Marginal Impacts of OBBB Provisions on ARC and PLC Payments

By Dylan Turner

The One Big Beautiful Bill (OBBB) made several changes that will influence ARC and PLC payments going forward, including changes to reference prices, modifications to payment calculation formulas, the “higher of” provision (unique to program year 2025), and the pending addition of base acres expected sometime in 2026 (USDA Farm Service Agency, 2025; Turner, 2026). The modifications are largely a response to calls for increasing the level of support provided by ARC and PLC to account for higher commodity prices and increased input costs. By all accounts, payments made by ARC and PLC are expected to be much higher in nominal terms going forward.

This brief addresses two related questions:

1. What is the relative increase in commodity support of the OBBB provisions relative to the 2018 Farm Bill?

2. What is the marginal impact of the various modifications that combine to create higher ARC and PLC payments?

To address these questions, ARC and PLC payments were computed under five scenarios using historical

USDA Farm Service Agency (FSA) data for all covered commodities from 2019 to 2025.¹ This analysis is generally retrospective in nature and should not be interpreted as a formal projection of future outlays. The scenarios are constructed so that the difference between successive scenarios isolates the marginal impact of each OBBB provision:

1. 2018 Farm Bill: Actual ARC and PLC payments under current law with observed enrollment elections. This serves as the baseline.

2. OBBB (Existing Elections): Applies OBBB reference prices and payment formulas but retains each producer’s actual ARC or PLC enrollment. The difference from the baseline captures the marginal effect of the formula and reference price changes.

3. OBBB (Existing Elections) + Additional Base Acres: Adds payments on estimated expanded base acreage to scenario 2. The difference from scenario 2 captures the marginal effect of the base acre expansion under existing elections.

4. OBBB (Higher of ARC/PLC): Assigns each county-crop the larger of its ARC or PLC payment. The difference from scenario 2 captures the marginal effect of the “higher-of” provision.

5. OBBB (Higher of ARC/PLC) + Additional Base Acres: Adds payments on estimated expanded base acreage to scenario 4. The difference from scenario 4 captures the marginal effect of the base acre expansion under the higher-of provision.

Figure 1 presents total payments across all covered commodities for each scenario and program year. Under the 2018 Farm Bill, cumulative payments from 2019 to 2025 totaled approximately $17.8 billion. The OBBB formula and reference price changes alone (“OBBB (Existing Elections)”) increase cumulative payments to roughly $42.6 billion (an increase of $24.8 billion). This is the single largest contributor to higher payments. Adding expanded base acreage under existing elections (“OBBB (Existing Elections) + Additional Base Acres”) brings the total to about $46.4 billion. The higher-of provision without additional base acres (“OBBB (Higher of ARC/PLC)”) increases cumulative payments to roughly $50.0 billion. Finally, combining the higher-of provision with expanded base acreage (“OBBB (Higher of ARC/PLC) + Additional Base Acres”) yields a cumulative total of about $53.8 billion. In total, the OBBB provisions roughly triple cumulative ARC/PLC outlays relative to the program as it existed under the 2018 Farm Bill.

Figure 1: Historical ARC/PLC Payments by Policy Scenario, 2019–2025

Note: Year-specific sequestration rates applied. “Higher of ARC/PLC” assigns the larger payment per county-crop. Additional base acres use scenario s1 from Turner (2026).

Source: ARPC calculations using USDA Farm Service Agency data.

Figure 2 decomposes these results by commodity, expressing cumulative payments under each scenario as a percentage of cumulative 2018 Farm Bill payments for that commodity. All crops experience substantial payment increases under the OBBB provisions, though the relative magnitude of each provision varies across commodities. The formula and reference price changes are the dominant drivers for every crop, with the largest relative increases for rice (183 percentage points above baseline), peanuts (168 percentage points), and corn (166 percentage points). The higher-of provision contributes meaningfully across most crops but is particularly impactful for corn (59 percentage points above the existing-elections scenario) and soybeans (56 percentage points). The base acre expansion adds the most for soybeans (36 percentage points above the higher-of scenario) and the “All Other” category (39 percentage points), reflecting where planted acreage most exceeds current base. Sorghum shows the smallest overall increase, reaching 206% of the baseline with all provisions in effect, compared to 351% for corn.

Figure 2: Cumulative ARC/PLC Payments by Crop and Policy Scenario, 2019–2025

Note: Each bar shows cumulative payments (2019–2025) as a percentage of cumulative 2018 Farm Bill payments for that commodity. “All Other” includes all covered commodities not separately identified.

Source: ARPC calculations using USDA Farm Service Agency data.

The analysis presented here is retrospective, meaning it computes the payments that would have been made over program years 2019–2025 had the OBBB provisions been in place over the full time period. The 2019–2025 period was characterized by a particular set of market conditions, including trade disruptions, pandemic-era supply chain shifts, and a commodity price cycle that saw prices rise sharply in 2021–2022. The current market and geopolitical environment differ substantially, and the actual cost of the OBBB provisions going forward will depend on future prices, yields, and enrollment decisions that may not resemble the historical period examined here. The results should therefore be interpreted as illustrative of the structural impact of the policy changes rather than as a forecast of future outlays.

That said, the “OBBB (Higher of ARC/PLC) + Additional Base Acres” scenario is likely the most representative of the provisions that program year 2026 payments will be based on. USDA has announced that ARC/PLC signup for the 2026 crop year will be significantly delayed (potentially until after harvest) (Hanrahan, 2026). This means producers may know (or at least have a good idea of) their actual yields and production before making their ARC or PLC election, effectively allowing them to choose whichever program pays more in each county-crop combination, which is functionally equivalent to the higher-of provision modeled here.

Note

¹ Estimates for 2025 are based on existing county level yields from FSA and RMA, national yields from NASS, and projected marketing year average prices as of March 2026.

References

Hanrahan, Ryan (2026). ARC, PLC Signup to be Significantly Delayed. farmdoc daily. Accessed March 27, 2026. URL:

https://farmpolicynews.illinois.edu/2026/01/arc-plc-signup-to-be-significantly-delayed/

Turner, Dylan (2026). Estimated Additional Base Acres Under OBBBA for Crop Year 2026. ARPC White Paper 2026–03. Agricultural Risk Policy Center, North Dakota State University. URL: https://ageconsearch.umn.edu/record/388986/?v=pdf

USDA Farm Service Agency (2025). ARC & PLC Fact Sheet. Tech. rep. U.S. Department of Agriculture, Farm Service Agency. URL: https://www.fsa.usda.gov/sites/default/files/2025-09/FSA_ARC%20%26%20PLC_3pg_Fact%20Sheet-SEPT%202025_final.pdf.