Farm bill update: Decisions with and without web-based decision aid

Farm bill update: Decisions with and without web-based decision aid

Questions and answers

Editor’s note: Anita Wilson is Agricultural Program Specialist for the Arkansas FSA, Tony Franco is the Chief of Farm Programs for the Arkansas FSA, and Bobby Coats is Professor, University of Arkansas Division of Agriculture.

What is the new extended timeline to update yield history or reallocate base acres? Has the timeline to elect ARC or PLC coverage changed?

Timeline to elect ARC or PLC coverage:

• September 29, 2014 until March 31, 2015 – Update yields & reallocate base acres

• November 17, 2014 until March 31, 2015 – One-time Election of either ARC or PLC for 2014 through 2018 crop years

• Mid-April 2015 through Summer 2015 – Contract enrollment for 2014 & 2015 crop years

Agriculture Secretary Tom Vilsack announced Feb. 27 that the final day to update yield history or reallocate base acres was extended one additional month, from Feb. 27 until March 31. The final day for farm owners and producers to choose ARC or PLC coverage remains March 31.

If no changes are made to yield history or base acres by March 31, what happens?

If no changes are made to yield history or base acres by March 31, the farm's current yield and base acres will be used.

If no program choice, ARC or PLC, is made by March 31, what happens?

A program choice of ARC or PLC coverage must be made by March 31 or there will be no 2014 payments for the farm and the farm will default to PLC coverage, beginning with the 2015 crop year through 2018.

Is cotton a covered commodity?

No, cotton is not a covered commodity. Covered commodities include barley, canola, large and small chickpeas, corn, crambe, flaxseed, grain sorghum, lentils, mustard seed, oats, peanuts, dry peas, rapeseed, long grain rice, medium grain rice (which includes short grain rice), safflower seed, sesame, soybeans, sunflower seed and wheat. Upland cotton is no longer a covered commodity.

What actions need to be completed as soon as possible at my area FSA office?

Farm by farm and crop by crop – March 31 deadline:

• Verify the correctness of countercyclical yield, base acres, 2009 to 2012 planted and prevented planted acres, etc. and provide required yield data for years 2008 to 2012.

• Retain or update yields, there is no reason why one should not update their yields if the updated yield is higher than the old counter cyclical yield.

• Retain or reallocate base acres, this decision can be simplistic or challenging.

• There is a one-time opportunity to elect either ARC or PLC (farm by farm and crop by crop) for 2014 through 2018 crop years.

What is the best approach to making the yield, base and ARC or PLC election decision?

For Southern producers we recommend using the Texas A&M and Missouri FAPRI Web-Based Farm Bill Decision Aid along with one’s farm data, assumptions and future expectations.

If I do not plan to use the previously discussed web-based farm bill decision aid, do you have a suggestion?

One option would be to use the Texas A&M and Missouri FAPRI ARC/PLC Evaluator for Generic (Cotton) Base Module or Decision Tool.

This tool compares expected PLC and ARC-CO payments (the average payment across many possible future realizations of prices and yields) for a county of your choice. In the calculations, they use two key assumptions. First, they assume that you would have a PLC Payment Yield equal to the default value assigned by FSA in the absence of a yield history. Second, they assume expected prices equal to the latest FAPRI projections.

The output reflects only expected payments for PLC and ARC-CO. It should be noted, that choosing ARC-CO precludes one from purchasing the crop insurance Supplemental Coverage Option (SCO). Expected net SCO indemnities are not reflected in the output.

We will be discussing this discussion aid module further in coming articles and in our March 3 and March 5 webinars.

2 critical Decision Aid Webinars worth viewing

• Decision Aid Training: 2014 Farm Bill Decision Aid Training with Professor James Richardson, Agricultural and Food Policy Center (AFPC) - Texas A&M University. Webinar Video and Power Point PDF

• The Crop Market Outlook & Farm Bill Choices: Professor Pat Westoff, Director of the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri-Columbia. Presentation Video and Power Point PDF

2 new Webinars: March 3 and 5

We continue our farm bill webinar series. Please register at the registration link.

• March 3, 2015: The Generic Base Decision Using the Texas A&M/Missouri FAPRI Farm Bill Web-Based Decision Aid, James W. Richardson, Regents Professor & AgriLife Research Senior Faculty Fellow, Co-Director Agricultural and Food Policy Center, Department of Agricultural Economics, Texas A&M University. Registration link: https://uaex.zoom.us/webinar/register/3d0ce37789874e75c5b9141539e44ee6

• March 5, 2015: ARC/PLC Considerations with Bobby Coats, Professor, Department of Agricultural Economics and Agribusiness, University of Arkansas Division of Agriculture. ARC/PLC Decision Using the Web-Based Decision Aid with Brad Watkins Professor, University of Arkansas Division of Agriculture. Registration link: https://uaex.zoom.us/webinar/register/a7b855ef47a9805cd746f627e8486654

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