States Affected by 1983 Drought Percent of Acreage Bases Enrolled in Payment in Kind (PIK) Percent of Eligible Acreage Bases Enrolled in Acreage and PIK Program An average of 81 percent of the eligible acreage bases in 28 states are enrolled in the program. September 1983 COMMODITY PROGRAMS HIGHLIGHTS The combination of payment-in-kind commodities (providing a farmer 80-95% of normal output on acres removed from production) and the usual program benefits of loans and cash payments has provided farmers with economic insurance during the current drought situation . . . ASCS has disbursed the equivalent of nearly $23 billion in farm program loans and payments to farmers in the 28 drought-affected states, most of which has been in the form of direct cash payments made since last fall and the payment-in--kind entitlements either already provided or now in the process of being provided to producers . The value of PIK entitlements, based on August 23 national average prices, Producers in 1,135 counties in 31 states are being allowed to graze and hay for their own livestock the conservation use acres removed from production under the 1983 programs PIK GOALS AND ACCOMPLISHMENTS What PIK was designed to accomplish: attract participation by enough farmers to be effective enable a large amount of acreage to be devoted to conservation -- reduce acreage of feed grains, cotton, rice and wheat -- ensure adequate market supplies -- reduce government outlays for support programs and storage costs -- increase farm prices and net farm income What PIK is accomplishing: PIK has turned out to be the largest acreage diversion program in history. Over 187.5 million acres (81 percent) of the 231 eligible base acres were enrolled in the program by farmers. The massive sign-up means over 80 million acres were removed from production and put into conservation uses, representing the largest soil, water and wildlife conservation effort ever undertaken by farmers in one year. As a result, crop acreage is down. The USDA's acreage report on -- Surplus stocks will be lower, yet supplies will be ample for market demand. Reduced plantings mean lower production, and the shift of most of the excess stocks -- now tied up in Government ownership loan programs and the grain reserve to farmer ownership and control will mean ample supplies for domestic and foreign markets. The PIK program, even after adding acquisition costs, is expected to reduce total Government outlays for commodity programs and storage and handling expenses by over $9 billion over the next three years. PIK has already helped bring a turnaround in farm prices. Since the implementation of PIK, prices farmers receive have increased; some as much as 20 to 30 percent. Farmers production expenses are lower because of reduced planted acreage, raising their net income prospects for the year. |