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					Stronger Payment Limitations                       FSA Farm Storage Facility Loan Program

The new program imposes a cap on average           The 2008 Farm Bill brings much-needed updates                                          GUIDE TO THE 2008 FARM BILL
adjusted gross income (AGI) for eligibility to     to the Farm Service Agency (FSA) farm storage
receive farm program payments. The hard cap        facility loan program. Loan amounts are now                                                 An Overview of the 2008
on non-farm income is $500,000, with a new         authorized for up to $500,000, compared to the                                                 Farm Legislation
cap on farm income placed at $750,000, above       prior limit of $100,000. The term of the loan may
which a producer will no longer be eligible for    be up to 12 years; the prior maximum tenure
direct payments.                                   was seven years. Another improvement requires
                                                   the Secretary of Agriculture to provide partial
The total payment cap for direct and counter-      disbursement of the loan principal to facilitate            NCGA Headquarters
cyclical payments for a single farmer is set at    purchase and construction.                                     632 Cepi Drive
$40,000 and $65,000, respectively. For producers                                                              Chesterfield, MO 63005
who participate in ACRE the limit on direct        There are also some changes on securitization.                 636.733.9004
payments will be reduced by the dollar amount      FSA will no longer be able to require a sever-    
that direct payments are cut. Their limit on       ance agreement from a prior lien holder on the
                                                                                                             Washington, D.C., Office
counter-cyclical and ACRE payments will be         real estate parcel if there is an increase in down
                                                                                                                 122 C Street NW
increased by the same dollar amount.               payment or other acceptable security provided.
                                                                                                                    Suite 510
                                                   FSA also will have to offer the option of allowing       Washington, DC 20001-2109
                                                   a sub-parcel of real estate to be used as collateral,
                                                   subject to approval of the Secretary.
         Direct Payment Rates
     Commodity          $/Unit 2008-2012           Several issues remain to be worked out during
 Wheat                    Bu.     $0.52            implementation of this provision, including if
 Corn                     Bu.     $0.28            FSA will again determine whether or not certain
 Sorghum                  Bu.     $0.35            loans at a lower dollar amount would not require                Contributors:
                                                   a lien on the real estate parcel. Under the current
 Barley                   Bu.     $0.24                                                                       University of Illinois
                                                   regulation, no lien is required for loans $50,000
 Oats                     Bu.    $0.024                                                                      Professor Gary Schnitkey
                                                   and less. Currently, implementation of this
 Upland Cotton            Lb.   $0.0667            program is expected to begin this September               Kansas State University
                                                   at FSA’s national headquarters in Washington, D.C.          Professor Art Barnaby
 Long Grain Rice         Cwt.     $2.35
                                                                                                           Mississippi State University
 Medium Grain Rice       Cwt.     $2.35
                                                                                                               Professor Keith Coble
 Soybeans                 Bu.     $0.44
 Minor Oilseeds
                                                   improvements                                               Ohio State University
                                                                                                               Professor Carl Zulauf
                                                        NATIONAL CORN GROWERS ASSOCIATION

2008 Farm Bill Overview &                               Average Crop Revenue Election (ACRE)                  Second, an individual’s actual revenue for the crop   Environmental Quality
                                                                                                              must be less than the farm’s benchmark revenue.       Incentives Program (EQIP)
Payment Calculator                                      While maintaining programs authorized in the          Benchmark yields at the state and farm levels are
                                                        2002 Farm Bill with minor changes, the new            Olympic averages of the most recent five years.       The EQIP offers financial and technical help to
                    The 2008 Farm Bill is finally a     Commodity Title offers the Average Crop Revenue                                                             assist farmers and ranchers install or implement
                    reality and will continue to pro-   Election (ACRE) program beginning with the 2009       If both triggers are met, a producer will receive     conservation practices on eligible agricultural
                    vide a safety net for producers     crop year. This program will make payments to         an ACRE payment calculated as the difference          land to protect water, air and soil quality and
                    of program commodities for          producers when the actual state revenue for the       between the state’s actual revenue and the ACRE       the wildlife habitat.
                    the next five years. A major        commodity is less than the revenue guarantee.         guarantee per acre, multiplied by a percentage
                    change to the 2008 bill is a                                                              (83.3% or 85% depending on the crop year) of the      In the 2008 Farm Bill, EQIP funding was
                    new market-based state level        Producers will continue to receive direct             farm’s planted acreage, but prorated based on the     increased by $3.4 billion and the evaluation
crop revenue protection program, which is based         payments, but at a 20 percent reduction in rate       individual farm’s yield history compared to the       process for applications was improved to offer
on the five-year state average yield and the                                compared to previous farm         state’s yield history.                                greater incentives for producer participation.
rolling two-year national average price.                                    programs. They also will re-                                                            Additionally, the new rules established the
                                                                            main eligible for non-recourse    The maximum payment is limited to 25 percent          Agricultural Water Enhancement Program
To assist producers in navigating this new                                  marketing loans, but at a 30      of the state ACRE guarantee. A producer’s total       (AWEP) to help producers achieve water quality
safety net option, economists at the University                             percent reduced rate.             number of planted acres for which he may receive      goals and address water quantity concerns.
of Illinois, Ohio State University, Mississippi                                                               ACRE payments may not exceed the total base
State University and Kansas State University have
developed a farm payments calculator CD. Please
use this enclosed tool to determine how various
                                                                            To receive an ACRE payment,
                                                                            two triggers must be met.
                                                                                                              acres for the farm.
                                                                                                                                                                    direct payments
                                                                            First, the actual state revenue   Crop Insurance Pilot Program
programs will impact your farm income.                                      for the crop must be less than    Enhances Policies
   risk management                                                          the state revenue guarantee
                                                                            amount.                           Another significant Farm Bill objective attained by
                                                                                                              NCGA is the adoption of a pilot program that will
                                                                                                              offer a greater incentive for producers to convert
                        Target Prices for Counter-Cyclical Payments                                           their optional and basic units crop insurance
              Commodity           $/Unit       2007       2008        2009      2010-2012                     coverage to higher levels of coverage for enter-
                                                                                                              prise and whole farm units. To address the current
          Wheat                     Bu.       $3.92      $3.92       $3.92        $4.17
                                                                                                              disparity in premiums between the units of cover-
          Corn                      Bu.       $2.63      $2.63       $2.63        $2.63                       age, the pilot program will provide policy holders
          Sorghum                   Bu.       $2.57      $2.57       $2.57        $2.63                       with enterprise or whole farm unit coverage for
          Barley                    Bu.       $2.24      $2.24       $2.24        $2.63                       the same premium subsidy per acre that would                                              SPONSORS
                                                                                                              otherwise have been paid for basic or option unit                           Maryland Grain Producers
          Oats                      Bu.       $1.44      $1.44       $1.44        $1.79
                                                                                                              coverage for the covered crop. The amount of the                       Ohio Corn Growers Association
          Upland Cotton             Lb.      $0.7240    $0.7125     $0.7125      $0.7125                      premium to be paid by the Federal Crop Insurance
          Soybeans                  Bu.       $5.80      $5.80       $5.80        $6.00                                                                                              Iowa Corn Growers Association
                                                                                                              Corporation, though, may not exceed 80 percent
          Other Oilseeds           Cwt.       $10.10     $10.10      $10.10       $12.68                      of the total premium for the enterprise and whole                   Illinois Corn Growers Association
                                                                                                              unit policy.                                                       Indiana Corn Growers Association
                                                                                                                                                                              Virginia Grain Producers Association