WSU CAHNRS

CAHNRS and WSU Extension

Wheat and Small Grains

WSU Extension Farm Bill Update

Overview

Previously the farm economic safety net was primarily based on direct payments that were not tied to yields or market prices. If you remember back to the federal legislative debates when the Farm Bill was being designed in 2013, the primary issue driving the legislative process was budget reduction. Therefore the new 2014 Farm Bill commodity programs, which are a significant departure from past legislation, are designed to provide farmers with an effective safety net while also reducing federal budget expenditures. The new programs are directly tied to market prices and production yields. Therefore when market prices and yields are above the new program defined target levels, no payments are made –thus generating federal budget savings compared to the direct payment and the ACRE programs of the past.

Washington farm land owners and operators have several decisions to make on the new programs in the 2014 Farm
Bill: 

  • Whether or not to reallocate base acres of a farm,
  • Whether or not to update program yields, and
  • Whether to enroll in a revenue protection program, called Agricultural Risk Coverage (ARC), at the county or individual farm level, or a price protection program, called Price Loss Coverage (PLC).
    • If a farm elects to enroll in PLC, the optional Supplemental Coverage Option (SCO) insurance program becomes available.

Each program option has its advantages, rules and limitations. Importantly the decisions made regarding base relocation, yield update, and the decision between ARC or PLC are binding for the life of the 2014 Farm Bill which is five years or potentially longer.

To aid farmers in making program participation decisions, the 2014 Farm Bill provided funding to develop two computer decision aids for evaluating alternatives. The decision aids are being developed by the University of Illinois and the agricultural and Food Policy Center at Texas A&M. These tools will not be available until the FSA completes its rule-making process. The 2014 Farm Bill does not change any Federal Crop Insurance programs. Therefore the crop insurance products and options available in the recent past will be available in the foreseeable future.

Estimated Farm Bill Time Frame One of the major concerns of the new Farm Bill is the timing of sign-up decisions. This time frame will determine when farmers need to learn about the program options, evaluate which option is best for them, and turn their final paper work into their FSA office. The official timeline for the 2014 Farm Bill program options sign-up has not been announced. However, as a planning aid, the figure below presents an estimated time frame of when decisions must be made. Actual deadlines could be soon or later than indicated in the figure, so it is important to remain current on Farm Bill sign-up announcements. The ARC and PLC not are expected to be required until spring of 2015 except for farmers wanting to sign-up for SCO on their 2014 winter wheat plantings. In that case farmers must sign up by September 30.

Click to enlarge the graph.

Estimated Farm Bill Time Frame

One of the major concerns of the new Farm Bill is the timing of sign-up decisions. This time frame will determine when farmers need to learn about the program options, evaluate which option is best for them, and turn their final paper work into their FSA office. The official timeline for the 2014 Farm Bill program options sign-up has not been announced. However, as a planning aid, this figure presents an estimated time frame of when decisions must be made. Actual deadlines could be soon or later than indicated in the figure, so it is important to remain current on Farm Bill sign-up announcements. The ARC and PLC not are expected to be required until spring of 2015 except for farmers wanting to sign-up for SCO on their 2014 winter wheat plantings. In that case farmers must sign up by September 30.

To read the full overview of the 2014 Farm Bill, click here.

Questions or Comments?

Aaron Esser
County Director, WSU Extension
Adams County
205 W. Main Ritzville
aarons@wsu.edu
509 659 3210

Randy Fortenbery
Professor and Thomas B. Mick Endowed Chair
School of Economic Sciences, WSU
r.fortenbery@wsu.edu
509 335 7637

Shannon Neibergs
Assoc. Professor and Director of Western Center
School of Economic Sciences, WSU
sneibergs@wsu.edu 
509 335 6360

Wheat and Small Grains, P.O. Box 646420 Washington State University, Pullman, WA 99164-6420, 509-335-1719, Contact Us
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