MANHATTAN, Kan. – The long-awaited Agricultural Act of 2014, otherwise known as the farm bill, signed into law on Feb. 7 ends direct payments to farmers but still provides some safety net programs – and that’s just for starters.
“This new five-year legislation means the beginning of several new programs for agricultural producers,” said Kansas State University agricultural economist Art Barnaby. “It also means the end of some familiar programs, including SURE (Supplemental Revenue Assistance) and ACRE (Average Crop Revenue Election).”
While the new legislation does away with direct payments, it includes two new safety net programs, Agriculture Risk Coverage and Price Loss Coverage, designed to help farmers when crop prices or revenue are low. Producers will have to make a one-time irrevocable decision this year to select one of the two programs. If they do not choose, the PLC is the default option and they would give up any 2014 payment.
The two programs are separate from traditional crop insurance programs, which remain largely unchanged, but with some significant improvements, Barnaby said. Improvements include separate enterprise units for irrigated versus dryland agriculture and farmers may select different coverage levels for a dryland enterprise unit versus an irrigated enterprise unit on the same crop. If the county suffers a 50-percent yield loss, then farmers in that county and contiguous counties are allowed to exclude that low yield out of their actual production history and avoid a reduction in their APH.
K-State Research and Extension will host a one-hour webinar, “The New Farm Bill,” on Friday, Feb. 21 in which Barnaby, a risk management specialist, will discuss the legislation and what it means to producers. The presentation will include National Agricultural Statistics Service prices and yield used for the calculation of payments, as well as changes to crop insurance. More information and registration is available online at www.agmanager.info or by contacting Rich Llewelyn at firstname.lastname@example.org or 785-532-1504.
Barnaby will also discuss the new farm bill on Thursday, Feb. 27 in Scott City, Kan. in a two-part workshop, “New Farm Bill Commodities Programs and Risk-Assessed Marketing II Workshop.” More information and registration for those programs is available by contacting John Beckman at email@example.com or 620-872-2930.
Agriculture Risk Coverage – This new program covers what farmers would lose before their regular crop insurance kicks in. It provides protection when crop revenue falls just 14 percent below a five-year rolling Olympic average benchmark. A farmer chooses whether the benchmark is based on county yield times crop year average prices or his or her individual crop yield times the price. The county payment is based on 85 percent of the farmer’s base acres, but if they elect individual coverage they must enroll all crops in to ARC and payments are made on 65 percent of base acres.