American Farmland Trust's Jon Scholl says many organizations have proposed alternatives to the current Title I farm safety net programs. The result has been an alphabet soup of proposals. Scholl says it's important to consider what is the right role for government to play in helping farmers manage risk, and what characteristics set the standard for good public policy. To help people understand the proposals AFT has engaged Ohio State University agricultural economist Dr. Carl Zulauf to analyze the features of the 10 leading safety net proposals.
According to AFT, Zulauf's assessment found positives including: 90% of the proposals would require farms to experience a loss in order to receive government assistance, making the farm safety net a risk management partnership between farms and the public. Also 90% of the proposals address both an existing hole in today's crop insurance program: multiple-year revenue declines that are not the fault of the farm, and, the current imbalance in the farm safety net, shallow revenue losses. Zulauf says these nine proposals would in effect make the risk management safety net more equitable across crops and regions. Eight of the programs would end fixed-prices or a revenue-benchmark, removing the incentive to adjust to risk events.
Concerns raised in the assessment include: the proper economic justification for a farm safety net is to address systemic risks that occur across many farms, not losses unique to an individual farm or a small number of farms; the majority of the ten proposals would address risk at the farm level, if for no other reason than such a program delivers the most risk assistance to individual farms; providing more assistance to individual farms than their share of systemic risk leads to inefficient use of public and private resources by encouraging more production in areas with the greatest risk, creating detrimental environmental consequences since risky production areas are often environmentally-sensitive areas, encouraging the use of more risky production practices, and, increasing the cost of the program to the public.