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Corn+Soybean Digest


Agriculture Secretary Mike Johanns recently announced that USDA is making more than $170 million in emergency assistance available to agricultural producers suffering from Hurricane Katrina. In addition, USDA's Commodity Credit Corporation (CCC) is implementing immediate changes to its Marketing Assistance Loan Program due to the hurricane. These changes will allow producers to obtain loans for on-farm grain storage on the ground in addition to grain bins and other normally approved structures.

"We are doing everything we can to help our Gulf Coast producers recover from the affects of Hurricane Katrina," says Johanns. "The assistance announced today is an important component of USDA's efforts and our commitment to help farmers and ranchers rebuild their operations."

Emergency Conservation Funding
USDA is providing more than $20 million in Emergency Conservation Program (ECP) funds to help producers repair damage to their lands. ECP participants will receive cost-share assistance of up to 75 percent of the cost to implement approved emergency conservation practices such as debris removal and restoration of fences and conservation structures. The ECP is administered at the county level under the guidance of USDA Farm Service Agency (FSA) state offices.

The following states and counties will receive more than $20 million in ECP funding:

Alabama - $855,000

Baldwin, Choctaw, Clarke, Greene, Marengo, Mobile, Sumter and Washington

Louisiana - $12,452,000

Acadia, Ascension, Assumption, Calcasieu, Cameron, East Baton Rouge, East Feliciana, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, St. Bernard, St. Charles, St. Helena, St. James, St. John, St. Martin, St. Mary, St. Tammany, Tangipahoa, Terrebonne, Vermilion, Washington, West Baton Rouge and West Feliciana, and Allen, Avoyelles, Beauregard, Concordia, Evangeline and St. Landry

Mississippi - $7,102,000

All Counties

Tennessee - $25,000

Giles, Lawrence and Wayne

Emergency Loans
A total of $152 million in FSA's Emergency Loan Program is available to eligible producers who have suffered at least a 30 percent reduction in crop production or have sustained physical losses to buildings, chattel or livestock. Farmers and ranchers have eight months from the date of a presidential or secretarial disaster declaration to apply for low-interest agency loans.

Marketing Assistance Loans and "On-Farm" Grain Storage
USDA's CCC is implementing changes to its Marketing Assistance Loan Program to allow producers to obtain loans for "on-farm" grain storage on the ground in addition to grain bins and other normally approved structures. This action is designed to alleviate short-term logistical problems and support local cash prices above distressed levels as a result of the hurricane.

Grain producers in the U.S. are facing logistical challenges as port operations in the central Gulf Coast and lower Mississippi River have been hampered by Hurricane Katrina, which were already complicated by summer drought conditions in the upper Mississippi and Illinois River basins.

The changes to the Marketing Assistance Loan Program are consistent with emergency storage provisions already available to commercial warehouses and remain consistent with the existing CCC mandate that ensures the orderly marketing of U.S. farm commodities. CCC has authorized outside, on-farm storage of commodities which have been offered as collateral on non-recourse marketing assistance loans as long as such storage meets CCC guidelines. Commodities stored outside must be protected from animals and located so that water drainage will not seriously affect the quality and quantity of the commodity. Producers are responsible for ensuring that the quality of the commodity pledged as marketing assistance loan collateral is maintained during the entire loan period.

CCC also reminds producers that its Farm Storage Facility Loan Program (FSFL) is available to provide low-interest financing for producers to build or upgrade on-farm grain or silage storage facilities. Eligible size of the structure is determined by the borrower's demonstrated need for additional on-farm storage capacity to store eligible commodities. An eligible borrower must have a satisfactory credit rating as determined by CCC and demonstrates the ability to repay the facility loan debt. Facilities built for commercial purposes and not for the sole use of the borrower(s) are not eligible for financing.

The maximum amount a person is allowed to borrow through the FSFL program is 85 percent of the net cost of the eligible storage facility and handling equipment not to exceed $100,000. Loans over $50,000 must be additionally secured with a real estate lien. Loans are repaid through 7 annual equal installments.

Loan applications should be filed in the administrative FSA office that maintains the farm's records.

Additional Assistance
FSA has other programs to help producers recover from losses resulting from natural disasters such as Hurricane Katrina. FSA's Noninsured Crop Disaster Assistance Program (NAP) provides financial assistance to producers of noninsurable crops when low yields, loss of inventory or prevented planting occur due to natural disasters. To be eligible for NAP assistance, crops must be noninsurable crops and agricultural commodities for which the catastrophic risk protection level of crop insurance is not available. Producers must meet other eligibility requirements to receive NAP payments.

Also, FSA's Debt Set-Aside (DSA) Program is available to producers in primary or contiguous counties declared presidential or secretarial disaster areas. When borrowers affected by natural disasters are unable to make their scheduled payments on any debt, FSA is authorized to consider set aside of some payments to allow the farming operation to continue. After disaster designation is made, FSA will notify borrowers of the availability of the DSA. Borrowers who are notified have 8 months from the date of designation to apply. Also, to meet current operating and family living expenses, FSA borrowers may request a release of income proceeds to meet these essential needs or request special servicing provisions from their local FSA county offices to explore other options.

Producers should attempt to contact state FSA offices if local FSA offices are temporarily closed due to hurricane considerations. The following telephone numbers cover Gulf Region state FSA offices:

Alabama: (334) 279-3500 Louisiana: (318) 473-7721

Arkansas: (501) 301-3000 Mississippi: (601) 965-4300

Florida: (352) 379-4562

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