Exploring farmers' ACRE enrollment decisions

Under the Average Crop Revenue Election (ACRE) program, farmers receive revenue-based payments if yields and/or prices fall below ACRE triggers but give up 20 percent of direct payments, receive no countercyclical payments, and face reduced marketing assistance loan rates. The 2009 Agricultural Resource Management Survey (ARMS) queried farmers as to their reasons for choosing to enroll or not in the ACRE program. About 10 percent of almost 500,000 farmers who gave explicit reasons for their enrollment decision did enroll in ACRE. The reason most frequently cited for enrolling in ACRE was the expectation that no CCPs would be received, followed by anticipation of high guaranteed prices and concerns about farm income variability. Of the 442,000 farmers who chose not to enroll in the ACRE program, an equal percentage cited the complexity of the ACRE program and anticipated foregoing CCPs as their reason. Another 20 percent of those not enrolling said they were waiting for neighboring farmers to join. This chart is found in Agricultural Income and Finance Outlook, AIS-91, December 2011.

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