Higher crop prices mean no counter cyclical payments for '06

The Farm Security and Rural Investment Act of 2002 provides for CC payments for covered commodities beginning with crop years 2002 through 2007. Under the Act, if prices for a commodity fall below the expected target price counter cyclical payments are issued to provide producers with a price for their grain that is appropriate.
Norwalk Reflector Staff
Jul 25, 2010

 

The Farm Security and Rural Investment Act of 2002 provides for CC payments for covered commodities beginning with crop years 2002 through 2007.

Under the Act, if prices for a commodity fall below the expected target price counter cyclical payments are issued to provide producers with a price for their grain that is appropriate.

However, for 2006, no first or second advances payments were made on corn and soybeans. Because the effective price of these crops exceeded their respective target prices there will be no final counter cyclical payment for these crops.

Here are some agri-business notes from the Huron and Erie County Farm Service Agency:

n NAP coverage — The Non-Insured Crop Disaster Assistance Program (NAP) was designed to reduce financial losses that occur when natural disasters cause a catastrophic loss of production or prevented planting of an eligible crop by providing coverage equivalent to catastrophic (CAT) insurance. Statute limits NAP to each commercial crop or agricultural commodity, except livestock, for which CAT is not available.

The application deadline date for the 2008 NAP coverage for winter wheat, rye, barley and speltz in Ohio is Oct. 1. Producers who already have coverage on 2007 NAP crops may choose to continue coverage on the same crop or crops for 2008, if the applicable service fee is submitted by the application closing date. A new CCC-471, application for coverage is not required to be signed when applying for continuous coverage of the same crop or crops. Producers who choose to add a new crop(s) or delete a crop(s) from previous year’s coverage or changing crop shares must file a new CCC-471 with signatures and pay the applicable service fee. Producers with 2007 NAP coverage must remember to complete the following to qualify for benefits:

Timely file acreage reports and keep track of harvested production using acceptable methods. For example, bale weights or other means of determining quantities of hay are required.

File a “Notice of Loss” within 15 days of when a loss is apparent, due to drought, hail, etc.

n Succession in interest — If you have made any changes that affect your interest in base acres since you signed your last Direct and Counter-cyclical Program contract, you must report these successions-in-interest to the county committee by Sept. 28, so that a final determination can be made on who is program eligible on the property.

Changes that qualify as a succession-in-interest include:

A sale of land, a change of operator or producer, including an increase or decrease in the number of partners, a foreclosure, bankruptcy or involuntary loss of the farm, and a change in producer shares to reflect changes in the producer’s share of the crop(s) that were originally approved on the contract.

If a succession-in-interest has taken place, you, as the “predecessor,” are required to refund any advance DCP payments you received for the affected base acres before a payment can be made to the “successor.” Not reporting a succession-in-interest can result in contract termination and a loss of program benefits for all producers involved. A revised CCC-509, Direct and Counter-cyclical Program Contract, with all succession changes must be complete with all signatures by Sept. 28 for payments to be distributed.

Changes that require a reconstitution should have been reported to the county committee by Aug. 1 of the fiscal year in which the change occurred.

n Final DCP payments — Enrolled producers can expect their final direct payment to be directly deposited into personal bank accounts sometime during the first few weeks of October. Producers who did not elect to receive an advance direct payment will receive their entire direct payment for the year in one lump sum after Sept. 28. The direct payment for a crop equals 85 percent of the farm’s base acreage times (x) the farm’s direct payment yield times the direct payment rate. If there are any unearned advance counter-cyclical payments, Commodity Credit Corporation will automatically subtract those amounts from the final direct and counter-cyclical program payments the producer(s) will receive.

Diana Strouse is the county executive director for the Huron and Erie County Farm Service Agency. For more information, call the agency at (419) 668-4113.