Eliminating Direct Payments for 2013 Crops Again Eyed as Budget Offset, But Very Unlikely to Occur

February 8, 2013 03:18 AM

Via a special arrangement with Informa Economics, Inc.

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Some are pushing direct payment elimination to force farmers into ACRE.

President Obama and Democratic leaders are frantically trying to come up with budget offsets to avoid $85 billion in across-the-boar/sequestration cuts come March 1. But guaranteeing Republican opposition, Democratic leaders want a "balanced" approach to the cuts, with half coming from tax/revenue increases – a move roundly rejected by virtually all Republicans.

Included in some proposals for budget cuts is eliminating around $5 billion in direct payments for 2013 eligible crops – a move considered highly unlikely to see reality due to Republican opposition and other opposition due to a lack of an adequate farmer safety net should direct payments be eliminated without a new farm bill in place.

But some Democratic senators, and a commodity group lobbyist, are reportedly pushing eliminating direct payments so producers would then be forced into the ACRE program. ACRE participation bombed relative to the 2008 Farm Bill, with under 10 percent of base acres enrolled in the program. The "shallow-loss" revenue-type program in last year's failed farm bill proposals has been dubbed "the son of ACRE" by some farm bill analysts.

ACRE payments would not come for some time. Payments for 2013 crops would not start rolling to producers if they are triggered until October 2014 at the earliest, with some such as rice producers not likely to see any payment until Feb. 2015 based on the way the program was operated for the 2009-2012 crops. ACRE payments will be made after the end of the marketing year for the respective commodity, but no sooner than October 1, as required by statute.



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