Reference Prices for ARC/PLC Payments Need Updating


Reference prices that trigger PLC and ARC county payments to producers need updating. That’s according to the American Farm Bureau, and that will require a bigger farm bill funding baseline. Reference prices at $3.70 for corn, $8.40 for soybeans, and $5.50 for wheat are simply too low to benefit farmers, especially when soaring input costs squeeze margins.

General Farm Commodities Chair Austin Scott brought up reference prices at a recent House farm bill hearing; “Seems to me they weren’t set when diesel prices were as high as they are and fertilizer as high as it is. Could you speak to the need to increase the reference prices to reduce the risk to those that are actually out there planting the crops?”

American Farm Bureau President Zippy Duvall prefaced his answer by stressing AFB’s reluctance to ask for more money. Duvall; “We’re looked at as a very conservative organization. Our voting delegates in Puerto Rico at our annual convention this year debated heavily whether or not to ask y’all to broaden the baseline.”

But logic prevailed according to Duvall.

“And of course, they came down to say, yes it’s time to broaden the baseline, because those targets that we use and the commodity programs and the costs that we have to go to growing a crop are nowhere near what it was when those targets were set. And it needs to be modernized, and it needs to be a true safety net based on the cost of production today.”

Ag Democrats claim the same baseline can still accommodate a farm bill where 82 percent of funding goes to food stamps. Ag Republicans argue nutrition is squeezing farm program spending and the farm bill budget pie must get bigger.