1971 Wheat and Feed Grain Programs: Guidelines for Deciding on Participation

Abstract

The information presented in the pages which follow is designed to help farmers decide whether or not it is profitable for them to participate in the 1971 wheat and feed grain programs. Some important changes have been made in the programs this year as a result of legislation adopted late in 1970; however, both programs are still entirely voluntary which means that a farmer can forego any payments and plant whatever he likes if he prefers to do so. If a farmer wants to participate, he must sign up at the local ASCS office sometime between March 1st and April 9th. The new programs allow participating farmers more freedom in deciding · what to plant on the land they are permitted to put into crops after meeting minimum "set-aside" requirements. The term "set-aside" refers to acreage from which crops cannot be harvested in 1971. This acreage must be in addition to each participating farmer's conserving base. As a result of the changes adopted this year some farmers who have not been participating in the past because they needed to plant more land to corn may find they can qualify for payments in 1971 without reducing their corn acreage provided they can maintain their conserving base and are willing to cut back on other crops. While the 1971 feed grain program offers participating farmers more flexibility in cropping, it is less attractive than the old program to farmers who have been receiving payments for putting their entire feed grain base in the program and have planted no corn or wheat on the farm. There will be no payments in 1971 for additional "Voluntary diversion". Land owners who do not plant any corn or wheat on farms with feed grain bases or wheat allotments this year (and accept payments) will have their payments reduced in 1972 and subsequent years; furthermore, they will lose their base or allotment at the end of three years. It is difficult to generalize about the conditions under which it will or will not pay a farmer to participate in the 1971 wheat and feed grain programs. For this reason, it is important for each producer to make his own calculations and. to compare costs and returns with and without participation. In order to assist producers in making their own decisions, the major features the 1971 wheat and feed grain programs are first summarized. This is followed by a comparison of returns under alternative assumptions for several types of farm situations common to New York. These "typical" farm budgets show the major items to consider in attempting to assess the relative profitability of participating in the 1971 wheat and feed grain programs.