Farm BIll Counter Cyclical not protecting farms

With low prices facing farmers as they harvest their 2016 crop, it is becoming clear that the counter-cyclical policies contained in the 2014 Farm Bill will not provide much protection for most producers. As a result, farm groups are beginning to look toward the next farm bill and the types of policies that might best protect farmers against low prices.  In last week’s column, we argued against direct payments, subsidized revenue insurance when crop prices are above the cost of production, and loan deficiency payments. We promised future columns that would lay out some policy instruments we support. To start with, we want to identify a couple of principles that we keep uppermost in our minds as we identify program instruments that make sense to us.  We believe that farm policies ought to be designed so as to treat the cause of farm problems, not the symptoms. Our concern about the current array of crop programs is that they are designed to treat the symptoms, price variability while prices are at or above the cost of production, while ignoring the possibility of prices that are well below the cost of production and likely to remain there for extended periods of time.