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Iowa Farmers’ Decisions about Enrolling in Average Crop Revenue Election (ACRE)

Iowa Farmers’ Decisions about Enrolling in Average Crop Revenue Election (ACRE). Mail Survey April 2010. Random sample of Iowa farm operators who received FSA commodity payments in 2007 3,384 surveys sent out 363 returned (11%) . % Used Importance* 89% 3.8 79% 3.1

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Iowa Farmers’ Decisions about Enrolling in Average Crop Revenue Election (ACRE)

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  1. Iowa Farmers’ Decisions about Enrolling in Average Crop Revenue Election (ACRE) William Edwards, Extension Economist

  2. Mail Survey April 2010 • Random sample of Iowa farm operators who received FSA commodity payments in 2007 • 3,384 surveys sent out • 363 returned (11%) William Edwards, Extension Economist

  3. % UsedImportance* 89% 3.8 79% 3.1 68% 3.3 61% 3.2 61% 2.7 16% 2.5 * on a scale of 1 to 5 90% received information about ACRE Source of Information • FSA newsletters, personnel • Farm magazine, newsletter, website or radio • Extension newsletter, web site • Extension presentation • Lender, farm manager, friend • Others (insurance agent, market advisor, IA Corn Growers) William Edwards, Extension Economist

  4. 25% used an electronic spreadsheet Source • ISU Extension 52% • Farm Service Agency 30% • Own worksheet 4% • Illinois or Kansas Extension 4% • Unknown 10% William Edwards, Extension Economist

  5. FSA Farm Units (averages) *11% of all FSA farm units in Iowa were enrolled in ACRE. William Edwards, Extension Economist

  6. FSA Units Enrolled--% of Respondents William Edwards, Extension Economist

  7. Wanted more risk protection Believe ACRE payments will exceed 20% of direct payment lost Farm has high yield variability Lender or farm manager advised it Landlord wanted to enroll farm Other Importance* 3.9 3.2 1.8 1.6 1.4 0.3 *scale of 1 to 5 Reasons to Enroll William Edwards, Extension Economist

  8. Reasons to Not Enroll Program too complex 20% of direct payment given up Would lose loan deficiency payments Too hard to explain to landlord Unlikely to get a payment Farm yields don’t track with state Marketing loan rate will be lower Lack farm yield information Do not need more risk protection Landlord did not want to enroll Importance* 3.8 3.6 3.0 3.0 2.9 2.7 2.4 2.2 2.1 2.1 * Scale of 1 to 5 William Edwards, Extension Economist

  9. Risk Management Characteristics (versus data from Census of Ag, RMA, IFBA) • 785 crop acres operated in 2009 (318) • 78% of gross income from crops (51%) • 86% of acres were insured (85%) • Average coverage level was 75% (76%) • 27% of crop was priced before harvest • Average debt/asset ratio was 28% (25%) • Average operator age was 55 (54.5) William Edwards, Extension Economist

  10. *difference significant at 5% level ** difference significant at 1% level William Edwards, Extension Economist

  11. ** difference significant at 1% level on a scale of 1 to 5 William Edwards, Extension Economist

  12. Suggestions for ACRE • Make it less complicated (40) • Eliminate it (12) • Eliminate all government farm programs (7) • Don’t tie payment to state yield (7) • Make it part of crop insurance (5) • More education (4) • Various (15) William Edwards, Extension Economist

  13. Iowa Farmers’ Decisions about Enrolling in Average Crop Revenue Election (ACRE) Questions? William Edwards, Extension Economist

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