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Higher limits now available on USDA farm loans

By Norwalk Reflector staff • Jan 28, 2020 at 5:00 PM

Higher limits are now available for borrowers interested in USDA’s farm loans, which help agricultural producers purchase farms or cover operating expenses. The 2018 Farm Bill increased the amount that producers can borrow through direct and guaranteed loans available through USDA’s FSA and made changes to other loans, such as microloans and emergency loans.

Key changes include: The direct operating loan limit increased from $300,000 to $400,000, and the guaranteed operating loan limit increased from $1.429 million to $1.75 million. Operating loans help producers pay for normal operating expenses, including machinery and equipment, seed, livestock feed, and more. The direct farm ownership loan limit increased from $300,000 to $600,000, and the guaranteed farm ownership loan limit increased from $1.429 million to $1.75 million.

Farm ownership loans help producers become owner-operators of family farms as well as improve and expand current operations. Producers can now receive both a $50,000 farm ownership microloan and a $50,000 operating microloan. Previously, microloans were limited to a combined $50,000. Microloans provide flexible access to credit for small, beginning, niche, and non-traditional farm operations. Producers who previously received debt forgiveness as part of an approved FSA restructuring plan are now eligible to apply for emergency loans. Previously, these producers were ineligible. Beginning and socially disadvantaged producers can now receive up to a 95 percent guarantee against the loss of principal and interest on a loan, up from 90 percent.

About Farm Loans

Direct farm loans, which include microloans and emergency loans, are financed and serviced by FSA, while guaranteed farm loans are financed and serviced by commercial lenders. For guaranteed loans, FSA provides a guarantee against possible financial loss of principal and interest. For more information on FSA farm loans, contact your FSA County office.

Signup Continues for Conservation Reserve Program

USDA opened signup for the Conservation Reserve Program (CRP). The deadline for agricultural producers to sign up for general CRP is February 28, while signup for continuous CRP is ongoing. Farmers and landowners who enroll in CRP receive a yearly rental payment for voluntarily establishing long-term, resource-conserving plant species, such as approved grasses or trees (known as “covers”) to control soil erosion, improve water quality and develop wildlife habitat on marginally productive agricultural lands.

Enrollment Continues for Agriculture Risk Coverage and Price Loss Coverage Programs

To enroll in the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs – two U.S. Department of Agriculture (USDA) safety net programs – for the 2019 and 2020 crop year. ARC provides income support payments on historical base acres when actual crop revenue declines below a specified guaranteed level. PLC provides income support payments on historical base acres when the effective price for a covered commodity falls below its reference price. The 2018 Farm Bill reauthorized and updated both programs. Signup for the 2020 crop year closes June 30, while signup for the 2019 crop year closes March 15. Producers who have not yet enrolled for 2019 can enroll for both 2019 and 2020 during the same visit to an FSA county office.

FSA Reminds Producers of Approaching NAP Deadlines for 2020 Crops

FSA reminds producers who are interested in the 2020 Noninsured Crop Disaster Assistance Program (NAP), of the need to apply for coverage by the following crop deadline dates. March 15 is the deadline for 2020 NAP coverage on forage sorghum, oats, potatoes, soybeans, sunflowers and all spring planted specialty crops grown for food.

Feb. 17 ---- President’s Day Holiday. FSA Offices Closed.

Feb. 28 ---- Deadline to sign-up for General CRP.

Mar. 15 --- Deadline to obtain 2020 NAP coverage on spring planted crops.

Mar. 15 --- ARC/PLC signup deadline for the 2019 Program Election and Enrollment Closes.

Producers who fail to elect either Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC) by March 15, 2020 will NOT receive a 2019 payment and their 2020 election will default to the prior farm bill election.