With the 2014 Farm Bill in effect, producers and landowners are required to elect new safety net programs before the deadlines released by the United States Department of Agriculture (USDA). The Farm Service Agency (FSA) is making efforts to provide online resources to producers and landowners to help them understand the programs before making decisions for their operations. These programs include Agricultural Risk Coverage and Price Loss Coverage (PLC).
Agricultural Risk Coverage, Individual Coverage (ARC-IC) is a new program in the 2014 Farm Bill that offers protection against moderate losses at the farm level for covered commodities. Decisions regarding revenue loss for each covered commodity planted will be made after USDA publishes the market year average price. Agricultural Risk Coverage, County Level (ARCCO) provides revenue loss protection at the county level. Decisions regarding revenue loss will be the same as ARC-IC. Along with ARC, producers have the option to sign up for PLC.
The PLC program provides payments when the market year average price for a covered commodity falls below the crop’s reference price specified in the 2014 Farm Bill. Payments for the 2014-2018 crops are issued no later than October 1st of each crop year or when the USDA average market price is published.
All producers, including owners and operators on the farm with a share of the 2014 cropland must agree to PLC, ARC-CO or ARC-IC by March 31, 2015. Program elections will remain in effect through the 2018 crop.
Producers also must make the decision about whether or not they want the Supplemental Coverage Option (SCO). The SCO is an add-on to crop insurance that provides an area-based insurance for the underlying insurance policy’s deductible and is only available to producers participating in the PLC. Another additional crop insurance product under the 2014 Farm Bill is Stacked Income Protection (STAX).
STAX is a new crop insurance product for cotton designed to work as a supplement to existing crop insurance products and it can be purchased as a stand-alone insurance policy. STAX and SCO decisions are made annually.
During the yield update base period of 2008 through 2012, farmers must certify a crop yield for each year the crop was planted. A one-time adjustment may be made to the farm’s base acres called a reallocation of base acres, but the 2014 Farm Bill does not allow for an increase in the farm’s total acres. Only covered commodities will allow for yield updates and base acres to be reallocated including wheat, oats, barley, corn, grain sorghum, rice, soybeans, sunflower seed, rapeseed, canola, safflower, flaxseed, mustard seed, crambe, sesame seed, dry peas, lentils, small chickpeas, large chickpeas, and peanuts. Upland cotton is no longer a covered commodity and all acres are now considered “generic base acres.” They will be treated as that commodity’s base acres if they are planted as a covered commodity for ARC and PLC.