The next scheduled arrival at county Farm Service Agency offices will be the much awaited payment software that will allow payments to go out to growers. Hopefully, this last piece of the puzzle will be in place in the next couple of weeks now that the rules are settled.

Also, some 200 counties nationwide have received the last of the files they needed to allow growers to go through the CDP sign-up process. Lubbock County was one of those counties and should now be in a position to begin signing producers up for the program.

Months of hard work have gone into the process to transform rules used for the 2000 CDP into an appropriate set of regulations to govern what is a very different disaster program for the 2001 and 2002 crops.

Producers will be glad to know that the final provisions do not include any surprise elements and that information published on previous occasions to get them up to speed on the program has been indeed extremely accurate.

The following is a quick refresher on the different aspects of the program and how payments and eligibility will be determined.

Program eligibility for the Crop Loss portion of the program remains unchanged from programs past. To qualify a producer must have a documented loss in excess of 35 percent of either their crop insurance Actual Production History (APH) yield for the disaster year, or the 5-year County average yield, whichever is higher.

County average yields are computed taking the five years of data, dropping the high and low years, and averaging the remaining three years.

The 2001-2002 CDP payment yields will be determined by calculating the yield loss in excess of the 35 percent eligibility threshold and subtracting actual production harvested during the growing season or the appraised production as determined by Federal Crop Insurance rules.

Production to count in the CDP payment calculation can also be adjusted by quality if average quality data for crops harvested during the year is provided to the County Office.

Additionally, a separate bale-by-bale Quality Loss Program (QLP) is also available to producers who suffered only quality losses or whose actual yield losses were not large enough to meet the 35 percent loss threshold for the Crop Loss portion of the program.

The stand-alone Quality Loss program will require a complete listing of all bales produced and the average loan value for each to determine eligibility and payment amounts.

CDP payments will be calculated at three different payment levels. Insured crops will be paid at a rate equal to 50 percent of the applicable crop insurance payment rate for the crop. Non-insured crops will be paid at 45 percent of the applicable crop insurance price. Non-insurable crops will be paid at a rate equal to 50 percent of the applicable price.

Non-harvest factors will apply to the payment calculation for crops not taken to harvest. For Texas Upland cotton the non-harvest factor will be .88, meaning CDP payments will be reduced by 12 percent for cotton crops not taken to harvest.

Program benefits are limited for producers at $80,000 per person/entity. In addition to the individual payment limitation an overall eligibility cap also exists that excludes individuals with adjusted gross incomes of greater than $2.5 million from participating in the program.

Because of the complex nature of the program and the many pieces of information that are required to complete the sign-up process it is important that producers do some advance preparation before they get to the FSA office.

One of the best ways for producers to avoid problems is to pull together copies of the type of information needed for the sign-up. This will provide a quick double-check of the data FSA receives from other sources, and can also be used to fill in the missing pieces that could hold-up the process.

Taking the following steps should make everything move a little quicker:

  • Identify specific production units that meet the minimum eligibility requirement of a 35 percent or greater yield loss.
  • Identify the appropriate FSA Farm Number for each qualifying unit.
  • Bring a recap sheet with the average quality of the bales produced on the unit and a listing of each bale’s loan value.
One other important piece of information to remember about the new program is that anyone receiving benefits will be required to carry Federal Crop Insurance in both 2003 and 2004. For crops that the 2003 insurance sales closing date had passed before passage of the Agricultural Assistance Act the insurance requirement must be fulfilled over the next two available crop years.

CDP participants who fail to comply with this provision will have to refund the full amount of CDP assistance they received plus interest.

Shawn Wade writes for Plains Cotton Growers, Inc.

e-mail: rsmith@primediabusiness.com