Safety-net payments issued to farmers
The U.S. Department of Agriculture (USDA) announced that beginning today, many of the 1.7 million farms that enrolled in either the Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC) programs will receive safety-net payments due to market downturns during the 2015 crop year.
“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 in a news release. “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.
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.