When Congress first experimented with a revenue-support program for farmers, there were few takers. Only 8 percent of “base” acres were enrolled in the so-called ACRE program in 2013. But growers opted for the new version of revenue support, called Agriculture Risk Coverage, on 77 percent of subsidy-eligible land, according to USDA data. For corn and soybeans, the selection rate topped 90 percent. Economists Carl Zulauf of Ohio State U and Gary Schnitkey, Jonathan Coppess and Nick Paulson of U-Illinois say, “The large percentages suggest that farmers raising corn and soybeans were comfortable with revenue-based programs.” After all, they write at farmdoc daily, revenue-insurance policies are widely used in corn and soybean country.
The turnaround from ACRE, the Average Crop Revenue Election, may stem from its complicated structure and the requirement that farmers give up 20 percent of their direct-payment subsidy and accept a 30-percent cut in price-support loan rates. The 2014 farm law eliminated direct payments and offered the same loan rates for all crop subsidy programs – two changes that may have made ARC more attractive. Also, ARC seems more likely to pay off in the early years of the 2014 farm law than the traditional subsidy plan, now called Price Loss Coverage. “This suggests that farmers will use revenue-based programs, particularly those of relatively straight-forward design,” write the economists.
ARC was most popular in the Midwest and the Northeast. PLC was the favorite choice in the South, Southwest and Mountain states. Peanut and rice growers opted almost entirely for PLC. The selection period ended in late winter. Growers have until Sept. 30 to enroll in the farm program for 2014 and 2015 crops.