Department of Economics The 2008 Farm Bill ISU Extension ANR Lunch and Learn Ames, Iowa December 12, 2008 Chad Hart Assistant Professor/Grain Markets Specialist.

Department of Economics

The 2008 Farm Bill

ISU Extension ANR Lunch and LearnAmes, Iowa

December 12, 2008

Chad HartAssistant Professor/Grain Markets Specialist

[email protected]


A Short Timeline for the Farm Bill

May 2005 Farm groups outlines proposals

July 2005 USDA begins nationwide forums

Feb. 2006 Congress begins farm bill hearings

Jan. 2007 USDA releases farm bill recommendations

July 2007 House passes its version of the farm bill

Dec. 2007 Senate passes its version

May 2008 House and Senate agree on farm bill

June 2008 House and Senate override veto of farmbill


Farm Bill Titles

I. Commodities IX. EnergyII. Conservation X. Hort. & Organic Ag.III. Trade XI. LivestockIV. Nutrition XII. Crop InsuranceV. Credit XIII. Commodity

FuturesVI. Rural Development XIV. MiscellaneousVII. Research XV. Trade & TaxesVIII. Forestry


Farm Bill Projected Spending

14%

8%

66%

8%4%

Commodity Conservation Nutrition Crop Insurance Other

Projected Spending 2008-2013$297 Billion


The 2008 Farm BillContinues many of the same programs we have currently

Direct paymentsPrice countercyclical payments (CCPs)Marketing loansCRP, EQIP, and other conservation programs

Gives producers a choice on programsAverage Crop Revenue Election (ACRE)

Sets up new permanent disaster programSupplemental Revenue Assistance Payments Program (SURE)


Commodity Title

Crop Unit 2008-09 2010-12

Soybeans $/bu. 5.80 6.00

Target Price Changes

Direct payments and loan rates unchanged

Payment acres reduced 2009-11 (to 83.3%)

Posted county price -- 30-day moving average


Average Crop Revenue Election (ACRE)

ACRE is a revenue-based counter-cyclical payment programBased on state and farm-level yields per planted acre

and national prices

Producers choose between the current price-based counter-cyclical payment (CCP) program and ACRE

There are still some details to be worked out about ACRE (stay tuned)


Payment LimitationsDirect payments: $40,000 (w/o ACRE)

$32,000 (w/ ACRE)Counter-cyclical payments: $65,000ACRE: $73,000 ($65,000 + $8,000)Marketing loans: No limitsDirect attribution of paymentsElimination of the 3-entity rule


Supplemental Revenue Assistance Payments Program (SURE)

Provides payments to producers in disaster counties for crop losses

Based on crop insurance program, non-insured crop assistance program, and disaster declarations

Whole-farm revenue protection, not commodity-specific


Crop Insurance Changes Reduced premium subsidy rates for area crop

insurance plans (GRP, GRIP)

Increased premium subsidy rates for enterprise and whole-farm units

Increased fees for catastrophic (CAT) coverage to $300 per crop per county

Moved premium billing date to August 15th, starting in 2012

Required studies of organic production, energy crops, poultry, bees, and aquaculture


Energy in the Farm BillGrants for advanced biofuel biorefineries,

up to 30% of the cost of the project

Loans for the same, up to $250 million or 80% of the cost per project

Bioenergy Program for Advanced Biofuels

Biomass Crop Assistance Program

Cellulosic biofuel producer tax credit


Nutrition Food Stamp funding approved through Sept. 2012

Renamed Supplemental Nutrition Assistance Program Increased funding for The Emergency Food

Assistance Program (TEFAP) Continues fresh fruit and vegetable programs Sets up “Hunger-Free Community” and

Emergency Food Infrastructure grantsAwards to food-program service providers, local

nonprofits, and food banks to assess community food issues and improve capacities for handling food products


Conservation

CRP limited to 32 million acres (starting 2010)

WRP extended (3 million acres)EQIP funding increasedCSP renamed and strengthened

Targeted enrollment: 12.77 million acres per year


Thank you for your time!

Any questions?

http://www.econ.iastate.edu/faculty/hart/

Department of Economics The 2008 Farm Bill ISU Extension ANR Lunch and Learn Ames, Iowa December 12, 2008 Chad Hart Assistant Professor/Grain Markets Specialist.

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