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Serving: Central

Arkansas farmer: ACRE’s problems

Testifying before the Senate Agriculture Committee on June 30, Dow Brantley III, provided criticism of current farm bill programs and suggestions for their replacements. Brantley — who farms cotton, corn, rice, and soybeans on some 8,500 acres with his father and brothers outside England, Ark. — told the committee how the ACRE program had failed to provide a safety net for Mid-South producers.

The 2008 farm bill “provides a sound and stable farm policy that is essential for our farming operation by continuing the traditional mix of safety net features consisting of the non-recourse marketing loan and loan deficiency payment program and the direct and counter-cyclical payment program.

“While the counter-cyclical payment and marketing loan programs have been helpful in the past, they have recently been overwhelmed by the costs of production. If crop prices drop sharply, most producers, including me, will be in dire financial straits by the time these programs make payments. While there has been much debate about the effectiveness of direct payments, I believe they are an integral part of our farm program delivery system and should be maintained.

“The 2008 farm bill made very substantial changes to the payment eligibility provisions of the safety net, establishing an additional adjusted gross income (AGI) means test and a very significant tightening of the ‘actively engaged in farming’ requirement for eligibility. In my opinion, the USDA over-stepped the intent of Congress in payment eligibility provisions and issued regulations that are overly complicated and restrictive.

“The Farm Service Agency’s (FSA) overly restrictive financing rules, legally incorrect active personal management rules, and multiple sets of ‘actively engaged in farming’ rules — which are inconsistent when applied to different commodity and conservation programs within the same program year — are a few examples of the problems that we are facing. Sound farm policy provisions are of little value if commercial-size farming operations are ineligible for benefits.

“The 2008 farm bill also included the addition of the Average Crop Revenue Election (ACRE) as an alternative to counter-cyclical payments for producers who agree to a reduction in direct payments and marketing loan benefits. The bill also added the Supplemental Revenue Assurance Program (SURE) as a standing disaster assistance supplement for federal crop insurance.

“The support mechanisms within ACRE do not provide an adequate safety net for cotton or rice producers when compared to the traditional DCP program. If a revenue-based approach is to find support among us producers, a more reasonable revenue target would have to be established.

“In my home county, we have 1,650 producers and no one has elected to participate in ACRE. In fact, only two producers in the entire state have chosen ACRE.

“The SURE program has provided little, if any, assistance to row crop producers in the Mid-South who, last year, suffered significant monetary losses due to heavy rains and flooding occurring prior to and during harvest. I recognize the challenge facing Congress to make improvements in this program. Without increased baseline spending authority, there will be no funds to even continue the program in the next farm bill, much less make the necessary improvements for it to be an effective disaster relief mechanism. However, I do not support reallocating existing spending authority from current farm programs to apply to SURE.

“Crop insurance as a whole has not worked on our farm — or many others like ours — in Arkansas. Our farm is one hundred percent irrigated, and on average, our yields are very consistent. Our financial problems occur with higher production costs due to irrigation, or a weather event in the fall that disrupts our harvest and ultimately affects the quality of our crops. These circumstances cannot be hedged against.

“For example, the coverage available under the current mix of federal crop insurance policies is not as well-suited to rice or other Mid-South crops as compared to producers of other crops in other regions.

“What rice producers need from federal crop insurance are products that will help protect against price risk and increased production and input costs — particularly energy and energy-related inputs.

“The rice industry has been working for over a year now to develop a new generation of crop insurance products that we hope will provide meaningful risk management tools for rice producers in protecting against sharp, upward spikes in input costs.

“My family has participated in several conservation programs over the years. Programs such as the Environmental Quality Incentives Program (EQIP), Wetlands Reserve Program (WRP), and Conservation Reserve Program (CRP) have helped us become better stewards of the land and better conserve our natural resources.

“Conservation programs, such as the new Conservation Stewardship Program (CSP), I think, can lead to improved environmental and conservation practices. However, I believe that this program is not succeeding in the way that it could. Of all the conservation programs offered by USDA, the CSP program might have the most potential in terms of actually producing the desired results that are beneficial to both the environment and producers. This program is a win/win for everyone. However, it has always been vastly underfunded.

“The CSP program has been hampered by overly restrictive payment limitations contrived by USDA regulators — restrictions that I do not believe are supported by statute.

“In summary, I appreciate the work of this committee in crafting the 2008 farm bill. I know the next farm bill will present its own set of challenges especially due to inadequate budget authority and international trade obligations. Based on my experience in working with the USA Rice Federation, the National Cotton Council and the Farm Bureau, I know they will work closely with this committee to ensure that we have an effective farm policy.”

TAGS: Management
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