May 7, 2004
Don't forget: June 1
Signup for the Farm Service Agency's (FSA) Direct and Counter-Cyclical Program (DCP) continues. In order to avoid late filing fees, producers must visit FSA offices to sign up before the June 1, 2004 deadline.
"This is the second year of enrollment for the DCP," said Juan M. Garcia, Agricultural Program Manager/Texas State FSA. "Unlike the Production Flexibility Contract program (PFC), this program authorized by the 2002 Farm Bill, requires producers to sign contracts annually."
The 2002 Farm Bill authorizes direct and countercyclical payments to enrolled producers. Both payments are computed using the base acres and payment yields established for each farm. Producers receive direct payments at rates established by statute regardless of market prices. Countercyclical payment rates vary depending on market prices and are issued only when the effective price for a crop is below the target price for the commodity.
Producers can request 50 percent of their direct payments to be issued any month between December 2003 and September 2004. However, Garcia said before payments can be made, approved 2004 contracts, other required eligibility forms and 2004 rental agreements, if applicable, must be on file. Payments will be computed by taking 85 percent of the applicable crop base acreage times the program payment yield times the payment rate applicable to the crop, he said.
Both direct and countercyclical payments are computed using the base acres and payment yields established for each farm last spring, which are effective through 2007. Producers will receive direct payments at rates established by statute regardless of market prices. Countercyclical payment rates are made when the average market price falls below the target price minus the direct payment rate. The earliest possible counter-cyclical payment would be in October 2004.
Before signing the contract to receive the 2004 direct payments, Garcia cited the following land and business issues that must be addressed:
Will you continue to rent the same property you rented last year? If not, notify the office so we can update your farm records or perform a reconstitution to remove land from your farming operation.
If the land in your operation won't change, do you have a signed lease from the landowner? A signed rental agreement indicating you have land cash leased for 2004 is required to receive an advance payment.
A cash-rent certification may be used if you rented the land last year; however, an advance payment cannot be issued for the farm until July 1, 2004.
Are you changing the structure of your operation? For example, is the farm converting from an individual to a partnership or Limited Liability Corporation (LLC)? Are you changing shares within the business or is one of the shareholders leaving the business? These questions need to be answered prior to sign-up.
Applications received after June 1, 2004 will be considered late-filed. Late-filed applications will be accepted through September 30, 2004, but will incur a $100 late filing fee per farm. FSA has no provisions allowing for a contract after September 30. Producers also have the option of not participating in the DCP program for 2004. Any farm not enrolled in the 2004 DCP program will retain eligibility for the 2005 DCP program.
To apply for the 2004 DCP program or obtain additional information, contact your local USDA Service Center, or county FSA office. Or visit FSA's Web site at: http://www.fsa.usda.gov.