Agriculture Secretary Ed Schafer announced USDA will begin issuing $315 million in partial 2007-crop counter-cyclical payments for upland cotton and peanuts based on the market outlook for those crops.
Schafer made the announcement during a speech at the National Cotton Council's 70th annual meeting in Memphis, Tenn. The payments will include $300 million for cotton and $15 million for peanuts.
“I'm happy to announce that based on market figures released Feb. 8, USDA has decided to issue partial payments for the 2007 counter-cyclical program at the maximum level of 40 percent,” he said.
“With a payment rate of 3.09 cents a pound we expect about $300 million in payments.”
The 2002 farm bill authorizes preliminary partial payments for the 2007 crop to be made six months after the start of the marketing year, which began on Aug. 1, 2007, for these commodities. Preliminary payments must be refunded if full-year price calculations result in a lower payment rate.
The 2007-crop year projected partial payment rates, equal to 40 percent of the projected amount, are 3.09 cents per pound for upland cotton and $7.60 per short ton for peanuts.
Producers may receive counter-cyclical payments when effective prices for eligible commodities are less than their respective target prices specified in the 2002 farm bill.
USDA calculates CCPs based on the calculated rate and on historical base acreage and payment yields, not current production.
For the 2007 crop, if CCPs are required to be paid, USDA issues CCPs in two installments.
The first payment may not exceed 40 percent of the projected payment and is made after the first six months of the marketing year.
USDA makes the final calculation after the end of the marketing year and an additional payment or refund demand is made accordingly.
USDA calculated CCP rates using the February World Agricultural Supply and Demand Estimates, released on Feb. 8.
More information on DCP is available at local FSA offices and on FSA's Web site at: http://www.fsa.usda.gov.