An Alternative Approach in Calculating Louisiana ARC-CO Program Benchmarks for Corn and Soybean

AN ALTERNATVIE ARRPOACH IN CALCULATING LOUISIANA ARC-CO PROGRAM BENCHMARKS FOR CORN AND SOYBEANS Michael A. Deliberto Brian M. Hilbun Louisiana State University Agricultural Center Department of Agricultural Economics and Agribusiness Baton Rouge, LA Abstract As the new farm bill debate process begins, the market outlook for commodities is a driving force behind efforts aimed at maintaining and strengthening the farm financial safety net. The 2014 farm bill provides price and income support to producers of covered commodities via the Price Loss Coverage (PLC) program and the Agriculture Risk Coverage (ARC) program. The risk management feature of ARC models an area-wide, shallow-loss revenue protection mechanism that is administered at the county-level. Since no individual farm data is used, variability in historical yields can create disparities in revenue guarantees calculation per locale. This study examine alternative policy designs for determining the benchmark and subsequent revenue guarantee levels by employing a longer-tem average yield calculation that operates inside the existing structure of the ARC program. The intent of this research is to evaluate any change in the payment frequency or amount of ARC payments to parishes planting corn and soybeans to generic base acres.