Seed Cotton ARC and PLC Program Sign Up Opens

Cotton seed producers have until Dec. 7, 2018 to sign up for Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC).

Changes to the Bipartisan Budget Act of 2018 instruct that farm owners with generic base acres and recent planting history of covered commodity have this one-time opportunity to allocate all of the generic base acres on their farm. Eligible farms include generic base acres that were approved prevented plant acres or were planted from 2009 to 2016. Upland cotton qualifies.

“ARC and PLC are a vital part of the safety net that ensures American agriculture remains competitive and producers are able to manage risk,” said Richard Fordyce, USDA Farm Service Agency administrator in a recent press release. “USDA encourages any cotton producers to look into these important safety net programs.”

There are two options to allocate cotton generic base:

  1. Allocate generic based acres on a farm to seed cotton base acres equal to the higher of these two options: 80% of the generic base acres on the farm with the remaining 20% unassigned with no payments or the average of planting and prevent from planted upland cotton acres from 2009 to 2009, not to exceed total generic base acres on the farm.
  2. Allocate generic base acres in proportion to the four-year average acres planted on the farm and prevent from being planted for each covered commodity (including upland cotton), from 2009 to 2012, to the total acreage planted and considered planted for all commodities on the farm.

If farmers don’t allocate generic base acres by the deadline it will automatically be allocated to seed cotton based under the first option.

What you need to know about enrolling.

The Farm Service Agency gave notice that farm owners have this one-time opportunity to update the farm’s payment yield for seed cotton by either retaining Counter-Cyclical (CC) payment yield for upland cotton (as listed on farm records as of Sept. 3, 2013, multiplied by 2.4), or update upland cotton yield to 90% of an average of upland cotton yield per planted acre on the farm for 2008 through 2012.

If retained or updated yield becomes the PLC yield for the farm, effective for 2018 crop year, it will only be used in calculating payment rates for the PLC program. When yields aren’t updated, the former CC yield on the farm, multiplied by 2.4 will be carried forward as the farm’s PLC yield for 2018. Farmers may update yields for new crops if generic base acre allocation results in crop base acres for a covered commodity base where PLC yield doesn’t exist on the farm.

After generic base acre allocation and yield updates, farmers have the one-time opportunity to unanimously elect either ARC or PLC for seed cotton base acres resulting from generic base acre allocation. Farms with ARC-IC election will continue in ARC-IC, including seed cotton base acres allocated to the farm. Any farm that doesn’t make a unanimous election of either ARC or PLC will automatically elect for PLC for acres allocated on the farm to seed cotton.

After completing the above steps, farms need to enroll the farm for it to be eligible for ARC and PLC for 2018. Enrollment in those programs began Nov. 1, 2017 and will end Dec. 7, 2018.