NEWS RELEASE

UNITED STATES DEPARTMENT OF AGRICULTURE

Office of Communications News Room 460-A

Washington, DC 20250-1300

Internet: News @usda.gov

Phone: 202-720-4623

World Wide Web Home Page: http://www.usda.gov

Release No. 0093.09

WASHINGTON, April 7, 2009 - Agriculture Secretary Tom Vilsack today announced that the new regulations for the Marketing Assistance Loans (MAL) and Loan Deficiency Payments (LDP) program have been implemented in accordance with the 2008 Farm Bill.

"Both President Obama and I want to ensure that farmers can produce agricultural products without fear that they will not earn fair market value for what they harvest," said Vilsack.

Marketing Assistance Loans and Loan Deficiency Payments provide financing and marketing assistance for wheat, rice, feed grains, soybeans, other oilseeds, peanuts, pulse crops, honey, wool and mohair. This assistance is available to eligible producers beginning with harvest or shearing season and extending through the program year.

The 2008 Farm Bill included several changes to marketing assistance loan provisions. The regulation for Marketing Assistance Loans and Loan Deficiency Payments redefines rice as long grain and medium grain. Large chickpeas are included as an eligible pulse crop beginning with crop year 2009. The 2008 crop year marketing loan and loan deficiency payment benefits were subject to a limit of $75,000 per person. Starting with the 2009 crop year, these benefits will no longer be subject to a payment limit.

As part of USDA's efforts to streamline the loan process, the Commodity Credit Corporation (CCC) will no longer adjust loan rates on warehouse-stored loans by premiums and discounts at loan making time. Loan rates will be adjusted by premiums and discounts only at loan settlement, if the commodity is either farm-stored delivered or warehouse-stored forfeited. This change starts with the 2009 crop year and does not apply to peanuts.

In the past, CCC executed storage agreements with warehouse operators to set forth financial and storage conditions to protect against the massive accumulation of commodities resulting from forfeitures. This practice resulted in duplicity of efforts already provided by other federal and state level jurisdictions. During recent years, CCC's loan repayment policies have minimized forfeitures to very low levels. So as part of USDA's modernization of delivering services, CCC will no longer require the execution of a storage agreement in storage facilities that are either (a) federally-licensed or (b) in compliance with applicable state laws and issue warehouse receipts. CCC reserves the right to execute a storage agreement in either (a) or (b) if deemed necessary by the Secretary. CCC may, on a case by case basis, require a storage agreement for storage facilities that are neither (a) nor (b). This modification in the regulation is expected to benefit warehouse operators and producers by eliminating redundant costs without increasing financial risk for CCC. This change starts with the 2009 crop year and does not apply to peanuts.

For more information about Marketing Assistance Loans and Loan Deficiency Payments please visit your FSA county office or http://www.fsa.usda.gov