By Tim Kelleher
California rice growers are shaking their heads over the different payments in the two USDA/FSA revenue protection programs: PLC (Price Loss Coverage) and ARC (Agricultural Risk Coverage).
The 2024 payments have just been announced and range from $230/acre under ARC and $90/acre under PLC. The difference is the result of the time periods each program references to determine if payments are to be made and how much. ARC looks back five years and calculates the average yields and price, deleting the high and low of both, and then compares to the current price and yield to determine if revenue falls below the average. PLC looks only at the current year and compares the market price to the predetermined reference price to determine if the grower’s revenue is below that price.
Rice prices and yields were average in 2018, 2019, 2020, very good in 2021, and fantastic in 2022. The 2022 year is discarded but the 2021 year still brings the average up, producing a high benchmark revenue, higher than 2024 average price and yield, so a significant payment was generated.
The rice price in 2024 ($18.70) is compared only to the reference price, or $19.90. The PLC price is based on the October 2024 to September 2025 reported payments to growers with adjustments from all marketing organizations. The difference in times the grower’s PLC yield generates a much smaller payment than ARC.
Note: The same scenario applies to the 2025 crop, but fortunately, the OBBB provides that the grower will receive a payment based on whichever program generates the higher payment.
Looking forward to 2026, the 2021 crop year high price still holds the average up for ARC, but this must be compared to the higher PLC reference price of $24.33 before the grower chooses to enroll in either program.
For more information, contact Tim Kelleher at tim@ricelawyers.net or (530) 751-9730.
