While enrollment for 2021 farm programs has been open since Oct. 13, questions of which option to select — Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC) — are lacking solid answers in the minds of many Michigan producers.
A Michigan State University webinar series, sponsored by Farm Bureau Crop Insurance of Michigan, hopes to provide answers and clarity to which option works the best on a farm-by-farm basis, according to MSU Farm Business Management Educators Roger Betz and Jon LaPorte.
“Although commodity prices have shown remarkable improvement over the last three months, safety-net programs like ARC and PLC, combined with crop insurance tools, including the new Enhanced Coverage Option, can help producers mitigate financial risk,” Betz said.
While the PLC/ARC programs have not fundamentally changed, Betz said the enrollment decisions do impact the two newer RMA crop insurance options available to producers. ECO joins Supplemental Coverage Option as a crop insurance tool to manage revenue risk.
“If a farm signs up for ARC, they’re not eligible for SCO. The new ECO crop insurance option, however, is available with either ARC or PLC enrollment,” Betz added. “Since the FSA farm program choices are directly tied to crop insurance decisions, we need to discuss the programs together to help producers understand the potential impact of these varying combinations in farm program choices.”
According to LaPorte, the “2021 Farm Bill Program & Crop Insurance Decisions – What Fits Your Farm?” webinar series will provide producers with a step-by-step demonstration of an online, Excel-based decision tool developed by MSU that will allow producers to enter their operation’s CCC yields and FSA base acres to identify the best combination of enrollment options for their farm.
“There’s not one single cookie-cutter answer to which farm program option is the best fit for your farm,” LaPorte said. “Producers can elect coverage and enroll in crop-by-crop ARC-County or PLC, or ARC-Individual for the entire farm, for the 2021 crop year.”
Although election changes for 2021 are optional, enrollment (and a signed contract) is required for each year of the program. If a producer has a multi-year contract on the farm and makes an election change for 2021, it will be necessary to sign a new contract.
Enrollment for the 2021 crop year closes March 15, 2021. If an election is not submitted by the deadline of March 15, 2021, the election defaults to the current election for crops on the farm from the prior crop year.
The webinar series will also provide a crop insurance update, including the availability of a new crop insurance product — Enhanced Coverage Option — being offered by USDA’s Risk Management Agency for the first time in 2021.
The additional ECO coverage is available alongside an underlying crop insurance policy and will pay for losses on a county-by-county basis. An indemnity would be triggered when there is an area-level loss in yield or revenue, according to Kevin Robson, agribusiness and crop manager for Farm Bureau Insurance.
“ECO is a new crop insurance option that provides additional area-based coverage for a portion of your underlying crop insurance policy deductible,” Robson said. “The underlying policy pays a loss on an individual basis, and an indemnity is triggered when you have an individual loss in yield or revenue. ECO, on the other hand, pays a loss on an area basis, and an indemnity is triggered when there is a decrease in the county level yield or revenue.”
According to Robson, ECO coverage is unaffected by participation in Agriculture Risk Coverage for the same crop on the same acres, meaning producers may elect ECO regardless of their farm program enrollment election.
The “2021 Farm Bill Program & Crop Insurance Decisions – What Fits Your Farm?” webinar series are regionally based to allow for producer questions and answers on the following schedule:
Each session is scheduled to begin at 5 p.m. and is expected to be concluded by 6:30 p.m. All sessions will be conducted through Zoom Meetings. Although participation is free, producers are asked to register at https://events.anr.msu.edu/farmbill2021/.
Once producers are registered, they will receive a confirmation message at the end of the registration process with all the necessary Zoom Meeting information including a Meeting ID number and Passcode.
For additional information and/or assistance in getting registered, contact one of the Farm Bureau Crop Insurance specialists.