[Federal Register Volume 91, Number 7 (Monday, January 12, 2026)]
[Rules and Regulations]
[Pages 1043-1059]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-00313]
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Rules and Regulations
Federal Register
________________________________________________________________________
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 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 91, No. 7 / Monday, January 12, 2026 / Rules
and Regulations
[[Page 1043]]
DEPARTMENT OF AGRICULTURE
Farm Service Agency
7 CFR Part 718
Commodity Credit Corporation
7 CFR Parts 1400, 1412, and 1430
[Docket ID FSA-2025-0202]
RIN 0560-AI83
Changes to Agriculture Risk Coverage, Price Loss Coverage, and
Dairy Margin Coverage Programs
AGENCY: Commodity Credit Corporation and Farm Service Agency, U.S.
Department of Agriculture (USDA).
ACTION: Final rule.
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SUMMARY: This rule revises the provisions of the Agriculture Risk
Coverage (ARC), Price Loss Coverage (PLC), and Dairy Margin Coverage
(DMC) programs to conform with provisions of the One Big Beautiful Bill
Act (OBBBA). OBBBA authorized modifications to the 2025 crop year ARC
and PLC programs and the continuation of the ARC and PLC programs for
the 2026 through 2031 crop years. The modified provisions are related
to the reference prices, the effective reference prices, base acres,
program elections, and payment provisions. OBBBA also authorized DMC
for calendar years 2026 through 2031, providing participating dairy
operations with the ability to establish a new production history. In
addition, the Tier 1 coverage level was increased by 1 million pounds
of milk to a 6-million-pound limit and eligibility for multi-year
(lock-in) contracts was maintained until December 30, 2031. The Farm
Service Agency (FSA) is also making minor administrative changes and
updates to the ARC, PLC, and DMC regulations and the regulations that
apply to multiple FSA programs.
DATES: This rule is effective on January 12, 2026.
FOR FURTHER INFORMATION CONTACT: For ARC and PLC, Jamie Garriott;
telephone: (202) 253-9843; or email: [email protected]. For DMC,
Douglas E. Kilgore; telephone: (717) 887-0963; or email:
[email protected]. Individuals with disabilities who require
alternative means for communication should contact the USDA Target
Center at (202) 720-2600 (voice and text telephone (TTY mode)) or dial
711 for Telecommunications Relay Service (both voice and text telephone
users can initiate this call from any telephone).
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. ARC and PLC Programs
A. Continuation of ARC and PLC Programs
B. Base Acres
C. ARC Changes
D. Election of ARC or PLC Programs
E. Owners Make Base Allocation Decision, and Producers Elect and
Enroll
F. ARC and PLC Payments
1. PLC Payment Calculations
2. ARC Payment Calculations
G. Eligibility for Crop Insurance
H. Deadlines for ARC and PLC Actions
I. General Provisions That Apply to ARC and PLC
J. Payment Limitations
III. DMC Program
IV. Severability
V. Regulatory Analyses
A. Effective Date, Notice and Comment, and Paperwork Reduction
Act
B. Executive Orders 12866, 13563, and 14192
C. Cost Benefit Analysis Summary
D. Environmental Review
E. Executive Order 13175
F. Unfunded Mandates Reform Act
G. E-Government Act Compliance
I. Background
On July 4, 2025, President Trump signed into law H.R. 1 (Pub. L.
119-21), also known as the One Big Beautiful Bill Act. This rule amends
the provisions of the ARC and PLC programs and the DMC program to
implement changes made by OBBBA. This rule also makes several
discretionary changes to those programs to improve program
administration and clarify existing policy, in addition to minor
changes such as updating references to the applicable program years and
removing outdated provisions. FSA will implement other provisions of
OBBBA for other Commodity Credit Corporation (CCC) programs in future
rules.
II. ARC and PLC Programs
OBBBA amended the Agricultural Act of 2014 (``the 2014 Farm Bill'';
Pub. L. 113-79), as amended by the Agriculture Improvement Act of 2018
(``the 2018 Farm Bill''; Pub. L. 115-334), to modify certain provisions
for the 2025 crop year ARC and PLC programs and to authorize the
continuation of the ARC and PLC programs, with modifications, for the
2026 through 2031 crop years. This rule amends 7 CFR part 1412 to
implement those changes and discusses how the ARC and PLC programs will
be conducted, which is similar to how they were conducted in recent
years. ARC and PLC are CCC programs administered by FSA.
FSA is making the following mandatory changes to implement the
OBBBA provisions:
Revising the ARC guarantee calculation as defined in 7 CFR
1412.3;
Revising the effective reference price calculation as
defined in Sec. 1412.3 for the 2025 crop year forward;
Updating reference prices as defined in Sec. 1412.3 for
the 2025 through 2030 crop years, with a further modification for the
2031 crop year;
Allocating up to 30 million additional base acres, based
on a farm's planting history, to eligible farms beginning with the 2026
crop year;
Specifying that the higher of ARC-CO \1\ or PLC payments
will be issued for the 2025 crop year, regardless of whether the
producer elected ARC-CO or PLC;
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\1\ Under ARC, 2 options are available for producers: a county
option (ARC-CO) and an individual option (ARC-IC). These options are
discussed further in section II.A.
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For base acres that are considered grass, idle, or fallow,
continuing the 2018 Farm Bill provision that addresses those acres, but
updating the ending year for which producers are ineligible for payment
to the 2031 crop year;
Requiring an election of ARC or PLC for crop year 2026 or,
in the case of no election being made, defaulting to the 2025 crop year
ARC or PLC election with no payment for the 2026 crop year as explained
in Sec. 1412.74;
Updating the marketing years used to calculate the
reference price for temperate japonica rice;
[[Page 1044]]
Updating the payment rate calculation for ARC-CO for the
2025 crop year forward; and
Increasing the payment limitations.
In addition to changes mandated by OBBBA, this rule also makes
discretionary changes to the ARC and PLC programs, including:
Adding definitions for tree, bush, vine, hemp, and
eligible non-covered commodity;
Updating the definitions of average historical county
yield, benchmark revenue for ARC-IC, historical irrigated percentage,
marketing year, replacement crop, and subsequently planted crop
acreage;
Updating the years used to calculate the historically
irrigated percentage (HIP); and
Updating the eligible fruit and vegetable (FAV) double
crop combination counties.
This rule details the requirements necessary to carry out
administration of ARC and PLC. This rule also clarifies and reaffirms
which farms are eligible, which producers are eligible, election
periods, enrollment periods, and more specifically, the actions that
owners and producers must perform in order to ensure producer and farm
payment eligibility.
Because of the timing of OBBBA enactment and publication of this
rule, producers will have planted and potentially harvested their 2026
crops before: (1) the crop year 2026 ARC or PLC election is made; and
(2) the annual enrollment decision is made. Producers will know their
2026 production and yields before they decide whether to elect and
subsequently enroll in ARC or PLC for the 2026 crop year. For the 2026
crop year, all producers with an interest in base acres on a farm, at
the time the election is made, must unanimously elect ARC or PLC on
each covered commodity having base acres and may enroll each or all of
those covered commodities. For each of the 2027 through 2031 crop
years, the producers with an interest in base acres on a farm, at the
time the election is made, are eligible for covered-commodity-by-
covered-commodity election of ARC or PLC and subsequent enrollment in
each crop year.
The terms ``owners'' and ``producers'' under this rule are defined
as the person or legal entity for the applicable contract period for
which that person or legal entity is signing forms or performing
actions under this rule. Many of the actions required under the ARC and
PLC programs (program election, enrollment, base allocation update, and
subsequent opportunity to perform program election) can only be
performed by the farm's owners and producers in that contract or
program year. For the 2026 program year, as is discussed in greater
detail below, and as required by the 2014 Farm Bill, as amended, the
farm's producers must unanimously and irrevocably elect ARC or PLC
during the prescribed election period. FSA will announce the election
period each year.
A. Continuation of ARC and PLC Programs
Consistent with administration of the ARC and PLC programs in prior
years, producers have a choice:
ARC is an income support program that provides payments
when actual crop revenue declines below a specified guarantee level.
ARC continues to have 2 options:
[cir] Agriculture Risk Coverage--County Option (ARC-CO) provides
payments when the actual county crop revenue for a covered commodity is
less than the ARC-CO guarantee for the covered commodity. The actual
county revenue and the revenue guarantee are based on county-level
yield data for the physical location of the base acres on the farm and
tract.
[cir] Agriculture Risk Coverage--Individual Option (ARC-IC)
provides payments when the actual individual crop revenue for all
covered commodities planted on the ARC-IC farm is less than the ARC-IC
guarantee for those covered commodities. ARC-IC uses producer's
certified yields, rather than county level yields.
PLC provides payments when the price for a covered crop
declines below its ``effective reference price.''
Eligible producers may elect to participate in either ARC-CO or
PLC, but not both, for a single covered commodity on the farm, for the
2026 through 2031 crop years. An election of ARC-IC will apply to all
covered commodities on the farm. Beginning in 2027 and in each
subsequent program year, the farm's producers can unanimously choose a
different program election for each of their covered commodities.
Under the 2014 and 2018 farm bills, expected yield, revenue, and
price were based on the most recent 5 crop years. Because the most
recent yield and price data for the immediately preceding 5 crop years
is not available in the current crop year, this rule uses the term
``most recent 5 crop years available,'' which is defined as the 5 years
preceding the most immediately preceding crop year. For example, the
most recent 5 crops years available for the 2026 crop year are the 2020
through 2024 crop years.
OBBBA has updated the calculation of effective reference prices
beginning with crop year 2025. The effective reference price for a
covered commodity in any given crop year is the lesser of: (1) 115
percent of the reference price for a covered commodity; or (2) an
amount equal to the greater of the reference price for the covered
commodity or 88 percent of the average of the market year average (MYA)
price \2\ of the covered commodity for the most recent 5 crop years
available, excluding each of the crop years with the highest and lowest
MYA price.
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\2\ The crop year and market year are identical for each covered
commodity. ``Market year'' is the term used by USDA's National
Agricultural Statistics Service (NASS), which is the source of price
data used for ARC and PLC.
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The reference prices are set through crop year 2031, at which time
they will be updated to equal the reference price in the previous crop
year multiplied by 1.005, with the stipulation that the reference price
will not exceed 113 percent of the reference prices stated in OBBBA.
Under OBBBA, all producers with an interest in base acres, on the
farm, at the time the crop year 2026 election is made, are required to
affirmatively and unanimously elect PLC or ARC and, if an election is
not made, the farm's covered commodity will be ineligible for payments
in the 2026 crop year and the election on the farm will default to the
same ARC or PLC election that was in place for 2025 for each covered
commodity on the farm. This 2025 election will be used for the 2027
through 2031 crop years unless a new election is completed. If a new
election is completed, it is valid through 2031 unless it is changed
again for a subsequent year. These provisions are specified in the
OBBBA and FSA does not have discretion to deviate from the
ineligibility of producers for payments for the 2026 crop year on farms
if they do not have a valid election made during the election period
for the 2026 crop year. Producers who do not make a valid election in
the 2026 crop year election period will not be eligible for 2026 crop
year payments. However, they are eligible to receive payments in the
2027 through 2031 crop years based on their election for the specific
year.
The 2018 Farm Bill amended the 2014 Farm Bill to specify that a
farm on which all of the cropland was planted to grass or pasture,
including cropland that was idle or fallow from January 1, 2009,
through December 31, 2017, would have base acres and yields maintained
for the covered commodities on the farm, except that no payment would
be made with respect to those
[[Page 1045]]
base acres for the 2019 through 2023 crop years. Additionally, the
producers on a farm for which all of the base acres are maintained
under this provision are ineligible to change the ARC or PLC election
for the farm. The producers are also not permitted to reconstitute the
farm to void or change this treatment of base acres. OBBBA extends
these provisions through crop year 2031.
Any farm that receives a base allocation described below will be
permitted to update the applicable election on all covered commodity
base acres; however, only the newly established base acres will be
eligible for payment.
B. Base Acres
Base acres are central to the payment formulas for ARC and PLC.
Section 1111 of the 2014 Farm Bill provides that the base acres in
effect under sections 1001 and 1301 of the Food, Conservation, and
Energy Act of 2008 (``2008 Farm Bill''; Pub. L. 110-246; 7 U.S.C. 8702,
8751), as adjusted, that were in effect September 30, 2013, constitute
the base acres for the ARC and PLC programs, subject to any
reallocation, adjustment, or reduction under section 1112 of the 2014
Farm Bill, as amended. The term ``base acres'' includes unassigned base
acres, which are derived from generic base acres \3\ where no ARC or
PLC payments are generated or earned.
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\3\ Base acres of upland cotton under the 2008 Farm Bill in
effect as of September 30, 2013, subject to any adjustment or
reduction, became ``generic base acres'' beginning with the 2014
crop year. Under terms of the Bipartisan Budget Act of 2018 (Pub. L.
115-123), if a covered commodity, including seed cotton, was not
planted or prevented from being planted on the farm during the 2009
through 2016 years, the generic base acres became unassigned base
acres, which are not eligible for any ARC or PLC benefits. For a
discussion of generic base acres, see 83 FR 40653.
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OBBBA provides the one-time opportunity to allocate an additional
30,000,000 base acres nationwide in crop year 2026. The additional
acres are automatically allocated to eligible farms, unless the owner
requests not to receive additional base acres. A farm's eligibility to
receive an allocation of new base acres is determined by the following:
Acreage on a farm that was either planted, or prevented
from being planted, because of drought, flood, or other natural
disaster or condition beyond the control of the producer, to a covered
commodity during the 2019 through 2023 crop years; plus
The lesser of 15 percent of the total acres on the farm,
which is the total of cropland acres minus acres enrolled in a
federally funded conservation program that restricts the production of
an agricultural commodity \4\ except the Conservation Reserve Program
(CRP), or the 5-year average of acreage planted and prevented from
being planted, due to drought, flood, or other natural disaster or
condition beyond the control of the producer, of eligible noncovered
commodities for harvest, grazing, haying, silage, or other similar
purposes during the 2019 through 2023 crop years.
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\4\ This includes programs such as the Wetland Reserve Program.
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In cases where two different covered commodities were planted on
the same acreage and were not in an approved double cropping practice,
the acreage will only count once. The owner will have the opportunity
to select which covered commodity is used for the new base acreage
determination.
A farm will be ineligible to receive an allocation of new base
acres if:
The farm does not meet the criteria of a covered commodity
planted or prevented from being planted in the 2019-2023 crop years; or
The 5-year average of planting history as outlined above
does not exceed existing base acres on the farm excluding unassigned
base acres.
If a farm is ineligible to receive an allocation, and currently has
base acres, it will maintain its current base acres.
If a farm is eligible for an allocation of additional base acres
and has unassigned base acres, those unassigned base acres will be
converted to covered commodity base acres, on an acre-for-acre basis,
first. If the amount of the additional base acres does not exceed the
amount of unassigned base acres on the farm, the difference will remain
as unassigned base acres.
Allocation of new base acres will be in proportion to the ratio of
the 5-year average of planted and considered planted \5\ covered
commodities calculated for acreage history purposes. For any base acre
added, a PLC payment yield must be established. If the covered
commodity already exists on the farm, then the current established
yield will be used as the PLC payment yield. If the covered commodity
base acre is new, the PLC payment yield will be equal to either the
average PLC payment yield for the covered commodity for the county in
which the farm is located or a yield for a similarly situated farm.
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\5\ ``Planted and considered planted'' (P&CP) means, with
respect to an acreage amount, the sum of the planted and prevented
planted acres on the farm approved by the FSA county committee for a
crop. P&CP is limited to initially planted or prevented planted crop
acreage, except for crops planted in an FSA approved double-cropping
sequence. Subsequently planted crop acreage and replacement crop
acreage are not included as P&CP. See 7 CFR 718.2.
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If the total amount to be allocated exceeds the 30 million
statutory limit, an across the board pro-rata reduction will be applied
by FSA.
FSA is also defining the terms ``eligible non-covered commodity'',
``tree'', ``bush'', and ``vine'' for the purpose of base allocation.
These definitions follow the intent provided by Congress in OBBBA.
``Eligible non-covered commodity'' means all other commodities that are
not considered to be covered commodities, excluding the following:
Tobacco, consistent with other CCC programs;
Cannabis that does not meet the definition of hemp;
Commodities that are reported as a tree, bush, vine,
grass, idle, or fallow;
Cover crops, such as oats, turnip mixture, or rye grass,
reported specifically as cover; and
CRP and other conservation program acres due to being
ineligible for dual payments.
The following table provides an example of the base acre allocation
on a farm with no current base acres.
Base Acre Allocation Calculation Example
[2024 Farm information: 50 total cropland acres, 0 base acres]
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2019-2023 Planting history............. 25 acres planted to a covered
commodity (CC) each year, 25
acres planted to an eligible
non-covered commodity (ENCC)
each year.
5-year average planting history (25 32.5 acres.
(the total CC Acres P&CP divided by 5)
+ (the lesser of 7.5 (15% of total
cropland) or 25 (total ENCC P&CP
divided by 5)).
Maximum potential allocation (5-year 32.5 base acres.
average planting history--2024 base).
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[[Page 1046]]
The following table provides an example of the base acre allocation
on a farm with current base acres.
Base Acre Allocation Calculation Example
[2024 Farm information: 50 total cropland acres, 10 base acres]
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2019-2023 Planting history............. 25 acres planted to a covered
commodity (CC) each year, 25
acres planted to an eligible
non-covered commodity (ENCC)
each year.
5-year average planting history (25 32.5 acres.
(the total CC Acres P&CP divided by 5)
+ (the lesser of 7.5 (15% of total
cropland) or 25 (total ENCC P&CP
divided by 5)).
Maximum potential allocation (5-year 22.5 base acres.
average planting history--2024 base =
32.5-10).
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C. ARC Changes
As provided by OBBBA, for each of the 2025 through 2031 crop years,
FSA will:
Calculate the ARC guarantee at 90 percent of the benchmark
revenue; and
Calculate the ARC payment rate using 12 percent of the
benchmark revenue.
FSA is also updating the years used to calculate the HIP to 2019
through 2023 to better align with the years used for the base
allocation process. FSA is also updating the counties designated as
irrigated counties for crop years 2026 forward. FSA is updating the
definitions of ``average historical county yield'' and ``benchmark
revenue'' for ARC-IC to incorporate the new HIP years as well. FSA is
also making conforming changes to 7 CFR part 718, which are discussed
below.
Additionally, the 2018 Farm Bill allowed no more than 25 counties
nationwide to be divided into two administrative units. Eligible
counties for consideration of administrative units were those that were
larger than 1,400 square miles and that contained more than 190,000
base acres. There were two counties that previously elected to be split
into two administrative units and they will continue to be recognized
as such through crop year 2031.
D. Election of ARC or PLC Programs
During the 2026 crop year election period that will be announced by
FSA, all of the producers with an interest in base acres on a farm, at
the time the election is made, must make a unanimous election of either
of the two following options:
ARC-CO or PLC on a covered-commodity-by-covered-commodity
basis (the election can be for ARC-CO, PLC, or a combination of ARC-CO
and PLC); or
ARC-IC for all covered commodities on a farm.
Producers are those with an interest in base acres that perform the
election. The election, if valid as described in this rule, will apply
to the farm for the 2026 through 2031 crop years, unless unanimously
changed by the producers on the farm in any of crop years 2027, 2028,
2029, 2030, or 2031. Election of ARC and PLC will occur in a defined
period that will be announced by FSA in a press release in each of
those crop years.
The election will be based on the farm structure for the 2026 crop
year or, as may be applicable, the farm structure in the applicable
2027, 2028, 2029, 2030, or 2031 crop years. The term ``farm structure''
means the farm as last constituted in the crop year. Reconstitutions
\6\ of farms initiated after August 1, 2025, will not be considered by
FSA until after the base allocation period has ended. Unless changed
under provisions of this rule in any of the 2027 through 2031 crop
years, the election of ARC and PLC for a farm will apply to that farm
in all of the 2026 through 2031 crop years 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 producers with
an interest in base acres on a farm, at the time the election is made,
agree to the unanimous election during the election period or the valid
election that was made by those producers.
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\6\ As defined in Sec. 718.2, ``reconstitution'' means a change
in the land constituting a farm as a result of combination or
division.
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If no election is made in 2026 for a covered commodity's base
acres, the farm will default to the same coverage for the covered
commodity on the farm that was made in the 2025 crop year and the
producers on that farm will not be eligible for 2026 crop year payments
even if the farm is enrolled in ARC or PLC for the 2026 crop year.
During the 2026 election period, all producers with an interest in base
acres on the farm, at the time the election is made, must unanimously
make the election as discussed in this rule in order to preserve the
payment eligibility of all producers of the covered commodity on the
farm for the 2026 crop year. If a valid election is submitted by all
producers with an interest in base acres on the farm, at the time the
election is made, that election will be recognized as valid for the
farm in the 2026 through 2031 crop years unless that election is either
rescinded or terminated by any 2026 producer on the farm during the
election period, or unless the valid election for the 2026 crop year is
modified and replaced by another valid election by producers during the
2026 crop year election period. At any time during the election period,
a producer on a farm can rescind an election or terminate an election
by withdrawing from the election or by providing written notice to FSA
requesting to have the election rescinded.
E. Owners Make Base Allocation Decision, and Producers Elect and Enroll
OBBBA specifies the roles of owners and producers, and FSA does not
have the discretion to set different requirements. If, within 90 days
after FSA notification of a farm's eligibility for an additional
allocation of base acres, owners exercise the option to decline
additional base acres, that decision will apply to the farm unless the
decision to decline is either withdrawn, rescinded, or modified by the
owners in writing prior to the end of the same 90 day period. FSA is
under no obligation to notify owners on a farm if a base allocation
rejection has been filed, rescinded, modified, or withdrawn by one or
more other owners during the base allocation period.
All producers with an interest in base acres on a farm for the 2026
crop year, at the time the 2026 crop year election is made, must
unanimously elect ARC, PLC, or a combination of ARC and PLC for each
covered commodity and farm. If producers cannot agree, the farm's
election for each covered commodity
[[Page 1047]]
will default to the election made for the 2025 crop year for each
covered commodity on the farm, and the farm's covered commodity will
not be eligible for crop year 2026 payments. If a person or legal
entity acquires ownership of a farm that has already had an election of
ARC or PLC made by producers in crop year 2026 or by producers for the
2027, 2028, 2029, 2030, or 2031 crop years, FSA will provide the
election status to that person or legal entity on request, but FSA is
under no obligation to notify new owners or new producers as to whether
an election has previously been made on that particular farm unless the
new owner or new producer specifically makes a request.
An election in ARC or PLC does not constitute enrollment. In order
to be eligible for payments, producers must enroll their respective
share interest of covered commodity base acres on the farm in ARC or
PLC. Only producers who annually enroll, or who are subject to a valid
multiyear enrollment,\7\ may receive payments. In each crop year, the
producers on the farm may choose to enroll base acres on the farm in
ARC or PLC on a covered-commodity-by-covered-commodity basis.
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\7\ The option to enroll in a multiyear contract for the 2026
through 2031 program years is available in each year; otherwise,
enrollment must be completed annually. A multiyear contract will
remain valid as long as there are no changes to farm records or
producers associated with the farm. If a change occurs, the
multiyear contract will be cancelled and enrollment must be
completed on an annual basis in subsequent years.
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F. ARC and PLC Payments
As noted earlier, ARC has two options--a county option (ARC-CO) and
an individual farm coverage option (ARC-IC). For ARC-CO, the benchmark
revenue is based on average revenues at the county level for covered
commodities. For ARC-IC, the benchmark revenue is based on the average
revenue for a specific farm. For ARC-CO, 85 percent of the specific
covered commodity base acres for a commodity will be ``payment acres''
that are used to calculate payments; for ARC-IC, 65 percent of all
covered commodity base acres on the farm will be ``payment acres.'' On
a covered-commodity-by-covered-commodity basis, the farm's producers
with an interest in base acres, at the time of the crop year 2026
election, can elect ARC-CO, PLC, or a combination of ARC-CO and PLC for
a farm. In other words, they can elect ARC-CO for some covered
commodities and PLC for others. However, if the farm's current
producers with an interest in base acres, at the time the election is
made, elect ARC-IC, the election applies to all the covered commodities
and the whole farm.
There are several factors that affect payments and, therefore, the
decision as to whether to participate in ARC or PLC. ARC payments are
limited to 12 percent of the benchmark revenue per acre. The PLC
calculation does not include current yields, so if market year prices
were above the effective reference price, but current yields were low,
there would be no PLC payment.
1. PLC Payment Calculations
As noted above, PLC is a counter-cyclical price program that makes
a payment to an enrolled producer with a share of base acres when the
effective price for a covered commodity falls below its effective
reference price. The effective price is the higher of the national
market year average (MYA) price or the national average loan rate (the
Marketing Assistance Loan rate) for that crop year. Usually, the market
price will be the effective price. FSA will continue to establish
separate reference prices for temperate japonica rice for high altitude
or high latitude areas. This rule updates the years used to calculate
the reference price to crop years 2017 through 2021.
PLC payments for a given crop year will be made after October 1 of
the following year. For example, 2025 crop year PLC payments will be
made after October 1, 2026, and 2026 crop year PLC payments will be
made after October 1, 2027. FSA is not changing the PLC payment
calculation in this rule. For an explanation of the PLC payment
calculation and an example, see 84 FR 45880-45881.
2. ARC Payment Calculations
As discussed above, ARC is an income support program that is
designed to cover a portion of a farmer's out-of-pocket cost when crop
revenues fall below guarantee revenue levels, with the benchmark
revenue based on either county level historic revenue for ARC-CO or the
individual farm's historic revenue for ARC-IC. Farmers may elect ARC-CO
as an alternative to PLC on a covered-commodity-by-covered-commodity
basis, or ARC-IC for all the covered commodities and the whole farm.
For both ARC-CO and PLC, the payment calculation is based on covered
commodity base acres. For ARC-IC, the payment calculation is based on
the entirety of covered commodities grown on the farm during the crop
year.
Under ARC-CO, payments are issued when actual county crop revenue
for a covered commodity is less than the ARC-CO guarantee for that
covered commodity. Since payment is not based on the revenue or yield
of the individual farm, the producer does not need to provide any
additional price or yield data to FSA to qualify for the ARC-CO
payment. The calculation uses county data for yields and national
prices, not individual farm data.
The ARC-CO guarantee is 90 percent of the crop's benchmark revenue
in the county for each of the 2025 through 2031 crop years. Benchmark
revenue is calculated by multiplying the ARC-CO average historical
benchmark price by the ARC-CO average historical benchmark yield. The
ARC-CO average historical benchmark price is equal to the most recently
available previous 5-year MYA price, excluding the years with the
highest and lowest prices. The ARC-CO benchmark yield is equal to the
most recent 5-year average county yield available, excluding the years
with the highest and lowest yields. The ARC-CO payment is equal to 85
percent of a farm's base acres of the covered commodity multiplied by
the difference between the county's ARC-CO guarantee and the actual
county revenue for the covered commodity.
The ARC-CO payment cannot exceed 12 percent of the county benchmark
revenue (the ARC-CO average historical benchmark price times the ARC-CO
average historical benchmark yield) for the 2025 through 2031 crop
years. The following table provides an example of an ARC-CO payment
calculation using estimated 2025 soybean prices and yields. This
example uses an estimated 2025 MYA price and estimated 2025 actual
average county yield because these values are not available for crop
year 2026 at this time.
ARC-CO Payment Calculation Example
[Soybeans--100 base acres]
------------------------------------------------------------------------
------------------------------------------------------------------------
2025 MYA price (estimate).................................. $10.00/bu.
2025 actual average county yield (estimate)................ 40
Benchmark revenue (2019 through 2023 prices x yields for $473.78
the county)...............................................
[[Page 1048]]
Base acres................................................. 100
2025 Actual crop revenue (MYA price x actual county yield). $400
ARC-CO guarantee (90% x benchmark revenue)................. $426.40
Maximum payment (the ARC-CO average benchmark price of $56.85
$12.17 x the ARC-CO average benchmark yield of 38.93
bushels per acre x 12%)...................................
Payment rate (ARC-CO guarantee of $426.40--actual crop $26.40
revenue of $400, not to exceed maximum payment of $56.85).
Payment (payment rate of $26.40 x 85% of 100 base acres)... $2,244
------------------------------------------------------------------------
ARC-IC provides payments when an individual's actual revenues,
averaged across all covered commodities planted on the ARC-IC farm, are
less than the overall ARC-IC guarantee, averaged across those covered
commodities on the farm. As specified in the 2014 Farm Bill, as
amended, the farm for ARC-IC purposes is the sum of the producer's
interest in all enrolled ARC-IC farms in a 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 from each of those
farms. The farm's ARC-IC guarantee equals 90 percent of the farm's
individual benchmark guarantee (5-year average of the annual benchmark
revenues), excluding the years with the highest and lowest annual
benchmark revenues, then averaging across all crops on the farm. Actual
revenue is similarly calculated, with both the guarantee and the actual
revenue calculated using planted acreage on the farm. The ARC-IC
payment is equal to 65 percent of the sum of the base acres of all
covered commodities on the farm multiplied by the difference between
the individual guarantee revenue and the actual individual crop revenue
across all covered commodities planted on the farm. Payments may not
exceed 12 percent of the benchmark revenue. Since the payment is based
on yields for that individual farm, the producers enrolled on ARC-IC
elected farms must report acreage and yield data to qualify for
payment.
The following table provides an example of an ARC-IC payment
calculation.
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 x $826) + (0.4 x 770.40
$687))....................................................
Guarantee (90% of total benchmark revenue)................. 693.36
Actual revenue (2025 MYA price of each commodity x each 637.20
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 x $702) + (0.4 x $540)).................
Maximum payment (12% of benchmark revenue of $770)......... 92.45
Payment rate (ARC-IC Guarantee minus Actual Crop Revenue; 56.16
adjusted, if needed to not exceed maximum payment)........
Payment (payment rate x 65% of 100 base acres)............. 3,650.40
------------------------------------------------------------------------
* For corn, the 2025 projected actual price is $3.90 and the yield is
180 bushels per acre. For soybeans, the projected actual price is
$10.00 and the yield is 54 bushels per acre.
G. Eligibility for Crop Insurance
Crop insurance is not required as a condition of eligibility for
ARC and PLC, but ARC and PLC elections and enrollment may impact
eligibility for crop insurance. Producers of upland cotton who choose
to enroll upland cotton in ARC or PLC are ineligible for Stacked Income
Protection Plan insurance under section 508B of the Federal Crop
Insurance Act (7 U.S.C. 1508b).
H. Deadlines for ARC and PLC Actions
Annual enrollment for each covered commodity and crop year or
multiyear contract enrollment will be announced by FSA. The contract
year is based on the fiscal year, October 1 to September 30 of the next
calendar year, with the enrollment occurring in the program year. Due
to the timing of OBBBA and this regulation, producers will enroll by a
deadline announced by FSA for the 2026 crop year, and that deadline
will be in the 2027 contract year for a contract period that ended
September 30, 2026. For each subsequent year, the enrollment deadline
will be for a contract that began on the previous October 1. For
example, the producer will enroll by March 15, 2027, for a 2027
contract that runs from October 1, 2026, to September 30, 2027.
The enrollment deadline announced by FSA will be consistent with
the deadline for similar FSA and CCC programs and take into
consideration the reporting of cropland and crop acreage on the farm.
The 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.
The following table provides a summary of deadlines for ARC and
PLC:
------------------------------------------------------------------------
Activity Deadline
------------------------------------------------------------------------
2026 acreage reports by 2026 operator Not later than July 15, 2026,
or producers on farm. for covered commodities. For
all other cropland on the
farm, the acreage reporting
date for the crop or crops in
the State. (This deadline is
unchanged by this rule.)
2026 base allocation period............ As announced by FSA.
Election and enrollment of ARC and PLC As announced by FSA.
by 2026 producers on farms in election
and enrollment period.
[[Page 1049]]
2027 contract election and enrollment As announced by FSA.
by 2027 producers on farms.
2026 production report of covered July 15, 2027.
commodities by ARC-IC producers.
2027 and subsequent crop year acreage Not later than July 15 for
reports by 2027 and subsequent covered commodities. For all
operator or producers on farm. other cropland on the farm,
the acreage reporting date for
the crop or crops in the
State.
2028 and subsequent years contract As announced by FSA.
election and enrollment by 2028 and
subsequent year producers.
2027 and subsequent year production July 15 of the year following
report of covered commodities by ARC- the program year (for example,
IC producers. the 2027 production report is
due July 15, 2028).
------------------------------------------------------------------------
I. General Provisions That 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
provision requires producers to effectively control noxious weeds and
otherwise maintain the land in accordance with sound agricultural
practices.
ARC and PLC continue to have provisions for planting flexibility
and reductions of payment acreage for plantings of fruits, vegetables,
and wild rice on base acres. FSA is updating the list of counties in
Sec. 1412.46(f) that have been determined to be regions having a
history of double-cropping covered commodities or peanuts with fruits,
vegetables, or wild rice beginning with crop year 2026.
FSA is updating the definitions of ``benchmark revenue for ARC-
IC'', ``historical irrigated percentage'', ``replacement crop'', and
``subsequently planted crop acreage'' for clarity. FSA is also updating
the definition of ``marketing year'' to clarify the dates for long
grain and medium grain rice, and to add the period for temperate
japonica rice. FSA is adding a definition of ``corn'' to Sec. 1412.3
that does not exclude popcorn and blue corn; this definition will apply
to ARC PLC instead of the definition currently in Sec. 718.2. FSA is
removing subpart H of 7 CFR part 1412, because that subpart provides
the provisions for the Cotton Transition Assistance Program (CTAP),
which has ended. FSA has also updated examples throughout part 1412 to
use current dates.
This rule also makes changes to provisions in 7 CFR part 718 that
generally apply to FSA and CCC programs, including ARC and PLC. For
clarity, FSA is adding the definitions of ``administrative county'' and
``servicing FSA county office'' to Sec. 718.2. FSA is removing the
definition of ``partial reconstitution'' because prior rules removed
the provisions related to that term and it is no longer used in part
718. FSA is updating the definitions of ``beginning farmer or rancher''
and ``limited resource farmer or rancher'' for consistency with the
certification statements on the FSA-860 and to update the references to
specific years. FSA is also updating the definition of ``county'' to
add a reference to councils of government. FSA is also amending the
provisions for reconstitutions to clarify that they are effective for
the fiscal year in which they are requested and adding the definition
of ``fiscal year''.
F. Payment Limitations
The regulations in 7 CFR part 1400 specify payment limitations for
ARC and PLC for covered commodities and peanuts. Beginning with crop
year 2025, payment limitations, prior to the inflation adjustment, are
increased and the following payment limitations apply for ARC and PLC:
$155,000 for covered commodities (other than peanuts); and
$155,000 for peanuts.
As mandated by OBBBA, and beginning with crop year 2025, FSA will
annually adjust the payment limitation for inflation based on the
Consumer Price Index for All Urban Consumers (CPI-U), which is
published by the Bureau of Labor Statistics of the Department of Labor.
FSA will publish the adjusted payment limitation as soon as practicable
for each crop year, on or around October 1, on FSA's website.\8\
---------------------------------------------------------------------------
\8\ See https://www.fsa.usda.gov/tools/informational/payment-eligibility/payment-limitations.
---------------------------------------------------------------------------
To calculate the annual adjustment, FSA will compare the average
CPI-U for the most recently available September to August 12-month
period to the average CPI-U for the September 2022 to August 2023 base
period to determine the payment limit adjustment. The adjustment will
then be applied to the existing payment limitation for ARC and PLC for
both covered commodities and for peanuts, which have a separate payment
limit. Each calculated adjusted payment limitation will be rounded to
the nearest $1,000.
At no time for crop year 2025 and subsequent years will the payment
limitation for ARC and PLC for covered commodities decline from one
year to the next. If the calculated adjustment would result in a
reduction in the payment limitation, the current payment limitation
will remain in effect for the subsequent crop year. Applying the
adjustment in this manner ensures that periods of negative inflation
will not reduce the maximum payment amount.
An example of how FSA will calculate an adjustment is provided
below. This example is for illustration only and does not establish the
2025 or 2026 payment limitations.
CPI-U *
----------------------------------------------------------------------------------------------------------------
2022 2023 2024 2025
----------------------------------------------------------------------------------------------------------------
Jan............................................. 281.148 299.170 308.417 317.671
Feb............................................. 283.716 300.840 310.326 319.082
Mar............................................. 287.504 301.836 312.332 319.799
Apr............................................. 289.109 303.363 313.548 320.795
May............................................. 292.296 304.127 314.548 321.465
June............................................ 296.311 305.109 314.069 322.561
Jul............................................. 296.276 305.691 314.175 323.048
[[Page 1050]]
Aug............................................. 296.171 307.026 314.540 323.976
Sep............................................. 296.808 307.789 314.796 ..............
Oct............................................. 298.012 307.671 315.664 ..............
Nov............................................. 297.711 307.051 315.493 ..............
Dec............................................. 296.797 306.746 315.605 ..............
----------------------------------------------------------------------------------------------------------------
* CPI-U data is published at https://www.bls.gov/cpi/tables/supplemental-files/.
To determine the 2025 payment limitation, FSA will complete the
following steps:
(1) The average of the September 2023 CPI-U through August 2024
CPI-U is 310.955.
(2) The average of the September 2022 CPI-U through August 2023
CPI-U is 301.3742.
(3) The inflation percentage is equal to 310.955 divided by
301.3742, which is 1.032, or 3.2 percent.
(4) The 2025 payment limitation is $155,000 multiplied by 1.032,
rounded to the nearest $1,000, which equals $160,000.
To establish the 2026 payment limitation, FSA will use the same
steps, comparing the average of the CPI-U for September 2024 through
August 2025 (319.205) to the result of Step 2 above (301.3742),
resulting in an adjustment of 1.059 or 5.9 percent. The payment
limitation would equal $155,000 times 1.059, rounded to the nearest
$1,000, which is $164,000.
III. Dairy Margin Coverage (DMC)
FSA is revising the DMC regulations in 7 CFR part 1430, subpart D,
as required by OBBBA. Specifically, this rule amends the regulations to
provide eligible dairy operations \9\ with the ability to establish a
new production history and provides for the reauthorization of DMC
through calendar year 2031. In addition, the rule increases the pounds
of Tier 1 coverage by 1 million pounds to a 6-million-pound limit,
maintains eligibility of multi-year (lock-in) contracts until December
30, 2031, and streamlines the DMC regulation by removing unnecessary
prior program and production history amendments that are no longer
relevant for the administration of DMC in the 2026 and succeeding
calendar years.
---------------------------------------------------------------------------
\9\ As defined in 7 CFR 1430.402, ``dairy operation'' means, as
determined by the Deputy Administrator, and subject to conditions
that the Deputy Administrator may impose to advance the achievement
of the purposes of the DMC Program, any one or more dairy producers
that produce and market milk commercially produced from cows as a
single unit in which each dairy producer:
(1) Shares in the pooling of resources under a common ownership
structure;
(2) Is at risk in the production of milk in the dairy operation;
(3) Contributes land, labor, management, equipment, or capital
to the dairy operation that are at least commensurate to the
producer's share in the operation; and
(4) Has production facilities located in the United States.
---------------------------------------------------------------------------
Section 1403 of Subtitle D of Title I of the 2014 Farm Bill (7
U.S.C. 9053) authorizes DMC, which provides a risk management program
for dairy operations that pays producers when the difference between
the price of milk and the cost of feed (the margin) falls below a
certain dollar amount selected by the producer. Producers are eligible
for catastrophic-level margin protection (based on a $4 margin and 95
percent production history coverage) for their dairy operations by
paying an annual administrative fee, and they are also able to purchase
greater coverage (up to a $9.50 margin on 5 to 95 percent of production
history) for an annual premium. A participating dairy operation from
2019 through 2025 enrolled their first 5 million pounds of covered
production at the Tier 1 level with the remaining pounds of coverage
over 5 million pounds enrolled at the Tier 2 coverage level.
Section 10313 of Subtitle C of Title 1 of OBBBA provides all
eligible participants in the DMC program with the opportunity to
establish a new milk production history. This new milk production
history, first used in the 2026 calendar year, is based on the highest
marketed milk production level from any one of the 2021, 2022, or 2023
calendar years, rather than based on the highest annual milk marketings
from the 2011, 2012, and 2013 calendar years. Beginning with the 2026
coverage year, all participating dairy operations will establish a new
production history based on the specified years. The production history
established during the years of 2014 through 2025 will no longer be
applicable for coverage under DMC starting with the 2026 calendar year.
OBBBA clarifies the definition of a new dairy operation, for
purposes of establishing production history, based on when the dairy
operation first began to commercially market milk. Operations that are
determined to be ``new dairy operations'' under this rule are dairy
operations that have never established a production history under DMC
and have begun producing and commercially marketing milk within 60
calendar days prior to registering to participate in DMC.
For new participating dairy operations that started to commercially
market milk after January 1, 2023, OBBBA allows these operations to
establish a production history by one of two methods:
The volume of first-year milk marketings for the months
that a participating dairy operation has been in business extrapolated
to a yearly amount; or
An estimate of the actual milk marketings based on the
herd size for the first year of milk marketings of the participating
dairy operation relative to the national rolling herd average data.
For example, a dairy operation that started commercially marketing
milk on January 1, 2025, does not have milk marketings from 2021, 2022,
or 2023. Therefore, the dairy operation will be considered new and must
select from the two options (either the extrapolation method or the
rolling herd average method) to establish production history, even
though the dairy operation may have 12 full months of milk marketings
in 2025.
The option selected by the new dairy operation will become their
production history of record. Previous provisions allowed alternative
conditions for establishing production history under DMC; those are no
longer authorized and have been removed from the regulations.
Prior to 2026, a participating dairy operation enrolled their first
5 million pounds of covered production at the Tier 1 level with
applicable premium fees, and the remaining pounds of coverage over 5
million pounds were enrolled at the Tier 2 coverage level. OBBBA amends
the Tier 1 premium rate schedule coverage limit from 5,000,000 pounds
to 6,000,000 pounds, allowing mid-size dairy operations that market
more than 5 million pounds of annual production to cover an additional
1
[[Page 1051]]
million pounds of production history at the Tier 1 level. The increase
to the maximum allowable pounds under Tier 1 is consistent with the
growth of mid-sized dairies that currently milk 250 head of cattle with
an average production of 24,000 pounds annually. For dairy operations
with more than 6 million pounds of production history, the pounds over
6 million pounds will be assigned to Tier 2 pounds of coverage.
OBBBA maintains the provision that a dairy operation can elect a
Tier 1 coverage level threshold of $8.00, $8.50, or $9.00 and have the
option to select a different coverage level threshold for Tier 2.
Premium rate fees for producer-selected coverages under Tier I and Tier
II are unchanged.
OBBBA reauthorizes the DMC lock-in option for participating dairy
operations. During the 2026 coverage election period, a dairy operation
may make a one-time election of coverage level and coverage percentage,
``locking-in'' those elections for a six-year period beginning January
2026 and ending December 2031. All dairy operations that elect the
lock-in option are required to participate in DMC at the same elected
premium coverage level for a six-year period beginning in January 2026.
DMC participating dairy operations locking in elections for the six-
year period will receive a premium discount of 25 percent off the
premium rate per cwt in each applicable Tier table. Annually, ``locked-
in'' dairy operations are required to certify to commercially marketing
milk and timely pay the administrative and premium fees (if applicable)
when due according to FSA.
FSA is also making additional discretionary changes. The
administrative provisions of Sec. 1430.401 have been updated to be
consistent with other FSA and CCC programs. In addition, the rule
clarifies that for an informal joint venture dairy operation, when a
non-participating member declines participation in DMC for the coverage
year, the premium obligation and payments will be pro-rated for only
the participating members and will exclude the share percentage of the
non-participating member. Also, to remain consistent in the rule with
the 6-million-pound increase of production history coverage under Tier
1, for an intergenerational transfer production history increase
according to Sec. 1430.405(h), the amount of production history
increase for an intergenerational transfer will also be limited to an
amount not more than 6 million pounds. The rule also clarifies the
effects of a participating dairy operation's failure to pay the
administrative fee and premium fees when due. A participating dairy
operation that does not timely pay their administrative fee for a
coverage year is not eligible for DMC for that coverage year. Likewise,
for a participating dairy operation that fails to pay a premium when
due, the rule clarifies that an accrued DMC payment will process if
applicable; however, the dairy operation must pay the amount of
outstanding premium or receivable before a concurrent DMC contract
application can be approved.
The rule also removes unnecessary provisions and language
pertaining to supplemental production history that is no longer
relevant to DMC. For example, the authority to make DMC payments based
on supplemental production history ended on December 31, 2023. In
addition, production history ``bump'' adjustments and the establishment
of an adjusted base production history are also no longer authorized
under the DMC program.
The Margin Protection Program for Dairy (MPP-Dairy) was the risk-
based predecessor program to DMC. Since DMC replaced MPP-Dairy, FSA is
removing all MPP-Dairy related references and language in this rule.
FSA is also removing and reserving 7 CFR 1430, subpart A, which
contained the regulations for MPP-Dairy.
IV. Severability
The modifications to the ARC, PLC, and DMC programs authorized by
the OBBBA are distinct and severable from one another, as well as from
the minor administrative changes and updates to the regulations. Each
provision is designed to function independently, ensuring that the rule
as a whole remains effective and aligned with the agency's intent, even
if certain provisions were to be invalidated.
V. Regulatory Analyses
A. Effective Date, Notice and Comment, and Paperwork Reduction Act
The OBBBA amended Title I of the 2014 Farm Bill to reauthorize the
ARC, PLC, and DMC programs. As specified in 7 U.S.C. 9091(c)(2), the
regulations to implement these provisions are exempt from:
The Paperwork Reduction Act (44 U.S.C. chapter 35), and
The notice and comment provisions of 5 U.S.C. 553.
Further, the Administrative Procedure Act (APA, 5 U.S.C. 553(a)(2))
provides that the provisions requiring notice and comment and a 30-day
delay in the effective date do not apply when the rule involves
specified actions, including matters relating to benefits or contracts.
This rule governs payments to agricultural producers and therefore
falls within the benefits exemption.
In addition, 7 U.S.C. 9091(c)(3) directs the Secretary to use the
authority provided in 5 U.S.C. 808 of the Congressional Review Act
(CRA). Because this rule meets the criteria specified at 8 U.S.C.
804(2), the CRA would ordinarily necessitate delaying its effective
date for 60 days (5 U.S.C. 801(a)(3)(A)). However, the CRA, at 5 U.S.C.
808(2), allows an agency to make such regulations effective immediately
if the agency finds there is good cause to do so. USDA has determined
that such good cause exists here. USDA believes that notice and comment
is ``unnecessary'' under that subsection because it is exempt from the
APA's public notice requirements as described above. Further, this rule
is implementing mandatory requirements of the OBBBA, and the assistance
provided by this rule is necessary to help the beneficiaries of this
rule sustain their normal business operations. As a result, USDA finds
that notice and public procedure are contrary to the public interest.
Therefore, USDA is not required to delay the effective date for 60 days
from the date of publication to allow for Congressional review.
Accordingly, this rule is effective upon publication in the Federal
Register.
This rule is exempt from the regulatory analysis requirements of
the Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by the
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)
because it .is exempt from the public notice requirements of 5 U.S.C.
553 as described above. The requirements for the regulatory flexibility
analysis in 5 U.S.C. 603 and 604 are specifically tied to the
requirement for a proposed rule by section 553 or any other law; in
addition, the definition of rule in 5 U.S.C. 601 is tied to the
publication of a proposed rule.
B. Executive Orders 12866, 13563, and 14192
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
[[Page 1052]]
emphasized the importance of quantifying both costs and benefits, of
reducing costs, of harmonizing rules, and of promoting flexibility.
Executive Order 14192, ``Unleashing Prosperity Through Deregulation,''
announced the Administration policy to significantly reduce the private
expenditures required to comply with Federal regulations to secure
America's economic prosperity and national security and the highest
possible quality of life for each citizen and to alleviate unnecessary
regulatory burdens placed on the American people. In line with the
Executive Order requirements, the Agency chose this regulatory
approach, which implements mandatory provisions of the OBBBA and
clarifies and simplifies program requirements, to maximize benefits and
minimize burden on American producers. This rule is not an Executive
Order 14192 regulatory action because it does not impose any more than
de minimis regulatory costs.
The Office of Management and Budget (OMB) designated this rule as
economically significant under Executive Order 12866, section 3(f)(1),
and therefore, OMB has reviewed this rule. The costs and benefits of
this rule are summarized below. The full CBA is available on
regulations.gov.
C. Cost Benefit Analysis Summary
OBBBA authorized modifications to the 2025 crop year ARC and PLC
programs and the continuation of the ARC and PLC programs for the 2026
through 2031 crop years. The modified provisions are related to
reference prices, effective reference prices, base acres, program
elections, and payment provisions. The numerous changes to ARC and PLC
increase the likelihood and the amount of payments in any given year
relative to the pre-OBBBA amended programs. Payments for these programs
are expected to be $72.19 billion in total for the FY2027-2036 period,
an increase of $46.2 billion relative to expected outlays under the
2018 Farm Bill.
OBBBA also increased ARC and PLC payment limits (to $155,000 for
covered commodities and to a separate limit of $155,000 for peanuts)
and indexes them to inflation as measured by the U.S. Bureau of Labor
Statistics' Consumer Price Index for All Urban Consumers (CPI-U). The
indexing will begin with the 2025 crop year payment limits. Each year
in early October, USDA will announce the payment limit for the upcoming
crop. For example, USDA will announce the 2027 crop ARC and PLC limits
in October 2026. Outlays are projected to increase by around $592
million over 10 years due to the combined effect of the ARC and PLC
payment limit increasing to $155,000 and the use of indexing.
OBBBA extends the DMC program through the 2031 calendar year and
makes two main changes. First, it defines production history as the
highest annual milk marketings achieved in any one of the calendar
years 2021, 2022, or 2023, allowing producers to establish a more
current and often more favorable production benchmark. For new or
recently established operations, production history may be calculated
either by extrapolating from actual production or by estimating output
based on herd size relative to the national rolling herd average
published by USDA. Prior to these amendments, production history was
based on highest milk production in 2011, 2012, and 2013.
Second, OBBBA increases the Tier I coverage limit for a dairy
operation from 5 million to 6 million pounds of milk per year. Tier I
coverage includes subsidized premiums at higher coverage levels than
Tier 2. As a result, OBBBA reduces per-unit program costs for a
significant share of U.S. milk production. OBBBA also updates the
premium discount and multi-year enrollment provisions and resets the
program authority from 2019-2023 to 2026-2031, encouraging producers to
commit to multi-year DMC participation. Combined, these DMC changes are
estimated to result in about $238.2 million of additional cost over 10
years.
The combined total cost of the above OBBBA changes is approximately
$47 billion.
D. Environmental Review
The environmental impacts have been considered in a manner
consistent with the provisions of the National Environmental Policy Act
(NEPA, 42 U.S.C. 4321-4347) and the USDA regulation for compliance with
NEPA (7 CFR part 1b).
This rule implements primarily mandatory changes to the ARC, PLC,
and DMC programs required by the OBBBA, with limited discretionary
aspects that do not have the potential to impact the human environment
as they are administrative. Accordingly, these discretionary aspects
are covered by the FSA Categorical Exclusions specified in 7 CFR
1b.4(c)(16)(ix) that applies to safety net programs and Sec.
1b.(c)(16)(vii) that applies to price support programs.
No Extraordinary Circumstances (Sec. 1b.3(f)) exist because these
are administrative payment programs. As such, the implementation of and
participation in the ARC, PLC, and DMC programs do not constitute major
Federal actions that would significantly affect the quality of the
human environment, individually or cumulatively. Therefore, FSA will
not prepare an environmental assessment or environmental impact
statement for this action and, consistent with Sec. 1b.3(g), this
document serves as the programmatic finding of applicability and no
extraordinary circumstance (FANEC) for this Federal action.
E. 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 Government-to-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.
USDA has assessed the impact of this rule on Indian Tribes and
determined that this rule does not, to our knowledge, have Tribal
implications that required Tribal consultation at this time. If a Tribe
requests consultation, FSA will engage the Office of Tribal Relations
as needed, to ensure meaningful consultation is provided.
F. Unfunded Mandates Reform Act
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 of State, local, and Tribal governments or the
private sector. Agencies generally must prepare a written statement,
including 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.
[[Page 1053]]
G. E-Government Act Compliance
FSA is committed to complying with the E-Government Act of 2002, 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.
Federal Assistance Programs
The titles and numbers of the Federal assistance programs, as found
in the Assistance Listing, to which this document applies are 10.112--
Price Loss Coverage, 10.113--Agriculture Risk Coverage, and 10.127--
Dairy Margin Coverage.
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 1400
Agriculture, Grant programs--agriculture, Loan programs--
agriculture, Natural resources, Price support programs.
7 CFR Part 1412
Acreage allotments, Cotton, Feed grains, Oilseeds, Peanuts, Price
support programs, Reporting and recordkeeping requirements, Rice, Soil
conservation, Wheat.
7 CFR Part 1430
Dairy products, Fraud, Penalties, Price support programs, Reporting
and recordkeeping requirements.
For the reasons discussed above, FSA and CCC amend the regulations
in 7 CFR parts 718, 1400, 1412, and 1430 as follows:
PART 718--PROVISIONS APPLICABLE TO MULTIPLE PROGRAMS
0
1. The authority citation for part 718 continues 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
0
2. Amend Sec. 718.2 as follows:
0
a. Add the definition of ``Administrative county'' in alphabetical
order;
0
b. In the definition of ``Beginning farmer or rancher'', remove the
words ``all members must be related by blood or marriage and all
members'' and add ``at least 50 percent of the interest'' in their
place;
0
c. Revise the definition of ``County'';
0
d. Add the definition of ``Fiscal year'' in alphabetical order;
0
e. Revise the definition of ``Limited resource farmer or rancher'';
0
f. Remove the definition of ``Partial reconstitution''; and
0
g. Add the definition of ``Servicing FSA county office'' in
alphabetical order.
The additions and revisions read as follows.
Sec. 718.2 Definitions.
* * * * *
Administrative county means the FSA-determined county of record for
systematic control and administration under programs relying on such a
determination.
* * * * *
County means the county, council of government, or parish of a
state. For Alaska, Puerto Rico and the Virgin Islands, a county shall
be an area designated by the State committee with the concurrence of
the Deputy Administrator.
* * * * *
Fiscal year means the period October 1 through September 30.
* * * * *
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 $227,100 (2025 program year) in each of the 2 calendar years
that precede the most immediately preceding complete taxable year
before the relevant program year that corresponds to the relevant
program year (for example, for the 2026 program year, the two years
would be 2023 and 2024), adjusted upwards in later years for any
general inflation; and
(2) A person whose total household income was at or below the
national poverty level for a family of four in each of the same two
previous years referenced in paragraph (1) of this definition. (Limited
resource farmer or rancher status can be determined using a website
available through the Limited Resource Farmer and Rancher Online Self
Determination Tool through National Resource and Conservation Service
at https://lrftool.sc.egov.usda.gov.)
(3) For legal entities, all members must meet the criteria in
paragraphs (1) and (2) of this definition.
* * * * *
Servicing FSA county office means the FSA office which is
responsible for updating, processing and maintaining the records of a
specific administrative county and the associated producers and
applications thereof.
* * * * *
Subpart C--Reconstitution of Farms, Allotments, Quotas, and Base
Acres
Sec. 718.204 [Amended]
0
3. In Sec. 718.204(b), remove the word ``calendar'' and add the word
``fiscal'' in its place.
PART 1400--PAYMENT LIMITATION AND PAYMENT ELIGIBILITY
0
4. The authority citation continues to read as follows:
Authority: 7 U.S.C. 1308, 1308-1, 1308-2, 1308-3, 1308-3a,
1308-4, and 1308-5; and Title I, Pub. L. 115-123.
Subpart A--General Provisions
0
5. Amend Sec. 1400.1 as follows:
0
a. In Table 1 to paragraph (f), revise the entry for items (1) and (2)
and add footnote 3 at the end of the table.
Sec. 1400.1 Applicability.
* * * * *
(f) * * *
Table 1 to Paragraph (f)
------------------------------------------------------------------------
Limitation per person or legal entity
Payment or benefit ($)
------------------------------------------------------------------------
(1) Price Loss Coverage, 155,000 per program year.\3\
Agriculture Risk Coverage
payments (other than Peanuts).
(2) Price Loss Coverage and 155,000 per program year.\3\
Agriculture Risk Coverage
payments for Peanuts.
[[Page 1054]]
* * * * * * *
------------------------------------------------------------------------
\3\ The $155,000 limitation is the base total amount a person or legal
entity can receive directly or indirectly for program year 2025, and
future years. Beginning in program year 2025, the payment limitation
amount will be adjusted annually for inflation based on the Consumer
Price Index for all Urban Consumers as discussed in Sec. 1400.106.
0
6. In Sec. 1400.3, add the definition of ``CPI-U'' in alphabetical
order.
Sec. 1400.3 Definitions.
* * * * *
CPI-U means the Consumer Price Index for all Urban Consumers
published by the Bureau of Labor Statistics of the Department of Labor
at https://www.bls.gov/cpi/.
* * * * *
Subpart B--Payment Limitation
0
7. In Sec. 1400.106, add paragraph (d) to read as follows.
Sec. 1400.106 Payment limits.
* * * * *
(d) The payment limitations described in items (1) and (2) of table
1 to Sec. 1400.1(f) will be annually adjusted for inflation based on
the CPI-U beginning with crop year 2025 according to the following:
(1) On or about October 1 of each year, FSA reviews the CPI-U for
the most recently available twelve-month period on the date of review;
(2) FSA will average the CPI-U data and compare the average of the
previous 12-month period to determine the percentage of inflation;
(3) The result of paragraph (d)(2) of this section will be applied
to the limitation specified in items (1) and (2) of table 1 to Sec.
1400.1(f), as adjusted; and
(4) The resulting adjusted limitation will be rounded to the
nearest thousand.
PART 1412--AGRICULTURE RISK COVERAGE AND PRICE LOSS COVERAGE
0
8. Revise the authority citation for part 1412 to read as follows:
Authority: 7 U.S.C. 1508b, 7911-7912, 7916, 8702, 8711-8712,
8751-8752, 9011-9018, and 15 U.S.C. 714b and 714c.
0
9. Revise the heading for part 1412 as set forth above.
Subpart A--General Provisions
0
10. Amend Sec. 1412.2 as follows:
0
a. Revise paragraphs (a) and (b);
0
b. In paragraph (c) introductory text, remove the word ``may'' and add
``will'' in its place;
0
c. Revise paragraph (d); and
0
d. Remove and reserve paragraph (e).
The revisions read as follows.
Sec. 1412.2 Administration.
(a) The ARC and PLC Programs will be administered under the general
supervision and direction of the Executive Vice President, CCC, and
will be carried out in the field by FSA State and county committees,
respectively.
(b) State and county committees, and representatives and their
employees, do not have authority to modify or waive any of the
provisions of the regulations set forth in this part.
* * * * *
(d) No provision or delegation to an FSA State or county committee
will preclude the Executive Vice President, CCC, or a designee, from
determining any question arising under this part, or from reversing or
modifying any determination made by an FSA State or county committee.
* * * * *
0
11. Amend Sec. 1412.3 as follows:
0
a. In paragraph (3) of the definition of ``Actual average county
yield'', remove ``2013'' both times it appears and add ``2019'' in its
place, and remove ``2017'' both times it appears and add ``2023'' in
its place;
0
b. In the definition of ``ARC guarantee'', remove ``86 percent'' and
add ``90 percent'' in its place;
0
c. In the definition of ``Average historical county yield'', remove
``2013'' both times it appears and add ``2019'' in its place, and
remove ``2017'' both times it appears and add ``2023'' in its place;
0
d. In paragraph (3) of the definition of ``Benchmark revenue for ARC-
IC'', remove ``2023 and add ``2031'' in its place, and remove the words
``and eligible subsequently planted crop acreage'' both times they
appear;
0
e. Add the definition of ``Bush'' in alphabetical order;
0
f. In the definitions of ``Contract period'' and ``Contract year or
program year'', remove ``2019'' each time it appears and add ``2026''
in its place, and remove ``2018'' each time it appears and add ``2025''
in its place;
0
g. Add the definition of ``Corn'' in alphabetical order;
0
h. In the definition of ``Crop year'', remove ``2019'' each time it
appears and add ``2026'' in its place, and remove ``2018'' each time it
appears and add ``2025'' in its place;
0
i. In paragraph (2)(ii) of the definition of ``Effective reference
price'', remove ``85 percent'' and add ``Beginning with the 2025 crop
year, 88 percent'' in its place;
0
j. Add the definition of ``Eligible non-covered commodity'' in
alphabetical order;
0
k. In the definition of ``Fiscal year'', remove ``2019'' each time it
appears and add ``2026'' in its place, and remove ``2018'' and add
``2025'' in its place;
0
l. Add the definition of ``Hemp'' in alphabetical order;
0
m. Revise the definitions of ``Historical irrigated percentage'' and
``Marketing year'';
0
n. In the definition of ``Most recent 5 crop years available'', remove
``2019'' and add ``2026'' in its place, remove ``2013'' and add
``2020'' in its place, and remove ``2017'' and add ``2024'' in its
place;
0
o. Revise the definition of ``Reference price'';
0
p. In the definition of ``Replacement crop'', remove the words ``unless
the replacement crop acreage meets the definition of eligible
subsequently planted crop acreage as specified in this section; and''
and add a period in their place;
0
q. Revise the definition of ``Subsequently planted crop acreage'';
0
r. In the definition of ``Temperate japonica rice'', remove ``2012''
both times it appears and add ``2017'' in its place, and remove
``2016'' both times it appears and add ``2021'' in its place; and
0
s. Add the definitions of ``Tree'' and ``Vine'' in alphabetical order.
The additions and revisions read as follows.
Sec. 1412.3 Definitions.
* * * * *
Bush means a low, branching, woody perennial plant, from which at
maturity of the bush, an annual fruit or vegetable crop is produced.
* * * * *
[[Page 1055]]
Corn means field corn or sterile high-sugar corn that follows the
standard planting and harvesting practices for corn for the area in
which the corn is grown. Corn nuts, sweet corn, and corn varieties
grown for decoration uses are not corn.
* * * * *
Eligible non-covered commodity means all other commodities that are
not considered a covered commodity, excluding the following:
(1) Tobacco;
(2) Cannabis sativa L. and any part of that plant that does not
meet the definition of hemp;
(3) CRP, other Federal Conservation Program Acres;
(4) Cover crops, and
(5) Commodities that are reported as a tree, bush, vine, grass,
idle, or fallow.
* * * * *
Hemp means the plant species Cannabis sativa L. and any part of
that plant, including the seeds thereof and all derivatives, extracts,
cannabinoids, isomers, acids, salts, and salts of isomers, whether
growing or not, with a delta-9 tetrahydrocannabinol concentration of
not more than 0.3 percent on a dry weight basis, that is grown under a
license or other required authorization issued by the applicable
governing authority that permits the production of the hemp.
Historical irrigated percentage means the percentage of the P&CP
covered commodity on a farm that was irrigated divided by the total
acreage of the P&CP covered commodity between the years 2019 through
2023.
* * * * *
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 seed cotton: August 1 through July 31;
(4) Corn, grain sorghum, soybeans, sunflowers, safflower, mustard,
crambe, sesame, and chickpeas: September 1 through August 31;
(5) Long grain and medium grain rice: August 1 through July 31; and
(6) Temperate Japonica rice: October 1 through September 30.
* * * * *
Reference price means, with respect to a covered commodity for a
crop year:
(1) The following for the 2026 through 2030 crop years:
(i) Wheat, $6.35 per bushel;
(ii) Corn, $4.10 per bushel;
(iii) Grain sorghum, $4.40 per bushel;
(iv) Barley, $5.45 per bushel;
(v) Oats, $2.65 per bushel;
(vi) Long grain rice, $16.90 per hundredweight;
(vii) Medium grain rice, $16.90 per hundredweight;
(viii) Soybeans, $10.00 per bushel;
(ix) Other oilseeds, $23.75 per hundredweight;
(x) Peanuts, $630.00 per ton;
(xi) Dry peas, $13.10 per hundredweight;
(xii) Lentils, $23.75 per hundredweight;
(xiii) Small chickpeas, $22.65 per hundredweight;
(xiv) Large chickpeas, $25.65 per hundredweight; and
(xv) Seed cotton, $0.42 per pound.
(2) Beginning with the 2031 crop year, the reference price for the
previous crop year multiplied by 1.005, not to exceed 113 percent of
the reference price for the covered commodity provided in paragraph (1)
of this definition.
* * * * *
Subsequently planted crop acreage means acreage of a crop following
an initial crop that is not in an approved double cropping combination.
Subsequently planted crop acreage can be used for base reallocation for
ARC and PLC under subpart B.
* * * * *
Tree means a tall, woody plant having comparatively or potential
great height.
* * * * *
Vine means a perennial plant that has a flexible stem supported by
climbing, twining, or creeping along a surface.
Subpart B--Establishment of Base Acres for a Farm for Covered
Commodities
Sec. 1412.26 [Amended]
0
12. In Sec. 1412.26(a), remove ``2023'' and add ``2031'' in its place.
0
13. Add Sec. 1412.27 to read as follows.
Sec. 1412.27 Additional Base Acres.
(a) An additional 30,000,000 base acres will be allocated to
eligible farms for program year 2026. Owners will be notified by CCC
and given the opportunity to elect to not receive the additional
allocation no later than 90 days after the receipt of the notification.
An owner may appeal a determination of ineligibility for an allocation
of base acres by requesting a review of the accuracy of information
contained in the notification by filing a written request to the County
Committee within 30 calendar days after the notice is received. If an
adverse decision is made by the County Committee, the owner may appeal
the adverse decision to the FSA State Committee or the National Appeals
Division, or request mediation.
(b) Effective beginning with the 2026 crop year, a farm is eligible
to receive an allocation of base acres if, with respect to the farm,
the 5-year average sum exceeds the total number of base acres on the
farm. The 5-year average sum is the sum of:
(1) The 5-year average of:
(i) The acreage planted on the farm to all covered commodities for
harvest, grazing, haying, silage or other similar purposes for the 2019
through 2023 crop years; and
(ii) Any acreage on the farm that the producers were prevented from
planting during the 2019 through 2023 crop years to covered commodities
because of drought, flood, or other natural disaster, or other
condition beyond the control of the producers, as determined by CCC;
plus
(2) The lesser of:
(i) 15 percent of the total acres on the farm; or
(ii) The 5-year average of:
(A) The acreage planted on the farm to eligible noncovered
commodities for harvest, grazing, haying, silage, or other similar
purposes for the 2019 through 2023 crop years; and
(B) Any acreage on the farm that the producers were prevented from
planting during the 2019 through 2023 crop years to eligible noncovered
commodities because of drought, flood, or other natural disaster, or
other condition beyond the control of the producers, as determined by
CCC.
(c) The total number of base acres for covered commodities, with
respect to a farm, is the total number of base acres for covered
commodities on the farm, excluding unassigned crop base, as in effect
on September 30, 2024.
(d) If the 5-year average planted acreage of covered commodities
for a farm is equal to zero, that farm is ineligible to receive an
allocation of base acres.
(e) The number of base acres allocated to an eligible farm:
(1) Is equal to the difference obtained by subtracting the total
amount of base acres for covered commodities on the farm, excluding
unassigned crop base, from the amount determined in the 5-year average
sum calculation; and
(2) Includes unassigned crop base.
(f) The allocation of additional base acres for covered commodities
is in proportion to the ratio of:
(1) The 5-year average of:
(i) The acreage planted on the farm to each covered commodity for
harvest, grazing, haying, silage, or other similar purposes for the
2019 through 2023 crop years; and
[[Page 1056]]
(ii) Any acreage on the farm that the producers were prevented from
planting during the 2019 through 2023 crop years to that covered
commodity because of drought, flood, or other natural disaster, or
other condition beyond the control of the producers, as determined by
CCC; to
(2) The 5-year average cropping history, as calculated in (b)(1).
For the purpose of determining a 5-year acreage average, any crop year
in which a covered commodity was not planted will not be excluded.
(g) For the purpose of determining the acreage on a farm that
producers planted or were prevented from planting during the 2019
through 2023 crop years to covered commodities, if the acreage that was
planted or prevented from being planted was devoted to another covered
commodity in the same crop year (other than a covered commodity
produced under an established practice of double cropping), the owner
may elect the covered commodity to be used for that crop year in
determining the 5-year average, but may not include both the initial
covered commodity and the subsequent covered commodity.
(h) The allocation of additional base acres among covered
commodities on a farm may not result in a total number of base acres
for the farm in excess of the total number of acres on the farm
according to Sec. 1412.24 with the removal of the acres specified in
(a)(2).
(i) Unassigned base will be converted to covered commodity base
acres on farms eligible for additional base acres. The allocation of
additional acres will first be applied on an acre-for-acre basis not to
exceed total amount of additional allocation, converting unassigned
base acres to specific covered commodity base acres. These converted
acres are not counted toward the additional 30 million acres and are
not subject to any pro-rata reduction.
(j) If the total number of eligible acres allocated to base acres
across all farms in the United States would exceed 30,000,000 acres,
CCC will apply an across-the-board, pro-rata reduction to the number of
eligible acres to ensure the number of allocated base acres is equal to
30,000,000 acres.
(k) Beginning with crop year 2026, for the purpose of making PLC
payments, FSA will establish payment yields for new base acres
allocated equal to:
(1) The payment yield established on the farm for the applicable
covered commodity; and
(2) If no such payment yield for the applicable covered commodity
exists, a payment yield:
(i) Equal to the average payment yield for the covered commodity
for the county in which the farm is situated; or
(ii) Equal to a yield for the covered commodity for similarly
situated farms.
(l) In the case of a farm for which the owner on the date of base
allocation eligibility notification was not the owner for the 2019
through 2023 crop years, CCC will use the planting history of the prior
owner or owners of that farm for purposes of determining:
(1) Eligibility;
(2) Eligible acres; and
(3) The allocation of acres.
Subpart D--ARC and PLC Contract Terms and Enrollment Provisions for
Covered Commodities
0
14. Amend Sec. 1412.41 as follows:
0
a. In paragraphs (a)(1)(i) and (f), remove ``2019'' each time it
appears and add ``2026'' in its place; and
0
b. In paragraph (a)(1)(iii), add ``or 2026'' after ``2019'' each time
it appears;
0
15. Amend Sec. 1412.46 as follows:
0
a. Revise paragraph (f)(1);
0
b. Remove paragraph (f)(6);
0
c. Redesignate paragraphs (f)(7) through (f)(45) as (f)(6) through
(f)(44);
0
d. In newly redesignated paragraph (f)(6), add ``Crowley and'' before
``Otero'';
0
e. Revise newly redesignated paragraphs (f)(13), (f)(14), and (f)(27);
0
f. In newly redesignated paragraph (f)(32), add ``Oswego,'' after
``Orleans,'';
0
g. In newly redesignated paragraph (f)(35), add ``Pike,'' after
``Muskingum,'';
0
h. In newly redesignated paragraph (f)(36), add ``Comanche,'' after
``Cleveland,'';
0
i. Revise newly redesignated paragraphs (f)(43) and (f)(44);
0
j. Add new paragraph (f)(45); and
0
k. In paragraph (49), remove ``Yakima'' and add ``None'' in its place.
The revisions and addition read as follows.
Sec. 1412.46 Planting flexibility.
* * * * *
(f) * * *
(1) Alabama. All counties.
* * * * *
(13) Illinois. Adams, Alexander, Bureau, Calhoun, Cass, Clark,
Clay, Clinton, Crawford, DeKalb, Edgar, Edwards, Effingham, Franklin,
Gallatin, Hamilton, Hardin, Iroquois, Jefferson, Jersey, Johnson,
Kankakee, LaSalle, Lawrence, Lee, Madison, Marion, Mason, Monroe,
Peoria, Pulaski, Randolph, Richland, St. Clair, Saline, Sangamon,
Tazewell, Union, Vermilion, Wabash, Washington, Wayne, White, Woodford,
and Whiteside.
(14) Indiana. Allen, Bartholemew, Crawford, Daviess, Floyd, Gibson,
Harrison, Jackson, Johnson, Knox, LaGrange, LaPorte, Madison, Marion,
Martin, Miami, Pike, Posey, Ripley, Shelby, Sullivan, Vanderburgh, and
Warrick.
* * * * *
(27) Nebraska. Dawes-North Sioux and Sheridan.
* * * * *
(43) Tennessee. All counties.
(44) Texas. Anderson, Andrews, Aransas, Archer, Armstrong,
Atascosa, Austin, Bailey, Bastrop, Baylor, Bee, Bell, Bexar, Borden,
Bosque, Bowie, Brazos, Brazoria, Briscoe, Brooks, Brown, Burleson,
Caldwell, Calhoun, Callahan, Cameron, Carson, Cass, Castro, Chambers,
Cherokee, Childress, Clay, Cochran, Coleman, Collin, Collingsworth,
Colorado, Comanche, Concho, Cooke, Coryell, Cottle, Crosby, Culberson,
Dallam, Dallas, Dawson, Deaf Smith, Delta, Denton, Dickens, Dimmit,
Donley, Duval, Eastland, Ellis, El Paso, Erath, Falls, Fannin, Fayette,
Fischer, Floyd, Foard, Fort Bend, Franklin, Freestone, Frio, Gaines,
Galveston, Garza, Gillespie, Glasscock, Gonzales, Gray, Grayson,
Grimes, Guadalupe, Hale, Hall, Hamilton, Hansford, Hardeman, Hardin,
Harris, Hartley, Haskell, Hemphill, Henderson, Hidalgo, Hill, Hockley,
Hood, Hopkins, Houston, Howard, Hudspeth, Hunt, Hutchinson, Jackson,
Jefferson, Jim Hogg, Jim Wells, Johnson, Jones Karnes, Kaufman, Kent,
King, Kinney, Kleberg, Knox, Lamar, Lamb, LaSalle, Lee, Leon, Liberty,
Limestone, Lipscomb, Live Oak, Llano, Loving, Lubbock, Lynn, Martin,
Mason, Matagorda, Maverick, McCulloch, McLennan, Medina, Menard,
Midland, Milam, Mills, Mitchell, Montague, Moore, Motley, Navarro,
Nolan, Nueces, Ochiltree, Oldham, Palo Pinto, Parker, Parmer, Pecos,
Potter, Rains, Randall, Reagan, Red River, Reeves, Refugio, Roberts,
Robertson, Rockwall, Runnels, San Patricio, San Saba, Schleicher,
Scurry, Sherman, Smith, Somervell, Starr, Stonewall, Swisher, Tarrant,
Taylor, Terry, Tom Green, Travis, Upton, Uvalde, Van Zandt, Victoria,
Walker, Waller, Washington, Webb, Wharton, Wheeler, Wichita, Wilbarger,
Willacy, Williamson, Wise, Wilson, Wood, Yoakum, Young, Zapata, and
Zavala.
(45) U.S. Virgin Islands. None.
* * * * *
Sec. 1412.47-1412.48 [Reserved]
0
16. Add and reserve Sec. Sec. 1412.47-1412.48.
Subpart E--Financial Considerations Including Sharing Payments
Sec. 1412.51 [Amended]
0
17. Amend Sec. 1412.51 as follows:
[[Page 1057]]
0
a. Remove and reserve paragraphs (b) and (c); and
0
b. In paragraph (e), remove ``2019'' both times it appears and add
``2026'' in its place, remove ``2020'' and add ``2026'' in its place,
and remove ``2021'' both times it appears and add ``2028'' in its
place.
Sec. 1412.52 [Amended]
0
18. Amend Sec. 1412.52 as follows:
0
a. In paragraph (d) introductory text, remove ``in Sec. 1412.51 and'';
and
0
b. In paragraph (e)(2), remove ``Part 1403 of this chapter'' and add
``Part 3 of this title'' in its place.
0
19. Amend Sec. 1412.53 as follows:
0
a. In paragraph (b)(2), remove ``10 percent'' and add ``12 percent'' in
its place;
0
b. In paragraph (c), remove ``2013'' each time it appears and add
``2019'' in its place, and remove ``2017'' each time it appears and add
``2023'' in its place;
0
c. In paragraph (d), remove ``2019'' and add ``2026'' in its place;
0
d. Revise paragraph (e)(2); and
0
e. Add new paragraph (h).
The revision and addition read as follows.
Sec. 1412.53 ARC payment provisions.
* * * * *
(e) * * *
(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 12 percent of benchmark
revenue for ARC-IC for each of the 2025 through 2031 crop years.
* * * * *
(h) For the 2025 crop year, CCC will make the higher of PLC
payments or ARC-CO payments to the producers on a farm for the payment
acres for each covered commodity on the farm.
Subpart F--Violations and Compliance Provisions
Sec. 1412.61 [Amended]
0
20. In Sec. 1412.61, remove ``part 1403 of this chapter'' and add
``part 3 of this title'' in its place.
Sec. 1412.62 [Reserved]
0
21. Add and reserve Sec. 1412.62.
Sec. 1412.65 [Amended]
0
22. In Sec. 1412.65(a), remove ``part 1403 of this chapter'' and add
``part 3 of this title'' in its place.
Subpart G--ARC and PLC Election
Sec. 1412.71 [Amended]
0
23. Amend Sec. 1412.71 as follows:
0
a. In paragraph (a) introductory text, remove ``2023'' and add ``2031''
in its place, and remove ``2019'' and add ``2026'' in its place; and
0
b. In paragraph (a)(2), add ``or 2026'' to the end of the paragraph.
Sec. 1412.72 [Amended]
0
24. In Sec. 1412.72(a), add ``or 2026'' after ``2019''.
Sec. 1412.74 [Amended]
0
25. Amend Sec. 1412.74 as follows:
0
a. In paragraph (a), remove ``2019'' and add ``2026'' in its place; and
0
b. In paragraph (b), remove ``2019'' both times it appears and add
``2026'' in its place, remove ``2023'' and add ``2025'' in its place,
and add ``or 2027 through 2031 crop years as was applicable for the
2025 crop year'' at the end of the paragraph.
Subpart H--[Reserved]
0
26. Remove and reserve subpart H, consisting of Sec. Sec. 1412.81
through 1412.89.
PART 1430--DAIRY PRODUCTS
0
27. The authority citation for part 1430 continues to read as follows:
Authority: 7 U.S.C. 9051-9060 and 9071 and 15 U.S.C. 714b and
714c.
Subpart A--[Reserved]
0
28. Remove and reserve subpart A.
Subpart D--Dairy Margin Coverage Program
0
29. Amend Sec. 1430.401 as follows:
0
a. Revise paragraphs (a), (b), and (d); and
0
b. Remove and reserve paragraph (e).
The revisions read as follows.
Sec. 1430.401 Administration.
(a) The Dairy Margin Coverage Program (DMC) will be administered
under the general supervision and direction of the Executive Vice
President, CCC, and will be carried out in the field by FSA State and
county committees, respectively.
(b) State and county committees, and representatives and their
employees, do not have authority to modify or waive any of the
provisions of the regulations set forth in this part.
* * * * *
(d) No provision or delegation to an FSA State or county committee
will preclude the Executive Vice President, CCC, or a designee, from
determining any question arising under this subpart, or from reversing
or modifying any determination made by an FSA State or county
committee.
* * * * *
0
30. Amend Sec. 1430.402 as follows:
0
a. Remove the definitions of ``Adjusted Base Production History'' and
``Milk Income Loss Contract Program or MILC'',
0
b. Revise the definitions of ``New operation'' and ``Production
history''; and
0
c. Remove the definition of ``Supplemental Production History''.
The revisions read as follows.
Sec. 1430.402 Definitions.
* * * * *
New operation means a dairy operation that started commercially
marketing milk:
(1) After January 1, 2023, and does not have one full 365-day
calendar year of commercial milk marketings from 2021, 2022, or 2023;
(2) After January 1, 2023, with a full calendar year of commercial
milk marketings for 2024 or subsequent year; or
(3) Within 60 calendar days of submitting a contract application
under DMC.
* * * * *
Production history means the production history determined for a
participating dairy operation under this subpart when the participating
dairy operation first registers to participate in DMC as determined
under the provisions of this subpart.
* * * * *
0
31. Amend Sec. 1430.403 as follows:
0
a. Revise paragraphs (a)(1) and (e); and
0
b. Remove paragraph (f).
The revisions read as follows.
Sec. 1430.403 Eligible Dairy Operations.
(a) * * *
(1) Produce milk from cows in the United States that is marketed
commercially at the time of each annual election for an applicable
coverage year in DMC;
* * * * *
(e) CCC will determine additional dairy operations that operate in
a manner that are separate and distinct from each other according to
paragraph (d) of this section and may be considered an operation even
though they may not meet the conditions otherwise imposed in this
definition. CCC may combine dairy operations to be considered one dairy
operation when the business is operating more than one milking facility
that is not separate and distinct and is conducting business as one
dairy operation.
0
32. Amend Sec. 1430.404 as follows:
[[Page 1058]]
0
a. In paragraph (a), remove the words ``and, if eligible, adjusted base
production history,'';
0
b. Revise paragraphs (b) introductory text, (c)(1), (d), and (e)(2) and
(3);
0
c. Remove paragraph (e)(4);
0
d. Revise paragraphs (f)(2) and (g); and
0
e. Remove paragraph (h).
The revisions read as follows.
Sec. 1430.404 Time and method of registration and annual election.
* * * * *
(b) A dairy operation must submit completed contracts and any other
supporting documentation, during the annual election period established
by CCC to the administrative county FSA office serving the dairy
operation. However, the production history must be established only
once and approved by CCC before the contract is submitted and
considered complete.
* * * * *
(c) * * *
(1) The applicable year of coverage for contracts received during
an annual election period will be the following calendar year.
* * * * *
(d) If the dairy producer operates more than one separate and
distinct operation, the producer must register each operation for each
operation to be eligible for coverage. If the producer moves the same
herd of cattle between two facilities, then the two facilities will not
be regarded as separate and distinct but as one operation. A separate
operation must distinctly, as a single unit, have their own cattle,
facilities, milk marketings, tanks, feed, records, State level
licenses, and permits. A dairy operation operated by more than one
dairy producer will be considered to be a single dairy operation for
purposes of participating in DMC and may only submit one contract.
(e) * * *
(2) During the 2026 annual coverage election period only,
participating dairy operations that make a one-time election of
coverage level and percentage of coverage, according to Sec.
1430.407(j), will be locked in at the same coverage level and
percentage of coverage for a 6-year period beginning January 1, 2026,
and ending December 31, 2031. Dairy operations that elect the lock-in
option are required to pay the annual administrative fee and submit an
annual contract during the annual contract election period for each
coverage year to certify that the dairy operation is still in the
business of producing and commercially marketing milk. If the operation
fails to pay the applicable administrative fees or certify the status
of the dairy operation, the dairy operation will remain obligated for
all applicable unpaid administrative and premium fees calculated for
the lock-in period.
(3) All participating producers in the participating dairy
operation must agree to the coverage level threshold and coverage
percentage elected by the operation on the contract. Producers in the
participating dairy operation that elect not to participate may not
submit a separate contract for coverage. All producers that share in
risk of the dairy operation's production must be indicated on the
contract with their corresponding share in the dairy operation;
however, a signature from the non-participating member will not be
required for CCC approval. When a member of an informal joint venture
declines participation on the DMC contract, the premium amount and
potential payments for the participating members are prorated
accordingly.
(f) * * *
(2) All information provided is subject to verification by CCC. CCC
may require a dairy operation to provide documentation that supports
all verifiable records.
(g) At the time the completed contract is submitted to CCC for the
first program year in which the operation is to participate in DMC, the
dairy operation must also submit a separate form, as prescribed by CCC,
to establish the production history for the dairy operation. An
established production history and a completed contract are both
required to have a complete submission that is subject to approval by
CCC.
0
33. Amend Sec. 1430.405 as follows:
0
a. Revise paragraph (a) introductory text;
0
b. In paragraph (a)(2), remove the words ``or 2019 milk marketings'';
0
c. Remove paragraphs (a)(3) and (4), and (b);
0
d. Redesignate paragraphs (c) and (d) as paragraphs (b) and (c);
0
e. Revise newly redesignated paragraph (b) introductory text;
0
f. Remove paragraph (e);
0
g. Redesignate paragraphs (f) through (h) as paragraphs (d) through
(f);
0
h. In newly redesignated paragraph (d) introductory text, remove the
words ``or adjusted base production history'';
0
i. In newly redesignated paragraphs (d)(1) and (d)(2), remove the words
``and or adjusted base production history'';
0
j. In newly redesignated paragraph (e), remove the words ``and adjusted
base production history'';
0
k. In newly redesignated paragraph (f), remove ``5 million'' and add
``6 million'' in its place; and
0
l. Revise paragraph (f)(1).
The revisions read as follows.
Sec. 1430.405 Establishment and transfer of production history for a
participating dairy operation.
(a) Except as provided in paragraphs (b) of this section, CCC will
establish the production history for a dairy operation for DMC as the
highest annual milk marketings of the participating dairy operation
during any one of the 2021, 2022, or 2023 calendar years.
* * * * *
(b) A participating dairy operation that began marketing milk after
January 1, 2023, will be considered a new dairy operation according to
Sec. 1430.401. To establish the production history for such a new
dairy operation the new dairy operation is required to elect one of the
following methods:
* * * * *
(f) * * *
(1) The dairy operation must notify CCC of the intergenerational
transfer within 60 days of the purchase of the cows by filing form CCC-
800C at the County office. The operation has the option of the
additional production history taking effect beginning with the month
the producer first began to commercially produce and market milk as
part of the dairy operation, or the following January 1. If the
additional production history takes effect between January 1 and August
31, the premium is due September 1, as specified in Sec.
1430.407(h)(2). If the additional production history takes effect
between September 1 and December 31, the premium is due immediately.
* * * * *
0
34. Amend Sec. 1430.406 as follows:
0
a. Revise paragraph (a); and
0
b. In paragraph (c), remove ``2024'' and add ``2031'' in its place.
The revision reads as follows.
Sec. 1430.406 Administrative Fees.
(a) Except as provided in paragraph (e) of this section, dairy
operations must pay an administrative fee to CCC in the amount of $100
at the time of enrollment during the annual election period for each
applicable coverage year the dairy operation decides to participate in
DMC. Annual administrative fees are due and payable to CCC through the
administrative county FSA office no later than the close of business on
the last day of the annual election period established by CCC for each
applicable calendar year of dairy margin coverage under DMC. The
administrative fee paid is non-refundable; however, if paid during the
Coverage Election Period, and made in
[[Page 1059]]
error or other detrimental circumstances, the COC may refund the
administrative fee to the dairy operation.
* * * * *
0
35. Amend Sec. 1430.407 as follows:
0
a. In paragraphs (c), (d), and the headings of the second and third
column in Table 1 to paragraph (e), remove ``5 million'' each time it
appears and add ``6 million'' in its place;
0
b. In paragraph (f) introductory text, remove the words ``or adjusted
base production history, as applicable,'';
0
c. In paragraph (f)(1), remove the words ``or adjusted base production
history'';
0
d. Revise paragraphs (i) and (j); and
0
e. Remove paragraph (n).
The revisions read as follows.
Sec. 1430.407 Buy-up coverage.
* * * * *
(i) If the total premium is not paid for an applicable calendar
year of coverage as specified in paragraph (g) of this section, the
participating dairy operation contract for a concurrent year cannot be
approved until the prior year premium or receivable is paid.
(j) For each calendar year 2026 through 2031, a participating dairy
operation that makes a one-time election of a coverage level threshold
and a percentage of coverage according to this section, for a 6-year
period, will have their elected coverage level, as applicable to each
tier, reduced by 25 percent. The option to lock in for the premium rate
discount must be elected during the 2026 annual coverage election
period announced by CCC. Except that, new dairy operations, not in
existence during the 2026 annual election period, that elect to
participate in DMC according to Sec. 1430.404(b), are eligible to
receive the premium rate discount for locking coverage for the period
beginning with the first available calendar year and ending in 2031,
except that new dairy operations registering for DMC for the first time
for coverage year 2031 and dairy operations that stop producing and
marketing milk in 2026 that are registering for eligible months in 2031
are not eligible for the multi-year premium rate discount. All dairy
operations that elect the lock-in option are subject to full
participation in DMC at the same elected premium coverage levels and
calculated premium for the duration of DMC according to Sec. 1430.413.
* * * * *
Sec. 1430.408 [Removed and reserved]
0
36. Remove and reserve Sec. 1430.408.
0
37. In Sec. 1430.410, revise paragraph (a)(2) and add paragraph
(a)(3).
The revision and addition read as follows.
Sec. 1430.410 Effect of failure to pay administrative fees or
premiums.
(a) * * *
(2) Upon such failure to pay the administrative fee when due, loses
coverage under DMC for the coverage year; and
(3) Upon such failure to pay the premium fee or receivable when
due, a subsequent DMC contract cannot be approved.
* * * * *
Sec. 1430.412 [Reserved]
0
38. Remove and reserve Sec. 1430.412.
Sec. 1430.413 [Amended]
0
39. Amend Sec. 1430.413 as follows:
0
a. In paragraph (a) remove ``2023'' both times it appears and add
``2031'' in its place; and
0
b. Remove paragraphs (d) and (e).
Sec. 1430.416 [Amended]
0
40. In Sec. 1430.416, remove ``part 1403 of this chapter'' and add
``part 3 of this title'' in its place.
William Beam,
Administrator, Farm Service Agency, and Executive Vice President,
Commodity Credit Corporation.
[FR Doc. 2026-00313 Filed 1-9-26; 8:45 am]
BILLING CODE 3411-E2-P