(Editors Note: U.S. Senator Pat Roberts, author of the 1996 farm bill when he was
Chairman of the House Agriculture Committee, found himself in the unusual position of voting
against the 2002 Farm Bill. The High Plains Journal asked him to explain the vote and got a
lesson into the inner workings of this year's bill as well.)
Farm Bill Commodity Title Questions and Answers by 
U.S. Senator Pat Roberts for the High Plains Journal

I wanted to attach a supplemental package for the 2002 crop to the Farm Bill that would have provided assistance quickly while allowing USDA and producers time to implement and understand the bill.

Instead of receiving the full level of assistance for the 2002 crop, producers will now have to wait 13 to 16 months, and receive four different checks, to receive the same amount of assistance.

A final counter-cyclical payment in June 2003 or even September 2003 does not help you pay your bills in 2002.

A counter-cyclical program should provide assistance to producers when they need it most. However, an analysis of average marketing year prices for wheat in the 1982 to 1999 crop years shows there would have been no counter-cyclical payment for wheat had this bill been in effect. This situation would have occurred for the crops in 1982, 1983, 1984, 1988, 1989, 1994, 1995, 1996, and 1997. This means Kansas wheat producers would have received no counter-cyclical payment in 9 of the last 18 years.

Higher loan rates do not provide assistance to producers with no crop to harvest. Furthermore, they are market distorting and impact planting decisions. We should provide the money in guaranteed, direct payments.

The bill does not provide 70 percent more money for payments to producers. First, the advertised increase in funding represents the total increase above budgeted funding for all USDA programs. Second, this figure does not include a comparison to the supplemental assistance packages of the last four years.

The average level of supplemental assistance in recent years was $7 billion. This bill provides less than $5 billion a year in additional assistance. Or, about $2 billion less than we've been providing.

The bill cuts $2 billion from the bipartisan crop insurance reforms we passed in 2000. The bill significantly increases the odds the U.S. will be found in violation of its WTO agreements.

The bill provides direct payments for apples and onions but eliminated a pilot project for the creation of Farm Savings Accounts

2. Will there be a supplemental AMTA payment this year?
Answer: No. There will be a very small additional direct payment and new counter-cyclical program in its place. Both are described below.

3. How much would I have received under Senator Robert's supplemental proposal, and when would the payments have been made to producers? What will the actual, additional, direct payment for 2002 be under the new Farm Bill since there will be no supplemental?
Answer: Under my supplemental proposal you would have received a payment equal to the 2000 AMTA payment, and it would have been made prior to September 30, 2002.

The payments for the 2002 crop under the supplemental proposal would have been:
     Wheat   58.9 cents
     Corn   33.4 cents
     Sorghum   40 cents
     Cotton 7.33 cent/lb

Actual additional payment producers will receive in 2002 under the new Farm Bill:
     Wheat   6 cents
     Corn   1.9 cents
     Sorghum   3.6 cents
     Cotton   .95 cents
     Soybeans   44 cents

4. When does this bill go into effect and how long does it last?
Answer: The bill replaces the 1996 Act and applies to the 2002 through 2007 crops.

5. I see that loan rates have been increased. Does this mean my loan rate on wheat will now be $2.80/bu, $1.98 for corn, etc.?
Answer: Not necessarily. Under the previous bill, the national average loan rate for wheat was $2.58. However, the key words were national average. Some Kansas counties were below the average while some were above. Loan rates will still be calculated on a national average. Thus, we could still have loan rates that are both above and below the $2.80 national average in Kansas.

6. What will the loan rate be in my county this year?
Answer: USDA will have to recalculate the loan rate for every commodity, in every county, prior to this year's harvest. That means they have around 6 to 7 weeks to get the job done for Kansas wheat producers. It also means this is an opportunity for USDA to address discrepancies in rates across state and county lines.

7. Are there any changes in the operation of the LDP and marketing loan programs under this bill?
Answer: This program will still work as it has in the past.

The bill also includes a Roberts' provision that addresses the lost beneficial interest problem for producers of the 2001 crop. This will benefit approximately 350 Kansas producers.

8. Does the bill include LDPs for 2001 crops harvested on non-AMTA acres?
Answer: Yes.

9. Does the bill include eligibility for LDPs on grazed out wheat?
Answer: Yes, this provision has been made permanent for the life of the bill. Eligibility also continues for barley and oats. One important addition for Kansas producers is eligibility for grazed out triticale.

10. What are the national average loan rates for the individual commodities we raise in Kansas?

Answer: Wheat is $2.80 in 2002 and 2003, falling to $2.75 in 2004
         Corn and Sorghum are $1.98 in 2002 and 2003, falling to $1.95 in 2004.
         Soybeans are $5.00 for the duration of the bill
         Cotton is 52 cents/lb for the duration of the bill
         Oats $1.35 in 2002 and 2003, falling to $1.33

11. How does the counter-cyclical program work, and is it coupled to production?
Answer: The counter-cyclical program is calculated on a target price system and on base acreage, just like direct payments, instead of production.

A producer may be able to get a counter-cyclical payment on his base acres for a crop he did not grow in a particular year, while he may not get a payment on a crop he actually grew.

For Example. Assume a producer has a corn and wheat base but grows cotton on 200 acres this year. If a payment is triggered, the producer could collect a counter-cyclical payment on wheat and corn, but not cotton.

12. What are the target prices for each crop and how is the counter-cyclical program calculated?

Answer: Target Prices for Kansas commodities are as follows:
     Wheat   $3.86/bu in 2002 and 03, rising to $3.92/bu in 2004
     Corn   2.60/bu in 2002 and 03, rising to $2.63 in 2004
     Sorghum   $2.54/bu in 2002 and 03, rising to $2.57/bu in 2004
     Soybeans   $5.80/bushel for the life of the bill
     Cotton   72.4 cents/lb for the duration of the bill.

The payments are calculated as follows:
     The higher of the national avg. loan rate or the 12 month avg marketing price, plus the
     direct payment level, subtracted from the target price. The difference is the amount of
     the counter-cyclical payment rate that will be received.

Example for wheat: Assume loan of $2.80, avg. market price of $2.75, direct payment of 52
cents, and target of $3.86. Since price is below $2.80, we use the loan rate in the calculation.
The calculation is as follows:
     (2.80) + (.52) = $3.32
     (3.86) - (3.32) = 54 cents 
Thus, the maximum counter-cyclical payment rate on wheat is 54 cents. If price goes above
$2.80, the total amount of this payment will fall.

 Wheat = 54 cents
     Corn = 34 cents
     Sorghum = 21 cents
     Soybeans = 36 cents
     Cotton = 13.73 cents

14. What is the direct payment rate for each crop?

Payment rates for 2003 to 2007:
     Wheat = 52 cents
     Corn = 28 cents
     Grain Sorghum = 35 cents
     Soybeans = 44 cents 
     Cotton = 6.67 cents
     Minor Oilseeds = .8 cents/lb

15. Since the direct payment on wheat is 52 cents for 2002, does this mean I get that payment on top of the 46 cents I already received this year under the 1996 Act?
Answer: No. You will receive the difference between the two, i.e, 6 cents. It will work the same for other commodities. A producer that adds soybean or oilseed base will receive the full payment because these crops have not received payments in the past.

16. How much will I receive, and when will the payments be made?
Answer: You should receive your additional direct payment as soon as possible.
You will receive your counter-cyclical payment as follows:
Elect to receive up to 35 percent by October 31.
Receive the difference between 70 percent and the October payment by February 1, 2003.
The final portion of any assistance will come at the end of the 12 month marketing year for the crop. Wheat is June 1, 2003, Cotton is August 1, 2003, and corn, sorghum, and soybeans are September 1, 2003.

If USDA over estimates the early counter-cyclical payments and the actual marketing year price is higher than they projected you will have to repay the overpaid amount.

17. Will direct and counter-cyclical payments be made on 100 percent of my base acres?
Answer: No. Payments will be made on 85 percent of your base acreage.

18. Will I have the option to update my base acres?
Answer: Yes. A producer will have three options for base acres.
1. Maintain existing base acres.
2. Maintain current acres, but add your average oilseed acres for 1998 to 2001 and reduce existing acres by a like amount.
3. Do a complete update for all crops that will be the average of your 1998 to 2001 planted or prevented from planting acres.
Key point here is that base update is based on planted and/or prevented from planting acres, not harvested.

Example of how this works:
Assume Kansas producer currently has 1000 acres of base divided as follows:
600 acres wheat, 300 acres corn, 100 acres grain sorghum.

However, his 1998 to 2001 average planted acres were:
400 wheat, 200 corn, 100 sorghum, and 300 soybeans.

This producer can:
1. Keep the existing 1000 acre split.
2. Keep the existing 1000 acre split, but add soybeans. Could be done as follows: Reduce the wheat acres by 150, corn by 100 and sorghum by 50. Then add in 300 acres of soybeans. He still has 1000 acres of base.
3. Update the entire farm to the 1998 to 2001 average for the four crops.

19. Will I have the opportunity to update my base yields?
Answer: Yes. But only if you choose option 3 above, option 2 is not considered a base update, and the yield update will only apply for purposes of the counter-cyclical program. You must keep AMTA yields for the purposes of calculating the base.

For the purposes of yield calculations a producer can:
1. Keep AMTA yields.
2. Take AMTA yields and add 70 percent of the difference between existing yields and the average yield for 1998 to 2001.
3. Take 93.5 percent of the average yield for 1998 to 2001.

Example under option number 2:
Assume producer has an existing average yield of 25 bushel/acre for wheat and 100 bu. for corn. Then assume that his 1998 to 2001 average yields were 50 bushels for wheat and 200 bushels for corn.

Thus, the 1998 to 2001 average is 25 bushels higher for wheat and 100 bushels higher for corn.

70 percent of each of these numbers is:
(25 bu)(70 percent) = 17.5 bushels
(100 bu)(70 percent) = 70 bushels

Thus, by applying 70 percent of the difference, the new yields for the producer under this option would be 42.5 bushels for wheat and 170 bushels for corn.

Example for Option 3.
Use the same assumptions for yields in the example above.

Take average yields for 98 to 01 times 93.5 percent
(50 bu)(93.5 percent) = 46.75 bu, wheat
(200 bu)(93.5 percent) = 187 bu, corn

These would be the new yields for that producer if he chooses this option.

20. Can I update my base or yield for one crop, or do I have to do it for all crops?
Answer: If you choose to update base and/or yield, it must be done for all crops on the farm. You can not cherry pick.

However, you do not have to do it for all your farms if you do it for one. Each individual farm will be treated separately. If you have 5 farms you could do the following:

Farm 1 Keep current base and yield with no update.
Farm 2 Keep current base but add oilseed acreage
Farm 3 Update Base, but keep current yields
Farm 4 Update Base, update yields using 70 percent option
Farm 5 Update Base, update yields using 93.5 percent option.

If a producer has 30 farms, he will have to pencil it out for each of the 30 farms and figure out what the best option is for each farm.

Yes, producers and FSA are going to love this.

21. What happens if I want to update yields but I suffered a crop loss in one of the years from 1998 to 2001?
Answer: In any year that your production fell below 75 percent of the average county yield, you can insert this plug into the equation for the purposes of your yield update calculation.

22. What happens if I update my base using the 1998 to 2001 average plantings of a crop(s) that I did not grow in 1981 to 85 when current direct payment yields were figured?
Answer: For all crops other than oilseeds, you would take the yield of a similar farm in your area. In other words, if your neighbor has an existing corn yield, you may be assigned his yield, or something very similar.

Oilseed yields for direct payment purposes only are figured by:
Taking the 1981 to 1985 avg national yield of 30 bu/acre for soybeans, divided by the 1998 to 2001 national average yield of 38.2 bushels an acre. This basically equals 78.5 percent. Multiply this number by your actual 1998 to 2001 yield to get your yield for direct payment purposes.

Example:
Assume producer has 1998 to 2001 average of 40 bu/acre. Thus, using the calculation above his yield is: (40bu)(78.5 percent) = 31.4 bushels an acre.

23. Can you explain the actual timing of payments for the next year or so?
Answer:
1. Additional direct payment on the 2002 crop as soon as possible
2. Up to35 percent of counter-cyclical payment by October 31
3. Producer option to take up to 50 percent advance of the 2003 direct payment on or after December first.
4. Difference between October payment and 70 percent of counter-cyclical payment after February 1, 2003
5. Remainder of counter-cyclical after end of 12 month marketing year for each crop.
6. Remaining 50 percent, or full direct payment, for 2003 crop after October 1, 2003.

24. When do I have to make a final decision on updating base and/or yield?
Answer: The bill gives the Secretary flexibility in this regard but indicates it should be done as quickly as possible.

25. If I make one decision regarding updating, can I make a change next year?
Answer: No. The decision made this year will stand for the remainder of the life of the bill.

26. I want to try planting peanuts in western Kansas. How will the new bill affect this decision?
Answer: The old peanut quota system is eliminated by this bill. It is replaced by a marketing loan program that is very similar to that in place for other program crops. All producers will be eligible to participate in this program regardless of where they are growing their peanuts.

27. Are there any payment limit changes in this bill?
Answer: Yes
A $2.5 million gross income limit will apply to eligibility for the 2003 crop. A producer or entity is only ineligible for assistance under this limit if less than 75 percent of their gross income comes from farming.

Beginning in 2002, the payment limits will be $40,000 for direct payments, $65,000 for counter- cyclical payments, and $75,000 for LDPs. The combined limits for a husband and wife will be $360,000. Generic certificates remain in place for the marketing loan program and the 3-entity rule remains in place.