Source: FARM DOC DAILY, UNIV. OF ILLINOIS, 3/24/17

Limits on payments by farm commodity programs have been a contentious issue in recent farm bills. Several types of limits now exist, including a 10% cap on the payment per base acre by ARC (Agriculture Risk Coverage). This 10% cap results from a payment band that is 76% to 86% of ARC's per acre revenue benchmark. The top end (86%) is ARC's coverage level. The bottom end (76%) is the lowest per acre revenue level for which ARC assistance is available. Per acre revenue losses greater than 24% of ARC's revenue benchmark receive no assistance payment. This 10% per acre payment cap substantially reduced ARC payments for the 2014 and 2015 crops. Moreover, payments by PLC (Price Loss Coverage) would have been 40% smaller if the 10% per acre payment cap had been extended to PLC in the 2014 farm bill. These budgetary impacts suggest per acre payment caps could be a topic of discussion in the next farm bill. 

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