2010 DCP, ACRE signup begins
Oct 8, 2009 10:05 AM, Farm Press Editorial Staff
Enrollment for the 2010 Direct and Counter-cyclical Program (DCP) and the Average Crop Revenue Election (ACRE) program has begun and will continue through June 1, 2010.
USDA is urging producers to make use of the eDCP automated website to sign up, or producers can visit any USDA Service Center to complete their 2010 DCP or ACRE contract.
The electronic service saves producers’ time, reduces paperwork and speeds up contract processing at USDA Farm Service Agency (FSA) offices. It is available to all producers who are eligible to participate in the DCP and ACRE programs and can be accessed at www.fsa.usda.gov/dcp.
To access the service, producers must have an active USDA eAuthentication Level 2 account, which requires filling out an online registration form at www.eauth.egov.usda.gov followed by a visit to the local USDA Service Center for identity verification.
USDA computes DCP Program payments using base acres and payment yields established for each farm. Eligible producers receive direct payments at rates established by statute regardless of market prices.
For 2010, eligible producers may request to receive advance direct payments based on 22 percent of the direct payment. USDA will issue advance direct payments beginning Dec. 1, 2009.
Counter-cyclical payment rates vary depending on market prices. Counter-cyclical payments are issued only when the effective price for a commodity is below its target price. The effective price is the higher of the national average market price received during the 12-month marketing year for each covered commodity and the national average loan rate for a marketing assistance loan for the covered commodity.
The optional ACRE program provides a safety net based on state revenue losses and acts in place of the price-based safety net of counter-cyclical payments under DCP. A farm’s payment is based on a revenue guarantee calculated using a five-year average state yield and the most recent two-year national price for each eligible commodity.
For the 2010 crop, the two-year price average will be based on the 2008 and 2009 crop years.
An ACRE payment is issued when both the state and the farm have incurred a revenue loss. The payment is based on 83.3 percent (85 percent in 2012) of the farm’s planted acres times the difference between the state ACRE guarantee and the state revenue times the ratio of the farm’s yield divided by the state expected yield.
The total number of planted acres for which a producer may receive ACRE payments may not exceed the total base on the farm.
In exchange for participating in ACRE, in addition to not receiving counter-cyclical payments, a farm’s direct payment is reduced by 20 percent, and marketing assistance loan rates are reduced by 30 percent.
“When you consider rising input costs, a more volatile commodity market and other operation challenges, ACRE is a very timely addition to grower members’ set of risk management tools,” said Darrin Ihnen, president of the National Corn Growers Association.
“While the enrollment for last year is relatively small compared to the 1.5 million farms that opted to remain in the regular Direct and Counter-cyclical Program, NCGA was pleased with the participation number for the first year the new ACRE program was offered.”
USDA records show at least 130,000 applications have been approved, with many more still waiting to be processed. These applications represent roughly 10 percent of all farmable land.
The decision to enroll in the ACRE Program is irrevocable. The owner of the farm and all producers on the farm must agree to enroll in ACRE. Once enrolled, the farm shall be enrolled for that initial crop year and will remain in ACRE through the 2012 crop year.
The June 1, 2010, deadline is mandatory for all participants. USDA will not accept any late-filed applications.
More information on DCP and ACRE is available at your FSA county office and www.fsa.usda.gov.
