Some farmers may receive less financial support from the government to mitigate crop loss due to changes to the federal farm bill. The US Department of Agriculture is cutting the direct payment program which provided support to farmers who submitted a base production plan.
The plan includes the farmer’s acreage, yield and revenue over a number of years. USDA Farm Service Agency Deputy Administrator Brad Pfaff says the Farm Billwas signed into law February 2014. That piece of legislation removed the Direct and Counter cyclical Payments and replaced it with the safety-net programs.
“The The Agriculture Risk Coverage (ARC) and the Price Loss Coverage (PLC) program provide assistance only when there are market downturns. Unlike the old direct payment program which issued payments regardless of market prices.” Pfaff said.
Calloway County Farmer, Sharon Furches is grateful a safety net still exists.
“Farmers are always apprehensive when one farm bill ends and another one begins. We never know what to expect or if in fact a farm bill will even be implemented.” Furches said.
Furches says it unrealistic to not expect change and the Farm Bill is something that has to be looked at each time it is reinstated. When the new regulations come out, she says they take a good look to see what best fits their farming operation and then move forward from there.
“Farmers would always prefer to grow a good quality crop and to sell that for a good price, but often times we do have to rely on programs from the federal government to kind of be a safety-net and we are grateful to have that in place.” Furches said.
According to Furches, programs like this are most effective when you have had a drought year.
For example, the corn price for 2014 is 30 percent below the historical benchmark price used by the ARC-County program, and revenues of the farms participating in the ARC program are down by about $20 billion from the benchmark during the same period. The nearly $4 billion provided today by the ARC and PLC safety-net programs will give assistance to producers where revenues dropped below normal. Approximately 18,000 Kentucky farmers will receive some payment.
“Crops receiving assistance include barley, corn, grain sorghum, lentils, oats, peanuts, dry peas, soybeans, and wheat. Disbursements began October 26 and will continue into next year.” Pfaff said.
According to a USDA press release “The Budget Control Act of 2011”, passed by Congress, requires USDA to reduce payments by 6.8 percent.
