Legislative and Policy Analysis
Section 10304: Price loss coverage
Executive Summary
Section 10304 extends the Price Loss Coverage program through the 2031 crop year by amending Section 1116 of the Agricultural Act of 2014.[1] It does not create a new standalone appropriation line or a separate grant program. Instead, it keeps an existing USDA Farm Service Agency commodity support program operating for additional crop years and updates related statutory cross-references and historical years used for a rice-specific reference price calculation.[1]
The practical effect is that eligible producers of covered commodities can continue to receive PLC payments when the effective price for a covered commodity falls below that commodity’s effective reference price.[2] Section 10304 works together with other commodity-title changes in the same legislation, including reference price changes, base acre changes, and producer election rules. Because of that interaction, the budgetary effect of PLC is not fully separable from the surrounding commodity provisions. Farmdoc analysis of the reconciliation agriculture provisions estimated that most of the additional farmer assistance would come through PLC payments, about $50.5 billion over fiscal years 2025 through 2034.[3]
What Section 10304 Actually Does
Section 10304 amends the existing PLC statute, 7 U.S.C. 9016, rather than creating a new program from scratch.[1] The main legal change is an extension: where prior statutory text referred to crop year 2023 or 2025 end points, Section 10304 substitutes 2031, keeping PLC authority available through the 2031 crop year.[1]
PLC is a counter-cyclical commodity program. USDA explains that PLC provides payments when the effective price for a covered commodity is below the effective reference price.[2] Under FSA’s implementing rule, the effective price is generally the higher of the national market year average price or the national average loan rate for the crop year.[4] PLC payments are based on base acres and PLC payment yields, not the producer’s current-year planted acreage or individual current yield.[4]
| Program or activity | Amount | What the money supports |
|---|---|---|
| Price Loss Coverage continuation | No standalone dollar amount is appropriated in Section 10304 itself | Continues mandatory commodity support payments through crop year 2031 when covered commodity prices fall below effective reference prices |
| Additional PLC-related assistance under the broader reconciliation agriculture package | About $50.5 billion over FY2025-FY2034, as estimated by farmdoc from CBO-based reconciliation estimates | Additional projected PLC payments to producers, driven by the combined effect of higher reference prices, base acre changes, program extension, and election rules rather than Section 10304 alone[3] |
Section 10304 also updates the historical years used for a temperate japonica rice provision from 2012 through 2016 to 2017 through 2021.[1] FSA’s rule states that it will continue to establish separate reference prices for temperate japonica rice for high altitude or high latitude areas and updates the years used for that calculation to crop years 2017 through 2021.[4]
Legislative Mechanism
Section 10304 operates through targeted amendments to Section 1116 of the Agricultural Act of 2014.[1] Its mechanism is simple but financially significant:
- Extend PLC payment authority through crop year 2031.
- Extend related payment and election timeframes to match the 2031 crop year endpoint.
- Update a rice-specific cross-reference and historical calculation period.
- Leave the core PLC formula in place while allowing the broader bill’s reference price and base acre changes to affect payment exposure.
FSA’s 2026 implementing rule confirms that it is not changing the PLC payment calculation itself.[4] That means the day-to-day formula remains structurally familiar to producers and county offices: determine the applicable effective reference price, determine the effective price, calculate any payment rate, apply the farm’s PLC payment yield, apply payment acres, and issue payment after the marketing year.
Expenditure Tracking and Reporting Protocol
PLC is a federal financial flow because it produces mandatory commodity support payments to eligible agricultural producers. Section 10304 does not create a new public tracking mechanism or a section-specific account. Spending is therefore likely to be tracked through existing USDA Commodity Credit Corporation and Farm Service Agency budget execution systems, Treasury outlay reporting, FSA program data, USDA financial reporting, and congressional budget estimates.
The likely tracking pathway is:
Statutory PLC authority through crop year 2031
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USDA Farm Service Agency implementation
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Farm records, base acres, PLC yields, elections, and enrollment
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Commodity price and effective reference price calculations
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PLC payment rate determination
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Commodity Credit Corporation and Treasury payment execution
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USDA budget execution and financial reporting
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FSA ARC and PLC data releases, CBO estimates, GAO or Inspector General oversight, and congressional review
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Public visibility partly aggregated and delayed
The most direct public program data source is FSA’s ARC and PLC data page, which publishes payment rates, effective reference prices, reference prices, program yields, base acres by county, and related program-year files.[5] That data can show program parameters and some geographic program information, but it may not isolate the fiscal effect of Section 10304 alone because PLC costs are affected by reference prices, market prices, base acres, payment yields, producer elections, and payment eligibility rules.
Public tracking is likely to be delayed because PLC payments are made after the end of the marketing year. FSA’s implementing rule states that 2025 crop year PLC payments will be made after October 1, 2026, and 2026 crop year PLC payments after October 1, 2027.[4] Therefore, public datasets may show payments after crop-year decisions have already been made and after market year average prices are finalized.
Day-to-Day Government Process Changes
For USDA, the main operational change is continuity and extension. FSA county offices must keep administering PLC through crop year 2031, including election and enrollment processing, farm record maintenance, payment yield records, base acre records, producer eligibility checks, and payment calculations.[4]
For producers, the practical workflow remains familiar but extends for a longer period. Producers and landowners will continue working with FSA records, commodity elections, annual or multi-year enrollment, acreage reporting, and compliance requirements. FSA’s implementing rule emphasizes that election is not the same thing as enrollment: producers must enroll their share interest in covered commodity base acres to receive payments.[4]
For oversight staff, the change means more years of potential PLC exposure. CBO, USDA budget staff, FSA program managers, auditors, and congressional committees will need to monitor payment rates, participation, market price assumptions, base acre changes, and outlay timing.
Effects on Consumers
Section 10304 does not directly change grocery eligibility, SNAP benefits, consumer food prices, or retail food assistance. Its consumer effects are indirect.
PLC can help stabilize farm income for producers of covered commodities during low-price periods. That may support continuity of production in commodity crop regions. However, because PLC payments are paid to producers and are tied to historical base acres and payment yields, consumers should not expect a direct rebate, direct price reduction, or immediate grocery bill effect from this section.[4]
The broader distributional question is that PLC increases federal support for certain commodity producers when market prices fall. Consumers who are also taxpayers may bear part of the fiscal cost through the federal budget, while the direct payment benefit flows to eligible agricultural producers.
Effects on Businesses
The most direct business beneficiaries are farms and agricultural entities with eligible covered commodity base acres and valid PLC elections and enrollments. PLC can improve downside revenue protection when commodity prices fall below statutory support levels.[2]
Businesses in commodity supply chains may also see indirect effects. Grain elevators, input suppliers, lenders, crop consultants, and farm management advisers often incorporate ARC and PLC expectations into producer cash-flow planning. Because payments are generally delayed until after the marketing year, PLC is more likely to affect working capital and credit planning than day-of-sale pricing.[4]
The benefits are not evenly distributed across all agricultural businesses. Specialty crop producers, livestock-only operations, and farms without eligible covered commodity base acres generally do not receive PLC payments from this program. Farms with larger eligible base acres, higher payment yields, or commodities more likely to trigger PLC payments may receive larger benefits, subject to payment limitation and eligibility rules.
Environmental and Climate Impact
Section 10304 does not directly amend conservation compliance, climate programs, pesticide rules, water quality rules, or greenhouse gas standards. Its environmental impact is therefore indirect.
Because PLC payments are based on historical base acres rather than current production, the program is less directly production-coupled than a payment tied only to current planted acreage.[4] That design can reduce, but not eliminate, planting incentives. The broader commodity title may still influence land use by increasing the value of covered commodity base acres and by extending income support for covered commodity systems.
Potential indirect impacts include continued support for commodity crop production systems that may involve fertilizer use, irrigation demand, soil erosion risk, and monoculture patterns depending on region and management. At the same time, FSA regulations continue to require participants to satisfy general eligibility and land stewardship conditions, including maintaining land in accordance with sound agricultural practices and controlling noxious weeds.[4]
Impact Summary
Section 10304 is a continuation and extension provision for Price Loss Coverage. It keeps a major USDA commodity safety-net program available through crop year 2031 and updates related statutory details. Its fiscal importance comes from how that continuation interacts with the broader bill’s commodity changes, especially higher reference prices, base acre expansion, and producer election rules.
The section’s direct winners are eligible covered commodity producers who enroll in PLC and face qualifying price declines. Its public visibility will be real but imperfect: FSA publishes ARC and PLC data, CBO estimates budget effects, and USDA tracks payments through existing systems, but Section 10304-specific costs may be difficult to isolate from the broader commodity title.
Key References and Sourcing
| Source | Relevance |
|---|---|
| Senate Budget Committee, One Big Beautiful Bill Act text | Primary bill text for Section 10304 and its amendments to 7 U.S.C. 9016. |
| USDA Farm Service Agency, Agriculture Risk Coverage and Price Loss Coverage | Official USDA overview of ARC and PLC program purpose and administration. |
| Federal Register, Changes to Agriculture Risk Coverage, Price Loss Coverage, and Dairy Margin Coverage Programs | Official implementing rule explaining PLC calculations, election, enrollment, timing, and base acre administration. |
| USDA Farm Service Agency, ARC and PLC Data | Official source for ARC and PLC payment rates, effective reference prices, reference prices, base acres, and program-year data. |
| farmdoc daily, Farm Bill in Reconciliation: ARC/PLC Payment Projections | Secondary budget and policy analysis estimating additional PLC payments under the reconciliation agriculture provisions. |
| Iowa State University CALT, Reviewing the Agricultural Provisions in the One Big Beautiful Bill Act | Secondary legal and agricultural analysis of the bill’s ARC, PLC, and commodity program changes. |
[1] Senate Budget Committee, “The One Big Beautiful Bill Act,” Section 10304, bill text, https://www.budget.senate.gov/imo/media/doc/the_one_big_beautiful_bill_act.pdf.
[2] USDA Farm Service Agency, “Agriculture Risk Coverage (ARC) & Price Loss Coverage (PLC),” official program overview, https://www.fsa.usda.gov/resources/income-support/arc-plc.
[3] farmdoc daily, “Farm Bill in Reconciliation: ARC/PLC Payment Projections — Policy Design Lab Update,” PLC payment projection and broader agriculture-title budget discussion, https://farmdocdaily.illinois.edu/2025/07/farm-bill-in-reconciliation-arc-plc-payment-projections-policy-design-lab-update.html.
[4] Federal Register, “Changes to Agriculture Risk Coverage, Price Loss Coverage, and Dairy Margin Coverage Programs,” USDA Commodity Credit Corporation and Farm Service Agency implementing rule, https://www.federalregister.gov/documents/2026/01/12/2026-00313/changes-to-agriculture-risk-coverage-price-loss-coverage-and-dairy-margin-coverage-programs.
[5] USDA Farm Service Agency, “ARC and PLC Data,” official program data page for payment rates, effective reference prices, reference prices, yields, and base acre files, https://www.fsa.usda.gov/resources/programs/arc-plc/program-data.
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