Payments without Production: Why Farmers Need a Mandatory Base Acre Update

Haley Bickelhaupt

May 22, 2024  |  ICGA |  Legislation & Regulation |  Farm Policy

Farm bill proposals in the United States House and Senate could build policies on a flawed foundation.  

Since the 1980s, few things remain the same- including crops planted on American farm ground.  


Last Friday, the United States House Committee on Agriculture released its new farm bill. The proposal calls for a voluntary base acre update in the legislation’s commodity programs. Midwestern farmers are concerned a voluntary update promotes weak policy, increases regional disparity, and increases federal farm bill spending.  


“We don’t want to see an important program built on a shaky foundation,” Victoria farmer and IL Corn Growers Association President Dave Rylander. “We want a farm bill that incentivizes growth from the market and upholds the bill’s integrity for years to come.” Rylander supports a mandatory, not voluntary, base acre update. 


A farmer’s base acreage determines the amount of federal assistance a grower can receive -when market prices or revenues drop below a specific point. Payments are based on a crop’s reference price which is set by law and varies for each commodity. The current system was established in the 1996 Farm Bill but is often based on planting history from 1981-1983.  The changes implemented in the 1996 Farm Bill were aimed at “decoupling” support from planting decisions, to encourage farmers to grow crops based on market demand rather than government payments.  Therefore, payments may be made to farmers that haven’t grown an affected crop in years and potentially decades.  As time passed and voluntary base acre updates were allowed, the system has become further removed from reality.  


Here is where the problem lies- acres planted before 1996 don’t match acres planted today. As a result, some farmers can’t enroll in the program for support, and some receive payments on crops they don’t plant. “The 1996 Farm Bill is 28 years ago,” a report from the University of Illinois’s farmdoc said. “As the 1990s become further in the past, base acres likely will continue to diverge from planted acres… A mandatory update is likely needed in the future to cause base acres to be more reflective of actual planted acres. “ For example, rice base acres for 2024 are 4.2 million acres, but U.S. farmers have never planted more than 3.8 million acres in a year.  In 2024 the total amount of base acres eligible for peanut payments is 2.386 million acres. Over the past five years, the U.S. planted only 1.6 million acres on average.  The last time American farmers planted more than 2.3 million acres of peanuts was 1951.  


The opposite is true of other crops like soybeans and cotton.  In 2024, only 52.6 million acres of soybean base exist, while the average plantings over the past ten years amount to 84.5 million acres (a 38% difference). For cotton, total 2024 base acres at 7.5 million, but the US has never planted so few acres. These policies have a knock-on effect of impacting land prices. Farms with base in higher reference price crops are now worth more in the market than land in lower reference price crop base. Farms without any base tend to be worth less in the marketplace.


The inability to enroll new base acres into the program limits farmers with ground not enrolled in the program. Some farmers in northern Illinois own land without base as it was previously used for livestock production.  “My land without base carries more risk and puts me at a disadvantage compared to other farmers,” Randy DeSutter, a farmer in Woodhull, Illinois said “It does not offer me the same safety net as my land in the Commodity Program.”  


The IL Corn Growers Association (ICGA) and the National Corn Growers Association (NCGA) advocate for a mandatory update- the change would force farmers to report recent planting history, thus improving crop accuracy and allowing new farmers, or land to enroll. “Because the base acres used for the Agriculture Risk Coverage and Price Loss Coverage commodity programs do not reflect recent crop planting history, corn growers voted to adopt a new policy supporting a nationwide mandatory base-acre update. If enacted by Congress, this policy would modernize base acres and address the accessibility of these farm programs,” NCGA said in a statement, last July.  


The Congressional Budget Office reported a voluntary base acre could cost up to $10.8 billion from 2024-2033. Farrmdoc reported a mandatory update could raise spending only $1.6 billion. A voluntary update is guaranteed to increase spending as farmers can choice to enroll new acres in the program without foregoing less profitable ones.  ICGA calls on Congress to forego a voluntary base acre update and pursue honest, up to date data. 


“I want to see a program with honesty,” Rylander said. “We don’t need an inflated Commodity Program. We need a Title I that serves its purpose and reflects the actual needs of American farmers.”