The 2014 Farm Bill’s Six Month Checkup

USDA in full swing of implementing new 2014 Farm Bill, but has it done enough to roll out the new programs?

It’s been six months since the new farm bill was signed into law and Ag Secretary Tom Vilsack gave an update on where things are at now. The ball is rolling on several important new provisions, while it appears others have been moved down the totem pole.

“I think if you compare this to previous farm bills, there’s been a significant amount of activity that’s taken place. And we’re, you know, obviously going to be prepared for a great deal of action and activity this fall as we implement some of the new safety net programs,” Vilsack said in a call with reporters Aug. 6.

Here’s a quick lowdown:

ARC/PLC: In early August, the Farm Service Agency sent producers updates on their current base acres, yields and 2009-2012 planting history data. It is important for producers to cross check the information received with their own farm records. Then farmers and ranchers will have an opportunity to update their crop yield information and reallocate base acres.

By mid-winter all producers on a farm will be required to make a one-time, unanimous and irrevocable election between price protection and county revenue protection or individual revenue protection for 2014-2018 crop years. Producers can expect to sign contracts for ARC or PLC for the 2014 and 2015 crop years in the spring of 2015.

Producers who elect ARC on a farm will not be eligible for Supplemental Coverage Option (SCO).
 

August 2014

Late Summer 2014

Winter 2014

Early 2015

Producers receive letters notifying them of current bases and yields and 2009 to 2012 planting history.

ARC and PLC online tools become available. Owners have opportunity to update yields and reallocate bases for ARC/PLC purposes.

ARC/PLC

one-time elections occur.

ARC/PLC sign-up for 2014 and 2015 starts.

APH: Much to the dismay of southern producers, USDA continues to say it's too hard to implement Actual Production History (APH) for crop insurance policies written for the 2015 crop year- which includes winter wheat that will be planted this fall.

An APH adjustment offers producers the ability to elect to exclude any recorded or appraised yield for any crop year in which the per planted acre yield in the county was at least 50% below the simple average of the per planted acre yield during the previous 10 consecutive crop years.

For states such as Texas and Oklahoma with prolonged droughts it could have a dramatic impact.

House Agriculture Committee chairman Frank Lucas, R-Okla., said what he’s asked USDA is if the agency can't implement it for the whole country for this coming crop year, at least look at Oklahoma and Texas and Colorado, California and New Mexico, Kansas, the places that have suffered from the drought. However, it’s also been found that 40 states in Illinois could benefit from the change.

“If you can't implement the whole thing, at least consider doing a partial implementation in the hardest hit areas. Producers who have really suffered in recent years, this APH is the difference between having viable crop insurance for the coming year or not having viable crop insurance,” Lucas shared with Vilsack.

Vilsack defended the agency’s decision to look at other aspects of the safety net first. “We had a choice to make in terms of allocating assets and directing assets in terms of trying to get work done that was mandated by Congress to get it done within a certain period of time,” Vilsack said, adding that they felt it was more important to move forward on the cotton program (STAX), SCO, ARC and PLC.

“If we’d done APH, then we wouldn’t have been able to do STAX or SCO. And I suspect the Chairman would then be complaining about the fact we haven’t gotten STAX and SCO done,” Vilsack quipped.

The farm bill includes money to be used for implementation of the crop insurance provisions including the APH updates at $14 million per year for the five-year farm bill, or a total of $70 million, however, USDA had said it was unaware of the funds.

For now, it seems USDA from the top to the bottom continues to claim it will not be able to update APH until the 2016 crop year. Vilsack said, “It’s an IT challenge, it’s a staffing challenge, and it’s about priorities.”

He added that if USDA can more quickly accomplish higher priorities such as roll out of the new commodity programs, the agency will then turn its attention “fully and completely” to doing the APH as quickly as it possibly can.

Dairy: Earlier this summer House Agriculture Committee ranking member Collin Peterson, D-Minn., called on USDA to do more about getting the word out on the new Dairy Margin Insurance program.

However, Vilsack said at this point in time if the new margin insurance program were in place, “no one would be utilizing it because dairy prices are pretty strong and feed costs have come down a bit,” he said.

He added that producers should have substantial amount of time to make decisions for 2014-15.

Vilsack also shared that he’d just finished briefing staff on the dairy program and a number of decisions still need to be made. “It is complicated and it’s difficult. We want to make sure that we get it right, but we also want to make sure that we’re getting it done,” Vilsack added regarding the dairy program.

The farm bill mandated the program be out by Sept. 1, 2014.

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