Montana Senator Max Baucus recently unveiled a new crop insurance program designed to take the place of direct payment farm subsidies.

Direct payments have been a major part of American agricultural policy for nearly 20 years. First introduced in the 1990s, direct payments were critical to farmers who encountered record low commodity prices. Direct payments cost taxpayers almost $5 billion last year.

Current high crop prices and record farm incomes have soured voters on direct payments. As part of the current farm bill negotiations, politicians have indicated that other farm support programs will replace direct payments. Farmers have indicated a willingness to eliminate these subsidies in exchange for strengthened crop insurance programs.

“They understand the budget crunch we are facing, and they are ready and willing to chip in their fair share,” Baucus said. “But they aren’t willing to shoulder the burden for the rest of the country — and I’m fighting to make sure they don’t have to. It’s not an easy fight, but it’s one I think we can win.”

The Revenue Loss Assistance Program recently proposed by Senator Baucus would supplement current crop insurance programs and would be triggered by losses due to weather, markets, or low quality harvests. In addition, the triggering mechanisms would be farm specific rather than region specific (as many current programs are). Farmers are optimistic that these programs will be beneficial, but are still worried about the future of these programs and the farm bill as a whole.

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Written by: Justin Ellison / Farm Plus Staff Writer