The Agricultural Act of 2014 (also known as the 2014 U.S. Farm Bill), was passed in the United States House of Representatives on January 29, 2014, and the United States Senate on February 4, 2014 during the 113th United States Congress. U.S. President Barack Obama signed the bill into law on February 7, 2014. The bill provides for closer integration of farm subsidy and crop insurance policies for farmers and ranchers. The act repeals direct payments, counter-cyclical payments, and the ACRE program but CCP and ACRE programs extend through 2013 crop year. For the 2014 crop, producers must choose between the Agriculture Risk Coverage (ARC) program and Price Loss Coverage (PLC).

Agricultural Producers will have to make a few choices based on the new Farm Bill. First the producers will have to decide to reallocate or keep their current base acres to crops planted on the farm at any time during the 2009 to 2012 crop years. All Cotton base acres will now become known as generic base acres as of September 30, 2013. Secondly producers will have to enroll in either the Agriculture Risk Coverage (ARC) program or Price Loss Coverage (PLC).  The PLC program covers losses in income due to covered commodity price declines below the established reference prices. The ARC program covers losses in income for a covered commodity relative to a revenue guarantee. The ARC can be selected at the County (85%) or Individual (65%) level. ARC participants will not be allowed to participate in the Special Coverage Option (SCO). As a word of advice all producers should understand the provisions of each program before selecting an option.

Some other key provisions of the 2014 Farm bill include:

• A $125,000 per person payment limits for (ARC, PLC, LDPs and marketing loan gains) combined, and a $900,000 3 year average adjusted gross income (AGI) on commodity and conservation programs.
• A new area-wide insurance program (SCO) will be available to all producers to purchase beginning in 2015 that is designed to protect them against losses that would normally fall within their insurance deductible range.
• Upland cotton producers will no longer participate in commodity programs other than the marketing loan program. The primary government safety net for cotton producers will be a new cotton only insurance program referred to as stacked income protection plan (STAX). STAX will not be available until the 2015 crop year at the earliest so the bill provides cotton producers a transition payment for up to 2 years if needed that is similar to the direct payment in previous farm bills.
• The Dairy Price Support Program was cut from the 2014 Farm Bill. Provides historic reforms to dairy policy by repealing outdated and ineffective dairy programs. Offers producers a new, voluntary, margin protection program without imposing government-mandated supply controls
• The Bill reauthorizes and strengthens livestock disaster assistance.

For additional information or continuing updates please visit: the Texas A&M Agricultural Economics Department at: http://agecon.tamu.edu/ or the Agricultural Food Policy Center at: http://www.afpc.tamu.edu/ .