1. U.S. Agriculture: A Private/Public Partnership
Ames, Iowa
July 27, 2018
Chad Hart
Associate Professor/Crop Marketing Specialist 1 1

2. Summary Data on U.S. Agriculture
Source: 2012 Ag Census

3. Summary Data on U.S. Agriculture
Source: 2012 Ag Census

4. Agricultural Production Decisions
Farmers decide their own production and marketing paths, within the guidelines of federal, state, and local laws and regulations.
The federal and state governments regulate agricultural production and markets to balance multiple concerns (examples: production, environment, energy, etc.) and provide support in a variety of ways.
The main interaction between the federal government and agricultural producers is via the Farm Bill.

5. Involvement of Ag Organizations
Agricultural industry and commodity groups can propose and lobby for the inclusion of or the modification of programs in the Farm Bill.
The groups provide information supporting their positions to Congress and other interested parties.
They also support research on production, distribution, and regulation of agricultural products and markets.

6. What is a Farm Bill?
The farm bill is the primary agricultural and food policy legislation set by the U.S. federal government.
It governs commodity programs, trade, food and nutrition programs, rural development, farm credit, conservation, agricultural research, and other programs related to agriculture.
Some programs within the farm bill are permanent legislation, whereas other programs have expiration dates.

7. Farm Bill History
Congress passed the 1st farm bill in 1933, the Agriculture Adjustment Act.
The 1938 farm bill established a base set of agricultural policies as permanent and set a timeline for updates every 5-7 years.
There have been numerous updates to agricultural policy since then, with the latest in 2014.

8. Farm Bill Targeting
Early farm bills were influenced by the Great Depression and the Dust Bowl.
Policy targets were to ensure an adequate food supply for the U.S. and to assist farmers in low price scenarios.
Since then, farm bills have been used to:
control supplies, manage trade, provide farm
income support, increase environmental
awareness

9. Farm Bill Process
While each farm bill is different, in general, the process is:
The executive branch (President, U.S. Department of Agriculture) proposes agricultural policies.
The legislative branch (Congress) can adopt, modify, and/or ignore these proposals as they craft the next farm bill.

10. Farm Bill Process
Within Congress, separate policy proposals can arise from the House of Representatives and the Senate.
Both the House and the Senate have Agriculture Committees that start the legislative process for the farm bill.
Proposed bills move from the Committees to the full House and/or Senate.

11. Farm Bill Process
Once the House and Senate have voted on their farm bill proposals, a conference committee is formed to blend the proposals together.
The conference committee’s version is then voted on by the full House and Senate.
Once both the House and Senate pass the same farm bill, it is sent to the President to either sign into law or veto (and possibly restart the process).

12. Farm Bill Titles Commodities IX. Energy
Conservation X. Hort. & Organic Ag.
Trade XI. Crop Insurance
Nutrition XII. Miscellaneous
Credit
Rural Development
Research
Forestry

13. Programs by Title Commodity
Income and price support programs for producers
Conservation
Environmental/conservation programs
Trade
Trade promotion programs
Nutrition
Income and price support programs for consumers

14. Programs by Title Credit Farm loan/Ag credit programs
Rural Development
Rural infrastructure programs
Research
Research funding for USDA and higher education
Forestry
Forestry management programs

15. Programs by Title Energy Biofuel programs
Horticulture and Organic Agriculture
Farmers markets
Crop Insurance
Modifications to crop insurance
Miscellaneous
Livestock disaster programs and price reporting

16. Recent Spending on Farm Bill Programs
Source: USDA, FY 2019 Budget Summary

17. Federal Crop Insurance
Federal Crop Insurance Corporation – 1938
Government’s initial move in crop insurance
Federal Crop Insurance Act of 1980
Premium subsidies
Federal Crop Insurance Reform Act of 1994
Catastrophic coverage and higher subsidies
Agricultural Risk Protection Act of 2000
The 2008 and 2014 Farm Bills

18. Federal Crop Insurance: A Public/Private Partnership
The Federal Government works with private insurance companies to offer crop insurance.
Since 1998, all federal crop insurance products are sold and serviced by private companies.
The Federal Government sets and/or approves premium rates and insurance terms.
Both entities share risks and returns from crop insurance.

19. Federal Crop Insurance

20. Federal Crop Insurance: Total Acres Insured

21. Yield Insurance Indemnities
No Payout
Payout

22. Revenue Insurance Indemnities
No Payout
Payout

23. Combination Insurance
No Payment
Neither Pay
RPHPE Pays
YP Pays
Both Pay
Payment

24. Corn Insurance Prices

25. What Units to Choose? Optional Units: Each farm is separate
Basic Units: Combine owned and cash rented acres in same county
Enterprise Units: Combine all acres of the same crop in same county
Whole Farm: Combine all crops in county

26. Current Subsidy Rates 60% 64% 80% 65% 59% 70% 75% 55% 77% 48% 68% 71%
Coverage level
Basic Units
Optional Units
Enterprise Units
Whole Farm Units
60%
64%
80%
not avail.
65%
59%
70%
75%
55%
77%
48%
68%
71%
85%
38%
53%
56%

27. Corn Acres Insured in 2017
87% of all
corn acres
are insured

28. 2017 Corn and Soy Coverage Levels

29. Thank you for your time. Any questions. My web site: http://www2. econ
Thank you for your time! Any questions? My web site: Iowa Farm Outlook: Ag Decision Maker: