Average Gross Income, Consent Certification Required

Average Gross Income, Consent Certification Required

Farmers signing up for USDA's 2013 farm programs are subject to AGI rules and must certify their eligibility.

FAQ: Regarding my certification with USDA for Average Gross Income when I sign up for the 2013 farm DCP or ACRE farm program, what forms do I need to sign? 

Answer: Participants signing up for USDA’s Direct and Countercyclical Program, or DCP, or the Average Crop Revenue Election, or ACRE, programs for 2013 are reminded of a couple of important rules they must follow.

FARM PROGRAM OPTIONS: Farmers can now sign up for USDA’s DCP and ACRE programs for 2013. The Farm Service Agency began sign-ups for DCP and ACRE for 2013 crops on February 19. The DCP sign-up period for this year will end Aug. 2; and ACRE sign-up period will end June 3.

“Namely, they are subject to Average Adjusted Gross Income, or AGI, rules and they must annually certify their eligibility to receive program benefits,” explains Steve Johnson, an Iowa State University Extension farm management specialist. “The Internal Revenue Service also requires written consent from an individual or legal entity to provide USDA verification of the average AGI.”

Such annual AGI certification and written consent are accomplished by completion of form CCC-931 available at your local Farm Service Agency office. The name of the form is Average Adjusted Gross Income Certification and Consent to Disclosure of Tax Information for 2009 through 2012 program years. Or if you are signing up for these programs for the first time, you will have to complete form CCC-933, Average Adjusted Gross Income Certification and Consent to Disclosure of Tax Information for the 2013 program year.

Failure to provide the certification and consent will require refund of applicable program payments received from FSA and NRCS.

QUESTION:  The sign-up period for USDA’s farm program for 2013 is underway. What are my options?

Answer: The provisions for the Average Crop Revenue Election, or ACRE, and the Direct and Counter-cyclical Payment Program, or DCP, are unchanged from 2012—with one exception.~~~PAGE_BREAK_HERE~~~

Producers who enrolled in ACRE during the 2009 through 2012 crop years were obligated to remain in ACRE through 2012. That obligation does not extend through 2013, however. “Each producer can choose to enroll each farm he or she manages in either the DCP program or the ACRE program this year, regardless of which program the farm was enrolled in last year,” says William Edwards, Iowa State University Extension economist.

Two revenue triggers are in effect under ACRE program

Briefly, two revenue triggers are in effect under ACRE, one at the farm level and one at the state level, Edwards explains. Actual revenues, based on the farm and state yields and the average marketing year price for the 12 months following harvest, must be below both of the corresponding trigger levels for a payment to be made.

* Farm level triggers will depend on recent yields for each farm, but the state level trigger is the same for everyone. The ACRE program does not allow the state trigger to increase or decrease more than 10% from one year to the next. The past three years’ increases in both the corn and soybean trigger revenues in Iowa have been limited due to the 10% cap. Thus, they haven’t increased as fast as actual revenues, and no ACRE payments have been made in Iowa during the time the program has been in effect.

* State level trigger revenues for Iowa for the 2013 crop are currently projected as $781 per acre for corn and $574 per acre for soybeans, using the current USDA forecasts for the 2012 average marketing year prices. These could change slightly over the next seven months.

This means if the state average corn yield for 2013 is 160 bushels per acre, for example, the marketing year price for the 2013 crop will have to average less than $4.88 per bushel to trigger an ACRE payment. Likewise, if the state average soybean yield is 47 bushels per acre, for example, the 2013 marketing year price will have to average less than $12.21 per bushel to trigger a payment. Recently, futures contracts covering the 2013 marketing year have been projecting prices substantially higher than these.

To help you analyze sign-up decisions, use ACRE Payment Estimator

Keep in mind that, as before, enrolling in ACRE reduces the farm’s direct payments by 20%, notes Edwards. Conversely, farms that have been enrolled in ACRE in the past can decide not to enroll in 2013, and receive 100% of their direct payments. Payment rates will be the same as in 2012, and funds will be distributed in October.

To analyze their individual signup decisions, farmers are encouraged to use the ACRE Payment Estimator, decision file A1-45 on the Ag Decision Maker website. For more information about DCP & ACRE, visit your county Farm Service Agency office.

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