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.
Agriculture Risk Coverage and Price Loss Coverage in the 2014 Farm Bill
The 2014 Farm Bill’s commodity title requires producers to make an important decision: whether to sign up for one of two versions of the Agriculture Risk Coverage (ARC) program or the Price Loss Coverage (PLC) program (see January 30, 2014, February 12, 2014, and February 6, 2014 for further information). This decision is made for each Farm Service Agency (FSA) farm. The choice of program is a one-time decision to be made by the deadline established by FSA and expected to be during the upcoming summer. The decision cannot be changed during the five-year life of the 2014 Farm Bill. Today’s post describes each of the program options using an example farm to illustrate payment calculations across a range of price levels for corn and soybeans.
2014 Crop Safety Net Decision: Key Considerations
This article builds upon the recent articles (farmdoc daily January 30, 2014; February 6, 2014). The focus is considerations in choosing among the three crop safety net options: (1) Price Loss Coverage (PLC) a target price program; (2) county Agricultural Risk Coverage (ARC) a county revenue program, and (3) individual ARC an individual farm revenue program. A reference table at the end of this article contains a brief, comparative list of key program parameters for each option.