The 2014 farm bill (Agricultural Act of 2014, P.L. In contrast, this report uses actual historical data to construct a series of charts and tables that provide information on the distribution of commodity-specific outlays under the farm safety-net programs of the 2014 farm bill during its first three years of operation (2014 through 2016). Overview of U.S. In particular, when farm program payments are linked to specific crops, they can influence relative market incentives and resource allocations. Also, significant differences in support levels across program crops may have strong regional or geographic implications, because not all agricultural activities may be undertaken successfully in all agro-climatic settings, as these vary widely across the United States. The Federal Crop Insurance Act of 1980 ( P.L. Under this framework, private insurance companies deliver and service crop insurance policies that are regulated and supported by USDA's Federal Crop Insurance Corporation (FCIC). Commodity-Specific CCC Support

CCC-funded commodity support programs include the marketing assistance loan (MAL) program and two revenue support programs—the Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) programs. An expanded list of "loan commodities" is eligible for MAL benefits. Premium subsidies are crop-specific. However, the major farm program crops (i.e., the covered crops) account for over 90% of all federal premium subsidies. Program-Specific Outlays

The 2014 farm bill's safety-net programs cover the five crop years of 2014 through 2018. In annual terms, commodity-specific outlays are estimated at $12.7 billion per year, including $7.5 billion for CCC programs plus $5.2 billion in FCIC crop insurance premium subsidies ( Figure 4 and Table 6 ). Corn support represents 46% of annual CCC and FCIC commodity-specific payments ( Figure 6 ). The next section adjusts commodity payments for planted acres and for the value of production. Payments Per-Acre and as a Share of Value of Production

When federal subsidies are measured as payments per acre ( Figure 12 ) or as a share of the program crop's value of production ( Figure 13 ), then peanuts, rice, and cotton emerge as the program crops with the highest payment levels under the current structure of farm programs and market conditions. Another important observation is the absence of measureable direct support for the U.S. dairy sector. When USDA payments are expressed as a share of variable COP ( Figure 14 ) and total COP ( Figure 15 ) for each program crop for crop years 2014-2016, peanuts, at 66%, receive higher levels of federal assistance than other program crops. Then, the level of "price protection" provided under the MAL and PLC programs is measured as the percent of monthly farm price observations below the MAL loan rates and PLC reference prices established under the 2014 farm bill for each program crop. Results for the 40% price-protection level are displayed in ( Figure 20 ). To the extent that the January 2008 through May 2017 time period reflects long-term market conditions, then the parity price-protection method of comparison evaluated in this report suggests that peanuts (and cottonseed when included as a hypothetical program crop) receive significantly higher price protection levels under both the MAL and PLC reference price programs as compared to the other program crops under the 2014 farm bill. Canola, sorghum, and rice also have greater support levels relative to the remaining program crops by these measures. In contrast, soybeans and pulse crops receive relatively lower price protection.
The 2014 farm bill (Agricultural Act of 2014, P.L. 113-79) authorizes farm safety-net programs for the five crop years of 2014 through 2018. This includes revenue support for 20 "covered commodities" under either the Agricultural Risk Coverage (ARC) program or the Price Loss Coverage (PLC) program and interim financing and floor price support for an expanded list of 24 "loan commodities" under the Marketing Assistance Loan (MAL) program. Outlays under the MAL, ARC, and PLC programs are funded by the U.S. Department of Agriculture's (USDA's) Commodity Credit Corporation (CCC).
In addition, federally subsidized crop insurance is available for over 100 agricultural commodities—including both covered and loan commodities. Federal crop insurance is permanently authorized by the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) but is periodically modified by new farm bill legislation. The principal subsidy component of federal crop insurance is premium subsidies that pay for an average of 62% of the cost of buying an insurance policy since 2014. Premium subsidies are funded by USDA's Federal Crop Insurance Corporation (FCIC).
Through the first three years of the 2014 farm bill (2014 through 2016), USDA has spent over $38 billion on commodity-specific farm program outlays. Annually, commodity-specific outlays are estimated at $12.7 billion per year, including $7.5 billion for CCC programs and $5.2 billion in FCIC crop insurance premium subsidies. When farm program payments are linked to specific crops, they can influence relative market incentives and resource allocations. Furthermore, significant differences in spending across program crops may have regional or geographic implications.
This report looks at available CCC and FCIC data for the major program crops and compares relative support using several different measures: absolute payments, payments per acre, payments as a share of the value of production, and payments as a share of the cost of production. In addition, price and income support levels are compared to market prices. By all of these measures, there has been substantial variation in relative support across program crops. Annual corn payments account for 46% of all CCC and FCIC commodity-specific outlays; however, corn also has the most planted acres and the largest annual value of production. When payments are compared per acre, and as a share of either the value or the cost of production for each crop, then peanuts and rice receive higher levels of support than do other program crops. Also significant is the absence of any net program outlays for the U.S. dairy sector under the 2014 farm bill.
One particular analytical method for comparing price-protection levels across program crops involves PLC reference prices. PLC reference prices for each commodity are adjusted such that 35%, 40%, or 45% of monthly farm price observations fall below the adjusted reference price during the January 2008 through May 2017 period. The choice of these reference levels is arbitrary but facilitates comparison. Important differences in support levels emerge. Peanuts and cottonseed (included for comparative purposes as a hypothetical program crop) receive significantly higher price protection levels compared to the other program crops. Canola and sorghum also have above-average support levels relative to the remaining program crops. In contrast, soybeans and pulse crops receive lower levels of price protection.