Campaign circular 162: The Soil Bank Bid Plan, talks about the soil plan in Nebraska and who agrees and what parts of Nebraska are included in the plan

Peterson, Everett E.

English

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University of Nebraska - LincolnDigitalCommons@University of Nebraska - LincolnHistorical Materials from University of Nebraska-Lincoln Extension Extension1-1958CC162 The Soil Bank Bid Plan : How it Operatesin NebraskaEverett E. PetersonFollow this and additional works at: http://digitalcommons.unl.edu/extensionhistThis Article is brought to you for free and open access by the Extension at DigitalCommons@University of Nebraska - Lincoln. It has been accepted forinclusion in Historical Materials from University of Nebraska-Lincoln Extension by an authorized administrator of DigitalCommons@University ofNebraska - Lincoln.Peterson, Everett E., "CC162 The Soil Bank Bid Plan : How it Operates in Nebraska" (1958). Historical Materials from University ofNebraska-Lincoln Extension. 3144.http://digitalcommons.unl.edu/extensionhist/3144l cc 162 TBE S()IL BANK BID PLAN How It Operates in Nebraska UNIVERSITY OF NEBftverei!t E. Lt ::5R4 r<Y JUN 1 7 1988 INTRODUCTION R\\ ::v 9:J <:; '~-~- ~ ~ .::::} '-:>-The U. S. Departmen_t of Agricultm'e recently announ a cha:QSe in the Conservation Reserve Part of the Soil Bank Program effective in ~8. The purpose of this change is to try to develop a more effective method of reducing t otal farm production by providing farmers rtlitb a greater incentive to "be.XJ.k," or place in reserve, all the cropland on their farms. Easically the plan is an auction-in-reverse; farmers will make bids or offers t n ASC of the price per acre they will accept for putting all cropland in the Conservation Reserve. Under the regular Conservation Reserve Program, the payment rate per acre is set and farmers can take it or leave it. The plan is being tried at first on an experimental basis in only four Statsa -Nebraska in the Great Plains Region; Illinois in the Corn Belt; Maine in the new England Area; and Tennessee in the South. On the basis of the experience in these four States, such a plan may be offered to the other forty-four States, end recommendations may be submitted to Congress on needed changes in farm legislation. HOW THE PLP.N \.fORKS IN NEBRASKA 1. Can entire farms or ranches be placed in the Conservation Reserve under ·t:fiis.:Pianf ________ -- - --- ----- - --- --- - - - --- ---- - --- - ----- -------- -------- - --No. The bid plan, like the regular Conservation Reserve Program, applies only to cropland, including rotation hay or pasture. Permanent range or pasture land and native or wild bay meadows are not eligible under this or any other phase of the Soil Bank Program. 2. What payments will be made to farmers for placing land under contract? - ------ ··-- ·- ---- ·- - · ~- ··- -·- - - --- -- --- ·-··- - -·---- ---- --- - - ·-- - -- - ------------ ---- - -Farmers whose bids are accepted and who fulfill the provisions of their conservation reserve contracts, can receive two kinds . of payments: (l) An annual payment at the bid rate per acre to provide income from cropland taken out of production; and (2) Cost-sharing payments for establishing approved conservation practices on the banked acres. 640ame-l/58 EXTENSION SERVICE UNIVERSITY OF NEBRASKA COLLEGE OF AGRICULTURE AND U. S. DEPARTMENT OF AGRICULTURE COOPERATING W. V. LAMBERT, DIRECTOR The largest tntal payments which can be made to any one farmer in a single year under this plan iA $10, ()00 . - · 3 . H01.r ~~~-?~~11 the conservation reserve contracts run under this bid pla.."l 'Z ·----- ---~ - ------ -- ------ ---- ·--------~ - -Contracts can be fnr 5 or 10 years at the option of the bidder. 4 . Row does a farmer submit a bid if he is interested in this - plan? First, he should obtain as much information as possible about the plan fr om his county ASC and Extension offices end consider carefully how it might apply t o his situation. Next, he goes to his count y ASC office and prepares and s igns a conservat ion reserve contract and gets a bid or offer form. He then figures out a price per acre that lie is \filling to accept for keeping his cropland out of production for a 5 or 10 year period. This price, in dollars per acre, is entered on the bid form by the farmer like marking a secret ballot. Finally he places the contract and his bid in an envelope, seals it, and returns it to · the county ASC office not later than January _31, 1958 . The closing -ttate is January 31, 1958. 6. When will farmers be notified whether their bids have been accepted? -- - - - --- - ---- ----- - -- ~ ------------~---- -------- - --·---------- -As soon as possible after the closing date, the county ASC offices will not ify farmers as to acceptance or rejection of their bids. This ivill probably take about three week~ after the closing date. If a bid is accepted, the contract is effective at once. If a bid is r e ject ed, t he farmer will have time to sign-up for the Corn Acreage Reserve (before March 7) or the r egular eonservation Reserve Program (before April 15), or to keep the cropland in :production. All the s~aled bids or offers will be sent in to the State ASC Office where t he State Committee, in cooperation with other State and Federal agencies, will set "ceiling prices" for bids from the various areas of the State. All bids at these prices or below will be accepted; all those exceeding these r ates will be rejected. Fact ors to be considered in setting maximum rates for an area will include: t he range in :per-acre offering :prices, the number of offers from an area in re-l ation t o the total number of farms, the estimated productivity and sa le value r atings as supplied by county ASC committees, and the amount of funds available f or t he program. 640ame-l/58 8. If a bid is accepted, does a farmer have a chance to reconsider before the ccntract-bE:lcom~s~)·iD·ai- ari<f~~~~~-:fil~_(- - ····-- --- - --·· -- ------·- - ·- - - ---- ~- ---- · - -. No, he cannot withdraw his offer or .. con.tract. When he submits en offer, he should do so with the full realization 'that the offer may be accepted and,. if accepted, the contract is effective immediately. --- ··----~-- ~ ---- - ---- ·-·- ~---···-- ----- ---. . 9. If a bid is reje?ted, __ ~~-~J~rm:'_!.__submit a new, _ __!9~~X: .. _?~~J-No. This is not possible in 1958. ·ne can :participate in the regular Soil Bank Program or keep his cropland in Jiroducti6n. The bid or offer rate :per acre will vary among farms even in the same community bec.e.use of differences in productivity, tenure, size, improvements, relation of cropland to pasture land, and family situations. Family situations differ as to the age and physical ability of the o~er.ator, investment in live-stock and machinery, and alternative employment opportunities. In general, the offers should be based upon the costs that will go on even though the cropland is taken out of production and upon a realistic return for investment in land and in machinery end buildings, if idled by participation in this program. This plan is not intended to provide full compensation for the farmer's labor and management, in other words, to permit farm operators to receive the same net income as when they were using their labor end managerial ability in crop production. Allowances should be made for possible increases in property taxes and for further declines in the purchasing power of the dollar. "The simplest situation is that. of the farmer who is near or past retire-ment age and wishes to cut down on the amount of farm work while still receiving some income from his farm. Such a farmer would add - the taxes ·on his farm; his share of the cost of establishing and maintaining conservation practices and of weed control, fence repair (also building maintenance if not used tor livestock), and interest on investment. He should prorate the taxes, fence repair and investment between cropland and pasture · if he plans to rent out his pasture and buildings or keep a livestock enterprise to use his buildings and wild hay and pasture. This sum (taxes plus other costs plus .interest on investment) would be d:Lvided by the acres of cropland to g~t the bid price in dollars per acre. Interest on investment can be figured by taking about 6 percent of the market value. · The same method of figuring would apply to the farm landlord or to ·the farm o-vmer-operator who has a chance to work at an off-:f'arm job • . ~ The problem is more· complicated on a rented farm because the tenant as well as the farm owner is involved. The return to the landlord would be figured as d·escribed above. In addition, there should be added- the tenant'~ costs that will go on, such as, depreciation and personal property ):.axes an· machinery, and net cost of feed (total less crop production costs saved) ' if lives tock are· involved. The tenant and landlord must agree in advance on the division of the payment and both must sign the contract. 64oame-l/58 -4- · 11. Ca~_s:ontr~c_t -~~~~E}~~?:_E_e_:fo!.:_~ _  t_E~-~?::...9_f_~he · con~~~~~-p~~i_?~_?_ No, except under special circumstances s.uch as . the physical or mental incapacity of' the farmer to such en extent that he cannot ce.rry out the terms of the contract. . . Such a change in control of the farm ends the contract with the original owner or tenant. He receives no further payY!1ents and will have to refund all cost-sharing payments received tmless his successor becomes a party to the contract. The successor may, at his req_ueet, be substituted under the contract. 13.. _Qan ~L~r.!I! land~o~~teEP_!~g?-~~a___!eaE_~__J.n_?~d~r _to __Eut his cropl~~~-j-,~e. S oi 1 Bank_ ~<!-2:~cei_~~ __!.lf.~~~~~-I'~~~!?-t_? The Soil Bank Act specifically provides that tenants shall be given the opportunity to participate under the contract and that a tenant cannot be removed from a farm for the purpose of sole participation in the program by the landlord. However, if a tenant voluntarily gives up his lease on a farm, the landlord is not req_uired to offer the farm for rent to another tenant but can place his cropland in the Soil Bank and receive the entire :payment .. 14. What are th~ req_uirements 8:!3 . ~C?- the trea~~~~---~!.l-~z:t~ -~}-aced in _!'ese~~~ under th~.§!_:plan.:_? The req_uirements and restrictions are essentially the same as under the regular Conservation Reserve Program. The reserve acres must be seeded to permanent grass cover or planted to trees; such land can also be used for water storage facilities and for food, cover and water for fish and wildlife. The reserved land cannot be grazed and no hay, grain or seed crops can be harvested from it during the contract :period. Noxious weeds must be controlled on the reserve acres. The farmer also agrees not to break out any new land for crop production. If the provisions of the conservation reserve contract are violated sub-stantially, the contract may be ended, all rights to payments forfeited, and all :payments made refunded to the Federal Government. For less serious vio-lations the rights to payments will be adjusted, forfeited, and refunded as determined to be appropriate. In addition, the Soil Bank Aqt provides that any producer -who "knowingly and wilfully" grazes or harvest~:~ any crop from an acreage in violation of a contract is subject to a fine or civil penalty of 50 percent of payments for the year in addition to the forfeit and refund of payments. 640ame-l/58 16. Do payments under this plan co~t for soci~l security purposes? Income from conservation reserve payments will count for social security purposes in the same manner and subject to the same limitations as that from regular farm sources, such as crop sales. Farmers and farm landlords who need such income to become eligible for social security payments should make sure that they do not change their tenure arrangements and participation in pro-duction so that their income becomes strictly rental or investment income. Those vrho have retired will want to consider making such changes to permit them to receive their soil bank payments and all their social security benefits. 17. Can a farmer participate in the Bid Plan and in the Great Plains Conserva-tTo!lProgi:am or A~{~~it~~! -C ons~!vatToE:-_:Pr-o_Si~L-- ---- - ---------- ----- --- -- -He could participate in the Soil Bank Bid Plan and either or both of the others. For example, he could place all his cropland in the Conservation Reserve f or the purpose of receiving income payments while regressing. He could obtain technical assistance in developing and carrying out long-run changes in his land use and cropping system under the Great Plains Conservation Program. He could receive cost-sharing payments .for approved conservation practices under either the Soil Bank, Great Plains, or Agricultural Conservation Programs. _ Cost-sharing payments can be obtained from only one of these sources for any one practice. _ 18 . Will putting land in the Conservation Reserve reduce f~ B:_~~eag~_ allotments in the -future? -- --- ---- - -- ---------- ----No. Cropland placed in the Soil Bank will be regarded as having been in crop production in setting future allotments or corn bases. 19. JIS!1i_d_Q~_F? __ ~_P..J__~ _ _E_:I,~_ Jll-!'1:~--Y.Qrk if ~-!~~! al!'~ad_y has __ s <?me_)~E_~_ln -~he_§_C?_il_ ~~nk _ ~~ his bid is _~_~ep~-~~-? He may still submit an offer for all his cropland. If he has some land in the Conservation Reserve, · the new contract will include all the cropland. The annual payment rate for land already under contract will remain at the regular fixed rate provided in the original contract. If he has some land in the 1958 Wheat Acreage Reserve, he earns the acreage reserve payment on this land in 1958 and the bid rate on the remainder. If he has a corn acreage allotment on his farm, he may alSo participate in the 1958 Corn Acreage Reserve Program at the acreage re_serve rate for corn. In 1959 and subsequent years, all payments will be made at the bid rate for all cropland. SOME ADDITIONAL CONSIDERATIONS Should I participate in this new Soil Bank Bid Plan? Since no two farms or farm family situations are alike, each farm operator or owner will have to work out his own final answer. Participation is voluntary but the contracts are 6l+Oame-l/58 -6-legal and binding once they are effective. The late announcement of the plan end the necessarily early cut-off date limit the amount of time available for studying, figuring and deciding whether to make an offer? and if so, 1vhat price to bid. · In reaching a decision, the following advantages and disadvantages might be considered carefully: 1. 2. l.~. 5. 6. Income is certain; risk from 1. drought, price change, and other hazards reduced. Soil improvement, better land use 2. and possibly higher future income. Lo-vrer operating costs - less 3. fertilizer, labor, seed, machinery, end power expense. Improved market prices for crops 4. i f production control is effec-tive. Possibility of less restrictions 5. on production on remaining farms. Less farm work with income to 6. supplement retirement pay or off-farm earnings. Cropland use restricted for 5 or 10 years; permanent pasture and wild hay not included. Fixed costs continue; property taxes are likely to increase in Nebraska. Less efficient use of operators' and family la ·oor, machinery, buildings, and permanent pasture and wild hay land in some situations. Loss of farm-grown feed for live-stock enterpris es, making it necessary t o buy feed or sell the livestoGk in s ome cases. Landlord-tenant problems on rented farms; whe t her to participate; how to figure the bid; how to divide _ payments. Payments may not offset l oss in income unless retirement payments or earnings from off-farm jobs ere available. FOR MORE INFORMATION Ask your COUNTY AGRI CULTORAL AGENT for help in working out how this plan might apply t o yo-irr- situafioii. ·an.·ci--in- figuring a realistic bid price. See your COUNTY ASC COMMITTEE for detailed information on the program for preparing conserva."tion-·raser-ve contracts and for the "bid" form. # 64oame-l/58 •• 

CC162  The Soil Bank Bid Plan : How it Operates in Nebraska

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CC162 The Soil Bank Bid Plan : How it Operates in Nebraska

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