Agriculture is facing hard times.
Commodity prices have languished. Input prices have increased. Destructive weather has left few operations untouched.
In Arkansas, “there have been nearly 60 farm equipment auctions since December,” said Hunter Biram, extension economist for the University of Arkansas System Division of Agriculture. “That’s about 10 times more than what we would typically see in this time frame and that’s an indicator of just how serious the economic downturn is in Arkansas” agriculture.
Biram, who co-authored a report on net farm income in Arkansas, noted that it was only federal aid that halted a two-year slide. Net farm income was expected to continue its downward trajectory in 2026.
However, the latest House and Senate versions of a federal spending bill now headed to reconciliation offer some glimmer of hope, keeping farm safety nets largely intact, with some notable changes, he said.
Independent reporting for Pine Bluff & Jefferson County since 1879.
“The Senate’s version of the reconciliation package is almost exactly like the House version in terms of the farm safety net, which I find to be pretty encouraging,” Biram said.
There are a variety of safety nets in farming including ARC, or Agriculture Risk Coverage, and PLC, or Price Loss Coverage. These programs are administered by the Farm Service Agency, part of the U.S. Department of Agriculture.
The ARC program provides payments when the county revenue for a farm is less than a guarantee set based on historical data and market conditions. The PLC program provides payments when the realized price for a covered commodity falls below its effective reference price, or target price.
In the face of chronically low commodity prices, farmers urged Congress to raise to reference prices. In the most recent report on net farm income for Arkansas, corn receipts dropped 48% since 2022; cotton declined 11% since 2023 and rice has fallen 8% since 2024. Soybean receipts are down 31% since 2022.
“A stronger safety net will certainly help those who have been able to withstand the economic downturn so far. Many farmers have not been as fortunate to make it to this point.” Biram said.
“On average, it’s looking like there’s a 15% increase in the PLC statutory reference prices across all of the crops,” Biram said.
“The Agricultural Risk Coverage county guarantee was increased from 86% to 90%, and the maximum payment rate was increased from 10% of expected county revenue to 12.5%,” he said.
Biram also noted increases in premium subsidies in crop insurance. The supplemental coverage option premium subsidy rate would increase from 65% to 80% and other major multi-peril crop insurance products would see anywhere from a 3 to 5 percentage point increase. Additionally, the maximum coverage levels for the supplemental coverage option would increase from 86% to 90%.
BENEFITS FOR SPECIALTY, BEGINNING FARMERS
If the spending bill is passed and signed into law, there will be other benefits for farmers.
Specialty crop growers — those who grow fruits and vegetables — had also urged Congress for stronger protections.
“The whole farm revenue protection program, which will be the primary crop insurance product that specialty crop producers would use, got an increase in its maximum coverage level from 85% to 90%,” Biram said.
Beginning farmers will also get a break. Currently, the insurance program for beginning farmers that provide a premium subsidy and exemption from some fees, only applies for farmers in their first five years.
“Eligibility for beginning farmer status has now increased from 5 years to 10 years,” Biram said. “This allows beginning farmers to hold status for 5 additional years, providing them with assistance that can help them as they establish the farm operation.”
To learn about extension programs in Arkansas, contact a local Cooperative Extension Service agent or visit www.uaex.uada.edu.
Mary Hightower is with the University of Arkansas System Division of Agriculture.