The 2008 Farm Bill included several changes to the marketing loan and LDP (loan deficiency payment) provisions.
Beginning with the 2009 crop year, loans and LDPs will no longer be subject to a payment limitation. However, farmers with average adjusted gross nonfarm income in excess of $500,000 are not eligible for marketing loan gains or LDPs. Those farmers with nonfarm adjusted gross income in excess of $500,000 will be eligible for the loan program; however, the loan must be repaid at principal plus interest, or by commodity certificate (for 2009). Effective with the 2010 crop year, commodity certificate exchange will no longer be available.
Another major change, beginning with the 2009 crop, is the Commodity Credit Corporation (CCC) will no longer apply premiums and discounts to warehouse-stored loans at the time of loan making. Loan rates will be adjusted for premiums and discounts if the loan is delivered or forfeited to CCC in settlement of the outstanding loan. This change does not apply to peanuts or cotton.
In addition, beginning with the 2009 crop year, CCC will no longer require federally or state-licensed grain warehouses to enter into a separate storage agreement contract with CCC in order to be eligible to store grain or rice pledged as loan collateral for a CCC loan. CCC may require a storage agreement on a case-by-case basis as deemed appropriate. These warehouse contracting changes do not apply to peanuts and cotton; therefore, warehouses storing peanuts and cotton must continue to enter into storage agreements with CCC in order to store CCC loan collateral.
Commodities stored in unlicensed warehouses (neither Federal nor State licensed) are ineligible for loan. In prior years, commodities could be stored in unlicensed facilities and a loan made if they were immediately redeemed from loan with commodity certificates.
Producers with questions regarding changes to marketing loans and LDP provisions may contact the Evangeline Parish FSA Office located at 205 Court Street, Ville Platte, La. or by calling 363-6602, ext. 2.