Agriculture policy in the United States has evolved over the years to address an expanding range of needs and concerns in the areas of nutrition, conservation, rural economic development, renewable energy, food safety, research, credit and risk management programs for various types of farm operations. NCGA believes the market oriented reforms adopted in the Food, Conservation and Energy Act of 2008 (FCEA) will enable corn growers and other producers to better meet the needs of a rapidly changing market and world economy.
Despite tight fiscal constraints, substantial budget increases for conservation, nutrition, international food assistance and rural renewable energy programs help to ensure a very comprehensive and carefully balanced farm policy. In fact, food and nutrition programs that help low income Americans and serve children and the elderly now account for 68 percent of the new farm bill budget allocations, an increase of 6 percent from 2002. These significant improvements would not have been possible without cost saving reforms to commodity programs, including more stringent payment limitations, reduced funding for federal crop insurance and the new optional Average Crop Revenue Election (ACRE) program for producers who agree to accept a 20 percent reduction in their direct payments and a 30 percent reduction in their marketing loan rates.
Like previous farm bills, the FECA was influenced significantly by the economic conditions in the farm sector and commodity markets as the bill was being written. While no one can predict how crop conditions in the United States will evolve between now and 2012, we can predict with some assurance that whatever they are will test the effectiveness of the new farm safety net and rural development programs. Much of the U.S. agriculture economy has performed extremely well in recent years, but corn growers are now confronting a number of serious challenges, particularly a sharp rise in their production costs, estimated to have increased 20 percent in 2008. Greater volatility in agriculture commodity and energy prices place even more importance on adequate risk management tools for crop and livestock producers. NCGA, a long time advocate of a revenue based risk management safety net that adjusts with market prices and crop yields, is confident that the new risk management option, ACRE, will better protect producers against losses not adequately covered by fixed target price programs and disaster assistance. Recognizing the many questions regarding this important reform, NCGA is committed to working for an effective implementation of ACRE by USDA Farm Service Agency and helping to inform farmers about this new opportunity.
Other Interests
A New Risk Management Tool – the Average Crop Revenue Election Program
Prospects for ACRE Payments in 2009 ACRE Issue Brief Letter to the Director, Product Administration and Standards Division Risk Management Agency Public Comments-Coalition Letter to USDA on the Food, Conservation and Energy Act of 2008 Written Testimony prepared for the House Agriculture Subcommittee on General Commodities and Risk Management on the Federal Crop Insurance Program