Herseth Sandlin Urges USDA to Ensure A Strong Safety Net for Our Producers

Press Release

As the United States Department of Agriculture (USDA) prepares to release a new rule regarding the implementation of the new Average Crop Election Program (ACRE) contained in the 2008 Farm Bill, Rep. Herseth Sandlin is working to ensure South Dakota producers are treated fairly. This week, she is leading an effort in the House to urge USDA Secretary Ed Schafer to fulfill the intention of the law by using 2007-2008 as "the most recent years" for the 2009 crop state revenue guarantees in ACRE.

USDA has indicated it may rule in favor of using the average farm gate prices for 2006 and 2007 - instead of 2007 and 2008 - which would diminish the value of the benefit in this new safety net program, and likely cause participation to be substantially reduced. Herseth Sandlin is gathering signatures for a letter to Secretary Schafer that states, in part, "By moving the ACRE guarantee price to 2006, the Department would make market signals more remote from actual planting decisions and significantly diminish the program's effectiveness."

The letter continues, "As producers begin to make planting decisions for the next crop year, it is critical that USDA moves forward with the rulemaking on the ACRE program quickly. Using the 2007 and 2008 crop years ensures that producers have a safety net firmly in place that provides the best means for offsetting growing risk and ever-increasing input costs as promised when Congress passed the 2008 Farm Bill."

Comparing the differences in the two sets of marketing years, the Food and Agriculture Policy Research Institute (FAPRI - University of Missouri) prepared the following average price scenarios:

06-07 07-08

Corn $3.65 $4.85
Wheat $5.37 $6.62
Soybeans $8.29 $11.48

The full text of the letter to Secretary Schafer is below.

Dear Secretary Schafer,

As you continue to implement provisions of the 2008 Farm Bill, we strongly urge you to uphold Congress' original intent in regards to the optional Average Crop Revenue Election Program (ACRE) by using the 2007 and 2008 average farm gate prices as "the most recent years" when determining the 2009 crop state revenue guarantees.

As you know, the underlying purpose of the ACRE program is to provide an optional farm safety net that is more in tandem with actual market conditions. By moving the ACRE guarantee price to 2006, the Department would make market signals more remote from actual planting decisions and significantly diminish the program's effectiveness.

Congress' intent in this matter is clear. Plainly stated under the ACRE statute is the directive to use the "most recent 2 crop years." The ACRE program will begin in the 2009 crop year, requiring USDA to use 2007 and 2008 in determining the ACRE price guarantee. Additionally, the program was scored by the Congressional Budget Office using the 2007 and 2008 crop years. USDA does not need to calculate revenue guarantees before publishing the rules that farmers will use to decide whether to enroll in the program.

As producers begin to make planting decisions for the next crop year, it is critical that USDA moves forward with the rulemaking on the ACRE program quickly. Using the 2007 and 2008 crop years ensures that producers have a safety net firmly in place that provides the best means for offsetting growing risk and ever-increasing input costs as promised when Congress passed the 2008 Farm Bill.

Thank you for your attention to this important matter.

Source