Document Type

Working Paper

Publication Date

8-8-2011

Working Paper Number

WP #11013, August 2011

Abstract

In 2009 Iowa farmers who had at least some land enrolled in the existing DCP program offered by FSA were given the opportunity to switch to an alternative called ACRE. Despite having access to information about the program and utilizing electronic decision aids, only 27.5% of the operators surveyed enrolled at least one farm in ACRE. Those who did enroll cited a desire for more risk protection and a belief that payments from ACRE would exceed the value of the direct payments they had to give up. The primary reasons operators gave for not enrolling were the program was too complex, and they did not want to give up a portion of the direct payments. Farmers who enrolled generally farmed more acres and depended more on crop production for their gross income, and were more likely to use other risk management tools such as crop insurance and pre-harvest pricing. In general, farmers who enrolled in ACRE were more concerned about controlling financial risk in their farming operations than those who did not.

JEL Classification

Q12, Q18

File Format

application/pdf

Length

9 pages

Included in

Economics Commons

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