2014 Farm Bill Decisions: Payment Yield Update Option

By: Carl Zulauf, Ohio State University, and Nick Paulson, Jonathan Coppess, Gary Schnitkey, and Todd Kuethe, University of Illinois at Urbana-Champaign

 

The 2014 farm bill provides the owner of a Farm Service Agency (FSA) farm with a one-time option to update the farm’s payment yield for covered crops.  This article will discuss this decision.  It concludes by recommending that all producers consider updating yields if updated yields are higher than current yields; however, updated yields may be surprisingly low. To read the full article Click Here

Farm Transition, Estate and Retirement Seminar

By: Sam Custer, Extension Educator

Do you have a concrete plan in place to transition the family farm to the next generation? OSU Extension, Darke County will offer a Farm Transition, Estate and Retirement Seminar on Wednesday, August 6 in Greenville. This event is for all generations involved with the family farm.

The purpose of the program is to offer tools and education to farm owners who are preparing to transition the farm to the next generation. Topics include trusts, gifting, protecting farm and personal assets, federal estate taxes, insurance options, retirement income and security, family communication and much more.

Speakers include Robert Moore, Attorney, Wright & Moore Law Company; Todd Durham, Second National Bank and Sam Custer, OSU Extension Educator Darke County.

Seminar check-in begins at 8:30 am with the program scheduled from 9:00 am until 3:00 pm. Cost of registration is $15 per farm family and includes lunch and a resource notebook. The seminar is made possible with generous support from Second National Bank.

The program will be held at the Second National Bank Conference Room, 499 South Broadway, Greenville, Ohio 45331. Click here for the 2014 Transition Estate and Retirement Seminar Flyer 

Registration and payment is required by July 29. Registration forms are available online at www.darke.osu.edu.

Contact Sam Custer, OSU Extension, Darke County, for more information at 937.548.5215 or custer.2@osu.edu.

U.S. Dairy Markets & Policy Update

by: Dr. Cameron S. Thraen, Associate Professor and OSUE State Dairy Markets and Policy Specialist, Department of Agricultural, Environmental and Development Economics, The Ohio State University, Thraen.1@osu.edu

Policy Update: Dairy Producer Margin Protection Program (DPMPP)

By now you are quite familiar with the broad outlines of the DPMPP. Participating producers will establish a base production history (bph) based on the highest annual production from the 2011, 2012 or 2013 calendar year. Once established a farm’s production base will be allowed to increase by the U.S. average production growth.  There is no penalty for increasing production over this level other than the stipulation that extra production will not be eligible for the coverage under the DPMPP.  Coverage rates will be 25% to 90% of the established production base.

The premiums will follow a two tier schedule.  For a production base at 4 million pounds or less there is one schedule and for those farms with a production base over 4 million pounds another, more expensive schedule.  Those producers whose annual production is at or below 4 million pounds the cost of coverage all the way up to $6.50 remains very reasonable, only become more expensive at the $7 to $8 levels.  For a producer whose annual production base is above the 4 million pounds, the cost is still modest up to the $5 level, but then increases rather significantly above that point. 

There are other provisions for new farms, farms with mutiple owners, and owners with multiple farms.  Producers will not be allowed to simultaneously use Livestock Gross Margin Insurance and this program.  The program will not start until September of 2014 and decisions on coverage will be made on an annual basis.  The text of the farm bill specifies September 1, 2014 as the deadline to have these rules in place.  Final DPMPP rules will be announced by the USDA Farm Services Agency.

In addition to the DPMPP the farm bill language directs the Secretary of Agriculture to implement a dairy product purchase and donation program to augment commercial demand with the intent of increasing the milk price in times of low margins.  Much of the operational details for this product purchase and donation program have been passed along to the USDA Secretary of Agriculture and are not known at this time.

If you would like to read more about these programs, link into the policy papers on the Farmdocdaily website (http://farmdocdaily.illinois.edu/authors/john_newton/)

Dairy Margin Update

The DPMPP margin is forecast to stay above $11.00 / cwt. through the next 12 months.  This forecast is updated daily.  If you wish to follow the Dairy Markets and Policy DPMPP margin forecast go to the DmaP website (http://dairy.wisc.edu/Tools/MILC-MPP.html).

 

2014 Farm Bill: Overlap between PLC and Crop Insurance

by: Carl Zulauf, Professor, Ohio State University, June 2014

Overview:  This article addresses the potential for overlap that can exist between crop insurance and the Price Loss Coverage (PLC) program option in the 2014 farm bill.  To provide perspective, the historical overlap that existed between target prices and crop insurance prices from 1974 through 2006 is examined.  The article ends with summary observations including implications for policy and the upcoming farm program decision by farmers. To download the pdf file click here

Policy Background:  Target prices began with the 1973 farm bill.  They have existed ever since except for the 1996-2001 crop years when the 1996 farm bill replaced target price payments with direct payments.  PLC is the latest version of target price programs.  It refers to target prices as reference prices.  All target price programs have made payments when the market price is below the target price, although different farm bills have used different measures of market price.

Price Decline Overlap:  PLC and crop insurance can make payments for the same price decline if

(1)  price declines between the insurance pre-plant and harvest price discovery periods, and

(2)  the price decline continues throughout the ensuing crop marketing year resulting in a crop year average price that is less than the PLC reference price.

Analysis:  The potential for this overlap is examined using target prices for the 1974-1995 and 2002-2006 crop years for the economically and politically important crops of corn, rice, sorghum, soybeans, upland cotton, and wheat.  This period was selected in part because market prices exhibited no sustained upward or downward trend.  Trends affect the probability of payment by target price programs.

The target prices are from Agricultural Statistics, an annual U.S. Department of Agriculture (USDA) publication (http://www.nass.usda.gov/Publications/Ag_Statistics/index.asp.)  Crop year average prices are from the USDA, National Agricultural Statistics Service (NASS) Quick Stats database (http://quickstats.nass.usda.gov/).  Consistent with PLC, per unit deficiency payment is calculated as the Target Price minus the U.S. crop year average price.

Insurance prices for 2000 and forward are from the Risk Management Agency (RMA) website, http://www.rma.usda.gov/.  For earlier years, a data set created by Art Barnaby of Kansas State University is used (http://www.agmanager.info/crops/insurance/workshops/default.asp).  RMA did not compute harvest insurance prices prior to the introduction of revenue insurance, which began with Crop Revenue Coverage (CRC) in 1996.  However, Art estimated harvest prices for prior years using RMA methods.  Note that crop insurance was not offered for rice until the 1987 crop year and the insurance price used for wheat is the price based on the Chicago futures market.

Findings:  The insurance price declined between the pre-plant and harvest price discovery periods in about 50% of all years as well as during only those years in which a deficiency payment occurred (Figure 1).  Such a finding was expected because insurance prices for the examined crops are based on futures prices.  It is widely-accepted that futures prices are unbiased price estimates and that new bullish and bearish price information is generated randomly.  Hence price increases and decreases about 50% of the time.

During the years a deficiency payment was made and insurance price declined, average per unit deficiency payment expressed as a percent of the pre-plant insurance price exceeded average decline in insurance price for all crops (Figure 2).  The smallest difference is for corn:  a -15% decline in insurance price vs. a per unit deficiency payment that averaged 18% of the insurance pre-plant price.  The largest difference is for rice: a -18% decline in insurance price vs. a deficiency payment that averaged 59% of the insurance pre-plant price.  It should be noted that the average decline in insurance price is similar among crops, ranging from -13% for wheat to -18% for rice.  Again, this finding was expected for reasons discussed in the previous paragraph.

Summary Observations

►   An overlap can exist between target price deficiency payments and declines in crop insurance price between the pre-plant and harvest price discovery periods.

►   The exact degree of overlap expected between PLC and crop insurance is difficult to calculate because PLC pays on 85 percent of FSA farms’ base acres while insurance pays on 100% of acres planted on the insured unit.  Nevertheless, this overlap has the potential to be large as illustrated by the historical experiences during the 1974-1995 and 2002-2006 crop years.

►   A policy issue is whether the deficiency payments that coincide with the insurance deductible is an overlap.  Farmers will not likely view this part of PLC payments as an overlap.  However, the social contract which underpins public subsidies for farm insurance is that a partnership exists between society and farmers in managing farm production and revenue risk.  The farmer’s share of this partnership involves the insurance deductible and payment of a premium.  PLC payments alter the deductible component of the social contract.

►   Given that crop revenue insurance is a key, if not the key, component of the crop safety net, an obvious policy question is whether the overlap between PLC reference prices and crop revenue insurance prices should be considered when designing the crop safety net?  More specifically, should the overlap be eliminated by integrating the prices of the two programs?

►   A related, interesting historical policy question is whether the elimination of target prices between 1996 and 2001 by the 1996 farm bill allowed revenue insurance products to gain traction, thereby altering the future path of farm policy debates?

►   Farmers should consider the insurance – PLC overlap when making their farm program choice.  Overlapping payments would provide additional government assistance if prices decline and stay below the PLC reference prices.  Electing PLC also creates the potential for substituting PLC for crop revenue insurance in providing assistance against price declines when a PLC payment is expected.  This substitution allows farmers to replace revenue insurance with cheaper yield insurance.

►   Because the new insurance Supplemental Coverage Option is only available if PLC is elected, insurance companies and agents have an economic self-interest in promoting PLC as the farm program choice.  However, the potential to replace higher premium revenue insurance with lower premium yield insurance when deficiency payments are expected blunts this economic self-interest.  It will be interesting to see how these competing impacts play out.

This publication is also available at http://aede.osu.edu/publications.

 

 

 

Fuel Tax – Credits and Refunds for Ohio Farmers

By: Larry Gearhardt, Field Specialist, Taxation, OSU Extension

Farming can be a fuel-intensive business. Both the federal and state governments impose an excise tax (fuel tax) on each gallon of fuel purchased. The amount of fuel tax can become substantial if the farming operation uses thousands of gallons of fuel to plant and harvest its crops.

There are exemptions from paying the fuel tax for certain off-road uses, including farming. There is no tax on dyed diesel fuel when it is delivered to the farm because it is assumed that the dyed diesel fuel will be used for an exempt purpose. However, for gasoline and un-dyed diesel fuel, the fuel tax is included in the cost of the fuel. If the tax is included in the cost of the fuel used in farming, the farm operator can file for a refund. In the case of the federal fuel tax, instead of a refund, the farm operator has the option of applying the fuel tax credit against any income tax liability. Unfortunately, there is no similar provision in Ohio law and the only avenue open to the farm operator is to apply for a refund of the Ohio fuel tax.

This article focuses on the two main fuels used in farming – gasoline and diesel fuel. Other specialized fuels, such as liquid natural gas and aviation fuel, have their own specific rules and the reader is encouraged to review those rules if specialized fuels are used on the farm. To read more Click Here

Ohio Farm Custom Rates 2014 – Part 2

by: Barry Ward, Leader, Production Business Management, Department of Agricultural, Environmental and Development Economics

A large number of Ohio farmers hire machinery operations and other farm related work to be completed by others. This is often due to lack of proper equipment, lack of time or lack of expertise for a particular operation.  Many farm business owners do not own equipment for every possible job that they may encounter in the course of operating a farm and may, instead of purchasing the equipment needed, seek out someone with the proper tools necessary to complete the job. This farm work completed by others is often referred to as “custom farm work” or more simply “custom work”. A “custom rate” is the amount agreed upon by both parties to be paid by the custom work customer to the custom work provider. To read more Click here

 

Ohio Farm Custom Rates 2014 – Part 1

By: Barry Ward, Leader, Production Business Management, Department of Agricultural, Environmental and Development Economics

A large number of Ohio farmers hire machinery operations and other farm related work to be completed by others. This is often due to lack of proper equipment, lack of time or lack of expertise for a particular operation.  Many farm business owners do not own equipment for every possible job that they may encounter in the course of operating a farm and may, instead of purchasing the equipment needed, seek out someone with the proper tools necessary to complete the job. This farm work completed by others is often referred to as “custom farm work” or more simply “custom work”. A “custom rate” is the amount agreed upon by both parties to be paid by the custom work customer to the custom work provider.  The read the entire article, Click Here

Western Ohio Cropland Values and Cash Rents 2013-14

By: Barry Ward, Leader, Production Business Management, Department of Agricultural, Environmental, and Development Economics

Ohio cropland varies significantly in its production capabilities and consequently cropland values and cash rents vary widely throughout the state. Generally speaking, western Ohio cropland values and cash rents differ from eastern Ohio cropland values and cash rents. This is due to a number of factors including land productivity and potential crop return, the variability of those crop returns, field size, field shape, drainage, population, ease of access, market access, local market price, potential for wildlife damage, field perimeter characteristics and competition for rented cropland in a region. This article highlights the summary of data collected for western Ohio cropland values and cash rents. 

Ohio cropland values and cash rental rates are projected to decrease in 2014. According to the Ohio Cropland Values and Cash Rents Survey, bare cropland values in western Ohio are expected to decrease from 4.0% to 5.4% in 2014 depending on the region and land class. Cash rents are expected to decrease from 0.1% to 3.1% depending on the region and land class.

The “Western Ohio Cropland Values and Cash Rents” study was conducted by surveying professionals with knowledge of Ohio’s cropland markets. Surveyed groups include farm managers, rural appraisers, agricultural lenders, OSU Extension educators, farmers, landowners, and Farm Service Agency personnel.

The entire survey summary is available online at:

http://aede.osu.edu/about-us/publications/western-ohio-cropland-values-and-cash-rents-2013-14 

Choices: Online Magazine – Analysis of the New Farm Bill – Ag Act of 2014 plus Economic and Policy Analysis of Advanced Biofuels and Higher Education’s Role in Supporting a Rural Renaissance

By: Barry Ward, Assistant Professor, The Ohio State University Department of Agricultural, Environmental and Development Economics; Ohio State University Extension Leader, Production Business Management

Choices is an online peer-reviewed magazine published by the Agricultural and Applied Economics Association (AAEA) for readers interested in the policy and management of agriculture, the food industry, natural resources, rural communities, and the environment. Online subscriptions are free of charge through http://www.choicesmagazine.org/choices-magazine

The latest issue of Choices highlights an analysis of the new Farm Bill (Ag Act of 2014), Economic and Policy Analysis of Advanced Biofuels, and Higher Education’s Role in Supporting a Rural Renaissance.

A list of articles is highlighted here:

Theme Overview: Deciphering Key Provisions of the Agricultural Act of 2014

The Agricultural Act of 2014 became law on February 7, 2014. The Act reforms the dairy program, includes changes to commodity programs, adds new supplemental crop insurance programs, consolidates conservation programs, expands programs for specialty crops, reauthorizes livestock disaster assistance programs, and reduces spending under the Supplemental Nutrition Assistance Program.

Agricultural Act of 2014: Commodity Programs

The Agricultural Act of 2014 offers new choices for commodity producers. In previous farm bills, commodity program and crop insurance decisions were not necessarily intertwined. However, with an ever-increasing focus on risk management and an emphasis on crop insurance, the Act introduces new interactions between commodity and crop insurance programs.

Theme Overview: Economic and Policy Analysis of Advanced Biofuels

The current theme presents economic and policy analysis on advanced biofuels. Its aim is to explain the various costs and benefits associated with the expansion and commercialization of advanced biofuels and their co-products.

Political Economy of Biofuel

We argue that biofuel policies in the United States and Brazil have been affected by macroeconomic considerations like balance of trade, government budget and, to a lesser extent, climate change. The oil sector aims to contain the expansion of first-generation biofuel while environmentalists are ambivalent and will only support second-generation biofuel.

Technology Forcing and Associated Costs and Benefits of Cellulosic Ethanol

The revised Renewable Fuels Standard (RFS) is technology forcing to commercialize biofuel production. This article reviews rationale, current cellulosic biofuel supply cost and implicit CO2 reduction costs. The RFS may induce significant biofuel technology improvements, but it may be costly if not phased-in efficiently.

The Potential for Aviation Biofuels-Technical, Economic, and Policy Analysis

Aviation may offer the brightest prospects for a cellulosic biofuel industry. This paper presents economic analysis of the corn stover to jet fuel pathway with fast pyrolysis technology. The focus is on the role of risk in inhibiting investment and policy options that might help attenuate private sector risk.

Are Bioenergy Crops Riskier than Corn? Implications for Biomass Price

Yield risks of growing miscanthus and switchgrass on cropland with moderate risk aversion result in a risk premium over the breakeven price under certainty of 8% and 16%, respectively, on average. Risk premiums and breakeven prices vary regionally and are substantially lower in the South and on marginal land.

Biofuels at a Crossroads

Biomass fuels in the United States may present a viable alternative to fossil-based fuels and address mounting concerns regarding the environment, population growth, and increasing fuel prices. This paper discusses the economic opportunities and challenges facing biomass, and concludes that energy production is but one of several uses for biomass.

Theme Overview: Higher Education’s Roles in Supporting a Rural Renaissance

Land-grant universities were instrumental in transforming American agriculture by unlocking the full potential of the nation’s natural resource base. What if these same institutions, and other higher education institutions, became equally committed to helping unlock the full potential of rural people and places? This special issue helps inform that vision.

Using Rural Innovation Principles for University Renaissance

Integrating the rural development mission of Cooperative Extension into the land grant university has long suffered from a clash of cultures. This article identifies design thinking as a potentially fertile common ground for the out-of-the-box thinking required to generate simultaneously both a rural renaissance and a higher education renaissance.

Extension Reconsidered

This article argues that dominant views of cooperative extension’s purposes and work need to be reconsidered in ways that include attention to extension’s human and community development roles. Previous examples of such reconsiderations are reviewed, followed by suggestions for how deliberations about extension’s future can be approached.

Opportunities for Rural Development in Cooperative Extension’s Second Century

This article lays out challenges for a healthy rural future and roles Cooperative Extension might play in achieving positive outcomes. Extension can build a stronger rural America through government efficiency, labor market information systems, health programs, and revitalized educational systems on targeted topics.

The New Rural-Urban Interface: Lessons for Higher Education

The urban-rural interface is a space of intense interaction that joins urban and rural communities, economies, and environments. We contend that Land Grant social scientists should increase their attention on issues at the urban-rural interface, that such studies are inherently multi-disciplinary, and that they should be translated into Cooperative Extension programming.

2014 Farm Bill: The Big Picture as seen through Spending

By: Carl Zulauf, Professor, Ohio State University, May 2014

 Overview:  This post takes a broad view of the 2014 farm bill and more specifically the farm safety net as seen through the lens of projected spending levels.   In essence, the post examines the who-won/who-lost question and what it tells us about the state of the farm bill debate in the U.S.  Primary sources of information are the (1) U.S. Congress, Congressional Budget Office (CBO) January 28, 2014 letter to the Honorable Frank D. Lucas, Chair, House of Representatives Committee on Agriculture, available http://www.cbo.gov/publication/45049; and (2) Agricultural Act of 2014, available http://www.gpo.gov/fdsys/pkg/BILLS-113hr2642enr/pdf/BILLS-113hr2642enr.pdf.

 Summary Observations

   The field crop safety net (including crop support under the commodities and crop insurance titles) retains nearly 80% of the savings from eliminating direct payments as projected spending increases for the other field crop safety net programs:  price programs, revenue programs, and insurance.  Thus, the farm safety net continues its historical focus on field crops.

   Over 80% of the projected increase in spending on insurance was for the new county insurance products.  However, the farm bill also enhances current insurance products, creates new insurance products, and increases premium reductions for beginning and new farm operators.

   Some of the savings from eliminating direct payments funds a new dairy risk assistance program and a now permanent disaster assistance program, primarily for livestock.  Thus, the livestock sector is a winner at the expense of the field crop sector.

   The previous observation, combined with increased spending on the horticulture title, is consistent with a farm bill policy trend that dates to the 2002 farm bill:  the growing inclusive of farm products in the farm bill and more specifically the farm safety net.

   Spending is shifted from the titles that historically account for the largest share of farm bill spending (commodities, nutrition, and conservation titles) to the other titles, including trade, credit, rural development, research and extension, forestry, energy, and miscellaneous.  While spending remains comparatively very small on these titles, the marginal shift in spending to them likely reflects the need to extend the scope of the farm bill so as to secure its passage.

   In short, the 2014 farm bill is more inclusive in its farm and nonfarm scope and less inequitable in spending across farm products, features key to its legislative success.

Titles, Agricultural Act of 2014 (2014 farm bill)

Title I      Commodities

Title II    Conservation

Title III   Trade

Title IV    Nutrition

Title V      Credit

Title VI    Rural Development

Title VII   Research, Extension, Related Matters

Title VIII Forestry

Title IX     Energy

Title X      Horticulture

Title XI    Crop Insurance

Title XII  Miscellaneous

 

Spending (Direct Outlays) over Fiscal Years (FY) 2014-2023 ▬ Figure 1

    CBO projects spending by the 2014 farm bill to total $956.40 billion over the 10 fiscal years.

    As noted widely, Title IV (Nutrition) dominates projected farm bill spending at a 79.1% share.

    Second largest share of projected spending (9.4%) is for Title XI (Crop Insurance).

    Third largest share of projected spending (6.0%) is for Title II (Conservation).

    The title most associated with farm bills, Title I (Commodities), is 4.6% of projected spending.

    The farm safety net (Titles I plus XI) accounts for 14% (9.4% + 4.6%) of projected spending.

    The other 8 titles account for only 0.8% of projected spending, with Trade (Title III) the largest.

    Credit (Title V) is a source of revenue for the government, primarily because it is able to borrow money at somewhat cheaper rates than it lends for farm bill credit programs.  This revenue can, in part, be seen as a way to cover the administrative costs of farm bill credit programs.

 

Estimated Changes in Spending over FY 2014-2023 ▬ Figure 2

    CBO projects the 2014 farm bill will spend -$16.50 billion less over the 10 fiscal years than an extension of existing programs, the so-called baseline spending.

    Projected spending declines for Title I (Commodities) but increases for Title XI (Crop Insurance), resulting in a -$8.59 billion decline in spending on the farm safety net.

    Projected spending declines almost as much for Title IV (Nutrition) as the farm safety net: -$8.00 billion vs. -$8.59 billion.  Projected spending also declines for Title II (Conservation) by -$3.97 billion.  For more detail on spending on Title II, see the May 14, 2014 farmdoc post, “2014 Farm Bill Conservation (Title II) Programs” by Carl Zulauf, available http://www.farmdoc.illinois.edu/.

    The projected spending declines in the previous bullet as a share of projected spending on the area are -6.9% for Conservation, -6.4% for the farm safety net, and -1.1% for Nutrition.

    Excluding Title V (Credit), projected spending increases for the other titles, with the largest increase being for Title VII (Research, Extension, and Related Matters).

 

Spending Changes in Title I (Commodities) over FY 2014-2023 ▬ Figure 3

    The largest single source of savings in the 2014 farm bill is the elimination of direct payments, with projected savings of -$40.85 billion over FY 2014-2023.

    Since the projected spending on Title I declines by only -$14.31 billion, 65% ($26.54 billion / $40.85 billion) of the savings from eliminating direct payments remain in Title 1.

    Projected spending on price programs increases $11.84 billion, primarily because price support levels in the Price Loss Coverage (PLC) program are higher than in the Price Countercyclical (PC) program it replaces.

    Projected spending on the revenue program increases $9.39 billion, primarily because participation is projected to be higher in the Agriculture Risk Coverage (ARC) program than in the Average Crop Revenue Election (ACRE) program it replaces.

    Projected spending is $3.67 billion on a permanent Supplemental Disaster Assistance Program.  It contains the (1) Livestock Indemnity Program for livestock losses from adverse weather or attacks by federally reintroduced animals; (2) Livestock Forage Program for losses from drought or fire; (3) emergency relief for producers of livestock, honey bees, and farm raised fish not covered by the two previous programs; and (4) Tree Assistance Program for natural disasters.

    Projected spending on the dairy safety net is $0.91 billion higher as a Dairy Production Margin Protection Program based on the difference between the price of milk and feed cost of producing milk replaces the Dairy Product Support and Milk Income Loss Contract programs.

 

Spending Changes in Title XI (Crop Insurance) over FY 2014-2023 ▬ Figure 4

    Projected spending on the new county insurance products for crop production yield and revenue risk is $5.00 billion.  These products are the Supplemental Coverage Option (SCO) for all crops except cotton, which has a slightly different Stacked Income Protection Plan (STAX).  Both provide farms the option to buy subsidized county insurance to cover part of the deductible of their individual yield and revenue product (STAX is also available as a stand-alone product).

    Projected spending on enhancements for current insurance products is $1.06 billion.  They include (1) a new option for determining the minimum Actual Producer History (APH) insurance yield, (2) separate insurance contracts, including enterprise insurance, for dryland and irrigated land, and (3) new price elections for insurance for organic crops.

    Projected spending on new individual insurance products is $0.25 billion.  They include revenue insurance for peanuts, weather index insurance, and margin insurance with rice the initial crop.  Studies are authorized for a wide variety of new products, including insurance for catastrophic disease in swine and poultry, business interruption in poultry production; and food safety.

    Projected cost to reduce insurance for new and beginning farmers and ranchers is $0.26 billion.

    Projected savings from changes to existing products are $0.54 billion.  They include changes to catastrophic insurance premiums and limits on crop production on native sod in selected states.

    Interactions between Title I (Commodities) programs and Title XI (Crop Insurance) programs are projected to reduce demand for insurance, thus generating savings of -$0.46 billion.

 This publication is also available at http://aede.osu.edu/publications.