Production Flexibility Payments for Contract Commodities
Published on AidPage by
IDILOGIC on Jun 24, 2005
Purpose of this program:
To support farming certainty and flexibility while ensuring continued compliance with farm conservation and wetland protection requirements.
Possible uses and use restrictions...
Producers enrolled in the 7-year Production Flexibility Contracts during the one-time sign-up held in 1996 are eligible to receive contract payments. All contracts, except those executed after the expiration of Conservation Reserve Program contracts (with an associated crop acreage base reduction), began with the 1996 crop and extend through the 2002 crop. A farm was eligible for enrollment if it had a wheat, corn, grain sorghum, barley, oats, upland cotton, or rice crop acreage base established for 1996. Once the farm is enrolled, the crop acreage base becomes contract acreage. Commodity- specific contract payment rates are determined annually based on the statutory spending levels and the amount of enrolled contract acreage. Farm level commodity payments are equal to the contract payment rate multiplied by 85 percent of the contract acreage multiplied by the farm program payment yield. To be eligible for contract payments producers are required to: (a) comply with the conservation and wetland protection requirements on all of the producer's farms; (b) comply with planting flexibility requirements; (c) use the contract acreage for an agricultural or related activity; and (d) obtain at least the catastrophic level of crop insurance for each crop of economic significance or provide a written statement that waives any eligibility for emergency crop loss assistance; and (e) file annual acreage reports on any fruit or vegetable plantings on contract acreage. Annual payments are made no later than September 30 of each of fiscal years 1996-2002. For fiscal year 1996-1998, producers could elect to receive 50 percent advance payments on December 15 or January 15 of the respective fiscal year. For fiscal years 1999-2002 payments, producers may choose to receive fiscal year 1999-2002 production flexibility contract payments as two 50 percent payments or one 100 percent payment at any time during the respective fiscal year. Final payments will be paid by September 30 of the respective fiscal year.
Who is eligible to apply...
Owner, landlord, tenant, or sharecropper on a farm with enrolled contract acreage that meets program requirements as announced by the Secretary.
Credentials/Documentation
Record of farming operation must be on file in the FSA county office. This program is excluded from coverage under OMB Circular No. A-87.
Note:This is a brief description of the credentials or documentation required prior to, or along with, an application for assistance.
About this section:
This section indicates who can apply to the Federal government for assistance and the criteria the potential applicant must satisfy.
For example, individuals may be eligible for research grants, and the criteria to be satisfied may be that they have a professional or scientific degree,
3 years of research experience, and be a citizen of the United States. Universities, medical schools, hospitals, or State and local governments may also be eligible.
Where State governments are eligible, the type of State agency will be indicated (State welfare agency or State agency on aging) and the criteria that they
must satisfy.
Certain federal programs (e.g., the Pell Grant program which provides grants to students) involve intermediate levels of application processing, i.e., applications
are transmitted through colleges or universities that are neither the direct applicant nor the ultimate beneficiary. For these programs,
the criteria that the intermediaries must satisfy are also indicated, along with intermediaries who are not eligible.
How to apply...
Application Procedure:
The farm operator visits the FSA office to sign Form-478, a Production Flexibility Contract and to report fruit and vegetable acreage planted for harvest on contract acreage on Form-578. This program is excluded from coverage under OMB Circular Nos. A-102 and A-110.
Note: Each program will indicate whether applications are to be submitted to the Federal headquarters, regional or local office, or to a State or local government office.
Award Procedure:
Not applicable.
Note: Grant payments may be made by a letter of credit, advance by Treasury check, or reimbursement by Treasury check.
Awards may be made by the headquarters office directly to the applicant, an agency field office, a regional office,
or by an authorized county office. The assistance may pass through the initial applicant for further distribution by
intermediate level applicants to groups or individuals in the private sector.
Deadlines and process...
Deadlines
The sign-up period, except for farms with land under a Conservation Reserve Program (CRP) contract that has an associated crop acreage base reduction, ended in 1996. The land under an expiring CRP contract can be added to an existing Production Flexibility Contract or enrolled as a new contract from October 1 through November 30 in the year following the fiscal year in which the CRP contract expires. Once enrolled, farm operators report acreage of fruits and vegetables grown on contract acreage specified dates which vary by State and within States. Contact State or county FSA offices for applicable deadlines.
Note:
When available, this section indicates the deadlines for applications to the funding agency which will
be stated in terms of the date(s) or between what dates the application should be received.
When not available, applicants should contact the funding agency for deadline information.
Range of Approval/Disapproval Time
Approval of payments depends on farmer compliance with conservation and wetland protection requirements on all of the producers' farms, planting flexibility requirements and other eligibility, and is fairly routine and prompt.
Preapplication Coordination
None. This program is excluded from coverage under OMB Circular No. A-102 and E.O. 12372.
Note:
This section indicates whether any prior coordination or approval is required with governmental or nongovernmental units
prior to the submission of a formal application to the federal funding agency.
Appeals
If producer questions yields or other determinations, he may appeal to the FSA county office within 15 days after being notified.
Note:
In some cases, there are no provisions for appeal. Where applicable, this section discusses appeal procedures or allowable rework time for resubmission
of applications to be processed by the funding agency. Appeal procedures vary with individual programs and are either listed in this section or
applicants are referred to appeal procedures documented in the relevant Code of Federal Regulations (CFR).
Renewals
Not applicable.
Note:
In some instances, renewal procedures may be the same as for the application procedure, e.g., for projects of a non-continuing nature renewals will be treated as new, competing applications; for projects of an ongoing nature, renewals may be given annually.
Who can benefit...
Owner, landlord, tenant, or share cropper on a farm with contract acreage that meets program requirements as announced by the Secretary.
Beneficiaries
About this section:
This section lists the ultimate beneficiaries of a program, the criteria they must satisfy and who specifically is not eligible. The applicant and beneficiary will generally be the same for programs that provide assistance directly from a Federal agency. However, financial assistance that passes through State or local governments will have different applicants and beneficiaries since the assistance is transmitted to private sector beneficiaries who are not obligated to request or apply for the assistance.
What types of assistance...
Direct Payments with Unrestricted Use
Financial assistance from the Federal government provided directly to beneficiaries who satisfy Federal eligibility requirements with no restrictions being imposed on the recipient as to how the money is spent. Included are payments under retirement, pension, and compensatory programs.
How much financial aid...
Range and Average of Financial Assistance
The production flexibility contract payments for the 2000 crops as of December 31, 2001 consisted of: $2,719,900,000 for feed grains; $1,336,361,000 for wheat; $574,433,000 for upland cotton; and $432,865,000 for rice. The estimated production flexibility contract payments for the 2002 crops as of December 31, 2001 are: $713,770,000 for feed grains; $373,723,000 for wheat; $108,675,000 for upland cotton; and $45,287,000 for rice. Cotton, feed grain, wheat and rice production flexibility contract payments, in total, may not exceed $40,000 to any one person during any fiscal year.
Note:
This section lists the representative range (smallest to largest) of the amount of financial assistance available. These figures are based upon funds awarded in the past fiscal year and the current fiscal year to date. Also indicated is an approximate average amount of awards which were made in the past and current fiscal years.
Obligations
(Production Flexibility Contract Payments) FY 03 $5,056,953,514; FY 04 $4,071,721,000; and FY 05 est $0. Obligations include the amounts formerly in 10.052, 10.055, 10.058, and 10.065.
Note:
The dollar amounts listed in this section represent obligations for the past fiscal year (PY), estimates for the current fiscal year (CY), and estimates for the budget fiscal year (BY) as reported by the Federal agencies. Obligations for non-financial assistance programs indicate the administrative expenses involved in the operation of a program.
Account Identification
12-4336-0-3-351.
Note:
Note: This 11-digit budget account identification code represents the account which funds a particular program.
This code should be consistent with the code given for the program area as specified in Appendix III of the Budget of the United States Government.
Examples of funded projects...
Not applicable.
About this section
This section indicates the different types of projects which have been funded in the past. Only projects funded under Project Grants or Direct Payments for Specified Use should be listed here. The examples give potential applicants an idea of the types of projects that may be accepted for funding. The agency should list at least five examples of the most recently funded projects.
Program accomplishments...
The contract enrollment report for the 2001 crop production flexibility contracts consisted of: 1,607,321 contract enrolled farms for feed grains; 1,016,618 contract enrolled farms for wheat; 176,650 contract enrolled farms for upland cotton; and 24,608 contract enrolled farms for rice.
Criteria for selecting proposals...
Not applicable.
Assistance considerations...
Length and Time Phasing of Assistance
Payment by check is made no later than September 30 of each of fiscal years 1996-2002. For fiscal year 1996-1998 payments, producers could elect to receive 50 percent advance payments on December 15 or January 15 of the respective fiscal year. For fiscal year 1999-2002 payments, producers may choose to receive production flexibility contract payments as two 50 percent payments or one 100 percent payment at any time during the respective fiscal year. Final payments will be paid by September 30 of the respective fiscal year.
Formula and Matching Requirements
Not applicable.
Note:
A formula may be based on population, per capita income, and other statistical factors. Applicants are informed whether there are any matching requirements to be met when participating in the cost of a project. In general, the matching share represents that portion of the project costs not borne by the Federal government. Attachment F of OMB Circular No. A-102 (Office of Management and Budget) sets forth the criteria and procedures for the evaluation of matching share requirements which may be cash or in-kind contributions made by State and local governments or other agencies, institutions, private organizations, or individuals to satisfy matching requirements of Federal grants or loans.
Cash contributions represent the grantees' cash outlay, including the outlay of money contributed to the grantee by other public agencies, institutions, private organizations, or individuals. When authorized by Federal regulation, Federal funds received from other grants may be considered as the grantees' cash contribution.
In-kind contributions represent the value of noncash contributions provided by the grantee, other public agencies and institutions, private organizations or individuals. In-kind contributions may consist of charges for real property and equipment, and value of goods and services directly benefiting and specifically identifiable to the grant program. When authorized by Federal legislation, property purchased with Federal funds may be considered as grantees' in-kind contribution.
Maintenance of effort (MOE) is a requirement contained in certain legislation, regulations, or administrative policies stating that a grantee must maintain a specified level of financial effort in a specific area in order to receive Federal grant funds, and that the Federal grant funds may be used only to supplement, not supplant, the level of grantee funds.
Post assistance requirements...
Reports
Applicant reports any disaster (when applicable) which would affect crop yield.
Note:
This section indicates whether program reports, expenditure reports, cash reports or performance monitoring are required by the Federal funding agency, and specifies at what time intervals (monthly, annually, etc.) this must be accomplished.
Audits
Recipients are subject to audit by Office of Inspector General, USDA.
Note:
This section discusses audits required by the Federal agency.
The procedures and requirements for State and local governments and nonprofit entities are set forth in OMB Circular No. A-133.
These requirements pertain to awards made within the respective State's fiscal year - not the Federal fiscal year,
as some State and local governments may use the calendar year or other variation of time span designated as the fiscal year period,
rather than that commonly known as the Federal fiscal year (from October 1st through September 30th).
Records
Not applicable.
Note:
This section indicates the record retention requirements and the type of records the Federal agency may require.
Not included are the normally imposed requirements of the General Accounting Office.
For programs falling under the purview of OMB Circular No. A-102, record retention is set forth in Attachment C.
For other programs, record retention is governed by the funding agency's requirements.
Regulations...
Authorization
Agricultural Market Transition Act, Public Law 104- 127, as amended; Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act of 2000, Public Law 106-78; Emergency Farm Financial Relief Act, Public Law 105-228; Food Security Act of 1985, as amended, Public Law 99-198; Agricultural Act of 1949, as amended, Public Law 81-439; Commodity Credit Corporation Charter Act, as amended, Public Law 80-806; Agricultural Adjustment Act of 1938, as amended, Public Law 75-430.
Note:
This section lists the legal authority upon which a program is based (acts, amendments to acts, Public Law numbers, titles, sections, Statute Codes, citations to the U.S. Code, Executive Orders, Presidential Reorganization Plans, and Memoranda from an agency head).
Regulations, Guidelines, And Literature
Program regulations are published in the Federal Register. Announcements issued to news media and letters to producers. Background Information--"Services for Farmers", July 1999, no cost; Fact Sheet--"Production Flexibility Contracts and Marketing Assistance Loans", February 1999, no cost; Final Cost/Benefit Analysis, no cost; Farm Service Agency, U.S. Department of Agriculture, STOP 0508, 1400 Independence Avenue SW., Washington, DC 20250-0532.