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New ARC payment pilot program underway

Pilot program in 14 counties across seven states will use RMA data to calculate ARC payments if NASS data are insufficient.

The U.S. Department of Agriculture has implemented a new pilot program to improve the fairness of payments under the agency’s Agriculture Risk Coverage (ARC) program. USDA has started the pilot in 14 counties across seven states.

Sen. John Hoeven (R., N.D.) introduced legislation to create the pilot program as part of the fiscal 2017 funding bill, and he has included additional funding for the program in the Senate’s fiscal 2018 appropriations legislation.

“For purposes of determining ARC county payments, USDA has used National Agricultural Statistics Service (NASS) county data to determine yields,” Hoeven said. “The problem is that, in some cases, there isn’t enough NASS data for a particular county to get an accurate assessment of yield, and the USDA has substituted other yield data that in certain cases doesn’t match actual yields. This pilot program provides a backup so that, if a state’s Farm Service Agency (FSA) office determines that USDA’s current calculation method is insufficient to make an accurate determination, an alternative method of documenting yields can be used that will provide farmers with a fair payment.”

Hoeven continues to work to include a similar measure in the next farm bill as a long-term solution to the ARC payment calculation issue.

“This pilot program will help ensure that ARC payments to farmers are fair and reflect real-world yields,” Hoeven said. “The upcoming farm bill gives us an opportunity to implement this kind of a solution on a long-term basis for farmers across the nation, and I continue to work with agriculture producers in North Dakota and my colleagues on the Senate Agriculture Committee to do just that.”

The pilot program gives state FSA offices a role in ensuring accurate yield determinations under the ARC program. If the FSA office finds a disparity between yield calculations in comparable counties using NASS data, the office may fix any inaccuracy by using an alternate calculation method, such as Risk Management Administration (RMA) data or NASS district data.

ARC county payments became an issue for farmers across the country beginning in the 2014 crop year due to USDA’s current method of calculating yields, which are determined using voluntary data producers report to NASS. However, in some counties reporting is sparse, resulting in no data or inaccurate data on which to base ARC payments.

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