E8-14694. 2008 Direct and Counter-Cyclical Program

AGENCY:

Commodity Credit Corporation, USDA.

ACTION:

Notice.

SUMMARY:

As announced by this notice, the Commodity Credit Corporation (CCC) is implementing the provisions of the Food, Conservation, and Energy Act of 2008 (the 2008 Farm Bill) regarding direct and counter-cyclical payments for the 2008 crop year. The 2008 Farm Bill authorizes direct and counter-cyclical payments, with some changes, that were previously authorized for preceding crops under the Farm Security and Rural Investment Act of 2002 (the 2002 Farm Bill). As a result of this notice, CCC will be able to commence administration of the Direct and Counter-cyclical Program (DCP) for the 2008 crop. Through a subsequent rule, CCC will implement DCP for the 2009 through 2012 crops.

EFFECTIVE DATE:

June 30, 2008.

FOR FURTHER INFORMATION CONTACT:

Salomon Ramirez, Director, Production, Emergencies and Compliance Division, Farm Service Agency, USDA, STOP 0517, 1400 Independence Avenue, SW., Washington, DC 20250-0517; telephone: [phone]; e-mail: [e-mail]. Persons with disabilities who require alternative means for communication (Braille, large print, audiotape, etc.) should contact the USDA Target Center at [phone] (voice and TDD).

SUPPLEMENTARY INFORMATION:

As explained in this notice, CCC will operate the 2008 DCP program as required by the 2008 Farm Bill using the standards of 7 CFR 1412 to the extent they are not in conflict with the 2008 Farm Bill and this notice. With a few changes, the Food, Conservation, and Energy Act of 2008 (Pub. L. 110-246) (the 2008 Farm Bill) authorizes a continuation for the 2008 crop year of the Direct and Counter-cyclical Program authorized by the Farm Security and Rural Investment Act of 2002 (the 2002 Farm Bill) and set forth in regulations at 7 CFR 1412.

Section 1001 of the 2008 Farm Bill provides that the base acres and yields established by the 2002 Farm Bill that were in effect on September 30, 2007 will, with a few exceptions, constitute the base acres for the 2008 through 2012 crop years. The 2008 Farm Bill contains requirements for adjustments of base acres for various reasons including, but not limited to, land no longer being devoted to agricultural uses.

With respect to payment yields, the 2008 Farm Bill provides that the payment yields for direct and counter cyclical payments under the 2002 Farm Bill, as in effect on September 30, 2007, will be used. Section 1102 further requires the Secretary to establish a payment yield for direct and counter-cyclical payments for each farm for any designated oilseed or eligible pulse crop for which a payment yield was not established under the 2002 Farm Bill. For new yields, this will involve a determination of an average yield per planted acre for the designated oilseed or pulse crop on a farm for the 1998 through 2001 crop years, excluding any crop year in which the acreage planted was zero. An adjustment to the payment yield will equal the product of the average yield and the ratio resulting from dividing the national average yield for the 1981 through 1985 crops by the national average for the 1998 through 2001 crops. If the yield for a farm for any of the 1998 through 2001 crop years was less than 75 percent of the county yield, then the Secretary will assign a yield equal to 75 percent of the county yield to determine the average.

Like with the 2002 Farm Bill, the 2008 Farm Bill sets forth certain requirements to which the participant must agree to be eligible for direct and counter-cyclical payments. Included in these requirements is the requirement to effectively control noxious weeds and otherwise maintain the land in accordance with sound agricultural practices. These provisions will continue to be applicable in 2008.

One significant change in the 2008 Farm Bill that was not present in the 2002 Farm Bill, which will be implemented in 2008, relates to farms with small bases. A producer on a farm may not receive DCP payments if the sum of the base acres of the farm is 10 acres or less. However, such prohibition does not apply to a farm that is wholly owned by socially disadvantaged or limited resource farmers or ranchers, as provided by Section 1101 of the 2008 Farm Bill. If the farm is owned by a legal entity, such as a corporation, each shareholder, partner, or member of the entity must be a socially disadvantaged or limited resource farmer or rancher. Effective with the date of publication of this notice, to be assured that producers on farms with base acres of 10 acres or less are prohibited from receiving payments as provided in the 2008 Farm Bill, Farm Service Agency County Committees (COC) will not approve requests for farm combination reconstitutions of farms having base acres of 10 acres or less if the request was received after the date of enactment of the 2008 Farm Bill (May 22, 2008). However, as an exception to the above rule, a farm with a total of 10 base acres or less may combine with another farm if one of the farms undergoes a change in land ownership. To qualify for this exception the owners of each of the farms participating in the new combination must be identical and have identical shares in both farms.

Subject to subsections (b) and (c) of section 1108 of the 2008 Farm Bill, for the purposes of determining the amount of the counter-cyclical payments to be paid to the producers on a farm for long grain rice and medium grain rice under section 1104 of the 2008 Farm Bill, base acres on the farm will be apportioned based on acreage planted to long grain rice and medium grain rice during the 2003-2006 crop years. Section 1108 requires that base acres, payment acres, and payment yields established with respect to rice under sections 1101 and 1102 be maintained. Although these provisions of the 2008 Farm Bill are effective for the 2008 crop year, because of administrative concerns related to the late date of enactment of the 2008 Farm Bill, these calculations cannot be accomplished at this time, as counter-cyclical payments are not anticipated for rice in 2008. This should have no impact. If the situation changes, measures will be taken to implement these provisions.

In response to concerns regarding the sharing of contract payments and various forms of cash and share leases (such as traditional cash leases, traditional share leases, and combination or flex leases that have features of both traditional cash and traditional share leases), an Advance Notice of Proposed Rulemaking was issued on September 28, 2007 (72 FR 55105-55108). Accordingly, regulations will be issued to clarify that for the purpose of determining payments made with respect to the 2009 through 2012 crop years, combination or flex leases will be viewed as cash leases.

The final enrollment date for 2008 DCP is September 30, 2008. A DCP contract not having all requisite signatures of producers having more than a zero share of DCP contract acreage on or before the enrollment deadline will not be considered submitted to CCC for any purpose and will not be acted on or approved. With respect to those contracts submitted by a producer on or before September 30, 2008, that were not signed by other producers on the farm, DCP payments will be issued only with respect to the producers who enrolled prior to September 30, 2008.

Accordingly, this notice announces that CCC will implement DCP provisions for the 2008 crop year based on the current regulation in 7 CFR 1412, Direct and Counter-cyclical Program except as otherwise noted in this Notice and as otherwise required by the 2008 Farm Bill.

Environmental Review

FSA has determined that this change would not constitute a major Federal action that would significantly affect the quality of the human environment. Therefore, in accordance with the 7 CFR 799, Environmental Quality and Related Environmental Concerns—Compliance with the National Environmental Policy Act, implementing the regulations of the Council on Environmental Quality (40 CFR 1500-1508), no environmental assessment or environmental impact statement will be prepared.

Signed at Washington, DC, on June 24, 2008.

Glen L. Keppy,

Acting Executive Vice President, Commodity Credit Corporation.