Tuesday, February 11, 2014

The 2014 Farm Bill Passed, Now What?

After more than two years of discussion, Congress passed the 2014 Farm Bill. President Obama signed the $956-billion Agriculture Act of 2014, better known as the “Farm Bill”, on Friday, February 7th. This law outlines food and agriculture programs and policy for the next five years.

President Obama, surrounded by members of Congress, signs the Farm Bill
The majority of Farm Bill funding goes to food programs for low income Americans. It also funds programs for farmers including crop insurance, livestock disaster assistance, conservation programs, and agriculture research.
What does that mean to me as a dairy producer and a consumer?  

Impact to Dairy Producers
The 2014 Farm Bill includes a new dairy program. The Dairy Production Margin Protection Program which is an insurance program based on the difference between the price of milk and cost of feed. Participating dairy farmers can elect a specific level of coverage with premiums based on the amount of coverage selected. This goal of this risk management tool is to protect against periods of both low milk process and high feed costs.

Since this is a new program, it’s hard to tell how it will be received and used by dairy producers. One thing I do know is this won’t make or break us. It’s just one of many tools available to use. Some will find it benefits their operation, others may not find it’s worth the cost. I’m not sure if we’ll participate or not. I’ll be interested in learning more about the cost vs. benefit.
Law makers tout the Farm Bill as “providing certainty and stability for farmers”. This is the intention with the farm insurance programs, but there is nothing certain or stable about agriculture. Being involved in production agriculture is risky no matter how you slice it. Commodity prices change quickly, weather may or may not cooperate, and government policy throwing a wrench in supply/demand are among the many challenges farmers encounter today.

Impact to Consumers
This legislation has little impact on the average consumer. If you are a person who depends on the Supplemental Nutrition Assistance Program (SNAP), school lunch program and other food programs, this legislation benefits you. It’s good to see the new Farm Bill includes some reforms to reduce fraud. Examples include; demanding outcomes from existing employment training programs, establishing a 10-state pilot program requiring able-bodied adults to work, prohibiting USDA from engaging in SNAP recruitment activities and promotional campaigns, and ensures people are not receiving benefits in multiple states.

The number of people on government assistance is a scary trend

Like many government policies, the impact this will have on farmers, consumers, commodity prices, and food cost won’t be known until the program is in full swing. Stay tuned. . .

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