Agriculture Secretary Ann M. Veneman announced USDA's schedule for issuing 2004 direct and counter-cyclical payments, including the deadline for the annual sign-up for the DCP program.
Producers will have until June 1, 2004, to sign up for the 2004 direct and counter-cyclical payments. After June 1, farmers can continue to enroll in the program with the payment of a $100 late fee until Sept. 30, 2004. (The new farm bill, unlike the old, requires an annual signup for the farm programs.)
“This begins the second year of operation of programs under the 2002 farm bill,” said Veneman, in announcing the schedule. “Timely implementation has been a priority for us, and we appreciate the hard work of our staff around the country.”
Veneman said the projected annual counter-cyclical payment rates and the first partial payment rates, equal to 35 percent of the amount, are:
- Wheat, 9 cents per bushel; 3.15 cents per bushel.
- Corn, 22 cents per bushel; 7.7 cents per bushel.
- Sorghum, 4 cents per bushel; 1.4 cents per bushel;
- Upland cotton, 5.73 cents per pound; 2.01 cents per pound.
- Rice, $1.65 per hundredweight; 57.75 cents per hundredweight.
- Peanuts, $104 per short ton; $36.40 per short ton.
Producers may elect to receive the counter-cyclical payments in three installments: a first in October, a second in February and the final at the end of the marketing year for each crop.
A first installment payment is not available for barley, oats, soybeans and other oilseeds because their projected effective prices exceed their respective target prices.
The above payment rates are calculated from crop supply and demand information provided in the recent October World Agricultural Supply and Demand Estimates (WASDE) report.
The supply, demand and price forecasts are subject to a high degree of variability, as evidenced by the WASDE's forecast price ranges. Given historic variability in early-season market price forecasts, a small partial payment has some chance of requiring producer repayment.
Should the market price for some crops increase slightly from the current projected levels, payments may have to be deducted from producers' future direct and counter-cyclical program payments, as required by the 2002 farm bill.
Producers are eligible for counter-cyclical payments if effective prices for each eligible commodity are less than their respective target prices set in the 2002 farm bill. For each DCP commodity, the counter-cyclical payment equals the payment rate times 85 percent of the farm's base acreage times the farm's counter-cyclical payment yield.
The counter-cyclical payment rate is the amount by which the target price of each DCP commodity exceeds its effective price. The effective price equals the direct payment rate plus the higher of: (1) the national average market price received by producers during the marketing year; or (2) the national loan rate for the commodity.
The first partial payment may be up to 35 percent of the total projected counter-cyclical payment, at the discretion of the secretary of agriculture.
Commodity organizations have been asking that Veneman make the maximum initial payment.
A second partial counter-cyclical payment may be issued to producers in February. These payments may be up to 70 percent of the projected counter-cyclical payment, less any payments already received.
Final counter-cyclical payments will be determined at the end of the marketing year for each crop. The end of the 2003-04 marketing year for each commodity is:
- Wheat, barley and oats, May 31, 2004.
- Rice, upland cotton and peanuts, July 31, 2004.
- Corn, grain sorghum and soybeans, Aug. 31, 2004.
More information on DCP is available at local USDA Farm Service Agency (FSA) offices and on FSA's Web site at: http://www.fsa.usda.gov.