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The
1996 Farm Bill
Sign
up
The
Bill requires USDA to hold a one- time sign-up. This is expected
to run from late May through mid-July 1996. Except for the CRP,
producers who miss this one sign up, which will cover crop years
1996 through 2002, will not be eligible to enroll at a later date.
Producers
on a farm with eligible cropland may sign a Production Flexibility
Contract. The producer must continue to comply with the conservation
and wetland protection requirements on the farm, comply with the
planting flexibility requirements, and use the contract acreage
for an agricultural or related activity.
All
contracts will begin with the 1996 crop, except for CRP, when the
contract begins on the date the production flexibility contract
was signed or expanded to cover the acreage. All contracts extend
through the 2002 crop, unless ended earlier by mutual agreement
of the Secretary and other parties to the contract.
At
the beginning of each fiscal year, land from expiring CRP contracts
may be added to existing agreements or enrolled as new agreements
as the CRP contract expires. For the fiscal year the CRP contract
is ended, the owner or producer has the option to choose between
either the contract payments or a pro-rated payment under the CRP
contract, but not both.
Eligibility
To
enter into a contract, a person must meet the following criteria:
- An
owner of eligible farmland who assumes all or part of the risk
of producing a crop.
- A
producer (other than an owner) with a share-rent lease of the
eligible cropland, regardless of the length of the lease, if the
owner enters into the same contract.
- A
producer (other than an owner) on eligible farmland who cash rents
the eligible cropland under a lease expiring on or after September
30, 2002, in which case the consent of the owner is not required.
- A
producer (other than an owner) on eligible farmland who cash rents
the eligible cropland under a lease expiring before September
30, 2002. The owner of the eligible crop acreage bases may also
enter into the same contract. If the producer enrolls less than
100 percent of the eligible cropland in the contract, the consent
of the owner is required.
- An
owner of eligible farmland who cash rents the eligible farmland
with a lease term that expires before September 30, 2002, if the
tenant declines to enter.
The
Secretary is required to maintain adequate safeguards to protect
the interests of tenants and sharecroppers.
Eligible
contract acreage must have either been included in the annual acreage
reduction program for at least one out of the last five crops, or
have been considered planted. The definition of considered planted
has been expanded to include acreage which may not have participated,
but which was reported to the local Farm Service Agency office.
Eligible contract acreage also includes cropland subject to a CRP
contract whose term expired, or was voluntarily terminated, after
January 1, 1995, or is released by the Secretary between January
1, 1995, and August 1, 1996.
An
owner or producer may enroll all or a portion of the eligible cropland
on the farm as contract acreage. Also, an owner or producer who
enters into a contract may subsequently reduce, but not add to,
the quantity of contract acreage covered by the contract.
Payments
Annual
payments will be made no later than September 30 of each of fiscal
years 1996-2002. For FY 1997-2002, a 50 percent advance payment
will be made at the option of the owner or producer on December
15 or January 15 of the fiscal year. Owners and producers must give
advance notice as to which date they prefer, and the date may change
from year to year. For 1996, the advance payment will be made no
later than 30 days after the date on which an owner's or producer's
contract is approved.
To
the extent practicable, total spending levels for each fiscal year,
along with each crop's share of the total are:
Spending
Levels
FY
1996 $5.570 billion
FY 1997 $5.385 billion
FY 1998 $5.800 billion
FY 1999 $5.603 billion
FY 2000 $5.130 billion
FY 2001 $4.130 billion
FY 2002 $4.008 billion
Marketing
Loans
Current
loan rate formulas will be maintained for wheat, feed grains, and
upland cotton. Rice loan rates are frozen at $6.50 per hundredweight.
However, loan rates are capped at their 1995 level except for soybeans
and minor oilseeds. Soybean rates will range between $4.92 and $5.26
per bushel. The range for minor oilseeds will be between $8.70 and
$9.30 per hundredwieght.
Producers
are eligible to receive loan benefits on all production of contract
commodities on the farm with a production flexibility contract,
even if produced on noncontract acres. Contract farms cannot be
combined with noncontract farms to increase loan eligibility. All
producers are eligible for loans on ELS cotton and oilseeds on any
production.
Interest
rates applicable to loans are increased by 1 percentage point.
Payment
Limitations
The
total amount of contract payments made to a person under one or
more production flexibility contracts during any fiscal year may
not exceed $40,000, down from the current $50,000. Marketing loan
gains and loan deficiency payments are limited to $75,000 per person.
The three-entity rule is retained.
Planting
Flexibility
Except
for fruits and vegetables, any commodity or crop may be planted
on contract acreage on a farm. The planting for harvest of fruits
and vegetables (other than lentils, mung beans, and dry peas) is
prohibited on contract acreage, except in the following situations:
- Harvesting
double-cropped fruits and vegetables on contract acreage is permitted,
without loss of payments, in any region which has a history of
double- cropping contract commodities with fruits and vegetables.
An individual farm does not have to have a double-cropping history,
only the region.
- Harvesting
of any fruits or vegetables on contract acreage is permitted,
with an acre-for-acre loss of contract payments for each contract
acre planted to fruits or vegetables, if the Secretary determines
that there is a history of planting fruits and vegetables on the
farm.
- Harvesting
a specific fruit or vegetable on contract acreage is permitted,
with an acre-for-acre loss of contract payments for each contract
acre planted to the specific fruit or vegetable, if the Secretary
determines that a producer has an established planting history
of the specific fruit or vegetable. In such a case, the quantity
harvested cannot exceed the producer's average annual planting
history of the specific fruit or vegetable during the 1991-1995
crop years (excluding any crop year with 0 acres planted).
Haying
and grazing restrictions have been eliminated, except for CRP acres.
There are no minimum planting requirements for contract commodities.
There
are no restrictions as to what a producer can plant on non-contract
acres.
Concepts
described in this report were provided by Jon Newkirk, WSU Cooperative
Extension and member of the WSU Ag Horizons Team following a seminar
held in Pullman, WA, on Februray 14, 1997.
Agricultural
Sustainability. Highlights from a seminar series conducted by Washington
State University's Ag Horizons Team and funded by USDA Western Region
SARE.
Jon
Newkirk
WSU Cooperative Extension
210 W Broadway
Ritzville, WA 99169-1894
Phone: (509) 659-3209
FAX: (509) 659-3303
 jnewkirk@coopext.cahe.wsu.edu
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