ACRE
The low adoption rate by growers of the Average Crop Revenue Election (ACRE) program was broached by Rep. Jerry Moran (R-KS). Is the low sign-up numbers “troublesome to you? Expected? You’ve indicated your disappointment in the lack of education in the field. Do you think this program will grow?”

“I think (ACRE) will grow,” responded Ron Litterer, Iowa farmer and National Corn Growers Association chairman. “But let me remind the subcommittee that ACRE enrollment didn’t begin until April 27, right the middle of planting season. A lot of farmers haven’t had the opportunity” to study ACRE.”

There are two segments of producers, said Litterer: “A third that hasn’t enrolled in either program and two-thirds that already enrolled – like I had previously – in the direct counter-cyclical program. I elected to change over to the ACRE program.”

When enrolling in ACRE, warned Litterer, there could be a problem with producers already enrolled in the direct counter-cyclical program.

“On their own land that isn’t a problem. For rented acres, though, forms must be taken out and signed by the landowners. According to my (FSA) office, once that form is printed for ACRE that automatically takes them out of the direct counter-cyclical program option. There’s some fear that paperwork would be (necessary) if the landowner changes his mind and doesn’t want to be in ACRE and wants to stay with the direct counter-cyclical.

“And if they don’t re-enroll by August 14, they could be totally out of the program. That’s a concern.”

IRS
In mid-March, claiming a desire to streamline farm program eligibility concerns, USDA secretary Tom Vilsack said the USDA would partner with the IRS. The proposal has prompted another round of privacy worries in the agricultural community.

What agency can best keep farmers’ financial information confidential? The IRS or local FSA offices?

Stallman said the AFBF would reserve judgment on the set-up “until further details are known.  Farm Bureau is extremely sensitive to producer privacy concerns, but if this is handled correctly, it could provide producers a more secure and private alternative to providing annual confidential business information and tax documentation to local FSA offices and county committees. We are concerned most FSA offices do not have adequate storage nor the security to ensure the safety of information that could be used to commit identity theft and fraud.”

AFBF’s understanding “is that USDA will provide the IRS with a set of income criteria, and the IRS will use this criteria to ‘red-flag’ certain producers who could exceed the Adjusted Gross Income limits.  USDA will then request additional information from ‘red-flagged’ producers and conduct an audit.” 

The NCC, said Hardwick, was “surprised and concerned to learn” of the IRS/USDA plan “and further that every program participant must file a separate form authorizing the IRS to release data to USDA or the producer will be ineligible for benefits even though virtually identical language is on an existing USDA form (CCC-926). While we have been assured that the IRS will not provide taxpayer information to USDA, we have been advised that USDA will provide taxpayer ID’s of all program participants and ask IRS to review records to identify those ID’s who may have income above the relevant income test levels.

“However, we do not know what criteria USDA has asked IRS to use, nor have we been advised what procedure will be followed to determine compliance once a taxpayer’s ID is identified for further scrutiny.”

Also of concern: under the IRS plan a red-flagged operation – even those later exonerated – could be exposed through Freedom of Information (FOIA) requests.

Any potential outing of such operations through FOIA “is unacceptable to Farm Bureau and its members,” said Stallman. “The ability of an organization or private citizen to obtain the list of producers who have been red-flagged by the IRS would be very problematic. The standards used to red-flag producers also will be pivotal. The goal of this joint arrangement should not be to audit thousands of producers every year.”

Currently, there is “no assurance that if the IRS – using USDA’s criteria – identifies an ID for further review, even though they may ultimately be determined to be in compliance, that the list won’t be subject to a (FOIA) request,” said Hardwick.

For full subcommittee testimonies, see http://agriculture.house.gov/hearings/statements.html.