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FSA announces key changes in milk income loss, DCP programs

March 21, 2006

Colleen Cashell, executive director of USDA's Farm Service Agency in Washington County, announced key changes to FSA programs authorized by the Deficit Reduction Act of 2005.

The law calls for changes to the Milk Income Loss Contract Program and the Direct and Counter-cyclical Payment Program, Cashell said.

The law extends the authority to issue Milk Income Loss Contract Program payments through Aug. 31, 2007. Originally, that was to end Sept. 30, 2005.

The law also reduces payments from 45 percent to 34 percent of the difference between $16.94 per hundredweight and the monthly Boston Class I milk price. In addition, the law eliminates provisions for transition period payments.

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Dairy producers are to be compensated when the domestic class I milk price falls below $16.94 per hundredweight.

Eligible dairy producers are those who commercially produce milk in the United States during the extended program period and enter into a contract with the Commodity Credit Corp.

Sign-up began March 13, but the forms and software are still going through changes, and payments are not yet authorized, Cashell said.

Also, under the Direct and Counter-cyclical Payment Program, the law reduces the maximum advance direct payment percentage for the 2006 crop year from 50 percent to 40 percent. The law reduces the maximum advance direct payment percentage for the 2007 crop year to 22 percent.

DCP, authorized by the 2002 Farm Bill, provides payments to eligible producers on farms enrolled for the 2002 through 2007 crop years. Direct payments are computed using the base acres and direct payment yields established for the farm and the statutory payment rate.

DCP participants may elect to receive their direct payments in two installments per year:

An advance payment during any month beginning in December of the calendar year before the calendar year in which the crop is harvested

The balance of the direct payment in October of the calendar year in which the crop is harvested

For more information about these and other FSA programs, visit your local FSA office. Washington County's FSA office is at 1260 Maryland Ave, Suite 107, Hagerstown.

You also may go to the FSA Web site at www.fsa.usda.gov.

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