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Government payments to total $11 billion in 2012

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Willmar,Minnesota 56201
West Central Tribune
Government payments to total $11 billion in 2012
Willmar Minnesota 2208 Trott Ave. SW / P.O. Box 839 56201

WILLMAR -- According to the latest forecast by the U.S. Department of Agriculture, the amount of government payments paid directly to producers in 2012 will total $11 billion. That would represent a 4 percent increase from the $10.6 billion issued in 2011.


However, whether expressed in nominal dollars or constant dollars, the amount paid in 2011 and the dollars projected for 2012 represent the lowest amounts provided to producers since 1997, and far below the most recent high of $24 billion that was issued in 2005.

Direct payments under the Direct and Counter-cyclical Program and the Average Crop Revenue Election Program are forecast at $4.96 billion for 2012. This represents a 5.3 percent increase from dollars issued in 2011, largely because the percentage of base acres on which direct payments are made will increase from 83.3 percent during the 2011 crop year, to 85 percent for 2012.

Under the 2008 farm bill, the direct payment rates are fixed through the 2012 crop year. Producers who elect to participate in the Average Crop Revenue Election Program also receive direct payments, but their rates are reduced by 20 percent.

With respect to program payments based on price levels, strong crop prices are expected to persist through 2012, thereby reducing all expected program payments to $10 million, a decline of 72 percent from 2011.

Producers are not expected to qualify for any counter-cyclical payments or marketing loan benefits under the Marketing Assistance Loan Program. However, revenue-based payments under the Average Crop Revenue Election Program are expected to total $10 million in 2012, virtually unchanged from 2011.

Dairy producers are expected to receive $170 million in payments under the government's Milk Income Loss Contract Program, which compensates dairy producers when domestic milk prices fall below a specified benchmark price.

Due to higher than normal feeding costs, the program's benchmark price is expected to be adjusted upward to a level that will trigger payments.

Tobacco farmers and tobacco quota holders are expected to receive $646 million under the Tobacco Transition Payment Program in 2012. Initially authorized in 2005, the program provides annual payments over a 10-year period to eligible quota holders and producers of tobacco.

Producers and landowners participating in USDA's myriad of conservation programs are forecast to receive $3.7 billion in payments in 2012. This amount reflects programs being brought closer to the funding levels authorized under the 2008 farm bill.

Payments for supplemental and ad hoc disaster assistance programs are expected to total $1.5 billion in 2012, a 4.7 percent decrease from 2011.

Organic program sign-up ends June 1

Certified organic producers or those wanting to transition to organic production, and who sell less than $5,000 in organic products annually, may qualify for financial assistance under USDA's organic initiative. However, applications for the final ranking period of 2012 will need to be submitted to your local Natural Resources Conservation Service office by June 1.

The 2008 farm bill authorized using the Environmental Quality Incentives Program to provide funding for a wide array of conservation practices designed for organic production. The top five organic initiative conservation practices are cover crops, nutrient and pest management, seasonal high tunnels, crop rotation and fencing.

The selected practices are designed to help applicants meet the requirements of their USDA Organic System Plans and stay in compliance with USDA's National Organic Program.

USDA to purchase $2M of lamb products

The U.S. Department of Agriculture has announced that it intends to purchase up to $2 million of lamb products for federal food nutrition assistance programs, including food banks.

The purchases will also provide support to the lamb industry and its many small independent sheep growers, which are experiencing challenging economic times. Lamb producers have already cut production substantially, and USDA's purchases should help bring supplies more in line with demand.

Each year, USDA's Agricultural Marketing Service purchases a variety of high-quality food products to support the National School Lunch Program, the School Breakfast Program, the Summer Food Service Program, the Commodity Supplemental Food Program and Emergency Food Assistance Programs.

Government food experts work to ensure that all purchased food items meet specified requirements related to quality and nutrition. In addition, all products purchased must be of domestic origin.

Latest Minnesota Grown Directory now available

The Minnesota Department of Agriculture has announced that the 2012 edition of the Minnesota Grown Directory is now available. The directory makes it easy to locate local orchards, farmers markets, berry farms and garden centers where consumers can purchase products directly from the grower.

More than 190,000 copies of the free guide are distributed by tourist information centers, farms, libraries, real estate agents, retailers and other supporters of local growers.

A complimentary copy may be ordered by calling Explore Minnesota Tourism at 1-888-868-7476. The directory is also offered online as a searchable database on the Minnesota Grown website at

Wes Nelson is executive director of the USDA Farm Service Agency in Kandiyohi County.