The U.S. Department of Agriculture (USDA) announced in mid-October that many of the 1.7 million farms enrolled in either the Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC) programs would receive safety-net payments because of market downturns during the 2015 crop year.
“This fall, USDA will be making more than $7 billion in payments under the ARC-County and PLC programs to assist participating producers, which will account for more than 10 percent of USDA’s projected 2016 net farm income. These payments will help provide reassurance to America’s farm families, who are standing strong against low commodity prices compounded by unfavorable growing conditions in many parts of the country,” says Agriculture Secretary Tom Vilsack. “At USDA, we are standing strong behind them, tapping in to every resource that we have to help.”
Watching Weather Challenges
In 2016, USDA created a one-time cost share program for cotton ginning, purchased about $800 million in excess commodities to be redirected to food banks and those in need, made $11 million in payments to America’s dairy farmers through the Dairy Margin Protection Program, and reprogrammed Farm Service Agency funds to expand credit options for farmers and ranchers in need of extra capital.
“As always, we continue to watch market conditions and will explore opportunities for further assistance in the coming months,” Vilsack says. “For producers challenged by weather, disease and falling prices, we will continue to ensure the availability of a strong safety net to keep them farming or ranching.”
Ability To Keep Working
Unlike the old direct payment program, which issued payments during both weak and strong market conditions, the 2014 Farm Bill authorized the ARC-PLC safety net to trigger and provide financial assistance only when decreases in revenues or crop prices, respectively, occur. The ARC and PLC programs primarily allow producers to continue to produce for the market by making payments on a percentage of historical base production, limiting the impact on production decisions.
Nationwide, 96 percent of soybean farms with base acres, 91 percent of corn farms with base acres, and 66 percent of wheat farms with base acres elected the ARC-County coverage option. Ninety-nine percent of long grain rice and peanut farms with base acres, and 94 percent of medium grain rice farms with base acres, elected the PLC option.
Overall, 76 percent of participating farm base acres are enrolled in ARC-County, 23 percent in PLC and one percent in ARC-Individual. For other program information including frequently asked questions, visit www.fsa.usda.gov/arc-plc.
Payments are made to producers who enrolled base acres of barley, corn, grain sorghum, lentils, oats, peanuts, dry peas, soybeans, wheat and canola. In the upcoming months, payments will be announced after marketing year average prices are published by USDA’s National Agricultural Statistics Service for the remaining covered commodities. These include long and medium grain rice (except for temperate Japonica rice), which will be announced in November, remaining oilseeds and chickpeas, which will be announced in December, and temperate Japonica rice, which will be announced in early February 2017. Upland cotton is no longer a covered commodity.
The Budget Control Act of 2011, passed by Congress, requires USDA to reduce 2015 ARC and PLC payments by 6.8 percent. For more information, producers are encouraged to visit their local Farm Service Agency (FSA) office.