“Generic” Base Acres
In my previous post, I had mentioned that it does not matter what you plant for the 2017 crop year; you will receive the exact same amount of ARC-CO payments. However, an observant reader sent me a question regarding generic acres. Cotton producers under the 2014 Farm Bill were not able to enroll their cotton base into ARC-CO. Rather, they were allowed to allocate their cotton base acres to “generic” acres. Under this situation, what the farmer plant does matter.
ARC-CO payments for generic base acres are, in fact, based on what is planted for that crop year. Therefore, if the farmer has 1,000 cotton generic base acres and plant 1,000 acres of corn on those “generic base” acres, then the farmer will be paid the county ARC-CO corn payment for 2017. Therefore, the original observation from the farmer indicating they would plant soybeans since they would get more ARC-CO payment from soybeans than corn might in fact be accurate. But this is only true for cotton generic base acres. For all other farmers with no cotton generic base acres, it does not matter what you plant.
The bottom line is if you have cotton generic base acres, part of your revenue mix from ARC-CO will be based on what you plant. Otherwise, do not enter that into your equation. You will be getting the same amount no matter what you plant.