The Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs were authorized by the 2014 and 2018 Farm Bills.
On Nov. 16, 2023, President Biden signed into law H.R. 6363, the Further Continuing Appropriations and Other Extensions Act, 2024 (Pub. L. 118-22), which extended the Agriculture Improvement Act of 2018 (Pub. L. 115-334), more commonly known as the 2018 Farm Bill. This extension now allows authorized programs, including ARC and PLC, to continue through Sept. 30, 2024.
The Agriculture Risk (ARC) and Price Loss Coverage (PLC) programs provide financial protections to farmers from substantial drops in crop prices or revenues and are vital economic safety nets for most American farms.
2024 Crop Year Election/Enrollment
The election and enrollment period opened Dec. 18, 2023 and runs through March 15, 2024. Producers can now make or change elections and enroll for 2024 ARC or PLC, providing future protections against market fluctuations.
All farm producers with interest in the cropland must make a unanimous election in 2019 of either ARC-CO or PLC on a crop-by-crop basis; or ARC-IC for all covered commodity base acres on a farm. This election will apply to the farm for 2019 through 2024. Program election changes are permitted in crop years 2021, 2022, 2023, and 2024. Failure to make a valid election in 2019 will result in a continuation of the program elected for 2014 through 2018 crop years for all covered commodities with base acres on the farm; and 2019 payments for those unelected covered commodities are prohibited.
What commodities are covered?
Covered commodities include wheat, oats, barley, corn, grain sorghum, rice, soybeans, sunflower seed, rapeseed, canola, safflower, flaxseed, mustard seed, crambe and sesame seed, seed cotton, dry peas, lentils, small chickpeas, large chickpeas, and peanuts.
Base Acres
Base acres on farms where all cropland acres have been planted entirely to grass or pasture; including cropland that was idle or fallow, from January 1, 2009 through December 31, 2017, will be maintained, but no ARC or PLC payments will be issued for those base acres from 2019 through 2024. Reconstitutions are not permitted to void or change this treatment of base acres.
Unassigned base acres resulting from the 2018 allocation of generic base acres are ineligible for payment. Payment acres under ARC-CO and PLC are equal to 85% of the specific covered commodity base acres. For ARC-IC, payment acres are 65% of the farm’s total covered commodity base acres. A producer is not eligible to receive ARCPLC payments if the sum of base acres on ALL farms in which the producer has an interest is 10 acres or less. This 10-acre rule will not apply to a socially disadvantaged, beginning, veteran, or limited resource farmer or rancher.
Payment Schedule
Payments for PLC, ARC-CO and ARCIC, if triggered, will be issued after October 1 of the year following the program year.
Price Loss Coverage (PLC)
PLC program payments are issued when the effective price of a covered commodity is less than the respective effective reference price for that commodity. The effective price equals the higher of the national market year average price (MYA) or the national average loan rate for the covered commodity. The effective reference price is the lesser of 115% of the reference price or an amount equal to the greater of the reference price or 85% of the average of MYA prices from the 5 preceding years, excluding the highest and lowest price. This new method of calculating the PLC payment rates will allow the effective reference price to be greater than the statutory reference price if the historic average of MYA prices is greater than the statutory reference price. PLC payments are not dependent upon the planting of a covered commodity or planting of the applicable base crop on the farm. PLC payments, if triggered, will be paid on 85% of the farm’s base acres of each covered commodity with a PLC election where the farm has been enrolled. Payment will be issued after the end of the marketing year of the covered commodity, but not before October 1 of the year following the program year.
County Agriculture Risk Coverage (ARC-CO)
ARC-CO program payments are triggered when the actual county crop revenue of a covered commodity is less than the ARC-CO guarantee for the crop. The actual county revenue and the revenue guarantee are based on county level yield data for the physical location of the base acres on the farm and tract. ARC-CO payments are not dependent upon the planting of a covered commodity or planting of the applicable base crop on the farm. The ARC-CO benchmark revenue is the 5-year Olympic average MYA price multiplied by the 5-year Olympic average county yield. Benchmark yields and MYA’s will be calculated using the 5 years preceding the year prior to the program year. The ARC-CO guarantee is determined by multiplying the ARC-CO benchmark revenue by 86%. The ARC-CO actual crop revenue is determined by multiplying the applicable actual county yield by the MYA price for the program year. County yields for the benchmark and actual revenues will be based on the physical location and historical irrigated percentage of base acres on the farm and tract. If a farm has base acres physically located in more than one county or has a historical irrigated percentage for the covered commodity, the benchmark and actual crop revenues will be weighted and summarized based on those aspects to the farm level. The ARC-CO payment is equal to 85% of the base acres of the covered commodity multiplied by the difference between the county guarantee and the actual county crop revenue for the covered commodity. Payment rates may not exceed 10% of the ARC-CO benchmark revenue.
Individual Agriculture Risk Coverage (ARC-IC)
ARC-IC program payments are issued when the actual individual crop revenue for all covered commodities planted on the ARC-IC farm is less than the ARC-IC guarantee for those covered commodities. ARC-IC uses producer’s certified yields, rather than county level yields. ARC-IC payments are dependent upon the planting of covered commodities on the farm. A producer’s ARC-IC farm is defined as the sum of the producer’s interest in all ARC-IC enrolled farms in the state. The farm’s ARC-IC guarantee equals 86% of the ARC-IC farm’s weighted benchmark revenue. The ARC-IC benchmark revenue is the 5-year Olympic average revenue, which is the MYA price multiplied by the individual’s certified yield for each year in the benchmark period. A benchmark revenue is calculated for each planted covered commodity on the ARC-IC farm in the current year, weighed and summed across all covered commodities on the farm. The yields and MYA prices used in the benchmark calculation will be the 5 years preceding the year prior to the program year. The ARC-IC actual crop revenue is determined by multiplying the MYA price by the individual’s certified yield, weighted and summed across all covered commodities planted on the farm in the current year. The ARC-IC payment is equal to 65% of the total base acres on the farm, multiplied by the difference between the calculated individual guarantee revenue and the actual individual crop revenue summed across all covered commodities planted on the farm. ARC-IC payment rates may not exceed 10% of the individual weighted benchmark revenue.
To be eligible for payments, producers must annually enroll their respective share interest of covered commodity base acres. For 2019 and subsequent years, enrollment will occur on a covered commodity-by-covered commodity base acre crop basis. Enrolling less than 100% of a covered commodity’s base acres on a farm is not allowed. In 2019 producers had the option of selecting a multi-year enrollment which remains in effect through the 2024 program year, provided there are no changes to the election or shares on the contract. Program election and enrollment for each program year are as follows:
Eligible producers can apply for ARC/PLC by working directly with the Farm Service Agency (FSA) office at their local USDA Service Center. Applications will be accepted via mail, fax, hand delivery, or electronic means.
Alternatively, producers with an eAuthentication account may apply for ARC/PLC online. Applications will be completed, electronically signed, and submitted directly to your local USDA Service Center through this online system.
To login to ARC/PLC or any other program, an eAuthentication account is required. Producers interested in creating an eAuthentication account for online access should visit farmers.gov/sign-in to learn more.
For more information on FSA programs, eligibility and related information, visit fsa.usda.gov. To locate your local FSA office, visit: farmers.gov/service-locator.
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