What's up at the FSA Office?

by Joyce Davidshofer, Allamakee County Executive Director

May 14 - August 2: Nesting season. Food plots or mid contract management actives are not allowed during this time.
May 31: Last day to receive a corn and/or soybean loan for 2014 crop.
June 1: Deadline to sign an AD-1026 for Federal Crop Insurance.
July 4: Office closed.
July 15: Deadline to certify all crops and CRP acres.

Farm Loan Programs

Farm Ownership Loans
Eligible applicants may obtain direct loans up to a maximum indebtedness of $300,000. Maximum indebtedness for guaranteed loans is $1,392,000 (amount adjusted annually for inflation). The maximum repayment term is 40 years for both direct and guaranteed farm ownership loans. In general, loan funds may be used to purchase a farm, enlarge an existing farm, construct new farm buildings and/or improve structures, pay closing costs, and promote soil and water conservation and protection.

Farm Operating Loans
Eligible applicants may obtain direct loans for up to a maximum indebtedness of $300,000 and a direct operating Microloan for up to a maximum indebtedness of $50,000. Maximum indebtedness for a guaranteed loan is $1,392,000(amount adjusted annually for inflation). The repayment term may vary, but typically it will not exceed seven years for intermediate-term purposes. Annual operating loans are generally repaid within 12 months or when the commodities produced are sold. In general, loan funds may be used for normal operating expenses, machinery and equipment, minor real estate repairs or improvements, and refinancing debt.

Targeted Funds to Socially Disadvantaged and Beginning Farmers
Each year Congress targets a percentage of farm ownership and farm operating loan funds to socially disadvantaged and beginning farmers. For more information, refer to the FSA Fact Sheet, “Loans for Socially Disadvantaged Farmers.”

Down Payment Program
FSA has a special loan program to assist socially disadvantaged and beginning farmers in purchasing a farm. Retiring farmers may use this program to transfer their land to future generations.
To qualify:
• The applicant must make a cash down payment of at least 5 percent of the purchase price.
• The maximum loan amount does not exceed 45 percent of the least of (a) the purchase price of the farm to be acquired; (b) the appraised value of the farm to be acquired or; (c) $667,000 (Note: This results in a maximum loan amount of $300,000).
• The term of the loan is 20 years. The interest rate is 4 percent below the direct FO rate, but not lower than 1.5 percent.
• The remaining balance may be obtained from a commercial lender or private party. FSA can provide up to a 95-percent guarantee if financing is obtained from a commercial lender. Participating lenders do not have to pay a guarantee fee.
• Financing from participating lenders must have an amortization period of at least 30 years and cannot have a balloon payment due within the first 20 years of the loan.

Youth Loans
These are available as direct loans only and have a maximum loan amount of $5,000. Youth loans may be made to individuals who are sponsored by a project advisor, such as a 4-H Club, FFA or local vocational instructor. Individuals must be at least 10 but not more than 20 years old to be eligible.

Emergency Loans
These loans are available only as direct loans from FSA. Emergency Loans assist farmers who have suffered physical or production losses in areas declared by the President as disaster areas or designated by the Secretary of Agriculture as disaster or quarantine areas (for physical losses only, the FSA Administrator may authorize Emergency Loan assistance). For production loss loans, applicants must demonstrate a 30-percent loss in a single farming enterprise. Applicants may receive loans up to 100 percent of production or physical losses.
Loan purposes include operating and real estate, restoring/replacing essential property, production costs for disaster year, essential family living expenses, reorganization and refinancing certain debts.
The maximum indebtedness under the Emergency Loan program is $500,000.

Conservation Loans
Conservation loans are available as guaranteed loans only. Eligible applicants may use Conservation Loan funds to complete any conservation activity included in a conservation plan or Forestry Management Plan and refinance debts related to implementing any conservation activity if refinancing will result in additional conservation benefits. Maximum indebtedness is $1,392,000 (amount adjusted annually for inflation) and the maximum repayment term is 30 years.
Note: The family farm and test for credit requirements are not applicable to Conservation Loans.

Land Contract Guarantees
These provide certain financial guarantees to the seller of a farm through a land contract sale to a beginning or socially disadvantaged farmer. The seller may request either of the following:
Prompt Payment Guarantee: A guarantee up to the amount of three amortized annual installments plus the cost of any related real estate taxes and insurance.
Standard Guarantee: A guarantee of 90 percent of the outstanding principal balance under the land contract.
The purchase price of the farm cannot exceed the lesser of (a) $500,000 or (b) the market value of the property. The buyer must provide a minimum down payment of 5 percent of the purchase price of the farm. The interest rate is fixed at a rate not to exceed the direct FO loan interest rate in effect at the time the guarantee is issued, plus 3 percentage points. The guarantee period is 10 years for either plan regardless of the term of the land contract. The contract payments must be amortized for a minimum of 20 years. Balloon payments are prohibited during the 10-year term of the guarantee.

Loan Servicing and Supervised Credit
FSA’s mission is not limited to providing just credit — it is to provide supervised credit. This means that FSA works with each direct loan borrower to identify specific strengths and opportunities for improvement in farm production and management, and then works with the borrower on alternatives and other options to address the areas needing improvement to achieve success. Learning improved business planning and financial acumen through supervised credit is the difference between success and failure for many farm families.
To help keep borrowers on the farm, FSA may be able to provide certain loan servicing benefits to direct loan borrowers whose accounts are distressed or delinquent due to circumstances beyond their control. These benefits include:
• Re-amortization, rescheduling, and/or deferral of loans;
• Rescheduling at the Limited Resource (lower interest) rate;
• Acceptance of conservation contracts on environmentally sensitive land in exchange for reduction of debt and;
• Writing down the debt (delinquent borrowers only).
If none of these options result in a feasible farm operating plan, borrowers may be offered the opportunity to pay off their debt at the current market value of the security. If this is not possible, other options include:
• Debt settlement based on inability to repay;
• In some cases, where a feasible operating plan cannot be developed, FSA works with commercial lenders to help the borrower retain the homestead and up to 10 acres of land.
Farms that come into FSA ownership are sold at market value, with preference given to socially disadvantaged and beginning farmers.

Who May Borrow
To qualify for assistance, applicants must meet all loan eligibility requirements including:
• Be a family farmer;
• Have a satisfactory history of meeting credit obligations;
• For direct OL loans, have sufficient education, training, or at least 1-years’ experience in managing or operating a farm or ranch within the last 5 years. For direct FO loans, all applicants must have participated in the business operations of a farm for at least three years out of the 10 years prior to the date the application is submitted. Other relevant experience, such as post-secondary education, farm apprenticeship, leadership or management experience while serving in any branch of the military or extension programs, may count toward one of the three years’ experience required.
• Be a citizen of the United States, including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Commonwealth of the Northern Mariana Islands, Republic of Palau, Federated States of Micronesia and the Republic of Marshall Islands, a U.S. non-citizen national, or a qualified alien under federal immigration law;
• Be unable to obtain credit elsewhere at reasonable rates and terms to meet actual needs;
• Possess legal capacity to incur loan obligations;
• Not be delinquent on a federal debt;
• Not have caused FSA a loss by receiving debt forgiveness (certain exceptions apply) and;
• Be within the time restrictions as to the number of years they can receive FSA assistance.
In the case of an entity, certain eligibility requirements apply. The entity must:
• Meet applicant eligibility requirements;
• Be authorized to operate a farm in the state where the actual operation is located, and;
• Be owned by U.S. citizens, U.S. non-citizen nationals or qualified aliens.
For socially disadvantaged members, they must hold a majority interest in the entity applicant to receive benefits.
If the individuals holding a majority interest in the entity are related by blood or marriage, at least one member must operate the family farm. If they are not related by blood or marriage, the member(s) holding a majority interest must operate the farm.

For More Information
Additional information may be obtained by contacting Vicky Hinsenbrock, Farm Loan Manager @ (563)382-8777  or through the FSA website at www.fsa.usda.gov/farm loans.

Dairy Producers
This reminder is for dairy producers who are signed up for the Marginal Protection Program for dairy. Letters were sent out to dairy producers to remind them of the final premium due by June 1, 2015. If this premium isn’t received by June 1, 2015, this would put the dairy producer back to the $4.00 coverage. Please check to see if you received the letter for the premium amount due and if not contact the county office in regards to this matter.

Certification for 2015 crops
This is a reminder to all farmers that July 15, 2015 is the deadline to certify all the cropland acres, (including CRP) and pasture ground used for grazing. This is a requirement for future payments.  
1. In order to receive a CRP payment the CRP acres need to be certified.
2. If there is a payment due to you for the ARC/PLC programs the acres need to be certified.
For more information about certifying your acres, contact the county office at 563-568-2148.  

2015 Allamakee County Committee Elections
Producers elect farmers and ranchers to County Committees. The following are some of the requirements for being a candidate to serve on a County Committee:
1. Be of legal voting age.
2. Live in the LAA holding an election.
3. Participate or cooperate in a program administered by FSA.
The LAA #3 is up for elections. The townships are Iowa, Lansing, Center, La Fayette, Paint Creek and Taylor.
The nomination period begins June 15, 2015 and ends August 3, 2015. Request nomination forms from the Allamakee County FSA Office or you can obtain a nomination form online at http://www.fsa.usda.gov/elections.