<b>By JANE HOUIN<br>
Ohio Correspondent</b> </p><p>

WASHINGTON, D.C. — The USDA has announced that because market prices are high, producers with wheat, barley or oats base acres who are enrolled in USDA’s Direct and Counter-cyclical Payment Program (DCP) will not receive partial 2007-crop year counter-cyclical payments.</p><p>
The program is designed so that enrolled producers may receive counter-cyclical payments when effective prices for eligible commodities are less than their respective target prices specified in the 2002 farm bill.</p><p>
DCP provides payments to eligible producers on farms enrolled for the 2002 through 2007 crop years. There are two types of DCP payments: direct payments and counter-cyclical payments. Both are computed using the base acres and payment yield established for the farms.</p><p>
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.</p><p>
Any partial payments for producers with upland cotton, rice or peanut base acres will be announced on or after Feb. 1. Any partial payments for producers with corn, grain sorghum or soybean base acres will be announced on or after March 1.</p><p>
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.</p><p>
DCP was authorized by the 2002 farm bill as a replacement for the previous production flexibility contract (PFC) payments in the 1996 Farm Bill.</p><p>
The program is administered by the USDA’s Farm Service Agency (FSA). To be eligible to participate in the DCP program, owners, operators, landlords, tenants or sharecroppers must share the risk of producing a crop on base acres of a farm enrolled in DCP and be entitles to share in the crop available for marketing from the base acres (or would have shared has a crop been produced).</p><p>
Other eligibility requirements include annual reporting of the farm’s cropland acreage, compliance with conservation and wetland protection requirements on all land, compliance with planting flexibility requirements, using the base acres for agricultural or related activities and protecting all base acres from erosion, including providing sufficient cover as determined necessary by the country FSA committee and control of weeds.</p><p>
Base acres and payment yields are established for a number of eligible commodities, including barley, corn, grain sorghum, canola, flax, mustard, rapeseed, safflower, sesame, sunflower, peanuts, rice, soybeans, upland cotton and wheat.</p><p>
For each commodity, the direct payment for each crop year equals 85 percent of the farm’s base acreage multiplied by the farm’s direct payment yield and then multiplied by the direct payment rate.</p><p>
The addition of counter-cyclical payments in the 2002 farm bill was intended to provide support counter to the cycle of market prices as part of a “safety net” in the event of low crop prices. These payments are only issued if the effective price for a commodity is below the target price for the commodity.</p><p>
The legislation sets a target price of $2.63 per bushel for corn, $5.80 per bushel for soybeans and $3.92 per bushel for wheat.
Target prices for other commodities can be found online by viewing the FSA’s Fact Sheet on the Direct and Counter-Cyclical Payment Program website at www.fsa.usda.gov</p><p>
Producers had the opportunity to sign up for the 2007 fiscal year program from Oct. 1, 2006 until June 1, 2007. During sign up, producers could elect to receive up to three counter-cyclical payments per year.</p><p>
The bill requires that any overpayments to producers must be repaid. If not repaid, USDA may deduct overpayments from any future USDA payments.</p><p>