Downturn Markets Mean USDA Payments

Kelly MarshallUSDA

USDAMany of the 1.7 million farms enrolled in the Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC) programs will now be receiving safety-net payments, thanks to the down markets of 2015.

“This fall, USDA will be making more than $7 billion in payments under the ARC-County and PLC programs to assist participating producers, which will account for over 10 percent of USDA’s projected 2016 net farm income. These payments will help provide reassurance to America’s farm families, who are standing strong against low commodity prices compounded by unfavorable growing conditions in many parts of the country,” said Agriculture Secretary Tom Vilsack.

“At USDA, we are standing strong behind them, tapping in to every resource that we have to help. So far in 2016, this has included creating a one-time cost share program for cotton ginning, purchasing about $800 million in excess commodities to be redirected to food banks and those in need, making $11 million in payments to America’s dairy farmers through the Dairy Margin Protection Program, and reprogramming Farm Service Agency funds to expand credit options for farmers and ranchers in need of extra capital. As always, we continue to watch market conditions and will explore opportunities for further assistance in the coming months. For producers challenged by weather, disease and falling prices, we will continue to ensure the availability of a strong safety net to keep them farming or ranching.”

Unlike the old direct payment program, which issued payments during both weak and strong market conditions, the 2014 Farm Bill authorized the ARC-PLC safety net to trigger and provide financial assistance only when decreases in revenues or crop prices, respectively, occur. The ARC and PLC programs primarily allow producers to continue to produce for the market by making payments on a percentage of historical base production, limiting the impact on production decisions.

Nationwide, producers enrolled 96 percent of soybean base acres, 91 percent of corn base acres and 66 percent of wheat base acres in the ARC-County coverage option. Producers enrolled 99 percent of long grain rice and peanut base acres and 94 percent of medium grain rice base acres in the PLC option. Overall, 76 percent of participating farm base acres are enrolled in ARC-County, 23 percent in PLC and one percent in ARC-Individual. For other program information including frequently asked questions, visit www.fsa.usda.gov/arc-plc.

Payments will be made for acres of barley, corn, grain sorghum, lentils, lots, peanuts, dry peas, soybeans, wheat and canola.  Other commodity coverages will be announced in the upcoming months as the USDA’s National Agricultural Statistics Service compiles marketing year average prices.