ACRE Program and Sequestration

May 24, 2013 03:34 AM
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Direct payments reduced, but not any ACRE payouts for 2013 crop – at least for now

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

Those who enroll in the Average Crop Revenue Election (ACRE) program for 2013 crops will see an additional reduction of 8.5 percent in their direct payments -- payments that are already reduced by 20 percent in exchange for their participation in ACRE. As for whether sequester cuts would apply to 2013-crop ACRE payments, that is a question that has an answer of no... so far. Budget contacts advise that when the decisions were being made on sequester impacts earlier this year, USDA was not projecting any ACRE payments on 2013 crops, so therefore no sequester reduction would be taken.

But things could change. Contacts say that in the event that ACRE payments are made for 2013 crops, it's not clear what the answer to the question of whether they would be subject to a sequester-related reduction in October 2014 when most of the 2013-crop ACRE payments would be issued. One source said, "Hopefully if there are ACRE payments at that point, the sequester issue will have been dealt with and it won't be a question."

Another farm policy source said, "I think it is wishful thinking to hope that any potential ACRE payments would not be sequestered. Recall, USDA included language in the sign-up appendix to the that very effect. It is irrelevant whether USDA projected an ACRE payment when they were doing sequestration estimates; the sequester applies to payments that go out the door, whether or not USDA had projected payments would be made. And, regardless of whether the grower signs up for ACRE or DCP, the direct payment will be sequestered. In other words, if the sequester is still in existence, then the sequester is going to apply if a payment goes out the door."

NOTE:  Given the workload and other factors at county FSA offices (and the still ongoing 2013 planting season), FSA will allow them to use what is called a "register" to allow farmers to indicate whether they want to enroll in ACRE or not for the 2013 crop year. The register essentially gets farmers considered to have "signed up" even though they haven't yet. However, using the register doesn't give farmers an open-ended timeframe to actually come in and signup for ACRE -- that has to be wrapped up by June 28, 2013.


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.






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