The 2014 Farm Bill authorized the Agriculture Risk Coverage (ARC) Program and Price Loss Coverage (PLC) Program, which are administered by FSA. ARC and PLC provide revenue and price loss payments to eligible producers for the 2014 through 2018 crop years.
The USDA Agricultural Mediation Program makes grants to state-designated entities that provide alternative dispute resolution (ADR) through mediation to agricultural producers, their lenders and others directly affected by the actions of certain USDA agencies. In mediation, a trained, impartial mediator helps participants review and discuss their conflicts, identify options to resolve disputes and agree on solutions. Ideally, this process helps to avoid expensive and time consuming administrative appeals and/or litigation. These grants are administered by FSA. Cases covered by the grants include agricultural loans, whether made by USDA or commercial lenders, and disputes involving USDA actions on farm and conservation programs, wetland determinations, rural water loan programs, grazing on national forest system lands, pesticides, rural housing and business loans, and crop insurance.
Each fiscal year, FSA targets a portion of its direct and guaranteed farm ownership and operating loan funds to beginning farmers and ranchers. FSA makes and guarantees loans to beginning farmers and ranchers who are unable to obtain financing from commercial lenders. A beginning farmer or rancher is an individual or entity who (1) has not operated a farm or ranch for more than 10 years, (2) meets the loan eligibility requirements of the program to which he/she is applying, (3) substantially participates in the operation, and, (4) for farm ownership loan purposes, does not own a farm greater than 30 percent of the median size farm in the county and meet training and experience requirements.
BCAP is a voluntary program for agricultural and forestland owners and operators. BCAP supports the production and use of biomass crops for conversion to bioenergy or for the development of bio-based products. BCAP can include 1) Project Areas: Supports establishing and maintaining eligible crops up to five years for annual and non-woody perennial crops or up to 15 years for woody perennial crops for conversion to bioenergy or bio-based products. Support may include annual payments and up to 50 percent cost-share to establish eligible crops; and 2) Matching Payments: Assists agricultural and forest land owners and operators with retrieving eligible farm and forestry residues to a qualified Biomass Conversion Facility. The 2014 Farm Bill reauthorized BCAP through fiscal year 2018.
CRP is a voluntary program available to agricultural producers to plant long-term, resource-conserving grasses or trees on environmentally-sensitive farmland to improve the quality of water, control soil erosion, and enhance wildlife habitat. In return, FSA provides participants with rental payments and cost-share assistance. Contract duration is between 10 and 15 years.
CREP is a derivative program of the Conservation Reserve Program (CRP) whereby nonfederal partners and resources are coupled with federal resources to address conservation concerns within a State. CREP is a voluntary program that helps agricultural producers protect environmentally-sensitive land, decrease erosion, restore wildlife habitat, and safeguard ground and surface water. CREP priority areas include the Chesapeake Bay and Ohio River Watersheds.
The Dairy Indemnity Payment Program pays dairy producers when a public regulatory agency directs them to remove their raw milk from the commercial market because it has been contaminated by pesticides, nuclear radiation or fallout, or toxic substances and chemical residues other than pesticides. Payments are made to manufacturers of dairy products only for products removed from the market because of pesticide contamination.
FSA direct farm ownership loans (FO) may be made to purchase farmland, construct or repair buildings and other fixtures, and promote soil and water conservation. To qualify for a direct loan, the applicant must be unable to obtain credit from commercial credit sources, able to show sufficient repayment ability and pledge enough collateral to fully secure the loan. A percentage of loan funds is targeted to beginning farmers and ranchers and minority applicants.
FSA direct farm operating loans (OL) may be made to purchase items such as livestock, farm equipment, feed, seed, fuel, farm chemicals, insurance, and other operating expenses. They can also be used to pay for minor improvements to buildings, costs associated with land and water development, family subsistence, and refinancing debts under certain conditions. To qualify for a direct loan, the applicant must be unable to obtain credit from commercial credit sources, able to show sufficient repayment ability and pledge enough collateral to fully secure the loan. A percentage of loan funds are targeted to beginning farmers and ranchers and minority applicants.
ECP provides funding for farmers and ranchers to rehabilitate farmland damaged by wind erosion, floods, hurricanes, or other natural disasters, and for carrying out emergency water conservation measures during periods of severe drought. The natural disaster must create new conservation problems, which, if not treated, would 1) impair or endanger the land, 2) materially affect the productive capacity of the land, 3) represent unusual damage which, except for wind erosion, is not the type likely to recur frequently in the same area, and 4) be so costly to repair that federal assistance is or will be required to return the land to productive agricultural use. Subject to availability of funds, locally elected county committees are authorized to implement ECP for all disasters except drought, which may be authorized by the FSA national office. Eligible ECP participants may receive financial assistance of up to 75 percent of the cost to implement approved emergency land rehabilitation practices as determined by county FSA committees; qualified limited resource producers may receive financial assistance of up to 90 percent.
FSA provides EM loans to help producers recover from production and physical losses due to drought, flooding, other natural disasters, or quarantine. EM loans may be made to farmers and ranchers who cannot obtain credit from commercial sources and own or operate land located in a county declared by the President as a disaster area or designated by the Secretary of Agriculture as a disaster area or quarantine area (for physical losses only, the FSA Administrator may authorize emergency loan assistance). Emergency loan funds may be used to 1) restore or replace essential property, 2) pay all or part of production costs associated with the disaster year, 3) pay essential family living expenses, 4) reorganize the farming operation, and 5) refinance certain debts.
The Farm Storage Facility Loan (FSFL) Program provides low-interest financing for producers to build or upgrade farm storage and handling facilities. The CCC, through FSA, may make loans to producers to build or upgrade farm storage and handling facilities for grains, pulses, legumes, hay, honey, renewable biomass, fruits, vegetables, floriculture, hops, maple sap, milk, and cheese. A producer may borrow up to $500,000 per loan, with a minimum down payment of 15 percent. Loan terms are up to 12 years, depending on the amount of the loan.
The goal of the Grasslands Reserve Program (GRP) is to prevent grazing and pasture land from being converted into cropland, used for urban development, or developed for other non-grazing uses. Participants in the program voluntarily limit future development of their grazing and pasture land, while still being able to use the land for livestock grazing and activities related to forage and seed production. Participation in GRP may also entail restrictions on activities during the nesting season of certain bird species that are in decline or protected under Federal or state law.
FSA guaranteed loans provide lenders (banks, Farm Credit System institutions, credit unions) with a guarantee of up to 95 percent of the loss of principal and interest on a loan. Farmers and ranchers apply to an agricultural lender, which then arranges for the guarantee. The FSA guarantee permits lenders to make agricultural credit available to farmers who do not meet the lender’s normal underwriting criteria. A percentage of guaranteed loan funds is targeted to beginning farmers and ranchers and minority applicants. Guaranteed Farm Ownership Loans may be made to purchase farmland, construct or repair buildings and other fixtures, develop farmland to promote soil and water conservation, or to refinance debt.
FSA guaranteed loans provide lenders (banks, Farm Credit System institutions, credit unions) with a guarantee of up to 95 percent of the loss of principal and interest on a loan. Farmers and ranchers apply to an agricultural lender, which then arranges for the guarantee. The FSA guarantee permits lenders to make agricultural credit available to farmers who do not meet the lender’s normal underwriting criteria. A percentage of guaranteed loan funds are targeted to beginning farmers and ranchers and minority applicants. Guaranteed Operating Loans may be made to purchase items needed such as livestock, farm equipment, feed, seed, fuel, farm chemicals, repairs, insurance, and other operating expenses. OLs also can be used to pay for minor improvements to buildings, costs associated with land and water development, family living expenses, and to refinance debts under certain conditions.
LFP provides compensation to eligible livestock producers that have suffered grazing losses for covered livestock on land that is native or improved pastureland with permanent vegetative cover or is planted specifically for grazing. The grazing losses must be due to a qualifying drought condition during the normal grazing period for the county. LFP also provides compensation to eligible livestock producers that have suffered grazing losses on rangeland managed by a federal agency if the eligible
livestock producer is prohibited by the federal agency from grazing the normal permitted livestock on the managed rangeland due to a qualifying fire.
LIP provides benefits to livestock producers for livestock deaths in excess of normal mortality caused by adverse weather. In addition, LIP covers attacks by animals reintroduced into the wild by the federal government or protected by federal law, including wolves and avian predators.
The Margin Protection Program for Dairy (MPP-Dairy) is a voluntary risk management program for dairy producers authorized by the 2014 Farm Bill through Dec. 31, 2018. The MPP-Dairy offers protection to dairy producers when the difference between the all milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer.
Microloans are a special subcategory of direct operating loans that provide flexible access to credit for small farming operations, including specialty, niche and local food producers. The Microloan Program simplifies the loan application process and reduces the paperwork burden substantially. It provides additional flexibility regarding certain loan eligibility requirements, reduces documentation requirements, and streamlines financial planning for small operations. Eligible applicants may obtain a microloan for up to $50,000.
NAP provides financial assistance to noninsurable crop losses due to drought, flood, hurricane, or other natural disasters. Landowners, tenants, or sharecroppers who share in the risk of producing an eligible crop are eligible. Eligible crops are those where crop insurance is unavailable. Also eligible for NAP coverage are controlled-environment crops (mushroom and floriculture), specialty crops (honey and maple sap), and value loss crops (aquaculture, Christmas trees, ginseng, ornamental nursery, and turfgrass sod). The 2014 Farm Bill allows producers to purchase higher levels of coverage beyond the catastrophic coverage level for an additional premium. New, limited resource and targeted underserved farmers are eligible for free catastrophic coverage and higher levels of coverage for a significantly discounted premium.
MALs provide producers interim financing at harvest time to help them meet cash flow needs when market prices are typically at harvest-time lows. MALs for covered commodities are nonrecourse because the commodity is pledged as loan collateral and producers have the option of delivering the pledged collateral to the CCC as full payment for the loan at maturity. A producer who is eligible to obtain a loan, but who agrees to forgo the loan, may obtain an LDP. An LDP is the amount by which the applicable loan rate exceeds the alternative loan repayment rate for the respective commodity.
The 2014 Farm Bill reauthorized the Tree Assistance Program (TAP) to provide financial assistance to qualifying orchardists and nursery tree growers to replant or rehabilitate eligible trees, bushes and vines damaged by natural disasters. The 2014 Farm Bill established TAP as a permanent disaster program and provides retroactive authority to cover eligible losses back to Oct. 1, 2011.
FSA makes loans to individual rural youth, between the ages of 10 and 20 years, to establish and operate agriculture-related income-producing projects of modest size in connection with their participation in 4-H clubs, the Future Farmers of America and similar organizations. The project must be planned and operated with the help of the organization adviser, produce sufficient income to repay the loan, and provide the youth with practical business and educational experience.