Loan Deficiency Payments

The Agricultural Act of 2014 (2014 Farm Bill) authorizes loan deficiency payments (LDPs) for 2014 through 2018.  LDPs are direct payments made in lieu of a marketing assistance loan when the CCC determined value, which is based on the current local price in a county, is below the applicable county loan rate.  The payment is the difference between the two rates times the eligible quantity.  For a commodity to be eligible for a LDP, the producers must have beneficial interest in the commodity, in addition to other eligibility requirements.

Read the fact sheet Nonrecourse Marketing Assistance Loans and Loan Deficiency Payments for additional information on LDPs.      

The following commodities are eligible for LDP: 

BarleyMustard Seed
Chickpeas, large & smallPeanuts
Dry PeasSesame Seeds
Grain SorghumSunflower
HoneyUnshorn Pelts

The 2014 Farm Bill included the provision that producers or legal entities whose adjusted gross income (AGI) exceeds $900,000 are not eligible for LDPs.         

Beginning with the 2014 crop year, there are payment limitation on marketing loan gains (MLG) and LDPs associated with the MAL or LDP programs.  The total amount of payments received directly or indirectly, by a person or legal entity (except joint ventures or general partnerships) for Price Loss Coverage, Agricultural Risk Coverage, MLGs, and LDPs (for commodities other than for peanuts), is limited to no more than $125,000 annually.  A person or legal entity that receives, directly or indirectly, payments for peanuts has a separate $125,000 payment limit for those payments.  Read the Payment Limitation – 2014 – 2018 fact sheet for additional information.