2004 Program Sign-upBegins October 1

LUBBOCK, October 3, 2003    By Shawn Wade

      Secretaryof Agriculture Ann Veneman announced that enrollment for the 2004 Direct andCounter-cyclical Program (DCP) will begin Oct. 1.

      Underthe Farm Security and Rural Investment Act of 2002 (FSRIA) producers must signcontracts annually to participate in the DCP, unlike the one-time sign-upprocess that was installed under the previous farm program.

      Producershave until June 1, 2004, to enroll for the 2004 DCP. Late-filed applicationswill be accepted through Sept. 30, 2004, if accompanied by a $100 late fee.

      Producerscan opt out of participating in the program any year if they choose. For boththe 2002 and 2003 programs, more than 98 percent of the eligible base acreswere enrolled.

      The2002 Farm Bill authorizes direct and counter-cyclical payments to enrolledproducers. Both payments are computed using the base acres and payment yieldsestablished for each farm.

      Thefollowing are the 2004 crop year direct payment rates and maximum potentialcounter-cyclical rates:

 

 

 

Maximum

Commodity

Unit

Direct

Counter-Cyclical

 

 

($/unit)

($/unit)

Wheat

bushel

0.52

0.65

Corn

bushel

0.28

0.40

Grain Sorghum

bushel

0.35

0.27

Barley

bushel

0.24

0.15

Oats

bushel

0.024

0.086

Upland Cotton

pound

0.0667

0.1373

Rice

pound

2.35

1.65

Soybeans

bushel

0.44

0.36

Other Oilseeds

pound

0.0080

0.00

Peanuts

ton

36.00

104.00

 

      Thetable above refers ONLY to 2004-crop DCP payments, no announcement has yet beenmade regarding 2003 Counter-cyclical payments. Any announcement pertaining tothe 2003 CC payment would come during the month of October.

      Producersreceive direct payments at rates established by statute, regardless of marketprices. Counter-cyclical payment rates, on the other hand, vary depending onmarket prices.

      Counter-cyclicalpayments are issued only when the effective price (which takes into account thedirect payment rate, market price and loan rate) for a crop is below the targetprice for the commodity.

      For"other oilseeds," because of the existing loan rate, the maximumcounter-cyclical payment rate is zero.

      Thefollowing is the schedule of payments for the 2004 DCP:

December 2003 - 50% advance direct payment;

October 2004 - 50% final direct payment;

October 2004 - first advance counter-cyclical payment (up to 35 percentof projected payment);

February 2005 - second advance counter-cyclical payment (up to 70 percentof projected payment less first advance);

Dates vary by crop - In general, 30 days following the end of the marketingyear: Final counter-cyclical payment (100 percent of actual payment, less anyadvances received).

      Bythe end of October 2003, USDA reports that producers will have received some $8billion in DCP payments for the 2002 crops, the 2003 crop direct payment, andthe first advance counter-cyclical payments (if any) for 2003 crops.

      Forall years, refunds to USDA's Commodity Credit Corporation (CCC) will be due ifthere is a violation of eligibility requirements or, in the case ofcounter-cyclical payments, if the advance payments exceed the final paymentrate.