Could farm program payments surpass farm bill’s projections?

Falling crop prices are going against Congress’ assumptions of the 2014 Farm Bill’s programs, even before farmers and ranchers have signed up for the programs.

The Congressional Budget Office (CBO) recently weighed in with a revised baseline that shows annual payments to farmers could average $4.8 billion over the next decade—a nearly 50 percent increase over what CBO had predicted less than a year ago after passage of the 2014 Farm Bill, reports Politico.

CBO’s projections of the combined annual cost of Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) will average about $4.4 billion compared with $2.94 billion for the same two programs last April. Smaller subsidy programs add to the $4.8 billion projections with ARC and PLC accounting for more than 90 percent of the total.

Until farmers enroll in the programs and the market is better defined, all the estimated projections serve as a forewarning, but the numbers are important indicators of the political risk undertaken by the new farm bill at a time of wholesale change in market prices.