Law firms and grain marketers are pushing for possible legal action against the U.S. Department of Agriculture over the way USDA came up with the final county yield totals for the Agriculture Risk Coverage program.
Complaints have festered since last fall when the Farm Service Agency released the final 2014 payment rates. Payments weren't as high as projected in some counties around the country, especially in areas with high yields for particular crops.
A caveat to the 2014 farm bill is that it requires the Farm Service Agency to calculate yearly county yields for ARC-County payments. Therein lies the problem. At least a couple of law firms and others are holding meetings with farmers in parts of the Plains and Midwest to argue that FSA did not accurately calculate county yields.
ARC-County and Price Loss Coverage were created in the 2014 farm bill and farmers were given a choice of which program they wanted to enroll individual commodities in for the life of the farm bill. Farmers enrolled roughly 96% of soybean base acres and 91% of corn base acres in ARC-County.
Producers are used to direct payments that allowed them to go to bankers and point to a consistent, steady payment. Under ARC, potential government payments could vanish for counties, districts or states that see bumper crops.
USDA has paid out roughly $4.4 billion for ARC-County, of which $3.7 billion went to corn farmers. PLC has paid out about $756 million, mainly to long-grain rice and peanut farmers.
Farmers in just three states -- Iowa, Minnesota and Nebraska -- account for just under $2.19 billion of that $4.4 billion paid out for ARC-County, a full 49% of the payments.