Counter-cyclical payments issued sooner

ORIGINALLY WRITTEN BILL HARMON- FARM SERVICE AGENCY
Agriculture Secretary Mike Johanns has announced that U.S. Department of Agriculture’s Commodity Credit Corporation will accelerate the issuance of final 2005-crop upland cotton, grain sorghum and peanut counter-cyclical payments.

This is the earliest that producers will have received final counter-cyclical payments for these commodities.

“Drought and low market prices are just two factors adversely affecting many producers this year,” Johanns said. “These payments will help many farmers during this difficult period to remain a viable part of America’s agriculture sector in the future.”

The final 2005-crop grain sorghum counter-cyclical payment rate is $0.27 per bushel.

The grain sorghum payment rate is at the maximum level due to market prices averaging well below the $1.95 per bushel loan rate during the marketing year, which is established as Sept. 1 through Aug. 31.

Because of these low market prices, USDA is able to calculate the final counter-cyclical payment rate for grain sorghum at this time, prior to USDA’s release of the final season average price at the end of September.

Final counter-cyclical payments for grain sorghum are normally made following the marketing year.

The 2002 Farm Bill provided for the availability of partial 2005-crop counter-cyclical payments in October 2005 and February 2006.

Grain sorghum producers who accepted the two partial payments cumulatively received $0.1890 per bushel. They are due an additional $0.081 per bushel.

Marion County sorghum program producers received a total of just over $765,000 in final 2005 crop year sorghum counter-cyclical payments.

The counter-cyclical payment rate is the amount by which a commodity’s target price exceeds its effective price.

The effective price equals the direct payment rate plus the higher of: (1) the national average market price received by producers during the marketing year, or (2) the national average loan rate for the commodity.

The counter-cyclical payment amount equals the established counter-cyclical payment rate, times 85 percent of the farm’s base acreage, times the farm’s counter-cyclical yield per crop.

USDA’s Farm Service Agency distributes all counter-cyclical payments on behalf of CCC.

For more information on the direct and counter-cyclical payment program, contact your local USDA Service Center or visit this Web site: www.fsa.usda. gov/pas/publications/facts/html/dcp06.htm.

Bill Harmon is executive director of the Marion County FSA office in Marion.

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