Price Loss Coverage

House Agriculture chairman Micheal Conaway says he tried to help every section of the country in his version of the 2018 farm bill, which was ratified by his fellow House Republicans but now is stalled by myriad House-Senate disputes. One of the House provisions, to give some but not all growers the opportunity to potentially increase their subsidy payments, "does not seem prudent," said four university economists.

Roughly 16 months ago, at their first hearing for the 2018 farm bill, Senate Agriculture chairman Pat Roberts and Sen. Debbie Stabenow agreed to write a bipartisan bill that would be enacted on time, a seemingly simple goal that has eluded Congress repeatedly. With a committee vote set for Wednesday on their 1,006-page bill, the two committee leaders say they are on the verge of a major bipartisan victory.

The second-largest U.S. farm group says the mammoth tax cut now pending in Congress could force cuts in farm subsidies, or possibly wipe them out, because of "pay-as-you-go" law.  "That would be a disastrous trade," said president Roger Johnson of the National Farmers Union, taking a more skeptical view than many farm leaders of the impact of the proposed $1.5 trillion in cuts and associated changes to tax brackets and deductions.

Agriculture Secretary Tom Vilsack said he is looking at every factor, including trade rules and budgetary effects, in the cotton industry's request that he declare cottonseed oil eligible for the same subsidies offered to grains and soybeans.

Growers have one additional week, until April 7, to select their crop-subsidy program for the life of the 2014 farm law. They must choose between the insurance-like Agricultural Risk Coverage, which shields growers from declines in crop revenue, and the traditional Price Loss Coverage, which guarantees a minimum price. The USDA announced the one-week extension, saying 10 percent of likely farm-program participants had not made a decision as of last week.

More than one-fifrth of farmers have yet to tell the USDA which crop-subsidy plan they want under the 2014 farm law, the insurance-like Agricultural Risk Coverage or the traditionally styled Price Loss Coverage. The deadline for action is Tuesday. Some 77 percent of grain and oilseed growers made the ARC/PLC selection by March 19, says the USDA. "We expect these numbers to continue to increase significantly by the end of the month," said Val Dolcini, head of the Farm Service Agency, during a House Agriculture subcommittee hearing.

Farmers have an additional month, until March 31, to tell the USDA if they want to update their yield and acreage "bases" for crop subsidies. Operators also face a March 31 deadline to select a crop subsidy program - either the shallow-loss Agriculture Risk Coverage or the traditionally structured Price Loss Coverage - for the life of the 2014 farm law. The department announced "a one-time extension" on Friday, the previous yield-and-base deadline; the decision period opened on Sept. 29, 2014.

Agriculture Secretary Tom Vilsack said he would provide "flexibility" if needed to assure orderly handling of two important farm program deadlines. Growers have until Friday to tell the USDA whether they want to update two factors for calculating crop subsidies - average yields and acreage bases. And they have until March 31 to select either the insurance-like Agricultural Risk Coverage subsidy or the traditionally designed Price Loss Coverage subsidy.

The Senate proposal to place a $50,000 cap on premium subsidies for farmers buying crop insurance "could potentially impact participation" in the program, says Agriculture Secretary Tom Vilsack. The government pays an average of 62 cents of each $1 of premium, although the subsidy rate is as high as 80 percent on some policies. During a tele-conference, Vilsack said, "We don't want to go back to the days of ad hoc (disaster relief) legislation. That could potentially be much more expensive."

With years of low commodity prices ahead, U.S. corn and wheat growers will stick to traditional crop subsidies, forecasts the Congressional Budget Office. In its annual economic forecast, CBO estimates only 37.5 percent of corn land and 28 percent of wheat land will be enrolled in the new Agriculture Risk Coverage subsidy offered by the 2014 farm law; the bulk will be put into the Price Loss Coverage program, which has the familiar structure of price guarantees.