Iowa Senators Chuck Grassley and Joni Ernst have requested more information from USDA regarding the methodology the agency uses to determine average county yields for the Agriculture Risk Coverage program.
“Farmers have raised concerns about the yield data being utilized by USDA and the resulting distribution of payments to counties," wrote Grassley and Ernst in a May 2 letter to Agriculture Secretary Tom Vilsack. "We recognize counties are different sizes which can affect how well the crops in a county correlate to the county average yield. However, legitimate questions have been raised about the significant payment disparity that has occurred between adjacent counties in certain areas throughout the country."
The majority of Iowa corn and soybean farmers signed up for the ARC program that was enacted in the 2014 farm bill. The formula used to determine ARC payments is composed of two factors, including the average marketing year price and the average county yield.
The senators say there are several instances of significant discrepancies in payments between adjacent counties.
In 2014, Calhoun County received a payment of $23.21 per acre while the county directly north, Pocahontas County, received $91.52 and the two counties to the south received about $75 an acre. Webster County, to the East of Calhoun, received $46.80 per acre, double the payment that farmers in Calhoun County received.
Senators from North and South Dakota have also raised questions about the program, according to WNAX Radio.
North Dakota Sen. John Hoeven told WNAX that he’s talked with Vilsack about problems with ARC and South Dakota Sen. John Thune said he’s working with USDA to make the program more responsive.
In their letter, the Iowa senators asked for answers to three questions:
1. What methodology does USDA use to determine county yields for the ARC program?
2. If a significant inconsistency in county yields is determined between adjacent counties, does USDA do any further analysis to ensure the county yield numbers are correct?
3. Does anything prevent USDA from using county yield data from the Risk Management Agency (RMA) for the determination of ARC county yields?