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ARC/PLC Election Made by Current Producer Not Owner

Published on: 13:24PM Oct 03, 2014

The FSA just released on the Regulations on the implementation of ARC and PLC and I have not yet had time to read all of the regulations, but one of the more important features is the elections that need to be made by "current" owners and "current" producers. The assumption was that all owners and producers would have to agree in order to make the ARC/PLC election and we have posted several times in the past on how this could be cumbersome for producers with multiple owners under one FSN with the FSA.

Well, the final Regulations now indicate the "current" owners of the farm land will make the election to update base acres and payment yields. The "current" producers will make the election between ARC and PLC. Current owners who have a share of the crop are considered to be current producers, i.e. crop share landlord. This means that the ARC/PLC decision will only be made by the producer. If the land is under a cash rent arrangement, the landlord will not participate in this decision. If the land is under a crop share arrangement, then the tenant and the landlord will need to make a joint decision that is unanimous.

I tend to actually agree with these provisions. The base acres and yields are tied to the land and should be made by the owner. The decision on ARC/PLC should be made by the producer of the commodity including crop share landlords. Under old farm bills, these decisions were normally not made by cash rent landlords and they have extended the same "rules" to this farm bill.

As I read through all of the Regulations, I will update on any other changes.