10.055 Production Flexibility Payments for Contract Commodities

Direct Payments with Unrestricted Use

Individual/Family

Specialized Group

Profit Organization

A--Agriculture

A-Production, Operations

A-Stabilization and Conservation Service;

F--Disaster Prevention, Relief

F-Disaster Relief

       (Contract Commodity Direct Payments)

 

FEDERAL AGENCY: FARM SERVICE AGENCY, DEPARTMENT OF AGRICULTURE

AUTHORIZATION: Agricultural Market Transition Act, Public Law 104-127, as amended; Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriation Act of 2000, Public Law 106-78; Emergency Farm Financial Relief Act, Public Law 105-228; Food Security Act of 1985, as amended, Public Law 99-198; Agricultural Act of 1949, as amended, Public Law 81-439; Commodity Credit Corporation Charter Act, as amended, Public Law 80-806; Agricultural Adjustment Act of 1938, as amended, Public Law 75-430.

OBJECTIVES: To support farming certainty and flexibility while ensuring continued compliance with farm conservation and wetland protection requirements.

TYPES OF ASSISTANCE: Direct Payments with Unrestricted Use.

USES AND USE RESTRICTIONS: Producers enrolled in the 7-year Production Flexibility Contracts during the one-time sign-up held in 1996 are eligible to receive contract payments.  All contracts, except those executed after the expiration of Conservation Reserve Program contracts (with an associated crop acreage base reduction), began with the 1996 crop and extend through the 2002 crop.  A farm was eligible for enrollment if it had a wheat, corn, grain sorghum, barley, oats, upland cotton, or rice crop acreage base established for 1996.  Once the farm is enrolled, the crop acreage base becomes contract acreage. Commodity- specific contract payment rates are determined annually based on the statutory spending levels and the amount of enrolled contract acreage. Farm level commodity payments are equal to the contract payment rate multiplied by 85 percent of the contract acreage multiplied by the farm program payment yield.  To be eligible for contract payments producers are required to:  (a) comply with the conservation and wetland protection requirements on all of the producer's farms; (b) comply with planting flexibility requirements; (c) use the contract acreage for an agricultural or related activity; and (d) obtain at least the catastrophic level of crop insurance for each crop of economic significance or provide a written statement that waives any eligibility for emergency crop loss assistance; and (e) file annual acreage reports on any fruit or vegetable plantings on contract acreage.  Annual payments are made no later than September 30 of each of fiscal years 1996-2002.  For fiscal year 1996-1998, producers could elect to receive 50 percent advance payments on December 15 or January 15 of the respective fiscal year.  For fiscal years 1999-2002 payments, producers may choose to receive fiscal year 1999-2002 production flexibility contract payments as two 50 percent payments or one 100 percent payment at any time during the respective fiscal year.  Final payments will be paid by September 30 of the respective fiscal year.

ELIGIBILITY REQUIREMENTS:

Applicant Eligibility: Owner, landlord, tenant, or sharecropper on a farm with enrolled contract acreage that meets program requirements as announced by the Secretary.

Beneficiary Eligibility: Owner, landlord, tenant, or share cropper on a farm with contract acreage that meets program requirements as announced by the Secretary.

Credentials/Documentation: Record of farming operation must be on file in the FSA county office.  This program is excluded from coverage under OMB Circular No. A-87.

APPLICATION AND AWARD PROCESS:

Preapplication Coordination: None.  This program is excluded from coverage under OMB Circular No. A-102 and E.O. 12372.

Application Procedure: The farm operator visits the FSA office to sign Form-478, a Production Flexibility Contract and to report fruit and vegetable acreage planted for harvest on contract acreage on Form-578. This program is excluded from coverage under OMB Circular Nos. A-102 and A-110.

Award Procedure: Not applicable.

Deadlines: The sign-up period, except for farms with land under a Conservation Reserve Program (CRP) contract that has an associated crop acreage base reduction, ended in 1996.  The land under an expiring CRP contract can be added to an existing Production Flexibility Contract or enrolled as a new contract from October 1 through November 30 in the year following the fiscal year in which the CRP contract expires.  Once enrolled, farm operators report acreage of fruits and vegetables grown on contract acreage specified dates which vary by State and within States. Contact State or county FSA offices for applicable deadlines.

Range of Approval/Disapproval Time: Approval of payments depends on farmer compliance with conservation and wetland protection requirements on all of the producers' farms, planting flexibility requirements and other eligibility, and is fairly routine and prompt.

Appeals: If producer questions yields or other determinations, he may appeal to the FSA county office within 15 days after being notified.

Renewals: Not applicable.

ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements: Not applicable.

Length and Time Phasing of Assistance: Payment by check is made no later than September 30 of each of fiscal years 1996-2002. For fiscal year 1996-1998 payments, producers could elect to receive 50 percent advance payments on December 15 or January 15 of the respective fiscal year.  For fiscal year 1999-2002 payments, producers may choose to receive production flexibility contract payments as two 50 percent payments or one 100 percent payment at any time during the respective fiscal year.  Final payments will be paid by September 30 of the respective fiscal year.

POST ASSISTANCE REQUIREMENTS:

Reports: Applicant reports any disaster (when applicable) which would affect crop yield.

Audits: Recipients are subject to audit by Office of Inspector General, USDA.

Records: Not applicable.

FINANCIAL INFORMATION:

Account Identification: 12-4336-0-3-351.

Obligations: (Production Flexibility Contract Payments) FY 99 $5,475,570,144; FY 00 est $5,049,271,000; and FY 01 est $4,056,813,000. Obligations include the amounts formerly in 10.052, 10.055, 10.058, and 10.065.

Range and Average of Financial Assistance: The production flexibility contract payments for the 2000 crops as of January 31, 2000 consisted of: $1,578,626,147 for feed grains; $756,654,696 for wheat; $266,829,934 for upland cotton; and $196,945,622 for rice.  The estimated production flexibility contract payments for the 2001 crop are: $2,184,184,000 for feed grains; 1,068,243,000 for wheat; $456,766,000 for upland cotton; and $347,620,000 for rice. Cotton, feed grain, wheat and rice production flexibility contract payments, in total, may not exceed $40,000 to any one person during any fiscal year.

PROGRAM ACCOMPLISHMENTS: The contract enrollment report for the 1999 crop production flexibility contracts consisted of: 1,592,388 contract enrolled farms for feed grains; 1,006,583 contract enrolled farms for wheat; 174,382 contract enrolled farms for upland cotton; and 24,115 contract enrolled farms for rice.

REGULATIONS, GUIDELINES, AND LITERATURE: Program regulations are published in the Federal Register.  Announcements issued to news media and letters to producers.  Background Information--"Services for Farmers", July 1999, no cost; Fact Sheet--"Production Flexibility Contracts and Marketing Assistance Loans", February 1999, no cost; Final Cost/Benefit Analysis, no cost;  Farm Service Agency, U.S. Department of Agriculture, STOP 0532, 1400 Independence Avenue SW., Washington, DC 20250-0532.

INFORMATION CONTACTS:

Regional or Local Office: Consult the local telephone directory for location of the FSA county office.  If no listing, get in touch with appropriate FSA State office listed in the Farm Service Agency Section of Appendix IV of the Catalog.

Headquarters Office: Department of Agriculture, Farm Service Agency, Economic and Policy Analysis Staff, STOP 0532, 1400 Independence Avenue SW., Washington, DC  20250-0532.  Telephone: (202) 720-2711. Contact Person:  Philip W. Sronce.

RELATED PROGRAMS: None.

EXAMPLES OF FUNDED PROJECTS: Not applicable.

CRITERIA FOR SELECTING PROPOSALS: Not applicable.
10.062