Farm Bill Provisions explained January 2019

Here are a few insights on some of the provisions in the newest farm bill by 
Kent Thiesse.

Commodity programs

  • Producers will again choose between the price-only PriceLoss Coverage (PLC) and county yield revenue-based Ag Risk Coverage (ARC-CO)program choices for the 2019 and 2020 crop production years. Calculationformulas for the ARC-CO program will remain similar to the current farmprogram.
  • Beginning with the 2021 crop year, producers will be able tomake an annual election between the ARC-CO and PLC program choices.
  • ARC-CO payments will be based on the county where an FSAfarm unit is located, rather than the county that the producer chose as the FSAadministrative office.
  • The reference prices for PLC and ARC-CO programs will beestablished at the greater of the current reference prices or 85 percent of themarket year average (MYA) price for the most recent five years, excluding thehigh and low year. The reference price cannot exceed 115 percent of the currentreference price.
  • Crop base acres will remain at current levels for all cropson most farms.
  • Producers will have the opportunity to update their farmprogram payment yields beginning with the 2020 crop year. Yield updates will bebased on 90 percent of the average farm yields on planted acres for eligiblecrops for the 2013 to 2017 crop years. If the updated yields are lower thancurrent levels, producers can choose to keep their current FSA program yields.
  • The Risk Management Agency (RMA) yields that are used forcrop insurance yield calculations will now be used as the primary yield datasource for determining ARC-CO payments, rather than the National Ag StatisticsService (NASS) yields that are currently being used.
  • Farmers who lose farm program payments on unplanted acresover a designated timeframe will qualify for conservation payments, if theyagree to keep those acres in grass.
  • Nephews, nieces and cousins will be treated as eligiblefamily members to receive farm program payments, provided that they meet theFSA “actively engaged” in farming requirements.
  • The maximum allowable adjusted gross income (AGI) to beeligible to receive farm program payments will remain at $900,000, and maximumfarm program payment level will remain at $125,000 per qualifying individual orfarm entity.

Commodity loan rates

The CCC national loan rates were adapted for the most commoncrops in the Upper Midwest, beginning with the 2019 crop year:

  • Corn: $2.20 per bushel, currently $1.95 per bushel.
  • Soybeans: $6.20 per bushel, currently $5 per bushel.
  • Wheat: $3.38 per bushel, currently $2.94per bushel.

Dairy programs

The new Farm Bill will make some significant improvements to the current Dairy Margin Protection Program (MPP), which will now be named“Dairy Margin Coverage” (DMC). The DMC upgrades will especially benefit small to medium-sized dairy herds, less than 250 cows. These improvements are in addition to changes that were made earlier this year in the federal budget bill.

Crop insurance

There are very few changes to the crop insurance program. However, the USDA Risk Management Agency has the ability to make year-to-year adjustments in crop insurance program options.

Conservation

  • The maximum level of Conservation Reserve Program (CRP) acres goes up from 24 million acres to 27 million acres by 2023, with 2 million of the added acres designated for the Grassland Reserve Program.
  • The maximum CRP rental rates would be set at 90 percent of the average FSA prevailing rental rates in an area for the Continuous CRP program, which focuses on the most environmentally sensitive land, and at 85 percent for general CRP sign-ups.
  • The Conservation Stewardship Program, which involves implementing conservation practices on operating farms and is popular in Minnesota and neighboring states, continues, although some funding for it will be reduced over the next five years (2019-2023) and redirected to other programs.
  • The Environmental Quality Incentives Program (EQIP), which provides funding to help offset the cost of implementing farm-level conservation measures, will get increased funding in coming years.