USDA Price Support Program Sign-up Begins For 2010

USDA Price Support Program Sign-up Begins For 2010

USDA announced on October 10 that the sign-up period for the 2010 Direct and Countercyclical Payment Program and also the Average Crop Revenue Election Program has begun.

FAQ: USDA has announced the sign-up period for its 2010 price support programs. What programs does this include?

Answer: Provided by Kevin McClure, program specialist at the state office of USDA's Farm Service Agency in Des Moines.

While most Midwest farmers are working on getting the fall 2009 corn and soybean harvest in the bin, they are also thinking about their cropping plans for next year.

Part of that planning process includes thinking about signing up for USDA's 2010 Direct and Counter-cyclical Payment program (DCP) and the Average Crop Revenue Election program (ACRE). Sign-up for these two programs has begun and will continue through June 1, 2010.

DCP program. USDA computes DCP program payments using base acres and payment yields established for each farm. For 2010, eligible producers may request to receive advance direct payments based on 22% of the direct payment. The first month in which a producer can request the advance direct payment is Dec. 1, 2009. DCP contracts must be initiated and all signatures obtained before producers are eligible for payment.

ACRE program. The optional ACRE program for 2010 provides producers with a financial safety net based on state revenue losses and acts in place of the price-based safety net of countercyclical payments under the DCP. A farm's ACRE payment is based on a revenue guarantee calculated by USDA using a 5-year Olympic average of state yield and the most recent two-year national average price for each eligible commodity.

Farmers can now visit their local FSA office to begin signing up their 2010 crop in ACRE. While the enrollment period runs through June 1, 2010, farmers who decide to participate will enroll their farms for the remaining three years of the program. The 2009 crop year was the first year of this new ACRE program.

Farms that were enrolled into ACRE in 2009 do not have the option to revert back to the DCP program. Producers enrolling into the 2010 ACRE program also have the option to receive the 22% advance direct payment.

Producers electing the ACRE option for the first time on a farm in 2010 will be required to complete two contracts. The first contract is the ACRE Election. All producers on the farm are required to sign the ACRE Election. The second contract is the ACRE Enrollment. The ACRE Enrollment contract has the same signature requirements as the CDP enrollment contract.

Should you sign up for ACRE in 2010?

When you consider rising input costs, a more volatile commodity market and other farming challenges, ACRE is a very timely addition to a farmer's set of risk management tools.

The national enrollment for the 2009 ACRE is relatively small compared to the 1.5 million farms that opted to remain in USDA's regular Direct and Counter-cyclical payment program or DCP. However, USDA officials are pleased with the number of farmers who participated--considering 2009 was the first year the new ACRE program was offered.

USDA records show at least 130,000 applications for the ACRE program have been approved nationwide, with many more still waiting to be processed. These applications represent roughly 10% of all the eligible farmable land in the U.S.

If you have specific questions or need details regarding USDA farm programs, contact your local USDA Farm Service Agency office. You can also get news and information about DCP, ACRE and other USDA programs at www.fsa.usda.gov.

Two Iowa State University Extension Web sites have farm program information and analysis. They are ISU's Ag Decision Maker site at www.extension.iastate.edu/agdm and ISU Extension Specialist Steve Johnson's site at www.extension.iastate.edu/polk/farmmanagement.htm.

And be sure to read the regular column "Frequently Asked Questions about the Farm Program" that appears in each issue of Wallaces Farmer magazine and at www.WallacesFarmer.com

TAGS: Soybean USDA
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