Which is for you: PLC or ARC?
Zulauf says both plans use a system of base acres, and payment is made on 85% of the base acres. While the FSA office will retain the base acres for the farm, operators will be able to shift crop bases due to recent planting trends if desired. And since yields have been changing, the PLC program allows for payment yields to be updated to 90% of the average yield for planted acres over the past 5 years.
When calculating payments, operators must also calculate payment limitations. For farm program payments, legal limits are $125,000 for each person actively engaged in management operations. While that can be doubled for a spouse, USDA will be boosting its effort in the coming year to better define on each farm who is actively engaged in farming and management of the farm. However, any operator with an adjusted gross income over $900,000 will be ineligible for farm program payments.
The Farm Bill provides for two choices for a farm price and revenue support plan, one based on target prices per commodity, the other based on revenue risk from year to year. Farmers will have to study the two and make careful choices. Zulauf says, “Last, this farm bill did not settle the question of what is the best policy for multiple year assistance, price or revenue and fixed vs. moving targets. The next farm bill will continue this debate but with experiences that at present appear likely to be based on a more normal, potentially low, income. In other words, the context of the next farm bill debate will likely significantly differ from the context of this farm bill debate, raising the potential for different outcomes.”
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