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ARC/PLC could come under scrutiny in farm bill debate

An ag economist says the complexity of the current risk management tools available to farmers will be at the forefront of the farm bill debate.

Purdue University’s David Widmar says the Agriculture Risk Coverage /Price Loss Coverage programs will likely come under increased scrutiny.  “We’re in a tough time in agriculture,” he says.  “The ARC program starts to fade out in the next couple of years and producers are going to look for what the program set-up might look like.”

He tells Brownfield because program payments are difficult to calculate, a very small percentage of producers know what their ARC/PLC payments could be for the coming year – and that makes determining the benefits of the programs difficult to figure for any operations.  “ARC and PLC are complicated programs for producers to use as a risk management tool,” he says. “I think that is also going to come to the forefront is how this program fits in with the tools that producers are already using and trying to use.”

Widmar says if the ARC/PLC programs were re-authorized many producers would likely switch to PLC creating a very expensive farm bill.

AUDIO: David Widmar, Purdue University