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Monday, November 21, 2011

Farm Safety Net Proposals for the 2012 Farm Bill

Dennis A. Shields
Specialist in Agricultural Policy

Randy Schnepf
Specialist in Agricultural Policy

Ongoing budget deliberations by the Joint Select Committee on Deficit Reduction have generated concerns that a farm bill to reauthorize farm programs expiring in 2012 may be written by budget negotiators rather than by the House and Senate Agriculture Committees. Various proposals have emerged that recommend lower federal spending, including cuts to agriculture programs ranging from $10 billion to more than $80 billion over 10 years.

In response, Members of Congress, the Administration, and a number of farm groups have put forward proposals to reduce government expenditures on farm subsidies and revise farm programs. Many of these farm program proposals were unveiled in September 2011 as the Joint Select Committee on Deficit Reduction began its deliberations on government-wide budget cuts. The proposals discussed here might be a starting point for developing the next installment of farm programs when the 2008 farm bill expires in 2012. Other ideas have also been proposed but are not discussed here because of duplication or due to insufficient information at time of publication.

Many proposed cuts and policy changes have been directed at commodity programs and crop insurance because these programs account for the bulk of agricultural funding (excluding conservation and nutrition programs, which are also considered part of the agricultural budget). Commodity programs, crop insurance, and the recently expired farm disaster programs comprise the so-called “farm safety net”—the federal government’s suite of programs designed to support farm income and help farmers manage risks associated with variability in crop yields and prices. To generate budget savings and provide funding for proposed changes to the farm safety net, nearly all of the proposals either reduce or eliminate direct and counter-cyclical payments. Most proposals either leave the marketing loan program unchanged or retain it with modest modifications; however, it would be eliminated under two proposals.

To facilitate comparisons, the various proposals are loosely grouped into five categories: (1) minor policy changes, (2) revised revenue programs, (3) enhanced crop insurance, (4) whole-farm insurance, and (5) other.

Date of Report: November
10, 2011
Number of Pages:
Order Number: R4
Price: $29.95

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