Richardson predicted that crop insurance could come under attack later because it can be addressed in legislation outside the farm bill at any time. He added that the nutrition element of the farm bill might be restored to a final bill this year.
Wailes said the House bill appears to be the better option of the two current versions, particularly as it affects commodities produced in Arkansas. The House bill has a higher reference price for rice than the Senate bill does.
“Arkansas farmers are being hit now with the loss of direct payments, which have become politically unacceptable even though from an economic perspective they are a more efficient subsidy mechanism,” Wailes said. “We're going to lose those – $240 million to the state of Arkansas. As for the shallow loss revenue and deficiency price payment programs, there are differences and we'll see where the conferees wind up on that.”
Wailes said his research team's analysis of the farm bill's supplemental coverage option for crop insurance found that it would be “a very attractive option because of the level of subsidies for crop insurance buy-up.” Farmers who buy higher insurance coverage under the supplemental coverage would be able to do so with higher subsidies than they would receive for their regular crop insurance premium.
The House and Senate versions have significant differences in payment limits on commodity support. “Payment limits are fairly important for Arkansas just because of the size and scale of farms in the Delta,” Wailes said. “Payment limits on commodity support in the Senate bill is $50,000 and on the House side $25,000. That will also be an interesting discussion in conference to see where they end up.”