US farm bill holds crop insurance coverage steady for 2014
CHICAGO (REUTERS) - US farmers and bankers have almost a year to get ready for major changes in 2015 as crop insurance rather than direct cash payments to producers becomes the centerpiece of farm policy under the five-year farm bill signed by President Barack Obama earlier this month .
For 2014 plantings, analysts said there will be no major changes to crop insurance except sharply lower grain prices than in 2013, which will lower potential payments and premiums. Then in 2015, farmers will have a new insurance option for supplemental coverage based on local county yields.
"Other than commodity prices there is not a lot of difference between 2014 and 2013," said Michael Barrett, senior vice president for crop insurance at Farm Credit Services of America, one of the biggest lenders to farmers in the Plains states. "The structure of the policies is pretty much the same.
The cost sharing for the premium didn't change." But this year will be a major transition for bankers, insurers and farmers, he said. "The message is crop insurance does become the foundation of the farm bill and the primary safety net for producers because they have lost all those direct payments," Barrett said.