Mississippi farmers will no longer be able to rely on direct payments from the federal government as a safety net. The federal program will instead expand crop insurance to cover losses in revenue or crop yield.
In 1996, Congress passed a safety-net for farmers that became known as direct payments. Essentially, the federal government paid farmers based only on the number of acres of land they owned, not on the condition of their crop. While popular with some farmers, the payments were maligned by most lawmakers who saw them as wasteful.
However, under the new Farm Bill passed earlier this year, Congress repealed the direct payments in favor of a new safety-net based on crop insurance. Krysta Harden is the Deputy Secretary for the U.S. Department of Agriculture.
"Title one, which is the commodity title of the farm bill, will no longer have direct payments, and some of the other tools have been replaced two major programs," says Harden. "One is the Agricultural Risk Coverage program called ARC. The other is Price Loss Coverage, we refer to it as P.L.C. These are safety-net programs that producers are going to have the ability to determine works best for their own operations."
Under the two insurance programs farmers will have the benefit of protecting themselves from different eventualities. The Price Loss Coverage would protect a farmer from price fluctuations. Whereas the Agricultural Risk Coverage would protect a farmer from potential yield problems that could occur from a drought or too much rain.
Keith Coble is an Agricultural Economist with Mississippi State University's Extension Service. He says the changes provide more choices for farmers to protect themselves.
"The bill ultimately provided a mixture of programs in an attempt to accommodate the differences in agricultural production," says Coble. "For example, rice producers in Mississippi, who have very little yield risk, they I think in many instances were very interested in price-triggered programs. If you have more yield risk than a revenue protection plan may be more to your desire."
Bowen Flowers is a cotton farmer in Clarksdale. He's unsure what the changes will mean for him, but he remains optimistic.
"We probably won't have as good a safety-net as we had, but I think it's going to work out," says Flowers. "It's going to work out for sure. We're just going to have to learn to see how it works here in the future. We've got a lot of learning to do from extension service and others to figure out which way is the best way to go."
Mississippi farmers will have until the end of March, 2015, to decide which program is best for them.
