Ag Policy Blog

Senators Propose Modifications to ARC Program

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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From DTN's Washington Insider

Changes to the Ag Risk Coverage (ARC) program that started in the 2014 Farm Bill are being proposed by two lawmakers with an eye on the next version of the U.S. farm bill that the House and Senate are currently developing.

Sens. John Thune, R-S.D., and Sherrod Brown, D-Ohio, on Wednesday released their proposed improvements to ARC, with changes including the way the county revenue guarantee is calculated and to the payment trigger.

The bill would utilize a plan previously released by Thune to calculate payments based on a county’s physical location. The measure would also cap reference prices at either the current level or no more than the 10-year average price for a commodity.

Adjusting ARC to have a coverage level of 90% instead of the current 86% is another provision, and it would also use a three-year average price with a 10-year average market price as a floor for calculating ARC payments. Plus, the plan would also use a crop insurance trend-adjusted yield factor to calculate the ARC benchmark yield.

The package would include an 80% "T-yield" for substitute yields if historical yields are missing or lower than 80%, versus the current T-yield substitution factor is 70%.

Unlike the House farm bill, the Thune/Brown plan would keep the Individual ARC option for producers. Plus, the plan would also include an adjustment factor that could be used to calculate ARC wheat payments, when needed.

However, no information is yet available on the cost for the option which could loom large in the farm bill process.


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