FAQ: Signup for USDA's 2010 Farm Program, both DCP and ACRE are underway. The signup period ends June 1, 2010. I signed up for DCP in 2009 and also enrolled in the ACRE option. Do I need to signup for DCP in 2010? What about ACRE?
Answer: Provided by Kevin McClure, state program specialist for USDA's Farm Service Agency in Des Moines.
Farmers have until June 1 to sign up for the 2010 crop Direct and Counter-cyclical Payment Program (DCP) and the Average Crop Revenue Election (ACRE). Keep in mind that the DCP and ACRE enrollment are two separate steps.
If you signed up for DCP last year and then elected to enroll in the ACRE option, you are already in ACRE for 2010. Once you elect to be in ACRE, you are in ACRE though the end of the 2012 crop year. Farms where the ACRE election was completed in 2009 do not have to complete an ACRE election again.
However, farmers do have to sign up annually for the DCP or for ACRE at the county FSA office. For 2010 farmers must do this by June 1. If you didn't elect the ACRE program last year, you can elect to be in ACRE beginning this year.
What do you give up by electing to be in ACRE?
The ACRE program was created in the 2008 Farm Bill to help farm owners and operators manage revenue risk and move away from subsidies based primarily on price. The ACRE program is not a guaranteed payment, since the revenue loss is based on both price and yield. The annual shortfall in revenue has to be met at both the state level and the farm level in order to trigger a potential ACRE payment.
Farmers can choose to participate in ACRE or they can continue to enroll in the traditional DCP program only. Farmers who choose ACRE must give up 20% of their direct payments and all countercyclical payments. ACRE participants will continue to be eligible for marketing loans but their loan rates are reduced by 30%.
A farmer must enroll all eligible crops in an FSA farm unit into either the DCP or ACRE program. Once ACRE is elected, the choice applies to all subsequent years covered by the 2008 Farm Bill (2009 through 2012) because once the farm elects ACRE, ACRE remains with the farm through 2012.
ACRE payments are calculated on a crop-by-crop basis at the state level. If actual state revenue falls below the state revenue guarantee, then all farmers who have signed up for ACRE are potentially eligible for payments. All these potentially eligible farmers who also suffer a farm loss will receive an ACRE payment.
How will direct payments work for 2010?
USDA computes DCP payments using base acres and payment yields established for each farm. Farmers receive direct payments at rates established by statute regardless of market prices.
For 2010, eligible producers may request to receive direct payments in advance based on 22% of the direct payment rate for each commodity associated with the farm.
USDA in March 2010 began issuing DCP and ACRE direct advance payments for the 2010 program year. Counter-cyclical payment rates vary depending on market prices. Counter-cyclical payments are issued under the DCP program and are only made when the effective price (which takes into account the direct payment rate, market price and loan rate) for a commodity is below its target price.
If you have specific questions or need details regarding USDA farm programs, contact your local USDA Farm Service Agency office. You can also get news and information about DCP, ACRE and other USDA programs at www.fsa.usda.gov.
Two Iowa State University Extension Web sites have farm program information and analysis. They are ISU's Ag Decision Maker site at www.extension.iastate.edu/agdm and ISU Extension Specialist Steve Johnson's site at www.extension.iastate.edu/polk/farmmanagement.htm.
And be sure to read the regular column "Frequently Asked Questions about the Farm Program" that appears in each issue of Wallaces Farmer magazine and at www.WallacesFarmer.com