|By David Bennett|
|Penton Business Media|
Critics of the Senate’s proposed farm bill continue to pop up from all over the political spectrum. Both crop insurance and the “shallow loss” program – key components of the
The Senate’s shallow loss program, advocated by many farm organizations, would provide producers with revenue guarantees and support levels for crops. A study released by the right-leaning
The study claims shallow-loss programs “are potentially expensive for taxpayers and especially costly in an environment in which grain and oilseed prices are declining from recent levels, as seems likely to be the case"
See the AEI study here.
The next farm bill is expected to contain an expanded role for crop insurance. A new report from the
EWG claims its analysis “shows that while crop insurance benefits, like farm subsidies, are concentrated in the hands of a small number of large farming operations, premium subsidies are modest for the overwhelming majority of crop insurance policyholders. Those farm operations would be unaffected by premium subsidy limits now being debated in
To read the report, see here.
For an alternate viewpoint on crop insurance, see here.
Following a presentation for congressional staffers on the shallow loss findings,
On shallow loss, trade and the WTO…
“When you deconstruct the language in the
“So, these are clearly amber box programs. That is, they’ll inherently be viewed within the WTO agreements as trade distorting – domestic supports that encourage production of individual crop. And that makes them ‘amber box.’
“The key issue from a trade dispute perspective is whether or not when your subsidies of that type go up, world prices are falling. Then, you’ll lose what’s known as a ‘price suppression’ case.
“Shallow loss payments are inherently designed to go up when prices fall. They have the potential to be very substantial in a given year for a crop relative to its value.
“For all the crops subject to the shallow loss program – the five big ones: corn, wheat, soybeans, cotton, rice, along with a bunch of smaller-acreage crops – when prices go down, the payments kick in. That tends to be the exact circumstance the WTO’s