With the demise of direct payments in future farm policy, Congress is weighing how to redistribute those $6 billion per year dollars across a year to year safety net versus single season crop insurance programs.
Zulauf says, “However, over 60 percent of the eliminated direct payments remain in spending on the safety net for field crops. Between 65 percent (House) and 81 percent (Senate) of these dollars are used for multiple-year commodity price support programs while the remainder is shifted to single-year crop insurance programs."
He says this issue has received little attention so far in the Farm Bill debate, but could emerge as a key farm policy issue if commodity prices continue their downward plunge.
Crop insurance can protect the value of a crop during its growing season, but not during the marketing year. That has to be a function of any farm policy safety net, and that discussion has not been at the forefront of the on-going debate to reconcile the House and Senate versions of the legislation. With declining values of farm commodities, any price support program and its design will have to become a key part of the debate in the final days before expected passage.
Source: FarmGate blog