Fast Facts:
- 2014 Farm Bill ends direct payments to farmers
- Feb. 27 last day for growers to schedule appointment with county FSA office to update yields and reallocate base acreage
- Farm Bill webinars and workshops to continue through March, before deadline for choosing PLC or ARC
As two major Farm Bill deadlines approach, Arkansas growers are trying to balance long-term forecasting with sort-term survival.
Friday, Feb. 27, is the date when farmers must schedule an appointment with their county Farm Service Agency office to update yields and reallocate base acreage. Growers must make another major decision associated with the 2014 Farm Bill — to select Price Loss Coverage or Agricultural Risk Coverage — by March 31.
Tony Franco, chief of farm programs for the Arkansas Farm Service Agency, said growers have until Friday to contact their county Farm Service Agency office to schedule an appointment to update yield figures or reallocate base acreage.
Because of a backlog of appointments — due to both the sheer volume of producers signing up and weather-related office closures — the FSA will honor decisions made during those appointments, provided the appointment is made by Feb. 27, Franco said.
If a grower doesn’t meet the Feb. 27 deadline to submit new yields and allocations, or make an appointment to do so, he or she will retain the existing yields and allocations under the previous farm bill, Franco said.
Deadline pressure
When asked to identify their major concerns for 2015, many growers attending production meetings in counties throughout the state in January and February said the decision deadlines associated with the 2014 Farm Bill — and the possible ramifications of those decisions for years to come — was chief among them.
Jeff Welch, Lonoke County extension staff chair for the University of Arkansas System Division of Agriculture, said that while many Arkansas growers decide on the location, rotation and acreage of their crops several years in advance, the reality of having to live with an “irrevocable” decision under the federal law can be difficult and frustrating.
“The stress is that they’re having to make a decision this year that’s going to stick with them for five to eight years,” Welch said. “They don’t know the prices or the environmental conditions, three, four, five years out.”
The U.S. Congress is expected to produce a new farm bill every five years, although the complex legislative process often means that the wait between consecutive versions of the bill can take several additional years.
Welch, who has worked with the Cooperative Extension Service for more than 25 years, said the 2014 Farm Bill is considerably more complex than previous versions of the bill, and reflects a shift in committee leadership away from Southern senators and representatives toward their Midwestern counterparts.
“The Farm Bill is neither conservative nor liberal, it’s not Democratic nor Republican — it changed from being a Southern farm bill, based on high-capital-intensive crops, to a Midwestern farm bill, focused on lower-capital-intensive crops and a different regional philosophy,” Welch said. “Crop insurance became much, much more important in this farm bill that it ever has been in the past.”
Scott Stiles, a University of Arkansas Professor of Agricultural Economics and Agribusiness, said previous versions of the Farm Bill had provided as much as $40,000 per farmer per crop year in direct payments, a policy that came to an end with the 2014 Farm Bill.
“The [direct payments] provided a fixed source of farm income,” Stiles said. “They had the secondary effect of increasing land values and cash rents. But it’s debatable whether these payments affected a farmer’s risk aversion.”
Stiles said some farmers still employed crop insurance and sophisticated marketing strategies while receiving direct payments. Loss of the payments, he said, will shift the burden of risk management from the federal government onto the farmer.
Decision time
Growers must decide how their base acreage will be allocated on their farmland. While they have the option to retain the same allocation used in 2013, one major change for some growers to consider is that upland cotton is no longer a covered commodity under the bill, and is considered generic acreage.
Growers have until March 31 to decide whether to apply for Price Loss Coverage, which covers losses if commodity prices drop below established reference prices, and Agriculture Risk Coverage, which covers revenue for a covered commodity relative to a revenue guarantee.
The programs combine elements of previous programs from the Farm Service Agency, according to a release from the USDA, and either program can be applied to entire farms, or on a crop-by-crop basis.
“Growers are doing several things at once right now,” Welch said. “One, they’re putting their farm plan together — it has to be flexible enough to change as market prices change. Two, they’re looking at which crops can fit a piece of ground, and how much profit they can make per acre, and whether they have the cash flow to make it from this season to the next or not. And those are things that need to be figured out, regardless of the Farm Bill.”
Snow problems
Although experts with the University of Arkansas System Division of Agriculture and the Arkansas state office of the Farm Service Agency have been conducting instructional webinars and in-person workshops at Cooperative Extension Service offices across the state since late 2014, severe winter weather has caused a number of county Farm Service Agency offices to close periodically throughout the past two weeks.
Welch said that decisions required by the Farm Bill, including acreage allocation and the choice between different forms of crop insurance, are questions of long-term survival for growers.
“The Farm Bill decision is, what’s the wisest choice of action that ensures that I’m in business five to eight years from now?” he said.
Source:uaex.edu