September 18, 2019

Farm Bill; and Political Notes- Election Impact on Farm Policy and Biofuels

Categories: Ethanol /Farm Bill

Farm Bill

DTN Ag Policy Editor Chris Clayton reported yesterday that, “One of the biggest changes for farmers in the 2008 farm bill largely flies under the radar, but has allowed farmers to buy higher levels of crop insurance while spreading the risk of indemnity payouts for companies.

“Though commodity programs such as Average Crop Revenue Election (ACRE) and the Supplemental Revenue Assistance Payments (SURE) drew a lot of attention, a small provision in the crop insurance title created a pilot program to increase the federal premium subsidy to 80 percent for farmers who buy their crop insurance as enterprise units. Under enterprise units all of a particular farmer’s acreage of a single crop in a given county is covered under one policy. That was a boost from the basic or optional units subsidy, that ranges from 50 percent to 60 percent on a tract of land.

“‘The one big thing that came out of the farm bill that many people don’t think about is the enterprise unit subsidy,’ said Gary Schnitkey, a farm management specialist at the University of Illinois. ‘It greatly reduced premium and we have seen a tremendous shift from basic and optional over to enterprise units. That has had a pretty dramatic impact on changes in crop insurance. What we have seen is people switch to enterprise units and then a lot of people bought up coverage.’”