The smaller 10 percent adjustment is applied to peanuts and rice as both crops lack insurance products that function as well as those available to the major grain and oilseed commodities. AFBF suggests the same 10 percent loss threshold be used to determine appropriate target price levels for rice and peanuts. The target price will be based on 85 percent of planted acres, but not to exceed a producer's historical base acreage. This provides a safety net more accurately addressing the risks associated with current production decisions and eliminates the present mismatch between payments and actual production or market conditions. Capping the payment acres at the historical base minimizes any potential distortion of a target price system.
The Senate Agriculture Committee will likely begin markup of a comprehensive, long-term farm bill this month, while the House Ag Committee is considering moving a bill after the Senate Ag Committee completes its mark up.