2008 US FARM BILL
My comments on the new farm bill are taken from a variety of sources. No one has any clear direction or feel how the final bill will turn out. I do think we are looking at reduced federal subsidies and more conservation initiatives. Here are some things I believe will be key components of the new bill:
1) Crop insurance will remain a key function and heavily subsidized by the federal government. It may be expanded to provide more revenue insurance products.
2) Land stewardship practices may be rewarded more than they are today. The Conservation Security program may be expanded.
3) Support for renewable fuels will remain another key component.
4) The inclusion of more crops, niche markets, specialty crops, etc. will likely be part of the program.
5) Farmer savings accounts or rainy day funds may be established for farm operators to have a way to save during profitable years with pre-tax dollars.
6) Carbon credits are also receiving some positive press. Today there are companies that will pay farmland owners for certain practices that sequester or lock-up carbon dioxide gas, such as no-till, grasslands, forestry, etc. These companies are required by federal statute to mitigate their carbon emissions and by paying landowners for practices that help offset the deficit they can accomplish this. Currently a 500 acre farm might be able to sell carbon credits for roughly $900 or a $4,500 contract for five years if certain practices are being utilized.
The World Trade Organization will have a significant impact on the outcome of the final bill. Support payments such as direct payments are likely to go down and there may be less price support in the future as well. We will continue to monitor the progress the new Congress makes in 2007 and will have more information as it becomes available.
Howard Halderman, President
Halderman Farm Management Services, Inc.