Utah farmers can expect several changes as a result of a new farm policy signed by President Bush in December, according to a Utah State University economics professor.
The policy comes in the form of new farm legislation, the 1990 Farm Act. It supersedes the 1985 farm bill, officially called the Food Security Act of 1985. Unlike the 1985 bill, the new legislation was crafted under tight budgetary constraints with federal deficit mandates lurking in congressional shadows, said Jay C. Andersen, USU extension economics specialist.He said the new act most noticeably calls for a $13.6 billion reduction in 1991-1995 in government spending for agriculture.
According to information gathered by Bruce R. Weber, a U.S. Department of Agriculture director, Andersen said it appears that several changes will affect Utah farmers.
He said the acreage reduction program (ARP) will remain, but with additional features that provide alternatives for farmers and reduce crop production even further.
For Utah farmers, Andersen said, this program applies primarily to crops such as wheat, barley and corn. Through ARP and the new programs, farmers are encouraged to decrease the amount of certain crops grown in order to avoid oversupply. By holding supplies down to match use levels, market prices remain healthy, he said.
For wheat, the required reduction from historic base acreage is 15 percent. That means if farmers have a historical base of 100 acres of wheat and want to qualify for government supports, they must plant 15 percent less wheat, or 85 acres, he said.
For each of the next five crop years, Andersen said, the maximum payment acreage for wheat will be an acreage equal to 85 percent of the crop acreage base, less the total amount of acreage in flexibility programs that year.
He said that some Utah farmers may want to take note of a program where producers may participate without being locked into planting only one crop. They now have up to 25 percent of other crops they can plant. This means that farmers may maintain the historic 85 percent reduction base while diverting to other crops.
For example, with a 100 acre base acreage, he said farmers do not have to commit all 85 acres to wheat. Instead, they have planting flexibility - up to 25 percent - to plant any approved crop that falls under this program.
This acreage is known as "flex acreage." It includes within this 25 percent range two options. When combined with the traditional, or historic, crop reduction base, it is called "triple base." The triple refers to the possibility of planting the base acreage crop, other program crops, or non-program crops except fruits or vegetables.
Under the flex acreage program, farmers must plant 3 percent of base as normal flex acreage with an optional 10 percent that can be planted, known as optional flex acreage, he said.
For a 100-acre section then, this means, for example, that farmers do not have to plant all 85 acres to wheat. Instead, under the triple base program, they may choose to plant 60 acres in wheat, 15 acres in alfalfa and 10 acres in barley. That still comes to a total of 85 acres. Thus the historic base has been maintained, he said.
From a conservation standpoint, this is beneficial because farmers will be allowed to divert to other crops. This will allow for greater crop rotation, he said.
The difference between normal and optional flex acreage has to do with deficiency payments. With normal flex acreage, farmers are still allowed to receive deficiency payments. No payments are allowed, however, when it comes to crops planted under optional flex acreage, he said.
A deficiency payment is the difference between the target price of a certain crop and the actual price received by farmers.
For example, if the national target price for wheat was set at $4 per bushel, but nationally farmers were only able to get $3 per bushel, the government would pay farmers $1 for each bushel in their base acreage times their normal yield to make up for that deficiency, he said.
While this may appear generous, he said this is only half of what Japanese and European farmers receive from their governments. That is why it is difficult for American farmers to compete in the international market.
The sign-up period is when farmers must report to the U.S.
Agricultural Stabilization and Conservation Service (ASCS) in their counties. During this sign-up period, they must tell what portion of their croplands they will commit to the acreage reduction and flex programs in order to qualify for government payments, he said.
Farmers who need help in deciding how many acres and the kind of crops to include in the acreage reduction program can contact their county extension agent, he said.