The action comes after the American Soybean Association, National Sunflower Association and the U.S. Canola Association complained that the existing methods for establishing an oilseed base discriminated against farmers who rotate oilseeds with other crops.
“The Department found that the previous calculation used to determine oilseed bases when oilseeds were added to an existing 2002 Production Flexibility Contract (PFC) resulted in unintended disparities in the amount of oilseed bases that could be credited to farms,” USDA officials said in a press release issued today.
“This was particularly true for farms that planted oilseeds in a 100 percent year to year corn/soybean rotation when compared to farms that plant in a 50/50 corn/soybean rotation on the same farm.”
The officials noted that under the signup that began at Farm Service Agency offices on Tuesday, farmers could select one of five base options for the new direct and counter-cyclical payments.
Those include: 1) Retaining the 2002 PFC contract acres as the base, 2) Updating all bases on the farm using 1998-01 plantings, or 3) Using three other options that allow a producer to add oilseeds to existing PFC acres.
“Today’s announcement could provide producers additional oilseed bases under the latter three options, resulting in a more accurate reflection of current cropping practices,” the press release said.
The decision followed a letter written by the presidents of the three oilseed groups to the chairmen and ranking members of the House and Senate Committees on Agriculture.
In the letters, the presidents noted that the previous calculation methods could undercount eligible oilseed acreage by one-half for farms that have adopted annual whole-crop rotations.
“For example, a 100-acre farm with a 70-acre corn base, in annual rotation of 100 percent corn one year and 100 percent soybeans the next year during 1998-2001, would be able to count 30 soybean acres in excess of contract acres in only two years, for a four-year average of 15 eligible soybean acres,” the letter said.
“In contrast, the same farm in a 50-50 annual rotation, planting 50 percent corn and 50 percent soybeans each year, would count 30 soybean acres in excess of contract acres every year, for a four-year average of 30 eligible soybean acres.”
The writers said they did not believe Congress intended to penalize producers who find themselves in this situation.
“Many farmers responded to the opportunity for greater planting flexibility under the 1996 FAIR Act by introducing more convenient whole-crop annual rotations on small and mid-sized farms,” they said. “These producers should not lose valuable income support under the direct payment and counter-cyclical income support programs as a result of their planting practices.”
USDA said its Farm Service Agency (FSA) is modifying its computer software to reflect these changes. “Producers will be allowed to use the old formula so they can receive program benefits immediately,” the press release said. “USDA will accept updated base decisions using the new formula until April 1, 2003, with any additional payments to follow soon thereafter.”
It said USDA will provide additional information regarding this change on its Farm Bill website at http://www.usda.gov/farmbill .