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Agricultural News

USDA RMA Clarifies STAX Eligibility Procedures for 2021; Producers Who Want STAX Should Review ARC/PLC Status

Mon, 08 Mar 2021 08:02:26 CST

USDA RMA Clarifies STAX Eligibility Procedures for 2021; Producers Who Want STAX Should Review ARC/PLC Status USDA RMA Clarifies STAX Eligibility Procedures for 2021; Producers Who Want STAX Should Review ARC/PLC Status Friday, March 5, 2021 - By Shawn Wade Officials at the USDA Risk Management Agency have clarified how they will determine a cotton producerís eligibility for purchasing the Stacked Income Protection Plan (STAX) insurance endorsement on their 2021 cotton acres based on whether or not they have enrolled seed cotton base acres on a farm, into either the Agricultural Risk Coverage (ARC) or Price Loss Coverage (PLC) programs that are available through the USDA Farm Service Agency.

Legislatively, a producer is not allowed to have an active enrollment in the ARC/PLC program on seed cotton base acres and an active STAX policy endorsement on their insured cotton acres on the same farm (identified by FSA Farm Number) in the same crop year. In light of the earlier ARC/PLC signup deadline that USDA FSA set for 2021, the question arises of when RMA verifies the information a producer is required to report about the status of a farmís ARC/PLC participation.   The initial response to this question posed to RMA staff by Plains Cotton Growers in late January indicated that RMA would use the date the Crop Acreage Report is filed as the snapshot date to determine if the producer has an active ARC/PLC enrollment on the farm and if they would be eligible to purchase STAX on those acres.   

Following that response, PCG asked if a producer would be viewed as meeting the eligibility criteria of not having an active ARC/PLC enrollment on a farm where they had initially signed an ARC/PLC enrollment for seed cotton base but subsequently withdrew the enrollment under current FSA rules. Again, RMAís response was consistent: since the STAX eligibility snapshot is taken on the acreage reporting date, an ARC/PLC contract withdrawn prior to the producer filing their Crop Acreage Report would appear to meet the legislative requirement prohibiting concurrent participation in STAX and ARC/PLC on a farm.

Unfortunately, additional discussion of the question within USDA, which extended until a short two weeks before the last Upland cotton federal crop insurance Sales Closing Date and the USDA FSA ARC/PLC program enrollment deadline of March 15, resulted in a different interpretation of the situation and what can only be perceived as a significant shift in RMAís policy to determine if a producer is eligible for STAX on a farm.    The official RMA policy was announced in an informational bulletin released March 4 (Informational Memorandum: OA-21-002 that outlines how the agency will make eligibility determinations relative to STAX for 2021 and future years.

In simple terms, RMA has decided that the enrollment status of a farm in an ARC/PLC program contract on seed cotton base acres will be based on the farmís initial enrollment status as of the 2021 ARC/PLC enrollment deadline of March 15, regardless of the fact that a producer has the ability to withdraw base acres from an ARC/PLC contract and is not required to report the ARC/PLC status of the farm to RMA until they file their Crop Acreage Report.

This decision - and the language it is based upon in the revisions made to the STAX insurance policy in 2020 - appear to go beyond Congressís legislative prohibition of concurrent participation in STAX and ARC/PLC and will extend that prohibition to any acres that are initially enrolled in ARC/PLC, even if properly withdrawn before the producer is required to report their status to RMA.

Again, the decision between ARC/PLC (for seed cotton base) and STAX is made on a farm-by-farm basis (identified by FSA Farm Number).

With only one week left before the USDA FSA ARC/PLC signup deadline, producers who plan to add STAX to their risk management portfolio for 2021 are advised to make any necessary adjustments to their ARC/PLC enrollment status on seed cotton base at their local USDA FSA office prior to March 15 to ensure that their preferred insurance coverages can attach to 2021 cotton acres.



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