With corn and soybean prices at double or even triple their government loan rates, you wouldn't think government support programs would be in play in the new farm bill. But direct payments (DP) are still active in the game, and growers must decide whether using a new alternate program is worth trading for a portion of DP for 2009 and beyond.

Finally passed this summer, the Food, Conservation and Energy Act of 2008 was in the works over two years before meeting congressional approval in June. The bipartisan bill withstood two vetoes by President Bush.

Of most interest to corn and soybean growers, particularly in areas of high yields and price variability, is the new Average Crop Revenue Election (ACRE) program, which provides an alternative to traditional support programs.

The new bill includes changes in payment limitations and has emphasis on conservation, alternative energy and, of course, sees social programs taking a chunk of the legislation.

“It builds on the successes of the 2002 bill and creates a better future for agriculture, all of rural America and the nation by strengthening farm income protection and investing in critical conservation, energy and nutrition initiatives,” says Sen. Tom Harkin (D-IA), chairman, Senate Committee on Agriculture, Nutrition and Forestry. “This farm bill covers a broad swath of America, from farming to hunger to conservation to measures involving good tax policy,” adds Sen. Saxby Chambliss (R-GA), ranking minority leader on the committee.

Rep. Collin Peterson (D-MN), chairman, House Agriculture Committee, says the bill “continues and improves programs that work and enacts reasonable reform in other areas to take us into the future for American agriculture.”
Rep. Bob Goodlatte (R-VA), ranking minority on the committee, says Congress “made great strides in reforming farm programs to reduce benefits from going to the wealthiest farmers and non-farmers.”

PAYMENT LIMITATIONS
Key aspects of the new bill see changes in eligibility that could impact larger growers.

Those with non-farm adjusted gross income greater than $500,000 aren't eligible for any farm program payments. Those with farm income greater than $750,000 won't receive any fixed direct payments.

The income amounts are a moving three-year-average, so program eligibility could change from one period to the next.

Eliminated by the bill is the three-entity rule. The legislation requires direct attribution of farm program payments to improve program transparency. In many cases, a spouse involved in a farm can be designated a producer.