With the President expected to provide his signature on Friday....we are are now starting to hear about the good ...the bad and the ugly aspects of the Agricultural Act of 2014. The nearly 1,000 page bill with close to a trillion dollar price tag is being criticized for still being too costly. Although The agricultural portion of the bill makes up less than 20% of the total cost...and the bill is projected to reduce the deficit by nearly 23 billion dollars.
The new law will repeal direct payments..which were criticized, since farmers received them if they needed them or not.... and now will be replaced by risk management tools such as crop insurance and the new dairy margin insurance. As I mentioned in an earlier blog the margin insurance is a voluntary program where producers will be able to select margin protection (which is the difference between the all milk price and the average feed cost) at 50 cent increments beginning at $4 per cwt. through $8 per cwt. Fees are slightly different for operations that produce below and above 4 million pounds of milk. There is also an annual administrative fee of $100.... You can cover anywhere between 25 and up to 90% of your milk production..and there is no supply management element in the plan,
The new law will also streamline the number of conservation programs while strengthening conservation efforts to protect our soil and water. It invests more in research for product development..while boosting export opportunities. It supports beginning farmers..local farmer markets and organic food opportunities. It does maintain the controversial country of origin labeling law for meat products. It also support rural development .... provides promotional and research support for the Christmas tree industry and bio energy production.
As a compromise.... no one is going to be totally pleased but just the fact that a new 5 year bill could be passed is in itself.... a positive story.