Department of Economics The 2008 Farm Bill ISU Extension ANR Lunch and Learn Ames, Iowa December 12, 2008 Chad Hart Assistant Professor/Grain Markets Specialist

Department of Economics A Short Timeline for the Farm Bill May 2005Farm groups outlines proposals July 2005USDA begins nationwide forums Feb. 2006Congress begins farm bill hearings Jan. 2007USDA releases farm bill recommendations July 2007House passes its version of the farm bill Dec. 2007Senate passes its version May 2008House and Senate agree on farm bill June 2008House and Senate override veto of farm bill

Department of Economics Farm Bill Titles I. CommoditiesIX. Energy II. ConservationX. Hort. & Organic Ag. III. TradeXI. Livestock IV. NutritionXII. Crop Insurance V. CreditXIII. Commodity Futures VI. Rural DevelopmentXIV. Miscellaneous VII. ResearchXV. Trade & Taxes VIII. Forestry

Department of Economics Farm Bill Projected Spending Projected Spending $297 Billion

Department of Economics The 2008 Farm Bill  Continues many of the same programs we have currently  Direct payments  Price countercyclical payments (CCPs)  Marketing loans  CRP, EQIP, and other conservation programs  Gives producers a choice on programs  Average Crop Revenue Election (ACRE)  Sets up new permanent disaster program  Supplemental Revenue Assistance Payments Program (SURE)

Department of Economics Commodity Title CropUnit Soybeans$/bu Target Price Changes Direct payments and loan rates unchanged Payment acres reduced (to 83.3%) Posted county price day moving average

Department of Economics Average Crop Revenue Election (ACRE)  ACRE is a revenue-based counter-cyclical payment program  Based on state and farm-level yields per planted acre and national prices  Producers choose between the current price-based counter-cyclical payment (CCP) program and ACRE  There are still some details to be worked out about ACRE (stay tuned)

Department of Economics Payment Limitations  Direct payments: $40,000 (w/o ACRE) $32,000 (w/ ACRE)  Counter-cyclical payments: $65,000  ACRE: $73,000 ($65,000 + $8,000)  Marketing loans: No limits  Direct attribution of payments  Elimination of the 3-entity rule

Department of Economics Supplemental Revenue Assistance Payments Program (SURE)  Provides payments to producers in disaster counties for crop losses  Based on crop insurance program, non- insured crop assistance program, and disaster declarations  Whole-farm revenue protection, not commodity-specific

Department of Economics Crop Insurance Changes  Reduced premium subsidy rates for area crop insurance plans (GRP, GRIP)  Increased premium subsidy rates for enterprise and whole-farm units  Increased fees for catastrophic (CAT) coverage to $300 per crop per county  Moved premium billing date to August 15 th, starting in 2012  Required studies of organic production, energy crops, poultry, bees, and aquaculture

Department of Economics Energy in the Farm Bill  Grants for advanced biofuel biorefineries, up to 30% of the cost of the project  Loans for the same, up to $250 million or 80% of the cost per project  Bioenergy Program for Advanced Biofuels  Biomass Crop Assistance Program  Cellulosic biofuel producer tax credit

Department of Economics Nutrition  Food Stamp funding approved through Sept  Renamed Supplemental Nutrition Assistance Program  Increased funding for The Emergency Food Assistance Program (TEFAP)  Continues fresh fruit and vegetable programs  Sets up “Hunger-Free Community” and Emergency Food Infrastructure grants  Awards to food-program service providers, local nonprofits, and food banks to assess community food issues and improve capacities for handling food products

Department of Economics Conservation  CRP limited to 32 million acres (starting 2010)  WRP extended (3 million acres)  EQIP funding increased  CSP renamed and strengthened  Targeted enrollment: million acres per year

Department of Economics Thank you for your time! Any questions?