Since October is the start of the 2007 fiscal year, participants of two Farm Service Agency programs can expect to see benefits coming their way from fiscal year 2006. The two programs are the Conservation Reserve Enhancement and the Direct and Countercyclical Program.

CREP annual rental payments will be issued to eligible participants for fiscal year 2006. CREP participants signed a long-term contract of either 10 or 15 years that binds them to maintain CREP acreage as per the requirements of the conservation plan in return for an annual rental payment.

DCP payments will be issued to eligible participants for direct 2006 final payment rates as established by the current farm bill.

Also, producers that participated in the 2005 DCP program will be receiving a countercyclical payment for corn that will be 35 cents per bushel. Producers that were enrolled in either 2005 or 2006 will only be eligible for the year-specific payment. Producers that were enrolled for both years will receive both payments. Unlike CREP, DCP is much more complicated in how payments are calculated and earned.

DCP enrollment is available only to those farms that have an acreage base for program crops. Program crops are corn, soybean, wheat, oats, barley, grain sorghum and minor oilseeds. If a farm produced program crops for the base period of 1997-2001, then an acreage base is established by taking the average acres planted each year. However, if acreage reports were not filed at the FSA office, then there is no history of planting a program crop. If a producer only filed acreage reports for one year, then the other years are considered a zero.

The end result is the crop acreage base for the farm is only a fraction of what it should be. This has a direct correlation to DCP payments as they are based upon 85 percent of the acreage base at the time of the current farm bill.

This is how direct payments are calculated. Countercyclical payments are similar in that they are based on 85 percent of base acreage but the rate is unknown until the end of the marketing year.

Since we are now in October, the marketing year for the 2005 crop was completed on Sept. 30, 2006. FSA then tracks the average market price for the year to determine if it was below a preset target price. This the first time there has been a corn countercyclical payment.

The calculation is as follows:

The target price is $2.63. Subtract 28 cents for the direct payment issued in fiscal year 2005. That leaves $2.35. Subtract $2 from that for the 12 month average price. That leaves 35 cents at the counter-cyclical payment for fiscal year 2005 participants.

So this means that, since the 2005 corn price only averaged $2, a countercyclical payment is applicable. But, remember, it is only on the corn base acres that were set several years ago if acreage reports were filed. For those producers that are planting considerably more thsn seven or eight years ago, all you can do is continue to report your acreage each year. Then, if there is a new farm bill and the procedures to calculate base acres are changed, it will be much more accurate of what normal plantings are for the farm.

Some producers only seem concerned with the current year and if there is a Loan Deficiency Payment. Well, this year the grain market is high enough to where it seems there will not be an LDP.

But, if acreage reports are on file, there will at least be history credit when it is time to recalculate acreage bases for a new farm program. Most of the time a program like DCP is much more favorable then LDPs.