2014 Farm Bill: Historical Likelihood of County ARC and SCO Payments for Soybeans in Illinois
The farmdoc daily posts on May 8th and May 15th analyzed the County Ag Risk Coverage (ARC) and Supplemental Coverage Option (SCO) programs created in the 2014 Farm Bill. County ARC is one of the optional commodity programs available to producers of eligible program crops, while SCO is an optional insurance program which supplements the producer’s underlying individual plan of insurance. Both programs have “shallow loss” coverage designs: payments are triggered when actual revenues or yields fall below a specific guarantee, and are capped at a percentage of the value of the guarantee (details on the new commodity program options can be found in farmdoc daily February 20, 2014; details on SCO can be found in farmdoc daily February 27, 2014 and April 24, 2014; all posts in our continuing series on the 2014 Farm Bill can be accessed here). Today’s post extends the historical analysis of County ARC and SCO to soybeans in Illinois. Since the decision to use the County ARC (or Individual ARC) program limits the producer’s eligibility to use SCO, analysis comparing these programs should be useful in making program decisions.
2014 Farm Bill: Estimated Payment Sizes for County ARC and SCO on Soybean Acres in Illinois
Today’s post continues the historical analysis of the new County ARC and Supplemental Coverage Option programs created in the 2014 Farm Bill. Last week’s post (farmdoc daily June 5, 2014) focused on the likelihood of payments being triggered by yield or revenue losses on soybean acres in Illinois. This post provides estimates of relative payment size on Illinois soybean acres based on the same historical data. Similar analyses have also been performed for corn acres in Illinois (farmdoc daily May 8, 2014 and May 15, 2014). More details on the new commodity program options can be found in farmdoc daily February 20, 2014. Details on SCO can be found in farmdoc daily February 27, 2014 and April 24, 2014.
Evaluating Commodity Program Choices in the New Farm Bill
On February 4, 2014, the 2014 Farm Bill (named the Agriculture Act of 2014) cleared its final Congressional hurdle. The President is expected to sign the bill into law on February 7, 2014, then it goes down to the United States Department of Agriculture for implementation. The commodity programs in Title I of the farm bill and the choices required all begin with the 2014 crop year. The final regulations will further determine program and decision parameters, as well as when farmers can begin to sign up. The discussion below is based on the legislative text. It will be updated or revised as needed based on the regulations.