January 2012
Background
As authorized by the 2008 Farm Bill (Food, Conservation, and Energy Act of 2008), producers on eligible farms may elect to participate in the Average Crop Revenue Election (ACRE) Program.
Under the ACRE Program, producers may receive revenue-based payments as an alternative to receiving price-based counter-cyclical (CC) payments.
Eligible Farms
Only farms with covered commodity or peanut base acres may participate in ACRE. Farms that are already enrolled in the Direct and Counter-Cyclical Program (DCP) for a crop year, may elect to switch to ACRE before the end of signup. As provided by the 2008 Farm Bill, farms with 10 or less base acres are not eligible for DCP or ACRE Program payments, except for farms whose owners are socially disadvantaged or are limited resource farmers or ranchers.
Eligible commodities
The following planted or considered planted crops may be eligible for ACRE payments:
• Wheat, barley and oats • Grain sorghum and corn • Upland cotton • Rice (short/medium and long grain) • Soybeans • Other oilseeds: canola, crambe, flaxseed, mustard seed, rapeseed, safflower, sesame seed and sunflower seed • Peanuts • Dry peas, lentils and small and large chickpeas (garbanzo beans).
ACRE election and Enrollment
The deadline to elect and enroll in the ACRE Program is June 1, 2012. If elected in a previous year, producers must enroll the farm in ACRE by June 1 to receive payments. Farms that elect to participate in ACRE cannot receive CC payments.
Reporting Requirements
Producers on participating ACRE Program farms must annually report acreage and production to FSA. Failure to do so may result in ineligibility. Production reports are due by July 15, 2013.
Payment limitation
Maximum Payment Amounts
Direct payments are limited to $40,000 per person or entity minus the 20 percent Direct payments are limited to $40,000 per person or entity minus the 20 percent direct payment reduction for ACRE election, and ACRE payments are limited to $65,000 plus the 20 percent direct payment reduction amount. The limitation is applied by attributing both the amounts received directly by entities and persons, and indirect amounts received through entities.
Adjusted Gross Income (AGI)
Persons or legal entities whose average nonfarm AGI exceeds $500,000 are not eligible for direct, CC, or ACRE payments.
Also, persons or legal entities whose average farm AGI exceeds $750,000 are not eligible for direct payments under the DCP and the ACRE Programs.
In addition, individuals or entities whose total AGI is $1 million or more are ineligible for direct payments under the DCP and ACRE program.
Farm Yields
Yields for ACRE payments are based on an “Olympic” average of a combination of producer yields and average yields for the county for the five most recent crop years. If a producer certifies yield data for a year and it is higher than the county average, that yield will be used to calculate the ACRE farm yield (Benchmark Farm Yield) as long as yields are certified for the subsequent years.
Payments
Producers on participating ACRE Program farms can receive direct and ACRE payments. Payments will be reduced if base acres are enrolled in a federal program, which prohibits the production or harvesting of crops, such as the Conservation Reserve Program, Grassland Reserve Program and the Wetlands Reserve Program.
Direct Payments
Direct payments are based on the farm’s base acres and program yields for covered commodities and peanuts. The payment rates for direct payments for farms enrolled in ACRE are 20 percent less than the DCP direct payment rates. Similar to DCP, payment amounts are reduced if fruits or vegetables are planted on base acres, or the acres are used for non-agricultural purposes.
ACRE Payments
State Trigger: The Actual State Revenue for the program year must be less than the State ACRE Guarantee.
Farm Trigger: The participating farm’s Actual Farm Revenue for the program year must be less than the Farm ACRE Guarantee.
Payment Acreage Limitation
ACRE payment acreage is limited to the total amount of base acres on the farm, not to exceed 85 percent of the planted and considered planted acreage for each crop. If the planted and considered planted acreage exceeds 118 percent of the base acreage and there is more than one eligible crop, producers must designate payment acreage for each crop by Sept. 30 of the program year.
Triggers
Information or Estimations Needed to Project 2012 ACRE Payments
A. Projected National Average Market Price: 1) 2010 ________ ; 2) 2011 _________; 3) 2012 _________
B. Benchmark Farm Yield: 1) Benchmark Farm Yield _____OR Farm’s Est. Avg 2007 - 2011_____
C. Benchmark State Yield: 1) Benchmark State Yield _____OR State’s Est. Avg 2007 - 2011_____
D. Estimated Actual 2012 Yields: 1) State ________; 2) Farm ________
Q1: If one producer (owner, tenant, etc) on the farm does not sign the election form, can the farm still participate in the ACRE Program?
No. Without exception, all producers must agree in writing to the ACRE Program election.
Q2: If all producers sign the ACRE Program Election Form, is the farm considered enrolled in the ACRE Program?
No. Producers on the farm must also sign a contract to enroll in ACRE Program by the sign-up deadline.
Q3: Does a producer have to enroll all farms in ACRE?
No. Election and enrollment for the ACRE Program is on a farm by farm basis.
Q4: Can a farm enroll some base acres and not others?
No, the enrollment is for the farm and all of the base acres.
Q5: Can base acres be established to participate in the ACRE Program?
No. There is no authority to establish base acres to participate in the ACRE Program.
Q6: Is crop insurance or NAP required to receive ACRE payments?
No. There are no risk management purchase requirements for the DCP or the ACRE Programs. However, higher levels of insurance due to higher premiums increases the Farm Acre Guarantee and, thus the probability of meeting the “Farm Trigger.”
Q7: If both state and farm “triggers” are met, will the ACRE payment calculation provide benefits for prevented planted acres of covered commodity crops or peanuts?
Yes. Prevented planted acres are “considered planted.”
Q8: Can ACRE payments be calculated for eligible commodity crops that do not have base acres on the farm?
Yes. ACRE payments are based on planted and considered planted acres of eligible commodity crops, without regard to whether the farm has base acres for that crop. However, the maximum acreage eligible for ACRE payments cannot exceed the total base acres on the farm.
Q9: If the National Average Market Price for a covered commodity crop or peanuts is higher than average, will this result in no ACRE payments?
Not necessarily. Since the ACRE “triggers” are based on revenue (yield and prices) reductions, a significant yield loss for the State could result in ACRE payments.
Q10: If a producer designates payment for a crop, but the crop does not “trigger” payments, are the designated payment acres transferred to another crop?
No. In the event a crop does not trigger the designated payment acres become “unpaid.”
The U.S. Department of Agriculture (USDA) prohibits discrimination in all of its programs and activities on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status, familial status, parental status, religion, sexual orientation, political beliefs, genetic information, reprisal, or because all of part of an individual’s income is derived from any public assistance program. (Not all bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA’s TARGET Center at (202) 720-2600 (voice and TDD). To file a complaint of discrimination, write to USDA, Assistant Secretary for Civil Rights, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue, S.W., Stop 9410, Washington, DC 20250-9410, or call toll-free at (866) 632-9992 (English) or (800) 877-8339 (TDD) or (866) 377-8642 (English Federal-relay) or (800) 845-6136 (Spanish Federal-relay). USDA is an equal opportunity provider and employer.
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