Agriculture Committees expected to make several changes to the Agricultural Risk Coverage program in the next farm bill

OMAHA (DTN) -- While it's widely expected that the House and Senate Agriculture Committees will make several changes to the Agricultural Risk Coverage program in the next farm bill, a pair of senators put down their bipartisan marker for adjusting the way ARC-County calculates county revenue. Sen. Joni Ernst, R-Iowa, and Sen. Heidi Heitkamp, D-N.D., introduced a bill Tuesday to shift the data used for ARC-County and change how payments are determined based on where a farm is physically located. Along with that, the senators want to give state Farm Service Agency committees more discretion to change county yields as well. The senators, both members of the Senate Agriculture Committee, stated their bill's goal is to strengthen ARC-County "to better support farmers during tough times like low commodity prices or drought and make sure they get the accurate payments they deserve." While the bill makes some changes to how yields are plugged into the ARC-County benchmark formula, the proposed changes by the two senators do not address the declining overall revenue protection under ARC-County. Declining market-year average prices over the past four years have eroded ARC-County's revenue protection.  Among the changes in the bill, the senators want to require the Farm Service Agency to use crop-insurance yields reported by farmers and insurers to the Risk Management Agency as the first data used for yield calculations in ARC-County. Currently, FSA uses survey data from farmers reported to the National Agricultural Statistics Service as the first data of choice. NASS, however, has struggled with survey responses in at least some counties. Crop insurance data reported to RMA does provide more data points for calculating the average county yield. Still, one interesting twist in switching from NASS to RMA data is that it could reduce the likelihood of an ARC-County payment in some instances. Farmers generally report higher yield numbers to crop-insurance companies than farmers report on the NASS surveys. That's because insurance yields are used to determine a farmer's long-term Actual Production History for future crop insurance protection levels.