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Agricultural and Food Policy
 Agri Outlook
Radio
Number 79
Policy: Summary of key points to consider as the Senate debates the new farm bill on
agricultural policy, the global economy, and the need for a strong safety net for the U.S.
rice and cotton sector. (2:55 minutes)
Audio/Video Script:
Dr. Bobby Coats
Extension Economist
University of Arkansas, Division of Agriculture
The following is a summary of key points worth considering as the Senate
debates the new farm bill on agricultural policy, the global economy, and the
need for a strong safety net for the U.S. rice and cotton sector. I’m Bobby
Coats Extension Economist University of Arkansas Division of Agriculture.
- First, the trend in U.S. farm policy is producing consolidation
and rapid structural change for U.S. rice and cotton producers. This trend
will not change, but future policy mechanisms will determine how orderly or
disruptive the change takes place.
- Second, global growth remains inconsistent yielding rice and
cotton price volatility and uncertainty about future prices. In 2001 the
weakness of global growth produced deflated rice and cotton commodity prices
reflective of the 1950s.
- Third, rice and cotton production costs have risen dramatically
since 2002 giving even our best producers cash flow concerns and making them
extremely sensitive to policy changes that negatively impact their
operations. Producer cash flow concerns point to the need for a farm bill
disaster title.
- Fourth, the lack of a global trade agreement favors competitors
of U.S. rice and cotton producers. Trade agreements that aren’t fair,
reasonable, and don’t provide market access and orderly transition to our
producers are damaging.
- Fifth, priority in the new farm bill should be given to making
the traditional yield crop insurance product as viable for rice and cotton
producers as it is for Midwest corn and soybeans producers. The development
of a viable traditional yield crop insurance program then sets the stage for
developing a viable county, area, or like group revenue insurance product.
- Sixth, a question worth considering: Is the possible rapid
expansion of the U.S. rice and cotton farms into grain and confinement
operations and/or fruit, nut, and vegetable operations good farm policy?
- Seventh, growing a reasonably stable global economic platform
will take at least one or more decades. Bottom line a strong farm bill
safety net should exist until a reasonably stable global economic pricing
platform exists.
This has been Bobby Coats Extension Economist University of Arkansas Division
of Agriculture.
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Food Policy Radio
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