All Direct Payments Will Take a Hit to Cover Repayment Needed

DTN has reported that USDA will reduce direct payments for all crop farmers by 8.5-percent this year rather than requiring some 350-thousand producers to refund a portion of the payments they already received through other programs.

U.S. Agriculture Secretary Tom Vilsack had previously stated that sequestration would require USDA to ask farmers to pay back 151-million dollars received under the Milk Income Loss Contract Program, the Supplemental Revenue Assistance Payments Program and the Noninsured Crop Disaster Assistance Program.

With more than 90-percent of the farmers who received payments under those programs also getting direct payments - the Secretary suggested that the agency would simply reduce their direct payments by the amount the farmer would have had to pay back.

A USDA Farm Service Agency representative told DTN that the situation is a bit more complicated - and while cutting the direct payments of producers who didn't get the MILC, SURE or NAP payments may seem unfair - the move is less expensive than asking farmers to pay USDA back.

According to the FSA representative - the agency is trying to carry out sequestration cuts in a way that provides the least disruption to its customers. But USDA continues to urge Congress to replace sequestration with balanced deficit reduction.

All FSA payment programs are subject to the 5.1-percent sequester cut. The representative says USDA cannot mitigate the negative effects that cuts of this magnitude will have on its mission.

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