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USDA begins sending out advance direct payments for 2008

Jul 9, 2008 11:14 AM

Farmers have begun receiving $1.15 billion in direct payments for the 2008 crop year, USDA officials announced. The money represents the advance payments growers could request when they signed up for the Direct and Counter-Cyclical Payment program.

The payments began going out on Monday, July 7 and could help give producers much-needed help for dealing with sharply higher fuel, fertilizer and seed costs, agricultural economists said.

“We pledged to make the DCP program available to producers as quickly as possible,” said Agriculture Secretary Ed Schafer. “Signup began June 25th, and we are distributing payments to those producers who elected to receive a 22 percent advance payment at enrollment.”

To receive direct payments, an individual or entity must be a producer on a farm with base acres enrolled in the DCP. Producers may elect to receive a 22 percent advance payment when they enroll in the DCP. Base acres are established on a farm for covered commodities and peanuts based on historical plantings.

For each covered commodity and peanuts, the direct payment for 2008 equals 85 percent of the farm’s base acreage for the crop, times the direct payment yield for that crop, times the direct payment rate for that crop. The Commodity Credit Corporation reduces the final direct payment by any advance direct payment. Final direct payments will be issued after Oct. 1, 2008.

Commodities with base acres eligible for direct payments and their 2008 rates are: corn, $0.28 per bushel; grain sorghum, $0.35 per bushel; oats, $0.024 per bushel; soybeans, $0.44 per bushel; other oilseeds (canola, crambe, flaxseed, mustard seed, rapeseed, safflower, sesame seed, sunflower seed), $0.80 per hundredweight; peanuts, $36 per ton; long grain and medium grain rice, $2.35 per hundredweight; upland cotton, $0.0667 per pound; and wheat, $0.52 per bushel.

Final direct payments will be issued after Oct. 1.

The DCP program, first authorized in 2002, and re-authorized by the 2008 farm bill with some modifications, provides direct and counter-cyclical payments to producers who annually enroll their farms in the program.

Eligible farms are those farms that have base acres established for barley, corn, sorghum, oats, canola, crambe, flaxseed, mustard seed, rapeseed, safflower, sesame seed, sunflower seed, peanuts, rice, soybeans, upland cotton, and wheat.

A farm’s base acres were established using the historical plantings of those crops on the farm. Direct payment rates are fixed and are prescribed by law. Counter-cyclical payments provide support when prices are below certain statutorily set prices.

USDA’s Farm Service Agency distributes direct payments for the Commodity Credit Corporation. For more information on DCP, visit your local USDA Service Center or http://www.fsa.usda.gov.

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