Enrollment for the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs began June 17.
The programs are designed to protect the finances of agricultural producers in the case that market changes create substantial decreases in crop prices or revenues, according to a release. Both programs were established by the 2014 Farm Bill.
Under the ARC, farmers have the option to choose coverage for the county or for an individual farm.
If a farmer chooses county coverage, the actual county crop revenue of the crop must be less than the revenue guarantee. The actual crop revenue is calculated by multiplying the actual county yield and the national marketing year price, or the loan rate specified in the bill, according to the Farm Service Agency. This incorporates county data, not farm data.
To calculate the county guarantee 86 percent of the previous five-year average national farm price excluding the years with the lowest and highest guarantee prices must be multiplied by the five-year average county yield excluding the years with the highest and lowest guarantee yields, according to the agency.
The payment rate per acre is 85 percent of the covered commodity base acres multiplied by the difference between the county guarantee and the actual crop revenue. A benchmark county revenue, which is calculated by multiplying the guarantee price and the guarantee yield, was set so that payments could not exceed 10 percent of that benchmark, according to the agency.
For individual farms payments are given when the summed total of all crop revenues (covered by the bill) is less than the total sum of guarantees across those same covered commodities. The guarantee of an individual farm is 86 percent of the farm's benchmark guarantee. The benchmark guarantee for an individual farm is calculated by multiplying the guarantee price with the five-year average yield of an individual farm, except for the years with the highest and lowest yields, that is then summed across all crops, according to the agency.
The actual individual farm revenue is equal to 65 percent of the sum of all crop base acres multiplied by the difference of the individual guarantee revenue and the actual crop revenue, according to the agency.
In the case of the PLC payments are provided when the price of the covered commodity is less than the respective reference price established in the statute. The payment is equal to 85 percent of the covered crop base acres multiplied by the difference between the reference price and the effective price, which has been multiplied by the program payment yield for that crop, according to the agency.
The 2014 Farm Bill provided the United States Department of Agriculture with the opportunity to expand national and international markets, created jobs for rural Americans, strengthened American conservation and more, according to the USDA's website.
Crops and other commodities covered by the programs include: barley, canola, chickpeas, corn, crambe, flaxseed, grain sorghum, lentils, mustard seed, oats, peanuts, dry peas, rapeseed, long and medium grain rice, safflower seed, sesame, soybeans, sunflower seed and wheat. Upland cotton is no longer covered by the programs, according to the release.