Farm Bill Impacts Crop Insurance Choices - KFYRTV.COM - Bismarck, ND - News, Weather, Sports

Farm Bill Impacts Crop Insurance Choices

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On February 7th President Obama signed into law the 2014 U.S. Farm Bill. The bill authorizes $956 billion in spending over the next 10-years.  The new Farm Bill will have a big impact on crop insurance choices for farmers and producers in the near future.

With a total budget of $956 billion, close to $90 billion of that has been set aside for crop insurance, an important subject for farmers who have to deal with crop losses due to drought, flooding or any other weather related disaster.

"Crop insurance actually got a few more dollars put into it. That program is going to remain strong for the next five-years, at least the life of this farm bill, so that's very good," says the president of the North Dakota Farmer's Union Mark Watne.

Compared to previous years, producers will have two choices when it comes to their crop insurance plans over the next five years. Farmers will have to choose between an Agricultural Risk Coverage (ARC) option, or the Price Loss Coverage (PLC) Option.

"Now this year, both programs have some merit, but their merit is a little bit different, so you need to study and find out what fits your operation. And it's going to be unique to your operation, it's not just going to be a standard that just fits all," says Watne.

For the ARC option, a payment is determined on a shortfall of revenue, while a payment through PLC would happen if the current price falls below the national reference price. But no matter which plan farmers choose, there is one factor that stays the same.

"People need to understand that this whole farm program is determined on base acres, not on planted acres. So, it doesn't make any difference what you grow on that farm, whether you plant the crop you have a base for or not," says Dwight Aarkre, a farm management specialist with the NDSU Extension Service.

And unlike previous farm bills, producers will have to predict national prices and county yields for the next five-years.

"It's going to be a guessing game, and nobody is going to be absolutely certain that they made the right decision. The more you learn about it, the more comfortable you are with that decision," says Aarke.

Now, these new Crop Insurance Option do not take affect this year. The March 15 Crop Insurance date has already passed by, so farmers don't need to worry about covering crops with a new plan this year.

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