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Published January 16, 2013, 12:54 PM

Opting out of ACRE

Implementation of farm bill will give farmers a choice.

By: Jerry Hagstrom, Agweek

NASHVILLE, Tenn. — In implementing the farm bill extension that Congress passed, the U.S. Department of Agriculture will allow farmers to opt in or opt out of the Average Crop Revenue Election program known as ACRE, Agriculture Secretary Tom Vilsack said Jan. 14.

The 2008 farm bill allowed farmers to sign up for the ACRE program, but stipulated that if they did, they had to stay in the program for five years.

The extension bill extended ACRE for another year, but apparently did not say whether farmers had to stay in the program, which has not been as popular as hoped.

“We’re going to do what we have to do,” Vilsack said, and USDA will allow farmers to either join the program or leave it.

The extension also provides for an additional round of the $4.9 billion in direct payments that crop farmers have been getting whether prices are high or low.

Vilsack said USDA will also make those payments next fall, but stressed that he is uncertain whether that program will still be in place by that time. Congress, he noted, could use the direct payment budget authority as a tool to cut the deficit.

Congress seems less likely to cut crop insurance, Vilsack said, because there is an understanding that this was already cut in the 2008 farm bill and through USDA negotiations on the Standard Reinsurance Agreement. He said “the deeper issue is direct payments.”

Under what’s known as a sequestration program to reduce the budget deficit, most of the government programs except entitlements are supposed to be cut on a percentage basis in March, and if that happens, USDA’s discretionary programs will have to be cut by 8 percent.

But Congress is expected to pass legislation that would change the sequestration law to avoid a big cut to defense spending, and Vilsack said that if Congress changes sequestration, it is likely to cut domestic agencies like agriculture even more than planned.

Another possibility is that Congress would write a new farm bill and use the direct payments budget authority, which was eliminated in both the Senate and House Agriculture Committee-passed bills last year, to write a new farm program before the payments are made.

Vilsack said he hopes the agriculture committees act to keep the direct payments budget authority within the farm bill.

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