Farm Bill Program Choices

Well we all breathed a sigh of relief when the Farm Bill was FINALLY signed into law. Though presently we are in the wait and see period where the rules are being written. Now is the time to become familiar with the new program options says CliftonLarsonAllen Partner and Farm CPA Today Blogger Paul Neiffer

Neiffer: “They can elect to have either Agricultural Risk Coverage which is ARC that is essentially is a revenue product that is designed to provide a payment to farmers on their risk between 86 percent to expected revenue down to 76 percent. The second component is called Price Loss Coverage and where that kicks in — is it is not based on revenue it is simply based on price. Let’s take the example of corn right now the target price is $3.70 per bushel. If the average corn price for the marketing year drops below $3.70 then the farmer would be expected to get a payment. The wheat price is $5.50 and that is a U.S. price it is not specific.”

If a farmer selects PLC, there is an additional program Supplemental Coverage Option that functions like additional crop insurance but there is a premium to be paid however Neiffer shares the upside

Neiffer: “Unlike ARC, there is no limit on the amount of payment that the farmer can receive because this is still considered crop insurance.”

If you are interested in learning more go to Neiffer’s blog, Farm CPA Today.com.