Illinois FSA Newsletter

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[April 16, 2017]     USDA Announces Additional Financial Incentives for Conservation Reserve Program Participants to Improve Forest Health and Enhance Wildlife Habitat - In an effort to improve wildlife habitat and the health of private forest lands, the U.S. Department of Agriculture (USDA) Farm Service Agency (FSA) announced additional incentives available for Conservation Reserve Program (CRP) participants to actively manage forest lands enrolled in the program. 

Under the provisions of the 2014 Farm Bill, $10 million is available nationwide to eligible CRP participants. Those selected will be encouraged to thin, prescribe burn or otherwise manage their forests in order to allow sunlight to reach the forest floor. This will encourage the development of grasses, forbs and legumes, benefitting numerous species including pollinators and grassland-dependent birds such as the northern bobwhite. 

Eligibility is limited to landowners and agricultural producers already enrolled in CRP with conservation covers primarily containing trees. Incentive payments, not to exceed 150 percent of the cost to implement a particular customary forestry activity as described, have been established. CRP participants meeting eligibility requirements and interested in making offers to participate should visit their local FSA county office. 

For more information about FSA conservation programs, visit the FSA office at the local USDA service center or go towww.fsa.usda.gov/conservation.  

CRP Payment Limitation

Payments and benefits received under the Conservation Reserve Program (CRP) are subject to the following:  

  • payment limitation by direct attribution      

       ●  foreign person rule

  • average adjusted gross income (AGI) limitation  The 2014 Farm Bill continued the $50,000 maximum CRP payment amount that can be received annually, directly or indirectly, by each person or legal entity.  This payment limitation includes all annual rental payments and incentive payments (Sign-up Incentive Payments and Practice Incentive Payments).  Annual rental payments are attributed (earned) in the fiscal year in which program performance occurs.  Sign-up Incentive Payments (SIP) are attributed (earned) based on the fiscal year in which the contract is approved, not the fiscal year the contract is effective.  Practice Incentive Payments (PIP) are attributed (earned) based on the fiscal year in which the cost-share documentation is completed and the producer or technical service provider certifies performance of practice completion to the county office.  Such limitation on payments is controlled by direct attribution. 
     
  • Program payments made directly or indirectly to a person are combined with the pro rata interest held in any legal entity that received payment, unless the payments to the legal entity have been reduced by the pro rata share of the person.
     
  • Program payments made directly to a legal entity are attributed to those persons that have a direct and indirect interest in the legal entity, unless the payments to the legal entity have been reduced by the pro rata share of the person. 

New Actively Engaged Provisions for Non-Family Joint Operations or Entities

Many Farm Service Agency programs require all program participants, either individuals or legal entities, to be “actively engaged in farming”.  This means participants provide a significant contribution to the farming operation, whether it is capital, land, equipment, active personal labor and/or management.  For entities, each partner, stockholder or member with an ownership interest, must contribute active personal labor and/or management to the operation on a regular basis. 

The 2014 Farm Bill established additional payment eligibility provisions relating to the farm management component of meeting “actively engaged in farming”. These new provisions apply to joint operations comprised of non-family members or partners, stockholders or persons with an ownership in the farming operation.  Effective for 2016 and subsequent crop years, non-family joint operations are afforded to one member that may use a significant contribution of active personal management exclusively to meet the requirements to be determined “actively engaged in farming”.  The person or member will be defined as the Farm Manager for the purposes of administering these new management provisions.   

In some instances, additional persons or members of a non-family member joint operation who meet the definition of Farm Manager may also be allowed to use such a contribution of active personal management to meet the eligibility requirements.  However, under no circumstances may the number of Farm Managers in a non-family joint operation exceed a total of three in any given crop and program year.  

Joint operations composed of non-family members may be impacted by the new provisions effective for the 2017 program year.  Joint operations must complete any operational changes and report those changes to FSA on or before June 1, 2017

Payment Limitations by Program

The 2014 Farm Bill established a maximum dollar amount for each program that can be received annually, directly or indirectly, by each person or legal entity.  Payment limitations vary by program for 2014 through 2018.

Below is an overview of payment limitations by program.

Commodity and Price Support Programs
The annual limitation for the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs, Loan Deficiency Payments (LDPs) and Market Loan Gains is $125,000 each.

Conservation Programs
The Conservation Reserve Program (CRP) annual rental payment and incentive payment is limited to $50,000.  CRP contracts approved before Oct. 1, 2008, may exceed the limitation, subject to payment limitation rules in effect on the date of contract approval.

The Emergency Conservation Program (ECP) has an annual limit of $200,000 per disaster event.  The Emergency Forest Restoration Program (EFRP) has an annual limit of $500,000 per disaster event.

Cover Crop Guidelines

Recently the Farm Service Agency (FSA), Natural Resources Conservation Service (NRCS) and Risk Management Agency (RMA) worked together to develop consistent, simple and a flexible policy for cover crop practices.  

The termination and reporting guidelines were updated for cover crops.

Termination:

The cover crop termination guidelines provide the timeline for terminating cover crops, are based on zones and apply to non-irrigated cropland. To view the zones and additional guidelines visithttps://www.nrcs.usda.gov/wps/portal/ nrcs/main/national/landuse/crops/ and click “Cover Crop Termination Guidelines.”

Reporting:

The intended use of cover only will be used to report cover crops. This includes crops that were terminated by tillage and reported with an intended use code of green manure. An FSA policy change will allow cover crops to be hayed and grazed.  Program eligibility for the cover crop that is being hayed or grazed will be determined by each specific program. 

If the crop reported as cover only is harvested for any use other than forage or grazing and is not terminated properly, then that crop will no longer be considered a cover crop.  

Crops reported with an intended use of cover only will not count toward the total cropland on the farm. In these situations a subsequent crop will be reported to account for all cropland on the farm. 

Cover crops include grasses, legumes, and forbs, for seasonal cover and other conservation purposes.  Cover crops are primarily used for erosion control, soil health Improvement, and water quality improvement. The cover crop may be terminated by natural causes, such as frost, or intentionally terminated through chemical application, crimping, rolling, tillage or cutting.  A cover crop managed and terminated according to NRCS Cover Crop Termination Guidelines is notconsidered a crop for crop insurance purposes. 

Cover crops can be planted: with no subsequent crop planted, before a subsequent crop, after prevented planting acreage, after a planted crop, or into a standing crop. 

Organic Producers and Handlers May Apply for Certification Cost Share Reimbursements; Expanded Eligibility for Transition and State Certification Cost

Starting March 20, 2017, organic producers and handlers will be able to visit over 2,100 USDA Farm Service Agency (FSA) offices to apply for federal reimbursement to assist with the cost of receiving and maintaining organic or transitional certification.

USDA reimburses organic producers up to 75 percent of the cost of organic certification, but only about half of the nation’s organic operations currently participate in the program.  Starting March 20, USDA will provide a uniform, streamlined process for organic producers and handlers to apply for organic cost share assistance either by mail or in person.

USDA is making changes to increase participation in the National Organic Certification Cost Share Program (NOCCSP) and the Agricultural Management Assistance Organic Certification Cost Share Program, and at the same time provide more opportunities for organic producers to access other USDA programs, such as disaster protection and loans for farms, facilities and marketing.  Producers can also access information on nonfederal agricultural resources, and get referrals to local experts, including organic agriculture, through USDA’s Bridges to Opportunity service at the local FSA office.

Historically, many state departments of agriculture have obtained grants to disburse reimbursements to those producers and handlers qualifying for cost share assistance.  FSA will continue to partner with states to administer the programs.  For states that want to continue to directly administer the programs, applications were due Feb. 17, 2017.   

Eligible producers include any certified producers or handlers who have paid organic or transitional certification fees to a USDA-accredited certifying agent.  Application fees, inspection costs, fees related to equivalency agreement/ arrangement requirements, travel/per diem for inspectors, user fees, sales assessments and postage are all eligible for a cost share reimbursement from USDA.

Once certified, producers and handlers are eligible to receive reimbursement for up to 75 percent of certification costs each year up to a maximum of $750 per certification scope—crops, livestock, wild crops and handling.  This announcement also adds transitional certification and state organic program fees as additional scopes.

To learn more about organic certification cost share, please visit www.fsa.usda.gov/organic or contact a local FSA office by visiting http://offices.usda.gov.

Unauthorized Disposition of Grain

If loan grain has been disposed of through feeding, selling or any other form of disposal without prior written authorization from the county office staff, it is considered unauthorized disposition.  The financial penalties for unauthorized dispositions are severe and a producer’s name will be placed on a loan violation list for a two-year period.   Always call before you haul any grain under loan.

Reporting Organic Crops

Producers who want to use the Noninsured Crop Disaster Assistance Program (NAP) organic price and selected the "organic" option on their NAP application must report their crops as organic.  

When certifying organic acres, the buffer zone acreage must be included in the organic acreage.

Producers must also provide a current organic plan, organic certificate or documentation from a certifying agent indicating an organic plan is in effect.  Documentation must include: 

  • name of certified individuals
  • address
  • telephone number
  • effective date of certification
  • certificate number
  • list of commodities certified
  • name and address of certifying agent
  • a map showing the specific location of each field of certified organic, including the buffer zone acreage 

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Certification exemptions are available for producers whose annual gross agricultural income from organic sales totals $5,000 or less.  Although exempt growers are not required to provide a written certificate, they are still required to provide a map showing the specific location of each field of certified organic, transitional and buffer zone acreage. 

For questions about reporting organic crops, contact your local FSA office.  To find your local office, visit http://offices.usda.gov

USDA Offers New Loans for Portable Farm Storage and Handling Equipment

USDA’s Farm Service Agency (FSA) will provide a new financing option to help farmers purchase portable storage and handling equipment through the Farm Storage Facility Loan (FSFL) program. The loans, which now include a smaller microloan option with lower down payments, are designed to help producers, including new, small and mid-sized producers, grow their businesses and markets.  The FSFL program allows producers of eligible commodities to obtain low-interest financing to build or upgrade farm storage and handling facilities.  

The program also offers a new “microloan” option, which allows applicants seeking less than $50,000 to qualify for a reduced down payment of five percent and no requirement to provide three years of production history, with CCC providing a loan for the remaining 95 percent of the net cost of the eligible FSFL equipment. Farms and ranches of all sizes are eligible.  The microloan option is expected to be of particular benefit to smaller farms and ranches, and specialty crop producers who may not have access to commercial storage or on-farm storage after harvest. These producers can invest in equipment like conveyers, scales or refrigeration units and trucks that can store commodities before delivering them to markets.  FSFL microloans can also be used to finance wash and pack equipment used post-harvest, before a commodity is placed in cold storage.  Producers do not need to demonstrate the lack of commercial credit availability to apply for FSFL’s. 

Larger farming and ranching operations, that may not be able to participate in the new “microloan” option, may apply for the traditional, larger FSFL’s with the maximum principal amount for each loan through FSFL of $500,000.00.  Participants are required to provide a down payment of 15 percent, with CCC providing a loan for the remaining 85 percent of the net cost of the eligible storage facility and permanent drying and handling equipment. Additional security is required for poured-cement open-bunker silos, renewable biomass facilities, cold storage facilities, hay barns and for all loans exceeding $100,000.00.   FSFL loan terms of 3, 5, 7, 10 or 12 years are available depending on the amount of the loan. Interest rates for each term rate may be different and are based on the rate which CCC borrows from the Treasury Department.  

Earlier this year, FSA significantly expanded the list of commodities eligible for FSFL.  Eligible commodities now include aquaculture; floriculture; fruits (including nuts) and vegetables; corn, grain sorghum, rice, oilseeds, oats, wheat, triticale, spelt, buckwheat, lentils, chickpeas, dry peas, sugar, barley, rye, hay, honey, hops, maple sap, unprocessed meat and poultry, eggs, milk, cheese, butter, yogurt and renewable biomass.  

Applications for FSFL must be submitted to the FSA county office that maintains the farm's records. The FSFL application must be approved before:  purchasing the FSFL equipment, beginning any excavation or site preparation, accepting delivery of FSFL equipment, beginning installation or construction.  

To learn more about Farm Storage Facility Loans, visit www.fsa.usda.gov/pricesupport or contact a local FSA county office.  To find your local FSA county office, visit http://offices.usda.gov.

Guaranteed Loan Program

FSA guaranteed loans allow lenders to provide agricultural credit to farmers who do not meet the lender's normal underwriting criteria.  Farmers and ranchers apply for a guaranteed loan through a lender, and the lender arranges for the guarantee.  FSA can guarantee up to 95 percent of the loss of principal and interest on a loan.  Guaranteed loans can be used for both farm ownership and operating purposes.   

Guaranteed farm ownership loans can be used to purchase farmland, construct or repair buildings, develop farmland to promote soil and water conservation or to refinance debt.  

Guaranteed operating loans can be used to purchase livestock, farm equipment, feed, seed, fuel, farm chemicals, insurance and other operating expenses.  

FSA can guarantee farm ownership and operating loans up to $1,399,000.  Repayment terms vary depending on the type of loan, collateral and the producer's ability to repay the loan.  Operating loans are normally repaid within seven years and farm ownership loans are not to exceed 40 years.  

Please contact your lender or local FSA farm loan office for more information on guaranteed loans.

2016 MAL Final Loan Availability Dates Approaching

The Agricultural Act of 2014 authorized 2014-2018 crop year Marketing Assistance Loans (MALs) and Loan Deficiency Payments (LDPs), with a few minor policy changes.  

Among the changes, farm-stored MAL collateral transferred to warehouse storage will retain the original loan rate, be allowed to transfer only the outstanding farm-stored quantity with no additional quantity allowed and will no longer require producers to have a paid for measurement service when moving or commingling loan collateral.  

FSA is now accepting requests for 2016 MALs and LDPs for all eligible commodities after harvest. Requests for loans and LDP’s shall be made on or before the final availability date for the respective commodities.  March 31 is the final loan availability date for Barley, Canola, Crambe, Flaxseed, Honey, Oats, Rapeseed, Wheat, and Sesame Seed.  May 31 is the final loan availability date for Corn, Dry Peas, Grain Sorghum, Lentils, Mustard Seed, Rice, Safflower Seed, Chickpeas, Soybeans, Sunflower Seed, and cotton. 

Before MAL repayments with a market loan gain or LDP disbursements can be made, producers must meet the requirements of actively engaged in farming, cash rent tenant and member contribution.  

The 2014 Farm Bill also establishes payment limitations per individual or entity not to exceed $125,000 annually on certain commodities for the following program benefits: price loss coverage payments, agriculture risk coverage payments, marketing loan gains (MLGs) and LDPs.  These payment limitations do not apply to MAL loan disbursements or redemptions using commodity certificate exchange. 

Adjusted Gross Income (AGI) provisions were modified by the 2014 Farm Bill, which states that a producer whose total applicable three-year average AGI exceeds $900,000 is not eligible to receive an MLG or LDP.  Producers must have a valid CCC-941 on file to earn a market gain of LDP.  The AGI does not apply to MALs redeemed with commodity certificate exchange. 

For more information and additional eligibility requirements, please visit a nearby USDA Service Center or FSA’s website www.fsa.usda.gov

Youth Loans

The Farm Service Agency makes loans to youth to establish and operate agricultural income-producing projects in connection with 4-H clubs, FFA and other agricultural groups.  Projects must be planned and operated with the help of the organization advisor, produce sufficient income to repay the loan and provide the youth with practical business and educational experience.  The maximum loan amount is $5000.

Youth Loan Eligibility Requirements:

  • Be a citizen of the United States (which includes Puerto Rico, the Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands) or a legal resident alien
  • Be 10 years to 20 years of age
  • Comply with FSA’s general eligibility requirements
  • Be unable to get a loan from other sources
  • Conduct a modest income-producing project in a supervised program of work as outlined above
  • Demonstrate capability of planning, managing and operating the project under guidance and assistance from a project advisor. The project supervisor must recommend the youth loan applicant, along with providing adequate supervision.

Stop by the county office for help preparing and processing the application forms.

 

Illinois Farm Service Agency
3500 Wabash Ave.
Springfield, IL 62711
Phone: 217-241-6600
Fax: 855-800-1760

www.fsa.usda.gov/il

Acting State Executive Director:
Rick Graden

Acting State Committee:
Jill Appell-Chairperson
Brenda Hill-Member
Jerry Jimenez-Member
Joyce Matthews-Member
Gordon Stine-Member

Administrative Officer:
Dan Puccetti

Division Chiefs:
Doug Bailey
Jeff Koch
Randy Tillman

To find contact information for your local office go to www.fsa.usda.gov/il

USDA is an equal opportunity provider, employer and lender. To file a complaint of discrimination, write: USDA, Office of the Assistant Secretary for Civil Rights, Office of Adjudication, 1400 Independence Ave., SW, Washington, DC 20250-9410 or call (866) 632-9992 (Toll-free Customer Service), (800) 877-8339 (Local or Federal relay), (866) 377-8642 (Relay voice users).

 

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