As you contemplate all the acronyms — ARC, PLC, STAX, etc. —and complexities of the new crop insurance-based farm legislation, Keith Coble has some cautionary advice for you: “Don’t get terribly wrapped up in thinking that these programs are going to keep you in business.

“They aren’t enough to keep you in business if you have a really disastrous year,” he said at the annual meeting of the Mississippi Land Bank. “They are meant to supplement other parts of your risk management program.”

And he says, “Everyone — producers and lenders — is going to have to become more sophisticated about managing risk.”

Coble, who is Giles Distinguished Professor of Agricultural Economics at Mississippi State University and one of the nation’s leading experts on farm programs, spent a year in Washington as chief economist for the minority staff of the Senate Agriculture, Nutrition, and Forestry Committee, helping to craft the farm bill.

“Given the costs of production, projected prices, etc.,” he says, “I wouldn’t be distorting my planting decisions based on what I think ARC (Agricultural Risk Coverage) and PLC (Price Loss Coverage) are going to do for me.”

There is variation in terms of payout across commodities, he notes, “and you need to keep in mind that USDA projections are not very positive right now. One of the problems is that we start our projections with USDA’s price projections, and these produce very different results than if we start with futures market projections.

“You don’t want to make participation decisions until you have as much information as possible. There are some terribly complicated choices, some of which you have to make this year — and then you’re going to have to live with those choices for the next five years.”

Producers are going to face “a one-time big choice between participating in the ARC program or the PLC program, he says.

For example, the farm operator will get to make the choice of which program will be followed. “Landowners may have input in this decision, but the law says the operator gets to choose the program. However, the landowner gets to choose the updating of base and yields.

 “From what we’re hearing from USDA, this will probably take place sometime this fall. You will be allowed to do this by farm serial number and commodity — and that’s an important distinction. I think producers are likely to  choose to go into different programs for different commodities.”

Particularly for corn and soybeans, “The ARC program is going to look much more attractive in 2014 than it will look in 2016 or 2017. Don’t make the mistake of thinking that how it looks today is how it will look over time."