ARC is a “shallow loss” agribusiness income guarantee program created in the 2014 farm bill. Producers of major commodity crops such as wheat, corn, soybeans, grain sorghum, barley, oats, and rice may choose county-based or individual coverage. County-based ARC insurance provides payment to farmers when crop revenue falls below the “ARC county guarantee.” The guaranteed amount is equal to 86 percent of the previous five-year national farm price times the average county yield for that crop. ARC-Individual provides similar coverage but against individual farm yields instead of a county average. This policy covers shallow as opposed to deep losses experienced after severe droughts or floods. For producers choosing individual ARC, payments are issued when crop revenues summed across all commodities on the farm fall by a similar amount. ARC is made available to farmers in addition to crop insurance, a highly subsidized federal program that already guarantees up to 85 percent of producers’ revenue each year. Payments from ARC and other farm subsidy programs are limited to $125,000 annually, while spouses may receive an additional $125,000 (an increase from the 2008 farm bill’s tighter payment limitations). Any individual with an annual adjusted gross income above $900,000 (after expenses are deducted) is ineligible for ARC subsidies.
For more details, see TCS’s fact sheet on shallow loss programs – http://www.taxpayer.net/library/article/shallow-loss-programs-may-surpass-cost-of-old-subsidy-schemes« Back to Database