FAPRI Says Lugar Bill Increases Income By Almost $5 Billion

July 30,1999

The Food & Agricultural Policy Research Institute (FAPRI) says a risk management bill introduced by Senate Agriculture Committee Chairman Richard Lugar (R-IN) would increase net farm income by $4.71 billion between 2000-2004. Payments would go to farmers who receive transition payments if they use risk management strategies; those outside the payment program could get a discount up to 35% if they buy more expensive crop insurance.

A FAPRI analysis found that the bill would pay farmers about 95 cents of every $1 spent to implement the legislation. The report also indicates that an alterative crop insurance bill by Sens. Pat Roberts (R-KS) and Bob Kerrey (D-NE) would increase net income by $3.72 billion and cost nearly $650 million to implement, according to Lugar. Under the Roberts-Kerrey bill, less than 67 cents of every $1 spent would go to farmers, Lugar said.

Under the Lugar bill, farmers would be eligible for a risk management payment in addition to their base transition payment equal to 29.09% of their fiscal year 2000 transition payment, 36.11% of the 2001 payments and 37.21% of the 2002 payment. To qualify, farmers would have to use at least two risk management practices from a list spelled out in the legislation.