|USDA to issue safety net payments|
|November 05, 2015 Jerry Purvis|
Final totals are still being computed, but the U.S. Department of Agriculture has started the process for issuing safety net payments for the 2014 crop year.
Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) were new additions to the 2014 Farm Bill, and about 1.7 million farms signed up for the program.
In past years, producers would receive guaranteed direct payments from the USDA, whether the growing season was good or bad. Under the new provisions, the safety net programs protect producers only when market forces or adverse weather cause unexpected drops in crop prices or revenues. Consequently, there could be years when no payments go out.
The USDA recently announced that about half of producers signed up for the programs will receive those safety net payments, nearly $4 billion.
For example, the 2014 corn price was 30 percent below the historical benchmark price used by the ARC-County program.
Because of that, revenues of the farms participating in the ARC-County program were down by about $20 billion from the benchmark during the same period.
“We’re still processing those payments for the area,” said Barb Cross, County Executive Director with the Farm Service Agency office in Scottsbluff. “It should take another week or two before we get all the payments out of the office. Right now, there are no payments going out from the PLC program. We’re making our county payments out of the ARC program.”
She added the ARC coverage payments are computed at USDA in Kansas City and the local offices verify the numbers, which are different in every county due to average yields.
Nationwide, 96 percent of soybean farms, 91 percent of corn farms, and 66 percent of wheat farms elected the ARC-County coverage option.
The ARC/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.
The programs, implemented under the 2014 Farm Bill, build on historic economic gains in rural America over the past six years.
They also help achieve meaningful reform and billions of dollars in savings for taxpayers.