WASHINGTON, D.C. – The United States is still a few years away from a nationally available farm safety net program, says a senior American official.
And when it finally is pieced together, there likely will continue to be a federal subsidy in the system of more than $1 billion, said Ken Ackerman, acting administrator of the agriculture department’s risk management agency.
“I haven’t used a figure but if you do your numbers, it will be in that range, $1.1 billion or so,” he said in an interview during the annual USDA agricultural outlook conference.
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Earlier, in a speech to the conference, Ackerman outlined a dizzying array of safety net programs under consideration.
American farmers are in a new era in which government supports are being reduced. They must find ways to protect themselves, he said.
“U.S. farmers and ranchers in 1997 are planning and planting their second crop in this new risk environment,” he said in a paper presented to outlook delegates. “Our farmers and ranchers must now change their management style from passive to active.”
Revenue insurance
Part of the backstop will be an expansion of crop insurance programs to include coverage for catastrophes, plus several revenue insurance schemes.
Farmers also are being offered gross income insurance packages and various schemes to use futures hedging and options to protect themselves from price and income fluctuations.
Most of these programs are experimental, being tested in pilot projects with limited coverage.
He also held out Canada’s Net Income Stabilization Account program as a possible model.
Ackerman said as many as two-thirds of American farm acres already are covered in some form of safety net program.
“We already have substantial coverage and I think within a few years, we will have the pieces in place for a national plan.”
Iowa corn and soybean farmer John Kintzle told the conference farmers realize they must take more responsibility for safety net coverage. He said many realize management decisions and managing yield risk are the best protections of all.
“If you don’t have crop to sell, it doesn’t matter what the price is.”
