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Farm service agency news - December 7

Fri, Dec 4th, 2009
Posted in Agriculture

Marketing Assistance Loans

Marketing Assistance loans are commodity loans available to producers who share in the risk of producing the crop. To be eligible, you must maintain beneficial interest in the crop through the time of application. Beneficial interest means retaining the ability to make decisions about the commodity, responsibility for loss or damage to the commodity, and title to the commodity. Once beneficial interest in a commodity is lost, the commodity is ineligible for loan - even if you regain beneficial interest.

Commodity loan eligibility also requires you comply with conservation and wetland protection requirements, beneficial interest requirements, report how you use cropland acreage on the farm and ensure that the commodity meets CCC minimum grade and quality standards. For commodities to be eligible they must have been produced by an eligible producer, be in existence and in a storable condition and be merchantable for food, feed or other uses as determined by CCC. The quality of the commodity in farm storage must be maintained throughout the term of the loan.

Producers do not have to participate in the Direct and Counter-Cyclical Program to be eligible for commodity loans.

Violating provisions of a marketing assistance loan may trigger administrative actions, such as assessing liquidated damages, calling the loan and denial of future farm-stored loans.

The most common violations are removing or disposing of a commodity being used as loan collateral without prior authorization and providing an incorrect quantity certification.

Our application process has changed this year. Loan applicants will be required to make two trips to the FSA office, one to make application which will start the lien search process and the other to sign the loan note. In prior years we were able to take lien search requests by phone. This option no longer applies. Please plan accordingly. Some other changes this year include: 1) we no longer require warehouse receipts to show storage paid for the 9-month loan period, 2) we require in-handling charges on warehouse receipts to be included on receipt or a specific statement by the warehouse operator stating in-handling charges have been paid. When you make a request for a farm-stored commodity loan, please bring along with you the dimensions of the bin along with test weight and moisture percentage on your first visit as well as for warehouse loan requests, please bring along your warehouse receipts.

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