USDA announced it would be unable to make partial 2007-crop-year counter-cyclical payments for wheat, barley or oats because market prices for those crops are higher than the trigger price for such payments.

Producers enrolled in the government’s Direct and Counter-Cyclical Payment Program may receive counter-cyclical payments when the national average market price for a program crop is less than the target price specified in the 2002 farm bill.

USDA calculates these program payments based on historical base acreage and payment yields, not current production. USDA used the November World Agricultural Supply and Demand Estimates Report, which was released Nov. 9, to project these rates and determined that the effective prices exceed their respective target prices.

Any partial payments for producers with upland cotton, rice or peanut base acres will be announced on or after Feb. 1, 2008. Any partial payments for producers with corn, grain sorghum or soybean base acres will be announced on or after March 1, 2008.

By statute, the 2007 crop counter-cyclical payments can be made in only two installments, a change from prior crop years when counter-cyclical payments were made in three installments.

For 2007, if partial payments are made, the first installment will equal 40 percent of the projected total payment and will be made after the first six months of the beginning of the marketing year. The final payment is made after the end of the marketing year.

The 2002 farm bill requires that any overpayments to producers must be repaid. If not repaid, USDA may deduct overpayments from any future USDA payments.

More information on this program is available at local Farm Service Agency offices and at this Web site: http://www.fsa.usda.gov.

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