ACRE Might Reduce Farm Payments, Says TTU - KCBD NewsChannel 11 Lubbock

10/8/08

ACRE Might Reduce Farm Payments, Says TTU

There might be bad news for local agriculture. The Average Crop Revenue Election, or ACRE, will mean fewer payments to farmers according to a written statement from Texas Tech.  Federal farm payments have been credited with keeping many Lubbock area farmers out of bankruptcy during bad times. 

The ACRE program uses averages and complicated formulas.  Texas Tech says irrigated cotton farmers could lose out. However, Lubbock-based Plains Cotton Growers says farmers have to volunteer for the ACRE program rather than more traditional crop payments.  So, it might not have much impact.

For those of you needing more details, we have posted Texas Tech's written statement directly below.

The Cotton Economics Research Institute at Texas Tech University found that Texas' irrigated cotton growers may see fewer payments under a new program included in the 2008 farm bill.

The Average Crop Revenue Election (ACRE) is slightly different from previous farm programs and focuses on farm revenue instead of just prices. However, the new program follows a complex set of procedures involving both farm and state-level average revenues to determine whether a farmer is eligible to receive payments.

"We looked at several actual farm histories for both dryland and irrigated cotton in the Texas High Plains," said Darren Hudson, the Larry Combest Endowed Chair in Agricultural Competitiveness and institute director. "The new ACRE program differs considerably from the current program in how the ‘triggers' for payments are determined and how payments are calculated.  We compared the magnitude of payments under the existing program and what payments would have been under the new ACRE program for the past five years," Hudson said.

The results of theanalysis suggest that ACRE does not perform well for cotton in Texas, especially for irrigated cotton. 

"The ACRE program would have only triggered a payment about 20% of the time over the last 20 years compared with 65 to 70% of the time for the current program for irrigated cotton," Hudson said. "But for dryland, it would have potentially triggered a payment about 45% of the time.  Even so, the size of the payments appears to be larger under the current program as compared to the new ACRE program."

Hudson notes, however, that ACRE is a whole-farm program. 

"It may make sense to participate in ACRE for other crops," Hudson said.  Because of that, he says that cotton farmers should not immediately dismiss ACRE for their operation. "Our analysis is only for Texas cotton. Cotton in other states and different crops in Texas may have a different outcome with ACRE. The results of the program are highly farm specific and each farmer should carefully weigh their options before making a decision."

Click here for the full briefing paper on ACRE.

10/8/08
Heavy Rains Delay Cotton Harvest
Typically, farmers have started to strip cotton by this time of year, however the cotton is still too green. NewsChannel 11's Julia Bruck spoke with some Floyd County farmers about when they expect harvest to start.

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