Base Acres and Yield Updating Under New Farm Bill

(WASHINGTON, DC) The new farm bill makes several changes to Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC) that will improve risk management support. ARC makes program payments on 85 percent of a farm’s base acres. PLC also makes program payments on 85 percent of a farm’s base acres but also utilizes PLC program yields to determine the gross payment due to the farm. The 2018 farm bill addresses both base acres and PLC program yields. According to the American Farm Bureau Federation (AFBF), ARC and PLC program payments will be eliminated for growers who have not planted a crop on their historical base acres over the last decade. Program payments on the base acres subject to this provision would be suspended, but not eliminated, meaning future farm bills could reactivate those base acres making them eligible in the future for program payments. As compensation for having program payments suspended, farmers and ranchers could enroll those base acres in the Conservation Stewardship Program for five years at an annual program payment of $18 per acre. Second, many farmers experienced poor crop yields from 2008 to 2012, the period used to establish program yields under PLC in the 2014 farm bill. To address this yield shortfall, the 2018 farm bill will provide an opportunity to update PLC program yields based on crop yields from 2013 to 2017, with a floor equal to 75 percent of the county average crop yield. The yield update will be effective for the 2020 crop year.