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Senate says yes to farm bill, farmers face unnerving decisions ahead

After three years of struggle and in spite of a rift in Congress involving partisan politics, Americans will have a new five-year, $956-billion farm bill once President Barrack Obama adds his signature to the bill later this week.

Many are calling the passage of the new legislation a monumental bi-partisan accomplishment and some are calling it a major historical achievement considering the many hurdles lawmakers had to jump over and the hoops they needed to pass through to get the job done.

With little argument the new legislation represents a landmark rewrite of commodity programs and opens the doors to robust crop insurance options. It also sustains a majority of conservation programs, reduces some funds for food stamps and gives the nod to COOL labeling funding that livestock interests have opposed.

Because of the length, depth and complexity of the new legislation, there will no doubt be a fair amount of trepidation over how the changes will affect America's farming community. In addition, critics have and will continue to blast the bill for a number of reasons, not the least of which will be whether the bill will save or cost taxpayers more money in the long run.

But, in spite of the critics, the real test for the farm bill, at least in the farmer's mind, will be whether the changes it legislates will provide a positive or negative impact to their operations. And perhaps it is this question that will demand the most attention in the weeks ahead as farmers are faced with understanding how the new crop insurance programs versus the price-sensitive commodity titles actually work.

At face value it seems difficult to comprehend whether opting for crop insurance with floating premiums is a better option than selecting a commodity title program, if qualified, which means it will cost less when markets are good and more when prices fall. Considering the option you select will tie you in to a four year commitment, the importance of making the right decision at the outset of the untested program will be difficult at best.

You will be hearing a great deal more about Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) in the days and weeks ahead, so the more time you take now to understand how each works could pay big dividends in the months and years ahead.

On top of those program changes, farmers will also want to learn about a Supplemental Coverage Option (SCO) program, an insurance policy that provides another level of protection and one that is subsidized in part by USDA. Farm Press will be providing more information about all three of these options, including who will qualify for the later, in the days ahead.

A major plus to livestock producers in the new farm bill is critical livestock disaster assistance programs that will help the nation's cattle herds to recover from the serious drought that has plagued the industry over the last two years. With herds reduced to 1951 numbers, the new program is a welcome relief to ranchers.

Not so popular among ranchers however are provisions in the new legislation that strengthen COOL labeling requirements. Producers and meat processors and packers say it will drive the price of meat higher and could kick start a trading conflict with Canada and Mexico.

On another front the legislation is also drawing fire from critics who charge the cuts in the food stamp program and new legislation concerning professional standards for public food handlers will create a hardships for needy families and additional tax dollars from states that will charged with providing training for food workers.

There is little question it will take some time to analyze and study all the complexities of this new and comprehensive piece of legislation, but few farmers will argue that waiting any longer to adopt a meaningful Farm Bill would have been the greater evil.

Stay tuned for periodic updates to the Farm Bill and how it will affect farmers and ranchers in the days, weeks and years ahead.

TAGS: Management
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