Silver as an investment

Subsidies, Market Prices, and the 2014 Farm Bill

by Dick Clark

President Barack Obama signed the Agricultural Act of 2014 into law on February 7, 2014.[1] The legislation becomes law later than anticipated given the usual timing for farm bills, which typically work their way through the Congress every five years.[2] The last major farm bill was passed in May 2008,[3] and key provisions of that bill were at the center of discussions of the federal “fiscal cliff” in late 2012.[4] Of the $956 billion spent in this massive bill,[5] about 80 percent is earmarked for nutritional assistance programming, with the balance going to various types of agriculture spending.[6]

Within the agriculture spending provisions, the bill phases out some programs that provided direct payments to farmers[7] originally designed to wean crop producers off of old-fashioned price guarantees for crops including wheat, corn, sorghum, barley, oats, cotton, rice, soybeans, minor oilseeds, and peanuts.[8] Although the farm bill rolls back these direct payment programs, it also creates two new commodity programs to replace them: Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC).

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