Don’t Forget Those Generic Acres

• March 18, 2015
• Paul Neiffer

I was on the Farm Journal Farm Bill webinar yesterday and one of the subjects I covered was the cotton generic acres.  Because of the WTO rulings, the new farm bill does not have a cotton program (other than a special crop insurance STAX program).  However, for those farmers with old cotton base, they are not allowed to have what is called generic base.  The nice feature about generic base is that is can used for any covered crop on an annual basis.  This allows a farmer with generic base to either increase their base payments or allocate generic base to crops that they current do not have base acres.

For example:

Suppose Farmer Cotton has 200 cotton base acres, 100 corn and 100 wheat base acres.  During 2014, he grows 125 acres of corn, 125 acres of wheat and 100 acres of cotton.  Farmer Cotton is allowed to allocate 100 generic acres to both wheat and corn, thus increasing his base acres for each crop to 200 base acres or 400 total payment acres.  In addition, lets suppose that Farmer Cotton grew 125 acres of soybeans instead of wheat.  In this case, Farmer Cotton would have 200 corn base acres, 100 wheat base acres and 100 soybean base acres.

Therefore, although cotton growers did not get a program for cotton, in many cases, they actually end up with a better program since they get to allocate base acres to any covered crop that they grow each year.  This gives them more flexibility than most other row crop farmers.

There is one more webinar next Tuesday the 24th and it is designed to be a question only format.  If you still have any burning farm bill questions, I would suggest signing up for the webinar.  Here is a link to the sign up or to listen to the previous three webinars.

Paul Neiffer, CPA

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