Evaluating commodity program choices in the new farm bill
Second, the owners of a farm will be provided a single opportunity to elect to update payment yields for covered commodities. Payment yields are currently a part of the farm records at USDA (along with base acres) and, similar to the Counter-Cyclical Payments program from 2008, payment yields will be used to calculate the PLC payments for any covered commodities on which PLC has been elected. If a yield update is elected, the new payment yields will be equal to 90 percent of the average yield per planted acre of the covered commodity in the 2008 through 2012 crop years.
Third, beginning with the 2014 crop year all of the producers on a farm must make a one-time, irrevocable election among the price (PLC), county level revenue (County ARC) and individual farm level revenue (Individual ARC) programs. The PLC election can be made on a covered-commodity-by-covered-commodity basis, however, Individual ARC applies to all covered commodities on the farm and a farm cannot elect PLC for some commodities and Individual ARC for others. This feature essentially makes the programmatic choice as PLC and County ARC on a covered-commodity-by-covered-commodity basis, or Individual ARC for all covered commodities. If County ARC is elected for a covered commodity it is ineligible to receive PLC payments and the commodity is also ineligible for the Supplement Coverage Option (SCO) created in the crop insurance title of the bill. If Individual ARC is selected, it applies to all covered commodities and they would all be ineligible for PLC and SCO.
All of the producers on a farm must make this program decision for the 2014 crop year and it must be unanimous. If they fail to make a unanimous election for the 2014 crop year, they will not receive any payments for that crop year from the programs. Additionally, the farm will automatically be deemed to have elected PLC for all covered commodities beginning with the 2015 crop year. Notably, the term producer includes everyone sharing in the risk of producing a crop and entitled to share in the crop available for marketing from the farm. It includes owners, operators, landlords, tenants and sharecroppers. This unanimous program decision has similarities to the 2008 Farm Bill election between the Counter-Cyclical Payments program and the Average Crop Revenue Election (ACRE) program. Because direct payments have been eliminated, however, there is no reduction in payments for electing the revenue-based programs. But farmers will still need to involve landlords in this decision and everyone involved must agree.
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