FAQ: Who is a "producer" as defined by new Farm Bill?
Answer: Provided by Steve Johnson, Iowa State University Extension farm management specialist.
Just who is a producer? The definition in the farm bill says the producer has to have an interest in the crop that is at risk, so that covers landowners with a crop share rental arrangement. But what about landowners who cash rent?
People are asking that question this winter because they wonder what happens to a producer who cash rents and signs up for ACRE.
Also, what happens to the election if the producer is no longer renting the ground in a year or two? Is the new cash rent tenant eligible to pick between the old program and ACRE, or does the ACRE election remain in force? If it does remain in force, does that mean existing cash rent tenants must get their landlord to sign off on the ACRE election?
These are all good questions.
First, understand that the landlord is one of the "at risk" persons for farm program purposes as defined by USDA's Farm Service Agency in the 1996 Farm Bill. Cash rent landlords have not been receiving Direct Payments (DPs), LDPs (Loan Deficiency Payments), CCPs (Counter-Cyclical Payments) or the use of marketing loans since that time—due to the fact they did not have a "share" in the crop.
What's been happening is the cash rent landlord typically signs an FSA Power of Attorney form 211 and allows the tenant to make these decisions. Most of those forms will be honored for the 2009 DCP sign-up. However, they will not be honored for the ACRE sign-up.
The new ACRE program is an election, and if you chose to sign up for ACRE that will amend the DCP contract. Enrollment is by FSA Farm Serial Number or FSN. As a result all producers associated with the farm, including the cash rent landlord will need to sign the ACRE agreement, as the amendment is an irrevocable contract through 2012.
The final regulations of ACRE are yet to be provided. The 2009 sign-up must be completed by June 1, 2009. With cash rent landlords signing forms to enroll in ACRE, the number of farms enrolled in ACRE in 2009 might be limited.
I suggest that farmers focus on getting their own ground enrolled first, since it would be easier to obtain signatures. Also, consider the higher yielding farms which you have access to 5 years of yields data from (2004 through 2008).
To enroll a farm in ACRE in 2009, actual net production for each program crop will need to be verified and quantified to determine if the annual farm revenue falls below the revenue guarantee that uses the farm's yields over the most recent 5 years.
Remember, the actual ACRE payment by program crop is determined by yields at the state level annually. The use of farm yields and thus the farm revenue guarantee vs. actual revenue is in order that a farm be eligible for the ACRE payment.
If you have a question you'd like answered regarding the new USDA farm program, please send it to rswoboda@farmprogress.com. We will pass it on to the ISU Extension specialists or to the program specialists at USDA's Farm Service Agency office in Des Moines and they will send you the answer.
For more information and analysis of the new farm program, see ISU's Ag Decision Maker site www.extension.iastate.edu/agdm. For clarification on farm program details contact your local FSA office.