What is the Farm Bill?

The Farm Bill is a package of federal legislation enacted every five to seven years by Congress, administered by the United States Department of Agriculture, and sets the general direction for America’s farm and food policy. The first Farm Bill was enacted in 1921 in response to the Great Depression. The current farm bill is known as the Food, Conservation, and Energy Act of 2008 is set to expire in 2012. Debate and discussions are already underway to form the first draft of the 2012 Farm Bill.

Is my Farm Affected by the Farm Bill?

The Farm Bill is government policy that affects every aspect of a farmer’s ag marketing plan including ag risk management, crop insurance, pricing and more.

The Farm Bill effects a producers risk management and marketing plans because:

  • How the bill forces changes in the Supply and Demand balance sheets of the various commodities will of course affect prices and farmers’ marketing.
  • Defines a “safety net” created for the purpose of providing a life line to today’s farmer in the event of a prolonged period of potentially catastrophic economic conditions.
  • This safety net can consist of guaranteed payments (Direct Payments), contingent payments (Counter-Cyclical, LDP’s), crop insurance premium subsidies, loan programs and rates, acreage reduction/idling programs (CRP, set asides, etc.), and so on.
  • How these safety net components interact with current economic realities greatly affects how a farmer can or should optimally market his production.

Of particular significance in the 2008 Farm Bill were provisions that accelerated the development of advanced biofuels including ethanol and expanded the current Renewable Energy and Energy Efficiency Program.

Providing Guidance on the Farm Bill

AgriVisor advises farmers on the impact of the Farm Bill on a farmer’s marketing plan, risk management and whether a farmer is eligible for programs within the bill. With changes every 5-7 years, farmers need to plan not only for today, but for future policy and its impact on your production.

With AgriVisor’s Max-Visor and Crossover Solutions programs, we custom develop an agricultural marketing plan that takes these effects into consideration. Learn more about our agricultural consulting services, or speak with an AgriVisor Analyst without any obligation.