Commodity Loans and Loan Deficiency Payments
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.
General information about this opportunity
Last Known Status
Farm Service Agency, Department of Agriculture
Type(s) of Assistance Offered
D - Direct Payments With Unrestricted Use; E - Direct Loans
Agricultural Act of 2014, Public Law 113-79
Agriculture Improvement Act of 2018, Public Law 115-334
Who is eligible to apply/benefit from this assistance?
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.
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. State and County governments may be eligible for MAL's and LDP's when they have a share in produced and harvested eligible commodities on land they own, if the benefits or payments are used to support public schools.
The commodity must be produced and harvested by the producer, and the producer must meet program requirements as announced by the Secretary. Requirements include a record of the farming operation on file in the FSA county office and a complete acreage report to account for all cropland on the farm must be submitted for the applicable crop year.
What is the process for applying and being award this assistance?
Preapplication coordination is required. No additional information provided.
2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards applies to this program. In the case of warehouse-stored commodities, producer or Cooperative Marketing Association presents warehouse receipts to the FSA county office (warehouse-stored peanut loans may be made through Designated Marketing Associations). In the case of farm-stored commodities (including sugar), producer/processor or Cooperative Marketing Association requests a loan at the FSA county office.
Applications are approved by the FSA upon determination that applicant and commodity are eligible.
Deadline for the year following year in which crop is normally harvested is as follows:January 31st - MAL's and LDP's are available for peanuts and wool. March 31st - MAL's and LDP's are available for wheat, barley, oats, canola, flaxseed, crambe, rapeseed, sesame seed, and honey; May 31st - MAL's and LDP's are available for rice, corn, grain sorghum, cotton, soybeans, safflower, sunflower seed, mustard seed, small and large chickpeas, lentils, dry peas , and cotton; and September 30th - Loans are available for sugar.
Approval/Disapproval Decision Time
From 15 to 30 days. Approximately 3 days but could take from 15 to 30 days.
From 60 to 90 days. Applications may be reviewed by county, State, or national offices.
How are proposals selected?
How may assistance be used?
Commodity 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 non-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 produced and harvested wheat, corn, grain sorghum, oats, barley, rice, peanuts, upland cotton, extra-long staple cotton, soybeans, crambe, canola, flaxseed, mustard seed, rapeseed, safflower, sunflower seed, sesame seed, dry peas, lentils, small and large chickpeas, graded and ungraded wool, honey, and sugar. LDP's are offered for produced and harvested wheat, corn, grain sorghum, oats, barley, upland cotton, rice, soybeans, crambe, canola, flaxseed, mustard seed, rapeseed, safflower, sunflower seed, sesame seed, peanuts, dry peas, lentils, small and large chickpeas, graded and ungraded wool, unshorn pelts, honey, hay, and silage. 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, or date sold or date beneficial interest is lost, as applicable. The 2016 Consolidated Appropriations Act authorized producers the option of a commodity certificate exchange as a nonrecourse loan repayment mechanism. Effective for crop years 2015 through 2018, in situations when the loan rate exceeds the exchange rate, producers may opt to purchase a commodity certificate from the local FSA office and immediately exchange that certificate for their outstanding loan collateral.
What are the requirements after being awarded this opportunity?
Periodic and required spot checks of farm-stored grain will be made by the county FSA office. Recipients are subject to other audits by FSA and by the Office of Inspector General, USDA.
Other Assistance Considerations
Formula and Matching Requirements
Statutory formula is not applicable to this assistance listing.
Matching requirements are not applicable to this assistance listing.
MOE requirements are not applicable to this assistance listing.
Length and Time Phasing of Assistance
Assistance is generally available for 9 months or less, and is normally disbursed on a lump-sum basis. Method of awarding/releasing assistance: Lump.
Who do I contact about this opportunity?
Regional or Local Office
Consult the appropriate FSA State office where the property is located. For a list of FSA State offices with telephone numbers and addresses, information is available on the internet, visit FSA website at www.fsa.usda.gov to locate nearest office.
1400 Independence Avenue, SW, Stop 0510
Washington, DC 20250-0510 US
(Direct Loans) FY 18$3,145,610,000.00; FY 19 est $3,205,858,000.00; FY 20 est $3,159,314,000.00; FY 17$6,914,144,153.00; FY 16$6,560,230,313.00; - (Direct Payments with Unrestricted Use) FY 18$72,000.00; FY 19 est $33,451,000.00; FY 20 est $65,467,000.00; FY 17$46,564,581.00; FY 16$212,967,255.00; - Loan Deficiency Payments
Range and Average of Financial Assistance
Regulations, Guidelines and Literature
Program regulations published in the Federal Register 7 CFR, Chapter XIV, Parts 1421, 1425, 1427, 1434, and 1435; announcements issued to news media and letters to producers; " FSA Commodity Fact Sheets, " no cost: The Price Support Program," ; Farm Service Agency, Department of Agriculture, STOP 0506, 1400 Independence Avenue S.W., Washington, DC 20250-0506.
Examples of Funded Projects