Home / News / Policy news / Here's Agriculture Risk Coverage

Here's Agriculture Risk Coverage

DANIEL LOOKER 04/20/2012 @ 3:23pm Business Editor

The Senate Agriculture Committee has released a 2012 farm bill draft that would repeal direct payments, countercyclical payments and the average crop revenue election (ACRE) program.


The bill, if it becomes law, would set up a new Agriculture Risk Coverage, a revenue protection program that gives farmers a one-time choice of coverage at the individual level or the county level, if a county is approved for the program. Payments would be more generous for losses triggered by a county-wide drop in revenue.


The bill to reauthorize farm programs through 2017 keeps nonrecourse marketing loans. But for nearly all commodities, at the same level as in 2008. That's $2.95 a bushel for wheat, $1.95 a bushel for corn, $6.50 a bushel for long grain and medium grain rice and $5 a bushel for soybeans. Rice farmers had been seeking a higher loan rate. 


The Average Risk Coverage would apply to each commodity. The coverage would be based off a five-year olympic yield average (tossing out the high and low years) of yields multiplied by the five-year olympic average of national marketing year prices. Yields are either individual or county-wide, depending on the program you choose.


The program takes a bite out of potential payments several ways: 


First, the Agriculture Risk Coverage guarantee offered by the farm bill would be 89% of that average benchmark revenue.


The second limit is the payment rate. Each year's crop revenue will be calculated by yields times the mid-season price for that commodity. Payments are made if that revenue falls below the guarantee,  but they can't be bigger than 10% of the benchmark revenue. 


The third limit is the amount of eligible acres of the covered commodity. If you sign up for county-wide coverage, payments are made on 75% of your acres. If you sign up for the individual level, payments are on 60% of your acres.

CancelPost Comment
MORE FROM DANIEL LOOKER more +

Month-End Slide For Beans By: 07/31/2015 @ 2:10pm DES MOINES, Iowa (Agriculture.com)--On Friday, the CME Group grains futures ended mostly lower…

China Cancellation Hits Beans By: 07/31/2015 @ 11:11am At midday, the CME Group's corn and soybean contracts are trading lower.Aug. soybean futures…

Soybean Complex Down at Open By: 07/31/2015 @ 8:53am Grain markets opened mixed Friday, hardly reversing a bearish month for grains. Shortly after the…

MEDIA CENTERmore +
This container should display a .swf file. If not, you may need to upgrade your Flash player.
Cover Crops-How To Terminate
Agriculture.com

FREE MEMBERSHIP!

CLOSE [X]