Ag Policy Blog

The Alpha and Omega of ARC-County

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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Different land-grant universities issued some analysis on Wednesday looking at the alpha and omega of the Agricultural Risk Coverage Program.

The University of Missouri's Food and Agricultural Policy Research Institute -- FAPRI -- posted a bulletin summarizing the "All or Nothing" impacts of 2014 ARC-County payments.

FAPRI notes "ARC-CO payments for the 2014 crop year varied greatly across the country. In most counties, either no payments were made or payments were at the maximum levels allowed."

The article points to payments by counties and practice (irrigated or not). Out of 2,787 county-practice combinations for corn, 35% of counties got zero payments. Yet another 39% of counties got the maximum payments allowed, which was 10% of the county benchmark revenue.

Just 26% of counties had payments that fell between zero and the maximum. ARC was definitely an all or nothing deal for the 2014 crop.…

Shooting west on Interstate 70, Kansas State University posted an article dubbed, Corn ARC-County is Expected to Provide "Little" Coverage in the Final Year of the "Farm Bill." Art Barnaby, an agricultural economist at K-State, stated in his piece that low commodity prices will beget low farm-program payments.

'If the current low market price level doesn't change, the ARC safety net will be nearly gone in the last year of the Farm Bill," Barnaby stated.

That had been laid out early in the farm-bill process and probably contributed to getting the legislation passed. The projection of lower commodity payments in the latter years of the farm bill helped score the legislation as a cost-saver. Congressional budget counters forecast that commodity prices wouldn't be as high in the latter years and in doing so projected the revenue guarantee for ARC would decline as well.

Barnaby highlights how this price decline could wipe out ARC payments for farmers in those other 65% of counties as well and what that could mean in the next farm-bill debate.…

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4/18/2016 | 7:43 PM CDT
Anyone who is relying on government payments to keep them afloat is in big trouble anyhow.
4/16/2016 | 7:58 AM CDT
Was this decreasing amount not known when enrollment in ARC occurred? PLC was an option.