Ag Policy Blog
Chris Clayton DTN Ag Policy Editor

Thursday 02/27/14

ARC, PLC and the Decisions Ahead

While the farm bill is passed, attention at Commodity Classic in San Antonio turned Thursday to how it might work on the farm.

I was feeling more than a bit under the weather on Thursday at the event. Some simple advice: If your stomach is feeling a bit queasy, the solution isn't Mexican food.

Back to work, the basic decision farmers will have to make on commodity programs is whether to sign up for the Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC). Farmers get to choose which program they want for any particular commodity. They can sign up corn base acre in ARC while signing up wheat base acres in PLC. That decision will stick with a farmer for the life of the farm bill.

Farmers probably won't get the chance to sign up for these new programs until sometime later this summer.

What must be stated over and over again is that farmers who sign up a commodity for ARC will have their revenue program locked in. Farmers who sign up a commodity for PLC will then get the option of buying Supplemental Coverage Option insurance for that commodity starting in 2015.

I was still in a funk at an American Soybean Association press conference when another astute journalist asked how concerned farmers may be that they may have to make an irrevocable decision on commodity programs without the benefit of seeing what SCO will look like.

"Every farm is going to be different depending on how their yields compare to the county average, depending on their soil, depending on their rotation," ASA President Ray Gaesser said in an interview.

There are more implementation questions that will have to be addressed in USDA rulemaking. For instance, the farm bill explicitly allows farmers signing up for PLC to update their yields to 90% of the five-year average. Yet, no such language exists in the ARC provisions. Would USDA, in its rulemaking, allow farmers to make the same update for yields regardless of the program enrolled in?

Farmers raised questions about Farm Service Agency staffing at the county level. Everyone wants a smaller federal government until they have to enroll in a federal program.

Wade Cowan, a west Texas farmer and ASA's first vice-president, said he was concerned about that some FSA offices in his area deal with sizable crop counties. "So much of this farm bill ... is based on county yields," he said. "So much of this safety net is based on getting these county yields right and I see that as probably the biggest time-consuming things these offices are going to have to deal with because if you don't get those numbers right in the safety net, it could be a hammock or it could be nothing."

So FSA offices are going to need support to make sure they can implement this program well. USDA Deputy Secretary Krysta Harden noted when talking to farm groups on Thursday that staffing levels are unlikely to increase. The farm bill does set up $6 million for land-grant universities to help educate farmers on the decisions that must be made, but it won't be simple in the months ahead.

"These are complicated programs, by design, frankly. By design," Harden said. "We are going to do our best, and one of the reasons I am involved in this process is to see if there are decisions we can make that are just common-sense things that put less burden on you, but make sure it is accurate for you."

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Posted at 7:00PM CST 02/27/14 by Chris Clayton
Comments (4)
The obvious solution to the farm bill quandary is the same as the solution to obamacare which is to repeal both.
Posted by T Kuster at 9:13AM CST 03/03/14
Hope not, my health insurance costs dropped $100 per month under obama care.
Posted by Jay Mcginnis at 11:55AM CST 03/03/14
Jay, you have no idea on how much I am not surprised by that. Town and state, just once.
Posted by CRAIG MOORE at 1:31PM CST 03/03/14
Jay see
Posted by T Kuster at 4:48PM CST 03/03/14
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