crop subsidies

Agriculture Secretary Tom Vilsack said he is looking at every factor, including trade rules and budgetary effects, in the cotton industry's request that he declare cottonseed oil eligible for the same subsidies offered to grains and soybeans.

In a small step toward reform, the government will not allow more than three people per operation to collect crop subsidies by saying they are farm managers. The new USDA regulation will apply to large farms - over 2,500 acres - that operate as joint ventures or general partnerships, about 4 percent of the 2 million farms in the country.

The Agriculture Department is considering whether to let cotton growers claim two crop subsidies at the same time to offset a worldwide collapse in the cotton market, said a spokeswoman.

Farm-policy reformers in Congress want to rein in the costs of the most popular, and most expensive, part of the federally subsidized crop insurance program: revenue policies with the so-called Harvest Price Option (HPO).

Growers have one additional week, until April 7, to select their crop-subsidy program for the life of the 2014 farm law. They must choose between the insurance-like Agricultural Risk Coverage, which shields growers from declines in crop revenue, and the traditional Price Loss Coverage, which guarantees a minimum price. The USDA announced the one-week extension, saying 10 percent of likely farm-program participants had not made a decision as of last week.

More than one-fifrth of farmers have yet to tell the USDA which crop-subsidy plan they want under the 2014 farm law, the insurance-like Agricultural Risk Coverage or the traditionally styled Price Loss Coverage. The deadline for action is Tuesday. Some 77 percent of grain and oilseed growers made the ARC/PLC selection by March 19, says the USDA. "We expect these numbers to continue to increase significantly by the end of the month," said Val Dolcini, head of the Farm Service Agency, during a House Agriculture subcommittee hearing.

The USDA plan to tighten eligibility rules for crop subsidies is unduly restrictive, said two lawmakers from the South. The proposed rule would apply to general partnerships and joint ventures that are not owned by a farm family, about 3 percent of the 2.1 million farms in the country. Congress exempted family farmers when it instructed the USDA, in the 2014 farm law, to devise a stricter definition of who is a farm manager.

Growers across the country face tighter margins due to the combination of high production costs and sharply lower commodity prices, a panel of farmers told a House Agriculture subcommittee. They asked for action against farm subsidies overseas and for continued federal support at home. "For many Texas producers, there is no room for error" this year, said Steve Verrett, a cotton grower and executive vice president of Plains Cotton Growers in Lubbock, Texas.

A new rule proposed by the USDA would limit joint ventures and general partnerships to a maximum of three people who can collect crop subsidies by declaring they are farm managers. The proposal is open for public comment until May 26. The 2014 farm law empowered the USDA to write stricter rules about who is "actively engaged" in farming, but it exempted family farms, which constitute 97 percent of the 2.1 million farms in the country.

The government will pay $6.5 billion in crop subsidies for this year's grain and soybean crops because of falling commodity prices, according to an estimate by the Food and Agricultural Policy Research Institute, a think tank at the University of Missouri. The outlays would be the largest in seven years, said FAPRI, and would be well above its forecast average annual cost of $5 billion. "Payments under 2014 farm bill programs increase when crop prices fall," said FAPRI.

Farmers have an additional month, until March 31, to tell the USDA if they want to update their yield and acreage "bases" for crop subsidies. Operators also face a March 31 deadline to select a crop subsidy program - either the shallow-loss Agriculture Risk Coverage or the traditionally structured Price Loss Coverage - for the life of the 2014 farm law. The department announced "a one-time extension" on Friday, the previous yield-and-base deadline; the decision period opened on Sept. 29, 2014.

Agriculture Secretary Tom Vilsack said he would provide "flexibility" if needed to assure orderly handling of two important farm program deadlines. Growers have until Friday to tell the USDA whether they want to update two factors for calculating crop subsidies - average yields and acreage bases. And they have until March 31 to select either the insurance-like Agricultural Risk Coverage subsidy or the traditionally designed Price Loss Coverage subsidy.