2014 FARM BILL: COLLABORATION AND
EDUCATION STRATEGIES
Jody Campiche
Oklahoma State University
Disclaimer
This information is based on my understanding of the 2014 farm bill
Some details may be slightly different once the final rules and regulations are released
This information is intended to be for educational purposes only
Decision Aid Effectiveness
For the 2008 farm bill, OK had one of the highest ACRE enrollments in the nation
A large extension effort focused on educating producers on ACRE and developing an Excel-based decision tool to assist producers with the decision
Based on feedback from producers and extension educators across the state, the decision tool was extremely helpful in the decision process
Decision Aid Effectiveness: Oklahoma Experience
1. Presentations covering the basics of each program (for producers and extension educators)
2. Decision tool available via the web or through county extension educators
3. Extension educator training on the decision tool
4. Producer meetings to discuss how to use the tool, information needed, and specific scenarios relevant to the area
5. Producer workshops (with portable computer lab) to assist with entering data into the tool
Decision Aid Effectiveness: Oklahoma Experience
Availability of decision tools is important Need options to obtain extra help (county
educators, producer workshops, etc…)
Want to see specific examples for their area Of course results will vary by farm (crop
mix, farm size, yields, etc…) Easier for producers to understand if they
can see some examples similar to their operations
Producer Feedback:Farm Bill Extension Programs
What do producers want to know?
Which programs provide the best safety net?
Which programs provide the highest payments
First year of sign-up
Life of the farm bill
Producer Feedback:Farm Bill Extension Programs
2014 Farm Bill: Extension Education
Educate producers/landowners/bankers on the differences between past programs and new programs New programs are similar to previous programs – key
differences
Emphasize the interaction between commodity and crop insurance programs and the increased complexity
Start with the details of each program Provide examples (representative farms for the area)
of how each program works Provide examples comparing previous programs to
current programs (such as the differences between ACRE and ARC)
Extension Education
Eliminated Programs
CCP
SURE
ACRE
DP
Changes to Commodity/Crop Insurance Programs
Elimination of direct payments, countercyclical payments, ACRE payments, and SURE payments
One time election of: Price loss coverage (PLC) Agricultural risk coverage (ARC) – county or individual If landowners/tenants don’t reach agreement, no payments for
2014 crop and automatically enrolled in PLC for 2015
New supplemental crop insurance program (SCO) for PLC participants
New supplemental crop insurance program (STAX) for cotton producers
Commodity/Crop Insurance Programs
ARC-I
SCO, STAX
PLC
CROP INSURANCE
COMMODITY PROGRAMS
RP, YP, RP-HPE
ARC-C
Commodity Program/Crop Insurance Choices for Covered Commodities
PLC
PLC + SCO
ARC-County
ARC-Individual
RP, RP-HPE, YP changes?
2014 Farm Bill
One-time decision to reallocate base acres **total base acres cannot increase (will be
the same as on Sept. 30, 2013)
One-time decision to update CC yields on a farm
Decisions at the FSA office
Update base acreage?
Update FSA payment yields?
Enroll each crop/farm in ARC or PLC?
Decisions at the crop insurance office
Purchase SCO for 2015?
If the crop/farm is not in ARC
SCO is a county-level product
SCO only pays if the county has a loss but the premium is much cheaper than an RP policy
If the drought continues, is it likely that both the individual farm and county will have a loss?
SCO Covered Commodities:2015 crop year
Corn Cotton Grain sorghum Rice Soybeans Spring barley Spring wheat Winter wheat
Plant a different crop than base crop
Payment Acres
ARC/PLC paid on base acres Do NOT have to plant to receive ARC/PLC on base acres (not
including cotton base acres)
PLC calculation uses the FSA payment yield
Price loss coverage (PLC)
Similar to the CCP in the 2008 farm bill
Payments when price falls below the reference price Does not account for yield loss
Payments tied to base acreage and FSA program yields
Agricultural Risk coverage (ARC)
Similar to the ACRE program in the 2008 farm bill
Key Differences
Paid on base acreage, not planted acreage
Tied to county or farm yield (ACRE tied to state yield)
Limited to 10% of the benchmark revenue (lower payments than ACRE)
Base Update
Reallocate base acres?
Cannot increase base acres, but can reallocate current base acres
Reallocation based on 2009-12 planted and prevented planted (and double crops if an approved practice)
Base Reallocation Example
2009 2010 2011 2012
Corn 0 0 200 200
Grain Sorghum
150 100 0 0
Wheat 250 300 200 200
Totals 400 400 400 400
Yield Update
Updated payment yield = 90% of the average of the yield per planted acre for the 2008-2012 crop yearsExclude any year when no acreage was planted
to the covered commodityWill likely use crop insurance APH yield data for
2008-2012
Producers with yields in any of the 2008-2012 years that are < 75% of the county average yield can use 75% of the 2008-2012 county average yield as a substitute
Yield Update Example
Wheat CC yield = 35 bu Garfield Co., OK: 75% of 2008-12 yield = 24 (75%
of 24 = 18)
2008 2009 2010 2011 2012 Avg Yield
90% of Avg Yield
Wheat 45 15 42 10 43 35 31
75% Avg Garfield County Yield
24 24 24 24 24
Important Points
The decision to enroll in ARC/PLC varies by crop, region, farm size, etc…
SCO may not be an attractive option for some crops/regions/farms
ARC/PLC paid on 85% of base acres SCO paid on 100% of planted acres
No premium for ARC/PLC Premium for SCO
Payment limits for ARC/PLC No payment limits for SCO
ARC limited to 10% of benchmark revenue PLC/SCO may have higher limits than ARC
Important Points
SCO not available for all crops for 2015
Some producers have base but are not planting a crop
Some producers have a higher level of coverage on their individual policy so SCO is less attractive
Some producers plant more than their base so SCO may be more attractive
Important Points
Interaction between programs
Choices will all take place at different times
This may be particularly confusing for ARC/PLC and SCO No SCO for 2014 crop year
SCO sign-up for the 2015 crop year will occur before ARC/PLC sign-up for the 2014 crop year (for fall planted wheat)
Farm Program Choices
SCO: Slightly Confusing PLC/ARC Details
Example 1 Producer has 100 acres wheat base and
enrolls the wheat in ARC – plants 100 acres of wheat – CANNOT enroll wheat in SCO
Example 2 Producer has 100 acres of wheat base,
enrolls the wheat in ARC - plants 100 acres of corn – CAN enroll the corn in SCO
Payment Timing
2014/15 ARC/PLC payments – will receive around October 2015
2015 SCO payments – may not receive until Spring 2016 (when county yields are final)
SCO/RP/YP/ARC/PLC Decisions
Is SCO offered for the crop/county?
Is ARC a better option for the crop/farm?
Is the base acreage different than current planted acreage?
Will the producer reallocate base acreage?
What is the current RP/YP coverage level?
What is the cost of higher RP/YP coverage vs adding SCO?
Does the producer have enterprise units?
Is the producer planting a large amount of acreage over your base?
Decision Tools – Many Options
SCO Decision Tool – Winter Wheat
OSU/KSU Farm Bill Decision ToolJody CampicheEric DeVuyst
Oklahoma State University
Art BarnabyMykel Taylor
Kansas State University
Results