Tuesday, March 10, 2015

Farm Bill programs leading to bigger subsidies than previously predicted

A program in the Farm Bill called Agricultural Risk Coverage is having much higher participation than previously thought, leading to projections from the Food and Agricultural Policy Research Institute at the University of Missouri that the program's cost will increase $1.7 billion, or 81 percent, above what the organization had predicted for the 2015-16 marketing year, David Rogers reports for Politico.

Another report, by the Congressional Budget Office, "shows total payments to corn and soybean producers from ARC alone will be $3.37 billion in fiscal 2017—when the big subsidies come due for the government," Rogers writes. "That is 38 percent higher than what this sector collected in 2014 under the old system of direct cash payments to producers."

"In the case of corn and soybeans, CBO is projecting most producers will go in the direction of ARC, but thousands will opt for PLC (Price Loss Coverage) instead, accounting for another $1.47 billion in costs in fiscal 2017," Rogers writes. "When added to the ARC subsidies, the corn and beans sector is expected then to receive a total of $4.8 billion in government payments in fiscal 2017. That’s nearly double what the direct payments were for these two crops in 2014." (Read more)

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