By Peter Zimmel
When farmers choose one of the 2014 farm bill’s safety-net programs this winter, they are locked in for the next four years. A new online tool can help them evaluate which program is best for them.
The Food and Agricultural Policy Research Institute at the University of Missouri (MU FAPRI), in partnership with the Agricultural and Food Policy Center at Texas A&M University, built the tool for the USDA Farm Service Agency.
FAPRI program director Peter Zimmel says the tool allows farmers to enter specific information about their operation to help them make complex decisions.
“Based on the information they enter, it shows them what type of payments are possible in the future,” Zimmel says. “They can step through all these decisions and see if they want to reallocate their base acres, if they want to update their yields and what program they want to sign up for.”
Farmers can choose either Agricultural Risk Coverage (ARC) or Price Loss Coverage (PLC). Whichever one is selected will be in place for the life of the farm bill.
Under PLC, producers receive payments if a covered commodity’s national average price for the marketing year drops below a reference price, while ARC is based on both yield and prices, Zimmel said.
The tool can be accessed at fapri.missouri.edu or usda.afpc.tamu.edu.
Zimmel urges producers to use the tool before choosing a farm bill program.
“The decisions the producers face are very complex,” Zimmel says. “But there are real dollars involved, so they really need to take the time to enter their data and look at what these different decisions mean to their bottom line.”
Source:missouri.edu