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Grant Community.com Catalog of Federal Domestic Assistance Program Descriptions |
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CATALOG OF FEDERAL DOMESTIC ASSISTANCE 10.454: Dairy Options Pilot Program
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| PROGRAM AND AWARD | FINANCIAL AND INFORMATION CONTACTS |
| ELIGIBILITY REQUIREMENTS | FINANCIAL AND ADMINISTRATIVE INFO. |
| APPLICATION AND AWARD PROCESS | INFORMATION CONTACTS |
| RELATED PROGRAMS | ASSISTANCE CONSIDERATIONS |
| PROGRAM ACCOMPLISHMENTS | POST ASSISTANCE REQUIREMENTS |
Applicant Eligibility: To be eligible for any benefits under this program, applicants must be dairy farmers (i.e., an individual, entity, or joint operation, which as owner, operator, landlord, tenant, or sharecropper is entitled to share in the production available for marketing from the dairy farm, or share in the proceeds thereof) who: (1) Are eligible for a production flexibility contract, a marketing assistance loan or any other assistance under Title I of the Federal Agriculture Improvement and Reform Act of 1996; (2) volunteer to participate in this program; (3) operate a dairy farm located in a county selected for the pilot program; and (4) have documented production history of at least 100,000 pounds of production over any consecutive 6-month period during the most recent 12 months.
Beneficiary Eligibility: Dairy farmers.
Credentials/Documentation: Dairy farmers must certify that they are eligible for the DOPP and that their farm produced at least 100,000 pounds of milk over a consecutive 6-month period during the most recent 12 months.
Preapplication Coordination: The DOPP application and participation agreement materials include Form CCC-320 and a brochure explaining DOPP, along with instructions. Consultation or assistance is available from RMA and from extension agents to aid in preparing these forms. No informal preapplication consultation is necessary. This program is excluded from coverage under E.O. 12372.
Application Procedure: The DOPP application materials will be mailed to producers in counties where the program operates.
Award Procedure: The program will last up to 12 months for each participant and operate for 3 years. Participation is capped, by county, at 100 farmers. If more than 100 farmers apply, selection will be by random lottery. Producers who are not selected in the lottery will receive preference in subsequent rounds of the program in their county.
Deadlines: In the first round, farmers had 2 weeks to return their signed DOPP agreements. For the second round, farmers have 2 weeks after the date of training to return their signed application and a copy of their production records.
Range of Approval/Disapproval Time: In the first round, farmers should expect a response within 3 weeks of RMA's receipt of their applications. For the second round, there will be no approval/disapproval response time.
Appeals: None.
Renewals: None.
Criteria for Selecting Proposals: Not applicable.
Examples of Funded Projects: The program was operated to fund options purchases for producers in the first round in 12 counties in each of the following states, which began in Jan. 1999: California, Vermont, Wisconsin, Minnesota, New York, Pennsylvania, and Texas. For the second round, the program is scheduled to operate in an additional forty-nine counties in 25 additional states: Arizona, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Missouri, Nebraska, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, South Dakota, Tennessee, Utah, Virginia, and Washington.
Range and Average of Financial Assistance: None.
Federal Agency: RISK MANAGEMENT AGENCY (RMA), (DEPARTMENT OF AGRICULTURE )
Type of Assistance: Direct Payments for Specified Use.
Obligations: FY 99 $1,021,000; FY 00 est $9,744,000, and FY 01 est $9,744,000. Note: For FY 1999 and succeeding years, the DOPP costs will be paid by CCC funding; RMA is no longer paying the costs.
Budget Account Number: 12-4336-0-3-351.
Authorization: Federal Agriculture Improvement and Reform Act of 1996, Title I; Agricultural Market Transition Act, Subtitle H, Public Law 104-127.
Regulations, Guidelines, and Literature: Brochure - "Got Options? Announcing the Dairy Options Pilot Program".
Regional or Local Office: Not applicable.
Headquarters Office: Risk Management Agency, 6727-S, Stop #0804, 1400 Independence Ave., SW., Washington, DC 20250. Contact: Craig Witt. Phone: (202) 690-2957. Fax: (202) 690-2095. (Home Page)
(See Appendix IV for more contact info.)
Formula and Matching Requirements: The program has no statutory formula. The proposed cost-sharing arrangement between RMA and participating diary farmers calls for RMA to pay for 80 percent of premiums and up to $30 in brokers fees for each options contract purchased under the DOPP. The farmer pays for 20 percent of the premiums and any broker fees in excess of $30 per contract. This program has no matching requirements for State and local governments.
Length and Time Phasing of Assistance: This assistance is available to farmers in selected counties from the date application materials are mailed to farmers in those counties, until all options have been liquidated. All DOPP options must be purchased within 4 months of the date of the training session in each county. The assistance is paid to the farmer's broker on behalf of the farmer on a transaction-by-transaction basis.
Uses and Use Restrictions: Funds will be used to share the cost of premium for 'put' options purchased by DOPP participants and for a portion of the brokers' fees to conduct and execute transactions. Funds may be used to purchase only 'put' options on milk futures contracts. Other discretionary expenses will be incurred by RMA to operate the program such as those associated with the DOPP's required training sessions.
Reports: None.
Audits: RMA's Office of Risk Compliance will conduct random audits of participating producers' and brokers' trading activity to verify compliance with the DOPP agreements.
Records: None.
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Last Updated, November, 2000
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