You have another chance at ACRE
Whether to sign up in the average crop revenue election program was a major dilemma a year ago. Compared to the national average, more Hoosiers signed up for ACRE. Still, only a fraction of Indiana producers chose ACRE over the Farm Service Agency’s direct and countercyclical payment program. There’s another chance to sign up for ACRE this year.
This look at FSA issues starts with questions about ACRE. Thanks to Indiana FSA state staff for answering these questions.
How many farmers actually are in ACRE?
Carl Schweikhardt, production adjustment: In Indiana 9,641 farms enrolled in ACRE. That’s 9.5% of farms in FSA programs. Nationally, 128,620 farms enrolled, or about 8%. In comparison, 91,986 farms were enrolled in DCP in Indiana.
By base acres, about 15.5% were enrolled in Indiana, compared to 12.8% nationally.
Can I still consider the ACRE option this year?
Schweikhardt: Yes, sign-up for both ACRE and DCP are under way. Note that sign-up periods end much earlier than a year ago for both programs. The last date to sign up in either program is June 1.
If you enrolled in ACRE last year, you automatically remain in it, but you still must sign up for 2010. You don’t have the option of getting out of ACRE.
If you’re not in ACRE, here’s a Web site you can use to track ACRE yields and prices as you decide if you want to participate: www.fsa.usda.gov/FSA/webapp?area=home&subject
I’m considering applying for an FSA loan to buy land. My father is nervous because he remembers horror stories from the 1980s, and says FSA is “the lender of last resort.” Should I be concerned?
Greg Foulke, farm loan program chief: There was a stigma attached by some to government (FSA) loans, but we don’t feel it’s valid anymore. It’s true that to qualify you must show you can’t get the money anywhere else, but many banks partner with us today, especially on guaranteed loans.
Here are some numbers that should help you relax. The FSA delinquency rate currently is 1.7%, and loss rate from write- offs is 1.6%. Both numbers are very low. Also, our average time for processing a loan request is only 22.3 days.
Are you loaning money to buy farms, or just operating funds?
Foulke: We helped about 100 farmers in Indiana buy farms last year. The loan cap is now $300,000, up considerably. Some stimulus money helped us make loans to first-year or disadvantaged farmers last year at very attractive terms. Those funds were only for buying farmland.
Do you make more loans than FSA did 20 years ago?
Foulke: No, but the average- sized loan is much higher. For example, we made 660 loans in 1989, and the average loan was $64,000. In 1999 we made 788 loans, averaging $112,000. In 2009 we made 509 loans, but the average loan was $206,000.
REMEMBER DATE: Indiana FSA executive assistant Rick Kelley reminds farmers that sign-up for DCP and ACRE ends June 1.
This article published in the February, 2010 edition of INDIANA PRAIRIE FARMER.
All rights reserved. Copyright Farm Progress Cos. 2010.