Commodity election decision app released as deadline nears
Tuesday, February 25, 2020
Oklahoma State University researchers have released an online decision tool app to help agricultural producers choose between two important financial safety net programs.
However, the deadline is fast approaching. Eligible producers must elect participation by March 16 in either Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC), for the 2019-2020 crop years. The related paperwork cannot be a last-minute effort, agricultural economics assistant professor Amy Hagerman said.
“This tool provides projections for likely payments under those two programs and gives farmers some insight as to how they’ll be affected,” said Hagerman, whose research specialty at OSU is agricultural and food policy. “It’s very transparent, which allows producers to see how each calculation is made and takes some of the guesswork out of the process.”
The ARC/PLC programs were first authorized by the federal Farm Bill in 2014 and reauthorized for the latest version of the omnibus bill. Elections can be changed in 2021 onward.
OSU’s agricultural economists such as Hagerman and professor Eric DeVuyst developed the app in cooperation with Kansas State University faculty Rich Llewelyn, Robin Reid and Mykel Taylor. It was upgraded from user feedback from the previous version to make the app easier to operate with more features.
The OSU-KSU Farm Bill Decision Tool app is available to download online at https://okla.st/2HT4XXZ.
According to the U.S. Department of Agriculture, the ARC program provides income support tied to historical base acres of covered commodities instead of current production. Those payments are issued when the actual county crop revenue of a covered commodity is less than the ARC guarantee for the covered commodity.
By comparison, PLC payments are issued when the effective price of a covered commodity is less than the respective reference price for that commodity. The effective price equals the higher of the market year average price or the national average loan rate for the covered commodity.
Bambi Sidwell, owner of Sidwell Insurance Services in the Oklahoma City metro, said she has already started referring her farmer clients to the app tool. The response has been positive, Sidwell said.
“It was definitely a huge help,” Sidwell said. “Unless you work with that sort of data and decision-making every day, they’re pretty complicated programs.”
She likened the process to filing income taxes or planning for retirement: “Sometimes it’s hard to read through even a single paragraph of that sort of legal language,” Sidwell said. “For most producers, there’s no way of telling where the benchmarks come from or how to sift out the results. The effort OSU put into this is greatly appreciated.”
MEDIA CONTACT: Brian Brus | Agricultural Communications Services | 405-744-6792 | BBrus@okstate.edu