Analysis compares potential payouts under AFBF, other options
By Sara Wyant
© Copyright Agri-Pulse Communications, Inc.
WASHINGTON, February 8, 2012 -A University of Illinois analysis of the American Farm Bureau Federation's (AFBF) deep-loss revenue protection proposal for the 2012 Farm Bill is raising some eyebrows in the Corn Belt. “It didn't give what we thought were great results,” a state corn growers association staffer in the Midwest told Agri-Pulse.
AFBF President Bob Stallman shrugged off the concerns, explaining that the Illinois findings were based on yields in a historically low-risk production area.
“You can be selective and pick counties in areas and make that case, but I think if you look at it in the aggregate our program has a lot of merits and we'll be making that case” to Congress, Stallman said.
The analysis performed by agricultural economist Gary Schnitkey calculated expected per acre payouts to corn and soybean growers in LaSalle County, Illinois from 1977 to 2010 under the AFBF revenue plan at two coverage levels - 70% and 80%.
It found that annual payments per planted acre of corn would have averaged $2.72 at the 70 percent level and $11.09 at 80 percent. For soybeans, the payouts were $0.68 and $4.40 using the same coverage levels.
The Illinois analysis also examined current crop insurance revenue products and rival revenue protection proposals, as well as the existing Direct Payment and ACRE programs, and concluded that each would have paid out higher amounts in the county studied.
“Our program,” Stallman countered, “is for those areas that have more risk.” “If you compare our program in the southeast, say, and for some commodities we fare much better because, once again, this isn't about paying farmers a check every year. This is about protecting them when they have those deep losses from weather disasters or from massive revenue drops that they're going to have a hard time coping with.”
The Farm Bureau leader noted his group's safety net proposal was the only one that would result in lower crop insurance premiums, with rates projected to decline 10-25%, percent depending on the crop and the county in which its grown.
“The reason it does that is because the government takes the systemic risk, the big risk, and when you take that out of the risk from crop insurance you can have a lower premium,” Stallman said.
Original story printed in February 8, 2012 Agri-Pulse Newsletter.
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