The days of direct payments are over and so is some of the predictability about whether an individual grower will receive payments. That’s likely to cause some consternation, especially when growers of one crop in one county receive payments while growers in a neighboring county do not. USDA started issuing checks totaling about $3.9 billion last week.
How does that happen? It’s basically a function of how the new Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) were structured in the 2014 farm bill to provide assistance during periods of market downturns. In addition, the $125,000 payment limitation and adjusted gross income (AGI) test can further temper payments. Read the rest of the story here.