March 29, 2006 Agronomy

USDA Plans to Analyze Risk Management Options for Next Farm Bill

Secretary of Agriculture Mike Johanns continues to take a hands-on approach to the next farm bill. Wednesday the Department of Agriculture released an in-depth summary of views expressed at USDA farm bill forums and announced plans to conduct analysis on specific topics – the first being risk management.

The summary compiles over 4,000 producer comments from the 52 farm bill forums held in 48 states last year. USDA personnel spent the past several months categorizing and summarizing the comments received. The 41 summary papers featured at USDA’s Web site contains three sections – one containing factual background on the topic of the paper, another summarizing general opinions expressed and the third conveying specific, detailed suggestions that were conveyed to USDA.

Johanns hopes to narrow the focus of the national conversation on farm policy by analyzing up to half a dozen themes, led by USDA Chief Economist Keith Collins in conjunction with land grant universities up until the end of the year.

The first theme is risk management. The public comments offer a broad array of ideas about how to best manage the risks associated with agriculture. Johanns noted in selecting risk management as a good first topic for analysis that farm businesses must manage risks effectively to be economically sustainable. Risks range from production losses due to weather or diseases, to shifts in product demand, to surges in production costs. Crop insurance, price and income support programs and ad hoc disaster assistance have been the primary federal financial tools to help producers manage risks and were the subject of repeated concerns throughout the comments.

Johanns expects this analysis to be completed within the next 30 days, give or take a few days. USDA plans to publish each final analysis on its Web site.

All of the analyses will help frame the proposal USDA plans to propose to Congress at the beginning of 2007 prior to the writing of the next farm bill.

Farm Progress Editorial Director Willie Vogt sat down with Johanns after his last farm bill listening session. To hear the 15 minute interview, click HERE.

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