Agricultural and Food Policy
 Agri Outlook
Radio
Number 81
Policy/Noteworthy: USDA to Soon Issues Final 2007 Direct Payments (2:29 minutes)
Audio/Video Script:
Dr. Bobby Coats
Extension Economist
University of Arkansas, Division of Agriculture
USDA will soon issue final 2007 Direct Payments. I’m Bobby Coats Extension
Economist University of Arkansas Division of Agriculture.
On September 25, 2007 USDA announced that final 2007 direct payments will
soon be issued to producers with base acres enrolled in the Direct and
Counter-cyclical Program (DCP).
Commodities with historical base acres eligible for direct payments and their
total rates are: barley, $0.24 per bushel; corn, $0.28 per bushel; grain
sorghum, $0.35 per bushel; oats, $0.024 per bushel; soybeans, $0.44 per bushel;
other oilseeds (canola, crambe, flaxseed, mustard seed, rapeseed, safflower,
sesame, sunflower), $0.008 per pound; peanuts, $36 per short ton; rice, $2.35
per hundredweight; cotton, $0.0667 per pound; and wheat, $0.52 per
bushel.
The 2002 Farm Bill replaced production flexibility contract (PFC) payments
with direct payments.
Direct payments are not based on producers' current production choices, but
instead are tied to acreage bases and yields. Because direct payments provide no
incentive to increase production of any certain crop, the payments support farm
income without distorting producers' current production decisions and the
payments are believed by many to be in compliance with World Trade Organization
rules.
To receive direct payments, producers with base acres must be enrolled in the
Direct and Counter-cyclical Program (DCP) for an eligible commodity for the
respective program year. Direct payments are tied to historical acreage bases
and yields established for a farm, rather than the current farm's production.
For each commodity, the direct payment for each crop year equals 85 percent
of the farm's commodity base acreage, times the farm's direct payment yield,
times the direct payment rate. The Commodity Credit Corporation reduces final
direct payments by any advance direct payments producers may have already received.
This has been Bobby Coats Extension Economist University of Arkansas Division
of Agriculture.
USDA's Farm Service Agency distributes direct payments for the Commodity
Credit Corporation. For more information on DCP visit your local USDA Service
Center or
http://www.fsa.usda.gov.
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