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Local economist, farmer react to new farm bill

Reported by: Tyler Hill
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Updated: 1/29/2014 10:42 pm
STARKVILLE, Miss. (WTVA) -- It's taken over two years for Congress to pass a new farm bill, but it appears the legislation is finally moving forward.

On Wednesday, the U.S. House of Representatives passed a five-year, bipartisan farm bill, and the Senate is expected to vote next week.

"We've been two, three years without a farm bill and have had to rely on the old farm bill," said Bobby Carnathan, one of many farmers frustrated the bill has taken so long to come to fruition.

But, after all those years of partisan bickering, it seems Congress has finally reached an agreement.

"It got taken over by bigger picture issues," said Mississippi State University Assistant Extension Professor John Michael Riley.

The new bill cuts billions of dollars from the federal budget.

"It's gonna affect a little bit," Carnathan said. "Bit it ain't no killer. People can survive with it."

One of the biggest changes is ending the subsidy known as direct payments, which are paid to farmers whether they farm or not.

Instead, this subsidy is typically tied to the acreage a farmer owns.

"I think that's going to be the most direct impact, in terms of how it affects producers or landowners," Riley said.

The direct payment cut is expected to save the government roughly $5 billion per year.

Another change puts more focus on insurance based subsidies, which provides farmers protection in the event a farm revenue or county revenue falls below the benchmark or crop projection.

If that happens, the insurance will cover and pay the farmer up to a certain percent.

Riley said this new focus will affect most farmers.

"There are about to be a tremendous amount of decisions they have to make," he explained.

Most of the subsidies will shift towards defensible insurance programs, meaning farmers would have to incur losses before they receive a payout.

"As a farmer goes, he hopes he never has to use insurance," Carnathan said. "He hopes he makes a good crop."

Some say focusing on this type subsidy can be both positive and negative.

During favorable crop years, the government would save money, but during bad crop years like the U.S. Drought of 2012, the government will pay much more to farmers.

The bill passed the House by an 85 vote margin and is awaiting Senate approval, where leaders said it will most likely pass.

"Did they get it right," Riley questioned. "We'll determine that at the end of the farm bill. I think that's when we'll know whether or not it was correct."

The new bill also cuts about $8 billion dollars over 10 years from the food stamp program.

Overall, the Congressional Budget Office estimates the bill will reduce the federal budget by nearly $17 billion over a decade.

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