Farm bill signup decision may be more difficult this time
YANKTON, S.D. -- The signup for the 2018 Farm Bill is underway, and while some of the programs have not changed from the 2014 Farm Bill, the choice will be more difficult for farmers this signup.
YANKTON, S.D. - The signup for the 2018 Farm Bill is underway, and while some of the programs have not changed from the 2014 Farm Bill, the choice will be more difficult for farmers this signup.
"You know, 99% of our producers chose ARC-County last farm bill and this time around I think it's going to be a lot more individualized," Elly Daisy, Farm Credit Services crop insurance agent says.
The reason the 2014 Farm Bill election was more cut and dried in part because agriculture was just coming off an era of historically high commodity prices. With the current market environment, experts say farmers will need to closely reanalyze which program is best for their operation.
Under the 2018 Farm Bill, Agriculture Risk Coverage-County (ARC-CO) is again an option and so is Price Loss Coverage (PLC), but with reference prices of $3.70 for corn, $8.40 for soybeans and $5.50 for wheat. However, there's also a new program called ARC-Individual (ARC-IC).
David Charles, Farm Service Agency executive director for Yankton County, explains. "ARC-County uses county yields times the nationwide price. ARC-Individual uses that farm's yields," Charles says. "The PLC program, that's strictly price-based, anytime the nationwide price for that year gets under the reference price, it starts kicking a payment."
Officials say when deciding between these options, farmers need to closely analyze their farm data. "So, trying to go through every farm number, and that's really key as well, it's per farm number it's not per operation or per crop," Daisy says.
Charles advises farmers to look at what they raised on their farm for 2013 through 2017 to set up benchmark yields. "That's going to make a big difference on what program you go into," he says.
Daisy adds ARC-Individual presently looks like the best choice for farmers with prevented planting acres. "With prevent plant, ARC-Individual may make sense on certain farm numbers and being able to pick those farm numbers and select the ARC-Individual on those is probably going to make sense for some producers that are facing a lot of excess precipitation," Daisy says.
Charles says that's because a farm with 100% prevented planting would be a max payment under the ARC-Individual program. However, farmers must prove yields annually and the payout base is lower. "ARC-County and PLC, they use 85% of your base acres, ARC-Individual uses 65% of your base acres," Charles says.
South Dakota Corn Growers Association President Doug Noem says one change farmers asked for in the new farm bill is yields will be figured on Risk Management Agency data versus National Agriculture Statistic Service data. He says there will still be counties that may lose under that system, but they think this method overall will be more equitable.
"We think it's more accurate to use RMA data. RMA data is, I mean, it's enforceable by law." Noem says NASS data was often criticized by farmers. "The NASS data is just if you have 25 producers or 25% of the acres represented in our county, then you get a yield. If you don't have that ... then they have to use an adjoining county or some arbitrary number that the state committee or your county committee puts together."
Noem says FSA will provide information to help farmers make an election, but he said he thinks there will be more assistance from universities and private firms, including resources like a farm program calculator to compare programs similar to the one developed for the 2014 Farm Bill. He says that's because FSA has less money to implement this farm bill. "In the 2014 Farm Bill, there was $100 million for that kind of stuff. In this new farm bill, there's $15 million."
The good news is farmers won't have to make that decision for the length of the farm bill like they did with the 2014 program. Instead, they will sign up for two crop years, 2019 and 2020. So Charles says farmers will have a very good idea what 2019 is going to look like by the time they make an election on that farm.
Then going forward through 2023, it will be a year-by-year contract. That will allow farmers to switch between programs to utilize the one that works best for their operation at the time. The signup deadline is March 15, 2020.