With Farm Bill Stalled, Consumers May Face Soaring Milk Prices

If you know nothing about the current use of crop insurance in U.S. agriculture I encourage to check the (too) brief entry in Wikipedia. But in short, the program is why this summer you read about one of the worst droughts in the recent history of the Corn Belt, and didn’t read about farm foreclosures this fall.

While the news of the approaching fiscal cliff has been filling media time there hasn’t been much mention recently that the existing farm programs also expire December 31. It’s almost a certainty that any real spending adjustments in the federal budget will have to include a discussion of agriculture subsidies. 

The following is extracted from an AP piece by M.C. Jalonick on 12/15/12…

“While cutting food stamps and other farm programs, both the Senate and House agriculture bills preserve crop insurance subsidies that cover a big portion of farmers’ losses due to bad weather. Those subsidies buoyed a strong agricultural economy even through last summer’s scorching drought. Committee leaders from both parties say farmers consistently tell them crop insurance is the program they depend on most.

But both bills also create an insurance program that would give farmers additional protection against any kind of revenue losses, such as from a drop in commodity prices. The Senate bill’s version would cost almost $3 billion annually, with the House bill a little under $1 billion.”