ARC and PLC Strengthened in New Farm Bill

ARC and PLC Strengthened in New Farm Bill

The 2018 farm bill was signed into law last week. One of the big highlights of the bill was the strengthening of the farm safety net payments and crop insurance.  Adam Kline is an attorney with Bose, McKinney & Evans LLP and specializes in ag business law. He says farmers will be able to make a new election with this new farm bill. He says with Price Loss Coverage, or PLC, it is strengthened by two main variables.

“Reference prices, which are a main component of PLC, are able to be adjusted when markets improve. The second variable is that yields will be updated. So, for example, how this affected some farmers in United States, and not necessarily Indiana, there are some dry land farmers out west who had experienced low prior yield due to a prolonged drought. That threw off their PLC payments and now we’ll be able to update those figures.”

The ARC program was tweaked as well.

“It’s going to use actual yield collected by the RMA, which is the Risk Management Agency for the USDA. And then separate, they’re also going to tweak it by separately calculating dry land and irrigated acres by counting. So, this is going to mitigate any kind of county to county disparities that were in the previous regionals calculations.”

Kline said Washington got the message from farmers regarding crop insurance, and that message was do no harm.

“When you dig into the language of the bill, it looks like they’re maintaining the status quo and it’s going to be business as usual with the existing structure, but with a focus on improved risk management programs. So, what the agency is going to try to do is create programs that are more applicable in situations on a region by region basis.”

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