Ag Policy Blog

Sequester Cuts and Other Farm Program Disparities

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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Farmers will take a 6.8% cut in their farm-program payments because of federal sequestration rules, according to information from USDA on Wednesday. A statement on the sequester cuts was made at a House Agriculture Committee hearing on dietary guidelines.

The 6.8% cut covers a lot of programs, including the Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) programs. It also affects marketing loans, sugar loans and the Noninsured Crop Disaster Assistance Program.

USDA detailed some of the programs cut in 2013, but that was prior to the passage of the latest version of the farm bill. Ideally, a new list will be generated to provide full details of all of the affected programs.

In 2013, USDA did state that Conservation Reserve Program payments were not affected by sequester cuts.

On that note, everyone expecting an ARC-County payment for their 2014 crops should closely read Marcia Taylor's article today on ARC payments. http://dld.bz/…

Marcia learned at an agricultural economists' meeting that farmers with land in multiple counties will receive ARC payments based on the county where their office or records are located, not the actual farm ground. "For growers with farms in multiple counties, that rule means Agricultural Risk Coverage-County checks will not be paid at county rates where the ground is located but where records are housed."

Marcia highlights one farmer who lives in a county where ARC payments will be $18 an acre, but his ground is in an adjacent county where payments will be closer to $50 an acre. In that case, if you have 500 acres in one county, but live in another, you could see $16,000 less in payments --- on top of that 6.8% cut.

It's a significant payment disparity that wasn't part of the public discussion about ARC/PLC enrollment. Had that issue been highlighted, we would have certainly pointed it out to our readers. Farmers would have had the opportunity to more carefully consider their choice of Farm Service Agency office to enroll as their base for farm ground if the difference in adjacent counties caused that big a swing in payments.

Your initial reaction after reading Marcia's piece should be "What the heck." Or something to that effect. Then you should figure out how this impacts you personally and reach out to your local congressman or senator to point out the payment disparity.

In a shameless plug, be sure to tell them you read it on DTN.

Follow me on Twitter @ChrisClaytonDTN

Comments

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andrew mohlman
10/7/2015 | 5:58 PM CDT
If end users paid actual worth than we wouldn't have to worry about it
William Harshaw
10/7/2015 | 1:35 PM CDT
Since where the farm is administratively located was probably determined independent of the payment rates, some farmers will win, some will lose. Of course the congressman/senator will only hear from the losers.