A recently introduced bill in the U.S. Senate is designed to improve USDA’s Agricultural Risk Coverage-County (ARC-CO) program in the farm bill, and it is drawing strong support from farm organizations, including the American Farm Bureau.
The legislation, introduced in late October by Iowa Sen. Joni Ernst and North Dakota Sen. Heidi Heitkamp, is designed to strengthen the farm safety net, as farmers are struggling with low commodity prices and negative margins.
Both Senators are members of the Senate Ag Committee, which will lead the writing of a new farm bill in 2018. “A revision of the ARC-CO program is critical for Iowa farmers because the program is their primary safety net,” says Ernst.
During the enrollment period for the programs in the 2014 Farm Bill, Iowa farmers chose ARC-CO for 97% of the state’s corn acres and 98% of soybean acres. ARC-CO provides revenue loss coverage at the county level when the actual county crop revenue of a covered commodity is less than the ARC-CO guarantee.
Bill would direct USDA to use RMA yield data
Last year, Ernst joined Sen. Chuck Grassley in requesting that then-U.S. Secretary of Agriculture Tom Vilsack look into the method for determining county yields for the ARC program. “Unfortunately, some farmers have had payment discrepancies due to the program’s reliance on administrative county lines, rather than a farm’s actual physical location,” says Ernst.
The newly introduced bill would direct USDA to first use yield data from the Risk Management Agency to make calculations more accurate and help reduce the often wide variations in payments between neighboring counties. USDA is directed to first use data from National Ag Statistics Service and then use RMA data.
Wide variations in payment levels among counties
Variations in payments between counties have confused Iowa farmers since the program began in 2014 and showed up again in the state’s recently released 2016 ARC-CO payments. For example, farmers enrolled in Johnson County received payments of $85 per acre. Those payments were more than double any of the counties that border Johnson and 100% more than just to the south in Washington County, where farmers received no payments.
RMA data, say Ernst and Heitkamp, is typically often more accurate and timely than yield data generated by NASS, which is based partly on estimates. Thus, using RMA data would likely improve the ARC-CO program and reduce the county-to-county variations in payments. Using RMA data would also improve farmers’ confidence in the ARCO-program because farmers directly provide the yield and production data used in the RMA data set.
“Many farmers are talking about the discrepancy in payments between counties, and talking about what kind of data was being used,” says Mary Kay Thatcher, director of congressional affairs for the American Farm Bureau. “I think using the Risk Management Agency’s crop insurance data is the first choice, rather than using NASS data.”
Along with Farm Bureau, the Ernst-Heitkamp bill is endorsed by the American Soybean Association, National Corn Growers, National Association of Wheat Growers, National Farmers Union and other farm and commodity groups.
Enrollment open for ARC, PLC for 2018
Farmers with base acres in the Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC) safety net program may now enroll for the 2018 crop year. The enrollment period started Nov. 1 and ends Aug. 1.
“Since shares and ownership of a farm can change year to year, producers must enroll by signing a contract each program year,” explains Steve Peterson, acting administrator of USDA’s Farm Service Agency. “I encourage all producers to contact their local FSA office to schedule an appointment to enroll.”
Producers on a farm that are not enrolled for the 2018 enrollment period will not be eligible for financial assistance from the ARC or PLC programs for the 2018 crop should crop prices or farm revenues fall below the historical price or revenue benchmarks established by the program. Producers who made their elections in previous years must still enroll during the 2018 enrollment period.
In October, FSA began issuing about $8 billion in ARC and PLC payments for 2016 crops to assist U.S. producers who suffered a loss of revenue or price, or both. Over a half-million producers received ARC payments and over a quarter-million producers received PLC payments for 2016 crops. The ARC and PLC programs were authorized by the 2014 Farm Bill and offer a financial safety net to farmers when there is a substantial drop in prices or revenues for covered commodities.
Source: USDA Farm Service Agency