Bill Huffman
Director - Governmental Affairs

June 13, 2008

Lesher, Russell & Barron, the Washington, D.C. based lobbying and regulatory affairs firm for the California Rice Commission arranged a conference call this morning with USDA Deputy Undersecretary Floyd Gaibler of the Farm and Foreign Agriculture Service to discuss the timeline for implementation of the various provisions of the new Farm Bill. Many of the key questions were answered and I will try to cover the specifics in today’s Friday Report.

• With respect to the 2008 rice program, Mr. Gaibler said producers will not be required to file new CCC-501 or CCC 502 forms for 2008 crop unless there has been a change in the farm operating plan.

• For the 2008 crop, the three-entity rule still applies.

• USDA will formally announce the 2008 Direct and Counter-Cyclical (DCP) payment program next week. Information on the “advance” direct payment will be included and the signup dates will be announced. 2008 crop signup for rice will end on September 30, 2008.

• FSA will notify growers about making appointments for enrollment in the 2008 program.

• USDA has established loan values for 2008 crop whole kernel and broken rice. For California farm stored medium/short grain rice the loan rate will be $6.54 per cwt.

With regard to new provisions in the Farm Bill having to do with payment limits and program eligibility (Adjusted Gross Income), Undersecretary Gaibler said:

• An interim rule will be published prior to October 1, 2008 with a 60-day comment period with respect to the new Adjusted Gross Income and program participation rules. A final rule then will be issued that will be effective for the 2009 crop.

• New rules having to do with “actively engaged” requirements will be rewritten.  An interim rule will be published prior to October 1, 2008 with a 60-day comment period.  The final rule then will be published to be effective for the 2009 crop.

Gaibler said it is going to take time for his staff to write the new rules, properly notice those proposed rules, and write the final rules that will be applicable for the 2009 crop. 

Analysis

We’ve known Floyd Gaibler for many years. He is an experienced administrator, having been involved with writing the rules for the 2002 Farm Bill. He also knows the rice industry very well. One of the biggest challenges facing USDA in implementing this Farm Bill; is that they will still be using their somewhat antiquated computer system. While the agency had requested funding for a new computer system in conjunction with this bill, Congress did not approve their request, so they will be stuck with their current system as they move forward.

We are thankful the 2008 rice program is pretty well set. As for the 2009 program, as Mr. Gaibler said this morning “we have to write the rules, publicly notice the rules for comment, write the final rules and then develop the software to implement the programs, train State and County office staff and hold briefings for the industry and Congress as the process moves forward.

We hope today’s Friday Report answers some of the questions you may have had.  We’ll try to get answers to other questions as they come up.