The American Farm Bureau Federation has a long and proud history of carefully evaluating the economics of policy proposals in order to understand potential pitfalls and other unintended consequences. At the same time, AFBF has, since its inception, had a well-defined process for determining the organization’s policy positions. Each year the organization’s delegate body of farmer and rancher members deliberates and responds to challenges facing agriculture. Following the Delegates work, the AFBF Board of Directors interprets and gives direction to AFBF staff to proceed with advocacy actions to communicate the message from farmers and ranchers to leaders in all branches of government.
On July 20, 2017, the Senate Appropriations Committee passed the fiscal year 2018 agriculture appropriations bill. At the request of Appropriations Committee Chairman Thad Cochran (R-Miss.) and Vice Chairman Pat Leahy (D-Vt.), the bill included crucial improvements in the dairy and cotton farm bill safety net programs. This article reviews the proposed improvements to MPP and estimates how these changes would have altered program performance during the first two years of coverage. An article on the cotton provisions is being posted simultaneously with this piece.
In response to a Brazil-initiated 2009 World Trade Organization ruling against the United States, cotton was removed as a covered commodity in Title I of the 2014 Farm Bill. This made it ineligible for the Agricultural Risk Coverage or Price Loss Coverage programs. Cotton remained eligible for the marketing assistance loan program, but the primary safety net was the Stacked Income Protection Plan crop insurance policy. STAX is a county-based revenue protection policy that supplements existing cotton crop insurance policies. However, STAX was plagued by adoption rates that only averaged 26 percent and substantially underperformed relative to producer expectations.