This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

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Rules and Regulations Federal Register

57703 

Vol. 79, No. 187 

Friday, September 26, 2014 

DEPARTMENT OF AGRICULTURE 

Farm Service Agency 

7 CFR Part 718 

Commodity Credit Corporation 

7 CFR Parts 1412 and 1416 

RIN 0560–AI24 

Agriculture Risk Coverage and Price 

Loss Coverage Programs 

AGENCY: Commodity Credit Corporation 

and Farm Service Agency, USDA. 

ACTION: Final rule. 

SUMMARY: This rule implements the new 

Agriculture Risk Coverage (ARC) and 

Price Loss Coverage (PLC) Programs 

authorized by the Agricultural Act of 

2014 (the 2014 Farm Bill). It also 

includes conforming changes to certain 

Farm Service Agency (FSA) regulations 

that apply to multiple programs. ARC 

and PLC provide producers a choice 

between a program that provides 

counter-cyclical type of payment 

support—PLC, and a revenue support 

type of program—ARC. During a defined 

election period, current producers can 

elect different programs for different 

covered commodities on a farm, for 

example, choosing PLC for corn and 

ARC county option for soybeans on the 

same farm. ARC offers the additional 

choice of a revenue guarantee based on 

average revenue for a county or on 

actual historical revenue for an 

individual farm. If a producer elects 

ARC individual coverage based on 

historical revenue for that specific farm, 

however, all the farm’s covered 

commodities are elected with that 

option, with no option for PLC on that 

farm. This rule specifies the eligibility 

requirements, enrollment procedures, 

and payment calculations for ARC and 

PLC. 

DATES: Effective date: September 26, 

2014. 

First annual enrollment date: By June 

1, 2015, for the 2014 and 2015 crop 

years. 

FOR FURTHER INFORMATION CONTACT: 

Brent Orr; telephone: (202) 720–7641. 

Persons with disabilities who require 

alternative means for communication 

should contact the USDA Target Center 

at (202) 720–2600. 

SUPPLEMENTARY INFORMATION: 

Background 

The 2014 Farm Bill (Pub. L. 113–79) 

authorizes the new ARC and PLC 

Programs. ARC and PLC are Commodity 

Credit Corporation (CCC) programs 

operated for CCC by FSA. This rule 

discusses: 

• The basic structure for all payments 

to farms and producers under the ARC 

and PLC Programs; 

• The one-time opportunity owners 

will have to reallocate base acres; 

• The one-time opportunity for 

owners to update yields; 

• The one-time irrevocable program 

election that is required from all 

producers on a farm for the 2014 

through 2018 crop years; and 

• The opportunity for producers to 

annually enroll farms in ARC and PLC 

each year from 2014 through 2018. 

As specified in the 2014 Farm Bill, 

the following are covered commodities 

under ARC and PLC: wheat, oats, and 

barley (including wheat, oats, and 

barley used for haying and grazing); 

corn; grain sorghum; long grain rice; 

medium grain rice; pulse crops; 

soybeans; other oilseeds; and peanuts. 

This is the same list of commodities that 

were previously eligible for Average 

Crop Revenue Election (ACRE) Program 

and the counter-cyclical payments 

portion of the previous Direct and 

Counter-cyclical Payment Program 

(commonly known as DCP), which were 

repealed by the 2014 Farm Bill, except 

that cotton is not a covered commodity. 

In separate rulemaking implementing 

the Cotton Transition Assistance 

Payment (CTAP) Program, published on 

August 8, 2014 (79 FR 46335–46348), 

FSA previously explained that what 

were upland cotton base acres under the 

2008 Farm Bill are now ‘‘generic base 

acres’’ under ARC and PLC. Provisions 

for generic base acres are described in 

detail later in this document. In that 

separate rulemaking, FSA also 

implemented some of the general 

provisions applicable to ARC and PLC 

(such as the requirement to report all 

cropland acres on a farm, and planting 

flexibility provisions), so those 

provisions are already in the regulation 

in 7 CFR part 1412. 

The rule specifies what farms are 

eligible for ARC and PLC, what 

producers are eligible, actions that 

owners and producers must perform to 

be eligible for payments, election 

periods, and enrollment periods. 

Enrollment for both the 2014 and 2015 

crop year will take place by June 1, 

2015. That means that producers will 

have planted and harvested their 2014 

crops before: 

(1) Farm owners update their farm’s 

planting history and yields; 

(2) Farm owners reallocate base acres; 

(3) Producers make election; and 

(4) Producers make annual enrollment 

decisions. 

Producers will know their 2014 

planted acres and actual yields before 

they decide whether to elect and 

subsequently enroll for ARC or PLC. 

Several universities have partnered with 

USDA to provide web-based decision 

tools and calculators to help producers 

evaluate the available options under 

these programs for their farm, and these 

tools and calculators will be available in 

time for election decisions. 

Any payments under ARC or PLC for 

the 2014 crop year will not be issued 

until late 2015 because, as specified in 

the 2014 Farm Bill, payments cannot be 

made until after October 1, 2015. 

Overview of ARC and PLC 

Both the 2014 Farm Bill and the Food, 

Conservation, and Energy Act of 2008 

(Pub. L. 110–246, referred to as the 2008 

Farm Bill) included a choice between 

two types of commodity programs. Both 

the 2008 and 2014 Farm Bills give 

producers a choice between a revenue 

program whose revenue target can move 

up and down with the market and a 

price program whose target price is 

fixed for the duration of the respective 

Farm Bill. In nearly all cases, eligible 

producers for ARC and PLC would also 

have been eligible for DCP and ACRE, 

the previous programs authorized by the 

2008 Farm Bill that were repealed by 

the 2014 Farm Bill. 

ARC and ACRE both establish 

revenue targets, not price targets. The 

guarantee for ARC elected with county 

option (ARC–CO) is based on average 


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yields and U.S. crop market year 

average (MYA) prices as was the 

guarantee revenue target for ACRE. A 5- 

year Olympic average is used for yields 

(removing high and low) of the past 5 

years under both ARC–CO and ACRE. 

ARC–CO uses a 5-year Olympic average 

(removing high and low) for price while 

ACRE used a 2-year average. This means 

that under ARC–CO as with ACRE, the 

guarantee moves with the market 

(increasing when market revenue is 

increasing and decreasing when market 

revenue is decreasing). 

The guarantee for ARC elected with 

individual farm coverage option (ARC– 

IC) is based on average revenues at the 

farm level. The guarantee for ARC–IC is 

the farm’s individual benchmark 

revenue based on the 5-year average of 

the annual benchmark revenues 

excluding the years with the highest and 

lowest annual revenues then averaging 

against all crops on the farm. 

(Benchmark revenue calculations are 

described in more detail later in this 

document.) Under ACRE, producers 

who elected ACRE agreed to a reduction 

in direct payments on the farm. The 

2014 Farm Bill contains no direct 

payments. 

Under the 2008 Farm Bill, the yield 

for the State was used to determine the 

ACRE guarantee. Under the 2014 Farm 

Bill, the yield for the county is used for 

ARC–CO. ARC is likely to provide better 

protection against low yield than ACRE 

did because producer yields are likely to 

be better represented by yields in their 

farm’s county than in their State, 

because of similar growing conditions in 

the smaller geographic area of a county. 

Under ACRE, producers agreed to a 

reduction in a crop’s loan rate for 

marketing assistance loans (MALs) and 

loan deficiency payments (LDPs); no 

similar loan rate reduction applies to 

producers on farms that elect ARC (loan 

rates for commodities are the same 

regardless of election). 

PLC prices are set in the 2014 Farm 

Bill for the duration of the 2014 Farm 

Bill, as was the case with DCP with 

respect to the 2008 Farm Bill. For PLC, 

these are called reference prices. PLC 

makes payments based on historical 

base acres, although the base acres of 

covered commodities under the 2014 

Farm Bill may differ from those under 

the 2008 Farm Bill based on the option 

owners have to reallocate base acres of 

covered commodities, upland cotton not 

being a covered commodity, and the use 

of generic base acres. (Base acre 

reallocation is described in more detail 

later in this document.) Under ARC and 

PLC, generic base acres planted to a 

covered commodity will be recognized 

as base acres of the planted covered 

commodity in certain instances (without 

regard to the base acres of that covered 

commodity that may be on the farm). In 

other words, when there are generic 

base acres on a farm and covered 

commodities are planted or there are 

eligible subsequently planted crop 

acreage, the acres planted to the covered 

commodity or eligible subsequently 

planted crop acreage that are attributed 

to the generic base acres become base 

acres of the covered commodity for the 

purposes of ARC and PLC, thereby 

increasing the base acres of that covered 

commodity on the farm (by virtue of 

planting covered commodities, or 

eligible subsequently planted crop 

acreage on generic base acres) only in 

the year of planting. As specified in 

§ 1412.45, generic base acres on a farm 

will be attributed to a covered 

commodity as follows: 

1. If a single covered commodity is planted 

or is eligible subsequently planted crop 

acreage and the total planted or eligible 

subsequently planted crop acreage exceeds 

the generic base acres on the farm, the 

generic base acres are attributed to that 

covered commodity in an amount equal to 

the total number of generic base acres on the 

farm. 

2. If multiple covered commodities are 

planted or are eligible subsequently planted 

crop acreage and the total number of acres 

planted or eligible subsequently planted crop 

acreage to all covered commodities on the 

farm exceeds the generic base acres on the 

farm, the generic base acres will be attributed 

to each of the covered commodities on the 

farm on a pro rata basis to reflect the ratio 

of: 

• The planted and eligible subsequently 

planted crop acreage to a covered commodity 

on the farm; to 

• The total planted and eligible 

subsequently planted crop acreage to all 

covered commodities on the farm. 

3. If the total number of planted and 

eligible subsequently planted crop acreage to 

all covered commodities on the farm does not 

exceed the generic base acres on the farm, the 

number of planted and eligible subsequently 

planted crop acreage to a covered commodity 

is attributed to that covered commodity. 

In the 2014 Farm Bill, there is the 

one-time program irrevocable election 

between the ARC and PLC Programs 

that must be made by all current 

producers on a farm (current owners 

who have a share of crops on the farm 

are included as current producers). In 

contrast, under the 2008 Farm Bill, once 

a farm’s producers and owners elected 

ACRE, the decision was irrevocable 

from the year of election through the 

2012 crop year and an election for only 

the 2013 crop year was required for the 

1-year extension of the 2008 Farm Bill. 

If ACRE was not elected in a crop year, 

the producers and owners on the farm 

could elect ACRE in the next crop year. 

Under the 2014 Farm Bill, all current 

producers on a farm are required to 

affirmatively and unanimously elect 

PLC or ARC during the single election 

period, and, if an election is not made, 

the farm will be ineligible for payments 

in the 2014 crop year and default to PLC 

for the 2015 through 2018 crop years. 

This provision is specified in the 2014 

Farm Bill and neither FSA nor CCC has 

any discretion to specify a different 

policy for farms that do not have a valid 

election made during the election 

period. Farms with producers who do 

not make a valid election in the election 

period announced in this rule will not 

be eligible for 2014 crop year payments. 

Under the 2008 Farm Bill, producers 

were ineligible for payments under the 

DCP and ACRE if the sum of base acres 

of covered commodities and peanuts on 

a farm was 10 acres or less. The 10-acre 

limitation did not apply to producers on 

a farm that was at least 50 percent 

owned by a socially disadvantaged 

farmer or rancher or a limited resource 

farmer or rancher. The 2014 Farm Bill 

likewise has a 10-acre limitation; 

however, producer payment eligibility 

on a farm having 10 or less base acres 

(including generic base acres) is no 

longer contingent upon the ownership 

of the farm. Rather, it depends solely on 

the number of base acres. A producer is 

not eligible for ARC or PLC payments on 

a farm having a sum total of 10 or less 

base acres; however, if that producer is 

a socially disadvantaged farmer or 

rancher or a limited resource farmer or 

rancher, such limitation does not apply. 

ARC and PLC Decisions Must Be Made 

by Current Owners and Current 

Producers 

This rule includes specific actions 

that must be made by owners and 

producers. The timing of enactment of 

the 2014 Farm Bill and publication of 

this regulation require FSA to 

distinguish ‘‘current owners’’ and 

‘‘current producers’’ under this rule 

from ‘‘owners’’ and ‘‘producers’’ as 

defined in 7 CFR part 718. Many of the 

actions required under ARC and PLC 

(updating of planted and considered 

planted (P&CP) acres, reallocation of 

base acres, and yield updates) can only 

be made by the farm’s current owners as 

of the date of those actions. As is 

discussed in greater detail below, 

current producers will be required to 

unanimously elect ARC or PLC during 

the specified election period and such 

election is irrevocable. That election 

period will be announced in a press 

release. The terms ‘‘current owner’’ and 

‘‘current producer’’ are defined in this 

rule to mean the person or legal entity 

who is the owner or producer, as 


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applicable, on the date the action, 

which is required by this rule, is 

actually made (during a prescribed 

period). Defining these terms is a 

clarification necessary to determine who 

is included as the relevant owner or 

producer eligible for the actions 

required under the ARC and PLC 

Programs. 

Following the election period, 

enrollment will occur. Producers who 

were producers in 2014 (2014 producers 

on the farm) are eligible for 2014 

enrollment; 2015 and subsequent crop 

year producers on a farm are eligible for 

2015 and subsequent crop year 

enrollment. The core principle is that if 

the producers change from year to year, 

the producers who were on the farm in 

a given year are the ones who make the 

enrollment for that year, even if they are 

different from last year, and different 

from the ones who made the election. 

Base Acres 

Base acres are a key part of the 

payment formulas for CTAP, ARC, and 

PLC. Section 1111 of the 2014 Farm Bill 

specifies that the base acres in effect 

under sections 1001 and 1301 of the 

2008 Farm Bill (7 U.S.C. 8702 and 

8751), as adjusted, as of September 30, 

2013, and used for DCP and ACRE 

constitute the base acres for CTAP, ARC, 

and PLC, subject to any reallocation, 

adjustment, or reduction as specified in 

Section 1112 of the 2014 Farm Bill. The 

2014 Farm Bill requires adjustments to 

base acres for various reasons including, 

but not limited to, land no longer being 

devoted to agricultural uses. The term 

base acres includes generic base acres, 

which are the same as upland cotton 

base acres (upland cotton base acres are 

used only for CTAP; generic base acres 

are used in ARC and PLC). 

As is discussed in more detail later in 

this document, ARC has two options, a 

county option—ARC–CO, and an 

individual farm option—ARC–IC. Base 

acres are key to payment eligibility for 

both programs. For ARC–CO, the 

benchmark revenue is based on average 

revenues at the county level for covered 

commodities; for ARC–IC, the guarantee 

is based on the average revenue for that 

specific farm. For ARC–CO, the 

‘‘payment acres’’ used to calculate 

payments are equal to 85 percent of the 

base acres for a covered commodity; for 

ARC–IC, ‘‘the payment acres’’ used to 

calculate payments are equal to 65 

percent of base acres on the farm. The 

farm’s current producers can elect either 

ARC–CO or PLC on a covered 

commodity by covered commodity 

basis. In other words, they do not have 

to elect ARC–CO or PLC for all of the 

covered commodities; they can elect 

ARC–CO for some covered commodities 

and PLC for others. If the farm’s current 

producers elect ARC–IC, however, the 

election applies to all the covered 

commodities on the farm. 

ARC and PLC Programs Election 

During the election period that will be 

announced in a press release, all of the 

current producers on a farm must make 

an irrevocable, one-time, unanimous 

election of either of the two following 

options: 

• ARC–CO or PLC on a covered 

commodity-by-covered commodity basis 

(the election for each covered 

commodity on the farm can be for ARC– 

CO or PLC); or 

• ARC–IC for all covered 

commodities on a farm. 

The election made, if valid as 

prescribed in this rule, will apply to the 

farm for the 2014 through 2018 crop 

years. There are consequences of not 

making a unanimous or timely election. 

In the absence of a valid election on the 

farm, producers will be deemed to have 

elected PLC for all covered commodities 

on the farm for the 2015 through 2018 

crop years and are not eligible for any 

2014 crop year payment. 

There are several factors that affect 

payments and therefore, the decision 

whether to elect ARC, PLC, or both. 

ARC and PLC are intended to 

supplement, not replace, regular crop 

insurance, so ARC payments are capped 

at 10 percent of the benchmark revenue. 

The PLC calculation does not include 

current yields, so if market year prices 

are above the reference price but current 

yields are low, no PLC payment would 

trigger. Both programs are subject to a 

$125,000 annual payment limit. That 

means that the total payments received, 

directly or indirectly by a person or 

legal entity (except for a joint venture or 

general partnership) for any crop year 

for ARC, PLC, LDPs, and marketing loan 

gains combined for all commodities 

except peanuts cannot exceed $125,000. 

Peanuts have a separate $125,000 

payment limit for payments received 

from those same programs. Producers 

who enroll in PLC also have the option 

of purchasing Supplemental Coverage 

Option (SCO) through the USDA Risk 

Management Agency (RMA). Producers 

of covered commodities on farms that 

have elected and enrolled under ARC 

are ineligible for SCO on all ARC 

commodities. A separate regulation for 

SCO was published on July 1, 2014 (79 

FR 37155–37166). 

Base Acre Reallocation and 

Opportunity To Update Records 

Current owners of farms will have a 

one-time opportunity to either retain the 

farm’s 2013 base acres or reallocate base 

acres (except for cotton base acres, 

which, as discussed in the next section, 

become generic base acres for the 

purposes of ARC and PLC and cannot be 

reallocated) to reflect actual planting 

history for 2009 through 2012. Partial 

reallocations are not allowed; the only 

choice for reallocation is to reallocate 

the base acres on the farm to reflect 

actual planted and considered planted 

(P&CP) or subsequently planted crop 

acreage history for 2009–2012. The 

reallocation cannot increase the total 

number of base acres on the farm. A 

current owner can only reallocate base 

acres based on the actual P&CP or 

subsequently planted crop acreage 

history for 2009 through 2012; the 

owner cannot reallocate base acres to 

covered commodities that were not 

P&CP or subsequently planted crop 

acreage to a covered commodity on the 

farm in those years, or in proportions 

other than those reflected in the actual 

history. For example, if a farm has 100 

percent corn base acres, but it planted 

50 percent corn and 50 percent 

soybeans, on average, in 2009 through 

2012, it can keep all corn base acres for 

ARC and PLC, or choose a 50 percent 

corn and 50 percent soybean 

reallocation, but it cannot reallocate to 

other covered commodities or other 

percentage allocations. 

As required by the 2014 Farm Bill, 

FSA will provide current owners of 

farms with base acres a one-time 

opportunity to update planting records, 

including records of yields. Previously, 

base acres for DCP and ACRE eligibility 

were based on historical plantings that 

dated back several decades in most 

cases. Actual P&CP and subsequently 

planted crop acreage in 2009 through 

2012 may differ greatly from the history 

that was the basis for establishment of 

the base acres. In advance of this 

reallocation opportunity provided for 

ARC and PLC, FSA will provide the 

farm operator and farm owners of record 

with a summary of the history of all 

covered commodities for their farm 

during the 2009 through 2012 crop years 

(as reported to FSA on acreage reports 

in each of those years). Acreage not 

reported to FSA will not be included in 

the summary. Although farm operators 

are not eligible to reallocate base acres 

or update yields unless they are also the 

owner, FSA will send a copy of this 

information to the farm operator who 

may assist the current owner with 

analyzing this information. Current 

owners will be provided an opportunity 

to update the records, provided that 

there are crop insurance records or other 

verifiable documentation available to 


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support the updates. Updating the 

records to provide accurate information 

on P&CP acreage for covered 

commodities is independent of the 

decision whether or not to reallocate— 

a farm may decide to update the 

records, but then not reallocate. 

Owners that update records should be 

aware that updating 2009 through 2012 

records could adversely impact 

previously earned payments from other 

FSA or CCC programs that were 

conducted in those years based on those 

records (before any update). If a farm 

record is updated to reflect a new crop 

other than the one already recorded, any 

prior year program benefit under a 

variety of programs that may have been 

conducted in that year may be 

impacted. If, for example, a farm has 

recorded soybeans as an initial crop in 

2010 and the farm owner updates the 

record to show that corn was the initial 

planted crop instead of soybeans, then 

if an amendment is made to change the 

previously recorded acreage of soybeans 

to corn, that change could impact 

benefits in 2010. 

In the event that an update to a farm’s 

records for 2009 through 2012 causes 

any payment under another FSA or CCC 

program to become unearned, the 

overpayment must be refunded to FSA 

or CCC in accordance with the rules for 

that program and FSA or CCC’s rules 

governing the overpayment (7 CFR parts 

718 and 1403). That would include 

payments to producers who may not be 

current owners, payments that were 

issued to either current or previous 

owners who were producers at the time 

those payments were made, as well as 

other current producers and previous 

producers. 

Persons responsible for refunding any 

unearned payments will be determined 

using the rules for the program under 

which the overpayment was issued as 

well as either FSA or CCC’s debt 

settlement rules (7 CFR parts 792 or 

1403). Current owners are under no 

obligation to update records, but if they 

wish to do so, they must to do so before 

reallocating base acres because record 

updates cannot be made after 

reallocation. 

Once records have been updated, the 

owner(s) will have the opportunity to 

reallocate the farm’s base acres based on 

a proration of each covered 

commodity’s P&CP acres in crop years 

2009 through 2012 to the total P&CP 

acres of all covered commodities during 

that time. As discussed above, the 

reallocation of the farm’s base acres will 

be based on a proration of each covered 

commodity’s P&CP or subsequently 

planted crop acreage in crop years 2009 

through 2012 to the total P&CP acres 

and subsequently planted crop acreage 

of all covered commodities on the farm 

during that time. The table provides an 

example of base acre reallocation for a 

farm with 500 acres of cropland and 

shows the relevant information required 

to see how an owner decided to 

reallocate the farm’s base acres. 

BASE ACRE REALLOCATION EXAMPLE TABLE

Crop 2013 Base 

acres 

2009 

P&CP1 2010 P&CP 2011 P&CP 2012 P&CP 

Average 

P&CP 2009 

through 

2012 

Reallocation 

percentage 

2014 Base 

acre 

reallocation 

Wheat ....................... 200 150 150 150 200 162.5 41.94 167.76 

Barley ....................... 0 50 50 50 50 50 12.9 51.60 

Dry Peas .................. 100 200 150 200 150 175 45.16 180.64 

Canola ...................... 100 0 0 0 0 0 0 0 

Subtotal ............. 400 400 350 400 400 387.5 100 400.00 

Upland Cotton .......... 100 100 50 100 150 N/A N/A 100 

Generic Base Acres 2 N/A N/A N/A N/A N/A N/A N/A 100 

Total .................. 500 400 350 400 400 387.5 100 500 

1‘‘For the purpose of the example shown in this table, P&CP history shown reflects either P&CP or subsequently planted crop acreage. 2The 100 upland cotton base acres that were in existence as of September 30, 2013, become generic base acres for the purposes of ARC 

and PLC and are not included in the reallocation or in the proration of P&CP or subsequently planted crop acreage of each covered commodity 

to the P&CP or subsequently planted crop acreage of all covered commodities. 

In the base acre reallocation example 

table above, the owner has the following 

options: 

• Retain the 2013 base acres of 200 

wheat, 100 dry peas, 100 canola and 100 

acres of generic (do not reallocate any 

acres); or 

• Retain 100 acres of generic base 

acres, and reallocate base acres of 

covered commodities (based on the 

farm’s P&CP or subsequently planted 

crop acreage history) to 167.76 wheat 

base acres (400 total base acres times 

41.94 reallocation percentage), 51.6 

barley base acres (400 total base acres 

times 12.9 reallocation percentage), 

180.64 dry peas base acres (400 total 

base acres times 45.16 reallocation 

percentage). Therefore, the total base 

acres are 100 generic base acres and 400 

reallocated base acres, for a total of 500 

base acres. 

Generic Base Acres 

The 2014 Farm Bill does not include 

upland cotton as a covered commodity 

for ARC and PLC. Upland cotton base 

acres that were in existence as of 

September 30, 2013, are generic base 

acres for the purposes of ARC and PLC 

as of October 1, 2013 (fiscal year 2014). 

Generic base acres are treated for the 

purposes of ARC and PLC like other 

base acres, except that they cannot be 

reallocated. Generic base acres may: 

• Be planted to any crop including 

covered commodities, fruits, vegetables, 

minor oilseeds, or other crops; 

• Receive payment for the acres 

planted to a covered commodity 

• Be reduced for CRP participation; 

• Be reduced when taken out of 

agriculture production; 

• Be reduced on farms having more 

base acres than available cropland. 

As stated in an example above, if 

generic base acres are planted to a 

covered commodity or eligible 

subsequently planted crop acreage, the 

covered commodity’s crop acreage will 

be treated as base acres for that crop 

year for ARC and PLC payment 

calculations. 

Payment Yields 

The 2014 Farm Bill specifies that the 

payment yield for PLC is either the 

counter-cyclical yield from the previous 

DCP program, or 90 percent of the 

farm’s average yield from 2008 through 

2012 for that commodity. The farm 

owner must choose which yield applies 


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to the farm. (Note that, as specified in 

the 2014 Farm Bill, planted acres can be 

updated, and if that is done, the 

updated acres will be based on 2009 

through 2012 data, while payment yield 

can be updated, and if done, the 

updated yields will be based on 2008 

through 2012 data.) Therefore, FSA is 

providing owners of farms an 

opportunity to update, for each covered 

commodity on the farm, the payment 

yield that will be used for calculating 

PLC. The opportunity to update yields 

will occur before the election period. A 

current owner’s decision to update 

yields is independent of subsequent 

decisions of current producers on that 

farm as to what program(s) to elect or 

subsequent enrollment decisions. In 

other words, a current owner can update 

yields for PLC and then the current 

producers on that farm may later elect 

and enroll in ARC. 

If the Secretary at any time designates 

an oilseed or pulse crop as a covered 

commodity for PLC and there is not a 

counter-cyclical yield already 

established for that commodity, this rule 

specifies how an equivalent average 

yield will be established for that type of 

commodity for the purposes of PLC in 

section § 1412.33. 

A press release will announce specific 

periods for yield updates and it is only 

during those periods that current 

owners of a farm can update yields. 

Current Owners Make Yield Updates 

and Base Acre Reallocation Decisions; 

Current Producers Elect and Producers 

Enroll 

As discussed above, current owners 

are allowed to update acreage records 

incidental to reallocating base acres and 

yield updates for a farm. Current 

producers on the farm elect ARC or PLC 

or a combination of ARC–CO and PLC. 

If during the established periods for 

yield updates or base reallocation which 

occur before the election period, current 

owners exercise the option to update 

yields or reallocate base acres, that yield 

update and base reallocation will apply 

to the farm and to any subsequent 

election unless the yield update or base 

reallocation is either withdrawn during 

the yield update or base reallocation 

period by any current owner, or 

rescinded, modified, or withdrawn by a 

current owner on the farm in the 

established yield update or base 

reallocation period. Neither FSA nor 

CCC is under any obligation to notify 

owners on a farm if a yield update or 

base reallocation has been filed, 

rescinded, modified, or withdrawn 

during the base reallocation period or 

yield update period. If a person or legal 

entity acquires ownership of a farm 

before the end of the election period and 

that farm already had an election of 

ARC or PLC made by current producers, 

FSA will provide the election status to 

the new owner on request, but is under 

no obligation to notify new owners or 

new producers whether an election has 

previously been made on that particular 

farm. 

All current producers on a farm must 

unanimously make the one-time 

election of ARC or PLC for each covered 

commodity on the farm. If the current 

producers on the farm do not make a 

unanimous election, then the current 

producers on the farm are deemed to 

have elected PLC from 2015 through 

2018. Although the 2014 Farm Bill 

provides that the current producers on 

the farm are deemed to have elected 

PLC commencing with the 2015 crop 

year, for administrative purposes, the 

farm will be deemed to have elected 

PLC commencing with the 2014 crop 

year. Nevertheless, per the 2014 Farm 

Bill, the farm is not eligible for any 2014 

payments. To deem such election to 

occur commencing with the 2014 crop 

year serves to resolve any potential 

ambiguity with respect to eligibility for 

SCO. 

Election is not enrollment. In order to 

be eligible for payments, producers on 

the farm must annually enroll their 

respective share interest of base acres or 

interest of covered commodities. Only 

producers that annually enroll are 

eligible to receive payments. The role of 

owners versus the roles for producers is 

specified in the 2014 Farm Bill; FSA 

does not have discretion to do otherwise 

for these actions. 

PLC Payment Calculations 

As noted above, PLC makes a 

payment when the ‘‘effective price’’ for 

a covered crop is less than its ‘‘reference 

price’’ specified in the 2014 Farm Bill. 

The reference prices are already 

specified in 7 CFR part 1412. The 

‘‘effective price’’ is the higher of the 

national average market price received 

by producers during the 12 month 

marketing year for that covered 

commodity, or the national average loan 

rate (the MAL rate) for that crop year. 

The reference price for each covered 

commodity is set through 2018 and does 

not change from year to year. 

As authorized by the 2014 Farm Bill 

and as specified in 7 CFR part 1412, 

temperate japonica rice will have a 

separate reference price set by USDA for 

high altitude or high latitude areas 

versus other areas of the United States 

where rice is grown. The Secretary has 

determined that the applicable high 

altitude or high latitude areas of the 

United States for which this applies is 

California. Therefore, this rule specifies 

a separate reference price for temperate 

japonica rice in § 1412.52. 

Since neither the effective price nor 

the reference price is based on the price 

the individual producer receives, the 

producer does not need to provide FSA 

any price or yield data to qualify for 

PLC payment. 

As specified in the 2014 Farm Bill, 

payments for a given crop year will be 

made after October 1 of the following 

year. So, for example, 2014 crop year 

payments will be made after October 1, 

2015. The 2015 crop year payments will 

be made after October 1, 2016. 

An example of a PLC payment 

calculation using the corn reference 

price is as follows: 

PLC EXAMPLE—CORN

Reference price ....................................................................................................................................................................... $3.70/bu. 

Effective price .......................................................................................................................................................................... $3.55/bu. 

Payment rate (reference price minus effective price) ............................................................................................................. $0.15/bu. 

Payment yield .......................................................................................................................................................................... 150 bu./acre. 

Base acres (including any corn planted and attributed to generic base acres) ..................................................................... 100 

Payment (payment rate times payment yield times 85 percent of base acres) ..................................................................... $0.15 × 150 bu. × 85 

percent = $1,913. 

As noted above, the payment is based 

on a reference price ($3.70/bu.) and 

payment yield (150 bu./acre). In the 

example above, the producer would 

receive a payment of $1,913 for 100 base 

acres of corn ($3.70/bu. reference price 

minus $3.55/bu. effective price = $0.15 

payment rate times 85 percent of the 

100 corn base acres times the 150 

bushels per acre payment yield. Corn 

base acres are always included for 

payment, even if the corn base acres 


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were planted to another covered 

commodity. Corn planted or eligible 

subsequently planted crop acreage that 

is attributed to generic base acres 

become corn base acres for PLC 

payment purposes. Therefore, PLC 

payment is made on corn base acres and 

not necessarily corn planted on the 

farm. In the above example, the number 

of corn base acres attributed from 

generic base acres is not broken out or 

specified. 

ARC Payment Calculations 

ARC is a revenue-based program that 

is designed to cover a portion of a 

farmer’s out-of-pocket loss when crop 

revenues fall below the guarantee, with 

the benchmark revenue based on either 

county level historic revenue for ARC– 

CO or the individual farm’s historic 

revenue for ARC–IC. For both PLC and 

ARC–CO, the payment calculation is 

based on base acres including any base 

acres attributed to a covered commodity 

from generic base acres based on P&CP 

or eligible subsequently planted crop 

acreage. 

Under ARC–CO, payments are 

triggered when actual county crop 

revenue of a covered commodity is less 

than the ARC–CO guarantee for the 

covered commodity. Since payment is 

not based on the revenue or yield of the 

individual farm, the producer does not 

need to provide FSA any additional 

price or yield data to qualify for ARC– 

CO payment. The data used in the 

calculation is national data for prices 

and county data for yields, not 

individual farm data. The ARC–CO 

guarantee is 86 percent of the crop’s 

benchmark revenue. Under ARC–CO, 

benchmark revenue is calculated by 

multiplying the 5-year average county 

yield, excluding the years with the 

highest and lowest yields (the ARC–CO 

guaranteed yield) times the previous 

5-year MYA price, excluding years with 

the highest and lowest prices. The ARC– 

CO payment for a covered commodity is 

85 percent of the farm’s base acres of the 

covered commodity times the difference 

between the county guarantee and the 

actual county revenue for the covered 

commodity. 

The ARC–CO payment cannot exceed 

10 percent of the county benchmark 

revenue (the ARC–CO guaranteed price 

times the ARC–CO average historical 

benchmark yield). An example of an 

ARC–CO payment calculation using 

estimated 2014 soybean prices and 

yields is as follows: 

ARC–CO PAYMENT CALCULATION EXAMPLE—SOYBEANS

2014 MYA price (estimate only) ............................................................................................................................................................ $9.65/bu. 

2014 Actual average county yield (bu./acre) ......................................................................................................................................... 56 

Benchmark revenue (average historical county yield × average MYA for 2009 through 2013) ........................................................... $670 

Base acres (including any generic base acres attributed to soybeans) ............................................................................................... 100 

2014 Actual crop revenue (2014 MYA times 2014 actual county yield) ............................................................................................... $540 

ARC–CO guarantee (86 percent times benchmark revenue) ............................................................................................................... $575 

Maximum payment (benchmark revenue times 10 percent) ................................................................................................................. $67 

Payment rate (ARC–CO guarantee of $575 minus actual crop revenue of $540, not to exceed maximum payment of $67) ............ $35 

Payment (payment rate of $35 times 85 percent of 100 base acres) .................................................................................................. $2,975 

Under ARC–IC, payments are 

triggered when the actual crop revenue, 

averaged across all covered 

commodities planted or eligible 

subsequently planted crop acreage on 

the ARC–IC farm, is less than ARC–IC 

guarantee, averaged across those 

covered commodities planted or eligible 

subsequently planted crop acreage on 

the farm. The farm for ARC–IC purposes 

is the sum of all of that producer’s 

interests in all ARC–IC farms in the 

State, meaning that if a producer has an 

interest in multiple farms that have 

elected and enrolled in ARC–IC, the 

ARC–IC benchmark revenue for that 

producer will be a weighted average of 

the benchmark revenue for all of those 

farms. The farm’s ARC–IC guarantee 

equals 86 percent of the farm’s 

individual benchmark revenue (5-year 

average of the annual benchmark 

revenues), excluding the years with the 

highest and lowest annual benchmark 

revenues, then averaging across all 

covered commodities planted or eligible 

subsequently planted crop acreage on 

the farm. The actual revenue is similarly 

computed, with both the guarantee and 

actual revenue computed using planted 

acreage on the farm. The ARC–IC 

payment equals 65 percent of the sum 

of the base acres of all covered 

commodities on the farm, times the 

difference between the individual 

guarantee revenue and the actual 

individual crop revenue across all 

covered commodities planted or eligible 

subsequently planted crop acreage on 

the farm. Payments cannot exceed 10 

percent of the individual’s benchmark 

revenue. Since the payment is based on 

yields for that individual farm, the 

producers enrolled in ARC–IC elected 

farms must report acreage and yield data 

to qualify for payment. Producers of 

covered commodities enrolled in ARC– 

IC elected farms must, as a condition of 

payment eligibility, file a report of 

production by the crop reporting date 

the immediate year after the production 

and contract year. The failure to report 

production will render the producers 

sharing in any of the covered 

commodities on that farm ineligible for 

payments on all ARC–IC elected and 

enrolled farms for which the producer 

has an interest in covered commodities 

in the State. 

In the case of a total prevented 

planting situation, USDA has made a 

discretionary decision to calculate 

ARC–IC payments as if the producer 

had planted some acreage to each 

covered commodity on the farm. The 

reason for this decision is as follows: If 

a producer who has elected ARC–IC has 

all of their acreage prevented from being 

planted across their entire farm for a 

crop year, the ARC–IC calculation 

without this planting provision would 

result in a zero payment, an unintended 

result. The purpose of ARC–IC is to 

provide a safety net payment to a 

producer based on the individual’s 

actual farm revenue. To preclude any 

payment if the producer suffered a 

complete prevented planting on all of 

the farm’s acreage in which the 

producer has an interest would defeat 

the safety net purposes of ARC, 

particularly when compared to the 

theoretical example of a producer who 

suffered an almost complete prevented 

planting, which would trigger a 

payment. Therefore, if a producer has 

all prevented planted acreage across all 

acres of their farm, FSA will deem 

sufficient acres as being planted for each 

covered commodity in proportion to the 

approved prevented planted acreage of 

covered commodities on the farm to 

trigger an ARC–IC payment. This is 

being done within the Secretary’s 

general discretion to operate the ARC 

program, as it is reasonably related to 

the purposes of ARC. 


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An example of an ARC–IC payment 

calculation is shown in the following 

table: 

ARC–IC PAYMENT CALCULATION EXAMPLE—CORN AND SOYBEANS—100 BASE ACRES

[60 acres planted with corn and 40 acres planted with soybeans] 

Benchmark revenue corn * ...................................................................................................................................................................... $826 

Benchmark revenue soybean .................................................................................................................................................................. 687 

Benchmark revenue total for the farm ((0.6 × $826) + (0.4 × $687)) ..................................................................................................... 770 

Guarantee (86 percent of total benchmark revenue) .............................................................................................................................. 662 

Actual revenue (2014 MYA price of each commodity times each commodity’s actual yield times ratio of planted covered commodity to farm’s base acres 0.6 corn and 0.4 soybeans—in this case (0.6 × $702) + (0.4 × $540)) ................................................ 637 

Payment rate (difference between guarantee and actual revenue) ........................................................................................................ 25 

Maximum payment (10 percent of benchmark revenue of $770) ........................................................................................................... 77 

Payment rate (ARC–IC Guarantee minus Actual Crop Revenue; adjusted, if needed to not exceed maximum payment) .................. 25 

Payment (payment rate times 65 percent of total base acres) ............................................................................................................... 1,625 

* The benchmark revenue numbers are calculated as the 5-year Olympic average of the annual revenue for the farm, excluding the high and 

low years. 

Election of ARC and PLC 

The specified period in which 

producers may elect ARC or PLC will be 

announced in a press release. Current 

producers, as defined in this rule, will 

make the election. The election will be 

based on the farm structure that is in 

effect as of September 30, 2014. 

Reconstitutions of farms initiated after 

August 1, 2014 will not be considered 

by FSA until after the election period 

has ended. The election of ARC and PLC 

for a farm will apply to that farm in all 

years 2014 through 2018 and, in the 

case of that farm being reconstituted, the 

farms resulting from that reconstitution. 

Neither the requesting of a farm 

reconstitution nor the reconstitution of 

any farm will change either the 

requirement that all current producers 

on a farm must unanimously agree to 

the irrevocable election during the 

election period or that a valid election 

was made by those current producers. 

If no election is made, or if all 

producers on the farm cannot 

unanimously agree, the farm will 

default to a PLC election, and producers 

on that farm will not be eligible for 2014 

crop year payments (even if the farm is 

enrolled in 2014 PLC). During the 

election period, all current producers on 

a farm must unanimously make the 

irrevocable election as discussed in this 

rule in order to preserve the payment 

eligibility of all producers on the farm 

for 2014. If a valid election is made by 

all current producers on a farm during 

the election period, that election will be 

recognized as valid for the farm in the 

2014 through 2018 crop years unless 

that election is rescinded or terminated 

by any current producer on the farm 

during the election period, or unless the 

valid election is modified and replaced 

by another valid election by all current 

producers during the election period. At 

any time during the election period, a 

current producer can rescind an election 

or terminate an election by providing 

FSA with written notice of the current 

producer’s withdrawing from the 

election or by providing written notice 

to FSA requesting to have the election 

rescinded. 

If a producer acquires an interest in a 

farm on or after a valid election has 

been made in the election period by all 

of a farm’s current producers, that 

producer will be subject to any 

previously valid election made in the 

election period unless that producer 

changes the election during the 

remaining time in the election period by 

either withdrawing the election or 

getting all of the producers to agree to 

the new election in writing. While FSA 

will respond to inquiries submitted by 

such producers, neither FSA nor CCC 

has any obligation to notify owners or 

producers of whether or not a valid 

election exists or is in place or whether 

a producer has rescinded or terminated 

a previously made valid election. 

Additionally, neither FSA nor CCC have 

any role or responsibility of advising 

any producers on a farm of who all the 

farm’s current producers are in the 

election period. The identity of all 

current producers for a farm may only 

be known to each of the current 

producers and that information may or 

may not be on file with FSA during the 

election period. It is the responsibility 

of the current producers on a farm to 

ensure that a valid election is made in 

the prescribed election period. 

The election itself, its irrevocability, 

and the requirement that the election be 

made unanimously by all the current 

producers on a farm are required by the 

2014 Farm Bill and neither FSA nor 

CCC has any discretion to waive these 

requirements. Additionally, election 

does not result in enrollment in ARC or 

PLC. Current producers on farms that 

have made a valid election (and those 

that have not completed an election and 

producers who might want to 

participate in PLC for the 2015 and 

subsequent crop years) must still 

annually enroll the farm with that 

election (or default election) in order to 

be eligible for ARC and PLC payments 

on farms in those crop years, as 

applicable. 

The election made is important—it 

affects eligibility for some forms of crop 

insurance. Specifically, section 11003 of 

the 2014 Farm Bill amends the Federal 

Crop Insurance Act (7 U.S.C. 1508(c)) to 

authorize SCO. SCO covers a portion of 

the deductible for regular crop 

insurance on either a yield or revenue 

basis. As with other forms of crop 

insurance offered through RMA, SCO 

premiums are subsidized, and no 

payment limit or AGI limit applies. 

Additional details regarding SCO and 

benefits available under SCO can be 

obtained from an approved insurance 

provider. SCO coverage is available for 

crops subject to a PLC election. 

Producers of covered commodities on 

farms with a valid ARC election and 

enrollment, as well as acres that are 

enrolled in the stacked income 

protection plan for cotton under section 

508B of the Federal Crop Insurance Act 

(7 U.S.C. 1508b), are not eligible for 

SCO coverage. 

Sharing ARC and PLC Payments on 

Enrolled Farms Between Producers on 

a Farm 

FSA will determine eligibility for 

shared payments similarly to how FSA 

made those determinations for DCP and 

ACRE. Each eligible producer on a farm 

will be given the opportunity to enroll 

and receive payments determined to be 

fair and equitable as agreed to by all the 

producers on the farm and approved by 

the FSA county committee. Each 


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producer leasing a farm is required to 

provide a copy of their written lease to 

the county committee and, in the 

absence of a written lease, is required to 

provide to the county committee a 

complete written description of the 

terms and conditions of any oral 

agreement or lease, to the satisfaction of 

the county committee in order to make 

any determinations necessary under 

these programs. 

An owner’s or landlord’s signature, as 

applicable, affirming a zero owner or 

landlord share on a contract may be 

accepted as evidence of a cash lease 

between the owner or landlord and 

tenant, as applicable, as determined by 

FSA. This would allow the producer 

with the cash lease to claim 100 percent 

of any payments made, assuming all 

eligibility requirements and other 

conditions have been met. Such 

signature or signatures, if entered on the 

contract to satisfy the requirement of 

furnishing a written lease, is required to 

be entered on the contract by June 1, 

2015, for the 2014 and 2015 contract 

year and for subsequent crop years, June 

1 of each subsequent year. 

Deadlines for ARC and PLC Actions 

After the conclusion of the election 

period, the enrollment period begins. 

Starting with the 2015 crop year, the 

enrollment period ends June 1 of the 

relevant crop year. This means that 

enrollment of farms for the 2015 crop 

year will occur at the same time as the 

2014 crop year enrollment. 

The contract year is based on the 

fiscal year, October 1 to September 30 

of each year, with the enrollment period 

occurring in the middle of the contract 

year. For 2014, the producer will enroll 

by June 1, 2015, for a retroactive 

contract that ends September 30, 2014. 

For each subsequent year, the June 1 

enrollment deadline will be for a 

contract that began on October 1 of the 

previous year. For example, the 

producer must enroll by June 1, 2015 to 

be eligible to receive payments for a 

2015 contract that runs from October 1, 

2014 to September 30, 2015. 

The June 1 enrollment deadline is 

consistent with the deadline for similar 

types of programs since 2002. The June 

1 date is also in advance of compliance 

activities that are required to occur for 

the crop year (acreage and production 

reporting), and the final date for seeking 

reconstitution of farms. After the onetime election period ends, in each crop 

year or program year the producers on 

the farm in that crop year or program 

year may choose whether or not to 

enroll the farm. 

When a farm’s base acres are leased 

on a share basis, neither the landlord 

nor the tenant will receive 100 percent 

of payments for the farm. FSA will 

approve an ARC and PLC contract and 

approve the division of payment when 

all the following, as applicable, occur or 

have been determined to have occurred: 

• Landlords, tenants, and 

sharecroppers sign the application and 

agree to the payment shares shown; 

• FSA determines that the interests of 

tenants and sharecroppers are being 

protected; and 

• FSA determines that the payment 

shares do not circumvent either the 

provisions of this rule or the payment 

limitation provisions of 7 CFR part 

1400. 

The general order of activities 

associated with participation in ARC 

and PLC is: 

• Current owner updates P&CP acres 

and subsequently planted crop acreage 

and reallocation of base acres during 

acreage update and reallocation periods; 

• Current owner updates PLC yield 

during yield update period; 

• Current producers unanimously 

make ARC and PLC election during the 

election period; and 

• Producers enroll the farm during 

enrollment periods. 

The following table provides a 

summary of deadlines for ARC and PLC. 

Activity Deadline 

2014 acreage reports by 2014 operator or producers on farm ............... Not later than July 15, 2014, for covered commodities. For all other 

cropland on the farm, the acreage reporting date for the crop or 

crops in the State (Note: This deadline is unchanged by this rule.) 

Update acreage history ............................................................................ To be announced in a press release. 

PLC yield update ...................................................................................... To be announced in a press release. 

Base acres reallocation ............................................................................ To be announced in a press release. 

Election of ARC and PLC by current producers on farms in election period.To be announced in a press release. 

2014 contract year enrollment by 2014 producers on farms and 2015 

contract enrollment by 2015 producers on farms.

June 1, 2015. 

2014 production report of covered commodities by ARC–IC producers July 15, 2015. 

2015 and subsequent crop year acreage reports by 2015 and subsequent operator or producers on farm.Not later than July 15 for covered commodities. For all other cropland 

on the farm, the acreage reporting date for the crop or crops in the 

State. 

2016 and subsequent years contract enrollment by 2016 and subsequent year producers.June 1 of applicable program year. 

2015 and subsequent year production report of covered commodities 

by ARC–IC producers.

July 15 of the year following the program year (for example, the 2015 

production report is due July 15, 2016). 

General Provisions That Apply to ARC 

and PLC 

As noted above, the rule published on 

August 8, 2014, to implement the CTAP 

program implemented some general 

provisions that also apply to ARC and 

PLC. The regulations in 7 CFR part 1412 

specify certain requirements to which 

the participant must agree to be eligible 

for payments. One such requirement is 

to effectively control noxious weeds and 

otherwise maintain the land in 

accordance with sound agricultural 

practices. Since that rule was published, 

the Secretary has determined to amend 

the applicable regulations to remove 

P&CP acreage and specify that only 

planted and eligible subsequently 

planted crop acreage of covered 

commodities will attribute generic base 

acres to covered commodities. 

Base acres for covered commodities 

for ARC and PLC will be reduced for 

cropland that is on land that has been 

subdivided and developed for multiple 

residential units or other non-farming 

uses if the size of the tracts and the 

density of the subdivision is such that 

the land is unlikely to return to the 

previous agricultural use, unless the 

producers on the farm demonstrate that 

the land remains devoted to commercial 

agricultural production or is likely to be 

returned to the previous agricultural 

use. The regulation for the reductions in 

base acres is already in 7 CFR 1412.24, 


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and was implemented through the 

CTAP final rule. 

ARC and PLC have provisions for 

planting flexibility and reductions for 

plantings of fruits, vegetables, and wild 

rice on base acres. These reductions are 

already specified in 7 CFR part 1412. 

Common provisions in 7 CFR part 718 

that apply to all FSA and CCC programs, 

including those for base acres and farm 

reconstitutions, apply to CTAP and ARC 

and PLC. 

Miscellaneous 

As specified in the 2014 Farm Bill 

and in 7 CFR part 1400, payment limits 

and average adjusted gross income (AGI) 

limits apply to ARC and PLC. A person 

or legal entity is ineligible for payments 

if the person’s or legal entity’s AGI for 

the applicable ARC and PLC contract or 

AGI compliance program year exceeds 

$900,000. 

Producers eligible for ARC and PLC 

are required to be a person or legal 

entity who is actively engaged in 

farming and otherwise eligible for 

payment, as specified in 7 CFR part 

1400; and who complies with other 

general program eligibility requirements 

including, but not limited to, those 

pertaining to highly erodible land and 

wetland conservation provisions 

specified in 7 CFR part 12. 

Appeal regulations specified in 7 CFR 

parts 11 and 780 apply. FSA program 

requirements and determinations that 

are not in response to, or result from, an 

individual disputable set of facts in an 

individual participant’s application for 

assistance are not matters that can be 

appealed. 

Neither crop insurance nor coverage 

under noninsured crop disaster 

assistance program is required as a 

condition of eligibility for ARC or PLC. 

Additionally, ARC and PLC benefits are 

not subject to the multiple benefit 

exclusion provisions of the catastrophic 

plan of insurance or noninsured crop 

disaster assistance. 

FSA Notifications of General 2014 

Farm Bill Information for FSA 

Programs and ARC and PLC Provisions 

The following provides information 

regarding the notifications FSA made to 

ensure that farm owners are aware of the 

provisions of the 2014 Farm Bill and 

that participants have all applicable 

information available on record at FSA 

to assist them in making participation 

elections. (Note: The FSA notices are 

available on FSA’s public Web site.) 

Date FSA action 

March 11, 2014 .................. Issued a 2014 Farm Bill Fact Sheet discussing what is in the 2014 Farm Bill for Farm Service Agency customers. 

March 28, 2014 .................. Published an extension of authorization rule in the Federal Register (79 FR 17388–17390) regarding Continuation 

of Certain Benefit and Loan Programs, Acreage Reporting, Average Adjusted Gross Income, and Payment Limit. 

April 7, 2014 ....................... Issued FSA Notice ARCPLC–1 to FSA State and county offices discussing Fruits and Vegetables and Wild Rice 

(FAV) provisions for 2014 through 2018 crop years. 

April 7, 2014 ....................... Issued FSA Notice ARCPLC–2 to FSA State and county offices regarding establishing FAV and Wild Rice (WR) 

double-cropping regions. 

May 23, 2014 ..................... Issued FSA Notice ARCPLC–4 to FSA State and county office regarding 2014 Farm Bill information regarding 

ARC and PLC. 

May 29, 2014 ..................... Issued a press release concerning $6 million award for educational efforts to prepare farmers for new ARC and 

PLC programs. 

May 29, 2014 ..................... FSA posted ARC and PLC information and several links to: http://fsa.usda.gov/FSA/

webapp?area=home&subject=arpl&topic=landing 

June 18, 2014 .................... Issued FSA Notice ARCPLC–5 to FSA State and county office regarding ARC and PLC P&CP and subsequently 

planted crop acreage history update. 

July 18, 2014 ...................... Issued FSA Notice ARCPLC–6 to FSA State and county office regarding maintaining base acres. 

September 25, 2014 ........... FSA issues a document entitled ARC and PLC Backgrounder and makes the document available in FSA service 

centers and on the FSA public website. 

August 8, 2014 ................... Published the final rule implementing CTAP and announced some general ARC and PLC provisions. 

September 26, 2014 ........... This rule specifies the implementing regulations for ARC and PLC. 

Structure of the Regulation 

This rule revises 7 CFR part 1412 to 

add the specific requirements for ARC 

and PLC. Subpart A covers general 

administration; subpart B cover base 

acres; subpart C covers yields and 

production for ARC and PLC; subpart D 

covers ARC and PLC contract terms and 

enrollment provisions; subpart E covers 

financial considerations including 

sharing payments; subpart F covers 

violations; subpart G covers PLC and 

ARC election; and subpart H covers 

CTAP. This rule amends subparts A, B, 

D, and E, and adds subparts C and G. 

This rule also makes minor 

clarifications and amendments to 7 CFR 

part 718 to clarify how FSA determines 

a farm’s administrative county, how and 

when a farm’s administrative county 

can, or needs to, be changed, and a 

producer’s options regarding the 

selection of an administrative county. 

The rule also amends farm 

reconstitution provisions in part 718 to 

remove references to obsolete programs, 

clarifies the deadline for initiating farm 

reconstitutions, and provides the 

effective date of farms that are 

reconstituted. These amendments and 

clarifications, which are not required by 

the 2014 Farm Bill, will help to ensure 

that ARC and PLC are implemented 

effectively. This rule also moves some 

terms and definitions from part 1416 to 

part 718 because those terms and 

definitions are used in multiple 

programs, including ARC and PLC. 

Notice and Comment 

In general, the Administrative 

Procedure Act (5 U.S.C. 553) requires 

that a notice of proposed rulemaking be 

published in the Federal Register and 

interested persons be given an 

opportunity to participate in the 

rulemaking through submission of 

written data, views, or arguments with 

or without opportunity for oral 

presentation, except when the rule 

involves a matter relating to public 

property, loans, grants, benefits, or 

contracts. The regulations to implement 

the provisions of Title I and the 

administration of Title I of the 2014 

Farm Bill are exempt from the notice 

and comment provisions of 5 U.S.C. 553 

and the Paperwork Reduction Act (44 

U.S.C. chapter 35), as specified in 

section 1601(c)(2) of the 2014 Farm Bill. 

Effective Date 

The Administrative Procedure Act (5 

U.S.C. 553) provides generally that 

before rules are issued by Government 

agencies, the rule is required to be 

published in the Federal Register, and 

the required publication of a substantive 

rule is to be not less than 30 days before 


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its effective date. One of the exceptions 

is when the agency finds good cause for 

not delaying the effective date. 

Subsection 1601(c)(2) of the 2014 Farm 

Bill makes this final rule exempt from 

notice and comment. Therefore, using 

the administrative procedure provisions 

in 5 U.S.C. 553, FSA finds that there is 

good cause for making this rule effective 

less than 30 days after publication in the 

Federal Register. This rule allows FSA 

to provide adequate notice to producers 

about the new ARC and PLC regulation 

so they will have time to update base 

acres and yields and make the required 

election before the enrollment period for 

ARC and PLC in spring 2015. Therefore, 

to begin providing benefits to producers 

in a timely fashion, this final rule is 

effective when published in the Federal 

Register. 

Executive Orders 12866 and 13563 

Executive Order 12866, ‘‘Regulatory 

Planning and Review,’’ and Executive 

Order 13563, ‘‘Improving Regulation 

and Regulatory Review,’’ direct agencies 

to assess all costs and benefits of 

available regulatory alternatives and, if 

regulation is necessary, to select 

regulatory approaches that maximize 

net benefits (including potential 

economic, environmental, public health 

and safety effects, distributive impacts, 

and equity). Executive Order 13563 

emphasized the importance of 

quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. 

The Office of Management and Budget 

(OMB) designated this rule as 

economically significant under 

Executive Order 12866, ‘‘Regulatory 

Planning and Review,’’ and therefore, 

OMB has reviewed this rule. This 

regulatory action is being taken to 

implement a major budgetary program 

required by the 2014 Farm Bill. 

Consistent with OMB guidance, this 

type of action is considered a budgetary 

transfer representing a payment from 

taxpayers to program beneficiaries 

unrelated to the provision of any goods 

or services in exchange for the payment. 

As such, the benefits and payments to 

those who receive such a transfer are 

matched by the costs borne by 

taxpayers. The estimated transfer 

payments for ARC and PLC provided by 

this rule are summarized below. The 

full cost benefit analysis is available on 

regulations.gov. 

Cost Benefit Analysis Summary 

ARC and PLC payments are estimated 

to total $28.6 billion for crop years 2014 

through 2018 based on supply, demand 

and price conditions as of May, 2014. 

Nearly all producers on farms with base 

acres are expected to participate in PLC 

or ARC or both. Annual payments are 

projected at $0.8 billion for crop year 

2014, $10.1 billion for crop year 2015, 

$10.9 billion for crop year 2016, $3.9 

billion for crop year 2017, and $2.9 

billion for 2018. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601–612), as amended by the 

Small Business Regulatory Enforcement 

Fairness Act of 1996 (SBREFA), 

generally requires an agency to prepare 

a regulatory flexibility analysis of any 

rule whenever an agency is required by 

the Administrative Procedure Act (5 

U.S.C. 553) or any other law to publish 

a proposed rule, unless the agency 

certifies that the rule will not have a 

significant economic impact on a 

substantial number of small entities. 

This rule is not subject to the Regulatory 

Flexibility Act because neither FSA nor 

CCC is required by any law to publish 

a proposed rule for public comment for 

this rulemaking initiative. 

Environmental Review 

The environmental impacts of this 

final rule have been considered in a 

manner consistent with the provisions 

of the National Environmental Policy 

Act (NEPA, 42 U.S.C. 4321–4347), the 

regulations of the Council on 

Environmental Quality (40 CFR parts 

1500–1508), and the FSA regulations for 

compliance with NEPA (7 CFR part 

799). While ARC and PLC are new, their 

creation is mandated by the 2014 FB, 

and is therefore not subject to review 

under NEPA. The legislative intent for 

creating these new programs is to 

provide revenue support to the same 

group of producers eligible for the 

earlier and now-discontinued programs, 

DCP and ACRE. The discretionary 

provisions defined by FSA for ARC and 

PLC were administrative clarifications 

of the mandatory elements and FSA 

determined that they would not alter 

any environmental impacts resulting 

from implementing the mandatory 

programs. Therefore, FSA will not 

prepare an environmental assessment or 

environmental impact statement for this 

regulatory action. 

Executive Order 12372 

Executive Order 12372, 

‘‘Intergovernmental Review of Federal 

Programs,’’ requires consultation with 

State and local officials. The objectives 

of the Executive Order are to foster an 

intergovernmental partnership and a 

strengthened Federalism, by relying on 

State and local processes for State and 

local government coordination and 

review of proposed Federal Financial 

assistance and direct Federal 

development. For reasons specified in 

the final rule related notice regarding 7 

CFR part 3015, subpart V (48 FR 29115, 

June 24, 1983), the programs and 

activities within this rule are excluded 

from the scope of Executive Order 

12372, which requires 

intergovernmental consultation with 

State and local officials. 

Executive Order 12988 

This rule has been reviewed under 

Executive Order 12988, ‘‘Civil Justice 

Reform.’’ This rule will not preempt 

State or local laws, regulations, or 

policies unless they represent an 

irreconcilable conflict with this rule. 

The rule has retroactive effect in that the 

contracts will include a retroactive 

period. Before any judicial action may 

be brought regarding the provisions of 

this rule, the administrative appeal 

provisions of 7 CFR parts 11 and 780 are 

to be exhausted. 

Executive Order 13132 

This rule has been reviewed under 

Executive Order 13132, ‘‘Federalism.’’ 

The policies contained in this rule do 

not have any substantial direct effect on 

States, on the relationship between the 

Federal government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government, except as required 

by law. Nor does this rule impose 

substantial direct compliance costs on 

State and local governments. Therefore, 

consultation with the States is not 

required. 

Executive Order 13175 

This rule has been reviewed in 

accordance with the requirements of 

Executive Order 13175, ‘‘Consultation 

and Coordination with Indian Tribal 

Governments.’’ Executive Order 13175 

requires Federal agencies to consult and 

coordinate with tribes on a governmentto-government basis on policies that 

have tribal implications, including 

regulations, legislative comments or 

proposed legislation, and other policy 

statements or actions that have 

substantial direct effects on one or more 

Indian tribes, on the relationship 

between the Federal Government and 

Indian tribes or on the distribution of 

power and responsibilities between the 

Federal Government and Indian tribes. 

FSA has assessed the impact of this 

rule on Indian tribes and determined 

that this rule does not, to our 

knowledge, have tribal implications that 

require tribal consultation under 

Executive Order 13175. If a Tribe 

requests consultation, FSA will work 

with the USDA Office of Tribal 


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Federal Register / Vol. 79, No. 187 / Friday, September 26, 2014 / Rules and Regulations 57713 

Relations to ensure meaningful 

consultation is provided where changes, 

additions, and modifications identified 

in this rule are not expressly mandated 

by the 2014 Farm Bill. 

The Unfunded Mandates Reform Act of 

1995 

Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA, Pub. L. 

104–4) requires Federal agencies to 

assess the effects of their regulatory 

actions on State, local, and Tribal 

governments, or the private sector. 

Agencies generally need to prepare a 

written statement, including a cost 

benefit analysis, for proposed and final 

rules with Federal mandates that may 

result in expenditures of $100 million or 

more in any 1 year for State, local, or 

Tribal governments, in the aggregate, or 

to the private sector. UMRA generally 

requires agencies to consider 

alternatives and adopt the more cost 

effective or least burdensome alternative 

that achieves the objectives of the rule. 

This rule contains no Federal mandates, 

as defined in Title II of UMRA, for State, 

local, and Tribal governments or the 

private sector. Therefore, this rule is not 

subject to the requirements of sections 

202 and 205 of UMRA. 

Small Business Regulatory Enforcement 

Fairness Act of 1996 (SBREFA) 

This rule is a major rule under the 

Small Business Regulatory Enforcement 

Fairness Act of 1996, (Pub. L. 104–121, 

SBREFA). SBREFA normally requires 

that an agency delay the effective date 

of a major rule for 60 days from the date 

of publication to allow for 

Congressional review. Section 808 of 

SBREFA allows an agency to make a 

major regulation effective immediately 

if the agency finds there is good cause 

to do so. Section 1601(c)(3) of the 2014 

Farm Bill provides that the authority in 

Section 808 of SBREFA be used in 

implementing the changes required by 

Title I of the 2014 Farm Bill, such as for 

the changes being made by this rule. 

Consistent with section 1601(c)(3) of the 

2014 Farm Bill, FSA therefore finds that 

it would be contrary to the public 

interest to delay the effective date of this 

rule because it would delay 

implementation ARC and PLC as 

required by the 2014 Farm Bill. The 

regulation needs to be effective to 

provide adequate time for producers to 

update base acres and yields in 

preparation for enrollment in spring 

2015. Therefore, this rule is effective 

when published in the Federal Register. 

Federal Assistance Programs 

The title and number of the Federal 

Domestic Assistance Program found in 

the Catalog of Federal Domestic 

Assistance to which this rule applies 

are: 

10.112—Price Loss Coverage 

10.113—Agriculture Risk Coverage 

10.114—Cotton Transition Assistance 

Program 

Paperwork Reduction Act of 1995 

The regulations in this rule are 

exempt from the requirements of the 

Paperwork Reduction Act (44 U.S.C. 

Chapter 35), as specified in subsection 

1601(c)(2)(B) of the 2014 Farm Bill, 

which provides that these regulations be 

promulgated and administered without 

regard to the Paperwork Reduction Act. 

E-Government Act Compliance 

FSA and CCC are committed to 

complying with the E-Government Act, 

to promote the use of the Internet and 

other information technologies to 

provide increased opportunities for 

citizen access to Government 

information and services, and for other 

purposes. 

List of Subjects 

7 CFR Part 718 

Acreage allotments, Drug traffic 

control, Loan programs-agriculture, 

Marketing quotas, Price support 

programs, Reporting and recordkeeping 

requirements. 

7 CFR Part 1412 

Cotton, Feed grains, Oilseeds, 

Peanuts, Price support programs, 

Reporting and recordkeeping 

requirements, Rice, Soil conservation, 

Wheat. 

7 CFR Part 1416 

Dairy products, Indemnity payments, 

Pesticide and pests, Reporting and 

recordkeeping requirements. 

For the reasons discussed above, CCC 

and FSA amend 7 CFR parts 718, 1412, 

and 1416 as follows: 

PART 718—PROVISIONS APPLICABLE 

TO MULTIPLE PROGRAMS 

■ 1. Revise the authority citation to read 

as follows: 

Authority: 7 U.S.C. 1501–1531, 1921– 

2008v, 7201–7334, and 15 U.S.C. 714b. 

Subpart A—General Provisions 

■ 2. In § 718.2, add definitions in 

alphabetical order for ‘‘limited resource 

farmer or rancher’’ and ‘‘socially 

disadvantaged farmer or rancher’’ to 

read as follows: 

§ 718.2 Definitions. 

* * * * * 

Limited resource farmer or rancher 

means a farmer or rancher who is both 

of the following: 

(1) A person whose direct or indirect 

gross farm sales do not exceed $176,800 

(2014 program year) in each of the 2 

calendar years that precede the most 

immediately preceding complete taxable 

year before the relevant program year 

that corresponds to the relevant program 

year (for example, for the 2014 program 

year, the two years would be 2011 and 

2012), adjusted upwards in later years 

for any general inflation; and 

(2) A person whose total household 

income was at or below the national 

poverty level for a family of four in each 

of the same two previous years 

referenced in paragraph (1) of this 

definition. (Limited resource farmer or 

rancher status can be determined using 

a Web site available through the Limited 

Resource Farmer and Rancher Online 

Self Determination Tool through 

National Resource and Conservation 

Service at http:// 

www.lrftool.sc.egov.usda.gov.) 

* * * * * 

Socially disadvantaged farmer or 

rancher means a farmer or rancher who 

is a member of a socially disadvantaged 

group whose members have been 

subjected to racial, ethnic, or gender 

prejudice because of their identity as 

members of a group without regard to 

their individual qualities. Socially 

disadvantaged groups include the 

following and no others unless 

approved in writing by the Deputy 

Administrator: 

(1) American Indians or Alaskan 

Natives, 

(2) Asians or Asian-Americans, 

(3) Blacks or African-Americans, 

(4) Hispanics or Hispanic-Americans, 

(5) Native Hawaiians or other Pacific 

Islanders, and 

(6) Women. 

* * * * * 

■ 3. Revise § 718.8 to read as follows: 

§ 718.8 Administrative county. 

(a) If all land on the farm is physically 

located in one county, the farm will be 

administratively located in that county, 

except as provided in the rest of this 

section. 

(b) In cases where there is no FSA 

office in the county in which the farm 

is physically located or FSA county 

offices have been consolidated, the farm 

will be administratively located in a 

county contiguous to the physical 

county in the same State that is most 

convenient for the farm operator and 

owner. 

(c) If a county contiguous to the 

county in which the farm is physically 


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located in the same State does not have 

an FSA county office, the farm will be 

administratively located in a contiguous 

county in another contiguous State that 

is convenient to the farm operator and 

owner. Requests for changes made to 

administrative county under this 

paragraph must be made to FSA by 

August 1 of each year for the change to 

take effect that calendar year. 

(d) When land on the farm is 

physically located in more than one 

county, the farm will be administered in 

one county office responsible for 

administration of programs for one or 

more of the physical counties involved 

in the farm’s constitution as determined 

by FSA. Paragraph (b) or (c) of this 

section apply if changes occur to that 

administrative county. 

(e) The operator and owner of a farm 

administered in any county can request 

a change of administrative county to 

another county in the same State by 

August 1 for the change to take effect 

that calendar year. Requests for change 

in administrative county will be 

reviewed and approved by COC if all 

the following can be determined to 

apply: 

(1) The requested change does not 

impact the constitution of a farm; and 

(2) The requested change will not 

result in increased program eligibility or 

additional benefits for the farm’s 

producers that would not be earned 

absent the change in administrative 

county being made. 

(f) The change is not to circumvent 

any of the provisions of other program 

regulations to which this part applies. 

(g) The State committee will submit 

all requests for exceptions from 

regulations specified in this section to 

the Deputy Administrator. 

■ 4. Revise § 718.204 to read as follows: 

§ 718.204 Reconstitution of base acres. 

(a) Farms will be reconstituted in 

accordance with this subpart when it is 

determined that the land areas are not 

properly constituted and, to the extent 

practicable as determined by county 

committee, the reconstitution will be 

based on the facts and conditions 

existing at the time the change requiring 

the reconstitution occurred. 

(b) Reconstitutions will be effective 

for the calendar year if initiated by 

August 1 of that year. Any 

reconstitution initiated after August 1 

will not be effective for that year; it will 

be effective for the subsequent year. 

(c) The Deputy Administrator may 

approve an exception to permit a 

reconstitution initiated after August 1 to 

be effective for the same year, if FSA 

determines that the failure is due to 

administrative problems as determined 

by FSA at the local or national level. 

Producers have no right to seek an 

exception under this paragraph. When 

such situations exist, FSA will establish 

procedures under which reconstitutions 

will be accepted. 

PART 1412—AGRICULTURE RISK 

COVERAGE, PRICE LOSS COVERAGE, 

AND COTTON TRANSITION 

ASSISTANCE PROGRAMS 

Authority: 7 U.S.C. 1508b, 7911–7912, 

7916, 8702, 8711–8712, 8751–8752, and 15 

U.S.C. 714b and 714c. 

Subpart A—General Provisions 

■ 5. Amend § 1412.3 as follows: 

■ a. Add definitions in alphabetical 

order for ‘‘2014 farm structure’’, ‘‘actual 

average county yield’’, ‘‘actual crop 

revenue’’, ‘‘ARC guarantee’’, ‘‘ARC–IC 

farm’’, ‘‘average historical county 

yield’’, ‘‘benchmark revenue for ARC– 

CO’’, ‘‘benchmark revenue for ARC–IC’’, 

‘‘current owner’’, ‘‘current producer’’, 

‘‘effective price’’, ‘‘farm structure’’, 

‘‘marketing year’’, ‘‘market year average 

(MYA) price’’, ‘‘national average loan 

rate’’, and ‘‘transitional yield’’; and 

■ b. In the definition of ‘‘base acres’’, 

remove the term ‘‘P&CP’’ and add the 

word ‘‘planted’’ in its place. 

The additions read as follows: 

§ 1412.3 Definitions. 

* * * * * 

2014 farm structure means the farm as 

it was last constituted effective as of 

September 30, 2014. 

Actual average county yield is 

calculated as the crop year production 

of a covered commodity in the county 

divided by the commodity’s total 

planted acres for a crop year in the 

county, as determined by FSA. Separate 

irrigated and non-irrigated yields will be 

established in a county having a 

sufficient number of farms with P&CP 

acreage history of a covered commodity 

in 2009 through 2012, as determined by 

FSA. These separate yields will only be 

established where at least an average of 

25 percent of a covered commodity’s 

P&CP acreage was irrigated in 2009 

through 2012 and at least an average of 

25 percent of the same covered 

commodity’s P&CP acreage in that 

county was non-irrigated in 2009 

through 2012. 

Actual crop revenue is calculated as 

follows for: 

(1) ARC–CO, for a crop year of a 

covered commodity: The actual average 

county yield per planted acre of the 

covered commodity times the higher of 

either the market year average (MYA) 

price of the covered commodity or the 

national average loan rate for the 

covered commodity. 

(2) ARC–IC, for a producer on a farm 

for a crop year, which is based on the 

producer’s enrolled share of planted 

acres of all covered commodities on all 

farms for which ARC–IC has been 

elected and in which the producer has 

an interest for which the producer 

enrolled: the sum of the results of the 

following calculation for each covered 

commodity on the farm: 

(i) The total production of the covered 

commodity for all farms in the State in 

which the producer has an interest; 

times 

(ii) The higher of either the MYA 

price or national loan rate for the 

covered commodity; divided by 

(iii) The producer’s share of the 

planted acres of the covered commodity 

in the State. 

* * * * * 

ARC guarantee is calculated for a crop 

year for a covered commodity, and is 

equal to 86 percent of the benchmark 

revenue for ARC–CO and 86 percent of 

the benchmark revenue for ARC–IC, as 

defined in this part. 

* * * * * 

ARC–IC farm is calculated as the sum 

of the producer’s interests in all of the 

producer’s farms having an ARC–IC 

election and enrollment in the State. 

Average historical county yield means 

the 5-year Olympic average of actual 

average county yields for the most 

recent 5 years (substituting 70 percent of 

the county transitional yield as defined 

in this part in each year where the 

actual average county yield is less than 

70 percent of the county transitional 

yield). Separate irrigated and nonirrigated yields will be established in a 

county having a sufficient number of 

farms with P&CP acreage history of a 

covered commodity in 2009 through 

2012, as determined by FSA. These 

separate yields will only be established 

where at least an average of 25 percent 

of a covered commodity’s P&CP acreage 

was irrigated in 2009 through 2012 and 

at least an average of 25 percent of the 

same covered commodity’s P&CP 

acreage in that county was non-irrigated 

in 2009 through 2012. 

* * * * * 

Benchmark revenue for ARC–CO is 

calculated as the product obtained by 

multiplying the average historical 

county yield times the MYA price for 

the most recent 5 crop years, excluding 

each of the crop years with the highest 

and lowest prices and substituting the 

reference price in each year where the 

MYA price is less than the reference 

price. 


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Federal Register / Vol. 79, No. 187 / Friday, September 26, 2014 / Rules and Regulations 57715 

Benchmark revenue for ARC–IC 

means a producer’s share of all covered 

commodities planted on all farms in the 

State for which individual ARC has 

been elected and enrolled and in which 

the producer has an interest. FSA will 

calculate the benchmark revenue for 

ARC–IC using the following three steps, 

based on the producer’s planted 

commodities: 

(1) For each covered commodity for 

each of the most recent 5 crop years: 

(i) Yield per planted acre (substituting 

70 percent of the county transitional 

yield in each year where the yield per 

planted acre is less than 70 percent of 

the county transitional yield); times 

(ii) The MYA price for the most recent 

5 crop years, excluding each of the crop 

years with the highest and lowest prices 

and substituting the reference price in 

each year where the MYA price is less 

than the reference price. 

(2) For each covered commodity, the 

average of the revenues determined 

under paragraph (1) of this definition for 

the most recent 5 crop years, excluding 

each of the crop years with the highest 

and lowest revenues; and 

(3) For each of the 2014 through 2018 

crop years, the benchmark revenue for 

the ARC–IC farm is the sum of the 

amounts determined under paragraph 

(2) of this definition for all covered 

commodities on such farms, adjusted to 

reflect the ratio between the total 

number of P&CP acres and eligible 

subsequently planted crop acreage on 

such farms to a covered commodity and 

the total P&CP acres and eligible 

subsequently planted crop acreage of all 

covered commodities planted on such 

farms. If a producer has an interest in 

multiple farms that have enrolled in 

ARC–IC, the ARC–IC benchmark 

revenue for that producer will be a 

weighted average of the benchmark 

revenue for those multiple farms. 

* * * * * 

Current owner means the person or 

legal entity meeting the definition of 

owner in 7 CFR part 718 on the day that 

person or legal entity is signing any 

form or performing any action required 

under this part. For example, if a 

signature of a ‘‘current owner’’ is 

required under this part, the person or 

legal entity must be an owner on the day 

the person or legal entity is signing the 

form or performing the action required 

under this part. 

Current producer means the person or 

legal entity meeting the definition of 

producer in 7 CFR part 718 on the day 

that person or legal entity is signing any 

form or performing any action required 

under this part. For example, if a 

signature of a ‘‘current producer’’ is 

required under this part, the person or 

legal entity must be a producer on the 

day the person or legal entity is signing 

the form or performing the action 

required under this part. 

* * * * * 

Effective price is, the higher of the— 

(1) National average market price 

received by producers during the 12- 

month marketing year for the covered 

commodity (also known as the MYA 

price), as determined by FSA; or 

(2) National average loan rate as 

defined in this part for the covered 

commodity in effect for the crop year, 

which is the same as the loan rate for 

a marketing assistance loan for the 

commodity for that crop year. 

* * * * * 

Farm structure means the constitution 

of the farm. References to ‘‘farm 

structure’’ can be by date or crop year. 

When references to farm structure are by 

crop year, that means the farm as was 

last constituted as specified in 7 CFR 

part 718 subpart C in that crop year. 

* * * * * 

Marketing year means the 12-month 

period beginning in the calendar year 

the crop is normally harvested as 

follows: 

(1) Barley, oats, and wheat: June 1 

through May 31; 

(2) Canola, flax and rapeseed, lentils, 

and dry edible peas: July 1 through June 

30; 

(3) Peanuts and rice: August 1 through 

July 31; and 

(4) Corn, grain sorghum, soybeans, 

sunflowers, safflower, mustard, crambe, 

sesame, and chickpeas: September 1 

through August 31. 

Market year average (MYA) price 

means the national average price 

received by producers during the 12- 

month marketing year (as defined in this 

part), as determined by FSA for the 

relevant crop of the covered commodity. 

* * * * * 

National average loan rate means the 

loan rate established for a crop year of 

the covered commodity as specified in 

7 CFR part 1421. 

* * * * * 

Transitional yield means the yield 

determined according to section 502(b) 

of the Federal Crop Insurance Act (7 

U.S.C. 1502(b)). 

* * * * * 

Subpart B—Establishment of Base 

Acres for a Farm for Covered 

Commodities 

■ 6. Add § 1412.25 to read as follows: 

§ 1412.25 Reallocation of base acres on a 

farm and updating of records. 

(a) Any or all of the current owners of 

a farm with base acres of covered 

commodities as of September 30, 2013, 

as adjusted, will have a one-time 

opportunity in a reallocation period as 

announced by FSA to: 

(1) Reallocate the farm’s base acres of 

covered commodities (upland cotton is 

not a covered commodity) based on 

P&CP and subsequently planted crop 

acreage as specified in this section; or 

(2) Retain the farm’s base acres as of 

September 30, 2013. 

(b) Under no circumstances will 

reallocation of base acres of covered 

commodities on a farm as specified in 

paragraph (a) of this section result in 

any increase in total base acres on a 

farm. Additionally, if any current owner 

submits a written conflicting 

reallocation request or expresses written 

disagreement with a reallocation filed in 

according to paragraph (a), no 

reallocations will be approved for the 

farm unless all the current owners of the 

farm provide CCC with written evidence 

of the dispute resolution during the 

reallocation period. 

(c) FSA will provide the farm operator 

and owners of record with a summary 

of all covered commodities P&CP acres 

and subsequently planted crop acreage 

for the 2009 through 2012 crop years (as 

reported to FSA on acreage reports filed 

with FSA in each of those years). 

Acreage not reported to FSA by 

producers will not be included in the 

summary. The summary will reflect the 

2014 farm structure. 

(d) Current owners will be provided a 

one-time opportunity to update the 

records identified in paragraph (c) of 

this section during the reallocation 

period specified in paragraph (a) of this 

section, provided that there are crop 

insurance records (or other verifiable 

documentation available to support 

those requested updates). In the event 

that an update to a farm’s P&CP acres of 

a covered commodity for 2009 through 

2012 causes any payment under another 

FSA or CCC program to become 

unearned, the overpayment must be 

refunded to FSA or CCC in accordance 

with the rules for that program and the 

FSA or CCC regulations governing 

overpayment (7 CFR parts 718 and 

1403). 

(e) After an update as specified in 

paragraph (d) of this section, the owner 

may redistribute the farm’s base acres 

during the reallocation period, based on 

a proration of each covered 

commodity’s P&CP acres or 

subsequently planted crop acreage in 

crop years 2009 through 2012 to the 

total P&CP acres or subsequently 


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planted crop acreage of all covered 

commodities during that time. 

(f) Upland cotton base acres that were 

in existence as of September 30, 2013, 

are considered generic base acres for the 

purposes of ARC and PLC. Generic base 

acres cannot be reallocated to a covered 

commodity, but will be eligible for ARC 

and PLC payments as specified in in 

this part. 

(g) The summary of records specified 

in paragraph (c) of this section is 

intended to assist current owners of 

farms with the one-time opportunity for 

base acre reallocation as provided in 

this section. Any current owner of a 

farm may also at any time visit the FSA 

county office and request to obtain a 

copy of the summary referenced in 

paragraph (c) of this section. Current 

owners can reallocate base acres at any 

time during the reallocation period 

without receiving or requesting the 

summary records, and, therefore, failure 

to receive a summary record from FSA 

is not grounds for appeal or extension 

of the reallocation period. 

(h) The option to retain or reallocate 

base acres is an ‘‘all or nothing’’ 

decision for the farm. Partial retention 

of base acres or partial reallocation of 

base acres is not permissible. A decision 

by any current owner to reallocate base 

acres on a farm in accordance with this 

section is final and binding if made 

according to this section during the 

reallocation period unless that 

reallocation is withdrawn in writing by 

that current owner or another current 

owner. If another current owner 

subsequently files a different 

reallocation request in whatever time 

remains in the stated reallocation period 

or if there are conflicting reallocation 

requests of current owners in the 

reallocation period, FSA will deem no 

reallocation to have been performed 

unless the conflict is resolved via 

written agreement between the current 

owners who filed the conflicting 

requests. In the case of submitting 

evidence of resolution, the written 

agreement must be filed with FSA in the 

reallocation period. Any and all updates 

and reallocation requests mentioned in 

this section are subject to review and 

approval or disapproval by FSA for 

CCC. 

■ 7. Add subpart C to read as follows: 

Subpart C—Establishment of Price Loss 

Coverage Yields and Submitting Production 

Sec. 

1412.31 PLC yields for covered 

commodities. 

1412.32 Updating PLC yield. 

1412.33 PLC yield for additional oilseeds. 

1412.34 Submitting production evidence. 

1412.35 Incorrect or false production 

evidence. 

§ 1412.31 PLC yields for covered 

commodities. 

(a) The PLC yield for covered 

commodities on the farm is equal to the 

counter-cyclical payment yield 

established for each covered commodity 

on the farm that was effective 

September 30, 2013, unless the PLC 

yield is updated as specified in 

§ 1421.32. If the Secretary designates an 

additional oilseed or pulse crop as a 

covered commodity that does not have 

a counter-cyclical payment yield, the 

PLC yield for that commodity will be 

established as specified in § 1412.33 or 

§ 1412.34, whichever is applicable. 

(b) If a PLC yield is not already 

established for a covered commodity on 

a farm for which base acres are allocated 

through the base acres reallocation 

process or for which a covered 

commodity is planted on generic base 

acres, a yield will be established for the 

covered commodity on the farm using 

the yield on similarly situated farms, as 

determined by FSA. The yield on 

similarly situated farms will then be 

used as the 2013 county average 

counter-cyclical yield for the covered 

commodity. 

§ 1412.32 Updating PLC yield. 

(a) For any covered commodity on the 

farm that has base acres (except generic 

base acres), as adjusted, in excess of 

zero acres, a current owner of the farm 

has a one-time opportunity in a 

specified period, as announced by FSA 

to update PLC yields on a covered 

commodity-by-covered commodity basis 

equal to 90 percent of each covered 

commodity’s 2008 through 2012 average 

yield per planted acre, excluding from 

the average any year when no acreage 

was planted to the covered commodity. 

If the yield per planted acre in any of 

the years 2008 through 2012 is less than 

75 percent of the average of the county 

yield, then 75 percent of the average of 

the 2008 through 2012 county yield will 

be substituted for that year. 

(b) The current owner of the farm may 

retain the counter-cyclical yield as the 

PLC yield or update the PLC yield, on 

a covered commodity-by-covered 

commodity basis. 

(c) PLC yields are exclusively used for 

PLC. However, any owner of a farm can 

update the PLC yields, regardless of 

program election or decision on 

enrollment or participation. 

(d) A decision by any current owner 

of a farm to update any PLC yield as 

specified in this section is final and 

binding unless that decision to update 

the yield is withdrawn by that current 

owner or a different yield update is 

made by that current owner or another 

current owner. If that current owner or 

another current owner requests a 

different PLC yield update for the 

covered commodity during the yield 

update period specified in paragraph (a) 

of this section that update will become 

final. 

(e) All PLC yield updates are subject 

to review and approval by FSA as 

specified in § 1412.35. FSA’s decision to 

issue payments based on the PLC yield 

updated by an owner is subject to 

verification and spot check by FSA at 

any time. 

(f) Yield updates in this section will 

be permitted using the current owner’s 

certification of yield. The certification is 

subject to spot check or verification by 

FSA at any time. If selected for spot 

check or verification, the owner must 

submit evidence specified in § 1412.34 

to support the certified yield. 

§ 1412.33 PLC yield for additional 

oilseeds. 

(a) The PLC yield for the farm for 

additional oilseeds designated by the 

Secretary will be determined by 

multiplying the weighted average yield 

per planted acre for the crop on the 

farm, as determined in paragraph (b) of 

this section, times the ratio resulting 

from: 

(1) The national average yield for the 

crop, as determined by FSA, divided by 

(2) The national average yield for the 

crop for the 1998 through 2001 crop 

years, as determined by FSA. 

(b)(1) The yield per planted acre for 

such designated oilseed on the farm is 

calculated as follows: 

(i) The sum of the production of the 

crop for the 1998 through 2001 crop 

years, as determined in paragraph (b)(2) 

of this section; divided by 

(ii) The sum of the total planted acres 

of the crop for the 1998 through 2001 

crop years. 

(2) The production of the crop for 

each of the 1998 through 2001 crop 

years will be the higher of the following, 

except in a year in which the acreage 

planted to the crop was zero, in which 

case the production for the crop for such 

year will be zero: 

(i) The total production for the 

applicable year based on the production 

evidence submitted in accordance with 

§ 1412.34; or 

(ii) The amount equal to the product 

of: 

(A) The total planted acres for the 

crop, times 

(B) 75 percent of the harvested 

average county yield for that crop 

determined, where practicable, by 

calculating the weighted 4-year average 

of the National Agricultural Statistics 

Service (NASS) harvested acreage yields 

for the crop using the 1998 through 

2001 crop years. 


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(3) The NASS harvested acreage yield 

to be used in paragraph (b)(2) of this 

section will be based on: 

(i) NASS harvested irrigated yield for 

the crop, if available, for producers who 

irrigated the crop in the applicable 

years; 

(ii) NASS harvested non-irrigated 

yield for the crop, if available, for 

producers who did not irrigate the crop 

in the applicable years; or 

(iii) NASS harvested blended yield for 

all acreage, regardless of whether or not 

the acres were irrigated or non-irrigated, 

for all crops in all counties for which 

the yields in paragraphs (b)(3)(i) and (ii) 

of this section are unavailable. 

(4) If NASS harvested acreage yield 

data is not available, the Deputy 

Administrator will assign a yield to be 

used in paragraph (b)(2)(ii)(B) of this 

section. 

(c) The establishment of PLC yield for 

an additional oilseed in this section will 

be permitted using a producer 

certification of yield. The certification is 

subject to spot check or verification by 

FSA at any time. If selected for spot 

check or verification, the producer must 

submit evidence as specified in in 

§ 1412.34 to support the certified yield. 

§ 1412.34 Submitting production evidence. 

(a) When required by FSA as specified 

in this part, documentary evidence 

supporting any certification of yield or 

production must be provided to the 

county committee of the county where 

the farm is administratively located. 

(b) Documentary evidence acceptable 

to FSA includes, but is not limited to: 

(1) Production approved by the 

county committee for some other FSA 

program purpose; 

(2) Commercial receipts; 

(3) Settlement sheets; 

(4) Warehouse ledger sheets; 

(5) Elevator receipts or load 

summaries, supported by other evidence 

showing disposition, such as sales 

documents; 

(6) Evidence from harvested or 

appraised acreage, approved for FCIC or 

multi-peril crop insurance; or 

(7) Other production evidence 

determined acceptable by the Deputy 

Administrator. 

(c) Production evidence specified in 

paragraph (b) of this section must show: 

(1) The producer’s name, 

(2) The commodity, 

(3) The buyer or name of storage 

facility, 

(4) The date of transaction or delivery, 

and 

(5) The quantity. 

(d) FSA may verify the production 

evidence submitted with records on file 

at the warehouse, Risk Management 

Agency, or other entity that received or 

may have received the reported 

production. 

§ 1412.35 Incorrect or false production 

evidence. 

(a) If a certification of production and 

yield or production evidence submitted 

in support of that certification is false or 

incorrect, as determined by the county 

committee, the county committee will 

determine whether the owner, operator, 

or producer submitting the certification 

or production evidence for a farm acted 

in good faith or took action to defeat the 

purpose of ARC or PLC. 

(b) If the county committee 

determines the owner or producer who 

submitted the certification or 

production evidence referenced in 

paragraph (a) of this section acted in 

good faith and did not take action to 

defeat the purpose of ARC or PLC, the 

county committee will, as applicable: 

(1) Correct the PLC yield for the 

applicable covered commodity to equal 

the yield that would have been 

calculated as specified in § 1412.32 

based on accurate production evidence; 

and 

(2) Recalculate any payments based 

on the correct yield and require refunds 

of any payments that were issued as a 

result of the incorrect yield. Unearned 

payments must be refunded together 

with interest from the date of 

disbursement and are due from any 

producers who received payments that 

would not have issued absent the error 

or incorrect yield. 

(c) If the county committee 

determines the owner, operator, or 

producer who submitted the false or 

incorrect evidence did not act in good 

faith or took any action to defeat or 

undermine the purpose of ARC or PLC, 

the county committee will require a full 

refund of any payments, with interest, 

that were issued to any persons based 

on that false or erroneous certification 

or production evidence and the yield 

update request is invalid. 

Subpart D—ARC and PLC Contract 

Terms and Enrollment Provisions for 

Covered Commodities 

■ 8. In subpart D, add §§ 1412.41, 

1412.42, and 1412.43 to read as follows: 

§ 1412.41 ARC or PLC program contract. 

(a) The following provisions apply to 

ARC and PLC program contracts: 

(1) Eligible producers (as specified in 

§ 1412.42) of covered commodities with 

base acres may enroll in ARC and PLC 

contracts during the enrollment period 

announced by FSA. 

(i) For program year 2014, the 

enrollment period will end June 1, 2015. 

(ii) The 2014 contract period ends 

September 30, 2014. Accordingly, the 

enrollment for 2014 is the only program 

year a retroactive contract can be 

approved. 

(iii) If a 2014 farm did not have a 

valid election made by producers in 

accordance with subpart G, no producer 

on that farm is eligible for any 2014 

ARC or PLC payment for that farm. This 

is not an adverse decision for any 

enrolled producer on that farm; rather, 

the farm’s producers are simply not 

eligible for payments on the enrolled 

farm because the farm does not have a 

valid election. 

(2) For program years 2015 through 

2018, the enrollment period will end on 

June 1 of each such fiscal year. This 

means that the enrollment period for 

both 2014 and 2015 will end on June 1, 

2015. 

(i) Eligible producers must execute 

and submit an ARC or PLC program 

contract not later than June 1, 2015, for 

2014 and 2015 fiscal year contracts and 

not later than June 1 of the applicable 

year for 2016 through 2018 fiscal year 

contracts. 

(ii) Except as may otherwise be 

provided for the 2014 crop year as 

stated in this section, enrollment is not 

allowed after September 30 of the fiscal 

year in which the ARC or PLC payments 

are requested. Except as specifically 

stated for the 2014 crop year, FSA will 

not process offers of enrollment for a 

contract period after the contract period 

has ended. This is not a compliance 

provision but a rule of general 

applicability and will apply to every 

offer to contract in each contract year. 

(3) Except as discussed in this section 

for PLC and ARC–CO enrollments, 

contracts will not be approved unless all 

producers sharing in contract acreage 

with more than a zero share have 

submitted all applicable signatures on 

the contract and documentation 

necessary for FSA to make such 

approval, as determined by the Deputy 

Administrator. For those producers with 

an interest but a zero share of contract 

acreage, the contract will not be 

approved before all producers have 

signed the contract or furnished 

supportive and necessary contractual 

documents (such as cash leases in lieu 

of signing for a zero share). A contract 

not having all requisite signatures of 

producers having more than a zero share 

of contract acreage on or before the 

enrollment deadline are deemed 

incomplete and will not be considered 

submitted to CCC for any purpose and 

will not be acted on or approved. For 

ARC–IC contracts there are no 

exceptions to this provision. 

Additionally, contracts enrolled by a 


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57718 Federal Register / Vol. 79, No. 187 / Friday, September 26, 2014 / Rules and Regulations 

producer by the date specified in 

paragraph (a)(2)(i) of this section that 

were not signed by other producers 

according to this section will be deemed 

withdrawn and will not be approved. 

An exception to this applies to PLC and 

ARC–CO offers of enrollment. In those 

instances, at the discretion of the 

Deputy Administrator and where no 

dispute of shares or other disagreement 

between producers is evident or 

suspected, PLC and ARC–CO offers of 

enrollment can be approved to permit 

payment to only those eligible 

producers who did enroll and without 

regard to shares that do not have 

signatures. This exception will be made 

only if, in the sole judgment and 

discretion of FSA, FSA is satisfied that 

those producers who did sign in 

accordance with this section ensure 

compliance with all contract provisions 

and requirements of this part. Producers 

have no right to payment on any farm 

that is not enrolled in ARC or PLC and 

they are not entitled to a decision to 

authorize the exception for PLC and 

ARC–CO enrollments as discussed 

above, as that is discretionary. CCC and 

FSA are not responsible for ensuring 

that producers annually enroll in ARC 

or PLC. Producers on a farm are solely 

responsible for ensuring that enrollment 

occurs. 

(4) Eligible producers who choose to 

enter into a contract with FSA must 

enroll all base acres on the farm. 

Enrollment of fewer than all base acres 

on the farm is not allowed. 

(b) Eligible producers may withdraw 

from a contract at any time by June 1 of 

the applicable contract year provided all 

producer signatories to the contract, 

including FSA, agree to the withdrawal 

in writing. 

(c) All contracts expire on September 

30 of the fiscal year of the contract 

unless: 

(1) Withdrawn in accordance with 

paragraph (b) of this section; 

(2) Terminated in accordance with 

paragraphs (d) or (e) of this section; or 

(3) Terminated at an earlier date by 

mutual consent of all parties, including 

CCC. 

(d) A transfer or change in the interest 

of an owner or producer in the farm or 

in acreage on the farm subject to a 

contract will result in the termination of 

the contract. The contract termination 

will be effective on the date of the 

transfer or change. Successors to the 

interest in the farm or crops on the farm 

subject to the contract may enroll the 

farm in a new contract for the current 

and assume all obligations under the 

contract. 

(e) In the event a 2015 or subsequent 

crop year farm reconstitution is 

completed on a properly enrolled farm 

or farms in accordance with part 718 of 

this title, FSA will issue notices to the 

2015 and subsequent crop year farm 

operator and owners of record on a farm 

that all producers with an interest in the 

base acres on the farm must sign a new 

ARC or PLC program contract within the 

later of 30 days of the notice or 

September 30 of the fiscal year program 

payments are requested, after receiving 

written notification by the county 

committee indicating the reconstitution 

is completed. It is the responsibility of 

the operator and owners on a farm that 

producers with an interest in base acres 

are notified of the reconstitution and 

requirement for a new contract. 

§ 1412.42 Eligible producers. 

(a) Producers eligible to enter into a 

contract are: 

(1) An owner of a farm who has an 

ownership share of a crop and who 

assumes all or a part of the risk of 

producing a crop that is commensurate 

with that claimed ownership share of 

the crop; or 

(2) A producer, other than an owner, 

on a farm with a share-rent lease for 

such farm, regardless of the length of the 

lease, if the owner of the farm enters 

into the same contract; or 

(3) A producer, other than an owner, 

on a farm who cash rents such farm 

under a lease expiring on or after 

September 30 of the year of the contract 

in which case the owner is not required 

to enter into the contract; or 

(4) A producer, other than an owner, 

on a farm who cash rents such farm 

under a lease expiring before September 

30 of the year of the contract. The owner 

of such farm must also enter into the 

same contract, failing which the farm is 

not enrolled; or 

(5) An owner of an eligible farm who 

cash rents such farm and the lease term 

expires before September 30 of the year 

of the contract, if the tenant declines to 

enter into a contract for the applicable 

year. In the case of an owner covered by 

this paragraph, payments will not begin 

under the contract until the lease held 

by the tenant ends. 

(b) A minor child will be eligible to 

enter into a contract only if one of the 

following conditions exist: 

(1) The right of majority has been 

conferred upon the minor by court 

proceedings or law; 

(2) A guardian has been appointed to 

manage the minor’s property and the 

applicable program documents are 

executed by the guardian; or 

(3) A bond is furnished under which 

a surety guarantees any loss incurred for 

which the minor would be liable had 

the minor been an adult. 

(c) The owner of the farm may be 

considered the ‘‘producer’’ if there is no 

other producer, but the owner could 

have shared in the crop had a crop been 

produced, but only if the farm and 

owner otherwise meet all the 

requirements for payment. 

§ 1412.43 Reconstitutions. 

Farms will only be reconstituted in 

accordance with subpart G of this part 

and part 718 of this title. 

§ 1412.45 [Amended] 

■ 9. In § 1412.45, remove the term 

‘‘P&CP’’ each time it appears and add 

the word ‘‘planted’’ in its place. 

§ 1412.46 [Amended] 

■ 10. In § 1412.46, paragraph (c)(2), 

remove the words ‘‘percent of a farm’’ 

and add the words ‘‘percent of the base 

acres of a farm’’ in their place. 

■ 11. Add § 1412.50 to subpart D to read 

as follows: 

§ 1412.50 Transfer of land and successionin-interest. 

(a) Land subject to an election in 

subpart G will continue to be subject to 

the election even if there is a transfer of 

land or change in interest of any 

producer or owners on the farm. If a 

new owner or operator or producer 

purchases or obtains the right and 

interest in, or right to occupancy of, the 

land subject to an election option, such 

new owner or operator or producer, 

upon the approval of FSA, may enroll 

and participate under a new contract 

with FSA with respect to such 

transferred land in accordance with 

§ 1412.41. 

(b) A succession in interest to an ARC 

or PLC program contract is required if 

there has been a change in the operation 

of a farm such as: 

(1) A sale of land; 

(2) A change of operator or producer, 

including a change in a partnership that 

increases or decreases the number or 

changes who are partners; 

(3) A foreclosure, bankruptcy, or 

involuntary loss of the farm; 

(4) A change in the producer shares to 

reflect changes in the producer’s share 

of the crop(s) that were originally 

approved on the contract; or 

(5) Another change as otherwise 

determined by the Deputy 

Administrator by which the succession 

will not adversely affect nor defeat the 

purpose of the program. 

(c) A succession in interest to an ARC 

program contract is not permitted if FSA 

determines that the change: 

(1) Is not for all the time remaining 

under the ARC or PLC program contract; 


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(2) Results in a violation of the 

landlord-tenant provisions specified in 

§ 1412.55; or 

(3) Adversely affects or otherwise 

defeats the purpose of the program. 

(d) If a producer who is entitled to 

receive ARC or PLC payments dies, 

becomes incompetent, or is otherwise 

unable to receive the payment, CCC will 

make the payment in accordance with 

part 707 of this title. 

(e) A producer or owner of an 

enrolled farm must inform the county 

committee of changes in interest in base 

acres on the farm not later than: 

(1) August 1 of the fiscal year in 

which the change occurs if the change 

requires a reconstitution be completed 

in accordance with part 718 of this title 

or 

(2) September 30 of the fiscal year in 

which the change occurs if the change 

does not require a reconstitution be 

completed in accordance with part 718 

of this title. 

(f) In any case in which either an ARC 

or PLC payment has previously been 

made to a predecessor, such payment 

will not be paid to the successor, unless 

such payment has been refunded in full 

by the predecessor, in accordance with 

§ 1412.41(d). 

Subpart E—Financial Considerations 

Including Sharing Payments 

■ 12. In § 1412.51, add paragraph (e) to 

read as follows: 

§ 1412.51 Limitation of payments. 

* * * * * 

(e) Notwithstanding any other 

provision of this part, a producer on a 

farm is not eligible to receive ARC and 

PLC payments if the sum of the base 

acres including any generic base acres 

on the farm is 10 acres or less. The 10- 

acre limitation of this subsection will 

not apply to a socially disadvantaged 

farmer or rancher or a limited resource 

farmer or rancher as specified in this 

part. 

■ 13. Add §§ 1412.52 and 1412.53 to 

read as follows: 

§ 1412.52 PLC payment provisions. 

(a) Provided all provisions of this part 

including but not limited to election 

have been satisfied for each of the 2014 

through 2018 contract years, a PLC 

payment will be made to eligible 

participants on a farm enrolled in PLC 

with respect to covered commodities for 

which a PLC yield and base acres are 

established: 

(1) When the effective price for a 

covered commodity in a crop year is 

less than the reference price for the PLC 

enrolled covered commodity for that 

crop year as specified in this part; and 

(2) As soon as practical, as 

determined by the Deputy 

Administrator, after October 1 following 

the end of the 12-month marketing year 

for the covered commodity as 

applicable. 

(b) The effective price for a covered 

commodity is equal to the higher of the: 

(1) MYA price received by producers 

during the 12-month marketing year for 

the crop year of the covered commodity, 

as determined by FSA, or 

(2) National loan rate for a marketing 

assistance loan for the covered 

commodity for such crop year. 

(c) The payment rate used to calculate 

PLC payments with respect to covered 

commodity for which PLC yields and 

base acres are attributed to the covered 

commodity on a farm enrolled in a PLC 

contract is the reference price of the 

covered commodity minus the effective 

price of the covered commodity for a 

crop year, as determined in accordance 

with paragraph (b) of this section. 

(d) For PLC contracts, when PLC 

payments are triggered in accordance 

with paragraph (a) of this section, 

subject to the limitation in § 1412.51 

and in part 1400 of this chapter, the PLC 

payment to be paid to producers on a 

farm enrolled in a contract with respect 

to a covered commodity for which a 

PLC yield and base acres are attributed 

is equal to the product of: 

(1) The payment rate determined in 

accordance with paragraph (c) of this 

section, multiplied by 

(2) The relevant payment acres of the 

covered commodity, as applicable, 

minus any payment acre reduction in 

accordance with § 1412.46, multiplied 

by 

(3) The PLC payment yield for the 

covered commodity on the farm 

enrolled in a PLC contract as 

determined in accordance with 

§ 1412.31, minus 

(4) Any reduction calculated in 

accordance with subpart F of this part. 

(e) If a producer declines to accept, or 

is determined to be ineligible for all or 

any part of the producer’s share of the 

PLC payment computed for the farm in 

accordance with the provisions of this 

section, the: 

(1) Payment or portions thereof will 

not become available for any other 

producer and 

(2) Producer is required to refund to 

CCC any amounts representing 

payments that exceed the payments 

determined by FSA to have been earned 

under the program authorized by this 

part. Part 1403 of this chapter is 

applicable to all unearned payments. 

(f) The payment of any amount due 

any producer on a farm enrolled in a 

PLC contract will be made only after all 

the producers subject to the contract are 

determined to be in full compliance 

with the contract and the requirements 

in this part or any other applicable part. 

(g) A participant on a farm enrolled in 

a contract may receive a payment 

amount due without regard to the 

eligibility of other participants on the 

farm if the: 

(1) Participant is in full compliance 

with the contract and the requirements 

in this part or any other applicable part; 

(2) Payment of such amount does not 

adversely affect or defeat the purpose of 

the program, as determined by the 

Deputy Administrator, or designee; and 

(3) Payment is approved by the 

Deputy Administrator, or designee. 

(h) Temperate japonica rice or 

medium and short grain rice grown: 

(1) In California will receive the 

effective price and guarantee for 

medium and short grain based only on 

the prices that temperate japonica or 

medium and short grain rice receives in 

California. 

(2) Outside of California will receive 

the effective price and guarantee for 

medium and short grain rice based only 

on the prices that temperate japonica or 

medium and short grain rice receives 

outside of California. 

§ 1412.53 ARC payment provisions. 

(a) Provided all provisions of this part 

including but not limited to ARC–CO 

election and enrollment have been 

satisfied for each of the 2014 through 

2018 contract years, CCC will issue, as 

applicable and consistent with the 

election and enrollment: 

(1) An ARC–CO payment beginning 

October 1, or as soon as practicable 

thereafter, after the end of the applicable 

marketing year for the covered 

commodity to the producers on a farm 

for a covered commodity in each crop 

year if the farm was enrolled in ARC– 

CO and the ARC–CO actual crop 

revenue was less than the ARC–CO 

guarantee. 

(2) Payment is equal to the result of 

multiplying the payment acres for the 

covered commodity times the difference 

between the actual crop revenue and the 

ARC–CO guarantee, not to exceed 10 

percent of the ARC–CO benchmark 

revenue. 

(b) Provided all provisions of this part 

including but not limited to ARC–IC 

election and enrollment have been 

satisfied for each of the 2014 through 

2018 contract years, CCC will issue, as 

applicable and consistent with the 

election and enrollment: 

(1) An ARC–IC payment beginning 

October 1, or as soon as practicable 

thereafter, after the end of the applicable 

marketing year for the farm if the farm 


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was enrolled in ARC–IC and the ARC– 

IC actual crop revenue for that farm is 

less than the ARC–IC guarantee. 

(2) Payment is equal to the result of 

multiplying the payment acres for the 

covered commodities times the 

difference between actual crop revenue 

and the ARC–IC guarantee, not to 

exceed 10 percent of benchmark 

revenue for ARC–IC. 

(c) If a producer has an interest in 

multiple farms that have enrolled in 

ARC–IC, the ARC–IC benchmark 

revenue for that producer used in the 

payment calculation will be a weighted 

average of the benchmark revenue for 

those multiple farms. 

(d) In a county having a sufficient 

number of farms with P&CP acreage 

history of a covered commodity in 2009 

through 2012, as determined by FSA, 

where at least an average of 25 percent 

of a covered commodity’s P&CP acreage 

was irrigated in 2009 through 2012 and 

at least an average of 25 percent of the 

same covered commodity’s P&CP 

acreage in that county was non-irrigated 

in 2009 through 2012, a separate 

irrigated and non-irrigated benchmark 

revenue, guarantee, and actual revenue 

will be maintained by FSA for the 

affected county. For farms in these 

counties with covered commodities 

enrolled in ARC–CO and ARC–IC, the 

average 2009 through 2012 reported 

acreage of each covered commodity on 

the farm with irrigated and non-irrigated 

status will be used to calculate a 

percentage of each applicable covered 

commodity that will be applied against 

the irrigated and non-irrigated 

benchmark revenue, guarantee, and 

actual revenue as determined by FSA. 

(e) FSA will determine the irrigated 

and non-irrigated counties and crops 

prior to the 2014 enrollment period and 

that determination will be effective 

through the 2018 program year, unless 

there is a substantial change in the 

irrigated and non-irrigated practices in 

the county, as determined by the FSA. 

(f) The effective price and guarantee 

for temperate japonica rice will be based 

on the price that all medium and short 

grain (including glutinous) rice receives 

in California. The effective price and 

guarantee for medium grain rice outside 

California will be based on the price 

that all medium and short grain rice 

receives outside California. 

§ 1412.54 [Amended] 

■ 14. In § 1412.54(f) introductory text, 

remove the term ‘‘P&CP’’ each time it 

appears and add the word ‘‘planted’’ in 

its place. 

■ 15. Amend § 1412.66 by adding 

paragraph (c) to read as follows: 

§ 1412.66 Acreage and production reports, 

prevented planting, and notices of loss. 

* * * * * 

(c) As a condition of producer 

payment eligibility for all ARC–IC 

payments under this part, all producers 

of all covered commodities on enrolled 

ARC–IC elected farms must accurately 

submit a report of production by the 

acreage reporting date for the crop in the 

year immediately following the crop 

year of the reported crop acreage for all 

the covered commodities elected and 

enrolled in ARC–IC. The report is due 

for each covered commodity for which 

an acreage report greater than zero 

planted acres was filed for the farm 

according to paragraph (a) of this 

section. The report of production for all 

of such covered commodity or covered 

commodities can be submitted by any of 

the producers of the covered commodity 

or covered commodities on the farm, the 

farm operator, or an owner on the farm. 

The absence of the required production 

report of any covered commodity being 

filed on an enrolled ARC–IC elected 

farm will cause all of the producers who 

share in any of the covered commodities 

on that farm to be ineligible for payment 

on that farm and on any other ARC–IC 

elected and enrolled farm in the State 

for the crop year for which the 

production report was not filed or is 

missing. At the discretion of CCC, the 

report of production must be 

accompanied by documentation 

acceptable to CCC. The report must 

include the date harvest was completed. 

Records of production acceptable to 

CCC may include those specified in: 

(1) Commercial receipts, settlement 

sheets, warehouse ledger sheets, or load 

summaries of the crop that was sold or 

otherwise disposed of through 

commercial channels provided the 

records are reliable or verifiable as 

determined by CCC; and 

(2) Such documentary evidence such 

as contemporaneous measurements, 

truck scale tickets, and 

contemporaneous diaries, as is 

necessary in order to verify the 

information provided if the crop has 

been fed to livestock or otherwise 

disposed of other than through 

commercial channels, provided the 

records are reliable or verifiable as 

determined by CCC. If the crop will be 

disposed of through retail sales, such as 

roadside stands, u-pick, etc. and the 

producer will not be able to certify 

acceptable records of production, the 

producer must request an appraisal of 

the crop acreage prior to harvest. 

■ 16. Add subpart G to read as follows: 

Subpart G—ARC and PLC Election 

Sec. 

1412.71 Election of ARC or PLC. 

1412.72 Election period. 

1412.73 Reconstitutions of farms and 

election. 

1412.74 Failure to make election. 

§ 1412.71 Election of ARC or PLC. 

(a) All of the current producers on a 

farm must make a one-time election that 

is both: 

(1) Unanimous, and 

(2) Irrevocable. 

(b) The election by current producers 

is to obtain— 

(1) Either PLC or ARC–CO on a 

covered commodity-by-coveredcommodity basis on the farm; or 

(2) ARC–IC for all covered 

commodities on the farm. 

(c) The election will be based on the 

2014 farm structure (including any 

reconstitutions of farms that were 

initiated by August 1, 2014). 

(d) Valid elections specified in 

paragraphs (a) and (b) of this section by 

current producers will apply to the 2014 

farm structure and 2014 producers on 

the farm. The valid election will also 

apply to any subsequent year parent to 

the farm reconstitution as well as farms 

resulting from the parent farm as 

specified in § 1412.73. Neither the 

requesting of a farm reconstitution nor 

the reconstitution of any farm will 

impact either the requirement that all 

current producers on a farm must make 

the unanimous irrevocable election in 

the defined election period or the valid 

election that was previously made by 

those current producers. 

(e) FSA will process elections from 

current producers on a farm based on 

the election as submitted. For example, 

if the current producers of a farm attest 

that they are all or the only current 

producers on the farm and FSA later 

learns that there was another current 

producer at the time of election who did 

not agree to the election, the election is 

invalid. If at any time FSA determines 

that an election fails to satisfy the 

requirements of this subpart because it 

did not include the unanimous 

agreement of all current producers on 

the farm at the time of election, the 

election will immediately be invalid. 

This is not a compliance provision. 

Only valid elections by all current 

producers will be recognized and used 

by CCC. All ARC and PLC payments 

that were issued to any producers on a 

farm based on an election later 

determined by CCC to be invalid, for 

whatever reason, regardless of whether 

those producers who were issued 

unearned payments personally made or 

participated in the invalid election, 

must be refunded with interest. 

(f) Election is separate from 

enrollment; producers on farms that 


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Federal Register / Vol. 79, No. 187 / Friday, September 26, 2014 / Rules and Regulations 57721 

have validly completed an election by 

the current producers in the prescribed 

election period must still annually 

enroll as specified in subpart D for PLC 

and ARC payments, as applicable. 

§ 1412.72 Election period. 

(a) The election period will be 

conducted in a defined period as 

announced by FSA. During the election 

period, all current producers on a farm 

must unanimously make the irrevocable 

election as described in § 1412.71 to 

preserve the payment eligibility of all 

producers on the farm for 2014 and 

determine whether the default election 

(PLC) or elected option (either a 

combination of ARC–CO and PLC or 

ARC–IC) will apply to the farm. 

(b) If an election is submitted by all 

current producers on a farm as specified 

in § 1412.71 and paragraph (a) of this 

section, that election will be recognized 

as valid for the farm in all 2014 through 

2018 crop years unless any of the 

following occur: 

(1) The election is rescinded or 

terminated by any current producer on 

the farm in accordance with paragraph 

(c) of this section during the election 

period; 

(2) The valid election is modified and 

replaced by another valid election by all 

current producers during the election 

period; 

(3) A subsequent valid election by all 

current producers is made with FSA 

during the election period; or 

(4) FSA determines the election at the 

time it was made was invalid for any 

reason. 

(c) At any time during the election 

period, a current producer can rescind 

or terminate an election by providing 

written notice to FSA during the 

election period. The written notice to 

rescind or terminate must be physically 

received by FSA for CCC during the 

election period in order to be 

recognized. Immediately following 

receipt of such notice to rescind or 

terminate, the farm will be viewed as 

not having any effective valid election 

(in other words, no valid election will 

be determined to exist—even if there 

was another previous election in effect 

before the election that is rescinded, or 

terminated as specified in with this 

paragraph). 

(d) FSA is under no obligation to 

notify producers, owners, current 

producers, or current owners on a farm 

that an election has been rescinded or 

terminated. Current producers of a farm 

are solely responsible for filing a valid 

election during the election period or in 

whatever time remains in an election 

period following the rescission or 

termination of an election. 

(e) FSA is under no obligation to 

notify current producers, current 

owners, producers, or owners or new 

producers or owners of whether or not 

a valid election exists or is in place or 

whether any current producer has 

rescinded or terminated an election. 

However, FSA will respond to inquiries 

regarding the status of election of a farm 

by any current producer or current 

owner on a farm including a producer 

or owner who gains a producer or owner 

interest on the farm during the election 

period. 

(f) The election period and final day 

in that election period in which current 

producers can unanimously and 

irrevocably elect are not a compliance 

requirement or provision. The 

requirement of an election is mandated 

in the 2014 Farm Bill and as such is not 

subject to any of the equitable relief 

provisions of 7 CFR part 718, subpart D. 

Further, because the requirement of a 

unanimous irrevocable election and 

ramifications for not having a valid 

election are specified in the 2014 Farm 

Bill, FSA will not consider any 

equitable relief. There are no late-file 

provisions for election. 

1412.73 Reconstitutions of farms and 

election. 

(a) If a new producer or new owner 

gains an interest in a farm after the filing 

of a valid election on that farm during 

the election period, that new producer 

or new owner, whether or not known to 

FSA or the other producers or owners 

on the farm, will be subject to any 

previously submitted valid election 

under §§ 1412.71 and 1412.72 unless 

that new producer or new owner 

modifies, rescinds, or terminates the 

election as a producer or owner as 

specified in § 1412.72(c) during the 

remaining time in the election period. 

(b) Any reconstitution request 

initiated after August 1, 2014, will not 

be made until after the end of the 

election period specified in § 1412.72. 

Following the close of the election 

period in § 1412.72, a valid election on 

any farm cannot be changed by any 

reconstitution. This means that valid 

elected farms can only be combined 

with farms having an identical election 

for each and every covered commodity 

on the farm regardless of whether there 

are any base acres for any and all 

covered commodities on the farm. 

Reconstitutions will not be permitted to 

alter a valid election or the default 

election that may apply to a farm. 

§ 1412.74 Failure to make election. 

(a) If all current producers on a farm 

do not make a unanimous election 

during the period specified in § 1412.72, 

that farm will not have a valid election 

and any producer on the farm is not 

eligible for 2014 ARC or PLC enrollment 

or payments. 

(b) If a valid election is not made for 

a farm, FSA will not make any 

payments with respect to the farm for 

the 2014 crop year and the producers on 

the farm will default to a PLC election 

for all covered commodities on the farm 

for the 2015 through 2018 crop years. 

PART 1416—EMERGENCY 

AGRICULTURAL DISASTER 

ASSISTANCE PROGRAMS 

■ 17. The authority for part 1416 

continues to read as follows: 

Authority: Title III, Pub. L. 109–234, 120 

Stat. 474; 16 U.S.C. 3801, note. 

§ 1416.102 [Amended] 

■ 18. In § 1416.102, remove the 

definitions for ‘‘limited resource farmer 

or rancher’’ and ‘‘socially disadvantaged 

farmer or rancher’’. 

Signed on September 17, 2014. 

Val Dolcini, 

Executive Vice President, Commodity Credit 

Corporation, and Administrator, Farm 

Service Agency. 

[FR Doc. 2014–22879 Filed 9–25–14; 8:45 am] 

BILLING CODE 3410–05–P 

NUCLEAR REGULATORY 

COMMISSION 

10 CFR Part 70 

[NRC–2010–0271] 

RIN 3150–AJ34 

Domestic Licensing of Special Nuclear 

Material—Written Reports and 

Clarifying Amendments 

AGENCY: Nuclear Regulatory 

Commission. 

ACTION: Direct final rule. 

SUMMARY: The U.S. Nuclear Regulatory 

Commission (NRC) is amending its 

regulations related to reportable safety 

events involving special nuclear 

material. This rule increases the time 

licensees are allowed to submit a 

written follow-up report from within 30 

days to within 60 days after the initial 

report of an event, updates the reporting 

framework for certain situations, and 

removes redundant reporting 

requirements. These amendments affect 

a licensee or an applicant that is, or 

plans to be, authorized to possess 

greater than a critical mass of special 

nuclear material. This action resulted 

from a petition for rulemaking (PRM) 


asabaliauskas on DSK5VPTVN1PROD with RULES