USDA Update

By Rod Johnson

January 16, 2004

I just received an e-mail that had some information that may be of interest to farmers or ranchers with corporations who want to restructure their operations. The article indicates in May 2003 the Internal Revenue Service came out with some guidelines for supporting tax-free corporate separations. I know over the years I have heard some producers talking about wanting to dissolve or restructure corporations. I have no further information on this matter. You will need to discuss these issues with appropriate legal counsel or accounts.

The USDA Service Center along with other Federal agencies will be closed Monday, January 19 in observance of Martin Luther King, Jr’s Birthday Holiday. The offices will reopen on Tuesday, January 20.

Friday, January 30, 2004 is the final date to signup up for the 2001/2002 Crop Disaster Program. This disaster applies to virtually all crops in Kiowa County. The FSA Office is making every effort to identify any producer who may be eligible for crop loss in either or both of those years. Although we try to make sure we don’t miss anyone, it is ultimately each producer’s responsibility to apply for program benefits at FSA.

The FSA Office Staff has been working diligently to issue 2001/2002 Crop Disaster Program payments, 2003 Noninsured Crop Disaster Assistance Program (NAP) payments and 2004 advance Direct Payments. The vast majority of these payments should be issued by the end of January. In February the Secretary of Agriculture should announce the adjusted projected Counter-Cyclical payments for 2003 crops. At that time producers will be able to request up to 70% of the announced amount less any advance Counter-Cyclical payment already received.

IRS 1099’s will be mailed directly to producers from the Kansas City Computer Center. The FSA Office will receive a complete listing of all payments issued for a producer. If you are having trouble reconciling your payments for tax purposes we can provide you with a total listing of payments.

In a letter dated June 9, 2003, Governor Bill Owen requested Agriculture Secretary, Ann Veneman, to make Farm Service Agency emergency loans available in Baca, Bent, Elbert, Kiowa, Lincoln and Prowers Counties. The request was based on damages and losses caused by drought that began September 1, 2000, and is continuing. The request was approved under Secretarial Natural Disaster Determination S1797. Upon approval of the six primary counties, eight other contiguous counties were named including Cheyenne, Crowley, and Otero. Eligible family farmers in these counties may qualify for FSA Emergency Loans. The disaster designation also may have tax implications so check with your tax advisor on this issue.