DISCERNING PAYMENT OVERLAP INCIDENCE IN THE FARM SAFETY NET
Abstract
There are a number of government programs that farmers can access to help mitigate risk on their operations. The U.S. farm safety net, which is comprised of three main pieces, is the centerpiece of farm risk management. These three components include commodity income supports, federal crop insurance, and ad hoc disaster aid.
Commodity income support policies in recent Farm Bills have been the foundation of the farm safety net, historically providing producers with support based off of legislatively defined reference prices. Crop insurance developed soon after and is known for its wide coverage of commodities and its public-private partnership. A third piece of the farm safety net, ad-hoc disaster aid, completes the triad, and has been used intermittently for more than 50 years. Recent usage of ad hoc disaster aid largely began after the 2017 natural disaster season. While each component of the farm safety net offers a different approach to managing producer risk, they all work collectively to support the well-being of the agricultural producer.
With a multitude of government support programs available, the question becomes; are producers receiving overlapping government aid? Overlap in program payments is defined as an occurrence where a producer payment is made on the same yield losses, or the same price declines. This study analyzes the farm safety net to determine the incidence of overlap in government farm aid.
This analysis demonstrates the high occurrence of overlap in farm program payments, assuming consistent variables. However, a few caveats must be noted. Future research may entertain these ideas of inconsistency in yields, prices, and crop years – all to make this study more explanative.
Citation
Wright, Kate Nicole (2021). DISCERNING PAYMENT OVERLAP INCIDENCE IN THE FARM SAFETY NET. Master's thesis, Texas A&M University. Available electronically from https : / /hdl .handle .net /1969 .1 /195405.