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Report Compares House and Senate Farm Bill 'Safety Nets'

Researchers at the Agricultural and Food Policy Center at Texas A&M University released a study Monday comparing the potential impacts of the proposed 'safety net' programs in the 2012 House and Senate Farm Bills, finding that all farms represented in the study would prefer the House price loss coverage option over the Senate options, according to baseline prices.

House Committee on Agriculture Chairman Frank Lucas (R-Okla.) said the study illustrates the importance of risk management options that include crop insurance policies coupled with a farm bill that focuses on providing real price protection.

"The House farm bill saves taxpayers $35 billion, with more than $14 billion in these savings achieved by reforming U.S. farm policy. What the AFPC study says is that the House managed to save taxpayers money and reduce the deficit while still providing a safety net that farmers can truly depend on in hard times," Lucas said.

Study authors determined a farm's policy preference by selecting the legislation that provided the highest average net cash farm income over the life of the farm bill (2013-2017).

They examined three key policies in the Senate-passed Farm Bill: Agriculture Risk Coverage, a revenue protection plan; Supplemental Coverage Option, a crop insurance provision; and Stacked Income Protection Plan, an insurance/price guarantee for cotton only.

Authors examined each of the programs in contrast with the House policies, including: Revenue Loss Coverage, a revenue protection plan similar to the Senate's ARC program; Price Loss Coverage, an option that would provide assistance in extended periods of loss, and similar STAX and SCO options.

Between the two policies, the report determined that more of the representative farms would prefer county-based ARC program in the House bill over the individual-based ARC program in the Senate bill. Additionally, they would also prefer a Supplemental Coverage Option rather than the ARC program, unless a declining price scenario occurred.

Significant differences between the two bills exist in payment limitations and adjusted gross income limitations.

The complete report can be found here on the Texas A&M Agricultural and Food Policy Center website.