Policy Journal

August 27, 2008 01:12 PM
 
 

ACRE Questions Arise

USDA is still putting the rules and regulations together for the Average Crop Revenue Election (ACRE) program. USDA Deputy Secretary Chuck Conner says it won't be ready in time for winter wheat farmers to sign up before they plant. Those farmers, however, will have the opportunity to make the one-time election retroactively.
 
But even before USDA publishes ACRE plans, rumblings about which years they'll use to determine ACRE benefits are raising eyebrows in Washington. Most assume since the program starts with the 2009 crop year that the price guarantee will be based on 2007 and 2008, the two most recent crops.
 
But some budget types want to use 2006 and 2007 prices to set the ACRE price guarantee. They see budget savings going that route (those prices are far below the 2007- and 2008-based guarantee). Others point out the final prices for the 2008 marketing year won't be set until after the 2009 program year begins, so USDA would almost "have” to use 2006 and 2007.
 
Once again, "congressional intent” comes into play. If USDA doesn't use 2007 and 2008, lawmakers may force the issue legislatively.



CRP Haying and Grazing Updates
 

USDA rejected calls to allow Conservation Reserve Program (CRP) contracts a penalty-free early out to boost acreage for 2009 crops. But they'll keep an eye on the situation to make sure they made the right call. Word is Vice President Dick Cheney weighed against this option (recall he's an avid hunter).
 
Critical Feed Use (CFU) efforts will be limited on CRP acres via a decision by a U.S. District Court judge. If your CFU application was approved before July 8, you can hay or graze CRP acres until Nov. 10. If you applied but weren't approved by July 8, USDA can clear your application and you'll have to wrap up haying by Sept. 30 and grazing by Oct. 15. If you haven't applied, you still can. But the new deadlines apply and you have to prove you spent $4,500 or more before July 8 in anticipation of being able to access those acres.
 
Rent reductions for emergency haying and grazing in drought areas are now limited to 10%, and haying is now allowed in flood-affected areas, but the rent penalty stays at 25%.



EPA Says No to Texas
 

The Renewable Fuels Standard (RFS) mandates for 2008 and 2009 aren't going to change based on a decision by the Environmental Protection Agency (EPA) to deny a request by Texas for a 50% waiver of the mandate nationwide.
 
Texas Gov. Rick Perry (R) reacted to the decision, saying, "For EPA to assert that this federal mandate is not affecting food prices not only goes against common sense but every American's grocery bill.”
The law allows EPA to waive RFS requirements if it determines the mandated biofuel volumes would cause "severe harm” to the economy or the environment.
 
The battle may not be over. New Jersey is contemplating a request to be allowed to "opt out” of RFS. The state will decide whether to pursue this path in September.



A Heads-Up
 

  • Deadline for crop insurance and noninsured disaster assistance program (NAP)
  • buy-in for 2008 crops to ensure disaster aid coverage: Sept. 16.
  • Deadline for 2008 direct and counter-cyclical program (DCP) sign-up: Sept. 30.
  • NAP fees increase for 2009 coverage: $250 per crop (was $100), $750 per county (was $300) and $1,875 per producer for all counties (was $900).



10 Acres Matter
 

The 2008 farm bill includes language to nix farm program payments to small operations with a total of 10 base acres or less in order to cut costs and streamline things for the Farm Service Agency (FSA).
 
But when lawmakers caught wind of how USDA planned to implement the provision, howls of protest arose from Capitol Hill. That's because USDA says it will allow only farm consolidations made before May 22 to increase total base acres to more than 10.
 
Twenty-five senators wrote USDA Secretary Ed Schafer, warning him: "Congress acted and streamlined USDA's process in administering payments to small farms. Now USDA is disallowing consolidation that simplifies its administrative task and instead is focused on a punitive policy approach. It does not make sense from a policy or practical perspective.”
 
Schafer told Reuters if that's what lawmakers intended, then they should have written the law that way. But he says if Congress makes the legislative change, USDA will follow it.
 
If this shift is eventually approved by lawmakers, it will lessen the savings that went toward extra spending in the 2008 farm bill. It's unlikely lawmakers will replace those "lost” funds. Early in the farm bill process, savings via the new bill may already be on the decline.


 


 
You can e-mail Roger Bernard at rbernard@farmjournal.com.


 

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