Recent meetings by agricultural interest groups like the Farm Bureau indicate that farmers are willing to accept the end of direct payment farm subsidies. In a recent meeting of the Indiana Farm Bureau, officials told assembled farmers that they would need to rely on farm loans and crop insurance since, as Bureau President Don Villwock said, “Direct payments are toast.” The meeting was called to help prepare members for the future of the 2012 Farm Bill and brace them for the upcoming changes farmers can expect to farm loans, farm subsidies, and agricultural grant programs.

One of the reasons that these types of meetings are necessary is the failure of Congress to address the approaching expiration of the Farm Bill. The Farm Bill governs nearly every federal agricultural policy in existence, from farm loans to technology grants. Renewed every five years, the most recent bill was passed in 2008 and is set to expire at the end of the year. Given the gridlock endemic to Washington politics over the last year, many farmers have been left to speculate on the fate of loans and farm subsidies. In addition to financial support, the Farm Bill provides farmers with concrete policies from the Agriculture Department. It also allows them to rest assured that they have a safety net in the form of disaster funding and emergency farm loans.

With no specifics forthcoming from Washington, farmers have been left to their own speculative devices and are using the failed super committee negotiations to guide their predictions on the future of farm spending. While it failed to pass, the deficit reduction plan suggested by the super committee involved preserving loans and crop insurance at the expense of direct payment subsidies. Farmers acknowledged that the public no longer supported direct payments, particularly in the face of record profits. As such, many farmers are bracing for the elimination of direct subsidies, hoping that they can preserve access to farm loans as a way to offset lost revenues.

In exchange for accepting the loss of direct payment, many farmers are demanding major reforms to policies governing other farm support programs, including farm loans and crop insurance. Given the current record profits experienced by many farmers, direct payments are no longer as necessary as they once were. However, inclement weather can still ruin a successful farm regardless of the market price of corn. Farm loans and emergency funding allow farmers to take advantage of current market prices, while still offering a safety net should weather patterns change or crops fail.