Agriculture Secretary Tom Vilsack has announced that USDA will issue approximately $121 million in partial 2009-crop counter-cyclical payments to producers with upland cotton and peanut base acres enrolled in USDA’s Direct and Counter-cyclical Payment (DCP) program.
USDA will not issue final 2008-crop counter-cyclical payments for long-grain rice and short-and medium-grain rice because their average market prices exceed levels that would trigger these payments.
The 2008 farm bill provides that one partial counter-cyclical payment, in an amount up to 40 percent of the projected counter-cyclical rate, may be issued after 180 days of the marketing year. The projected counter-cyclical payment rate is the amount by which the target price of each commodity, specified by the 2008 farm bill, exceeds its effective price. The effective price equals the direct payment rate plus the higher of either the projected national average market price received by producers during the marketing year or the national average loan rate for the commodity.
The partial 2009-crop upland cotton counter-cyclical payment rate is 1.03 cents per pound, equal to 40 percent of the difference between the target price of 71.25 cents per pound and an effective price of 68.67 cents per pound. The effective price is equal to the projected average market price of 62 cents per pound plus the direct payment rate of 6.67 cents per pound.
The partial 2009-crop peanut counter-cyclical payment rate is $9.20 per ton, equal to 40 percent of the difference between the target price of $495.00 per ton and an effective price of $472.00 per ton. The effective price is equal to the projected average market price of $436.00 per ton plus the direct payment rate of $36.00 per ton.
Under the 2008 farm bill, producers are required to repay any amount by which the partial payment exceeds the actual counter-cyclical payments determined after the end of the marketing year.
For all commodities other than upland cotton and peanuts, the market price projections exceed levels that would trigger these payments. Thus, no partial 2009-crop counter-cyclical payments will be issued for wheat, barley, oats, long-grain rice, short- and medium-grain rice, pulse crops, corn, grain sorghum, soybeans, and the other oilseeds.
For each commodity, the counter-cyclical payment for each crop year equals 85 percent of the farm's base acreage multiplied by the farm's counter-cyclical payment yield multiplied by the counter-cyclical payment rate.
For more information on the direct and counter-cyclical payment programs including a table displaying the target price, projected average market price, loan rate, direct payment rate, effective price and projected counter-cyclical rates, visit your local FSA office or the FSA DCP Website: http://www.fsa.usda.gov/dcp.