AgWired

Now that the House has named members for a farm bill conference committee and agreed to actually go to conference with the Senate, there is renewed hope that we may yet see a new five year farm bill. All they have to do now is work out the differences between the two versions.

Pat Westhoff, the Director of the Food and Agricultural Policy Research Institute (FAPRI) located at the University of Missouri, says the two bills have a lot in common.

“They would eliminate the current Direct Payment program, the Countercyclical Payment program, and a variety of other programs as well, and replace them with new programs that would pay only when something bad happens – when prices are below average or when revenues are below historic figures as well,” he says, adding that a new report from FAPRI shows the elimination of the countercyclical payments could net fewer dollars going to farmers… but not always. “The current direct payment program makes about $5 billion a year of payments, whether the rain falls or doesn’t, when the price is high or the price is low. Under these new policies, you might get an even larger subsidy than you get today, if prices drop a lot. But you wouldn’t be getting a payment in a good year.”

Pat admits that if the new programs are passed, that means a lot less stability in payments; there won’t be that check coming every October as farmers have come to expect. But he says both bills offer some significant protections against a downturn in the farm economy – more than what the current legislation provides. He says whether you might like the changes or not depends on what kind of producer you are.

“There will be some types of producers in certain parts of the country who will do very well under these proposals, others who won’t do quite as well,” also depending market circumstances, he says.

As we mentioned, the two bills are pretty similar, but Pat says there are some differences, including the House’s version making payments when prices hit certain trigger levels and the Senate’s bill calling for payments when revenues per acre drop to a certain level. He believes there are reachable differences between the two bills, even in what many would call a toxic environment. In fact, Pat thinks the current budget debate might help push this through quicker. But he doesn’t believe either side wants to extend the current Farm Bill another time.

Pat concludes that no matter which version of the farm bill gets passed, consumers shouldn’t see a significant change at the store.

“In our estimation the impact of either of these bills on consumer food prices is very, very tiny, as in less than one-tenth of 1 percent.”

You can read more about FAPRI’s analysis here, and you can listen to my whole conversation with Pat here: Interview with Pat Westhoff, FAPRI