The Agricultural Act of 2014 provides payments for covered commodities enrolled in Price Loss Coverage (PLC) when the marketing year average price is below the reference price. The table below provides the 2018/19 marketing year average prices and PLC payment rates for long and medium grain rice and seed cotton.
For comparison, previous year PLC payment rates for rice under the 2014 Farm Bill are provided in the graph below.
The payment rates shown in the table and graph do not take into account sequestration. The sequestration rates for 2018 ARC and PLC payments is 6.6%. Thus, the net payment rate received for long-grain rice for example, would be 3 cents per pound (.032 – 6.6% = .03).
PLC payments are “decoupled”—that is, payments are made on a portion of a crop’s historical “base” acres rather than actual production. A producer does not have to plant a covered commodity to be eligible for payments. If PLC program payments are triggered, then they are made on 85% of the producer’s base acres that were signed up for that covered commodity irrespective of plantings.
The 2014 Farm Bill set a $125,000 per person cap on the total of PLC, ARC, marketing loan gains and loan deficiency payments. The limit applies to the total from all covered commodities except peanuts, which has a separate $125,000 limit (payments limits are doubled with a spouse).