USDA Releases Details of ARC and PLC Programs

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As reported by POLITICO, USDA has unveiled details of two key crop programs created in the 2014 farm bill — the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs.

“These new programs help ensure that risk can be effectively managed so that families don’t lose farms that have been passed down through generations because of events beyond their control,” said Secretary Tom Vilsack. “But unlike the old direct payment program, which paid farmers in good years and bad, these new initiatives are based on market forces and include county — and individual — coverage options. These reforms provide a much more rational approach to helping farmers manage risk.”

According to the write-up in POLITICO, ARC pays out when a farmer’s revenue falls below 86 percent of the five-year average of the local county, while PLC pays out when the average national price falls below levels set by Congress. But it’s more complex than that: There are two different versions of ARC, one based on county revenues and one based on individual revenues. Also, If a farmer chooses ARC, they are not eligible to sign up for the Supplemental Coverage Option, a separate farm bill provision that will help cover part of the a farmer’s crop insurance deductible.

Farmers can sign up for the options to aid in the decision making process between ARC and PLC, two consortia led by Texas A&M University and the University of Illinois have released online tools that break down both programs.