to choose between these subsidies or the revenue insurance." (Read more)

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