Deferred Appraisals:RMA Staff Backing Away
From Consideration of PCG/RMA Compromise

Friday,May 6, 2005                                  By Shawn Wade

      Whathas changed? That is the question officials at Plains Cotton Growers are askingthemselves after learning, through third parties, that RMA was revisiting adeferred appraisal fix they had previously said could not be supported.

      Asif pulling their hands from behind their back with crossed fingers to say"King's X", RMA officials are now suggesting to solve the deferredappraisal problem by leaving the problematic deferred appraisal rule in placeand taking away 8 days of the 15-day cotton late planting period for anunspecified number of counties located in Texas.

      Thedeferred appraisal rule imposes a mandatory deferral period when plantedacreage fails to establish a stand because seed has not emerged due toinsufficient soil moisture.

      PCG'sconcerns peaked following a May 4 House Agriculture Subcommittee hearing toreview the Federal Crop Insurance Program.

      Duringthe hearing of the House Agriculture Committee's Subcommittee on General FarmCommodities and Risk Management, Lubbock-area Congressman Randy Neugebauerasked USDA Risk Management Agency Administrator Ross Davidson a question aboutthe progress toward initiating changes to the deferred appraisal rule for the2005 crop year.

      Neugebauernoted that, after discussing the issue briefly with RMA Assistant AdministratorDavid Hatch the previous week, he seemed to be getting mixed signals about howthe Agency was proposing to deal with the problem.

      Hesaid, up until last week he understood that a compromise solution, developedjointly by PCG and RMA personnel, was moving forward but that now the Agencyseemed intent on revisiting the concept of reducing the length of the lateplanting period that it has previously rejected.

      Ina good faith effort to develop a workable solution to the issue that protectsthe interests of both High Plains cotton producers and RMA, PCG officialstraveled to Kansas City February 16 to work on the compromise solution.

      Aprimary catalyst for the meeting was the Agency's previous decision not tosupport one of its own possible solutions a shortened late planting period.This solution would have retained the current deferred appraisal rule withoutchange, making it exactly what the Agency seems to now be considering.

      Sowhat has changed since the Agency last determined this option was unfeasiblejust this past December? With no communication from RMA to provide actualinsight, PCG officials, and now members of the House Agriculture Committee, canonly speculate that internally there are those within RMA that would prefer tooffer up an already rejected proposal, rather than seriously consider thecompromise crafted by PCG and RMA representatives face-to-face.

      Ina nutshell, the PCG/RMA compromise solution amounts to a reworking of thecurrent deferred appraisal rule to allow appraisal at the end of the 15-daylate planting period for timely planted cotton, and also specify that acreageplanted after the final planting date would not be appraised until after theend of an additional 8-day deferred appraisal period following the end of thelate planting period.

      Initially,RMA personnel worked to clean up the proposed language and develop a decisionmemorandum for consideration by RMA Administrator Ross Davidson. This process,however, seems to have been diverted at some level and the result is that apreviously rejected option has been reincarnated like Mary Shelley'sFrankenstein.

      Ofprimary concern to PCG is that there now appears to be a significant weakeningin RMA's resolve to find a solution that can be implemented for the 2005growing season and provide an ongoing solution that allows producers to maketimely farm management decisions and also maintains RMA's ability to provideactuarially sound risk management products for the U.S. cotton producer.

 

May/June Farm ProgramDeadlines Looming

Friday,May 6, 2005                                  By Shawn Wade

      Themonth of May should bring more than thoughts of planting into the minds of HighPlains cotton growers. It should also bring to mind that it is time to takecare of any unfinished 2004-crop business down at the Farm Service Agencyoffice.

      Whilevery few producers have yet to sign-up for the 2005 Direct and Counter-cyclicalProgram, June 1 marks the last day growers can sign-up for the 2005 program.The DCP sign-up period for the 2005 crop year began October 1, 2004. Growersintending to participate in the program should contact their local Farm ServiceAgency office as soon as possible to complete the required paperwork.

      Thenext two deadlines that growers need to keep in mind, especially consideringthe extended harvest and ginning season, both fall on May 31. The first is thatMay 31 marks the last day a producer can request a 2004 crop cotton loan orapply for a 2004-crop Loan Deficiency Payment.

      Thesecond May 31 deadline concerns producers who received recourse Seed CottonLoans on cotton in modules earlier in the 2004 growing season. Growers whoreceived a Seed Cotton Loan must repay the recourse loan plus interest on orbefore May 31.

      Inaddition to these key dates, growers should also remember that small graincertifications must be reported by May 15. Late filed certifications aresubject to late filed provisions. Late filed acreage reports are required tohave a field inspection, which costs $35 for the first plot plus $15 for eachadditional plot per farm.