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ARC-IC Considerations for 2022 Farm Program Elections

The farm program election deadline for 2022 is March 15th, and producers have the option to enroll commodities in Price Loss Coverage (PLC) or Agriculture Risk Coverage (ARC).  PLC protects against declines in prices, and ARC protects against revenue losses at the county level (ARC-CO) or individual farm level (ARC-IC).  Among Southern producers, ARC-IC has not been popular in previous program elections, accounting for less than 1 percent of farm signups.  However, for the 2022 crop year, producers are making their farm program decisions at a time with relatively high commodity prices.  In this situation, it is unlikely that PLC will provide much support, and only alternatives that include yield losses will likely trigger support (ARC-CO and ARC-IC).  This begs the question of whether producers should consider ARC-IC for 2022.  ARC-IC differs from ARC-CO in the following ways: 

  1. The ARC-IC benchmark revenue is determined by a producer’s individual farm yields rather than county average yields. 
  2. ARC-IC election is made by Farm Service Number (FSN) rather than by commodity, i.e., if ARC-IC is selected for a FSN, then all commodities on that FSN are enrolled in ARC-IC.  If multiple FSNs are enrolled in ARC-IC, they will be treated as one “ARC-IC Farm.” 
  3. An ARC-IC payment is made on 65% of base acres rather than 85% for ARC-CO.
  4. Coverage applies to commodities with planted acres rather than base acres, i.e., if a producer has seed cotton base but plants corn in 2022, the ARC-IC benchmark revenue will be determined by corn prices and yields. 

In addition to the ARC-CO/PLC decision tool, Texas A&M University offers a spreadsheet calculator for producers considering ARC-IC available at www.afpc.tamu.edu.  For the ARC-IC calculator, producers will need the information in Table 1.  Producers can utilize the calculator to compare potential ARC-IC payments with different combinations of FSNs and different price and yield expectations. 

Table 1. ARC-IC Calculator Inputs

Graff, Natalie, and Joe Outlaw. “ARC-IC Considerations for 2022 Farm Program Elections“. Southern Ag Today 2(4.4). January 20, 2022. Permalink

Graduate Student
The Agricultural and Food Policy Center at Texas A&M

Professor and Extension Economist
Co-Director, The Agricultural and Food Policy Center at Texas A&M