Hard choices for farm bill sign-up

“Crop farmers have hard decisions to make under the 2014 farm bill,” Scott Brown told 140 growers at Macon, Mo., Nov. 11. “This farm bill is like nothing you’ve seen before,” said Brown, University of Missouri agricultural economist.  “You won’t walk out of here knowing how to sign up your farm.”

Macon was one of four stops in three days for a farm-bill team from Missouri Farm Service Agency (FSA) and MU Extension.

Mike Lafolette, from the FSA state office in Columbia, Mo., said, “This gets very complex. But first, know that direct payments are gone.”

With the last farm bill, crop farmers signed up at FSA offices. A few weeks later, their check arrived.

In the new law, farmers must choose one of three options. Then they won’t receive a check, if one comes, until next year after selling crops.

There are two major plans: Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC).  PLC covers crop prices. ARC covers farm revenue from yield and price.

A complexity: There are two ARCs. ARC-CO uses county average yields. ARC-IC, for an individual’s farm, uses proven farm yields.

“This is like crop insurance,” Lafolette said. “It’s a payment you don’t want to receive. You want prices and good yields every year.”

In bad years the farm bill provides a safety net. “It’s insurance without a premium,” he added.

Decisions differ for each farm, speakers said. Growers with multiple farms can enroll each in a different program, except under ARC-IC, where all farms are lumped together.

There’s lots of homework before going to the FSA office to sign up.

Mike Cadle, FSA state director, said, “We can’t tell you which program is best. You must decide.”

Under this farm bill, Congress mandated FSA and extension join to explain the programs. To help, MU FAPRI (Food and Agriculture Policy Research Institute) joined Texas A&M economists to create computer tools to help farmers study options.

Joe Outlaw, from College Station, Texas, said, “This tool won’t tell which program is best. It gives numbers to help you choose.”

He warned that “farmers’ fat fingers” will be typing a lot of farm data. But the software does a lot of data entry, he said. The tool downloads commodity prices and outlooks, plus county yield averages and other FSA records. Those numbers may be needed for farm calculations.

Pat Westhoff, from FAPRI, said decisions would be easy if farmers knew future yields and prices. His group will post monthly outlooks to use.

Brown assured farmers that local FSA and MU Extension specialists will hold follow-up meetings in most counties. His website will show new details at http://farmbill.missouri.edu.

“There are many people who can help,” he said. Contacts are on the website, a part of the MU agricultural economics department. Groups sponsoring local meetings include corn and soybean growers, Missouri Farm Bureau and FCS Financial.

Cadle said many farmers who’ve never come to an FSA office will be coming in to sign up.  Grass farmers who don’t plant crops may be eligible for safety-net help. If their farm has an FSA crop base, that can be used.

Because of the complexity of the farm bill, it has taken since April to write crop rules. As a result, there was no program sign-up for 2014. Farmers can sign up for 2014 and 2015 starting now.

In August, all owners and operators received from FSA a printout of base acres and yields on file. The first step will be to find the FSA letter and confirm its accuracy. It can be updated. That data applies for five years, the life of the bill.

Once a farm bill selection is made it cannot be changed.

On the first visit to the FSA office, update the yield records, Brown said. The next step is base reallocation.

“You can reallocate your base acres, but you cannot increase the base,” Lafolette said. “A lot of grass was plowed to plant crops. Those acres will not increase your base.”

All farmers and landowners should attend local farm bill meetings. The first deadline, for yield update and base reallocation, is Feb. 27. Selection of ARC or PLC is March 31.

Actual enrollment will be next summer. “Do the paperwork, but wait until near deadline to make final changes,” Brown said. “Market shifts could change final decisions.”

FSA details are posted at http://fsa.usda.gov.

“Remember, FSA has final say,” Brown told farmers. “If it looks red but they say it is blue, it is blue.”

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