Modernizing Base Acres

Farm program payments are made based on historical planted acreage, i.e. base acres, not actual plantings, and therefore are not dependent on current production. This decoupling prevents farmers making annual planting decisions based on potential program payments, and instead allows market prices and expected returns per acre to influence planting decisions. With the 2018 farm bill process underway there is renewed interest in updating base acres relative to recent planting patterns. This article reviews the merits of a potential base acre modernization and maps the distribution of base acres relative to actual plantings during 2014 to 2017 on a commodity-by-commodity basis.

What Are Base Acres?

The 1996 farm bill decoupled farm program payments from actual planted acreage and instead made payments (not including crop insurance) based on a farm’s historical planted acreage. This decoupling provided significant planting flexibility that allowed farmers to plant program crops outside of their commodity-specific base and make annual planting decisions based on which crop provided the greatest expected return per acre.

Under current law, determining a farm’s program payment(s) is based on its historical base acres – even if those acres are not actually planted to that crop. Base acres are tied to the farm not the farm owner and represent the number of acres of a covered commodity eligible to receive program payments. Base acres were established in the 2002 farm bill and, up until the 2014 farm bill, mostly reflected planted acreage from 1998 to 2001.

The 2014 farm bill provided a voluntary one-time reallocation of base acres. Farmers with existing base acres were allowed to keep and then reallocate base acres to reflect covered commodities planted on the farm during the 2009 to 2012 crop years. Cotton base acres were converted to generic base acres and were the only acres coupled to actual planting decisions. A review of base acres…

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