Farmers who have been unable to obtain past production records on new farms they are renting or operating will be allowed to use a “county committee” yield when they sign up for the new farm bill.
That's one of the actions announced last week by Agriculture Secretary Ann Veneman aimed at speeding signup for the Direct and Counter-cyclical Payment Program of the 2002 farm bill. USDA estimates that about one-third of eligible farmers had signed up for the program at the end of January.
The secretary also said USDA would begin making a second advance counter-cyclical payment for upland cotton, rice and peanuts in early February as authorized by the 2002 farm bill. Farm organizations have been urging her to make the second round of payments to help producers cash flow their operations for new farm loans.
Under the new farm bill, producers have until April 1 to update their acreage bases and yields for the new Counter-cyclical Payment Program and until June 2 to complete signup for the remaining farm programs.
Veneman said allowing county FSA committee to establish a yield, based on similar farms in the local farming community or the LDP records for the specific farm, should help more producers complete signup, which she said had increased by 20 percent in the last 30 days.
“We have seen considerable progress during the past month on farm bill signup,” said Veneman. “The steps we are taking today should help those producers who have had difficulties obtaining some of their records due to circumstances beyond their control.”
She said that today's actions should assist those landowners who are unable to obtain production evidence to prove yields for their program payments. “The inability to obtain this information may be because the landowner has recently purchased a farm or part of a farm and historical production evidence cannot be obtained from the previous producer.”
This change is effective immediately and will be applicable to counter-cyclical yields for those producers electing to update their bases for eligible commodities, and for direct payment yields for oilseeds, the secretary noted.
“Prior to these revisions, producers applying for these programs would have had to accept 75 percent of the county average yield,” she said. “Those farmers who have already accepted the 75 percent county average may take advantage of this new procedure by contacting their local USDA Service Center.”
Veneman said the sign-up average for the major grain and Southern states, which represent more than half of the total number of eligible farms nationwide, is 41 percent. At the current rate of sign-up, USDA would reach more than 60 percent of eligible farmers signing up nationwide and more than 80 percent of the major grain/Southern state farmers) by the April 1 deadline.
USDA expects that about 30 percent of landowners will choose to retain their existing yields and roll their historical program flexibility contract base and yield numbers forward.
“Approximately one-third of eligible farmers have signed up, and we expect another large segment, perhaps close to a third, will choose to retain their existing Production Flexibility Contract yields and simply roll them forward, which accounts for about two-thirds,” said J.B. Penn, undersecretary for Farm and Foreign Services.
“We now are focusing on getting the remaining one-third of producers enrolled in the next two months.”
Both Veneman and Penn noted that with the April 1 deadline fast approaching, producers who have yet to begin the sign-up process should contact their local USDA Service Center or FSA office as soon as possible to review program details and options.
Farm organizations applauded Veneman's announcement of the second advance counter-cyclical payment for cotton, rice and peanuts.
“We estimate this (the second advance CC payment) will total about $610 million for our farmers,” she said. “This action meets the schedule of the 2002 farm bill and provides timely benefits to farmers.”
The Farm Security and Rural Investment Act of 2002 provides for two advance payments, in October and February, under the farm bill's Direct and Counter-cyclical Program and a final payment after close of the marketing year.
The first partial counter-cyclical payment was 35 percent of the entire projected rate and began on Oct. 1, 2002. The first partial counter-cyclical payment rate for upland cotton was 4.8 cents per pound; for rice, 58 cents per hundredweight; and for peanuts, $36.40 per short ton.
The second partial counter-cyclical payment rate for upland cotton is 9.6 cents per pound; for rice, $1.16 per hundredweight; and for peanuts, $72.80 per short ton. These payments are 70 percent of the total projected counter-cyclical payment, less any counter-cyclical payments already received in the first partial payment.
Final counter-cyclical payments will be determined at the end of the respective marketing year for each crop. Producers who receive total partial payments exceeding the actual counter-cyclical payment for each respective crop must repay any excess amounts.
For each commodity, the counter-cyclical payment equals the counter-cyclical payment rate times 85 percent of the farm's base acreage times the farm's counter-cyclical payment yield for each crop. The counter-cyclical payment rate is the amount by which the target price of each covered commodity exceeds its effective price.
The effective price equals the direct payment rate plus the higher of: (1) the national average market price received by producers during the marketing year, or (2) the national loan rate for the commodity.
Producers can also request 2002 direct payments at their local USDA Service Center anytime during the sign-up period. For each commodity, the direct payment equals the direct payment rate times 85 percent of the farm's base acreage times the farm's direct payment yield.
The National Cotton Council and both rice producer groups, the U.S. Rice Producers Association and the U.S. Rice Producers Group had asked the secretary to make the payment available.
A letter written by Sens. Richard Shelby, R-Ala., and Zell Miller, D-Ga., and signed by 10 other senators cited data that indicates the CCP rate for cotton, rice and peanuts is expected to be the maximum under the law. Thus, making a partial (advance) available will assist producers experiencing cash flow difficulties due to disastrous losses and chronically low prices, the senators said.
For more information on DCP, contact a local USDA Service Center or visit the USDA Farm Service Agency's Website at: http://www.fsa.usda.gov.