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Texas Agriculture Archive

September 20, 2002

FSA clarifies Bureau's
farm bill concerns

The Farm Service Agency has replied to a list of concerns expressed by state Farm Bureaus about implementation of the new farm bill.

Those concerns, expressed to FSA officials in August, and FSA's written responses to the American Farm Bureau Federation, include the following:

• The landowner will be required to physically go to the local FSA office to enroll their property for commodity programs. If the landowner rents their land, the renter will not be allowed to sign-up the land for the landowner even if the renter has the power of attorney to do so.

Response: Incorrect. If an owner grants an operator a new power of attorney, then the operator can make the base and yield decision and enroll the farm in DCP.

Producers (those that share in the risk of the production of the crop or would have shared if the crop had been produced) will enroll the farm each year into the DCP. Because a cash rent landowner does not meet the definition of a producer, the landowner is not a part of the annual contract. However, the one time opportunity to update bases and yields is by statute the responsibility of only the farm owner.

• USDA intends to determine the calculation of oilseed acreage on a year-to-year basis and then take the average to determine oilseed payment acres. We believe Congress intended base calculations to be one-year average of the eligible oilseed acreage on a farm.

Response: Statutory provision with no discretion. Section 1101(a)(2) (A) and (B) specifically provides that the calculations are for each crop year. There are no provisions in the statute to do otherwise.

• Bases and yield updates will be required on a tract rather than a farm basis. If a renter has several landlords who do not agree on the updating decision, this will be a problem.

Response: Incorrect. Base and yield updates are on a farm by farm basis. If a farm is comprised of many landowners, the farm can be divided into single owner farms so that each owner can make their own base and yield decision. (Note: Once the bases are determined for the farm, the bases will be set on a tract. If a future farm division occurs, the resulting farm owners will know if their tract of land has a base associated with it.)

• Livestock producers who feed their production will not be allowed to use loan deficiency payment certification as evidence of production history. Scale tickets or bin measurements will be required.

Response: Proven yields are based on the farms average yield per planted acre on the farm. For LDPs farmers were able to estimate production. However, FSA is continuing to review the problems that some farmers are having with proving yields if they took their production for a use that does not lend itself to verifiable production evidence.

• USDA is requiring acceptable production evidence to update and establish yields. It may be difficult to provide such evidence given the significant number of changes in ownership and rental agreements over the past four years.

Response: We agree that in some cases it may be difficult for owners. However, updated yields are based on the farm's average yield per planted acre on the farm. If an owner decides to update yields, 75 percent of the county yield will be used for any year that the actual production evidence is below 75 percent of the county yield. However, FSA is continuing to review the problems that some farmers are having with providing verifiable production evidence.

• The 1996 farm bill gave farmers the flexibility to decide what crops to plant while continuing to protect their base acres. USDA will not allow producers to count base acres that were idled, devoted to conservation purposes or planted to other allowed commodities during the 98-01 base period, to be treated as planted or considered planted for purposes of updating base acres.

Response: Statutory provision with no discretion. The farm bill specifies that only acreage planted or prevented from being planted to the crop can be counted as base acres. The statute does not allow "considered planted" acres to be included when updating base acres. But the "considered planted" has been used to protect the 2002 PFC base, and this base can be used for DCP.

• USDA will allow the planting of fruits and vegetables on PFC land with a minor penalty.

Response: Incorrect.

USDA did not change the penalty for fruit and vegetable violations. The farm bill has specific restrictions and exceptions for planting fruits and vegetables (FAV). These provisions are very similar to the provisions of the 1996 farm bill. If FAVs are planted on enrolled bases, the payment acres are reduced on an acre-for-acre bases if the farm or producer has a history of growing FAVs. If there is no history, the farm is in violation and in addition to the acre-for-acre reduction, a payment reduction applies to that year's DCP payments in an amount equal to the value of the FAVs harvested.

In the past, the PFC contract was a multi-year contract and payment reductions applied to the year of violation and could carry over to a future year.

DCP is a single year contract and payment reductions will not exceed the amount of payments calculated for the contract for that year.

In addition, a producer can elect to not enroll the farm in a year, plant FAVs and then enroll the farm in the next year without jeopardizing bases.