MOUNT VERNON — U.S. Department of Agriculture Knox County Executive Director Katie Mills announces the American Taxpayer Relief Act of 2012 extended the authorization of the Food, Conservation, and Energy Act of 2008 (the 2008 Farm Bill) for many FSA administered commodity, disaster, and conservation programs through 2013. The extended programs, benefiting all consumers, include, among others: the Direct and Counter-Cyclical Payment Program, the Average Crop Revenue Election Program, and the Milk Income Loss Contract Program.
DCP — The 2013 Direct and Counter-cyclical Program will begin on Feb. 19, and end on Aug. 2. New contracts are required annually for each of these programs and all signatures must be obtained by the deadline.
“We encourage producers to call their Knox County office, located at 1025 Harcourt Road, and set up an appointment to begin the enrollment process as soon as possible,” said Mills. “This will allow adequate time to obtain all necessary paperwork and signatures before the August deadline.”
The 2013 DCP and ACRE program provisions are unchanged from 2012, except that all eligible participants in 2013 may choose to enroll in either DCP or ACRE for the 2013 crop year. This means that eligible farmers who were enrolled in ACRE in 2012 may elect to enroll in DCP in 2013 or re-enroll in ACRE in 2013.
“DCP program payments use base acres and payment yields established for each farm. Last year, the Knox County FSA office issued nearly $1.9 Million in direct payments. These payments go directly to eligible, local farmers as a subsidy to help offset the fluctuating rise of production input cost. Ultimately, these subsidies help all consumers because they aid in offsetting drastic increases at the grocery store,” Mills said.
The U.S. has the cheapest food supply in the world. Americans spend less on groceries than most places in the world due to subsidies. On average, consumers spend 8 percent of their income annually on food compared to nearly 17 percent prior to these types of payments or 11 and 36 percent respectively in Germany and Russia.
The DCP payments help to offset the cost to the farmer. In example, farmers receive approximately $0.19 from every dollar that is spent on food. This is roughly $1.95 for steak consumers buy in the grocery for $8.49 or $0.79 for potatoes we buy for $4.29. The American farmer does not reap the benefits from increased prices at the grocery store to offset their increasing inputs. The increased costs seen in the stores are attributed more to things such as transportation and fuel cost form both gas and diesel, product marketing, taxes and labor.
ACRE — Average Crop Revenue Election program provides a safety net based on state revenue losses. Election begins on Feb. 19 and ends on June 1. When the ACRE option is chosen, it acts as a price-based safety net. Farmers take a reduced DCP payment when enrolled in ACRE. USDA provides the farm a revenue guarantee. An ACRE payment is issued when both the state and the farm have incurred a revenue loss.
MILC — Due to the rising input cost dairy farmers are faced with, MILC payments are anticipated for 2013. The MILC program compensates dairy producers when domestic milk prices fall below the Boston Class I milk price of $16.94 per cwt. Knox County issued approximately $727,000 in MILC payments to local farmers over the last 3 years to subsidize the low raw milk prices and high input cost farmers are faced with.
MILC contracts are automatically extended to Sept. 30, for all dairy producers that participated in 2012. Eligible producers do not need to re-enroll in MILC. Dairy producers are reminded to continue to bring in their monthly production from October to present. New dairies that have not previously participated in the MILC program or are starting to milk will need to fill out the CCC-580, Milk Income Loss Contract before payments can be issued.
Other requirements — Landowners and operators are reminded that in order to receive payments, compliance with Highly Erodible Land and Wetland Conservation provisions are required. Farmers are reminded to follow tillage, crop residue and rotation requirements as specified per their conservation plan. Contact should be made with the Knox County FSA office prior to conducting land clearing or drainage projects to insure they remain in compliance. Farmers that rent ground are reminded it is their responsibility to help their land owners understand these regulations.
The 2013 Average Adjusted Gross Income limitations remain the same as 2012. All 2013 payments are subject to AGI limitations.
Knox County FSA office asks farmers to help with the extreme budget constraints. Farmers are encouraged to call to schedule appointments, bring in thumb drives to save farm maps electronically, and provide the county office with a valid email for basic communication such as newsletters and to obtain signatures on contracts.
To prepare accurate contracts and ensure timely payments, farmers are reminded to notify KCFSA of any changes in their farming operation. Changes include bank accounts, farm ownership, farm operator, address, tax identification number, and agricultural use.