Informa Economics, Inc., is offering a series of analytical reports entitled The US Farm Bill: Implications on the Canadian Pulse Industry. This series of reports examined the US Farm Bill in terms of its short and long term impact on the market and structure of the Canadian industry that has been built around the pea, lentil and chickpea crops. The primary focus was on the addition of peas, lentils and chickpeas to the marketing loan program of the US Farm Bill and the implications to the Canadian pulse industry in terms of acreage shifts in both Canada and the US, global competition, price and trade.

The new Farm Bill is estimated to spend around $170 billion over the next decade, representing an additional $73.5 billion over the previous farm program budget baseline. The Bill features the continuation of planting flexibility with generous farm subsidies tied to production, no acreage reduction programs, fixed de-coupled payments, re-balanced marketing loan rates, and the introduction of a counter-cyclical safety net based on target prices.

These new and expanded programs represent a 76 percent increase in agriculture spending. These estimates assume price increases among certain commodities – assessments with which few independent agricultural economists agree. If these estimates are wrong – as is often the case – the bill could cost $10 billion to $20 billion more than projected.

Over the past few years, current subsidy levels have led to overproduction and lower prices, and now more than 40 percent of net farm income in the US comes from the federal government. Increasing government subsidies only perpetuates this self-defeating cycle.

Under the legislation, subsidies for program crops are expanded and new commodities added; of particular interest to Canada is the addition of pulses – peas, lentils and small chickpeas. (Large chickpeas were dropped from the original Senate proposal largely to save expenditures as a compromise to California growers of large caliber kabuli chickpeas.)