USDA Releases New Programs to Help Farmers Manage Risk

Using online tools to decide best risk management

Using online tools to decide best risk management

U.S. Department of Agriculture (USDA) Secretary Tom Vilsack announced much anticipated new programs to help farmers better manage risk, ushering in one of the most significant reforms to U.S. farm programs in decades. These new programs, including the Agriculture Risk Coverage program (ARC), are a departure from New Deal-era target price policies and represent one of the most significant Farm Policy reforms in decades. 

Farmers Can Find The Right Program for Their Needs Now

“The 2014 Farm Bill represented some of the largest farm policy reforms in decades. One of the Farm Bill’s most significant reforms is finally taking effect,” said Vilsack. “Farming is one of the riskiest businesses in the world. These new programs help ensure that risk can be effectively managed so that families don’t lose farms that have been passed down through generations because of events beyond their control. But unlike the old direct payment program, which paid farmers in good years and bad, these new initiatives are based on market forces and include county – and individual – coverage options.”


The new programs, Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC), are cornerstones of the commodity farm safety net programs in the 2014 Farm Bill legislation that ended direct and counter-cyclical payments. The PLC program offers protection when the national average price of covered commodities fall below a legislated reference (target) price.  The ARC program is more market-oriented and protects farmers through both price and yield declines using rolling Olympic averages (dropping the high and low number)  to calculate farm revenue benchmarks established using more closer geographic proximity. Producers will have through early spring of 2015 to elect which program works best for their operations.

Not Just New Programs But Tools To Help You Decide

To help farmers choose between ARC and PLC, USDA helped create online tools that allow farmers to enter information about their respective operation(s) and view projections about what each program will mean for them under possible future scenarios. The new tools are now available at

USDA provided $3 million to the University of Illinois (lead for the National Coalition for Producer Education) and the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri and the Agricultural and Food Policy Center (AFPC) at Texas A&M (co-leads for the National Association of Agricultural and Food Policy), to develop the new programs.

Vilsack announced that new tools are available to help provide farmers the information they need to choose the new safety net program that is right for their business.

“We’re committed to giving farmers as much information as we can so they can make an informed decision between these programs,” said Vilsack. “These resources will help farm owners and producers boil the information down, understand what their options are, and ultimately make the best decision on which choice is right for them. We are very grateful to our partners for their phenomenal work in developing these new tools within a very short time frame.”


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Tim Cansler