CORVALLIS, Ore. – The National Farm Bill is on its way to President Obama’s desk for him to sign into law. Economists at Oregon State University have broken the bill down to explain what it would mean for farmers and for Americans on food stamps.
The Senate passed the nearly $1 trillion House Bill on Tuesday.
“It’s a very comprehensive bill,” said OSU professor of Applied Economics, JunJie Wu. “It would have a lot of benefits to me if I were a grower of a specialty crop.”
Wu says the bill would provide more insurance options for farmers in case of a natural disaster. In Oregon, more specialty crops would be eligible for insurance.
“It’s an opportunity for more of Oregon’s commodities to be involved in crop insurance,” said Susan Capalbo, the Department Head of Applied Economics at OSU. “And that, on net, is a good thing for the growers.”
But at the same time, Capalbo and Wu say the bill would cut direct payments to farmers – a payment from the government to growers despite how their crops turn out at the end of the season.
“For example, there’s a reduction in the direct payments that could adversely affect the wheat growers,” Capalbo said. “So there are winners and losers of the program.”
Capalbo says wheat is just one type of crop that has been eligible for direct payments. If the farm bill is signed into law, these farmers would no longer see the payments.
In exchange, they would have more insurance options.
“I think moving away from direct payments is definitely a good thing,” Capalbo said. “And moving more into some sort of risk-protection against natural disasters – which is what crop insurance does – and maybe broadening the options for crop insurance is a good thing.”
But another cut in the farm bill would be a total of $8 billion in the Supplemental Nutrition Assistance Program (SNAP).
“But it has a larger impact on some states than on others,” said OSU Applied Economics Professor Bruce Weber.
Weber says Oregon will suffer cuts more than many other states because it offers a dual enrollment for SNAP with a low-income home energy assistance program.
“Ten percent of those who are on food stamps in Oregon are part of that program,” Weber said. “They’re the ones facing the cuts. They’ll see a decrease of $58 every month in their benefits.”
Weber says Oregon would face $30-40 million in SNAP cuts, which would affect 80,000 food stamp recipients in the state – two percent of Oregon’s population.
“How you feel about that really depends on how you feel about the (SNAP) program,” Weber said. “If you think it is too generous or not generous enough.”
Is the farm bill a fair balance? Will more farmers benefit from the crop insurance program as opposed to the number of farmers who used to get direct payments? Economists say they are not sure yet – it will be something that they will have to study after the bill goes into effect. Capalbo says it is hard to tell how many farmers will take advantage of the new incentives.