Farm commodity programs over the decades have focused on protecting farmers against declines in farm prices and not declines in revenue (price times production). Traditional programs for field crops—specifically marketing assistance loan benefits and counter-cyclical payments—provide benefits to producers when farm prices drop below specified (and fixed) levels. The 2008 farm bill debate produced a new program to help farmers manage their revenue risks. Congress included the Average Crop Revenue Election (ACRE) program in the Food, Conservation, and Energy Act of 2008 ( P.L. 110-246 , the 2008 farm bill) as a revenue-based program option for farmers who enroll in traditional farm commodity programs. Unlike revenue protection provided by some crop insurance products, ACRE is designed to protect against losses from multi-year price declines, using price triggers based on national average prices from the previous two marketing seasons. Program authorization for ACRE ends with the 2012 crop year. The ACRE program pays a farmer when two conditions are met: (1) actual state-level revenue for a crop (determined after harvest) falls below a guaranteed level (determined before harvest), and (2) the farmer experiences an individual crop revenue loss on a farm. If farmers select the ACRE option on a farm, they forgo 20% of their direct payments; loan rates are reduced by 30%; and participants on the farm are not eligible for counter-cyclical program payments. The program applies to all DCP crops on that farm, and payments for each crop are calculated separately. A farmer who operates more than one farm may elect to enroll one or all farms in ACRE. Importantly, once a farm is enrolled, it must remain in the program for subsequent crop years (the program covers crop years 2009-2012). Selecting the ACRE Option

When deciding to participate in ACRE, producers generally consider the trade-off between reduced benefits under traditional programs and the expected increase in revenue risk protection provided by ACRE. For the 2009 crop year, approximately 8% of the total number of farms elected to participate in ACRE, representing nearly 13% of base acres (total program acreage). Both measures increased less than one percentage point in 2010. In November 2010, USDA began issuing approximately $420 million in 2009 ACRE payments for wheat, corn, barley, dry peas, grain sorghum, lentils, oats, peanuts, soybeans, and upland cotton, with about 70% of the total expected to be issued to wheat producers and 23% to corn producers. Issues for the 111th Congress

In the next farm bill debate, Congress will likely be interested in the effectiveness and cost of the ACRE program, particularly how it reduces revenue risk for producers of program crops and how variations of the program might be incorporated as part of the farm safety net.
Farm commodity programs over the decades have focused on protecting farmers against declines in farm prices and not declines in revenue (price times production). Traditional programs for field crops provide benefits to producers when farm prices drop below specified levels. To help farmers manage their revenue risks, Congress included the Average Crop Revenue Election (ACRE) program in the Food, Conservation, and Energy Act of 2008 (P.L. 110-246 or 2008 farm bill) as a revenue-based program option for farmers who enroll in traditional farm commodity programs for crop years 2009-2012. Unlike revenue protection provided by some crop insurance products, ACRE is designed to protect against losses from multi-year price declines.
Program authorization ends with the 2012 crops. As part of the farm bill debate expected in 2012, Congress will likely be interested in how ACRE reduces revenue risk for producers of program crops and how variations of the program might be incorporated as part of the farm safety net, which includes commodity programs, crop insurance, and disaster assistance.
The ACRE program pays a farmer when two conditions are met: (1) state-level revenue for a crop falls below a guaranteed level, and (2) the farmer experiences an individual crop revenue loss. (Payments for each crop are calculated separately.) If farmers select ACRE, they forgo 20% of their direct payments under the Direct and Counter-cyclical Payment Program (DCP), and commodity loan rates under the Marketing Assistance Loan Program are reduced by 30%. Also, ACRE participants are not eligible for counter-cyclical program payments under DCP. When deciding to participate in ACRE, producers must consider the trade-off between reduced benefits under traditional programs and the expected increase in revenue risk protection and potential payments provided by ACRE.
Once a farm is enrolled in ACRE, the program applies to all eligible crops on that farm. A farmer who operates more than one farm may elect to enroll one or all of the farms in ACRE. Importantly, once a farm is enrolled in ACRE, it must remain in the program for subsequent crop years. For the 2009 crop year, approximately 8% of the total number of farms elected to participate in ACRE, representing nearly 13% of base acres (total program acreage). Both measures increased less than one percentage point in 2010. In November 2010, USDA began issuing approximately $420 million in 2009 ACRE payments for wheat, corn, barley, dry peas, grain sorghum, lentils, oats, peanuts, soybeans, and upland cotton, with about 70% of the total expected to be issued to wheat producers and 23% to corn producers.