DCP Signup Underway

Online enrolling begins October 20 for direct and countercyclical payments. Compiled by staff

Published on: Oct 5, 2004

Sign-up for the 2005 Direct and Counter-cyclical Payment Program (DCP) is underway at USDA Service Centers, and producers may also enroll online starting October 20.

Secretary of Agriculture Ann Veneman says, "This month, we will be making an additional $2.6 billion in final direct payments for the 2004 crop year."

The electronic DCP service allows producers to choose 2005 DCP payment options, assign crop shares and sign and submit their contracts electronically from any computer with Internet access. The electronic service will be available online starting Oct. 20, 2004, by clicking HERE. To access the service, eligible producers must have an active USDA eAuthentication Level 2 account, which requires filling out an online registration form followed by a visit to the local USDA Service Center for identity verification.

DCP Contracts Due by June 1, 2005

Producers have until June 1, 2005, to enroll for the 2005 DCP. USDA will accept late-filed applications through Sept. 30, 2005, if accompanied by a $100 late fee. Producers must sign contracts annually under DCP and can opt out of participating in the program in any year. In addition to the new electronic DCP service, USDA is providing expanded service for producers who choose to travel to a USDA office to complete their 2005 DCP contract.

DCP Payments DCP payments are computed using the base acres and payment yields established for each farm. Producers receive direct payments at rates established by statute regardless of market prices. Countercyclical payment rates vary depending on market prices. Countercyclical payments are issued only when the effective price (which takes into account the direct payment rate, market price and loan rate) for a commodity is below the target price for the commodity. For "other oilseeds," because of the existing loan rate, the maximum countercyclical payment rate is zero.

The 2005 crop year direct payment rates and maximum potential countercyclical rates are as follows:

Commodity

Unit

Direct

Max countercyclical

($/unit)

($/unit)

Wheat

bushel

0.52

0.65

Corn

bushel

0.28

0.4

Grain Sorghum

bushel

0.35

0.27

Barley

bushel

0.24

0.15

Oats

bushel

0.024

0.086

Upland Cotton

pound

0.0667

0.1373

Rice

cwt

2.35

1.65

Soybeans

bushel

0.44

0.36

Other Oilseeds

pound

0.008

0

Peanuts

ton

36

104

The schedule of payments for the 2005 DCP is as follows:

  • Beginning December 2004: 50% advance direct payment;
  • October 2005: 50% final direct payment;
  • October 2005: first advance countercyclical payment (up to 35% of projected payment);
  • February 2006: second advance countercyclical payment (up to 70% of projected payment less first advance);
  • Dates vary by crop (in general, 30 days following the end of the marketing year): Final countercyclical payment (100% of actual payment, less any advances received). For all years, refunds to USDA will be due if there is a violation of eligibility requirements or, in the case of countercyclical payments, if the advance payments exceed the final payment.