WASHINGTON, Jan. 27, 2016 - Congressional
budget analysts have sharply increased their estimate of how much the new
Agriculture Risk Coverage program will cost in the wake of a
heavier-than-expected signup.
The ARC county option is now expected
to pay out $6.1 billion in fiscal 2017 and $5.2 billion in 2018, compared with
$1.6 billion and $1.9 billion, respectively, for the Price Loss Coverage
program, according to the Congressional Budget Office.
Last year, CBO estimated that the
Agriculture Department would make ARC payments of $3.7 billion and $2.7 billion
in 2017 and 2018, versus $2.9 billion and $2.8 billion in PLC payments.
ARC payments are tied to declines in
county farm revenue, which accounts for changes in average yields as well as in
market prices. Yields aren’t factored into PLC. PLC payments are triggered when
market prices fall below a target, or reference price for each covered
commodity.
Pat Westhoff, director of the
University of Missouri’s Food and Agriculture Policy Research Institute, said
the fiscal 2017 estimates could still change significantly since they are based
on final prices and yields for the 2015-16 marketing year. CBO estimates that
farmers will receive $4.1 billion in ARC payments on corn in fiscal 2017 and
$1.4 billion on soybeans.
A year ago, CBO estimated that 60
percent of corn acreage would be enrolled in the ARC program during the life of
the 2014 farm bill. The actual share is 93.4 percent.
The biggest share of PLC payments in
fiscal 2017 will go to peanuts - some $622 million. But due to slumping wheat
prices, PLC payments on wheat acreage are expected to total $471 million in
2017 and top peanuts in 2018 at $775 million.
Food stamp rolls continue to decline
slowly. CBO estimates that the cost of the Supplemental Nutrition Assistance Program
will be slightly lower in fiscal 2016 at $75 billion, down from $76 billion in
2015, with 45 million people receiving benefits this year. As of October, the
latest month for which data are available, 45.4 million people were enrolled in
SNAP, down from 46.5 million a year earlier.
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