A federal program that provides direct payments to farmers may soon be axed in favor of a new plan that helps subsidize the cost of crop insurance, according to The Associated Press.
Currently, the federal government spends $5 billion per year on direct payments to farmers, a fixed total that doesn’t change based on other factors. According to the news source, farm groups and politicians who back agricultural interests are hardly protesting the change to this plan, as the payments are considered excessive during a general time of prosperity for America’s farmers. Legislators believe they can save $23 billion over the next 10 years by enacting their new bill, which would end directprograms.
The newly proposed farm bill provides direct payments to farmers who experience small or “shallow” revenue over a period of five years. Essentially, if the farmers do not make as much as they are projected to for that time period, no matter what the reason, the federal government helps make up some of the difference in order to keep agricultural workers in business. If the revenue earned by farmers is on track, no payments are made.
Modifications are also being made to the federal government’s subsidization of crop insurance, which provides payments for farmers who experience crop loss due to weather or other factors. The bill would make it more affordable for farmers to get crop insurance and help expand the range of coverage. Currently, 83 percent of the country’s acreage is covered by government-subsidized insurance.
Farmers supported by the federal government should be sure to manage their finances carefully. One way to save money is by investing in used agricultural equipment, such as tractors or sprayers. The online auction site IronPlanet backs all of its equipment with IronClad Assurance, which allows buyers to view full inspection reports online before they bid.