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Farm Service Agency (FSA) News
12-09-2011
Commodity Loans
9 month non-recourse loans are available through the Farm Service Agency and provide cash flow if your grain will not be sold until next year. Producers considering a commodity loan on their stored grain before the end of the year will need to allow enough time before December 31st, to get the loan processed.
Commodity loans, also referred to as Marketing Assistance Loans, are 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 no longer eligible for loan - even if you regain beneficial interest.
Commodity loan eligibility also requires compliance with conservation and wetland protection rules, along with the beneficial interest requirement. The commodity must meet CCC minimum grade and quality standards. The soybeans, corn or wheat 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.
USDA is an equal opportunity provider and employer.
by Vicki D. Orians, Director
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