The check is in the mail so to speak. USDA is making the first payments under the new Farm Bill safety net programs. Payments for the Agriculture Risk Coverage (ARC) or Price Loss Coverage program for 2014 crops are going out this week. According to Val Dolcini, head of the Farm Service Agency, “We will be distributing almost $4 billion in payments to farmers who enrolled in the Farm Bill programs.”
“Unlike the old direct payments program, which paid farmers in good years and bad, the 2014 Farm Bill authorized a new safety-net that protects producers only when market forces or adverse weather cause unexpected 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. The nearly $4 billion provided today by the ARC and PLC safety-net programs will give assistance to producers where revenues dropped below normal.”
Growers had several options when it came to what program in which to enroll. In the end, Dolcini said the ARC program was the most popular, “Ninety-six percent of the soybean farms and over 90% of the corn farms chose the ARC County option.” The ARC/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. He added overall the first year of the program went well.
The Budget Control Act of 2011, passed by Congress, requires USDA to reduce payments by 6.8 percent. For more information, producers are encouraged to visit their local Farm Service Agency office.