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Changes coming in CCC loans, LDPs

Farmers can expect to see some changes if they decide to place their crops in the Commodity Credit Corp. marketing assistance loan or request loan deficiency payments on covered commodities beginning with the 2009 crop year.

Agriculture Secretary Tom Vilsack announced the changes, most of which are required by the Food, Conservation and Energy Act of 2008, in a press release distributed by USDA on Tuesday (April 7) to media outlets.

“Both President Obama and I want to ensure that farmers can produce agricultural products without fear that they will not earn fair market value for what they harvest,” said Vilsack, referring to the market stabilizing effects of marketing assistance loans and loan deficiency payments.

Under the former, producers put up their crops for collateral and receive eight-month loans for the equivalents of the loan rate for their commodity times the number of pounds, bushels or hundredweight they place in the loan.

Marketing assistance loans and loan deficiency payments provide financing and marketing assistance for wheat, rice, feed grains, soybeans, other oilseeds, peanuts, pulse crops, honey, wool and mohair. This assistance is available to eligible producers beginning with harvest or shearing season and extending through the program year.

In the 2008 farm bill, the regulation for marketing assistance loans and loan deficiency payments redefines rice as long grain and medium grain. Large chickpeas are included as an eligible pulse crop beginning with crop year 2009.

The 2008 crop year marketing loan and loan deficiency payment amounts were subject to a limit of $75,000 per person as part of the language in previous farm bills that sought to cap marketing loan benefits for producers. Starting with the 2009 crop year, these benefits will no longer be subject to a payment limit.

In the past, CCC executed storage agreements with warehouse operators to set forth financial and storage conditions to protect against the massive accumulation of commodities resulting from forfeitures.

“This practice resulted in duplicity of efforts already provided by other federal and state level jurisdictions,” the press release said. “During recent years, CCC’s loan repayment policies have minimized forfeitures to very low levels.

“As part of USDA's modernization of delivering services, CCC will no longer require the execution of a storage agreement in storage facilities that are either (a) federally-licensed or (b) in compliance with applicable state laws and issue warehouse receipts.

The officials said CCC reserves the right to execute a storage agreement in either (a) or (b) if deemed necessary by the Secretary. CCC may, on a case-by-case basis, require a storage agreement for storage facilities that are neither (a) nor (b). This modification in the regulation is expected to benefit warehouse operators and producers by eliminating redundant costs without increasing financial risk for CCC. This change starts with the 2009 crop year and does not apply to peanuts.

For more information about Marketing Assistance Loans and Loan Deficiency Payments please visit your FSA county office or


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