The devil is in the details. That's an often used and often true phrase to describe government programs. When it comes to the Average Crop Revenue Election (ACRE) program, the details of the program may well keep some folks on the sidelines for the 2009 crop season.
In order to receive an ACRE payment, a revenue loss has to occur on both the state and the farm level, which some farmers view as a double risk. In addition, some farmers are nervous about giving up 20% of their direct payments and eligibility for a counter-cyclical payment (CCP), plus a 30% reduction in their market loan rates, in exchange for partici-pating in ACRE.
Enrollment is based on farm numbers, so if you have multiple farm numbers, you can select which farms to put in ACRE and which ones to leave in the Direct and Counter-Cyclical Payment (DCP) program. Once the farm is enrolled in ACRE, it is in for the duration of the farm bill (through the 2012 crop year).
Sign-up for the program is yet to be determined, but it will end in conjunction with sign-up for DCP as of June 1, 2009. If you don't enroll in ACRE for the 2009 crop year, you can still enroll in 2010.
ACRE payments will be generated on a percentage of actual plantings, not base acres like direct payments or CCPs. But the total acres you receive an ACRE payment on can't exceed the total base acres on the farm.
While USDA has said it will use the season average prices for 2007 and 2008 crops to set the ACRE guarantee, those final prices will be determined during the last half of 2009. That means farmers will be forced to enroll in the 2009 program without a lot of "hard" numbers at hand. The same will apply to 2010 except that the revenue guarantee level cannot change more than 10% each year. So the 2009 information will set some parameters for the 2010 guarantee levels.
Given the unknowns and the complexity of the program, it may be more of a "pilot program" for the 2009 crop year. After all, many new government programs aren't heavily used in their first year until farmers get an idea of how they work. It will be interesting to see how the ACRE prospects unfold as 2009 continues.
Written by Roger Bernard