USDA issues initial ARC and PLC payments to farmers

USDA issues initial ARC and PLC payments to farmers

“For example, the corn price for 2014 is 30 percent below the historical benchmark price used by the ARC-County program, and revenues of the farms participating in the ARC-County program are down by about $20 billion from the benchmark during the same period,” Agriculture Secretary Tom Vilsack  noted in announcing the payments.

USDA has begun issuing Agricultural Risk Coverage and Price Loss Coverage payments for the 2014 crop year to eligible farmers. The payments are the first under the ARC and PLC programs authorized by the 2014 farm bill.

Unlike previous farm bills, which made payments to farmers in good years and bad, the Agricultural Act of 2014 provides assistance only when the markets and adverse weather cause drops in crop prices or revenues, said Agriculture Secretary Tom Vilsack.

“For example, the corn price for 2014 is 30 percent below the historical benchmark price used by the ARC-County program, and revenues of the farms participating in the ARC-County program are down by about $20 billion from the benchmark during the same period,” he noted in announcing the payments.

“The nearly $4 billion provided today by the ARC and PLC safety-net programs will give assistance to producers where revenues dropped below normal.”

During the farm bill debate, numerous analysts argued farm safety net programs were no longer needed because prices for many commodities were at record highs. But two years later, markets have returned to more historical levels. http://www.politico.com/story/2015/01/farm-bill-farmer-payments-114699.

Bad weather, low prices

Many producers are facing operating losses in 2015 due to adverse weather conditions such as excessive rains during planting or drought during the growing season and low prices after corn growers produced two record crops in a row and other commodities saw similar increases..

Nationwide, USDA reports 96 percent of soybean farms, 91 percent of corn farms and 66 percent of wheat farms elected the ARC-County coverage option, which is based on county yield averages. Ninety-nine percent of long grain rice and peanut farms, and 94 percent of medium grain rice farms elected the PLC option.

Overall, according to USDA, 76 percent of participating farm acres are protected by ARC-County, 23 percent by PLC, and 1 percent by ARC-Individual, which allows farmers to use their yields for payment calculations. For data about other crops and PLC price and payment data, visit www.fsa.usda.gov/arc-plc.

Crops receiving assistance include barley, corn, grain sorghum, lentils, oats, peanuts, dry peas, soybeans and wheat. In the upcoming months, disbursements will be made for other crops after marketing year average prices are published by USDA’s National Agricultural Statistics Service or NASS.

Any disbursements to participants in ARC-County or PLC for long and medium grain rice (except for temperate Japonica rice) will occur in November, for remaining oilseeds and also chickpeas in December, and temperate Japonica rice in early February 2016. ARC-individual payments will begin in November. Upland cotton is no longer a covered commodity.

Timely payments for rice

"This new safety-net payment program made possible by the 2014 farm bill will benefit rice farmers who have been impacted by unpredicted market forces," said USA Rice Chairman Dow Brantley. “While the need for these payments is unfortunate, the timely manner in which USDA is dealing with them is welcome.”

USDA also announced the Budget Control Act of 2011, or sequestration, as it is also known, requires the Agriculture Department to reduce payments by 6.8 percent. For more information, producers are encouraged to visit their local Farm Service Agency office.

The Agricultural Act of 2014 was passed in January of 2014. Since enactment, USDA has been working to implement each provision of legislation, including providing disaster relief to farmers and ranchers; strengthening risk management tools; expanding access to rural credit; funding critical research; establishing innovative public-private conservation partnerships; developing new markets for rural-made products and investing in infrastructure, housing and community facilities.

For more information on the law, visit www.usda.gov/farmbill.

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