Baseline for Next Farm Bill’s Crop Commodity Programs: An Early Perspective11/04/2016
A critical framing element for the next farm bill debate will be the baseline for the crop programs in the commodity title (Title I). Commentary on the baseline has been appearing as early work on the next farm bill commences. Some commentary explicitly or implicitly implies a small baseline, often attributed to declining payments by the ARC-CO (Agricultural Risk Coverage – county) program if prices remain near current levels. In contrast, this article argues that, should prices remain near current levels, the crop commodity program baseline could exceed $10 billion per year. More broadly, this article presents three reasons for why the baseline for crop commodity programs is unlikely to be close to zero: (1) use of probabilistic scoring by the Congressional Budget Office (CBO), (2) ARC-CO’s yield component, and (3) the high probability farmers will be allowed to shift between programs for the 2019 and subsequent crops.