Economic Information Bulletin No. (EIB-84) 23 pp

October 2011

An Analysis of the Limited Base Acre Provision of the 2008 Farm Act

The Food, Conservation, and Energy Act of 2008 eliminates direct and countercyclical payments (DCP) and average crop revenue election program payments to farms with 10 or fewer base acres. This report examines the effects of the provision. Findings suggest that Federal budgetary savings from the provision are small. In 2009, nearly 371,000 of the Nation's 2.2 million farms had 10 or fewer base acres (not including farms owned by limited-resource and socially disadvantaged farmers, which are exempt from the provision). However, not all farms with 10 or fewer base acres participate in the DCP program. Based on the 2008 enrollment rate, 148,400 farms would no longer receive DCP, estimated at $11.7 million in 2009. The effect of the provision varies among U.S. regions, with a larger portion of ineligible farms found on or near the East Coast.

Keywords: Farm Act, direct and countercyclical payments, base acres, farm policy

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