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ARC/PLC Program

 
Base Reallocation, Yield Updates, Price Loss Coverage (PLC) & Agricultural Risk Coverage (ARC)
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The ARC/PLC website provides helpful links to descriptive materials and data for producers to better understand program eligibility, how program payments are calculated, and choices to be made under the 2014 Farm Bill provisions.

 

 

 
Base Reallocation and Yield Update Links

 
Owners of farms have a one-time opportunity to: (1) maintain the farm’s 2013 base acres of covered commodities through 2018; or (2) reallocate base acres among those covered commodities planted on the farm at any time during the 2009 - 2012 crop years (excluding upland cotton bases). Click here for a base reallocation tool (Version 2)to compare a farm’s current bases with its reallocated bases. (.ZIP, 25 KB)

 
To use the tool, producers must know a farm’s 2013 base acres and 2009-2012 planting history. FSA producers will receive this information by mail in summer, 2014.

 
Owners also have an opportunity to update the program payment yield for each covered commodity based on 90 percent of the farm’s 2008-2012 average yield per planted acre, excluding any year when no acreage was planted to the covered commodity. Producers with yields in any of the 2008-2012 years that are less than 75 percent of the county average yield can use 75 percent of the county average yield as a substitute in the calculation. Note that the file contains substitute yields for covered commodities that are based on data available from the National Agricultural Statistics Service. The file will be updated as additional data becomes available.

 
Program payment yields are used to determine payment amounts for Price Loss Coverage (PLC). An owner’s opportunity to update yields is not contingent on Agricultural Risk Coverage or PLC election or enrollment. Note: Upland cotton is no longer considered a covered commodity, and the upland cotton base acres on the farm become “generic” base acres for purposes of the Agricultural Risk Coverage (ARC) and PLC programs discussed below. Producers may receive ARC or PLC payments on generic base acres if those acres are planted to a covered commodity.

 

 

 
Price Loss Coverage (PLC):

 
Payments are issued when the effective price of a covered commodity is less than the respective reference price for that commodity established in the statute for 2014-2018 crops. The effective price equals the higher of the market year average price or the national average loan rate. The PLC payment is equal to 85 percent of the base acres of the covered commodity times the difference between the reference price and the effective price times the PLC payment yield for the covered commodity. Click here for projected effective prices and PLC payment rates, based on current USDA market year average price projections. (PDF, 84 KB Sep 16, 2014| XLS, 35 KB Sep 16, 2014)

 

 
County Agricultural Risk Coverage (ARC-CO):

 
Payments are issued when the actual county crop revenue of a covered commodity is less than the ARC-CO guarantee for the covered commodity. The ARC-CO guarantee equals 86 percent of the previous five-year market year average price, excluding the years with the highest and lowest price (the ARC guarantee price), times the five-year average county yield, excluding the years with the highest and lowest yield (the ARC county guarantee yield). The payment is equal to 85 percent of the base acres of the covered commodity times the difference between the county guarantee and the actual county crop revenue for the covered commodity. Click here to see USDA’s current projections of benchmark prices (used in calculating the county guarantee) and 2014-crop projected “actual” prices (used in calculating actual county revenue) (PDF, 90 KB Sep 16, 2014 | XLS, 45 KB Sep 16, 2014)
Payments may not exceed 10 percent of the ARC guarantee price times the ARC county guarantee yield.

 

 
Individual Agricultural Risk Coverage (ARC-IC):

 
Payments are issued when actual ARC-IC revenue, summed across all covered commodities on the farm, is less than the associated ARC-IC guarantee. The farm for ARC-IC purposes is the sum of the producer’s interest in all ARC-IC farms in the state. The farm’s ARC individual guarantee equals 86 percent of the farm’s individual benchmark guarantee, defined as the five-year average of a producer’s annual benchmark revenue for each commodity, excluding the high and low annual revenues. The resulting revenues are averaged across all crops on the farm, based on plantings, to obtain the revenue guarantee. Actual revenue is computed similarly. The ARC-IC payment equals: 65 percent of the sum of the base acres of all covered commodities on the farm, times the difference between the individual guarantee revenue and the actual individual crop revenue across all covered commodities planted on the farm. Payments may not exceed 10 percent of the individual benchmark revenue. Click here to see USDA’s current projected prices (used in calculating the ARC-IC guarantee) and 2014-crop projected “actual” prices (used in calculating actual ARC-IC revenue). (PDF, 80 KB Sep 16, 2014| XLS, 46 KB Sep 16, 2014)

 

 
ARC-PLC Election Required:

 
All of the producers and owners with a share of production on a farm must make a one-time, unanimous election of: (1) PLC/ ARC-CO on a covered-commodity-by-covered-commodity basis; or (2) ARC - IC for all covered commodities on the farm. If the producers and owners with a share of production on the farm elect PLC/ ARC - CO, the producers and owners must also make a one-time election to select which base acres on the farm are enrolled in PLC and which base acres are enrolled in ARC - CO. Alternatively, if ARC – IC is selected, then every covered commodity on the farm must participate in ARC - IC. The election between PLC – ARC/CO and ARC - IC is in effect for the 2014-2018 crop years. If producers and owners with a share of production on a farm fail to make a valid election during the prescribed election period, the farm will be ineligible for any 2014 payments and the farm will be deemed to have elected PLC starting in the 2015 crop year. Election is not enrollment. Producers must still enroll their farm to receive program benefits. If the sum of the base acres on a farm is 10 acres or less, including generic base acres, a producer on that farm may not receive PLC or ARC payments, unless the producer is a socially disadvantaged farmer or rancher or is a limited resource farmer or rancher. Payments for PLC and ARC are issued after the end of the respective crop year, but not before Oct. 1.

 
Producers enrolling in PLC, and who also participate in the federal crop insurance program, may, beginning with the 2015 crop, make the annual choice as to whether to purchase additional crop insurance coverage called the Supplemental Coverage Option (SCO), if available. (USDA’s Risk Management Agency administers the federal crop insurance program.) SCO provides the producer the option of covering a portion of his or her crop insurance deductible and is based on expected county yields or revenue. The cost of SCO is subsidized and indemnities are determined by the yield or revenue loss for the county or area.

 
Crops/counties for which the producer has elected to receive ARC are not eligible to purchase SCO.

 
Producers who enroll their 2015 crop of winter wheat in SCO may elect to withdraw from SCO prior to their acreage reporting date without any penalty. This allows producers additional time to make an informed ARC/PLC participation decision. If they choose ARC, they will not be charged a crop insurance premium so long as they withdraw from SCO prior to their acreage reporting date.

 

 
Frequently Asked Questions:

 
  • What can a user do with the price data files? When combined with producers’ yield projections, the individual coverage and county coverage ARC tables allow producers to estimate 2014-crop ARC guarantees and projected “actual” revenues under both the individual and county coverage options. The PLC table provides payment rate projections. These price files will be re-posted monthly after each release of USDA’s World Agricultural Supply and Demand Estimates (WASDE) report until prices are finalized for program purposes.

 
  • Can the yield file be used for County Agricultural Risk Coverage (ARC-CO) purposes? No. ARC-CO yields are complicated by multiple years of data and irrigated/non-irrigated practices. An ARC-CO yield file will be posted soon.

 
  • On what date will the price files be re-posted monthly? The price files will be reposted no later than 3 business days after the WASDE posting.

 
  • What help can farmers get in learning more about ARC-PLC? Congress provided $3 million for universities to develop web-based decision tools for ARC-PLC and other 2014 Farm Bill programs. These tools will be available late this summer. In addition, Congress provided $3 million for producer education, which will also start in the late summer and provide farmers with information on how to use the decision tools.

 

 
Definitions

 
Acreage report--An annual report for each insured crop in the county in which the producer has an ownership share. It indicates the crop planted, acreage prevented from planting, the producer’s share in those crops, acres planted, the dates planted, and other information. Acreage reporting dates vary from crop to crop based on the production cycle. For example, the crop insurance acreage reporting date for many counties is November 15 for winter wheat.

 
Base acres-- A farm's crop-specific acreage of wheat, feed grains, rice, oilseeds, pulse crops, or peanuts eligible used for FSA program purposes. Base acres do not necessarily align with current plantings. Upland cotton base acres on the farm are renamed “generic” base acres.

 
Benchmark price—The higher of the reference price or the respective market year average price for the covered commodity. The benchmark price is used to compute annual ARC-Individual Coverage and ARC-County Coverage benchmark revenues.

 
Covered commodities--Include wheat, oats, barley, corn, grain sorghum, rice, soybeans, sunflower seed, rapeseed, canola, safflower, flaxseed, mustard seed, crambe and sesame seed, dry peas, lentils, small chickpeas, large chickpeas and peanuts.

 
Effective price—For the specific covered commodity, the higher of the market year average price or the national average loan rate.

 
Generic base acres—Former upland cotton base acres. Generic base acres are not involved in, or subject to, base acre reallocation. If generic base acres are planted to a covered commodity in a given year, then those acres are considered base acres for that planted covered commodity in that crop year. For example, if a farm with 500 generic base acres plants 250 of those generic base acres to corn, and the farm elected ARC-County Coverage for corn, then those 250 generic base acres are treated as corn base in that crop year and receive an ARC-County Coverage payment if one is triggered.

 
Limited resource producer—Limited resource producer status may be determined using the USDA Limited Resource Farmer and Rancher Online Self Determination Tool located on the Limited Resource Farmer and Rancher page at http://www.lrftool.sc.egov.usda.gov/The automated system calculates and displays adjusted gross farm sales per year and the higher of the national poverty level or county median household income.

 
Market year average (MYA) price-- Reflects the average price received by farmers across the nation at the point of first sale, across all grades and qualities of the crop. USDA publishes MYA price projections in the monthly World Agricultural Supply and Demand Estimates report.

 
Reference price—Prices for covered commodities set in Title I of the 2014 Farm Bill that apply for 2014-2018 crops and are used in the PLC and ARC programs. For example, the reference price for wheat is $5.50 per bushel for 2014-2018 crops.

 
Socially disadvantaged producer—Includes American Indians or Alaskan Natives, Asians or Asian Americans, Blacks or African Americans, Native Hawaiians or other Pacific Islanders, Hispanics, and women.

 
Supplemental Coverage Option--A county level revenue- or yield-based insurance optional endorsement that covers a portion of losses not covered by the deductible of the same crop’s underlying insurance policy

 

 

 
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Last Modified: 09/16/14 4:26:40 PM


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