A new report issued by USDA’s Economic Research Service, Federal Programs for Agricultural Risk Management, provides an overview of Federal risk management programs and discusses the mechanics of each program, including eligibility criteria, payment calculations, interaction with other risk management programs, and the implications of various market conditions on select programs’ risk reduction potential. Focus is given to risk management programs that are available under the Agriculture Improvement Act of 2018.
Here are a few key findings from the report:
- Following the 2018 Farm Bill, enrollment in the Agriculture Risk Coverage-County Option (ARC-CO) decreased, while enrollment in Price Loss Coverage (PLC) increased. Participation in PLC relative to ARC subsequently declined in 2021 and 2022. By 2022, ARC-CO again had more enrolled base acres than PLC and the Agriculture Risk Coverage-Individual Option (ARC-IC).
- Marketing assistance loans (MALs) are heavily used only by producers of a few specific commodities. Between the 2018/19 and 2020/21 crop years, marketing loan benefits averaged $60.27 million annually, peaking at $222.28 million in 2019/20 (mostly to cotton).
- Insured acreage within the Federal Crop Insurance Program (FCIP) has grown steadily since 2016 – driven primarily by the adoption of insurance policies for Pasture, Rangeland, and Forage (PRF).
- The Noninsured Crop Disaster Assistance Program (NAP) is small relative to the Federal Crop Insurance Program (FCIP) but offers protection for producers engaging in animal grazing and forage and specialty crop producers who otherwise may not have access to insurance.
More information is available in the full report.
USDA news release
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