Direct payments end with new Farm Bill

WASHINGTON - U.S. Department of Agriculture (USDA) Secretary Tom Vilsack has unveiled new programs to help farmers better manage risk now that direct payments have been ended.

"One of the Farm Bill's most significant reforms is finally taking effect," Vilsack said. "Farming is one of the riskiest businesses in the world. These new programs help ensure that risk can be effectively managed so that families don't lose farms that have been passed down through generations."

The new programs, Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC), are cornerstones of the commodity farm safety net programs in the 2014 Farm Bill, legislation that ended direct payments.

Both programs offer farmers protection when market forces cause substantial drops in crop prices and/or revenues.

Producers will have through early spring of 2015 to select which program works best for their businesses.

To help farmers choose between ARC and PLC, there are online tools that allow farmers to enter information about their operation and see projections about what each program will mean for them under possible future scenarios.

The new tools are available at www.fsa.usda.gov/arc-plc.

Farm owners may begin visiting their local Farm Service Agency (FSA) offices if they want to update their yield history and/or reallocate base acres, the first step before choosing which new program best serves their risk management needs.

Letters sent this summer enabled farm owners and producers to analyze their crop planting history in order to decide whether to keep their base acres or reallocate them according to recent plantings.

The next step in USDA's safety net implementation is scheduled for this winter when all producers on a farm begin making their election, which will remain in effect for 2014-2018 crop years between the options offered by ARC and PLC.