Special Report: D.C. Update

CS Feb 09 CoverAgricultural Leaders In The Obama Cabinet
Secretary of Agriculture Tom Vilsack, 58, former governor of Iowa, served as governor from 1999 until 2006 and was a promoter of “value-added agriculture,” promoting ethanol from agricultural products plus biotech seeds to expand yields and production in corn and soybeans. He advocated agri-tourism as a way to keep the state from losing youth that cannot easily get back into farming. Vilsack was born in Pittsburgh, Pa., and later moved to Mount Pleasant, Iowa, after marrying an Iowa girl and joining her father’s law practice.

The Obama Cabinet will have other agricultural leaders, including former Sen. Ken Salazar of Colorado who served on the Agriculture Committee and has been nominated as Interior Secretary. Health and Human Resources nominee Tom Dashchle is a seasoned agricultural leader as well as Ray LaHood, nominee for Transportation Secretary from rural Illinois.

No Farm Bill is expected during the next four years, but minor changes are often implemented if the legislation fails. Democratic Sen. Tom Harkin of Iowa will continue as chairman of the Agriculture Committee. He worked closely with Sen. Saxby Chambliss of Georgia but the Republicans have not made their choice public. In the House, Collin Peterson, Democrat from Minnesota, will continue as Ag Committee Chairman. Rep. Bob Goodlatte of Virginia has been replaced by Oklahoma Republican Frank Lucas.
Sign-Up For Direct And Counter-Cyclical Payment Program
Farmers may enroll in the 2009 Direct and Counter-cyclical Payment (DCP) Program for farms with base acres at local USDA service centers until June 1, 2009. Farmers are urged to use the DCP automated Web site to sign up; however, farmers can visit any USDA Service Center to complete their 2009 DCP contract. Officials said the electronic sign-up saves producers time, reduces paperwork and speeds up contract processing at USDA Farm Service Agency (FSA) offices. The program is located on the Web at www.fsa.usda.gov/dcp.

To access the service, producers must have an active USDA eAuthentication Level 2 account, which requires them to fill out an online registration form located at www.eauth.egov.usda.gov followed by a visit to the local USDA Service Center for identity verification.

USDA computes DCP Program payments, using base acres and payment yields established for each farm. Eligible producers receive direct payments at rates established by statute regardless of market prices.
Eligible producers may request to receive advance direct payments based on 22 percent of the direct payment for each commodity associated with the farm. USDA started the advance direct payments in December 2008.

ACRE Program Not Ready Until Spring
Producers eligible for the DCP will also be eligible for the Average Crop Revenue Election (ACRE) Program.

The enrollment period for ACRE will begin in the spring. Producers may first enroll in the DCP, elect to receive advance direct payments and later modify their enrollment to include ACRE, or they may wait and 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. An ACRE payment is issued when both the state and the farm have incurred a revenue loss. The payment is based on 83.3 percent (85 percent in 2012) 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. In exchange for participating in ACRE, in addition to not receiving counter-cyclical payments, a farm’s direct payment is reduced by 20 percent, and marketing assistance loan rates are reduced by 30 percent. The decision to enroll in the ACRE Program is irrevocable. 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.
Payment Limits & Income Qualifications
USDA has announced changes to the Adjusted Gross Income (AGI) qualifications, program payment limitations and direct attribution for the Farm Service Agency and the Natural Resources Conservation Services. The public can comment on the interim final rule for the next 30 days after publishing in the Federal Register. Secretary of Agricul-ture Ed Shafer says that this is a step in the right direction to ensure that program benefits are targeted to active qualifying farmers and ranchers.

For commodity and disaster programs, the Average Gross Income was reduced from $2.5 million from all sources to a three-year average non-farm AGI of $500,000. Also, under the new regulations, an individual or entity must have a three-year average AGI less than or equal to $750,000 per year from farm income in order to qualify for direct payments issued under the Direct and Counter-cyclical Program.

For conservation programs, the average non-farm AGI limitation is $1 million or less for eligibility. An individual or entity who has non-farm AGI in excess of $1 million remains eligible for conservation programs only if 66.66 percent or more of the total AGI is derived from farming, ranching and forestry operations. If environmentally sensitive land is of special significance, these rules may be waived. Check with the local Farm Service Agency for details.

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