ACRE implementation causing concern

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Several commodity groups expressed concern to Secretary of Agriculture Ed Schafer on how USDA plans to implement the ACRE program would undermine its goal of providing an accurate revenue guarantee.

By statute, the ACRE program guarantee price is the simple average of national average market price received by producers of the commodity "for the most recent 2 crop years".

Press reports have indicated that the Department plans to make the price guarantee for the first year of ACRE based on 2006 and 2007 prices rather than 2007 and 2008 prices, which provide a more accurate revenue protection.

The commodity groups wrote Schafer:

"In our view, Section 1105 (d) (3) is quite clear on the determination of the ACRE price guarantee and leaves very little to debate...

"By moving the ACRE guarantee price to 2006, the department will make market signals more remote from actual planting decisions and significantly diminish the program's effectiveness at a time of steep increases in production costs."

ACRE payments will be triggered by a combination of individual farm revenue loss AND actual state revenue falling below the state's crop revenue guarantee.

Organizations signing the letter included American Farm Bureau Federation; American Farmland Trust; American Soybean Association; National Barley Growers Association; National Corn Growers Association; National Farmers Union; National Association of Wheat Growers; National Sorghum Producers; National Sunflower Association; U.S. Canola Association and USA Dry Pea and Lentil Council.

To read the full letter, click here.

Harkin criticizes USDA

Senate Agriculture Committee Chairman Tom Harkin, (D-Iowa), also is urging USDA to implement the revenue protection program as intended.

USDA has hinted that computer problems at USDA offices may prevent its implementation. Harkin countered that "USDA's antiquated computer system is not a problem that developed overnight," and no official requests have been made for funding through the annual appropriations process. "Still, this problem should not interfere with ACRE being available in the 2009 crop year, so we urge USDA to seek emergency appropriations for computers if necessary."

Harkin criticized that the agency may use 2006 and 2007 crop year prices instead of 2007 and 2008.

"One of the key distinctions of the ACRE program is that it uses recent commodity prices to calculate the program benefits," said Harkin. "This distinction was critical for ACRE supporters to ensure that program benefits would be relevant to the producers who use the program. It was very important to ACRE proponents to have a strong correlation with real revenue experience. The closer the price data is to the current year the better. For that reason, USDA should use 2007 and 2008 prices to implement this program."

This week Deputy Secretary of Agriculture Chuck Conner said the program will be available in time for 2009, including fall-seeded 2009 crops.

"It's our hope to get a lot of these core decisions made and out there during the month of September," he said.

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