Sign-up Time On New Farm Program
University of Missouri
I can't believe the number of farmers who are not keeping up with the provisions of the new farm program.
I was visiting with one of them last week, and I asked him if he had studied the choices he had when it came to updating bases and yields. His response was: "What changes?" When I explained them in a general way, he seemed to be totally surprised and perplexed as to what to do.
Hopefully, you’re not like this producer. But if you are, you need to do some homework prior to signing-up in the new farm program.
FSA and NRCS have recently held a number of farm program informational meetings in the region. Researchers from the Food & Agriculture Policy Research Institute (FAPRI), a joint University of Missouri and Iowa State University research program, have also held some meetings throughout the state. I attended one of those meetings last week and thought you might be interested in some of the things I learned.
The new Farm Bill is actually named the Farm Security and Rural Investment Act of 2002.
Landowners will be required to make several critical decisions about their business when they sign up for the new program. These decisions include updating crop base acres and historic crop yields. These decisions will affect the government payments you’ll receive under the new Farm Bill. I have seen examples where making base and yield updates more than double yearly farm payments.
Landowners, or their appointed representative, are the only ones allowed to make decisions on base and yield updates.
There are two parts to the new program. One part is fixed payments and the other is variable payments. The fixed payments are calculated on base acres. The decision you make now on base acres will affect these payments for the life of the new Farm Bill.
The variable payments are actually called counter-cyclical payments. These payments may or may not be made depending upon the price of the commodity you’re producing. When prices of commodities (corn, soybeans, etc) are low, there will be a counter-cyclical payment. When commodity prices are high there will be no counter-cyclical payment.
Crop yields can be updated for the counter-cyclical part of the program. Evidence of historical crop yields must be provided to the FSA office if yield updates are made. That evidence may not be needed at the time of sign up, but it will be needed sometime during the life of the farm program.
I expect that landowners who farm their own ground will have an easier time providing yield update information than landowners who rent their ground, especially those who cash rent.
Landowners who sign forms (power of attorney) that allow tenants to report yields should remember that they (the landowner) will ultimately be responsible for proving that yield evidence. Consequently, landowners should ask for production evidence from the tenant, and then keep this evidence on file.
It’s the landowner who is ultimately and legally responsible for providing the evidence. If it’s not provided to FSA then it could result in repayment of funds, including interest and penalties.
FSA employees cannot make decisions for you relative to the new farm program. FSA can provide information to you, but they simply don't have the time or personnel to explain every option.
University Outreach & Extension can help. Our ag business specialists have been provided the software to help producers make choices. FAPRI has developed a Web site with an interactive spreadsheet that producers can use in determining the best financial options for their own farm. The Web tool is at http://www.fapri.missouri.edu/