USDA Farm Service Agency (FSA) Texas State Executive Director, Judith A. Canales, announced FSA has begun issuing financial assistance for the 2014 crop year to those agricultural producers who are participating in the new safety-net programs established by the 2014 Farm Bill.
The new programs, known as Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC), are designed to protect against unexpected drops in crop prices or revenues due to market downturns. “Unlike the old direct payments program, which provided funds in good years and bad years, these new programs only provide financial assistance when prices or revenues drop below normal,” said Canales. “For example, nationwide, farms participating in ARC-County that are receiving payments experienced a $20 billion drop in revenues relative to the historical benchmark. Similarly, lower prices in commodities such as peanuts and rice have triggered PLC assistance.”
Funds provided by the ARC-County program can vary from county to county. The 2014 Farm Bill requires ARC-County payments to be calculated using the national average market year price (which does not vary by county), and the average county yield (which varies by county). This creates county-by-county differences in payment rates.
The yield data comes from surveys conducted by the USDA National Agricultural Statistics Service (NASS), the national standard that uses the highest-precision statistical procedures available. Where that data does not exist, the next strongest data is used: county-level crop insurance data from the Risk Management Agency (RMA). If that data does not exist, the next strongest data is used: NASS district data. Where NASS district data doesn’t exist, the FSA State Committee provides data.
Canales adds that because the new programs are designed as financial assistance for prices and revenues lower than normal, not all producers will receive a payment, (as occurred with the old direct payments program). ARC/PLC payments are designed to help with unexpected changes in the marketplace, and to supplement other assistance programs, such as crop insurance.
Texas-specific ARC-County revenue reference maps for corn, wheat, and soybeans can be obtained at http://www.fsa.usda.gov/Internet/FSA_File/tx_arc_co_maps2015.pdf.
To learn more about the data used in calculating payments, how payments are calculated, crop-specific and state-specific information, please visit our website at www.fsa.usda.gov/arc-plc.