Policy & Politics

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Producers Benefit More from ACRE than Price-Based Programs

Published Dec. 30, 2009

A report released Tuesday by USDAís Economic Research Service on the Average Crop Revenue Election (ACRE) program suggests that for 2009-2012, producers of corn, soybeans, wheat and rice are likely to benefit more from the ACRE program than from the price-based, income-support programs.

Initial enrollment data suggest that factors aside from expected market prices and yields entered into the enrollment decision such as producer risk preferences and initial learning and negotiation costs, according to ERS.

Data indicate that about 8 percent of farms with almost 13 percent of eligible base acres elected to participate in ACRE, which is less than might be expected given price and yield-based analysis alone.

According to ERS, ACRE payments are triggered when a farmís revenue and state revenue (price multiplied by yield per planted acre) fall below a calculated guarantee for a crop. By contrast, other income-support programs are based on legislated rates and support levels, computed using a farmís base acres and payment yields.



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