2002 Farm Bill Issues:  Revised Oilseed Base Calculation and Farm Reconstitutions

Todd D. Davis
Extension Ag. Economist
Clemson University

The method FSA is using to calculate oilseed base acreage has been revised.  The original method used to calculate oilseed acreage resulted in some unintended disparities in the amount of oilseed acreage eligible to be added to the program base.  The new method will level the playing field for all oilseed producers.

Revised Oilseed Base Acreage Calculation

The oilseed acreage base is calculated using production data from 1998-2001.  The amount of oilseed acreage that can be added to program base is the smaller of either the planted plus prevented planted acreage of covered commodities minus the 2002 PFC acres or the total planted and prevented planted oilseed acreage.  The eligible oilseed base is the average over the four-year period. 

Remember that the total program base on a farm cannot exceed total crop acres except by the amount of eligible double-crop acreage.  Also, the base of each oilseed crop cannot exceed the 4-year average planted and prevented planted acreage.  If the difference between planted and prevented acres of covered commodities and the 2002 PFC acreage is negative, then the eligible oilseed base acreage is zero.  Let’s look at an example.

Example 1:  Assume a farm has 100 acres of cropland and a PFC base of 70 acres of corn.  The farm is using a 100% corn-soybean rotation.  The planted or prevented planted acreage is described in Table 1.

Table 1.  Oilseed Base Acreage Update Example 1.

The amount of oilseed acreage that can be added to the program base is the smaller of:

In this example, the landowner has the following base acreage alternatives:

The deadline for making the base acreage and program yield updating decision is April 1, 2003, and the deadline for signing a DCP contract is June 2, 2003.

Advanced PFC Payment and Farm Reconstitutions

As producers and landowners consider reconstituting farms, the question many producers are asking is “Do I have to repay PFC payments before the farm is reconstituted?” 

The good news is that FSA has waived the policy of requiring all PFC payments being refunded before initiating farm reconstitutions.  Producers requesting a reconstitution of a farm have the options of either repaying the PFC payments received in 2002 or requesting that the 2002 PFC payment refund be set up as a receivable to be offset by future direct or counter-cyclical payments.  County FSA offices require that all producers on the parent farm must agree in writing to the establishment of the receivable account.  The receivables will be monitored by FSA to ensure that the repayment will be made in a timely fashion.  FSA will process the request for farm division once the refund or receivable has been established.