USDA has not set the dates for signup for direct and counter-cyclical payments authorized in the new farm bill, but it will be sooner rather than later, according to Hunt Shipman, deputy under secretary for farm and foreign agricultural services at USDA.
“We have to have the interim final rule written by Aug. 10, but we don’t have to have the rule in place to begin signup,” he said. “We anticipate that once it begins, the bulk of producers will sign up in the first few weeks. We will not be able to issue a check to a producer until he has signed a new contract.”
Speaking at a meeting of the American Cotton Producers and The Cotton Foundation in Atlanta on July 24, Shipman said the Farm Service Agency has begun mailing letters to program crop producers advising them of the planted and prevented planted acres they have reported to FSA.
The FSA letter asks producers to review the Summary Acreage History Report in the letter and report any inaccuracies or updates by Aug. 31. Producers will need to provide verifiable documentation, including seed receipts, production records and crop insurance records, to correct any inaccuracies or update their records.
“A number of our people are in Chicago this week, undergoing training on updating bases and yield information as permitted in the new farm bill,” he said. “They will go back to their state and county offices and train their people.”
Under the Farm Security and Rural Investment Act of 2002, farmers may update their base acreages to reflect their planted and considered planted acres for the 1998-2001 period or they may add oilseed planted and considered planted from 1998 to 2001 to their existing base.
They can update their yields — for the new farm bill’s counter-cyclical payments — by taking 70 percent of the difference between their current base yields and 1998-2001 average yields or by taking 93.5 percent of the average yields in the 1998-2001 period.
Shipman says the farm bill provides USDA with an expedited process to promulgate the rules. “For many of the farm bill provisions, particularly for the commodity programs, we will be able to publish an interim final rule, which will not require a formal comment period.
“We anticipate that the rule-making process should be complete in August, and that producers will have ample time to see the rule and come to the county FSA offices and discuss their options.”
The checks that will be issued after they determine whether to update base or yield are what Shipman refers to as “top-up” payments or payments for the difference between the AMTA payments made under the Federal Agricultural Improvement and Reform or FAIR Act of 1996 and the payments authorized under the new farm bill.
Currently, FSA is issuing the final payments owed to producers under the old FAIR Act. Once signup is completed, FSA will begin sending out checks for the difference in the old farm bill and the new or, in the case of cotton, 1.11 cents per pound (6.67 cents under the new law — 5.56 cents under the old).
(For rice, the top-up payment should be 31 cents per hundredweight; for corn, 2 cents per bushel; for wheat, 6 cents per bushel; and sorghum, 4 cents per bushel.)
Shipman said that when producers receive the latest letter — an earlier letter sent in May outlined the new farm bill’s provision — they should review the Summary Acreage History Report as quickly as possible.
“Those who would like to update their base and yield information can come into their county FSA office and discuss their options,” he said. “We will have a new form with a row for each farm serial number farmed by that operator.
“I’ve been quoted extensively about the shoe-box approach,” he said, referring to a comment he made during an earlier farm bill press conference with Agriculture Secretary Ann Veneman. “You may not have to go with the shoe box, but you must be able to provide verifiable documentation if you decide to update your records.”
Shipman cautioned that growers who bring in crop insurance records may not put APH or actual production history yields into the calculations because those reflect 10 years of yield history along with “plugged-in” numbers to replace disaster years. “They may be useful as background information, however,” he said.
Once farmers have completed signup and FSA has issued the “top-up” payments, the agency will begin focusing on making the first advance counter-cyclical and the first advance fixed or direct payments under the new law.
The farm bill says the advance counter-cyclical payments will be made in “October or as early as practical,” Shipman said.
On a question that has been drawing considerable attention in farm circles, Shipman said that when a tenant farmer is renting from multiple landowners, all must approve before the land can be enrolled in the new farm bill or bases and yields updated.
He said FSA would also require that new powers of attorney be executed for all landowners participating in the new farm bill.
Asked how FSA would attribute yields on a farm with two or more owners, Shipman said it would be up to the renter to work out the division with the owners. “That’s the way we’ve done it in the past on reconstitutions,” he said.
Shipman noted that Texas A&M University, Louisiana State University, Mississippi State University and other land-grant universities and some farm organizations have developed computer programs to help growers calculate their best option on updating bases and yields.
He said county Farm Service Agency personnel also would provide as much help to producers as they can in helping them make decisions on the updates. “We will also be relying on county Extension agents and university specialists because they have experience in working with producers.”
County FSA offices now have desktop computers that will run the computer software to administer programs under the new bill, he said. “It may take longer to write the software than in the past, but we think we will provide better service in the end,” he said.
Unlike the 1996 farm bill, farmers will sign up for the new farm programs from year-to-year. However, they will have only one opportunity to update their acreage bases and yields.
“Under the old farm bill, farmers were locked into their fixed payments and, in some cases, locked out of eligibility for the marketing loan for the life of the farm bill,” he said. “We think annual signups will giver farmers more flexibility in dealing with the changes that will occur over the six-year life of the farm bill.”
Shipman noted that some uncertainty remains because of the possibility that appropriations bill amendments could be introduced limiting the amount of payments cotton and rice producers may receive under the new farm bill.
“Hopefully, we won’t go down that path,” he said. “Secretary Veneman has said she believes Congress should wait until the payment limits study commission has time to be formed and reports its findings before any further actions are taken.”
He also said USDA officials have been “disappointed” at the criticism that has been directed at the farm bill, some at the cotton provisions.
“There have been claims that the farm bill is protectionist, but that is absolutely false,” he noted. “This farm bill does not increase tariffs and it does not increase farm subsidy spending above the level of the payments in the 1996 farm bill and the ad hoc disaster payments of the last four years.
“We don’t expect the new law to significantly alter the number of the planted acres in the United States and certainly not like what occurred after the passage of the 1996 farm law.”