Base Acre Policy Raises Equity, Market Distortion Questions

Decoupled base acres may amplify income inequality and distort planting decisions as farm program payments increase.

URBANA, Ill. (RFD NEWS) — Federal farm payment policy may be increasingly misaligned with today’s production realities, raising equity concerns and potential market distortions as new base acres are allocated in 2026.

Jonathan Coppess, with the University of Illinois Department of Agricultural and Consumer Economics and former Administrator of the U.S. Department of Agriculture (USDA) Farm Service Agency, says the USDA’s continued reliance on decoupled base acres rewards historical planting decisions rather than current risk exposure.

In a January 15 farmdoc daily analysis, Coppess explains that ARC and PLC payments are tied to base acres, not planted acres, allowing farmers to receive payments for crops they do not grow. With USDA signaling it will prioritize assigning new base acres to formerly unassigned cotton acres, those design flaws are returning to the forefront as program signups are delayed.

Using national average data, Coppess shows that crops with high base-acre payment rates — particularly rice, peanuts, and seed cotton — generate significantly higher total returns when corn or soybeans are planted on those base acres. Two producers growing the same crop can receive vastly different income outcomes solely because of their base-acre history.

Those disparities may influence planting decisions, especially as higher ARC and PLC payments take effect under the Reconciliation Farm Bill. Coppess cautions that this could contribute to oversupply risks in corn and soybeans.

Farm-Level Takeaway: Decoupled base acres may amplify income inequality and distort planting decisions as farm program payments increase.
Tony St. James, RFD NEWS Markets Specialist
Related Stories
Secretary Rollins says the first U.S. calf infected with screwworm responded to treatment and is back to full health.
Trade estimates point to only modest changes in U.S. grain ending stocks ahead of USDA’s June 11 WASDE report.
Farmers may need flexible marketing plans as tighter supplies and uncertain demand heighten price risks for corn and soybeans.
Global fiber demand is growing, but cotton producers benefit only when cotton gains value and competes for market share.

Tony St. James joined the RFD-TV talent team in August 2024, bringing a wealth of experience and a fresh perspective to RFD-TV and Rural Radio Channel 147 Sirius XM. In addition to his role as Market Specialist (collaborating with Scott “The Cow Guy” Shellady to provide radio and TV audiences with the latest updates on ag commodity markets), he hosts “Rural America Live” and serves as talent for trade shows.

LATEST STORIES BY THIS AUTHOR:

Researchers say expanded E15 access may benefit corn producers but create challenges for soybean growers.
Rising payroll expenses continue to pressure small businesses across rural America.
Wheat Harvest Expands As Drought Still Pressures Pastures
CoBank economist Brian Earnest joins us to discuss the rapid growth of the meat snack category, shifting consumer protein demand, and how food companies are adapting to a changing retail landscape.
Texas Tech’s Dr. Jennifer Koziol discusses the latest New World screwworm cases in Texas, ongoing response efforts, and how livestock biosecurity can prevent the pest’s spread.
RealAg Radio’s Shaun Haney discusses the next generation of Canadian agricultural policy, producer priorities, concerns surrounding risk management programs, and what the framework could mean for agriculture on both sides of the border.