The $21 billion cost of the farm bailout bill filed by Mississippi Rep. Mike Kelly may be too large for Congress to swallow, and it could preclude passage of the new farm bill, said four analysts on Tuesday. Kelly says the bill will keep farmers in operation despite high costs and lower commodity prices, and it is supported by a dozen large farm groups.
“For the major commodities with a specified payment rate calculation outlined in the proposed legislation, we estimate the FARM (Farmer Assistance and Revenue Mitigation) Act would result in $21 billion in ad hoc support payments to farmers,” said the analysts, writing at the farmdoc daily blog. “The sheer size of the proposed support payments present significant hurdles to the FARM Act becoming law as proposed.”
In addition, the bill could be interpreted as evidence of shortcomings in U.S. farm policy and delay work on the farm bill into 2025, said the analysts, Jonathan Coppess, Gary Schnittkey, and Nick Paulson of the University of Illinois and Carl Zulauf of Ohio State University.
Kelly’s bill would pay farmers 60% of the shortfall per acre between expected revenue from crops and costs of production. It uses a formula that would reduce yields per acre, making payments more likely, and allow payments of up to $350,000 per farmer. The farm program generally sets a limit of $125,000 per farmer.
