What Happens If Farm Is Enrolled In ACRE, And Is Later Taken Out Of Production?

What Happens If Farm Is Enrolled In ACRE, And Is Later Taken Out Of Production?

Farmer enrolled a farm in ACRE, but now a developer wants to buy it.

FAQ: If a farmer (tenant) elected to participate in ACRE in 2009, and the farm is taken out of production in 2010 or 2011 or 2012, would the farmer or the landowner have to pay a penalty? This farm is potential development ground and land being taken out of production for commercial development is a concern. Since ACRE is a 4-year program with an irrevocable contract, would the removal of cropland be considered a loss in ACRE eligibility or a break in the contract? The former would not carry a penalty but the latter would—if this were a CRP contract.

Answer: Provided by Kevin McClure, state farm program specialist for USDA’s Farm Service Agency in Des Moines.

The ACRE election is a four-year program. Once the farm is enrolled in ACRE then the Direct and Counter-cyclical Payment or DCP is no longer an option for this farm. However, both ACRE and DCP require an annual enrollment.

This means the farmer can stay out of the program any year he/she wishes. In your example, if the farm is sold for development, the total base acreage on the farm is reduced to “zero” and there would be no direct payments to enroll for and there would be no crop planted that would be eligible for an ACRE payment to enroll as well.

One thing to remember is that ACRE works like DCP in that it takes a yearly enrollment request.

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

TAGS: Extension
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