Agricultural
Adjustment Act of 1938, 7 U.S.C. 1301- 1393, Public Law 75-430;
Commodity Credit Corporation Charter Act, as amended, 15 U.S.C.
714 et. seq.; Agricultural Act of 1949, as amended, 7 U.S.C. 1421,
et. seq., Public Law 81-439, as amended; Food Security Act of 1985,
Public Law 99-198, as amended; Joint Resolution Making Appropriations
for Government Agencies for Fiscal Year 1987, Public Laws 99-500
and 99-591; Omnibus Budget Reconciliation Act of 1987, Public Law
100-203; Food, Agriculture, Conservation, and Trade Act of 1990,
Public Law 101-624; Omnibus Budget Reconciliation Act of 1990, Public
Law 101- 508; Omnibus Budget Reconciliation Act of 1993, Public
Law 103-66; National Wool Act Amendments of 1993, Public Law 103-130;
Federal Agriculture Improvement and Reform Act of 1996, Public Law
104-127; Agriculture, Rural Development, Food and Drug Administration
and Related Agencies Appropriations Act, Public Law 106-78; Agricultural
Risk Protection Act of 2000, Public Law 106-224; Agriculture, Rural
Development, Food and Drug Administration, and Related Agencies
Appropriations Act of 2001, Public Law 106-387.
To
improve and stabilize farm income, to assist in bringing about a
better balance between supply and demand of the commodities, and
to assist farmers in the orderly marketing of their crops.
TYPES
OF ASSISTANCE:
Direct Payments with Unrestricted Use. Place Cursor Here for Definition
Direct Loans. Place Cursor Here for Definition
USES
AND USE RESTRICTIONS:
Loans
and loan deficiency payments (LDP's) give farmers a means of promoting
more orderly marketing. Loans to producers may be "nonrecourse"
which means that producers have the option of forfeiting the collateral
to CCC at loan maturity in full satisfaction of the loan obligation;
or "recourse" for low quality grain, or un-ginned seed cotton, which
means that producers must repay the loans by maturity." If market
prices are above the support level producers may repay their loans
at the original loan principal plus interest and market their commodities.
When market prices are low, most nonrecourse commodity loan repayments
are less than the original loan principal plus interest. Eligible
commodities for loans are feed grains, wheat, rice, peanuts, tobacco,
upland cotton, extra-long staple cotton, sugar, soybeans, crambe,
canola, flaxseed, mustard seed, rapeseed, safflower, and sunflower
seed. LDP's are offered for feed grains, wheat, upland cotton, rice,
soybeans, crambe, canola, flaxseed, mustard seed, rapeseed, safflower,
and sunflower seed. If the loan repayment rates for these commodities
are less than the established loan levels, producers may, for most
commodities that are eligible for a nonrecourse loan, agree to forego
such loan and elect to receive an LDP. The LDP payment rate equals
the amount by which the loan rate exceeds the loan repayment rate
in effect at the time the LDP application is approved, or the delivery
date for commodities delivered directly to processor, buyer, or
warehouse from the field. LDP's and any gain realized from repaying
a loan at a level lower than the original loan level are subject
to a $75,000 per "person" payment limitation, except for crops produced
in 1999, for which the payment limitation is $150,000 per "person".
ELIGIBILITY
REQUIREMENTS:
Applicant
Eligibility: Owner, landlord, tenant, or sharecropper
on an eligible farm that has produced the eligible commodities or,
in the case of sugar, a processor or refiner who meets program requirements
as announced by the Secretary.
Beneficiary
Eligibility: Owner, landlord, tenant, or sharecropper
on a farm that has produced the eligible commodities, meets program
requirements as announced by the Secretary, and maintains beneficial
interest in the commodity.
Credentials/Documentation:
Record of farming operation must be on file in the FSA county
office. This program is excluded from coverage under OMB Circular
No. A-87.
Pre-application
Coordination: None. This program is excluded
from coverage under E.O. 12372 and OMB Circular No. A-102.
Application
Procedure: In the case of warehouse-stored
commodities, producer or Cooperative Marketing Association presents
warehouse receipts to the FSA county office (warehouse-stored
peanut and tobacco loans are made through producer associations).
In the case of farm-stored commodities (including sugar), producer/processor
or Cooperative Marketing Association requests a loan at the FSA
county office. This program is excluded from coverage under OMB
Circular Nos. A-102 and A-110.
Award
Procedure: Applications are approved by the
FSA upon determination that applicant and commodity are eligible.
Deadlines:
Loans and LDP's are available for wheat, barley, oats, canola,
flaxseed, crambe, and rapeseed and loans are available for quota
peanuts pledged as collateral for farm-stored loans through March
31 of the year following the year in which the crop is normally
harvested. Loans and LDP's are available for rice, corn, grain
sorghum, cotton, soybeans, safflower, sunflower seed and mustard
seed through May 31 of the year following the year in which the
crop is normally harvested. Loans are available for sugar through
September 30.
Range
of Approval/Disapproval Time: Approximately
3 days.
Appeals:
Applications may be reviewed by county, State, or national offices.
Renewals:
None.
ASSISTANCE
CONSIDERATIONS:
Formula
and Matching Requirements: Not applicable.
Length
and Time Phasing of Assistance: Assistance
is generally available for 9 months or less, and is normally disbursed
on a lump-sum basis.
POST
ASSISTANCE REQUIREMENTS:
Reports:
Necessary loan documents will be held at the county FSA office.
Audits:
Periodic and required spot checks of farm-stored grain will be
made by the county FSA office. Recipients are subject to audit
by Office of Inspector General, USDA.
Records:
Not applicable.
FINANCIAL
INFORMATION:
Account
Identification: 12-4336-0-3-351.
Obligations:
(Commodity purchases) FY 01 $460,405,421; FY 02 est $129,281,000;
and FY 03 est $2,981,000. (Loans) FY 01 $9,691,205,594; FY 02
est $8,688,586,000; and FY 03 est $9,171,851,000. (Loan deficiency
payments) Feed Grains: FY 01 $2,482,725,981; FY 02 est $2,256,132,000;
and FY 03 est $1,075,126,000; Upland Cotton: FY 01 $668,037,359;
FY 02 est $111,900,000; and FY 03 est $70,400,000; Soybeans: FY
01 $2,140,736,647; FY 02 est $2,241,860,000; and FY 03 est $2,551,327,000;
Minor Oilseeds: FY 01 $178,022,758; FY 02 est $233,581,000; and
FY 03 est $194,672,000; and Honey: FY 01 $0; FY 02 est $16,254,000;
and FY 03 est $0.
Range
and Average of Financial Assistance:
Direct payments (Purchases): Range and average not available.
FY 01 loans: $162 to $1,006,400. Average: $22,959.
A total of 177,799 new loans and 2,855,289 loan deficiency payments
were made in fiscal year 2001. The dollar volume of commodity loans
and loan deficiency payments for fiscal year 2001 totaled $16,110,002,150
billion (comprised of loans made - $9,691,205,594, and loan deficiency
payments - $6,418,796,556). The dollar volume of commodity loan
and loan deficiency payment transactions for fiscal year 2002 is
estimated to be $14,299,113,000.
REGULATIONS,
GUIDELINES, AND LITERATURE:
Program regulations published in the Federal Register 7 CFR, Chapter
XIV, Parts 1421, 1425, 1427, 1430, 1434, 1435, 1446, and 1464; announcements
issued to news media and letters to producers; " FSA Commodity Fact
Sheets, " no cost: The Price Support Program," BI-4-USDA, no cost;
Farm Service Agency, U.S. Department of Agriculture, STOP 0532,
1400 Independence Avenue SW., Washington, DC 20250-0532.
INFORMATION
CONTACTS:
Regional
or Local Office: Consult the local telephone
directory for location of the FSA county office. If no listing,
get in touch with appropriate FSA State office listed under the
Farm Service Agency section of Appendix IV of the Catalog.
Headquarters
Office: Department of Agriculture, Farm Service
Agency, Price Support Division, STOP 0512, 1400 Independence Avenue
SW., Washington, DC 20250-0512. Telephone: (202) 720-7901.
