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Enrollment for the 2004 Direct and Counter-cyclical Program (DCP) began Oct. 1 and will continue until June 1, 2004.

Producers must sign contracts annually under the DCP, which is a change from Production Flexibility Contract requirements under previous farm legislation.

Producers have until June 1, 2004, to enroll for the 2004 DCP. Late-filed applications will be accepted through Sept. 30, 2004, if accompanied by a $100 late fee. Producers can opt out of participating in the program any year if they choose. For both the 2002 and 2003, more than 98 percent of the eligible base acres were enrolled, according to the Farm Service Agency.

The 2002 Farm Bill authorizes direct and counter-cyclical payments to enrolled producers. Both payments are computed using the base acres and payment yields established for each farm. Producers receive direct payments at rates established by statute regardless of market prices. Counter-cyclical payment rates, on the other hand, vary depending on market prices. Counter-cyclical payments are issued only when the effective price (which takes into account the direct payment rate, market price and loan rate) for a crop is below the target price for the commodity. For "other oilseeds," because of the existing loan rate, the maximum counter-cyclical payment rate is zero.

Following are the 2004 crop year direct payment rates and maximum potential counter-cyclical rates: wheat, $0.52/bushel direct, $0.65/bushel counter-cyclical; corn, $0.28/bushel direct, $0.40/bushel counter-cyclical; grain sorghum, $0.35/bushel direct, $0.27/bushel counter-cyclical; oats, $0.024 /bushel direct, $0.086/bushel counter-cyclical; soybeans, $0.44/bushel direct, $0.36/bushel counter-cyclical; other oilseeds, $0.0080/pound direct and $0.00 counter-cyclical.

Following is the schedule of payments for the 2004 DCP: December 2003: 50 percent advance direct payment; October 2004: 50 percent final direct payment; October 2004: first advance counter-cyclical payment (up to 35 percent of projected payment); February 2005: second advance counter-cyclical payment (up to 70 percent of projected payment less first advance). Dates vary by crop.

By the end of October 2003, producers will have received some $8 billion in DCP payments for 2002 crops and the direct and the first advance counter-cyclical payments (if any) for the 2003 crops. For all years, refunds to USDA's Commodity Credit Corporation will be due if there is a violation of eligibility requirements or, in the case of counter-cyclical payments, if the advance payments exceed the final payment rate.