What Is the Agricultural Risk Coverage (ARC) Program?

The Agricultural Risk Coverage program, known as ARC, is one of the two primary commodity support tools available to farmers of covered crops under the current farm bill. It was introduced in the 2014 Farm Bill as a replacement for direct and counter-cyclical payment programs, and was continued with modifications in the 2018 Farm Bill.

How ARC works

ARC pays when actual crop revenue falls below a benchmark guarantee. The guarantee is calculated as 86% of the Olympic average of the previous five years' revenue (excluding the high and low years). If the year's actual revenue falls short of that benchmark, USDA issues a payment to make up part of the difference — capped at 10% of the benchmark.

ARC-CO vs. ARC-IC

Farmers choose between two flavors:

• ARC-CO (county option) — uses the county's average yield and the national marketing year price to calculate revenue. This is the most common election and smooths out individual farm variation.
• ARC-IC (individual option) — uses the farmer's own actual production history. Provides more tailored coverage but requires more record-keeping.

Which crops are covered?

Covered commodities include corn, soybeans, wheat, grain sorghum, barley, oats, upland cotton, long-grain and medium-grain rice, peanuts, and several other crops designated by Congress. Farmers must have base acres — historical acreage — enrolled in the program.

ARC vs. PLC: the annual election

Each crop year, farmers elect either ARC-CO or PLC for each covered commodity on their farm. The choice is consequential: ARC pays on revenue shortfalls while PLC pays when market prices fall below a reference price. Farmers use crop insurance projections and price forecasts to decide which offers better expected protection. Browse program payment totals to see how ARC and PLC compare in aggregate across years.