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Good news and bad news for 2024 commodity programs

Farm bill extension provides direction for 2024, provided congress votes to fund government operations.

Forrest Laws

January 11, 2024

6 Min Read
Capitol
It is a challenge to try to figure out how to run an agency like USDA with annual production seasons, given two or three months of funding at a time, according to USDA’s Zach Ducheneaux.Brent Murphree

The good news is Congress passed a one-year extension of the Agriculture Improvement Act of 2018 which means farmers can sign up for Agricultural Risk Coverage, Price Loss Coverage and other programs for the 2024 crops.

The bad news? Unless Congress negotiates a path to keeping the federal government open past the Jan. 19 expiration date for part of the Continuing Resolution it passed back in November, farmers may not have anyone to sign them up for those programs.

USDA Farm Service Agency Administrator Zach Ducheneaux said the one-year extension of the 2018 farm bill through Sept. 30, 2024, will help FSA and growers. The one-year extension is preferable to having one- or two-month extensions, which he says would create another “whole set of problems

“We have one year of authority to deliver the programs and less than four weeks of funding to do the signup,” said Ducheneaux, who was interviewed on a wide range of FSA topics on Dec. 18. “We have producers trying to make plans for their 2024 and 2025 production and marketing, and we can’t do anything without guidance from the Hill.”

Farm bill discussion

Agricultural lenders, which include FSA and its direct and guaranteed farm loan programs, are in a similar situation. “It does present a lot of problems,” he noted, “But it does give our producers the opportunity to share their concerns about the farm bill with their congressional delegations for another period of time.”

The interview with the FSA administrator was initially set up to discuss the Pandemic Assistance Revenue Program, which was aimed at helping producers who suffered at least a 15% loss in gross revenue in the 2020 calendar year due to the Covid-19 pandemic.

FSA began making payments under the program the week of Dec. 11 after PARP applicants greatly oversubscribed the amount of money that was available. Those payments were intended to be based on a comparison of the producer’s revenue from 2020 compared to 2018 or 2019.

“We were allocated $650 million for PARP, but, in the end, we were left with about $250 million to spend because of a recission,” Ducheneaux said. “When we have programs that have oversubscribed demand, one option is to use a flat factor across the board to allocate the funds equitably.”

FSA arrived at a 9.5% factor by dividing the money that was available – about $233 million, in this case – by the number of payments. (Government agencies typically set aside a fund for errors, omissions and appeals when they disperse money for a program.)

The agency received about 55,000 applications for the PARP. Of those, 38,540 triggered a payment. The average payment processed was for $5,452.

“Invariably, there will be a situation where an application was not accurately considered or maybe just lost in the shuffle somewhere,” he said. “Sometimes our decision is overturned on appeal, and we have to find a way to make the payment.”

Deadline extension?

He was asked whether the deadline for applications for the Discrimination Financial Assistance Program, which was authorized under Section 22007 of the Inflation Reduction Act of 2022, might be extended past the Jan. 13, 2024, deadline.

“The deadline has already been extended once (from last November),” he said. “But I really can’t speak to that because the Farm Service Agency and USDA are really alongside that process and not guiding it since Congress mandated that it be administered by a third party.”

A spokesman for the Windsor Group, one of the third-party vendors, said its representatives have been meeting with significant numbers of producers to help them prepare documents they hope will help convince the program’s leaders and USDA they should receive payments to offset their losses to discrimination.

“The Windsor Group has conducted more than 700 outreach events, ranging from presentations at farm shows and other agricultural meetings to Zoom sessions with local NAACP chapters,” said Myles Caggins III, spokesman for the Discrimination Financial Assistance Program Region East.

Windsor Group, based in Maryland, is responsible for 29 states and territories east of the Mississippi River for the program, while Analytic Acquisitions is responsible for the West Region. Midtown Group was selected by USDA as the national administrator for the program.

Midsouth tour

Caggins was in Memphis, Tenn., as part of a tour through the Midsouth to meet with members of the news media to talk about the program and encourage other farmers, ranchers and forest landowners who believe they experienced discrimination in USDA lending programs to apply for the DFAP.

Ducheneaux said FSA has been focused on Section 22006 of the Inflation Reduction Act which is designed to help distressed borrowers in FSA’s direct and guaranteed farm loan programs. The Agency has used about $1.6 billion of Section 22006 funding to bring direct loan borrowers current in their payments.

The Discrimination Financial Assistance Program is different from most government programs not only in that it is being administered by a non-government agency, but also because it doesn’t appear to include some of the appeal or review procedures of those.

“I’m not privy to the conversations about those parts of the program,” Ducheneaux said. “I do know the desire was to get the money out into producers’ hands as quickly as possible because of concerns about the funding.”

Speaking to the National Black Growers Council annual meeting in Memphis on Dec. 13, Agriculture Secretary Tom Vilsack said USDA had decided to move quickly in establishing the DFAP program because of concerns Congress could reallocate the Section 22007 funds for other purposes.

“If we had followed all the usual steps, we probably would just now be announcing the signup for the DFAP instead of when we did last May,” he said.

For many government employees, the possibility of Congress shifting funds from one program to another or not funding the government at all is something they’ve grown accustomed to in recent years.

“Fortunately, we've been right up against that funding deadline twice now this calendar year, if you consider that good fortune,” Ducheneaux said. “So our stand down plans are ready if the funding doesn't materialize prior to this expiration.

“It is a challenge for us to try to figure out how to run an agency with annual production seasons, given two or three months of funding at a time. What really concerns me is the stress that it puts on not only our producers, but on our staff out there in the countryside who honestly don't know whether they're going to get paid the last two weeks of January.”

With the work FSA has done with the Inflation Reduction Act Section 22006 program, “We see firsthand the level of distress that a lot of our borrowers are in, not only in our direct loan program, but also in our guaranteed loan programs, which is a microcosm of the greater farm lending spectrum.”

About the Author(s)

Forrest Laws

Forrest Laws spent 10 years with The Memphis Press-Scimitar before joining Delta Farm Press in 1980. He has written extensively on farm production practices, crop marketing, farm legislation, environmental regulations and alternative energy. He resides in Memphis, Tenn. He served as a missile launch officer in the U.S. Air Force before resuming his career in journalism with The Press-Scimitar.

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