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Legal issue still being determined.
As the sequester spending reductions loom, questions have arisen on their potential impact to USDA payments, according to sources.
The question, contacts advise, is relative to those who enroll in the 2013 farm program before the sequester cuts become effective and whether their payments would be reduced by any sequester-forced cuts.
"It is a legal question," said one contact who noted if there has been a decision made, it has not yet been disseminated to the government agencies involved.
FSA, in releasing the Form CCC-509 Appendix which covers the 2013 Direct and Countercylical Payment (DCP) and Average Crop Revenue Election (ACRE) programs, included the following statements relative to the possible sequester reductions:
"Payments under the DCP and ACRE programs may be reduced by a certain percentage due to a sequester order required by Congress and issued pursuant to the Balanced Budget and Emergency Deficit Control Act of 1985. Should a payment reduction be required, FSA will provide notice about the required percent of payment reduction that applies to direct, countercyclical and ACRE payments."
Some believe that statement should "cover" FSA relative to this question and therefore mean that all 2013 payments would be reduced equally if the sequester cuts take place, regardless of when the producer enrolled in the program. But others note that while that statement is included, there is still a legal question that has been raised on the issue.
Comments: This appears to be one of those questions that shouldn't necessarily be a question as some note that when prior across-the-board spending reductions have taken place, such as those under the Gramm-Rudman cuts, they applied to most USDA payments, with one exception being CRP payments. And FSA did include, as noted, a clause in the form producers have to sign to participate in the farm program that addresses the sequester cuts. We are also attempting to get a response to this situation from lawmakers on the Hill.