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- FARM POLICY -

USDA Issues Direct Payments


America’s farmers will receive up to $1.15 billion in 2008 advance direct payments, beginning last month.

“We pledged to make the direct and counter-cyclical payment program (DCP) available to producers as quickly as possible,” says Agriculture Secretary Ed Shafer. “Signup for the program began June 25, and we are distributing payments to those producers who elected to receive a 22 percent advance payment at enrollment.”

To receive direct payments, an individual or entity must be a producer on a farm with base acres enrolled in the DCP. Producers may elect to receive a 22 percent advance payment when they enroll in the DCP.

Crop History Is Important

Base acres are established on a farm for covered commodities and peanuts based on historical plantings. For each covered commodity and peanuts, the direct payment for 2008 equals 85 percent of the farm’s base acreage for the crop, times the direct payment yield for that crop, times the direct payment rate for that crop.

The Commodity Credit Corporation reduces the final direct payment by any advance direct payment. Final direct payments will be issued after October 1, 2008.

Commodities with base acres eligible for direct payments and their 2008 rates are: barley, $0.24 per bushel; corn, $0.28 per bushel; grain sorghum, $0.35 per bushel; oats, $0.024 per bushel; soybeans, $0.44 per bushel; other oilseeds (canola, crambe, flaxseed, mustard seed, rapeseed, safflower, sesame seed, sunflower seed), $0.80 per hundredweight; peanuts, $36 per ton; long grain and medium grain rice, $2.35 per hundredweight; upland cotton, $0.0667 per pound; and wheat, $0.52 per bushel.

Changes In Program

The DCP program, first authorized in 2002 and re-authorized by the 2008 Farm Bill with some modifications, provides direct and counter-cyclical payments to producers who annually enroll their farms in the program. Eligible farms are those farms that have base acres established for barley, corn, sorghum, oats, canola, crambe, flaxseed, mustard seed, rapeseed, safflower, sesame seed, sunflower seed, peanuts, rice, soybeans, upland cotton and wheat.

Base acres were established using the historical plantings of those crops on the farm. Direct payment rates are fixed and prescribed by law. Counter-cyclical payments provide support when prices are below certain statutorily set prices.

USDA’s Farm Service Agency distributes direct payments for the Commodity Credit Corporation. For more information on DCP, visit your local USDA Service Center or http://www.fsa.usda.gov.

USDA contributed information for this article.

 
 


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