USDA implementing new farm bill

The new farm bill — which the Bush administration opposed for many months — wasn’t completed until June 18. Although displeased with the legislation, the USDA realized a tidal wave of congressional support for the bill meant its passage was inevitable.

“Once it was clear what the outcome would be, we moved ahead, and on June 12 we announced all of our 2008 marketing loan rates,” said Agriculture Secretary Ed Schafer, during a press conference.

“We wanted to make that program available as quickly as possible to producers who may want to use it this year. Today (June 25) we’re announcing that sign-up for the 2008 Direct and Counter-cyclical payment program is now open. When producers sign up for the DCP, they will be eligible immediately for a 22 percent advance on their direct payment.”

Over the next few months, the USDA expects the advance payments will amount to $1 billion. Checks will start going out in early July to those who sign up immediately.

“Overall, we expect 1.5 million producers to participate in this program, and because of the delayed passage of this year’s farm bill, the late fee that normally applies to sign-ups after June 1 will not be charged this year.”

While the 2008 DCP program is “very similar” to its predecessor, the new farm bill did “make one immediate change to the DCP by ending payments to farms with less than 10 base acres, unless they are owned by a socially disadvantaged or limited resource farmer or rancher.”

Other program changes will require more time to implement and will necessitate USDA “issue new rules and handbooks and develop new software. We’ll announce those changes as soon as they are ready and as they come to be implemented.”

The need for new equipment and software surfaced when Schafer was asked whether the ACRE program would be in place by planting of winter wheat. He wasn’t optimistic and said a major concern is not to put rules in place that might “exacerbate the problems” being experienced by flooded Midwest producers.

As for needed equipment and software, “we’re working closely with Congress to obtain some additional implementation resources for the Farm Service Agency,” said Chuck Conner, USDA deputy secretary. “Those additional resources, both for personnel as well as for equipment, will be necessary in order for us to have any kind of timely implementation of the ACRE program.

“Our advisors tell us that the data that is necessary to implement ACRE simply cannot be put upon the current computer system … and there will need to be changes in that system before we can implement ACRE fully.”

Those advocating early disaster payments for flooded Midwest operations — including the American Farm Bureau Federation — are likely to be disappointed. “There is some question whether we have the statutory authority to do so,” said Schafer. “Currently some lawyers are saying yes and some no, which is not unusual.”

And there are two additional problems.

“One is, a year from this harvest season is when we can evaluate what a disaster payment might be. As you know, the program is based on an annual average price, and we won’t know that until a year from October.

“The other issue is the Farm Revenue Program. We see prices that are very volatile these days.” If a producer loses his corn crop, it’s possible other crops on the operation will “see increased prices, and the total farm revenue will be enough so that they don’t get a disaster payment on the corn.

“So it’s going to be almost impossible to estimate what a cost would be, and if we can’t estimate what a payment might be, it’s pretty hard to give you an advance or a portion of that. So, unless Congress sees fit to make some changes in the way we have to deliver this program, I don’t think an advanced payment” is likely.

Schafer was also asked about allowing early release of Conservation Reserve Program acreage. Iowa Sen. Charles Grassley has advocated the release of 24 million CRP acres.

“The first decision we made was in the flood areas in the Midwest — to be able to move cattle to CRP land immediately. We’re pursuing that in the flood states … we’re re-evaluating all options as we look at the impact of the (Midwest) floods and the cropping patterns across the country.”

Originally Schafer was to make a CRP decision on the 2009 crop by September. Now, “we’ve accelerated that decision process. We’re meeting about these things as we speak, and I hope to be making some announcements on which way we’re going to go over the next couple of weeks.”

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