Rather than struggles between political parties, the new Farm Bill seems to be pitting southern rice and peanut growers against northern corn and soybean producers. The Farm Bill, currently being debated in the U.S. Senate proposes ending $5 billion per year in direct payments to farmers, regardless of whether a crop is planted. Instead, the government would offer a “shallow loss” program that would aid farmers when revenues drop between 11 and 21 percent below five-year averages. Regular crop insurance would cover losses above 21 percent. Rice and peanut growers argue that these changes are more suitable to corn and soybean farmers who experience greater swings in yields due to floods and droughts. Rice farmers, who have more consistent yields, don’t have crop insurance to protect them from yield loss, but they must deal with high production costs and wide variations in prices.
Farm Bill divides midwestern and southern farmers
Senate passage of a half-trillion dollar farm and food bill depends in part on resolving a dispute over subsidies between Southern rice and peanut growers and Northern corn and soybean producers. But that regional divide was less in evidence Wednesday, as senators narrowly voted to maintain price supports and quotas for sugar producers ranging from Florida to Montana.
Senators traditionally put their partisanship aside on farm bills, and this year is no different. But the five-year farm policy bill also makes dramatic changes in how farmers are protected from financial and natural disasters and, as in all major changes, some see themselves as losers. In this case, it’s the Southerners.
The bill ends $5 billion a year in direct payments to farmers whether or not they actually plant a crop and programs that reward farmers when prices fall below a targeted level.
Instead, the government would offer a new “shallow loss” program to aid farmers when revenues fall between 11 percent and 21 percent below five-year moving averages and would put greater emphasis on subsidized crop insurance. Farmers’ regular crop insurance would pay for losses above 21 percent.
Corn and soybean growers, which are more subject to natural disasters and rely on crop insurance, welcome the change. Rice and peanut growers, more affected by price fluctuations, say that for them the new safety net is inadequate.