April 1 Deadline for Selecting Farm Program Base, Yield Options Approaching

By Jerry W. Kram

Farmers have been slow to sign up for programs established by the 2002 Farm Bill, leading to fears of a mad rush on county Farm Service Agency offices as the April 1 deadline nears.

A number of farmers are likely still trying to figure out their best program options. “I think when people got that packet of information in the mail (from the FSA about farm program signup) there was so much information it was kind of intimidating. I think a lot of people just put it back in the envelope and hoped it would go away. But it didn’t. Now they are realizing they have to get after it,” says Ramsey County (N.D.) FSA director Loren Nelson.

In early February, just one out of four farmers in North Dakota and Minnesota were enrolled in the farm program. Nationwide, one third of farms were enrolled in the program and more than half of farmers in Arizona, Arkansas, Montana and Oklahoma have signed up.

Gary Nelson, director of the Farm Service Agency in North Dakota says few farmers came in to sign up for months after the signup started in October. In early January, the pace picked up and nearly 15,000 of the state’s 57,000 registered operations had enrolled by the end of the month.

Still, that leaves more than 42,000 applications to be processed in February and March, just in North Dakota. There are more than 80,000 applications outstanding in Minnesota and 1.4 million nationwide.

“Things have picked up dramatically,” Gary Nelson says. “I hope it will be a smooth signup and people will get in as soon as they can get their information put together. But if it doesn’t pick up a little more than it has, we will have a pretty big rush that last month.”  Farmers could expect some delays in getting appointments or payments because of the last minute rush.

The signup for the 2002 Farm Bill has been slower than that of previous farm bills, says Dale Ihry, who is in charge of programs for the N.D. office of the FSA.

“I would say this hasn’t been typical of new farm bills.” Ihry says. “This sign up process has so many different options that owners and operators have to agree on, what base to take and yield to go on. Operators have had to educate owners to make the elections because the owners have the final say. So I think this one is the toughest we’ve had,” says Ihry.

Local offices of the FSA have been collecting the data necessary to enroll farmers into the program since August. The process of assembling four years of production is continuing, however. Some operators are having problems assembling the information they need on prevented planting payments and on land that changed ownership during the update period.

“In North Dakota we have had about 8 million acres of prevented planting from 1998 to 2001,” Ihry says. “Now we have to go through all those thousands of acreage reports and re-tally the prevented planting acres and get them back in to program crop groups so we can calculate the bases properly. In North Dakota, that slowed us up considerably.”

To help farmers who cannot get production records from a previous owner, USDA has loosened the rules to allow county FSA committees to use an average of similar farms to estimate crop production on farms where records are not available due to a change of ownership.   Under the new rules, the county committee may establish a yield for an owner on land the owner or current operator did not farm in prior years. The yield can be based on three similar farms or the LDP records for that farm, but cannot exceed the county average yield.

Ihry says there will be no extensions for updating bases and yields for farmers who don’t contact their local FSA office by April 1. A default base election (FY 2002 PFC acres, plus oilseeds, if applicable) will be used in determining bases for the farm if farmers don’t update their bases and yields by April 1.

However, provisions will be made for operators and owners who have tried to get their farms signed up. “If it’s our problem because of workload, Washington usually provides us tools to help those guys file as soon as possible past the deadline and still have the same options,” Ihry says.

Details Emerge about Disaster Assistance
Congress has reached an agreement on disaster assistance for growers affected by weather-related production losses. “A lot of people are saying that grower visits on Capitol Hill in early January turned the tide and made this all possible. The NAWG played a big roll in the coordination of the Washington D.C. meetings in January. Having both Farm Bureau and Farmers Union on the same page was very helpful and went a long way to make this possible also,” says David Torgerson, executive director of the Minnesota Association of Wheat Growers.

Funding for the disaster package came from the new Conservation Security Program, included in the 2002 Farm Bill. CSP had recently been scored by the Congressional Budget Office at $7.77 billion over 10 years, up from the $2 billion score it gave last year during consideration of the farm bill, presumably a reflection of high enthusiasm for the new program among farmers and ranchers.  With CSP funds diverted to disaster assistance, spending on the CSP is now capped at $3.77 billion between 2003-2013, although lawmakers may seek to restore CSP funds from other sources.

Preliminary disaster assistance details:

Producers with crop insurance: Losses of greater then 35% will receive a payment equal to 50% of the price election times their lost bushels greater than 35%. (Covers the same quantity and quality losses that crop insurance did).  Similar to past disaster assistance packages except this package is 50% of price election instead of 65% of price election. So the payment would be lost bushels greater then 35% X (50% price election) x acres

Producers without crop insurance: 45% of the price election.

2001 or 2002 losses: The producer will elect which year he/she will receive assistance. One or the other, but not both.

Payment limits: Payments, including crop insurance payments and value of harvested crop, cannot exceed 95% of the normal value of the crop without losses (In the 2000 Crop Disaster Assistance there was a $80,000 payment limit per person. The new language does not reference this, so it is uncertain if there is a per person payment limit in this new disaster assistance package).

FSA offices will have more program details.