Implementing a new farm law always comes with the tedious task of developing and implementing the rules and regulations necessary for the program to run as smoothly as is possible.
The combination of implementing a new farm bill simultaneously with the arrival of a new administration makes the chore even more difficult.
“Changing administration slowed implementation of the 2008 law,” says Candace Thompson, acting director of the Farm Services Administration’s Production, Emergencies and Compliance Division. “We’re getting new people up to speed,” she said.
Thompson discussed changes in the farm law during the recent American Cotton Producers/Cotton Foundation summer meeting in Nashville. Changes in farm payment programs, including the new Alternative Crop Revenue Enhancement (ACRE) and new payment limitations pose challenges, Thompson said.
“Final rules on payment limitations will be published for 2010,” she said. “It’s a controversial subject and is the first change in payment limitations in 20 years. I’m not sure everyone will be satisfied with what we come up with, but we need to get the final rules out so farmers have consistency for the 2010 crop. We’re working on regulations.”
Part of the challenge, she said, is defining farm and non-farm income. “The limitation was written broadly and is hard to interpret. We’re also validating adjusted gross income (AGI) with the IRS and not requiring county offices to review tax returns.”
The goal is to identify entities that might exceed new AGI limits.
Corpus Christi, Texas, cotton farmer Jimmy Dodson pointed out that some farmers are trying to plan and make investments five to seven years out and relying on a program that is temporary.
Thompson said the FSA goal is to develop regulations that will carry farmers through 2012. “We’re tweaking a program that has not been touched in 20 years,” she said. “It’s difficult, but we want to bring some certainty to it.”
Dodson said many regulations being placed on farm operations “are not realistic. Regulations don’t match the real world.”
Thompson said the ACRE option has not been popular. Of the nearly 1.5 million farms enrolled in the government farm programs, only 28,000 have signed up for ACRE. The rest stayed with the direct payment option. Most of the ACRE signees are in the Midwest with Illinois, Iowa, Nebraska, Oklahoma and South Dakota in the top five states signing up for the new program.
In cotton states, Texas’ 44 farms enrolled in ACRE leads the pack, followed by Missouri with 40, Louisiana with 18, Tennessee with eight, North Carolina with seven, Alabama with four and Virginia with three.
Thompson also discussed the Conservation Reserve Program, which has a new acreage cap, 32 million acres, down from 33.7 million. Nearly 4 million acres will expire in 2009 and some of those will come from “dust bowl areas,” she said. The new acreage cap limits flexibility, she said, to keep some of that acreage in conservation practices.
She said other programs bring new opportunities for farmers. The Biomass Crop Assistance Program will support production of energy crops. “We’re just getting this program off the ground,” she said.
A Farm Storage Facility Loan Program will add hay, renewable biomass and cold storage options.
A new risk management program, Supplemental Revenue Assistance Payments (SURE), “will begin later this year,” Thompson said. “It’s a whole farm risk management program. It’s a simple concept but is quite complicated in implementation. We hope to have signup in November.”
She said the secretary of agriculture’s disaster designations are important for SURE. “Most of the Southwest has disaster designation for 2008,” she said. “And we have significant acreage in Texas designated for 2009.”
She said an emergency conservation program available to areas following disasters to improve damaged land is underfunded.
Thompson said the agency received more than 5,000 public comments following publication of the payment limitation rules and about 73 percent said the goals should be more restrictive and 2 percent suggested exceptions for small farms.
She said the term “actively engaged” also poses interpretation problems.