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ACRE, SURE —

By Staff | Mar 27, 2009

BOYDEN – Citizens State Bank of Boyden and Sheldon hosted a Crop Insurance Seminar for farmers interested to learn about the changes in crop insurance for 2009 and ACRE and SURE programs. Ron Hook, ISU Extension farm management specialist was the keynote speaker.

SURE, or Supplemental Revenue Assistance, is designed to be a permanent disaster bill. It is an add-on to crop insurance. There is no additional cost for SURE for those who have crop insurance and are signed up for the farm program.

“SURE provides 15 to 20 percent of added coverage above the crop insurance guarantee up to 90 percent.” said Hook. “All crops must be insured, except crops that are less than 5 percent of the total farm’s crop value.”

To calculate cover and losses, all crops and all farms per producer are added together. Payment is 60 percent of loss.

The program can be retroactive to the 2008 growing season. Because of the multiple natural disasters occurring in Iowa this past year most of the counties qualify for disaster. The four northwest-most counties – Lyon, Sioux, Osceola and O’Brien – are not eligible unless a farm suffers a 50 percent loss in 2008. Five other counties in Iowa also do not qualify because they were not in a disaster county or continuous county.

Not all crops are insurable. Those that are vary by county and age of some crops such as alfalfa and mixed forages. Crops likely to be insured in Iowa are corn, soybeans, oats for grain, alfalfa and red clover.

Payments for SURE will not be received until late the following year. Because in the formula for computing SURE payments, the crop price figure is an average of the cash payment for that crop year. A crop year is from September to August.

ACRE, or Average Crop Revenue Election, is a totally optional program. If you like the current farm program, stick with it, advised Chad Hart, ISU agricultural economist, speaking recently at the Northwest Iowa Research Farm near Calumet.

“We won’t know exactly what this looks like until April,” said Hart.

When signing up for this program, producers give up 20 percent of current direct payments. Once a farm is signed up, it is in the program for the duration until the Farm bill sunsets in 2012. Producers have until later in 2009.

Each farm is treated separately using FSA farm numbers. A producer may decide to enroll any number of farms. Average price and yield will update each year but the trigger amount can not change by more than 10 percent.

An Olympic average is used to decide yield number. The last five years of crop yields will be averaged without the highest and lowest yields. It is still undecided how each individual farm yields will be decided.

An ACRE payment will be issued when revenue is lower than the state’s and farm’s trigger. It has to be lower than both.

The state’s trigger is the five-year Olympic average state yield, times the two-year national season average market price. The farm trigger is the five-year Olympic average state yield, times the two-year national season average market price, plus the crop insurance premium paid by the farmer per acre.

Those who think farm prices will go up and don’t expect a yield disaster there would get no benefit from ACRE. However, those who stay with CCP will get the full direct payment.

For those who expect low prices and high yields, CCP will pay more than ACRE. If falling prices and a yield disaster occurs, then ACRE will pay more than CCP.

Using different scenarios, ACRE works 29 percent of the time, Hart said.

Contact Renae Vander Schaaf by e-mail at renaefarmnews@gmail.com.

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