Agriculture Secretary Ed Schafer announced farmers can begin signing up for the 2009 Direct and Counter-cyclical Payment program today.
The announcement, which came at 4:20 p.m. on Friday, should be good news for producers who have been waiting to request a 22-percent advance direct payment to help with the financing for their 2009 crops.
The 2008 farm bill required USDA to offer producers the 22 percent advance payment by Dec. 1. Farm groups and farm-state senators have been complaining about the “significant delay” in announcing the signup period.
“I have heard from farmers across Arkansas who, in addition to facing an extremely volatile market and working to overcome the damage wrought by natural disasters this year, are hampered in their ability to plan for the coming year,” Sen. Blanche Lincoln, D-Ark., said in a letter to Schafer.
“As we look for ways to boost our faltering economy, I hope you realize that publishing the 2008 farm bill implementing regulations could have a positive impact on the economy and provide a much-needed boost to rural America.”
USDA indicated it would begin issuing advance payments in December.
Schafer, who gave no explanation for the delay, also released new eligibility regulations for the farm program payments. He had indicated in October that he already had forwarded those rules to the Office of Management and Budget at the White House for review.
Producers will have until June 1 to complete enrollment in the Direct and Counter-cyclical Program. USDA said it will not accept late-filed applications as it has in the past.
Schafer also announced the basic rules for the optional Average Crop Revenue Election or ACRE program that Congress included in the Food, Conservation and Energy Act at the request of Midwest corn, soybean and wheat farmers.
Direct program payments are calculated using each farm’s base acres and payments yields, regardless of market prices. Farmers must sign up for the Direct and Counter-cyclical Payment program each year, which was creating an unusual level of uncertainty for producers.
“Farm program signup should already be under way, and producers should be receiving advance direct payments to use in financing their 2009 crops,” said Ricky Bearden, a Texas producer and National Cotton Council director, in a statement released by the NCC Dec. 9.
“Price volatility has caused many producers to delay marketing their crops so cash flow is critical and the advance payment option provided by Congress is increasingly important to farmers, suppliers and financial institutions. In addition, some producers would like to know the details of the ACRE program option so they can decide whether to enroll.”
Counter-cyclical payments will not be issued until the next marketing year. Those payments are issued only when the effective price for a commodity is below its target price. The effective price for each covered commodity and peanuts equals the direct payment rate plus the higher of the national average market price received by farmers during the 12-month marketing year or the national average loan rate.
USDA said the enrollment period for the ACRE program will begin in the spring. Producers may first enroll in the DCP program, elect to receive advance direct payments and then later modify their enrollment to include the ACRE program or they may wait and elect to enroll in DCP and ACRE at the same time in spring 2009.
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 2009 crop, the two-year price average will be based on the 2007 and 2008 crop years.
Farmers will receive an ACRE payment when both the state and the farm have incurred a revenue loss. For 2009, the payment is based on 83.3 percent 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. Farmers who sign up for ACRE will not receive a conventional counter-cyclical payment and will see their direct payment reduced by 20 percent and marketing assistance loan rates reduced by 30 percent.
Once a farmer enrolls in ACRE he cannot opt out during the life of the five-year 2008 farm bill. 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 direct payment rates for the 2009 crops are 28 cents per bushel for corn, 52 cents for wheat, 44 cents for soybeans and 35 cents for grain sorghum; $2.35 per hundredweight for long grain and medium grain rice; 6.67 cents per pound for upland cotton; and $36 per ton for peanuts.
The maximum counter-cyclical payment rate is 40 cents per bushel for corn, 65 cents for wheat, 36 cents for soybeans and 27 cents for grain sorghum; $1.65 per hundredweight for rice; 12.58 cents per pound for upland cotton; and $104 per ton for peanuts.
USDA is urging producers to make use of its eDCP automated Web site to sign up, but producers can go to any USDA Service Center or their administratively assigned center to complete their 2009 DCP contracts.
“The electronic DCP (or eDCP) service saves producers time, reduces paperwork and speeds up contract processing at USDA Farm Service Agency offices,” the press release announcing the signup said. “It is available to all producers who are eligible to participate in the DCP program and can be accessed at http://www.fsa.usda.gov/dcp.”
To access the service, it said, producers must have an active USDA eAuthentication Level 2 account, which requires filling out an online registration form at http://www.eauth.egov.usda.gov followed by a visit to the local USDA Service Center for identity verification.