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Considering 2014 Farm Bill payments when making 2018 Farm Bill decisions

A paper released today by ag leaders with Ohio State University and the University of Illinois analyzes if 2014 Farm Bill payments can inform 2018 Farm Bill decisions between Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs.

Ben Brown is an assistant professor in agricultural risk management with Ohio State University.  

“What we found is the Agriculture Risk Coverage county option triggered a lot more frequently, but the payment rates tended to be a lot lower than the Price Loss Coverage program,” he says.

ARC County is more likely to make payments, because low yields can cause payments, while PLC is more likely to make a large payment when payments are made.

He says a strategy is to diversify program choice across crops.

“Our recommendation there was to diversify choices across farms and commodities that way you’re spreading your risk out in the hope that you’re getting something in a year that you need it,” he says.

Brown encourages growers to sign up now if possible.

“I want people to get in and sign up for something because if you don’t sign up for something you lose your 2019 payment if it triggers and you’re automatically defaulted in 2020 to what you had in the previous farm bill,” he says.

The enrollment deadline is March 16.

Brown published the paper with Carl Zulauf, Gary Schnitkey, Krista Swanson, Nick Paulson, and Jonathan Coppess.

Audio: Ben Brown, Ohio State University

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