USDA Announces Changes to Risk Management Program
U.S. Agriculture Secretary Tom Vilsack says educational resources are now available for new programs established in the 2014 Farm Bill that help farmers better manage risk.
Before, farmers who experienced a bad harvest were compensated through direct payment programs which paid out in good years or bad. Two new initiatives, Agricultural Risk Coverage and Price Loss Coverage, are replacing that option.
Vilsack says both programs differ from crop insurance by offering farmers financial protection based on fluctuations in market prices.
“Crop insurance is designed to protect against vigories (sic) of Mother Nature,” he said. “These programs provide a little additional service above and beyond crop insurance. The reality is that these programs don’t necessarily guarantee a profit. Farmers in many cases will have tens of thousands if not hundreds of thousands of dollars in the ground. So there’s significant risk. And if we don’t have programs like ARC, PLC or crop insurance, then the risk of farming may get so high that many people might get out of the business.”
Beginning Sept. 29, farmers can visit a Farm Service Agency and update their crop yield histories in order to enroll in the safety net programs. Farmers will have through early next spring to determine which program works best for their business.