Unlike the Average Crop Revenue Election
(ACRE) program in the 2008 farm bill where payments were tied to planted acres of covered commodities (up to the number of base acres), the new commodity programs are paid on base acres of covered commodities.
Recently, three senators from the Northern Plains--Max Baucus (D-MT), Kent Conrad (D-ND), and John Hoeven (R-ND)--proposed their own commodity subsidy program in the guise of a blend between two programs with shallow-loss elements: the Average Crop Revenue Election
(ACRE) program and the Supplemental Revenue Assistance Payments (SURE) disaster program, which are among the most problematic shallow-loss-type programs from any economic efficiency, budgetary, or trade relations perspective.
The legislation would create the Revenue Loss Assistance Program (RLAP), an initiative that combines Supplemental Agricultural Disaster Assistance (SURE) and Average Crop Revenue Election
(ACRE) into one simpler and more effective program, according to a joint statement issued by the three co-sponsors.
As Congress reduced the amount spent on direct payments, it would change a subsidy known as the Average Crop Revenue Election
While the 2008 Farm Bill retained many of the old commodity programs with some minor changes, two new programs have been established: the average crop revenue election
(ACRE) and supplemental revenue assistance (SURE) programs.
Just as the 2008 Farm Bill's Supplemental Revenue Assistance Payments program was phased out and the Average Crop Revenue Election
program is slated for termination, it will be interesting to observe the development of the large-scale "shallow-loss" area plans and their coexistence with individual coverage.
The 2008 farm bill ended direct and countercyclical payments and average crop revenue election
(ACRE) payments to farms with 10 or fewer base acres, largely as a way to cut the amount of paperwork for county offices of USDA's Farm Service Agency, but also to reduce government outlays.
In 2009, crop farmers in Iowa and other states faced the decision of whether to continue with the existing Direct and Counter-cyclical Program (DCP) offered by the Farm Service Agency (FSA) of the United States Department of Agriculture (USDA) or to enroll in a new program called Average Crop Revenue Election
With regard to the next farm bill, AFBF says Congress should maintain a strong safety net that consists of direct payments, a simplified Average Crop Revenue Election
(ACRE) program and the countercyclical, marketing loan and crop insurance programs.
The chairman pointed out that the average crop revenue election
(ACRE) program held promise as an economic safety net for farmers, but that if it's going to survive, "it is going to be substantially changed from what it is." The reason, he says, is that the program as currently designed is too complicated and because ACRE needs to be based on economic conditions at the county rather that the state level.
Some of those supporting farm program reform question why there currently are so many risk management programs like SURE, the average crop revenue election
(ACRE) program and the various revenue-based crop insurance programs.
For example, it notes, payments of the new crop-specific average crop revenue election
(ACRE) program can be triggered even when commodity prices are high, as long as these prices are volatile.