- POLICY -
Editor’s note: Following are items of interest related to the new farm law. Producers are encouraged to get familiar with these topics and note applicable deadlines.
Direct/counter-cyclical payment program
To access the service, farmers must have an active USDA eAuthentication Level 2 account, which requires an online registration form at www.eauth.egov.usda.gov followed by a visit to the local USDA Service Center for identity verification. 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.
ACRE program not ready until spring
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 state and 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 through the 2012 crop year.
Payment limits & income qualifications
For commodity and disaster programs, the AGI 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. Rules possibly may be waived for environmentally sensitive land.