AgriLife Extension Expert: Complicated Farm Bill Will Take Homework by Producers

AMARILLO –- Crop producers may feel like they are back in school when they begin to deal with the new farm bill, because they certainly need to do their homework before going to sign up, according to one Texas A&M AgriLife Extension Service economist.

Speaking recently in Amarillo, Dr. Joe Outlaw, co-director of the Agricultural and Food Policy Center at Texas A&M University and an AgriLife Extension economist in College Station, said the new farm bill repeals direct payments, counter-cyclical payments and Average Crop Revenue Election, or ACRE. Producers now must choose between Agriculture Risk Coverage and Price Loss Coverage for their program crops.

“For the safety net to be the most effective, you really need to get your base as close as possible to what you are planting,” Outlaw said.

"The generic base becomes whatever crop it is planted to each year," Outlaw  said. "The generic base acres can be assigned to other covered commodities."

“You have to do your own homework,” he said. “Don’t get stuck with something that may or may not be good for you for the life of the bill.”

If producers choose the price loss coverage option, or PLC as it is referred to in the farm bill, they have the opportunity to update their payment yields to 90 percent of the 2008-2012 crop year averages.

All decisions will need to be made on a crop-by-crop basis for each farm, he said.

Additionally, a new area-wide insurance program, a supplemental coverage option, will be available to all producers beginning in 2015 and is designed to protect them against losses that would normally fall within their insurance deductible range.

“We are working on educational materials and tools to assist producers with all these decisions,” Outlaw said.

For more information about the farm bill or to find the decision aide once it is available, go to The Agricultural and Food Policy Center website.

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