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

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

William Edwards, Extension Economist 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) % Used Importance* 89% % % % % % 2.5 * on a scale of 1 to 5

William Edwards, Extension Economist 25% used an electronic spreadsheet Source ISU Extension52% Farm Service Agency30% Own worksheet 4% Illinois or Kansas Extension 4% Unknown10%

William Edwards, Extension Economist FSA Farm Units (averages) OwnedRentedTotal Operated in Enrolled in ACRE % enrolled in ACRE*24%17%20% *11% of all FSA farm units in Iowa were enrolled in ACRE.

William Edwards, Extension Economist FSA Units Enrolled--% of Respondents Units EnrolledOwnedRentedTotal None73%79%72% Some4%8%15% All23%13%

William Edwards, Extension Economist Reasons to Enroll 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* *scale of 1 to 5

William Edwards, Extension Economist 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* * Scale of 1 to 5

William Edwards, Extension Economist 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 *difference significant at 5% level ** difference significant at 1% level Risk Management Characteristic Did not enroll Enrolled some/all Crop acres in 2009**6821,095 % gross income from crops**76%83% % of acres insured*85%92% Average ins. coverage level*75%77% % of crop priced preharvest*25%30% % debt-to-asset ratio28%27% Age of operator5556

William Edwards, Extension Economist ** difference significant at 1% levelon a scale of 1 to 5 Source of ACRE Information Did not enroll Enrolled some/all FSA newsletters, personnel Farm magazine, newsletter, website or radio 3.1 Extension newsletter, web site Extension presentation** Lender, farm manager, friend Others (insurance agent, mkt. advisor, IA Corn Growers) 2.5

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