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CARD: Center for Agricultural and Rural Development

Budgetary and Resource Allocation Effects of Revenue Assurance: Summary of Results, The

David A. Hennessy, Bruce A. Babcock, Dermot J. Hayes
February 1995  [95-BP 7]

One of the more intriguing alternatives under consideration for the 1995 Farm Bill is the "Iowa Plan." This idea originated with a group of Iowa's farm and commodity organizations. It is receiving increased attention from national farm organizations, academics, and politicians. The basic premise is very simple. Rather than the current mixture of target prices, disaster payments, set-aside provisions, and crop insurance, the government would underwrite a program that guarantees producers a certain percentage of recent revenues. The idea has much intuitive appeal because farmers(and their bankers) would by assured of a certain revenue figure regardless of what happens to prices or yield.

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