	Recent Developments

This report provides an overview of farm safety net proposals for the next farm bill, as advocated by the Administration, Members of Congress, and various interest groups. The Senate Agriculture Committee approved its version of the 2012 omnibus farm bill on April 26, 2012 (Agriculture Reform, Food, and Jobs Act of 2012), and officially filed the measure, S. 3240 , on May 24, 2012. Introduction

In advance of the expiration of the 2008 farm bill ( P.L. 110-246 ), numerous proposals have been offered to revise the "farm safety net" for producers of crops covered by farm commodity support programs. Farm safety net proposals surfaced mostly during fall 2011, when budget deliberations by the Joint Select Committee on Deficit Reduction generated concerns that a new farm bill might be "written" or severely constrained from a budgetary perspective by budget negotiators, rather than by the House and Senate Agriculture Committees. The leadership's proposal was not publically released, and ultimately the joint committee failed to reach a bipartisan consensus on deficit reduction. As a result, development of the farm bill is now following a more traditional legislative process, beginning with committee deliberations. Current Farm Safety Net Programs2

The federal government supports farm income and helps farmers manage risks associated with variability in crop yields and prices through a collection of programs. The broader farming community often refers to the "farm safety net" as: 
1. farm commodity price and income support programs under Title I of the 2008 farm bill, 2. federal crop insurance (permanently authorized) under the Federal Crop Insurance Act of 1980, and 3. disaster assistance programs under Title XII of the 2008 farm bill, which expired on September 30, 2011. These include 
1. how price (or revenue) protection is established, 2. the geographic level at which program benefits are triggered, and 3. whether or not a proposal addresses "shallow losses" (i.e., losses not covered by federally subsidized crop insurance because of the policy deductible). "Recoupling"

Another choice when designing a farm program is whether to tie the benefits to current plantings or to historical plantings. Most proposals either reduce or eliminate direct and counter-cyclical payments to generate savings and provide funding to change the farm safety net so it addresses concerns pertaining to farm revenue risk for producers. Also, most either leave the marketing loan program unchanged or retain it with modest modifications. Several proposals would reduce or eliminate direct payments and other commodity payments, and create a new crop revenue program by borrowing concepts from current programs such as ACRE or SURE. In addition, the program uses harvest prices from the crop insurance program (which are based on current futures market prices for harvest-time contracts) for calculating actual and guarantee levels of revenue. The primary program is limited to current program crops. Program description: Replace current farm commodity programs and all crop insurance subsidies with a free crop insurance policy that covers yield losses of more than 30%. According to the organization, the proposed changes to the safety net would save $2.5 billion per year. The report outlines policy changes in six specific areas: commodity programs, conservation, research and development, beginning farmer programs, crop insurance, and nutrition. The draft contained multiple titles, including a proposal for the farm safety net.
In advance of the expiration of the 2008 farm bill (P.L. 110-246), numerous proposals have been offered to revise the "farm safety net" for producers of crops covered by farm commodity support programs. Farm safety net proposals by Members of Congress, the Administration, and a number of farm and interest groups surfaced mostly during fall 2011, when budget deliberations by the Joint Select Committee on Deficit Reduction generated concerns that a new farm bill might be "written" or severely constrained from a budgetary perspective by budget negotiators, rather than by the House and Senate Agriculture Committees.
Ultimately, the joint committee failed to reach a bipartisan consensus on deficit reduction. Nevertheless, the joint committee process generated substantial movement toward reshaping the policy framework underlying the farm safety net and other major farm bill issue areas, such as conservation and nutrition. Since early 2012, legislation for the next farm bill has followed a more traditional process, starting with committee hearings prior to expiration of the 2008 farm bill (generally September 2012, but for commodity program crops, prior to the 2013 harvest).
Many proposals with policy changes and proposed cuts have been directed at commodity programs and crop insurance, because these programs account for the bulk of agricultural funding (excluding conservation and nutrition programs, which are also considered part of the agricultural budget). Commodity programs, crop insurance, and the recently expired farm disaster programs comprise the so-called "farm safety net"—the federal government's suite of programs designed to support farm income and help farmers manage risks associated with variability in crop yields and prices.
To generate budget savings and provide funding for proposed changes to the farm safety net, many of the proposals either reduce or eliminate direct and counter-cyclical payments. Most proposals either leave the marketing loan program unchanged or retain it with modest modifications. Several proposals would make changes in crop insurance, including cuts in producer subsidies.
Three major issues are embedded in nearly all farm safety net proposals: (1) how price (or revenue) protection is established (i.e., within-year versus averaging across multiple years or fixed in statute); (2) at what geographic level—the farm level or a more aggregated regional level—program benefits are triggered; and (3) whether the proposal addresses "shallow losses," those not covered by federally subsidized crop insurance but paid by the producer via the policy deductible. Additional issues include whether program benefits should be based on current plantings ("re-coupled") rather than tied to historical plantings (as done since 1996 under direct payments), and to what extent a revised farm safety net program is applicable to crops outside of the traditional farm program mix.
The Senate Agriculture Committee approved its version of the 2012 omnibus farm bill on April 26, 2012 (Agriculture Reform, Food, and Jobs Act of 2012), and officially filed the measure, S. 3240, on May 24, 2012. It overhauls the farm safety net by eliminating direct and counter-cyclical payments and establishing a new shallow loss revenue program. For the revenue guarantee, farmers are offered a choice of basing the guarantee on either historical farm or county yields. A separate insurance program is made available for cotton, and other changes are made to the crop insurance program that are designed to provide additional options to all crop producers, not just traditional farm program crops.