USDA Issues Safety-Net Payments to Farmers in Response to 2015 Market Downturn
WASHINGTON, Oct. 4, 2016 — The U.S. Department of Agriculture (USDA) announced that beginning today, many of the 1.7 million farms that enrolled in either the Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC) programs will receive safety-net payments due to market downturns during the 2015 crop year.
“This fall, USDA will be making more than $7 billion in payments under the ARC-County and PLC programs to assist participating producers, which will account for over 10 percent of USDA’s projected 2016 net farm income. These payments will help provide reassurance to America’s farm families, who are standing strong against low commodity prices compounded by unfavorable growing conditions in many parts of the country,” said Agriculture Secretary Tom Vilsack. “At USDA, we are standing strong behind them, tapping in to every resource that we have to help. So far in 2016, this has included creating a one-time cost share program for cotton ginning, purchasing about $800 million in excess commodities to be redirected to food banks and those in need, making $11 million in payments to America’s dairy farmers through the Dairy Margin Protection Program, and reprogramming Farm Service Agency funds to expand credit options for farmers and ranchers in need of extra capital. As always, we continue to watch market conditions and will explore opportunities for further assistance in the coming months. For producers challenged by weather, disease and falling prices, we will continue to ensure the availability of a strong safety net to keep them farming or ranching.”
Unlike the old direct payment program, which issued payments during both weak and strong market conditions, the 2014 Farm Bill authorized the ARC-PLC safety net to trigger and provide financial assistance only when decreases in revenues or crop prices, respectively, occur. The ARC and PLC programs primarily allow producers to continue to produce for the market by making payments on a percentage of historical base production, limiting the impact on production decisions.
Nationwide, producers enrolled 96 percent of soybean base acres, 91 percent of corn base acres and 66 percent of wheat base acres in the ARC-County coverage option. Producers enrolled 99 percent of long grain rice and peanut base acres and 94 percent of medium grain rice base acres in the PLC option. Overall, 76 percent of participating farm base acres are enrolled in ARC-County, 23 percent in PLC and one percent in ARC-Individual. For other program information including frequently asked questions, visit www.fsa.usda.gov/arc-plc.
Payments are made to producers who enrolled base acres of barley, corn, grain sorghum, lentils, oats, peanuts, dry peas, soybeans, wheat, and canola. In the upcoming months, payments will be announced after marketing year average prices are published by USDA’s National Agricultural Statistics Service for the remaining covered commodities. These include long and medium grain rice (except for temperate Japonica rice), which will be announced in November, remaining oilseeds and chickpeas, which will be announced in December, and temperate Japonica rice, which will be announced in early February 2017. Upland cotton is no longer a covered commodity.
The Budget Control Act of 2011, passed by Congress, requires USDA to reduce 2015 ARC and PLC payments by 6.8 percent. For more information, producers are encouraged to visit their local Farm Service Agency (FSA) office. To find a local FSA office, visit http://offices.usda.gov.
USDA works to strengthen and support American agriculture, an industry that supports one in 11 American jobs, provides American consumers with more than 80 percent of the food we consume, ensures that Americans spend less of their paychecks at the grocery store than most people in other countries, and supports markets for homegrown renewable energy and materials. Since 2009, USDA has provided $5.6 billion in disaster relief to farmers and ranchers; expanded risk management tools with products like Whole Farm Revenue Protection; and helped farm businesses grow with $36 billion in farm credit. The Department has engaged its resources to support a strong next generation of farmers and ranchers by improving access to land and capital; building new markets and market opportunities; and extending new conservation opportunities. USDA has developed new markets for rural-made products, including more than 2,500 biobased products through USDA's BioPreferred program; and invested $64 billion in infrastructure and community facilities to help improve the quality of life in rural America. For more information, visitwww.usda.gov/results.