FAQ: Our farm program payment check from USDA hasn’t arrived yet. Our county FSA office says the procedure for issuing the checks has changed. What’s going on?
Answer: Provided by Kevin McClure, program specialist at the state office of USDA’s Farm Service Agency in Des Moines.
This fall, for the 2009 final Direct Payment, there’s a new process that USDA has set up. It’s called NPS—National Payment Services. In the past, the FSA county offices locally had the ability to just go into their local computers and they could issue payments by farm number. Now FSA has moved to the NPS system and the checks are issued from USDA’s office in Kansas City. So basically the Kansas City office issues the payments but the county FSA office still has to sign and certify each payment in web-based software.
The problem we’ve been having is with entities. Entities at the Kansas City level have run into some processing problems. There are some issues with the system and USDA is working to solve those. So if people can just be a little patient with us, we’re trying to get it worked out. Your local county FSA office has nothing to do with this problem. I know they are taking a lot of phone calls about this. The county office staff has no way of fixing these problems at this point.
Q: Can you please explain the “entity rule”—this apparently is something that was changed in the new 2008 Farm Bill?
A: That is correct. What happened for the Direct and Counter-Cyclical Payment program or DCP is that under the old rules we had combinations of entities, person determinations, etc. With the new 2008 Farm Bill, we changed to what is called “direct attribution.”
With entities, direct attribution funnels down to the individual members of the farm business. For payment limitation purposes, there are different limits.
What happened when USDA issued advance payments for 2009 DCP/ACRE, which was last spring and summer, those were still done under the old rules, because that’s the way the software was set up and it could not be changed at that point. So what producers are seeing now is a receivable for that amount being established, and then the whole payment was recalculated as a total here in October for the 2009 year for that farm, and then FSA just subtracts off the receivable amount the producer was paid last spring.
So ultimately, the producer should receive basically a 78% share or their final payment. Also, these receivables may not be offset from the farm the advance was issued to. The Kansas City payment processing office attached the receivables to whichever farm came up first in the computer system for the producer. However, the final amount issued “totally” for the producer should be the correct amount.
Farms enrolled in ACRE will also be reduced by the 20% required according to USDA regulations. Remember, if you are in ACRE there is a 20% reduction in the Direct Payment.
Q: Generally, in the past, these final USDA farm program payments were made in October--but now when does FSA think they will come out?
A: FSA has already issued a lot of the individual payments. It’s the entities that we are having issues with—but FSA is diligently working on those. Hopefully the system and the process will be fixed within a 10 day time window, which would be sometime before the first several days of November. If producers could give county FSA offices just a little bit longer, we’re diligently working on this.
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