TL/DR –
The article discusses the complexities and potential inequalities in US farm and conservation policies. It focuses on how payments from federal farm programs (Agriculture Risk Coverage and Price Loss Coverage) are scheduled to reduce costs in long-term budget projections, while conservation programs are subject to budget cap restrictions and potential funding cuts. It also highlights the Commodity Credit Corporation’s role in funding these programs and how budget shifts and reductions could impact farmers seeking conservation assistance.
Understanding the Implications of the Federal Fiscal Year on Farm Policies
With the commencement of October, the federal fiscal year begins. This marks the payment season for farm policies, notably the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs. As specified by Congress, these payments are traditionally made in October, postdating October 1 as stipulated in 7 U.S.C. §9016(e) and §9017(f). Therefore, payments disbursed in October 2026 were attributed to the 2025 crop year but will be accounted for in the fiscal year 2027. This timing shift in payments aids in curbing the cumulative expenses of farm program payments over a 10-year spending projection by the Congressional Budget Office (CBO).
The Commodity Credit Corporation and Farm Program Payments
Every fiscal year, the Commodity Credit Corporation (CCC)—the primary financier of all farm program payments and conservation—is usually renewed in October. With direct borrowing authority from the U.S. Treasury, which is capped at $30 billion by Congress, the CCC operates akin to a credit card that is reimbursed by Congress via appropriations. This repayment restores the borrowing authority for further use.
ARC/PLC Payments and Their Impact on CCC Borrowing Authority
As of October 2026, ARC/PLC payments have reached around $14 billion, marking a record high since the enactment of these programs in the 2014 Farm Bill. However, this amount is moderately lower than initial estimates due to higher-than-projected crop prices over the market year. These payments have more than doubled compared to the CBO’s projected $6.5 billion before the Reconciliation Farm Bill was passed under the One Big Beautiful Bill (OB3) Act of 2025. Along with ARC/PLC payments, farmers can also take out Marketing Assistance Loans (MAL) on harvested crops, which are financed by the CCC. On average, farmers borrow around $6.5 billion annually, most of which is repaid nine months later. Consequently, between ARC/PLC and MAL, the CCC’s borrowing authority is likely to be drained by over $20 billion, which is roughly two-thirds of the total.
Conservation Reserve Program Payments and Its Current Status
The fiscal year’s inception also coincides with the annual rental payments made by the FSA under the Conservation Reserve Program (CRP), which sums up to approximately $1.8 billion. However, the CRP’s authorization, extended by Congress until the end of FY2026, has technically expired as of September 30, 2026. Although existing contracts remain unaffected, this expiration prevents the USDA from registering or re-registering acres under the program until Congress reauthorizes or extends the authorization. The CRP’s uncertain situation is unique among all farm and conservation programs, especially since it was not included in the Reconciliation Farm Bill enacted the previous year.
Funding Allocation for the Natural Resource Conservation Service
Funds are also transferred from the CCC to the Natural Resource Conservation Service (NRCS) in October. These funds are put to use throughout the fiscal year for financial assistance to farmers engaged in conservation, technical assistance, and some operating costs.
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