How Farm Programs Offer the Opportunity To Try New Crops

by James A. Langley, Senior Policy Analyst, Agricultural Stabilization and Conservation Service, USDA, Washington, DC.

To qualify for program benefits prior to the 1990 Farm Act, agricultural producers had to comply with stringent regulations as to which crops and how many acres they could plant, regardless of market incentives.

Current farm programs, however, provide a wide range of opportunities for producers to try new crops and still be eligible for program benefits.

Programs and provisions such as:

Planting flexibility;

Dry peas and lentils on wheat and feed grain crop acreage bases;

0/92 and 50/92;

Zero-certification, and;

The integrated farm management program option are available to producers, at their discretion, for each marketing year through 1995.

The Secretary of Agriculture may also offer additional opportunities to producers if necessary to foster development of alternative crops. This chapter briefly reviews how farm programs offer producers the potential to try new crops.

Some Basics About Crop Bases

Planting flexibility rules, and the number of acres on which producers may earn Government support payments, are defined in terms of a producer's crop acreage base. Producers are assigned a crop base for each program crop (wheat, feed grains, upland cotton, and rice) on their farm. Crop bases are calculated each year as a 5-year moving average of acreage planted and considered planted (3-year average for cotton and rice). "Considered planted" includes acres enrolled in Government programs but not actually planted to the program crop, such as reduced acres. Other types of "considered planted" acres will be pointed out below in this chapter.

Since crop bases are calculated as a moving average, producers must be careful to plant (or to be considered to have planted) their entire base each year to keep from losing base acres in later years. The only way to increase the crop acreage base for a program crop or Extra Long Staple (ELS) cotton is to not participate in the annual commodity program for any of the program crops, or ELS cotton, on the farm.

To illustrate the various parts of a crop acreage base related to planting flexibility, consider figure 1. The crop acreage base of each program crop is essentially divided into four parts: reduced acres (acreage reduction program, or ARP, factor multiplied times the base), Normal Flex Acres (15 percent of the base), Optional Flex Acres (10 percent of the base), and remaining base acres.

Producers participating in Government programs are allowed to plant the program crop on all of the base except the reduced acres. The maximum acres on which producers may receive Government support payments is the base minus reduced acres minus the normal flex acres. Let's look into the relevant provisions a little closer.

Planting Flexibility

Producers may plant an eligible crop on up to 25 percent of any participating program crop's acreage base. This acreage is known as "flex" acreage, and the plantings can be credited as "considered planted" to the program crop for base protection purposes. Planting flexibility provisions do not apply to ELS cotton.

Normal and Optional Flex Acres

The first 15 percent of the flex acreage is known as "normal flex acreage" (NFA) and the other 10 percent as "optional flex acreage" (OFA).

Normal Flex Acres are not eligible for Government support payments, whether or not they are planted to the original program crop, or "flexed" to another crop. When deciding what to plant on NFA, producers would need to consider, among other things, how the market returns for the original crop compare to the market returns for the alternative crop.

If Optional Flex Acres are planted to the original program crop, they are eligible for Government support payments. If "flexed" to another crop, they are not eligible for Government support payments. When deciding what to plant on OFA, producers would need to consider, among other things, how the program returns for the original crop (including Government payments) compare to the market returns for the alternative crop.

Flex Crops

Crops that may be planted on flex acreage are:

any program crop (wheat, corn, sorghum, barley, oats, upland cotton, and rice);

oilseeds (soybeans, sunflowerseed, safflowerseed, canola, rapeseed, mustard seed, and flaxseed);

any industrial or experimental crop;

mung beans, and;

any other nonprogram crop except fruits, vegetables, potatoes, dry edible beans, lentils, and dry peas.

The Secretary may, however, prohibit the planting of any crop on flex acreage. A list of prohibited crops is available in county Agricultural Stabilization and Conservation Service (ASCS) offices. Prohibited crops for 1992 include fruits and vegetables, peanuts, nuts, wild rice, trees, tree crops, and tobacco. With a few exceptions, crops planted on flex acres are eligible for any available price support loans.

Government programs assign a crop base for each program crop, such as wheat, feed grains, cotton, and rice. Wheat USDA BN-49909

Cotton Dave Warren/USDA 067-10-28A