COLUMBUS, OH – Since 1973, US farm program payments follow a process of moving from one regime or plateau to another, with the move occurring in a one to two year period.
Two times since 1973 farm payments have increased to a higher plateau but the increase was preceded by an increase in ad hoc payments made outside of existing farm safety net programs. Then, according to Dr. Carl Zulauf an Ohio State University farm policy expert, higher ad hoc payments were then incorporated into the farm bill safety net. Therefore, the sharp rise in ad hoc payments over the past two years could be a leading indicator of sustained higher farm payments into the future, perhaps double their 2007-2017 average.
According to Zulauf, in a recent FarmDoc Daily article, the ad hoc payments have been disguised as two rounds of the Market Facilitation Payment (MFP), and the most recent Coronavirus Food Assistance Program (CFAP). Continuation of high ad hoc payments, he explains, could be seen as a statement that market-based farm prosperity remain an attainable aspiration in the near future.
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On the other hand, incorporation of current high ad hoc payments into the farm bill safety net could be seen as an acknowledgement that market-based farm prosperity is not attainable in the near, perhaps intermediate, future. If the payments become part of the baseline of funding, then about $8 billion in annual farm payments will be available for distributionn the future.
(SOURCE: FarmDoc Daily)