USDA farm subsidies, PLC ARC farm payments, Dairy Margin Coverage USA, Marketing Assistance Loan 2025, CRP conservation program farmers
Farming in the United States comes with many risks — from price fluctuations to climate disasters. To protect and empower farmers, the U.S. government offers multiple financial subsidies and payment programs through the USDA’s Farm Service Agency (FSA) and Risk Management Agency (RMA).
Below are the top 5 programs, explained in full detail.
1️⃣ Price Loss Coverage (PLC)
What It Is:
Price Loss Coverage (PLC) is a commodity support program that provides payments to farmers when the market price for a covered crop falls below a reference price set by Congress.
How It Works:
Each crop has a fixed reference price (set every Farm Bill).
If the average market price for the crop during the marketing year is lower than the reference price, a payment is triggered.
Payment = (Reference Price − Market Price) × Payment Yield × Base Acres × 85%
Example:
Crop: Corn
Reference Price: $3.70/bushel
Market Price: $3.00/bushel
Payment: $0.70/bushel × base acres × yield
✅ Eligible Crops:
Corn, soybeans, wheat, barley, rice, peanuts, oats, grain sorghum, lentils, chickpeas, dry peas, and more.
Who Should Choose PLC?
Farmers who expect price risk more than yield loss.
Farmers in areas with high production certainty.
2️⃣ Agriculture Risk Coverage (ARC)
What It Is:
ARC is a revenue protection program that pays when actual revenue from a crop (price × yield) falls below benchmark revenue.
Two Program Options:
ARC-CO (County Option): Based on county-wide revenue averages.
ARC-IC (Individual Option): Based on your specific farm’s revenue history.
How It Works:
Benchmark revenue = 5-year Olympic average of yield × price
If actual crop revenue < 86% of benchmark revenue, a payment is made
Payment = Difference × 85% of base acres (ARC-CO) or 65% (ARC-IC)
Example (ARC-CO):
Benchmark revenue = $600/acre
Actual revenue = $450/acre
Payment = $150 × 85% = $127.50/acre
✅ Eligible Crops:
Same as PLC: Corn, soybeans, wheat, rice, peanuts, barley, oats, sorghum, etc.
Who Should Choose ARC?
Farmers in areas with unpredictable yields or prices.
Farmers with historical yield variation.
3️⃣ Dairy Margin Coverage (DMC)
What It Is:
DMC is a voluntary risk management program for dairy farmers that pays when the margin between the milk price and the feed cost falls below a selected coverage level.
How It Works:
Margin = All-milk price − Feed cost
If margin falls below selected level ($4.00 to $9.50 per cwt), a payment is triggered.
Premiums are based on amount covered and production level.
Example:
Milk price = $17.00/cwt
Feed cost = $10.00/cwt
Margin = $7.00
If you selected $8.50 coverage, you receive $1.50/cwt × covered production
✅ Features:
Available for up to 5 million pounds at lower premium rates.
Large producers can buy higher-tier coverage at market rates.
Why It Matters:
Dairy prices are highly volatile.
Feed costs can spike unpredictably.
4️⃣ Marketing Assistance Loans (MAL) & Loan Deficiency Payments (LDP)
What They Are:
Marketing Assistance Loans provide short-term, low-interest loans to farmers. Farmers use their harvested, eligible commodities as collateral.
Loan Deficiency Payments (LDP) are direct payments made when market prices are low without taking a loan.
How MAL Works:
Farmer stores the crop and uses it as collateral for a USDA loan.
This allows time to wait for better market prices instead of selling immediately.
How LDP Works:
Instead of a loan, farmer receives a payment equal to the difference between the loan rate and current market price.
Paid on harvested production.
✅ Eligible Commodities:
Corn, wheat, soybeans, rice, cotton, barley, oats, sorghum, peanuts, wool, honey, dry peas, lentils, chickpeas, etc.
Example:
Loan rate = $2.20/bushel
Market price = $2.00/bushel
LDP = $0.20/bushel × quantity
Why It Matters:
Provides cash flow during harvest season.
Helps avoid selling in low-price markets.
5️⃣ Conservation Reserve Program (CRP)
What It Is:
CRP pays farmers to remove environmentally sensitive land from agriculture and plant grasses, trees, or other conservation cover to improve the environment.
How It Works:
Contract length: 10 to 15 years
Land must meet eligibility criteria (erosion-prone, near water, etc.)
USDA pays annual rental payments + cost-share for establishment
✅ Benefits:
Reduces soil erosion
Improves water quality
Restores wildlife habitats
Stores carbon and helps fight climate change
Example:
Enroll 100 acres at $150/acre/year
Annual income = $15,000 + seed/planting assistance
Who Should Apply:
Farmers with marginal or hard-to-farm land
Retiring farmers or those wanting to shift to conservation
Conclusion
These 5 USDA programs — PLC, ARC, DMC, MAL/LDP, and CRP — form the foundation of America’s farm income safety net. Each program targets specific risks, from falling prices and bad weather to long-term sustainability.
Whether you’re a crop grower, livestock owner, or conservation-focused landholder, there’s a support system designed for you.
