Factors influencing the ACRE decision: Characteristics of enrolled and non-enrolled farms, with analysis of which factors may affect the likelihood of participation in ACRE

The 2008 Farm Act introduced a wholly new type of commodity program intended to protect producers against price and yield variability through a market-oriented revenue guarantee. Expectations were high in 2009 that many producers would choose the new Alternative Crop Revenue Election (ACRE) program, but that did not happen. We analyze this unexpected outcome by using newly available farm-level administrative data to examine a range of characteristics of individual farms and multi-farm operations that enrolled and did not enroll in ACRE. We both confirm some previous survey and county-level findings and identify some additional characteristics associated with the decision. Using a logit model, we examine the probability that non-enrollment might be linked to the number of stakeholders on a farm, since enrollment required unanimous agreement. Unexpectedly, we find that the number of signatories on a base contract did not seem to affect the ACRE decision; if anything, there was a very slight probability that increasing the number of signatories might positively affect the ACRE decision. We also find that on multi-farm operations with some ACRE enrollment, those farms not enrolled in ACRE are distinctly different from the ACRE-enrolled farms and average farms in their regions, a finding we believe warrants additional investigation.