FAQ: I’d like to sign up for ACRE, but how do I explain the program to my landlord so she will sign off? She already has the rent for 2009, and there is only 3 years left as the ACRE program goes through 2012. The decision might only impact gross revenue by 3 years x $6 per year or $18 over the life of the contract, which is a pretty small amount of money compared to the total rent over three years. But the bottom line is the tenant can manage the financial risk better by enrolling the farm in ACRE, which helps insure that the rent checks keep coming to the landlord.
Answer: Provided by Steve Johnson, Iowa State University Extension farm management specialist
ACRE does provide an annual revenue guarantee through 2012 at a relatively low cost, but this revenue guarantee goes to the operator on the farm. Along with the commitment to a farm program beyond one year this could prove challenging when explaining it to your cash rent landlord. The landlord needs to know that you as the tenant are facing increased input costs and extreme crop price volatility, thus profitability isn’t guaranteed. In a cash rent situation, you are taking the risk.
You should consider ACRE as a part of longer-term farm lease negotiation with the landlord through the 2012 crop year. Some advantages for the cash rent landlord might be to include in subsequent written farm leases:
1. That the tenant provides both FSA and the landlord a copy of the 5-year production evidence required on the new FSA Form 658.
2. The tenant provides to the landlord annually a copy of the Acreage Certification (FSA Form 578) filed on that farm. In Iowa, the annual deadline for acreage certification is June 30 but it was extended to August in both 2008 and 2009. The deadline to report your 2009 planted acreage to FSA is August 14.
3. The tenant provides the landlord the annual actual production evidence or “certified farm yield” for program crops as required by the FSA as a part of the ACRE program.
For more information about ACRE, DCP and other programs, visit your local USDA Service Center or your FSA county office. You can also get information on-line at www.fsa.usda.gov.
If you have a question you'd like answered regarding the new USDA farm program, please send it to [email protected]. We will pass it on to the ISU Extension specialists or to the program specialists at USDA's Farm Service Agency office in Des Moines and they will send you the answer.
Also, ISU Extension farm management specialist Steve Johnson keeps Iowa farmers and landowners updated using his ACRE Answers web page at www.extension.iastate.edu/polk/farmmanagement.htm