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Glickman Announces Plan for Direct Cash Payments to Hog Producers

Livestock Update, February 1999

Submitted by: Allen Harper, Extension Swine Specialist, Tidewater AREC

WASHINGTON, Jan. 12, 1999 -- Agriculture Secretary Dan Glickman today outlined ways the U.S. Department of Agriculture will assist struggling small hog producers with approximately $50 million in direct cash payments. Last Friday, Vice President Al Gore announced that the Department would make such payments.

"This administration is committed to doing everything we can and using every authority we have to help struggling American family farmers," Glickman said. He estimated that 80-90 percent of American producers, or nearly 100,000, will be eligible for the payments. Producers will receive up to $5 per slaughter weight hog (or the equivalent for feeder pigs and other swine) marketed during the last six months of 1998. Producers will only be paid on up to 500 market hogs (or an equivalent number of feeder pigs), so the maximum payment will be $2,500 per operation.

In an effort to target limited resources to smaller producers, no payments will be made to operations whose 1998 gross income exceeded $2.5 million, as is true for USDA's crop disaster assistance programs. Glickman said producers are eligible if they marketed fewer than 1,000 hogs during the last six months of 1998, and are still in operation today. Producers are not eligible for payments on hogs marketed under fixed-price or cost-plus contracts.

Producers should apply for direct payments at their local Farm Service Agency offices from February 1-12, 1999. Payments will be made about two to three weeks after the end of the sign up period. Further program details will be published in the Federal Register in the near future.

Payments will be made under USDA's Section 32 program, which is used to purchase commodities that are in surplus for distribution through Federal food assistance programs, and which permits direct payments to farmers to reestablish their purchasing power. The use of Section 32 funds for direct payments will not reduce the amount of assistance for USDA's food and nutrition programs.

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