Base language leads to confusion on LDPs

That was the case with a recent column about the perils of marketing the 2001 crops. The column said some experts were suggesting that producers place their cotton in the CCC loan and redeem it with marketing certificates if they expect to exceed the limit on marketing loan gains.

It also said: “While the emergency assistance legislation signed by President Bush doubles the payment limit on marketing loan gains, it does not provide for LDPs (loan deficiency payments) on non-base acres. With so many farmers planting cotton on ‘non-traditional’ acres this year, the inability to receive a LDP on those fields could be devastating.”

Several readers e-mailed us because they planted cotton in 2001 although they did not have a cotton base. One Texas grower took the article to his county Farm Service Agency office.

“They told me that if I am a participating farm and have certified my acres there is no problem,” he wrote. “Several other farmers in my area also interpreted the article as I did.”

Why the confusion? Well, it comes back to a misunderstanding about the use of the word “base.” The Farm Service Agency person who reviewed the original article said that he considered “non-base” cotton to be cotton on a farm with insufficient base.

“What I meant by ‘non-base’ cotton was cotton not backed by ‘base’ or payment acres,” he said. “The farm has 100 acres of payment base (corn, wheat or another program crop), but has 150 acres of cotton. Fifty acres of cotton are non-base and can’t go into the CCC loan.”

Others have interpreted the rules to mean that a payment base qualifies the farmer for LDPs on all his acreage no matter how small that base might be. Who’s right? The folks in the county FSA office have the last word, so I would go with them.

The Senate Agriculture Committee attempted to pass language waiving the base requirement for farmers without a production flexibility contract or PFC, as was the case in 2000. It was not successful, but National Cotton Council officials say they will continue to ask Congress for a waiver this fall.

The waiver could be doubly important for farmers this fall as December cotton futures and other commodity prices continue to fall in the wake of the economic uncertainty following the terrorist attacks.

As noted here earlier, it appears increasingly unlikely that Congress will write a 2001 farm bill given the emergency measures now being considered. Some farm-state lawmakers reportedly are putting disaster assistance legislation together to help producers who face weather problems and plummeting commodity prices.

Footnote: On a day following the attacks, a national radio commentator criticized administration officials for planning to send 100,000 metric tons of U.S. wheat to Afghanistan. What better way could our government send a message that we have no quarrel with the Afghans, only with the cowards who are hiding among them?

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