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Last update: 08/21/14

Johanns Reminds Producers to Sign Up for Farm Bill & Tobacco Payments

Farm Bill Payments - Agriculture Secretary Mike Johanns is reminding producers to sign up for the 2005-crop Direct and Counter-Cyclical Payment Program (DCP) by June 1st, 2005 and for the Tobacco Transition Payment Program (TTPP), also known as the "Tobacco Buyout," before June 17, 2005. The 2002 Farm Bill requires that producers sign annual contracts through 2007 to participate in DCP. Producers may sign-up online for DCP at http://www.fsa.usda.gov/egov/edcp_default.htm.

To access the service, producers must have an active USDA eAuthentication Level 2 account, which requires filling out an online registration form at http://www.eauth.egov.usda.gov, followed by a visit to the local FSA office for identity verification. USDA will accept late-filed DCP applications through Sept. 30, 2005, if accompanied by a $100 late fee. Producers will be unable to apply for 2005 DCP payments after Sept. 30, 2005. "USDA has issued nearly $19 billion in DCP payments to producers since the program began in October 2002," said Johanns.

The online service allows producers to choose 2005 DCP payment options, assign crop shares and sign and submit their contracts electronically from any computer with Internet access. The user-friendly service saves time, reduces paperwork and speeds up contract processing at FSA offices. Producers also now have the option to visit any local FSA office, in addition to their administratively-assigned center as required in previous years.

Tobacco Buyout/Lump Sum Payments - Johanns also said tobacco quota holders and producers need to enroll in this new program by June 17 to be eligible to receive the first of ten possible payments amounting to $9.6 billion. The TTPP makes payments to tobacco quota holders and producers beginning in 2005 and ending in 2014 to help with the transition to the free marketplace. Eligible tobacco quota holders will receive $7 per pound based upon their basic quota at the 2002 marketing year level. Producers of quota tobacco will receive up to $3 per pound payment based on their share of the risk in the 2002, 2003, and 2004 crops of quota tobacco. TTPP payments will be made between June and September 2005 for Fiscal Year (FY) 2005. Subsequent payments in future years will be issued annually during the month of January.

A quota holder or tobacco producer may receive a lump-sum payment from a third party - such as a bank - through a successor-in-interest contract or an assignment of payment. The consideration received must be equal to or greater than the discounted value of the payments, based on the discount rate established by USDA's Commodity Credit Corporation (CCC). The discount rate is determined by adding 2 percentage points to the prime lending rate on the first business day of the month, rounded to the nearest whole number. A tobacco lump-sum calculator is available on the FSA Web site at: www.fsa.usda.gov/tobacco. By inputting a few numbers, the user can tell if the lump-sum offer meets statutory guidelines. The TTPP marks the end of the federal tobacco marketing quota and price support loan programs. Beginning with the 2005 tobacco crop, there will be no planting restrictions, no marketing cards and no price support loans. Signing up for the TTPP is the final and only opportunity to receive federal payments related to tobacco production.






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