Department of Economics
The 2008 Farm Bill
ISU Extension ANR Lunch and LearnAmes, Iowa
December 12, 2008
Chad HartAssistant Professor/Grain Markets Specialist
Department of Economics
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
Department of Economics
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
Department of Economics
Farm Bill Projected Spending
14%
8%
66%
8%4%
Commodity Conservation Nutrition Crop Insurance Other
Projected Spending 2008-2013$297 Billion
Department of Economics
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)
Department of Economics
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
Department of Economics
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)
Department of Economics
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
Department of Economics
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
Department of Economics
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
Department of Economics
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
Department of Economics
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
Department of Economics
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
Department of Economics
Thank you for your time!
Any questions?
http://www.econ.iastate.edu/faculty/hart/