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2018 ARC, PLC payments issued; crop insurance changes coming?

 

 

By TIM ALEXANDER

Illinois Correspondent

 

PEORIA, Ill. — A United States Department of Agriculture (USDA) news release dated Oct. 15 announced enrollment had opened to producers for Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) safety net programs for the 2020 crop year. Perhaps more exciting, however, was news within the release that producers who enrolled farms for the 2018 crop year have started receiving more than $1.5 billion in payments from the USDA’s Farm Service Agency (FSA).

“ARC and PLC payments are being issued to farmers, with most receiving them via direct deposit,” confirmed Peoria County Farm Bureau Manager Patrick Kirchhofer, in an email last week.

In a year marked by stagnant crop prices, limited export markets and declining farm income, this news comes as a welcome relief to producers who are walking a tight financial rope. The USDA’s ARC and PLC safety net programs, reauthorized and updated in the 2018 Farm Bill, provide income support to help producers manage the ups and downs in revenue and prices.

“USDA is here to support the economic stability of American agricultural producers by helping them maintain their competitive edge in times of economic stress,” said Richard Fordyce, FSA administrator. “We encourage producers to consider enrolling in one of these programs.”

ARC provides income support payments on historical base acres when actual crop revenue declines below a specified guaranteed level, while PLC provides income support payments on historical base acres when the effective price for a commodity falls below its reference price. Signup for the 2020 crop year closes June 30, 2020, while sign up for the 2019 crop year ends on March 15, 2020.

For farms and covered commodities enrolled in the ARC program, visit www.fsa.usda.gov/arc-plc for payment rates applicable to their county and each covered commodity.  Regarding PLC, USDA announced that the following crops met payment triggers for the program’s users: barley, corn, canola, dry peas, grain sorghum, lentils, peanuts and wheat. (Soybeans and oats did not meet PLC triggers.)

On Oct. 23, Illinois FSA State Executive Director William Graff announced the agency was processing almost $13 million in ARC and PLC payments for the 2018 crop year for distribution to Illinois producers.  Additionally, Illinois FSA will distribute some $158.5 million in Conservation Reserve Program rental payments to farmers and landowners.

“When reviewing payments, it’s important to remember that ARC and PLC payments by county can vary because average county yields will differ,” Graff noted, adding that all 102 Illinois counties have experienced a drop in price or revenues below the benchmark price established by the ARC or PLC programs and will receive payments.

FSA anticipates releasing more ARC-PLC payments in November, following the publishing of additional commodity prices for the 2018 crop by the USDA National Agricultural Statistics Service.

 

Crop insurance changes coming?

Crop insurance specialists are anticipating changes in crop insurance for the 2020 growing season that could include production insurance for hemp growers and changes in prevented planting insurance. However, these changes are not expected to be announced until after November meetings are held and, in the case of insurance for hemp production, possibly not until 2021.

“The RMA and USDA have talked about offering insurance for the industrial hemp crop,” said Bradley Clow, crop operations manager for Country Financial in Bloomington-Normal, Illinois. “(Country) have offered our own insurance for it since the beginning of the 2019 crop year, including the fiber, the seed and the flower. We were one of the first to be able to provide a private industry product, but the RMA and USDA will be offering federal insurance for hemp very soon.”

There is also discussion about changes to prevented planting insurance products, according to Clow. “We have the NCIS (National Crop Insurance Service) meetings coming up in November and January. A lot of information will be shared during the November meeting as to what may be coming up for the 2020 crop year,” he said. “It’s too early to speculate exactly what they are going to do.”

The USDA potentially cleared the way to offer hemp production insurance for the 2020 crop year in late October, when an interim final rule creating standards for production, testing, licensing and insurance was issued. Hemp producers can review the rule and provide feedback to the USDA through the Federal Register for a period of 60 days beginning Oct. 31, 2019.

 

11/7/2019