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Costs and Benefits of Moving to a County ACRE Program


  • Bruce A. Babcock


Better integration of the different programs that comprise the farm safety net seems inevitable in the next farm bill given widespread public concern over the rapidly growing federal debt. With $5 billion in direct payments flowing annually to farmers who own or rent base acres without regard to farm income, $7 billion flowing to crop insurance companies over the last two years, and $2.6 billion flowing to cotton farmers in the last two years from programs that violate our trade commitments, there is substantial room for improvement. One path toward better integration would be to modify the ACRE (Average Crop Revenue Election) program so that it covers county revenue rather than state revenue. For approximately the same cost as the direct payment program, 100% of planted acres could be covered at a 95% coverage level. Accounting for county ACRE payments before crop insurance payments are made could easily reduce the cost of the crop insurance program by more than $4 billion per year.

Suggested Citation

  • Bruce A. Babcock, 2010. "Costs and Benefits of Moving to a County ACRE Program," Center for Agricultural and Rural Development (CARD) Publications 10-pb2, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  • Handle: RePEc:ias:cpaper:10-pb2

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    Cited by:

    1. Mitchell, Paul D. & Rejesus, Roderick M. & Coble, Keith H. & Knight, Thomas O., 2011. "Analyzing Farmer Participation Intentions and Enrollment Rates for the Average Crop Revenue Election (ACRE) Program," Staff Papers 116705, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    2. Mitchell, Paul D. & Rejesus, Roderick M. & Coble, Keith H. & Knight, Thomas O., 2010. "A Real Options Framework for Analyzing Program Participation as Human Capital Investments: The Case of the Average Crop Revenue Election (ACRE) Program," Staff Papers 92896, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    3. Bulut, Harun & Collins, Keith & Zacharias, Thomas P. & Schnapp, Frank, 2011. "Why Do Producers Choose Individual or Area Insurance Protection?," NCIS Special Reports 160545, National Crop Insurance Services (NCIS).
    4. Arriola, Christine & Dismukes, Robert & Coble, Keith H. & Ubilava, David & Cooper, Joseph C., 2011. "Alternatives to a State-Based ACRE Program: Expected Payments Under a National, Crop District, or County Base," Economic Research Report 262235, United States Department of Agriculture, Economic Research Service.

    More about this item


    ACRE; agricultural risk; Average Crop Revenue Election program; crop insurance; direct payment program; farm bill; farm payments; SURE; Supplemental Revenue Assistance Payments Program.;

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