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
Strong production and rising stocks may pressure ethanol margins unless demand or exports continue to improve.
Without additional support, many soybean operations will continue to face financial stress as they prepare for the 2026 crop.
The National Cattlemen’s Beef Association and Public Lands Council published a joint press release regarding the advancement of legislation to delist the Mexican Gray Wolf from the Endangered Species Act.
Farm CPA Paul Neiffer joined us to break down the recent Fifth Circuit Court decision overturning a prior Tax Court decision on self-employment tax for limited partners, the ruling’s impact on farmers, and potential next steps in Congress.
Congressman Adrian Smith of Nebraska joined us with the latest on efforts to secure year-round E15 sales.
Jack Hubbard, with the Center for the Environment and Welfare, shares context and perspective on the controversial letter about Prop 12 circulating in Washington and how a review shows it misled the public.

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:

With the U.S.–Vietnam agreement nearing signature, U.S. cotton, corn, and soybean exporters could lock in new demand lanes just as global supply shifts.
Enforceable origin labels could create clearer premiums for U.S. cattle and address concerns some producers have had with competition from foreign imported beef.
A court decision that overturns Enlist labels would remove two major herbicides from use and reshape EPA’s future mitigation policies for other pesticides.
Rural businesses report softer sales, tougher hiring, and restrained investment — a backdrop that can pinch farm support capacity even if posted prices cool.
Friday’s release will be the first WASDE report in about two months, and early estimates indicate a corn surplus is still on the way.
Tyson expects another year of beef-segment losses due to tight cattle supplies, even as chicken, pork, and prepared foods strengthen overall margins.