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Economists say the safety net in the next farm bill needs to account for uncertainty

Several ag economists told members of a House Ag Subcommittee the safety net in the next farm bill needs to address the rising cost of production. 

During a hearing Thursday, Dr. Joe Outlaw, co-director with the Agricultural Food and Policy Center with Texas A&M University says farmers and ranchers are facing high input costs and inflation and current crop insurance isn’t enough. “Prices are going to decline, but input prices will stay up for awhile. They always do,” he says. “That’s going to leave people in what we call a cost-price squeeze. Either looking at some sort of margin or building in something to ratchet up reference price with cost is my suggestion.”

Robert Craven with the University of Minnesota says ad hoc programs like Agriculture Risk Coverage and Price Loss Coverage should be strengthened because they helped increase net farm income by nearly a third in the last two years. “Traditional commodity programs have not provided a major part of the support to react to the shocks that have hit the commodity agriculture in recent years. Ad hoc programs have filled in the gaps.”

Ron Rainey with the University of Arkansas says crop insurance programs should be expanded for specialty crop producers. “And the added cost sometimes results in minimal risk reducing strategies being implemented on their farms. The number insurance products that have been made available have expanded in recent years, but gaps in coverage still remain.”

As an example, he says contract poultry producers are not covered.