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Farm Bill Case Study

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The Farm Bill debate began in 2011. After missing their original November 1st deadline, the House and Senate Agriculture Committee leaders proceeded to work on completing the Farm Bill by the end of that year. The farm bill debate did not end until 2014, it was close to unanimous and almost everyone agreed the support of producers must be justified by risk reduction. Exposure of risk management and crop insurance lead to the development of the Agricultural Act of 2014, which was introduced as new interactions between commodity and crop insurance programs. There is a direct correlation between the “new” crop insurance programs and commodity program decisions. Previous crop insurance policies that were imposed prior to the Agricultural …show more content…

The new methods of this program helped establish insurable yields that allowed producers to have better county yields, better than some counties 10-year average. The Agricultural Act of 2014: Crop Insurance has perks; however, that does not exclude its implications. The data provided by the United States Department of Agriculture shows the economic implication that came from the program, some provisions of the Act is expected to extend beyond 2018. The subsidy rate of Supplemental Coverage Option rates was at constant sixty-five percent, while the subsidy rate of premiums for conventional crop coverage areas were from thirty-eight to eighty percent, depending on the insurance policies and other options chosen by way of the producer. As an end result, the introduction of Supplemental Coverage Option was put in place to protect the opposition, in case shallow losses may want to result in changes for conventional crop insurance coverage chosen by producers looking to get covered.
Supplemental Coverage Option coverage is based on a county’s averages, whether it be for the yield or revenue, rather than farm losses. Consequently, the closer a producer’s farm yields and revenues are to county averages, the larger the coverage blanket of Supplemental Coverage Option insurance.
The Stacked Income

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