FAQ: There are Few Good Excuses for not Signing up for ACRE

Expert says you haven't got much to say in defense against signing up for the program if you can get landowners to sign on.

FAQ: If you are an Iowa farmer who has a track record of producing respectable yields, what would keep you from signing up for USDA’s ACRE program in 2009? That is, other than a landlord refusing to sign the required FSA form, or perhaps the ACRE payment limits, which may affect you?

Answer: Provided by Steve Johnson, Iowa State University Extension farm management specialist.

There aren’t many good excuses for not signing up, but here are a few I’ve heard.

  • You have to give up 20% of your Direct Payment annually (about $3 per soybean base acre and $6 per corn base acre). Very few USDA farm programs have a cost. But ACRE does, as you can consider this 20% as a cost for participating in ACRE. Granted, it’s not a lot, but it is a cost.
  • You have to “certify actual yields” annually on that farm if you enroll it in ACRE.
  • You don’t like the inconvenience of having the CCC loan rate reduced. The county loan rate for marketing loans is reduced 30%. Also, you have to keep bushels from ACRE farms separate from other bushels.
  • Once you enroll a farm in ACRE, it is in the program through the 2012 crop year. The commitment to be in the ACRE program is for the life of the program. Most USDA farm program decisions are made year to year, which is different from ACRE.

The delay in farmers signing up for ACRE for 2009 is likely coming from many farmers waiting to see if 2009-10 national cash prices will be low enough to rigger 2009 ACRE payments. Using July 13 futures prices, farms enrolled in ACRE could see $30 to $50 per acre payments, depending on state yields. I think many farmers are having difficulty in understanding how all the yields and prices interact in order to make a decision.

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

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