Safety-Net Checks Coming

USDA Announces $7 Billion in ARC, PLC Program Payments

This map shows 2015 Agriculture Risk Coverage-county payment rates for corn. (Graphic courtesy of USDA Farm Service Agency)

OMAHA (DTN) -- The checks are in the mail. Farmers enrolled in either Agriculture Risk Coverage or Price Loss Coverage programs can expect to receive safety-net payments as a result of market downturns during the 2015 crop year, according to a news release from USDA Tuesday.

USDA said many of the 1.7 million farms enrolled in either ARC-county or PLC programs will receive some $7 billion in payments. That accounts for more than 10% 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," U.S. Agriculture Secretary Tom Vilsack said in a news release. "At USDA, we are standing strong behind them, tapping in to every resource that we have to help."

Val Dolcini, Farm Service Agency administrator, told DTN in a phone interview Tuesday afternoon that the payments were more widespread and about 50% larger than last year with a lot larger payments for wheat and soybeans especially.

Breaking total payments down by the three major commodities, Dolcini said about $1 billion in payments was going to wheat farmers, $1 billion to soybean growers and $4 billion to corn growers on farms that enrolled their base acres.

Dolcini noted that with electronic deposits, farmers could see payments within a matter of days.

"We are really looking at every potential tool in the toolbox to help farmers who have been hit with declining commodity prices," Dolcini told DTN.

The 2014 farm bill authorized the ARC-PLC safety net to trigger and provide financial assistance only when decreases in revenues or crop prices occur. The ARC and PLC programs allow producers to continue to produce for the market by making payments on a percentage of historical base production, limiting the effects on production decisions.

According to USDA, producers enrolled 96% of soybean base acres, 91% of corn base acres and 66% of wheat base acres in the ARC-County coverage option. They enrolled 99% of long-grain rice and peanut base acres and 94% of medium-grain rice base acres in the PLC option.

Overall, 76% of participating farm base acres are enrolled in ARC-County, 23% in PLC and 1% in ARC-Individual.

Payments are made to producers who enrolled base acres of barley, corn, grain sorghum, lentils, oats, peanuts, dry peas, soybeans, wheat and canola. In the upcoming months, payments will be announced after marketing-year average prices are published by USDA's National Agricultural Statistics Service for the remaining covered commodities.

These include long- and medium-grain rice (except for temperate Japonica rice), and are scheduled to be announced in November. Remaining oilseeds and chickpeas are scheduled to be announced in December, and temperate Japonica rice, are scheduled to be announced in early February 2017. Upland cotton is no longer a covered commodity.

The Budget Control Act of 2011, passed by Congress, requires USDA to reduce 2015 ARC and PLC payments by 6.8%, according to the release. For more information, producers are encouraged to visit their local Farm Service Agency (FSA) office. To find a local FSA office, visit http://offices.usda.gov/….

Other steps USDA has taken so far in 2016 to help farmers deal with low commodity prices include 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 some $11 million in payments to 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.

FSA Administrator Dolcini also noted that USDA has seen significant demand for farm loans and has loaned about $6.3 billion to farmers this year.

"As always, we continue to watch market conditions and will explore opportunities for further assistance in the coming months," Vilsack said. "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."

For other program information including frequently asked questions, visit www.fsa.usda.gov/arc-plc.

(AG)