Illinois FSA March Newsletter

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[February 24, 2018]    Message from the State Executive Director - Some of you may have already heard or read this but as my father used to say - Some things are just really worth repeating more than once.  With Illinois having the nation's largest number of farms, 161,000 to sign up for the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) farm programs, I would like to encourage farmers to sign up now.  I recommend farmers check with their local FSA office before visiting.  Some encourage appointments; others operate more casually.  By giving the office staff a little advance notice, they can get your information together to make the process more efficient.

Since shares and ownership of a farm can change year-to-year, producers must enroll by signing a contract each program year.

Some farmers tend to wait to sign up and report their acreages at the same time, however we never know if we'll have a wet spring and delayed planting that could change their acreage reporting. 

Credit concerns may also be on some farmer's minds. I recommend that you consider FSA, which has more than $1 billion in direct loans and guaranteed loans in Illinois this year.  If you are a farmer and you are struggling for credit, you need to come in and talk with us. If you didn't end up with big yields this year, you or your banker can come in and talk to us about a loan.  FSA offers direct loans, guaranteed loans and beginning farmer loans.  Young farmers especially, should discuss financial options available through FSA even if they are not ready to sign for a loan.  Come in and find out what is available should the situation arise later.

One more item on the farmers' to do list is checking their Conservation Reserve Program (CRP) contracts for any mid-management practices.  I urge farmers to seek what, if any, mid-management practices are stipulated in the contract and when those need to be accomplished.  Farmers need to check with their county offices regarding their CRP contract mid-management practices.  

Upcoming Noninsured Crop Disaster Assistance Program (NAP) Application Closing Date

The Noninsured Crop Disaster Assistance Program (NAP) closing deadline for spring and summer planted crops, including fruits and vegetables is March 15.  Eligible producers must apply for coverage and pay the applicable service fees annually by the application closing date.  Acreage reports are also due annually. Coverage for specific crops may be checked online at www.fsa.usda.gov/nap.   

Update Your Records

FSA is cleaning up our producer record database. If you have any unreported changes of address, zip code, phone number, email address or an incorrect name or business name on file they need to be reported to our office. Changes in your farm operation, like the addition of a farm by lease or purchase, need to be reported to our office as well. Producers participating in FSA and NRCS programs are required to timely report changes in their farming operation to the County Committee in writing and update their CCC-902 Farm Operating Plan. 

If you have any updates or corrections, please call your local FSA office to update your records.  

Farm Storage Facility Loans 

FSA’s Farm Storage Facility Loan (FSFL) program provides low-interest financing to producers to build or upgrade storage facilities and to purchase portable (new or used) structures, equipment and storage and handling trucks.  

The low-interest funds can be used to build or upgrade permanent facilities to store commodities. Eligible commodities include corn, grain sorghum, rice, soybeans, oats, peanuts, wheat, barley, minor oilseeds harvested as whole grain, pulse crops (lentils, chickpeas and dry peas), hay, honey, renewable biomass, fruits, nuts and vegetables for cold storage facilities, floriculture, hops, maple sap, rye, milk, cheese, butter, yogurt, meat and poultry (unprocessed), eggs, and aquaculture (excluding systems that maintain live animals through uptake and discharge of water). Qualified facilities include grain bins, hay barns and cold storage facilities for eligible commodities.    

Producers do not need to demonstrate the lack of commercial credit availability to apply. The loans are designed to assist a diverse range of farming operations, including small and mid-sized businesses, new farmers, operations supplying local food and farmers markets, non-traditional farm products, and underserved producers.  

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

Communication is Key in Lending 

Farm Service Agency (FSA) is committed to providing our farm loan borrowers the tools necessary to be a success. A part of ensuring this success is providing guidance and counsel from the loan application process through the borrower’s graduation to commercial lending institutions. While it is FSA’s commitment to advise borrowers as they identify goals and evaluate progress, it is crucial for borrowers to communicate with their farm loan staff when changes occur. It is the borrower’s responsibility to alert FSA to any of the following:  

Any proposed or significant changes in the farming operation;

Any significant changes to family income or expenses;

The development of problem situations;

Any losses or proposed significant changes in security 

In addition, if a farm loan borrower cannot make payments to suppliers, other creditors, or FSA on time, contact your farm loan staff immediately to discuss loan servicing options.  

For more information on FSA farm loan programs, visit www.fsa.usda.gov.   

CRP Participants Must Maintain Approved Cover on Acreages Enrolled in CRP and Farm Programs 

Conservation Reserve Program (CRP) participants are responsible for ensuring adequate, approved vegetative and practice cover is maintained to control erosion throughout the life of the contract after the practice has been established. Participants must also control undesirable vegetation, weeds (including noxious weeds), insects and rodents that may pose a threat to existing cover or adversely impact other landowners in the area.  

All CRP maintenance activities, such as mowing, burning, disking and spraying, must be conducted outside the primary nesting or brood rearing season for wildlife, which for Illinois is April 15 through August 1. However, spot treatment of the acreage may be allowed during the primary nesting or brood rearing season if, left untreated, the weeds, insects or undesirable species would adversely impact the approved cover. In this instance, spot treatment is limited to the affected areas in the field and requires County Committee approval prior to beginning the spot treatment.  The County Committee will consult with NRCS to determine if such activities are needed to maintain the approved cover. 

Annual mowing of CRP for generic weed control, or for cosmetic purposes, is prohibited at all times. 

USDA Processing Pending Conservation Reserve Program Continuous Enrollment Offers 

USDA’s Farm Service Agency (FSA) will process many pending eligible offers for land enrollment in the Conservation Reserve Program (CRP), and will temporarily suspend accepting most new offers until later in the 2018 fiscal year. 

All current, eligible CRP continuous enrollment offers made through Sept. 30, 2017, except for those made under the Pollinator Habitat Initiative (CP42), will be approved,  Additionally, FSA is temporarily suspending acceptance of most offers going forward to provide time to review CRP allocation levels, and to avoid exceeding the statutory cap of 24 million acres.  

The CRP acreage cap is a provision of the 2014 Farm Bill. Current enrollment is about 23.5 million acres nationwide. USDA is accepting all pending continuous enrollment offers that were made beginning on May 4, 2017, and extending through Sept. 30, 2017, except Pollinator Habitat Initiative offers. Pollinator acreage offers are being declined because the program has met its acreage enrollment goal. Effective immediately, USDA is suspending acceptance of all new CRP continuous offers received or submitted after Sept. 30, 2017. The suspension will continue until later in the 2018 fiscal year.  

However, FSA will continue to accept eligible offers for state-specific Conservation Reserve Enhancement Program (CREP) and CRP Grasslands enrollment. Offers received on or after Oct. 1, 2017, are subject to fiscal year 2018 rental rates which have been adjusted to reflect current market conditions and were established after careful review of the latest USDA National Agricultural Statistics Service (NASS) cash rent data.

In return for enrolling in CRP, USDA, through FSA, provides participants with rental payments and cost-share assistance. Landowners enter into contracts that last between 10 and 15 years. CRP pays farmers and ranchers who remove sensitive lands from production and plant certain grasses, shrubs and trees that improve water quality, prevent soil erosion and increase wildlife habitat. Payment totals for 2017 were announced earlier this week totaling over $1.6 billion.  

For more information about CRP, contact your local FSA office or visit www.fsa.usda.gov/crp. To locate your local FSA office, visit http://offices. usda.gov.   

Acreage Reporting

Permitted Revision of Intended use After Acreage Reporting Date:

New operators or owners who pick up a farm after the acreage reporting deadline has passed and the crop has already been reported on the farm, have 30 days to change the intended use. Producer share interest changes alone will not allow for revisions to intended use after the acreage reporting date.

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The revision must be performed by either the acreage reporting date or within 30 calendar days from the date when the new operator or owner acquired the lease on land, control of the land or ownership and new producer crop share interest in the previously reported crop acreage. Under this policy, appropriate documentation must be provided to the County Committee’s satisfaction to determine that a legitimate operator or ownership and producer crop share interest change occurred to permit the revision.  

Acreage Reports:
In order to maintain program eligibility and benefits, producers must timely file acreage reports. Failure to file an acreage report by the crop acreage reporting deadline may result in ineligibility for future program benefits. FSA will not accept acreage reports provided more than a year after the acreage reporting deadline.   

Definitions of Terms:
FSA defines “idle” as cropland or a balance of cropland within a Common Land Unit (CLU) (field/subfield) which is not planted or considered not planted and does not meet the definition of fallow or skip row. For example, the balance of a field that could not be planted due to moisture or a turn area that is not planted would be reported as idle.    

Fallow is considered unplanted cropland acres which are part of a crop/fallow rotation where cultivated land that is normally planted is purposely kept out of production during a regular growing season. Resting the ground in this manner allows it to recover its fertility and conserve moisture for crop production in the next growing season.

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 visit https://www.nrcs.usda.gov/ wps/portal/nrcs/main/national/landuse/
crops/  and click “Cover Crop Termination Guidelines.”  

Reporting Cover Crops 

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 not considered 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. 

Using FSA Direct Farm Ownership Loans for Construction 

The USDA Farm Service Agency’s (FSA) Direct Farm Ownership loans are a resource to help farmers and ranchers become owner-operators of family farms, improve and expand current operations, increase agricultural productivity, and assist with land tenure to save farmland for future generations.  

Depending on the applicant’s needs, there are three types of Direct Farm Ownership Loans: regular, down payment and joint financing. FSA also offers a Direct Farm Ownership Microloan option for smaller financial needs up to $50,000.   

Amongst other purposes, Direct Farm Ownership Loans can be used to construct, purchase or improve farm dwellings, service buildings or other facilities and improvements essential to an operation.   

To do this, applicants must provide FSA with an estimate of the total cost of all planned development that completely describe the work, prior to loan approval and must show proof of sufficient funds to pay for the total cost of all planned development at or before loan closing. In some instances, applicants may be asked to provide certified plans, specifications or contract documents. The applicant cannot incur any debts for materials or labor or make any expenditures for development purposes prior to loan closing with the expectation of being reimbursed from FSA funds.  

Construction and development work may be performed either by the contract method or the borrower method. Under the contract method, construction and development contractors perform work according to a written contract with the applicant or borrower.  An applicant for a direct loan to finance a construction project must obtain a surety bond that guarantees both payment and performance in the amount of the construction contract from a construction contractor. 

A surety bond is required when a contract exceeds $100,000, an authorized agency official determines that a surety bond appears advisable to protect the borrower against default of the contractor or a contract provides for partial payments in excess of the amount of 60 percent of the value of the work in place.  

Under the borrower method, the applicant or borrower will perform the construction and development work. The borrower method may only be used when the authorized agency official determines, based on information from the applicant, that the applicant possesses or arranges to obtain the necessary skill and managerial ability to complete the work satisfactorily and that such work will not interfere with the applicant’s farming operation or work schedule.  

For more eligibility requirements and information about FSA Loan programs, contact your local FSA office or visit www.fsa.usda.gov.  To find your local FSA office, visit http://offices.usda.gov.

Maintaining the Quality of Farm-Stored Loan Grain 

Bins are ideally designed to hold a level volume of grain. When bins are overfilled and grain is heaped up, airflow is hindered and the chance of spoilage increases. 

Producers who take out marketing assistance loans and use the farm-stored grain as collateral should remember that they are responsible for maintaining the quality of the grain through the term of the loan.

February Interest Rates and Important Dates to Remember

Illinois Farm Service Agency
3500 Wabash Ave
Springfield, IL 62711-8287

Phone: 217-241-6600 ext. 2
Fax: 855-800-1760

www.fsa.usda.gov/il

State Executive Director:
William J. Graff

State Committee:
James Reed-Chairperson
Martin Barbre-Member
Melanie DeSutter-Member
Ron Moore-Member
Troy Uphoff-Member

Executive Officer:
Rick Graden
Administrative Officer:
Dan Puccetti

Division Chiefs:
Doug Bailey
John Gerhke
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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