Both the Senate-passed farm bill and one reported from the House Ag panel in July would do away with the current system of direct cash payments to producers, saving about $45 billion over 10 years. But the two bills are very different when it comes to the next question of how to reinvest a portion of the money in an updated safety net for farmers.
The Senate bets $29 billion on a new “shallow loss” revenue insurance option that is especially popular with corn and soybean producers in the Midwest given their economic success. The House bill devotes about $9 billion to a similar revenue option but spends closer to $16 billion on more traditional price protection coverage to protect against collapsing markets.
In the latest exchange, the Senate gives some ground, by opening the door for the first time to include rice, peanuts and wheat in a new countercyclical program that will add about $2.6 billion to the Senate baseline for these crops. Rice is the biggest player, with about $1.3 billion; followed by wheat, $950 million; and peanuts at $375 million, according to people familiar with the talks.