WASHINGTON, Oct. 25, 2017 - If the Agricultural Risk Coverage-County level (ARC-CO) program is to be a viable option in the next farm bill, major farm organizations and commodity groups are convinced that the widely used program – developed as part of the 2014 farm bill - needs to be fixed.
Now, U.S. Senators Heidi Heitkamp, D-N.D., and Joni Ernst, R-Iowa, have introduced legislation to improve the program, primarily by directing the Farm Service Agency (FSA) to use data from the Risk Management Agency as the first choice in county yield calculations, rather than data from the National Agricultural Statistics Service – the current top choice for FSA.
ARC-CO is a county revenue program that makes payments when actual county revenue is below a guarantee set at 86 percent of a benchmark revenue.
As Agri-Pulse has reported in recent weeks, the disparity in farm program payments between counties has been a source of frustration for many farmers – especially those who compete for rented land. In Iowa, for example, corn farmers in Johnson County were estimated to receive over $85/corn base acre for 2016 (before a 6.8 percent reduction for sequestration), while corn farmers in neighboring Washington County would not receive any payments.
Economists writing for farmdoc daily recently explained calculations and showed the variations in corn, wheat and soybean 2016 payments nationwide in this map.
In addition to basing calculations on RMA data, the legislation introduced by Heitkamp and Ernst would:
- Calculate ARC-CO payments using the ARC-CO payment rate for the county in which the land is physically located rather than the rate for the administrative county used by the farmer.
- Allow state FSA committees to adjust. The bill would provide FSA state committees discretion to adjust yield data estimates to help reduce inexplicable variation between neighboring counties or along boundaries with neighboring states. Adjustments would be made prior to yields being finalized or published.
The bill is supported by the American Farm Bureau Federation, National Farmers Union, American Soybean Association, National Association of Wheat Growers, National Barley Growers Association, National Corn Growers Association, National Sunflower Association, USA Dry Pea & Lentil Council, US Canola Association, North Dakota Grain Growers Association, North Dakota Corn Growers Association, and the North Dakota Soybean Growers Association. Click here for statements of support.
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