Oct. 1 is the beginning sign-up date for the direct and counter-cyclical program for crop years 2002 and 2003. Payments will be made soon after.
The new farm bill provides for payments to be made to eligible producers of covered commodities for the 2002-07 crop years. Direct and counter-cyclical payments are made to producers with established crop bases and payment yields.
Payment rates for direct payments are established by the new farm bill and are used regardless of market prices. Producers are also eligible for counter-cyclical payments, but those payments are issued only if effective prices are less than the target prices set in the new farm bill.
The effective price is equal to the higher of the average loan rate or national average market price received by producers, plus the direct payment rate.
Producers should have already received a letter asking them to verify acreage history that has been reported to the Farm Service Agency. Based on that information, a second letter will be mailed soon providing producers with several options unique to their farm for establishing or updating bases. The base options for 2002-2007 include: 1) using the farm's 2002 production flexibility contract acres as the base acres; 2) adding oilseeds to the 2002 contract acres; and 3) using the farm's 1998-2001 planted acres.
The second letter will also inform producers that if they elect to update their bases using the farm's 1998-2001 planted acres, they will have the opportunity to use their current farm program payment yield or to update their yields using the farm's 1998-2001 production.
The updated yields may only be used for counter-cyclical payments. To update yields, producers must provide verifiable production evidence. The letter will also provide the date producers should begin providing base and yield information to the local county FSA office.
If there isn't any verifiable production history, producers can use 75 percent of the county average yield. The letter will also notify each producer of the farm's 2002 production flexibility contract program payment yield and 75 percent of the county average yield. In most cases, the 75 percent yield will be the lowest possible crop payment yield for counter-cyclical payments attributed to the farm.
Eligible commodities for both direct and counter-cyclical payments include: wheat, corn, sorghum, barley, oats, upland cotton, rice, soybeans, sunflower seeds, canola, flaxseed, mustard, safflower, and rapeseed.
Sign-up for the 2002 and 2003 direct and counter-cyclical program ends June 2.
Information regarding the 2002 farm bill is available by logging on to the Montana FSA homepage at: www.fsa.usda.gov/mt.