ARC/PLC Program Q & A’s

2

ARC/PLC Question

Can you simply

explain the

ARC-CO program?

3

ARC/PLC Answer

The ARC-CO program provides revenue

loss protection for revenue losses at the

county level

A determination regarding revenue loss

for each covered commodity with

enrolled bases acres in the county will be

made after the market year average

price is published by USDA

4

ARC/PLC Question

Can you simply

explain the PLC

program?

5

ARC/PLC Answer

The Price Loss Coverage program

provides payments when the market

year average price for a covered

commodity falls below the crop's

reference price specified in the 2014

Farm Bill

6

ARC/PLC Question

What is the

payment yield for

PLC?

7

ARC/PLC Answer

The current program payment yield

under the 2014 Farm Bill is the

farm's counter-cyclical (CC) yield in

effect on September 30, 2013

The owner of the farm may choose

to update the CC yield; this yield will

be used to calculate PLC payments

on the farm

8

ARC/PLC Question

Can you simply

explain the ARC-

IC program?

9

ARC/PLC Answer

The ARC-IC program provides revenue loss protection for revenue losses determined at the farm level

A determination regarding revenue loss for each covered commodity planted on the farm will be made after the market year average price is published by USDA

10

ARC/PLC Question

What happens to my farm’s base acres and yields if the owner does not allow an update?

11

ARC/PLC Answer The farm will retain the base acres

and counter-cyclical yields in effect on Sept. 30, 2013, excluding upland cotton base acres for the 2014 - 2018 ARC/PLC programs

Upland cotton base acres are automatically converted to generic base, which is not part of the base reallocation decision

12

ARC/PLC Question

Is the covered commodity required to be planted on a farm to receive an ARC-IC payment?

13

ARC/PLC Answer

Yes

Current year planted acres of

covered commodities on an

ARC-IC farm are used to

determine if a revenue loss

occurs on the ARC-IC farm

14

ARC/PLC Question

When is the sign-

up deadline for

the ARC and PLC

programs?

15

ARC/PLC Answer The final date to update yield

history or reallocate base acres is March 31, 2015

The date was originally February 27, 2015, but was extended to March 31st

The final date for all of the farms’ current producers to choose ARC or PLC is March 31, 2015

16

ARC/PLC Question

A producer has several

Farm Service Agency

(FSA) farm numbers. Can

he/she select different

programs for each farm?

17

ARC/PLC Answer Yes

A producer can elect ARC-CO or PLC

on one or more farms and/or can elect

ARC-IC on one or more farms

All farms with an ARC-IC election will

be combined to calculate the revenue

guarantee, actual revenue and, if

applicable, the payment per acre

18

ARC/PLC Question

Can a producer elect

different programs

on the same FSA

farm number?

19

ARC/PLC Answer Yes

A producer can elect ARC-CO or PLC on one or more crops on the same farm

Example – a farm has a long grain rice base and a soybean base ~~ producers may elect PLC for the rice and ARC-CO for the soybeans on the same FSA farm number

20

ARC/PLC Question

What happens to the

farm election when a

new owner or operator

acquires the farm?

21

ARC/PLC Answer

The farm's program election made during the election period will remain in effect for the life of the farm bill (Irrevocable)

Regardless of who acquires an interest in the land after the election, the farm’s program election remains the same

22

ARC/PLC Question

Does the 2014 Farm Bill allow separate PLC yields for dry land and irrigated practices on the same farm?

23

ARC/PLC Answer No

Farms will only have one PLC yield

The PLC yield for a crop that is both irrigated and non-irrigated will either be the farm's current counter-cyclical yield or an updated yield

PLC yield is based on the average of the total production on the farm divided by the planted acres of the crop for crop years 2008-2012 on the farm, times 90 percent

24

ARC/PLC Question

Once I make an

election, can I

change my mind?

25

ARC/PLC Answer

A program election made for

a farm can be changed

through the end of the

election period (which will be

March 31, 2015)

After that date the election is

irrevocable 26

ARC/PLC Question

What happens if all producers (all owners, operators, and other tenants) with an interest in the farm do not agree and do not sign the election by the deadline?

27

ARC/PLC Answer

All crops on the farm will

default to the PLC program

for the life of the farm bill

The farm will not earn a

payment for the 2014 crop

year

28

ARC/PLC Question

Once I've taken action

regarding base

reallocation and yield

updates, can I change

my mind?

29

ARC/PLC Answer Any base reallocation and yield

updates can be changed

through the end of the ARC/PLC

time designated to complete

This date was extended from

February 27, 2015 to MARCH

31, 2015

30

ARC/PLC Question

Must a producer carry

federal crop insurance

in order to be eligible

for the ARC/PLC

program?

31

ARC/PLC Answer No, Federal Crop Insurance is

not required for eligibility for the

ARC/PLC program

Federal Crop Insurance is

administered through Risk

Management Agency

ARC/PLC program is administered

through Farm Service Agency

32

ARC/PLC Question

When are payments

authorized for the

ARC/PLC Programs?

33

ARC/PLC Answer Payments for the 2014-2018

crops are issued the later of

October 1 of the subsequent

crop year

or when the national average

market year price (MYA) is

published by USDA

34

ARC/PLC Question

Who must sign the

ARC or PLC program

election?

35

ARC/PLC Answer All CURRENT PRODUCERS on the day the election

is made must sign the CCC-857 ARC/PLC Election

form

Current producer means the person or legal entity

meeting the definition of producer in 7 CFR Part 718

on the day that person or legal entity is signing any

form or performing any action required

Producer means an owner, operator, landlord, tenant,

or sharecropper who shares in the risk of producing

a crop and who is entitled to share in the crop

available for marketing from the farm, or would have

shared had the crop been produced

36

ARC/PLC Question

Who must sign the

Annual Enrollment

Contract to

participate in PLC,

ARC-CO, or ARC-IC? 37

ARC/PLC Answer All owners, operators and

tenants with an interest in the

base acres on the farm must

sign the annual enrollment

contract

Cash leases may be provided in lieu

of obtaining a signature from an

owner

38

ARC/PLC Question

Is the covered

commodity required to

be planted on a farm to

receive an ARC-CO

payment?

39

ARC/PLC Answer

No

Under ARC-CO, the

covered commodity is not

required to be planted to

receive the payment

40

ARC/PLC Question

How is generic

base treated?

41

ARC/PLC Answer To receive PLC or ARC payments on

generic base acres, a covered

commodity must be planted on generic

base acres

Attribution of the covered commodity(s)

planted on generic base acres depends

on the amount and crop planted on those

generic base acres

42

ARC/PLC Question

Can you provide

an example of

generic base

attribution? 43

ARC/PLC Answer

Rice – Long Grain 594.60

Soybeans 796.70

Wheat 139.60

Generic 391.10

44

Example of Attribution of Generic Base

2014 Crop Year

FSN# 1111

Bases

ARC/PLC Answer

Rice – Long Grain 615.07

Soybeans (Irr & Ni) 1106.34

Corn 20.70

*Cotton 66.79

45

Example of Attribution of Generic Base

2014 Crop Year

FSN# 1111

2014 Planted Acres as reported to FSA

ARC/PLC Answer

Rice – Long Grain 615.07 / 1742.11 = .3531

Soybeans (Irr & Ni) 1106.34 / 1742.11 = .6350

Corn 20.7 / 1742.11 = .0119

Since 46

Example of Attribution of Generic Base

2014 Crop Year FSN# 1111

Total covered commodities planted = 1742.11

*Note: Cotton planted acres are not used in the calculation since

cotton is no longer a covered commodity

ARC/PLC Answer

Generic Base 391.10 X .3531 = 138.10 acres

attributed to Rice-Long Grain

391.10 X .6350 = 248.35 acres

attributed to Soybeans

391.10 X .0119 = 4.65 acres

attributed to Corn

Since 47

Example of Attribution of Generic Base

2014 Crop Year FSN# 1111

ARC/PLC Answer

Rice – Long Grain 594.60 + 138.10 = **732.70 Soybeans 496.70 + 248.35 = **1045.05 Wheat 139.60 + 0 = **139.60 Corn 0 + 4.65 = **4.65

48

Example of Attribution of Generic Base

2014 Crop Year FSN# 1111

**New Base Acres for 2014 Crop Year with Attributed Generic Base

FSA Website – ARC/PLC

Go to: fsa.usda.gov

Under “Popular Topics”, click on:

“Agricultural Risk Coverage / Price Loss Coverage”