Journal of the NACAA
Volume 2, Issue 1 - September, 2009
Providing Web-Based Education on the New Farm Program
- Johnson, S.D., Farm & Agriculture Business Management Field Specialist, Iowa State University Extension
ABSTRACTBusiness adoption of the Internet has been rapid. By 2007, more than 63 percent of all U.S. farms have access to a computer and 55 percent report having Internet access. Passage of the 2008 Farm Bill (Food, Conservation and Energy Act of 2008) created major changes under the farm programís commodity title. Over 154,000 operators and landowners in the state of Iowa were expected to participate in the new 5-year commodity farm program. Decisions regarding the new Supplemental Revenue (SURE) disaster program, Direct & Counter-Cyclical Program (DCP) sign-up as well as well as a decision about enrollment in the new Average Crop Revenue Election (ACRE) program were required. Iowa State University (ISU) Extension responded by providing new SURE and ACRE on-line calculators and new publications, newsletters, webinars and webcasts. Statewide, Extension educators conducted more than 100 meetings, workshops, seminars and conferences with over 6,000 in attendance. Links on ISU Extensionís web sites had more than 5,000 unique visitors monthly. Webinars and webcasts were recorded to help disseminate complex farm program information and compliment more traditional methods of educational delivery. As a result, thousand of operators, landowners and other agribusiness professionals across Iowa and the nation benefited from these web-based efforts.
The adoption of the Internet for farm business purposes has been rapid. According to data from the USDA Economic Research Service, by 2007 more than 63 percent of all U.S. farms have access to a computer, and 55 percent report having Internet access. These numbers have more than doubled since 2005. However, rural residents depend more on Internet use outside the home, relying on places like the library, school and work, where broadband Internet access is available.
Since the mid-1990s Iowa State University (ISU) Extension has utilized the Internet to disseminate information via publications, newsletters, calendars and informational updates. In recent years, downloadable print publications and Excel spreadsheets have proven preferred methods of web-based dissemination.
During the 2002 Farm Program sign-up for the USDA Farm Service Agency’s (FSA) Direct & Counter Cyclical Program (DCP), more than 28,000 downloads of ISU Extension’s Base & Yield Analyzer occurred. The Analyzer consisted of an Excel spreadsheet posted to an ISU Extension web page that could be downloaded to a computer running Excel, and then saved for later use. Numbers specific to an individual farm could be inputted creating “what if” scenarios, with the option of the results being saved and printed out. This tool proved critical in helping Iowa’s more than 90,000 farm operators determine how base acres, as well as old and new crop yields, interacted to determine government farm program payments through 2008. Extension educators statewide were encouraged to “teach to the spreadsheet” so these operators could better determine their own farm program sign-up decisions.
Passage of the 2008 Farm Bill (Food, Conservation and Energy Act of 2008) in June 2008 created major changes under the farm program’s commodity title. Over 154,000 operators and landowners in the state of Iowa were expected to sign-up for the new 4-year commodity farm program. Additional financial information would be collected by county FSA office staff prior enrollment in the 2009 DCP. In addition, two new revenue-based programs would be optional decisions that operators and landowners would need to determine their participation.
One of the new farm programs is called the Average Crop Revenue Election (ACRE) program. Sign-up is optional and would begin in the late spring 2009. The sign-up would be a two-step process, as the landowner would need to sign the ACRE election, and the farm operator the ACRE enrollment. This revenue-based countercyclical program would thus amend the DCP on that farm through 2012-13 crop marketing year.
The sign-up decision is somewhat complex. Enrolling a farm in the ACRE program by FSA farm number means a loss of 20% of the direct payment, and 30% of the county loan rate, in exchange for a potential annual ACRE payment, but only if the actual state and farm revenue (yield times price) annually falls below predetermined state and farm revenue guarantees.
The decision to enroll in ACRE requires a thorough analysis by individual FSA farm number. For the 2009 ACRE sign-up, proving farm yields is required for the most recent 5 years (2004 through 2008). Additional decisions prior to sign-up require an estimate of 4 years of state yields, farm yields and national marketing year average cash prices from 2009-10 through 2012- 13. The likelihood is many farm operators will require an Excel spreadsheet in order to input actual farm yields along with 4 years of yield and price estimates. This would then allow the creation of “what-if scenarios” to better determine if ACRE enrollment was a viable risk management strategy.
Another new program offered as a part of the Food, Conservation and Energy Act of 2008 is the Supplemental Revenue (SURE) disaster program. This program too is optional for all crop farms nationwide beginning in 2008. To qualify for potential SURE payments annually, all crops on all farms in all counties were required to be insured. If crops could not be insured, then farm operators were required to purchase catastrophic (CAT) and/or Non-Insured Assistance Program (NAP) coverage. Additional qualifications for potential SURE claims are, that in the year of a loss, the insured would have to have one of the following occur: 1) the county in which they farm would have to declared a disaster by the Secretary of Agriculture, 2) the county in which they farm would be contiguous to a county declared a disaster, 3) their crops in that county would have to suffer from at least a 50% loss of revenue.
The interaction of yields, and especially the national marketing year average cash price, determined the actual revenue for the potential SURE claim. This interaction creates the need for a spreadsheet to determine whether a SURE payment is likely. Filing a SURE claim at the county FSA office would likely be self-directed by the farm operator. The potential SURE payment would not be made until one year following harvest, since the actual revenue that determined this SURE payment reflects the national marketing year average cash price. That final price is not determined until September each year.
Iowa State University (ISU) Extension Economics responded to these emerging needs by providing new ACRE and SURE on-line calculators. The primary spreadsheet developer was Dr. William Edwards, State Extension Farm Management Specialist. These calculators are also deemed “decision tools” as referenced for the more than 80 Excel spreadsheets available on ISU Extension Ag Decision Maker website. The calculators are user-friendly, and updated as changes to the farm program are released by FSA. New publications, newsletters and articles regarding the farm program were written and posted to the Ag Decision Maker and other ISU Extension web sites.
By late February, extension educators statewide had conducted more than 100 meetings, workshops, seminars and conferences with over 6,000 in attendance. Links on ISU Extension’s web sites had more than 5,000 unique visitors monthly since October. The ACRE calculator had more than 3,000 downloads while the SURE calculator was downloaded nearly 400 times.
Six live webinars were conducted on the major changes under the farm program’s commodity title. Another 12 webcasts were recorded, e-mailed and posted to both Extension’s and the Iowa Farm Bureau Federation’s web sites. More than 3,000 unique visitors participated in these types of distance delivery education featuring Power Point slides accompanied by the presenter’s voice.
Thousands of farm operators, landowners and other agribusiness professionals across Iowa and the nation have benefitted as a result of the ISU Extension’s web-based education efforts in response to the Food, Conservation and Energy Act of 2008.