1. Changing Farm Policies for
Changing Times
Bradley D. Lubben, Ph.D.
Extension Assistant Professor and
Policy Specialist
Department of Agricultural Economics
University of Nebraska-Lincoln
UNL Farm Bill information – farmbill.unl.edu
USDA Farm Bill information – www.usda.gov/farmbill

2. Farm Bill Goals
■ A continued evolution toward risk
management
■ 1930s – 1996
• Supply control and price support
■ 1970s – present
• Income support
■ 1980s – present
• Risk management

3. Farm Bill Goals
■ Supply control and price support
(1930s – 1996)
■ Marketing allotments
■ Production quotas
■ Non-recourse commodity loans (-1985)
■ Acreage reduction (-1996)
■ Government stocks/farmer-owned reserve (-1996)

4. Farm Bill Goals
■ Income support
(1970s – Present)
■ Target prices/deficiency payments (1973-1996)
• Counter-cyclical payments (2002-present)
■ Non-recourse marketing loans (1985-present)
■ Direct payments (1996-present)

5. A Short Review of Direct
Payments
Decoupled, fixed, transition(?) payments
■ Popular in 1996 ■ Popular target in
because of 2011 because of
■ Flexibility ■ Paid regardless of
■ WTO friendly price and income
■ Secured a ■ Accrue to large
disappearing farms
baseline ■ $5 billion/year

6. Farm Bill Goals
■ Risk Management
(1980s – Present)
■ Modern crop insurance legislation of 1980, 1994,
and 2000
■ Ad hoc disaster assistance
• SURE (2008-2011)
■ ACRE – (2008-present)

7. ACRE Enrollment in 2009
Selected DCP DCP Acres ACRE ACRE Percent Percent
Commodities Farms Farms Acres ACRE ACRE
Farms Acres
Corn 1,130,285 70,454,400 105,387 12,995,012 8.5% 15.6%
Soybeans 885,312 42,263,737 97,216 7,639,025 9.9% 15.3%
Grain 269,240 10,678,713 13,736 835,945 4.9% 7.3%
Sorghum
Wheat 809,401 62,966,761 61,875 9,143,849 7.1% 12.7%
Upland Cotton 186,417 17,604,272 966 30,117 0.5% 0.2%
Rice 45,703 4,270,846 8 384 0.02% 0.01%
Peanuts 28,449 1,437,355 31 387 0.1% 0.03%
U.S. Total 1,541,329 222,044,292 128,620 32,528,628 7.7% 12.8%
Source: USDA Farm Service Agency
Available from USDA-FSA at http://www.fsa.usda.gov/FSA/webapp?area=home&subject=dccp&topic=landing

8. Farm Income Safety Net Comparison
Corn Prices and DCP
8.00
7.00
6.00
$/Bushel
5.00
4.00
3.00
2.00
1.00
0.00
2004 2005 2006 2007 2008 2009 2010 2011 2012
Loan Rate CCP Trigger Price
CCP Target Price Market Price

9. Farm Income Safety Net Comparison
Nebraska Corn Revenue and ACRE
1,400
1,200
1,000
$/Acre
800
600
400
200
0
2004 2005 2006 2007 2008 2009 2010 2011 2012
NE ACRE Guarantee-Irrigated NE ACRE Guarantee-Nonirrigated
NE Act/Proj Revenue-Irrigated NE Act/Proj Revenue-Nonirrigated

10. Farm Income Safety Net Comparison
Cotton Prices and DCP
1.25
1.00
$/Pound
0.75
0.50
0.25
0.00
2004 2005 2006 2007 2008 2009 2010 2011 2012
Loan Rate CCP Trigger Price
CCP Target Price Market Price

11. Managing Risk with the Farm
Income Safety Net
“A Multiplicity of Confused Concepts”
Scope of Risk
Farm Level Area Level National Level
Protection
Hedging
Price
ML/LDP CCP
RP/HPE AGR GRIP ACRE
Revenue DP SURE
RP
Production
CAT YP GRP PRF