Farm bill extension gives crop producers more time

March 5th, 2015 FSA Andy

Hello Again!

The cold and snow have certainly brought the birds to the feeder. We had eight pair of cardinals on Sunday morning and to hear them tells me that spring is on the way.

We have also had our share of deer feeding on the shrubs. They seem to like one particular type more than the rest, so I won’t need to trim them this spring.

By the time you read this we may be complaining about mud as next week’s temperatures are supposed to be back up to normal for this time of year.

Hot off the press: The ag secretary announced that there will be a one-time extension of the deadline for the base and yield reallocation process for the ARC-PLC program, which was officially to end Feb. 27.

New deadline

The new deadline is now March 31, which coincides with the ARC- PLC program election deadline.

“This is an important decision for producers, because these programs provide financial protection against unexpected changes in the marketplace,” Vilsack said in a released statement. “We’re working to ensure that they’ve got the time, the information, and the opportunities to have those final conversations, review their data, and visit the Farm Service Agency to make those decisions,”

It is also important to remember that if no changes are made to the base and yield history by March 31, the farm’s current base and yield will be used unchanged.

Producers must also make their ARC-PLC program choices by March 31, or the farm will not be eligible for 2014 ARC-PLC program payments and will automatically default into the PLC coverage program through the 2018 crop year.

It will be very helpful if producers call the FSA office for an appointment as this will speed up your time in the office.

That’s all for now,
FSA Andy

USDA extends farm bill crop deadlines

February 27th, 2015 Other News

WASHINGTON — Agriculture Secretary Tom Vilsack announced that a one-time extension will be provided to producers for the new safety-net programs established by the 2014 farm bill, known as Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC).

The final day to update yield history or reallocate base acres has been extended one additional month, from Feb. 27, until March 31. The final day for farm owners and producers to choose ARC or PLC coverage also remains March 31.

“This is an important decision for producers, because these programs provide financial protection against unexpected changes in the marketplace,” Vilsack said.

Providing time

He added that producers are working to make the best decision they can. And, USDA is working to ensure they have the time, information, and opportunity to review their data, and to visit the Farm Service Agency.

If no changes are made to yield history or base acres by March 31, the farm’s current yield and base will be used.

A program choice of ARC or PLC coverage also must be made by March 31, or there will be no 2014 payments for the farm and the farm will default to PLC coverage through the 2018 crop year.

“These are complex decisions, which is why we launched a strong education and outreach campaign back in September,” Vilsack said.

Educating producers

Nationwide, more than 2.9 million educational postcards, in English and Spanish, have been sent to producers, and more than 4,100 training sessions have been conducted on the new safety-net programs.

The online tools, available at www.fsa.usda.gov/arc-plc, allow producers to explore projections on how ARC or PLC coverage will affect their operation under possible future scenarios.

Covered commodities include barley, canola, large and small chickpeas, corn, crambe, flaxseed, grain sorghum, lentils, mustard seed, oats, peanuts, dry peas, rapeseed, long grain rice, medium grain rice (which includes short grain rice), safflower seed, sesame, soybeans, sunflower seed and wheat. Upland cotton is no longer a covered commodity.

To learn more, farmers can contact their local Farm Service Agency county office. To find your local office visit http://offices.usda.gov.

Related coverage:

President signs the 2014 farm bill.

Conservation compliance programs are important part of farm bill

February 26th, 2015 FSA Andy

Hello again!

Wow, more snow and record low temperatures! What a February this is turning out to be.

I put a new engine heater on my tractor two weeks ago and found on the coldest day so far this month that it doesn’t work. So of course I had to get out the propane heater to warm the block.

I’m ready for spring or a heated garage if I can just convince my wife. We all face challenges on the farm this time of year but I guess the important thing is to stay safe and keep the wood pile stocked.

On to farming

We have had several calls related to the new conservation compliance changes in the new farm bill as they relate to crop insurance.

For farmers to be eligible for premium support on their federal crop insurance, a completed and signed AD-1026 form must be on file with the FSA. Since many FSA and Natural Resource Conservation programs have this requirement, most producers should already have an AD-1026 on file.

If producers have not filed, they must do so by June 1.

When a farmer completes the AD-1026, FSA and NRCS staff will outline any additional actions that may be required for compliance with the provisions.

The Risk Management Agency, through the Federal Crop Insurance Corporation, manages the federal crop insurance program that provides the modern farm safety net for American farmers.

Since enactment of the 1985 farm bill, eligibility for most commodity, disaster, and conservation programs has been linked to compliance with the highly erodible land conservation and wetland conservation provisions.

Conservation compliance

The 2014 farm bill continues the requirement that producers adhere to conservation compliance guidelines to be eligible for most programs administered by FSA and NRCS.

This includes the new price and revenue protection programs, the Conservation Reserve Program, the Livestock Disaster Assistance programs and Marketing Assistance Loans implemented by FSA.

It also includes the Environmental Quality Incentives Program, the Conservation Stewardship Program, and other conservation programs.

FSA recently released a revised form AD-1026, which is available at USDA Service Centers and online. USDA will publish a rule later this year that will provide details outlining the connection of conservation compliance with crop insurance premium support.

Producers can also contact their local County FSA office for more information.

That’s all for now,

FSA Andy

Stuck with farm bill mess until 2018

February 19th, 2015 Alan Guebert

The low whimpering and muffled whining heard in farm country this month are not the gripes and grunts of corn and soybean growers trudging through 2015’s purgatory of under-$4 corn and less-than-$10 beans.

Instead, it’s the rising complaints of cranky farmers as they trudge out of dull meetings where land grant experts and Farm Service Agency officials have spent hours explaining farm program options under the 2014 farm bill.

Complex

Good grief, one farmer moaned to a reporter from Iowa Public Television’s Market-to-Market program after a lengthy, acronym-packed meeting, “It would be hard to make it more complex.”

The farmer, like most now diving into the program’s insurance-based options for the first time, went on to wonder if members of Congress, who spent nearly three years researching, wrangling and writing the law, actually “know anything about agriculture or farming themselves or if they just know a lot about economics.”

Another farmer, also plowing through his complicated options prior to the program’s late-March sign-up deadline, telephoned to asked, “Who wrote this mess?”

The answer to that short and simple question is short and simple: You did.

Sausage, anyone?

And here’s how, according to decades-long Capitol Hill farm policy hand who watched as the farm bill sausage was ground, tasted, re-ground, then re-tasted and reground again and again from 2011 through 2013 until it became a bland blob all could chew but few could stomach.

The legislative debate began with a skirmish over whether the new law would go big — devise a new “deep loss” program with available money — or go small, design an add-on program to the current crop insurance-centered law that might pay lesser amounts more often on what were called “shallow losses.”

The American Farm Bureau Federation pushed the “deep loss” option, but not very far. Commodity groups, which preferred the “shallow-loss” idea, quickly gained traction with Congress and the deep loss idea was deep-sixed.

No consensus in ag

That quick, clean win set the stage for tougher, longer fights over “how each group could maximize federal farm program payments for their own members,” says the observer.

“Once that started, it became obvious there would be no cohesive legislation.”

The fighting turned nasty.

“Every option offered by one commodity group was followed by a counter-option from another group. That sup-option brought sub-sub-options from the first group and on and on it went.”

The commodity groups then brought in local and regional land grant policy experts and ag economists and each university group developed their own “program calculator” to analyze every option and sub-option.

“Then it just became a battle of this calculator versus that calculator versus another calculator.”

What he means is if “the corn growers offered A for corn, then the wheat producers wanted B for wheat and, in turn, the cotton growers now needed C for cotton. The debate became a grinding search for that narrow piece of ground where everyone could stand.”

In the end, that search yielded “a completely Balkanized program that is now completely, utterly incoherent.”

Not forward-thinking

Additionally, says the old farm bill hand, the 2014 law “is anything but forward-thinking” — it’s built on commodity programs of the past, not the food needs of the future — “and it looks like an open invitation to the WTO (World Trade Organization) to challenge it on multiple levels.

“So the farmers are right; this bill is a mess. It was a mess when it was passed and it’s still a mess.”
OK, it’s a mess. We can fix this, right?

“Boy, while a lot of members on both the Senate and House ag committees say they’d like to change several parts of the bill — SNAP, say Republicans; crop insurance subsidies, say Democrats — no one has the energy or votes to do it,” says this handicapper. “This is it.”

In other words, this mess is your mess until the whole messy process begins again in 2018.

Stark County to hold farm bill meetings

January 14th, 2015 Other News

MASSILLON, Ohio — The Stark County Farm Service Agency and Ohio State University Extension will hold a meeting to educate farm producers and landowners about the 2014 farm bill programs (Agricultural Risk Coverage and Price Loss Coverage) Jan. 26 at 6 p.m.

The meeting will be held at the R.G. Drage Career Center, in the auditorium, located at 2800 Richville Drive SE, in Massillon.

Topics

Producers who participate in the meeting will learn about the ARC and PLC programs, how to get signed up for the new program and how to use the online decision tool. And they’ll learn about whether to reallocate base acres and/or increase farm yields.

This opportunity must have paperwork signed by a landowner and returned to the county office by close of business Feb. 27 in order to benefit the producer.

Both programs offer farmers protection when market forces cause substantial drops in crop prices and/or revenues. Producers will have until March 31 to select which program works best for their businesses.

It is career center policy that if R. G. Drage is closed for any reason, the meeting will be canceled.

Opting out: Farm bill exempts more organic farmers from checkoffs

January 14th, 2015 Brian Lisik

SALEM, Ohio — Circleville, Ohio-based dairy farmer Perry Clutts has been farming 100 percent certified organic since 2005.

Since transitioning from a conventional dairy operation, Clutts has not had to pay into the national dairy checkoff order, thanks to a 2002 farm bill provision exempting 100 percent organic operations from conventional checkoffs.

A proposed rule change announced by the U.S. Department of Agriculture Dec. 15 would expand that exemption to include 95 percent organic farmers, handlers, marketers and importers — otherwise known as “primary organic” operations.

The USDA recently fast-tracked its efforts to expand the exemption, part of the 2014 farm bill. A 30-day public comment period on the proposed rule change ended Jan. 15.

There are 22 national research and promotion checkoff programs. Under these programs, producers of a particular agricultural product pay assessments to fund marketing campaigns and research initiatives that benefit their commodity.

The USDA estimates the organic exemption has freed up $13.6 million for the organic sector, which produces an estimated $35 billion in annual sales, according to the USDA.

Not far enough

Laura Batcha, CEO and executive director of Organic Trade Organization, applauded the USDA’s efforts to implement the rule change so quickly.

“The 100 percent exemption solved some of the problems, but was drafted in such a way that it was restrictive,” Batcha said. “Communications from some of the commodity orders were bordering on disparaging to organic. They were not promoting organic a lot.”

The USDA’s proposed rule change, Batcha explained, would apply to split operations, those that farm both organically and conventionally. It would also address instances when non-organic agents are used in processing, such as sanitizing agents on a production line or milk processing line.

Carol Goland, executive director for the Ohio Ecological Food and Farm Association, said the USDA’s proposed rule change corrects the 2002 rule’s inequity in defining different types of organic operations.

“In a sense, what this farm bill does is better define the multiple foods and crops of organic as a single commodity,” Goland said, adding that OEFFA fully supports the proposed rule change.

Public comment

A number of conventional commodity organizations, including the United Soybean Board and the Almond Board of California, have requested the USDA extend its 30-day public comment period due to the complexity of the issue.

Organic checkoff option

The 2014 farm bill grants the USDA authority to not only expand the organic exemption in the 2002 farm bill, but to also explore options for an organic-specific checkoff order.

Maggie McNeil, director of media relations for the Organic Trade Association, said the organization has been working on the framework for such a checkoff for three years.

McNeil said they hope to have the application out within the next two months. If accepted by the USDA, it then has to go through a comment period, and a referendum — an actual vote of all organic stakeholders in the industry.

“A lot of people know the word organic, but don’t know really what it means,” said Clutts, who also sits on the board of the Organic Trade Organization. “It is based on a very specific criteria like no other food process anywhere. I think the collective pool could do something bigger (to promote organic agriculture).”

Gaining majority support for an organic checkoff order, however, could be challenging.
Goland said OEFFA recognizes the need for organic research and promotion and feels the organic sector should “be able to spend its money as it sees fit.”

“But I would not necessarily go so far as an organic checkoff,” she said.

Several comments on the USDA’s rule change proposal also cautioned against an organic checkoff.

“Please stop the start of a checkoff plan for organic products,” wrote Roger Pepperl, of Wenatchee, Washington-based organic fruit farm, Stemilt Growers. “Our organic world is too large and diverse to have an organization work on our behalf. We grow organic tree fruit and have nothing in common with organic cotton, organic beef, etc.”

Organic farmer Ted Weydert, of DeKalb, Illinois, added, “Contrary to popular belief, the Organic Trade Association only speaks for a very small number of actual organic farmers. This checkoff is not needed.”

Northeast Ohio: Plans for farm bill workshops set

January 9th, 2015 Other News

JEFFERSON, Ohio — OSU Extension in Northeast Ohio will be collaborating with local Farm Service Agency offices to offer meetings to discuss the crop side of the 2014 farm bill.

Farm bill changes

The 2014 farm bill has instituted major changes to the federal farm programs which require landowners and farmers to make a couple major decisions during the winter of 2015.

Landowners will need to decide whether or not to update their property’s crop yields and determine whether or not to re-allocate the farm’s base acres by Feb. 27.

Program elimination

The new farm bill also eliminated the Direct Payment, Counter-Cyclical Payment (DCP) and the Average Crop Revenue Election (ACRE) programs that were included in the 2008 farm bill.

These programs were replaced by a choice of three programs that farmers may elect to enroll in for the 2014 to 2018 crop years.

Choices

These programs are Price Loss Coverage (PLC), Agricultural Risk Coverage County Option (ARC-CO), and Agricultural Risk Coverage Individual Coverage (ARC-IC). Producers need to choose their program choice by March 31.

OSU Extension Educator, David Marrison and a local Farm Service Agency Representative will share specifics of the farm bill.
Please note that additional meetings will be scheduled as demand persists. There is no cost to attend but pre-registrations are requested so that adequate handouts can be made.

Details

More information about these programs can also be obtained by calling the Ashtabula County Extension office at 440-576-9008.

Jan. 13
Lorain County Farm Service Agency
42110 Russia Road
Elyria, Ohio 44035
2 p.m. to 4 p.m. or 6 p.m. to 8 p.m.
Call 440-326-5830 to register.

Jan. 14
Trumbull County AG Center
520 West Main Street
Cortland, Ohio 44410
1:30 p.m. to 3:30 p.m.
Call 330- 637-2046, ext 109 to register.

Jan. 15
Akron University- Medina
Medina County University Center (of Akron University)
6300 West Technology Lane
Medina, Ohio 44256
10 a.m. to noon or 2 p.m. to 4 p.m.
Call 330-722-2628 to register.

Jan. 15
Portage County Ag Center
6970 State Route 88
Ravenna, Ohio 44266
1:30 to 3:30 p.m.
Call 330-297-7633, ext 113 to register.

Jan. 20
Trumbull County AG Center
520 West Main Street
Cortland, Ohio 44410
1:30 p.m. to 3:30 p.m.
Call 330- 637-2046, ext 109 to register.

Jan. 22
USDA Service Center
Hopedale, Ohio
10 a.m.
Call 740-942-8823 to register.

Usefulness of farm data to change with new Farm Bill provisions

December 8th, 2014 Katie Woods

The vast amounts of data that farmers collect, farm machinery records and drones can calculate aren’t analyzed by farmers due to time constraints and indifference to learning how to use the data. However, Delta Farm Press reports that provisions in the new Farm Bill will change this by requiring data reporting to government agencies and crop insurance.

Today, more than 60 percent of farmers have access to precision technology, and about 90 percent of farm machinery can connect to the Internet and transmit data back to the manufacturers so that future equipment can be improved, but almost all of that data is left on the machines and isn’t used by farmers.

The movement now is to get data into usable form that farmers can use. All of this data gathering and analysis will be used to develop farm management, sustainability and production

Via: Delta Farm Press > Today’s farms awash in data: But what to do with it?

Already unimpressed with farm bill

October 30th, 2014 Alan Guebert

In a series of toughly-worded articles published in Choices, the quarterly journal of the Agricultural & Applied Economics Association (AAEA), nearly every major element of the 2014 farm bill — from its expanded crop insurance program to its impact on global trade negotiations — comes under fire as either “perverse,” “false,” “vacuous,” “absurd,” “failing,” or “wasteful.”

The seven articles, overseen by Vincent H. Smith, a professor of ag economics at Montana State University, are a “careful, thoughtful examination of the economics behind the 2014 law,” explained Smith in a telephone interview Oct. 21. “Too often there has been a serious lack of critical attention given to farm bills by the ag economics community.”

Not anymore

Smith and 10 other land grant ag economists — most of whom are AAEA “Distinguished Fellows” — take a hard, unobstructed look at the $100-billion-per-year 2014 law and come away deeply unimpressed. (A link to all is posted http://farmandfoodfile.com/in-the-news/.) A quick sample shows just how unimpressed.

On the overall “potential economic benefits and costs” of the law, Smith and Barry Goodwin, a professor of ag and resource economics at North Carolina State University, write that the “standard pro-farm policy rhetoric … typically claims that subsidies are needed to save small family farms” and are “important rural development mechanisms.”

Facts show, however, that “the conventional wisdom is based on a paradigm that is, at best, a relic of history and the assertions that are often put forward to argue for billions of dollars in taxpayer subsidies are false in almost every case.”

In his explanation of the near-century old “resiliency of farm programs,” Iowa State’s Bruce Babcock, a pioneer of the 2014 law’s key element, crop insurance, writes, “The disconnect between a lack of actual economic rationale for farm subsidies and their continued existence demonstrates that farm programs exist not because of a need to enhance social welfare but rather to meet the political objective of members of Congress to care for a constituency that lends them political cover.”

Getting wealthy

That political back-scratching, explains Brian Davern Wright, an ag economist from the University of California, delivered a 2014 law even more reliant on “crop insurance and disaster programs (that) are themselves disastrous” because each “reduces the incentive for farmers to manage farm risks and environmental problems” while it “increases their wealth, which far exceeds the average wealth of non-farm families and continues to rise.”

The story is equally upside down when looking at the international food aid provisions of the 2014 law, claims Erin Lentz of the University of Texas, and Christopher Barrett of Cornell. If just one restriction of the food aid formula, the requirement that 50 percent of all U.S. food aid be sent abroad on American-flagged ships — which “only affect(s) six to 11 mainly outdated vessels” — was removed, “4-10 million acutely malnourished people … would receive food aid.”

Or, “In other words, roughly 10,000 additional hungry people are not being fed for each domestic shipping job protected” in the bill.

Free trade

Moreover, the global trade implications of the law, writes Colin Carter, an ag economist at UC-Davis, are in clear conflict with what farmers repeatedly claim they want: free trade.

“The 2014 farm bill … may well cost the United States any credibility in future agricultural trade negotiations in the Doha Round. Perhaps even more importantly, the (law) has undermined U.S. credibility in regional trade negotiations…” such as the now-bogged down trans-Pacific trade talks.

Two other articles dive into the farm bill’s impact on ag research and “U.S. Agri-Environmental Policy.” Both are equally blunt and equally unimpressed by the long-in-the-making, short-in-reality policies the law dictates.

Smith, who describes himself as “far more liberal” than the right-leaning American Enterprise Institute, the Washington, D.C. think tank where he serves as a “visiting scholar,” says “the empirical evidence that underpins the entire series of articles is rock solid.”

So will be the lumps of limestone, granite and coal thrown at him and his ag econ colleagues by all the beneficiaries of the 2014 farm bill.

Farm Science Review opens with farm bill commodity discussion

September 16th, 2014 Chris Kick

LONDON, Ohio — Early visitors to the 2014 Farm Science Review got a heavy dose of new acronyms and policy terms, during a farm bill crop update moderated by OSU ag economists and farm policy experts.

There are at least four main programs crop farmers can choose from — and they’re all complex and multifaceted.

“These have multiple moving features going on,” said Carl Zulauf, OSU farm policy expert. “I’m sorry they’re complex. But you’ve got to understand, that complexity means difficult answers.”

Program choices

They include the Agriculture Risk Coverage (ARC) county level program, the ARC individual farm program, and the Price Loss Coverage (PLC) program. And, farmers can participate in a new insurance program, called the Supplemental Coverage Option (SCO).

The ARC generates payments to farmers when pre-acre actual market revenue falls below the ARC per-acre revenue guarantee. Growers have a choice of whether to calculate actual revenue and revenue guarantee on county yields or on farm yields. Payments are calculated using base acres.

The PLC is basically the previous countercyclical payment program with a new name and higher trigger prices. Payments are triggered when the season-average market price is less than a crop’s reference price.

The SCO is a new crop insurance program that makes payments if county revenue or yield falls below 86 percent of the SCO guarantee. Unlike PLC and ARC, SCO payments will be based on planted acres.

What’s the difference?

In general, the ARC option will likely fit farmers who want to take a little more risk, while the PLC helps protect against drastic losses. But there still is no “default decision on program choice,” Zulauf said.

This is because of the complexities with each choice, and the ever-changing commodities market. On the one hand, it might make sense to protect oneself the most against major losses, but Zulauf said the smaller, “shallow” losses can be “just as dangerous, just as difficult,” especially over a period of several years.

The farm bill is in effect for five years, which means farmers need to give a lot of forethought and calculation to which program best fits their operation.

The ARC-Individual option allows farmers to protect their farm on an individual, per-farm basis.

The ARC-County is a county crop loss program with a coverage range limited to 76-86 percent. If the ARC benchmark revenue is reasonably close to the insurance guarantee, a farm — especially if cash-flow is restrained — may choose to buy individual insurance at 75 percent coverage and use ARC-CO to provide partial coverage, at the 76-86 percent level.

Both ARC-CO and PLC have a minimum price, and the PLC has a reference price. However, if market price is below the reference price for multiple years, PLC will likely pay more because ARC’s revenue benchmark changes with market conditions, and therefore declines if the low prices persist.

Calculate what’s best

Indeed, the options are complex, and Zulauf and the other panelists urged careful forethought and calculation. Calculators are being developed that will allow farmers to enter their data and determine their best option, but Zulauf warned that calculators are “only as good as the information you enter.”

He’s heard word that calculators could be available online by the end of September, but another issue is, the U.S. Department of Agriculture is still developing some of the rules for how to implement the commodity programs. These final rules could impact the calculation, and the farmer’s decision process.

Zulauf said there is speculation the rules will be finalized by late fall to early winter, at which point farmers will have a better understanding of which option works best.

He expects about $5 billion already could be paid to farmers this year, based on provisions within the new farm bill.

“Farmers have had choices before,” Zulauf said. “They’ve just never had these kinds of choices.”

Helpful resources

The panel was moderated by OSU Ag Economist Matt Roberts. OSU is involved in a statewide effort to help farmers understand their options, and Zulauf has published numerous articles about the issue. For more information, visit his article Program Choice — A Big Picture Perspective.

The one acronym most people already know is FSR — Farm Science Review — which continues Sept. 16-18 at the Molly Caren Agricultural Center in London, Ohio.

(Some information from Choices and the Agricultural & Applied Economics Association.)