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Arkansas farmers have received $280 million in federal "safety net" payments for losses that occurred in 2017 because of low market prices, the fourth-highest payout in the nation.

The payments compare with $491 million for 2016 market losses, especially in rice; $366 million for 2015 market losses in rice, corn and soybeans; and $213 million in 2014, also for market losses primarily in rice, corn and soybeans.

Administered through two programs of the U.S. Department of Agriculture's Farm Service Agency, payments made each year are for the previous market year.

The safety-net programs are part of the 2014 farm bill passed by Congress. It replaced years of "direct" payments to farmers, regardless of market conditions or crop yields, and required farmers to select one of the two programs for each of their subsidy-eligible crops. A new farm bill, passed by Congress late last year to run through 2023, retained the two programs:

• The Price Loss Coverage program makes payments when market-year average prices are below certain reference prices determined by the USDA.

• The Agricultural Risk Coverage program creates payment rates for each county in the nation by comparing historical average crop yields and prices in the county with actual yields and prices in the county.

Of the $280 million paid out in Arkansas, all but about $20 million was through the Price Loss Coverage program.

Better prices for rice are the main reason for the drop in payments of $491 million to $280 million, said H. Scott Stiles, an agriculture economist with the University of Arkansas System's Agriculture Division but who is based at Arkansas State University.

Almost all of the rice acreage in Arkansas -- the nation's biggest rice producer, at more than 1 million acres a year -- is enrolled in the Price Loss Coverage program, Stiles noted.

When the rice market dropped in 2016, with big yields on high acreage, farmers ultimately got $1.83 per bushel in Price Loss Coverage payments, Stiles said. When the market for rice rebounded somewhat the next year, in part because of tighter supplies and reduced acreage, they received $1.05 per bushel in Price Loss Coverage payments.

"That difference of 78 cents a bushel is driving the reduction in the [Price Loss Coverage] program payments," Stiles said. "We've been in a pattern of being strong one year and being down the next, so that's why you see the wild swings in Arkansas."

Nationally, the programs paid out a combined $3 billion for the 2017 market year, compared with $7 billion for 2016, $7.8 billion for 2015, and $5.2 billion for 2014, according to the USDA. The reduction generally reflects an increase in commodity prices, following five consecutive years in which average farm income declined, according to USDA figures.

The Price Loss Coverage and Agricultural Risk Coverage payments for long- and medium-grain rice dropped from about $815 million for the 2016 market year to $486 million.

Other crops in Arkansas eligible for the subsidies are soybeans, wheat, corn, oats, sorghum, barley and peanuts. Farmers in 69 of the state's 75 counties received payments. Cotton is covered under a separate program.

The safety-net programs for market losses don't include what farmers can receive for damage caused by floods, drought and other disasters.

They also are separate from payments this winter to farmers who saw prices for their commodities drop -- especially for soybeans -- because of President Donald Trump's trade war with China. Those numbers aren't yet available, in part because the 35-day partial shutdown of the federal government interrupted farmers' ability to file their applications for the tariff-relief package and delayed those payments.

"It's not as strong a safety net as we need, for circumstances that are beyond our control, like we saw all of last year," Randy Veach, a Mississippi County farmer and president of Arkansas Farm Bureau, said in projecting higher safety-net payouts for 2018 crops. He noted that average farm income has dropped by 50 percent since 2013.

"Weather in 2018 was just horrible, with some extreme heat early and then, especially late, when we couldn't get out into the fields for harvest," Veach said. "Soybeans damaged in the field by too much rain led to big discounts at the grain elevators. We had the intervention of our government into the market -- and I'm not saying that as a bad thing, because it might work out in the end -- but it did cause our market for soybeans and other crops to drop."

The safety-net payments don't make a farmer whole and are important to the nation, Veach said.

"The ag industry is part of national security," he said. "Without a doubt, we produce more food, fiber and shelter than any nation on Earth. We feed, clothe and shelter not just our nation but other nations around the globe. Agriculture is directly responsible for one in six jobs in Arkansas, and it's important that our government, through taxpayers, help support farmers."

About 30,500 payments were made in Arkansas through the two programs for the 2017 market year, compared with 36,450 for 2016. How many payments a farmer receives depends on the number of eligible crops enrolled in the program.

Farmers under the old farm bill had to choose between the two programs for the five-year duration of the law. The new law gives them a little more flexibility. They'll have to decide between Agricultural Risk Coverage and Price Loss Coverage for 2019 and 2020 crops. For 2021 crops and after, they'll make an annual selection.

The new farm bill also makes specialty crops, such as fruits and vegetables, eligible for Price Loss Coverage or Agricultural Risk Coverage coverage.

Arkansas crop safety-net payments information and map

SundayMonday Business on 03/10/2019

Print Headline: State farmers collect $280M for 2017 losses

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Comments

  • mrcharles
    March 10, 2019 at 11:13 a.m.

    Free market capitalism.

    Like free will.

    Words written on the subway walls.

  • Foghorn
    March 10, 2019 at 1:59 p.m.

    Why do we continue paying farmers to raise too much of certain crops, thereby driving their prices, leading to year after year of more farm welfare? It’s lunacy. It’s welfare, pure and simple; why is it called a safety net? Why aren’t people more outraged over this? Because farmers are largely white?

  • NoUserName
    March 10, 2019 at 2:12 p.m.

    "Because farmers are largely white?"
    .
    I don't think my eyes can roll enough for this comment.

  • GeneralMac
    March 10, 2019 at 2:46 p.m.

    This money is a tiny percentage of Farm Bill expenditures.

    The ..LARGEST BY FAR....expenditure is for food stamps.

    FOGHORN calls this "welfare" for farmers.

    If so, ALL welfare spending should have the recipients NAME, ADDRESS, AND AMOUNT $$$$$$$$$$ made public.

    Farmers receiving subsidies are public record.
    Make food stamp resipents public record , also.

  • Foghorn
    March 10, 2019 at 2:56 p.m.

    Continuing to grow crops of which there are already excess stores drives down prices. Continuing this practice AND paying farmers to make up for the low prices THEY THEMSELVES CREATED is insanity - and WELFARE.

  • SeanJohn
    March 10, 2019 at 3:14 p.m.

    NON, agreed. This story has nothing to do with race.

  • wolfman
    March 10, 2019 at 6:06 p.m.

    so we are bailing out the farmers because of trumps trade war with china. if you are going to bail out the farmers, bail out every other industry that is struggling because of the trade war. fair is fair.

  • mrcharles
    March 10, 2019 at 7:35 p.m.

    Sean, guess you dont know farmers are mainly white and vited for trump and are of a kind that point fingers at others for taking from the government. But as always cons make the yeah but. If it was a group mainly black the pharisees here would point that out.
    As to rolling eyes. Better spend time thinking instead of rolling eyes.
    Average farm family makes more than average non farm.
    Fog is correct, many are hurt by these right wing's candidate, but is it wrong to help those who might not be supporters of DT?
    where is the total free market capitalism for these white farmers who , OMG, vote gop?
    The yeah but of the right gets a little tiresome with their hypocracy and excuses.

  • PopMom
    March 10, 2019 at 7:51 p.m.

    Light sentences for white collar criminals such as Paul Manafort have everything to do with race. Many colleges' deference to alums--especially those who give large sums of money also favors whites. In this case, the cash payments to farmers were political to make up for Trump screwing up when trying to negotiate tariffs. As Arkansas and other rural states are mostly Republican, the Republicans favored bailing these people out. The cleaning people who were hurt by the government shutdown received no such bailout.

  • NoUserName
    March 10, 2019 at 8:26 p.m.

    Pop - "Light sentences for white collar criminals such as Paul Manafort have everything to do with race. "
    .
    On what basis do you make that statement? And how to you normalize for affluence?

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