Management

In today’s farmdoc daily article, we take a further look into a potential mandatory base acre update in the 2023 Farm Bill. There are three basic arguments for requiring a mandatory base acre update — improved equity or fairness in the programs, better aligning of payments with reality and producing CBO savings to use as an offset. However, there are at least an equal number of reasons Congress would decide not to do so, some of them justifiable and others simply political or factional matters.

One of the enduring puzzles of American farm policy involves the acres for which farmers receive farm program payments. Decoupled base acres — a substantial reform in the 1996 Farm Bill — attempts to address that puzzle. Up until the 1996 Farm Bill, federal support for program crops had been plagued by the problem that the federal assistance incentivized planting. Moreover, it provided the most incentive when prices were the lowest and crops oversupplied, which only contributed further to the supply and price problems. Base acres may present myriad problems of its own, but history teaches that the alternatives could be much worse or more problematic.

Program crops have dramatically different enrollments in the two major commodity title choices:  Price Loss Coverage (PLC) and Agricultural Risk Coverage at the county level (ARC-CO). Soybeans has a high…

We show payments for soybeans from Price Loss Coverage (PLC) and Agriculture Risk Coverage at the county level (ARC-CO) to aid in the deliberations over the next farm bill. Unlike…

The reference price escalator was introduced in the 2018 Farm Bill and uses effective reference prices to calculate Price Loss Coverage (PLC) payments. Effective reference prices can exceed statutory reference…