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Uptake Low For New U. S. Support Plan

Just eight per cent of farmers signing up for U. S. crop subsidies opted for a new federal program designed to protect grower revenue, the Agriculture Department said Oct. 20.

Some 128,620 farms enrolled in the Average Crop Revenue Election (ACRE) program for their 2009 crops while 1.54 million choose to receive traditional supports, which assure a minimum price.

Created as part of the 2008 farm law, ACRE is the first federal program to shield growers from poor yields as well as low prices. Backers said it marks a new direction for U. S. farm support.

Farmers apparently were wary of ACRE’s rules.

“I do think there is a bit of a learning curve and the complexities and program requirements certainly caused some people to stay away this year,” said Pat Westoff at the Food and Agricultural Research Institute, a think-tank. Once they enrol, growers cannot leave ACRE before 2013 and they must enrol an entire farm.

Grain, cotton and oilseed growers receive an ACRE payment when two conditions occur – statewide income from a crop falls below a trigger level and a producer sees a decline in revenue for the crop as well. Overall, 32.5 million acres were enrolled in the new program, equal to 13 per cent of U. S. land eligible for crop subsidies.

Illinois, Iowa, Nebraska, South Dakota and North Dakota – leading states for corn, wheat and soybeans – accounted for 58 per cent of farms and land in ACRE.

For months, analysts said ACRE would be more attractive in the corn belt and Great Plains than in the South. Growers accept lower support prices when they enrol in ACRE; cotton and rice have the highest support rates, making traditional supports more alluring than ACRE.

Wheat growers in many states are likely to qualify for an ACRE payment on their 2009 crop based on current prices, said Westoff. The picture was less clear for corn and soybeans, he said.

The program was created in response to complaints that traditional farm subsidies, triggered by low prices and based on a farm’s output, offer little help when bad weather destroys a farmer’s crop.

USDA said it will issue nearly $4 billion in so-called direct payments to farmers. Some $900 million was distributed in advance payments. Direct payments are made annually and are based on a farm’s past history of crop production. The sign-up period for ACRE and traditional supports for 2010 crops will run until June 1.

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