USDA announced that enrollment for the 2012 Direct and Counter-cyclical Program (DCP) and the Average Crop Revenue Election Program (ACRE) will begin on Jan. 23, 2012. The last day for producers to sign up for either program will be June 1, 2012.
USDA urges producers to make use of the electronic DCP (eDCP) automated website to sign up, or producers can visit any USDA Service Center to complete their 2012 DCP or ACRE contract. eDCP saves time, reduces paperwork and speeds up contract processing at USDA Service Centers. It is available to all producers who are eligible to participate in the DCP and ACRE programs and can be accessed at www.fsa.usda.gov/dcp. To access the service, producers must have an active USDA eAuthentication Level 2 account, which requires filling out an online registration form at www.eauth.egov.usda.gov followed by a visit to the local USDA Service Center for identity verification.
USDA computes DCP program payments using base acres and payment yields established for each farm. Eligible producers receive direct payments at rates established by statute regardless of market prices.
For 2012, advance direct payments are not authorized in accordance to the Food, Conservation, and Energy Act of 2008. Counter-cyclical payment rates vary depending on market prices.
Counter-cyclical payments are issued only when the effective price for a commodity is below its target price. The effective price is the higher of the national average market price received during the 12-month marketing year for each covered commodity and the national average loan rate for a marketing assistance loan for the covered commodity.
The ACRE Program provides a safety net based on state revenue losses. When the ACRE option is chosen, it acts in place of the price-based safety net of counter-cyclical payments under DCP. USDA provides the farm a revenue guarantee. The guarantee starts with multiplying an average yield calculated using a five-year state average times the most recent two-year national price average for each eligible commodity. For the 2012 crop year, the two-year price average will be based on the 2010 and 2011 crop years. When all criteria are considered in calculating the target and the annual revenue is lower than the revenue guarantee, the farm is eligible for support under ACRE, assuming all other qualifications are met.
Since 2009, producers have had the option to participate in either DCP or ACRE. A producer who initially chose to enroll in DCP has the option to switch to ACRE during the 2012 enrollment period; however, producers who chose to enroll in ACRE cannot switch back to DCP.
An ACRE payment is issued when both the state and the farm have incurred a revenue loss. The 2012 crop year ACRE payment is based on 85 percent of the farm's planted acres times the difference between the state ACRE guarantee and the state revenue times the ratio of the farm's yield divided by the state expected yield. The total number of planted acres for which a producer may receive ACRE payments may not exceed the total base on the farm.
In exchange for participating in ACRE, in addition to not receiving counter-cyclical payments, a farm's direct payment is reduced by 20 percent, and marketing assistance loan rates are reduced by 30 percent.