What's up at the FSA Office?

The next Allamakee County Committee meeting will be February 11, 2016 at 9 a.m. at the Allamakee County Farm Service Agency (FSA) Office conference room located in Waukon.

New General CRP Signup
December 1, 2015, through February 26, 2016 is the new general CRP signup. Land that is not currently enrolled in CRP may be offered for enrollment during CRP signup 49. In addition, CRP participants with contracts expiring on September 30, 2016, may submit offers at this time. Accepted contracts for CRP signup 49 will become effective on October 1, 2016.
Do not wait until February 26, 2016 deadline, due to determining eligibility per crop history and other steps in the CRP signup process.

CRP producers who have buffer strips, waterways, etc. in fields where the rest of the land can be cropped, you should review the CRP acres to make sure the size requirement is the same or if there is some encroaching happening.
If you rent the cropland out, sit down with your renter to make sure they understand the CRP regulations, number of acres under contract, and if there were to be a violation the penalty will be assessed to the participants who signed the CRP contract. As the landowner on the CRP contract, it is your responsibility to make sure the CRP acres are incompliance.
If you have any questions on this reminder, contact the Allamakee County Farm Service Agency (FSA) Office at (563) 568-2148.

Farm Loans Overview
FSA Farm Loans
FSA’s loan programs are designed to help family farmers to start, purchase or expand their farming operation. In many cases, these are beginning farmers who need additional financial and business acumen to qualify for commercial credit. In other cases, they are farmers who have suffered financial setbacks from natural disasters, or who need additional resources with which to establish and maintain profitable farming operations.
Some farmers obtain their credit needs through the use of loan guarantees. Under a guaranteed loan, a commercial lender makes and services the loan, and FSA guarantees it against loss up to a maximum of 90 percent in most cases. In certain limited circumstances, a 95-percent guarantee is available. FSA has the responsibility of approving all eligible loan guarantees and providing oversight of lenders’ activities.
For those not yet meeting the qualifications for a loan guarantee from a commercial lender, FSA also makes direct loans, which are serviced by an FSA official. FSA has the responsibility of providing credit counseling and supervision to its direct borrowers by making a thorough assessment of the farming operation. FSA helps applicants evaluate the adequacy of the real estate and facilities, machinery and equipment, financial and production management, and the applicant’s goals. FSA assists the applicant in identifying and prioritizing areas needing improvement in all phases of the operation. An FSA official then works one-on-one with the applicant to develop and to help strengthen the identified areas that ultimately result in the applicant’s graduation to commercial credit.
Unlike FSA’s commodity loans, most farm loans must be fully secured and can only be approved for those who have repayment ability.

Farm Ownership Loans
Eligible applicants may obtain direct loans up to a maximum indebtedness of $300,000. Maximum indebtedness for guaranteed loans is $1,399,000 (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 $1,399,000 (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.

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.

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 (SDA) 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 SDA 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.