This Farm Bill makes minor changes to the commodity programs that were authorized in the 2002 Farm Bill. The most substantial change is the addition of an optional Average Crop Revenue Election Program (ACRE). The program will begin with the 2009 crop year. Farmers may choose to enroll at any point; but once entered, may not exit the program until this Farm Bill expires. If the farmer enrolls in ACRE, 20% of their Direct Payments and 30% of their Loan Rates will be forfeited.

Those safety-nets will be replaced with a state-based revenue guarantee calculated by multiplying 90% of the 5-year state average yield per planted acre (high year and low year excluded) by the 2-year national average price for the covered commodity.

Payments will be made to farmers when the actual state yield falls below the calculated revenue guarantee. The payment will be equal to the difference between the state revenue and the revenue guarantee. A cap is set at 25% of the guarantee. Payments are made on 85% of planted (or considered planted) acreage. In years 2009-2011, the payment levels are reduced to 83.3%. In order to receive payments, producers must have suffered a loss on their farm.

The farm bill is finally on its way to reality. On Wednesday afternoon (5-14-08), the House passed the bill with a veto-proof majority. The Senate passed the bill with no changes on Thursday (5-15-08). The remainder of the process should go something like this:

• The President is expected to veto the bill (vetoed bill then goes back to the House for the veto to be overridden).
• The House will override the veto (according to the 5-14-08 vote count) and it will become law.

At this point in the process, the terms of the bill are set in stone. Below you will find details of the Commodity Title:

• Direct Payments:
  • Current rates continue (unless producer enrolls in the ACRE Program)
  • Option to collect advance direct payments terminates beginning for the 2012 crop year
• Counter-Cyclical Payments
  • Program is continued
  • Rebalances for many crops (including wheat and soybeans) for the 2010 crop year
  • Partial Counter-Cyclical Payments are terminated for the 2011 crop year and beyond
• ACRE Program
  • Optional Program (in lieu of 20% Direct Payments and 30% of Loan Rates)
  • Once enrolled, producers may not exit the ACRE program before 2012
  • Begins in the 2009 crop year
  • Creates a state-based revenue guarantee (calculated by multiplying the following)
    • 90% of the 5-year state average yield per planted acre (excl. high and low yrs)
    • 2-year national average price for the covered commodity
  • Payments made when the actual state revenue is lower than the calculated revenue guarantee
    • Producer must have suffered a loss on their farm
    • Payments equals the difference between state revenue and revenue guarantee (caps at 25% of the guarantee)
    • Payment made on 85% of planted acreage (or considered planted)
    • Payment reduced to 83.3% of planted acreage for years 2009-2011
• Loan Deficiency Payments
  • Rules remain unchanged (unless producer enrolls in the ACRE Program)
  • 2008-2009 rates: $2.75, Wheat; $1.95, Corn; $5.00 Soybeans
  • 2010-2012 rates: $2.94, Wheat; $1.95, Corn; $5.00 Soybeans
  • Rates will be determined on the date beneficial interest was lost

More on the Farm Bill:

• Statement by Agriculture Secretary Ed Schafer on House Passage of the Farm Bill Conference Report
• NCGA Applauds Senate for Farm Bill Conference Report Passage