Joe Outlaw of Texas A&M, Gary Schnitkey of the University of Illinois and Pat Westhoff of the University of Missouri discuss the new farm program and crop insurance with Keith Collins, economic adviser to National Crop Insurance Services, at the national crop insurance industry convention in Bonita Springs, Fla., today. (Jerry Hagstrom/The Hagstrom Report)
BONITA SPRINGS, Fla. — Economists at the crop insurance convention here today said that it’s too early for Congress to estimate which commodity program most farmers will adopt, and that farmers will make decisions on the programs depending on their own personal goals.

Keith Collins, a former chief economist at the Agriculture Department and adviser to National Crop Insurance Services, noted that the Congressional Budget Office has calculated that more farmers than expected will sign up for the Price Loss Coverage option, and fewer will sign up for the Agricultural Risk Coverage.

Those decisions plus lower crop prices have led the CBO to conclude that those programs will cost $9.5 billion more over 10 years than was projected when the 2014 farm bill was written, he said.

At the same time, the CBO has calculated that the crop insurance program will cost $2.5 billion less over 10 years because lower crop prices will mean that the crops will have less value, and the cost of insuring the crops will lower.

As a result of these numbers, Collins noted, the Obama administration proposed changes to the crop insurance program that would produce $16 billion in savings to make up for the difference in increased costs.

But Gary Schnitkey of the University of Illinois said that “it is a bit premature to make a cost estimate” because farmers are still signing up for the program. He noted that farmers’ participation patterns will be known in about two months.

Joe Outlaw of Texas A&M, who has been helping farmers decide which option to take, said the decision sometimes depends on whether the farmer is looking “to get the most money” as soon as possible or seeking a long-term safety net.

Those farmers who expect to be in business for many years are more likely to think about the long-term safety net.

The economists have said that payments may be higher under the ARC program in the first few years, but the payments could go down because that program will be based on average prices over a period of years.

Outlaw said that some farmers have complained that the decision is difficult to make, but he said the 2014 farm bill “is the most useful farm bill ever in tailoring the protection to your individual farm.”

The decision between PLC and ARC is not difficult, Outlaw said, but the overall decision becomes more difficult because the farmer also has to decide which of the crop insurance options to select.

Outlaw praised his staff for their patience in explaining to elderly farmers how to use a computer to figure out the programs. He also said that he has told some very elderly farmers that they can send him packages of materials and that he and his staff will figure out an answer for them.

The economists said they had no inside knowledge of whether the Agriculture Department would extend the March 31 deadline for enrollment in the farm program. Outlaw said he doubts the USDA will extend the deadline, but believes so many farmers will sign up late that county Farm Service Agency offices will establish registers of farmers who have declared their intention to enroll but whose paperwork will not be completed by the deadline.

Patrick Westhoff of the University of Missouri said farmers have a “big advantage” in waiting to decide between ARC and PLC “until the last minute,” but that they should start the process earlier.