Farm Bill Acronyms
The recently passed Farm Bill has several new parts with acronyms unfamiliar to the insurance industry and farmers.
For example, PLC is Price Loss Coverage and is one of the options farmers must choose in the next several months. It is free to the farmer and administered by FSA.
The other option includes one of the ARC (Ag Risk Coverage) options—ARC at the county level or ARC at the individual level. Both ARCs are free to the farmer and administered by FSA. A guaranteed revenue product using the 5-year national Olympic average market price and most recent 5-year county yield.
The ARC-County plan and PLC allows the farmer to enroll on a crop-by-crop basis; however, the ARC-Individual plan requires ALL crops to be combined into a whole farm revenue plan. The PLC uses set Reference Prices minus a national average market price for a payment rate per bushel or hundredweight. The PLC and ARCs are 5-year plans—the farmer makes a choice and lives with it for five years. The PLC and ARC programs won’t pay claims until October the year after the harvest.
The SCO (Supplement Coverage Option) is a county-level crop insurance policy/plan purchased from an agent /AIP. It will not be available until the 2015 crop year, has a premium and is only available to farmers who enrolled in the Price Loss Coverage (PLC) plan. It is NOT available to ARC plans. The SCO is a shallow-loss supplemental coverage requiring a mandatory underlying crop or CAT policy.