Update Your "Farms" by Sepember 26

Published on: 14:17PM Sep 15, 2014

I previously wrote on this subject recently, but want to reinforce that you need to take action before September 26, 2014 in order to make sure you do not end up losing any PLC/ARC benefits for this year. The election for ARC or PLC is done on a farm-by-farm basis which includes the operator (the farmer) and all of the related landowners. The election must be unanimous and if one landlord will not agree with the farmer and all of the other landlords, the penalty is very steep.

You will lose any payment for the 2014 crop year and be locked into PLC for 2015 through 2018. Let's see how an example might work:

Farmer Jones farms 4,000 acres in Kansas. He has 17 landlords and his current farm structure is that all of these are reported under one FSN with the FSA. He originally did this to save on paperwork filing. For 2014, he and 16 of his landlords would like to elect ARC. Farmer Jones expects this election to max out his and his wife's payment limitation of $250,000 and since he crop shares with most of his landlords, the landlords are expecting a healthy payment. However, one of the landlords is extremely opposed to any governmental payment programs and will not sign off on any election. Therefore, if Farmer Jones does not reconfigure his FSNs with FSA, he will lose out on $250,000 of payments this year and his other landlords will lose their share also plus all being locked into PLC for 2015 and beyond. To solve this problem, Farmer Jones goes down to the local FSA office(s) and reconfigures each landlord into a new FSN. Farmer Jones will now have 17 (or more) FSNs which creates additional paperwork, however, it will allow him and his landlords to receive maximum payments in 2014 and elect into ARC for 2015-2018.

As you can see, if you do not act now, you can lose a lot of payments and be locked into an election for four years that is not your preference. If this situation applies to you, make sure to act now.