Special to The Hays Daily News

Enrollment for the U.S. Department of Agriculture's 2010 direct and counter-cyclical program and the average crop revenue election program has begun and will continue through June 1.

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. Producers can request an advance direct payment based on 22 percent of the direct payment. USDA will issue advance direct payments beginning Dec. 1.

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 optional ACRE program provides a safety net based on state revenue losses and acts in place of the price-based safety net of counter-cyclical payments under DCP. A farm's payment is based on a revenue guarantee calculated using a five-year average state yield and the most recent two-year national price for each eligible commodity. An ACRE payment is issued when both the state and the farm have incurred a revenue loss.

The payment is based on 83.3 percent (85 percent in 2012) 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. 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.

The decision to enroll in the ACRE program is irrevocable. Once enrolled, the farm shall be enrolled for that initial crop year and will remain in ACRE through the 2012 crop year. The June 1 deadline for DCP and ACRE is mandatory and USDA will not accept any late-filed applications.

The loan limit for the Farm Service Agency's guaranteed loan program has been increased to $1,112,000, effective Oct. 1. The increased limit will enhance the agency's ability to meet the credit needs of farmers and ranchers throughout the country. The guaranteed loan program allows commercial and farm credit lenders to extend credit to qualified applicants, who otherwise would not meet their standard lending criteria.

Participating lenders can use the guaranteed loan program to strengthen a loan's viability through a guarantee of up to 95 percent of the loan amount. Farmers interested in guaranteed loans should apply through a conventional lender. FSA also offers the direct loan program as an alternative for those unable to obtain financing from commercial credit sources. Direct farm loans are government-funded, and made by FSA.

The loan limit for loans under the direct program is $300,000. A percentage of FSA's farm loan funds are set-aside for socially disadvantaged applicants (minorities and women) and beginning farmers.