June Illinois FSA Newsletter

[July 08, 2017]    Beginning Farmer Loans - FSA assists beginning farmers to finance agricultural enterprises.

Under these designated farm loan programs, FSA can provide financing to eligible applicants through either direct or guaranteed loans. FSA defines a beginning farmer as a person who:

Has operated a farm for not more than 10 years

• Will materially and substantially participate in the operation of the farm

• Agrees to participate in a loan assessment, borrower training and financial management program sponsored by FSA

• Does not own a farm in excess of 30 percent of the county’s average size farm. Additional program information, loan applications, and other materials are available at your local USDA Service Center. You may also visit www.fsa.usda.gov.

Change in Farming Operation

If you have bought or sold land, or if you have picked up or dropped rented land from your operation, make sure you report the changes to the office as soon as possible. You need to provide a copy of your deed or recorded land contract for purchased property.

Failure to maintain accurate records with FSA on all land you have an interest in can lead to possible program ineligibility and penalties. Making the record changes now will save you time in the future. Update signature authorization when changes in the operation occur. Producers are reminded to contact the office if there is a change in operations on a farm so that records can be kept current and accurate.

Loans for Targeted Underserved Producers

FSA has a number of loan programs available to assist applicants to begin or continue in agriculture production. Loans are available for operating type loans and/or to purchase or improve farms or ranches.

While all qualified producers are eligible to apply for these loan programs, FSA has provided priority funding for members of targeted underserved applicants.

A targeted underserved applicant is one of a group whose members have been subjected to racial, ethnic or gender prejudice because of his or her identity as members of the group without regard to his or her individual qualities.

For purposes of this program, targeted underserved groups are women, African Americans, American Indians, Alaskan Natives, Hispanics, Asian Americans and Pacific Islanders.

FSA loans are only available to applicants who meet all the eligibility requirements and are unable to obtain the needed credit elsewhere. You may also visit www.fsa.usda.gov. 

FSA County Committee Nomination Period is Now Open

The nomination period for all FSA county committees begins on June 15, 2017. Nomination forms must be postmarked or received in the County FSA Office by close of business on Aug. 1, 2017.

County Committees are unique to FSA and allow producers to have a voice on federal farm program implementation at the local level.

To be eligible to serve on the FSA county committee, a person must participate or cooperate in an agency administered program, be eligible to vote in a county committee election and reside in the Local Administrative Area (LAA) where they are nominated. All producers, including women, minority and beginning farmers and ranchers are encouraged to participate in the nomination and election process.

Producers may nominate themselves or others as candidates. Organizations representing minority and women farmers and ranchers may also nominate candidates. To become a nominee, eligible individuals must sign form FSA-669A. The form and more information about county committee elections is available online at: www.fsa.usda.gov/elections.

Elected county committee members serve a three-year term and are responsible for making decisions on FSA disaster, conservation, commodity and price support programs, as well as other important federal farm program issues. County committees consist of three members.

FSA will mail election ballots to eligible voters beginning November 6, 2017. Ballots are due back in the County Office by mail or in person no later than December 4, 2017. All newly elected county committee members and alternates will take office January 1, 2018.

For more information about county committees, please contact your local County FSA office or visit www.fsa.usda.gov/elections.

Payment Limitation

Program payments are limited by direct attribution to individuals or entities. A legal entity is defined as an entity created under Federal or State law that owns land or an agricultural commodity, product or livestock. Through direct attribution, payment limitation is based on the total payments received by the individual, both directly and indirectly. Qualifying spouses are eligible to be considered separate persons for payment limitation purposes, rather than being automatically combined under one limitation.

Payments and benefits under certain FSA programs are subject to some or all of the following:

• payment limitation by direct attribution

• payment limitation amounts for the applicable programs

• actively engaged in farming requirements

• cash-rent tenant rule

• foreign person rule

• average AGI limitations

• programs subject to AGI limitation

• effective date of implementation of AGI limitation

No program benefits subject to payment eligibility and limitation will be provided until all required forms for the specific situation are provided and necessary payment eligibility and payment limitation determinations are made. Payment eligibility and payment limitation determinations may be initiated by the County Committee or requested by the producer. There are statutory provisions that require entities, earning program benefits that are subject to limitation, to provide the names, addresses, and TINs of the entities’ members to the County Committee. All applicable payment eligibility and payment limitation forms submitted by producers are subject to spot check through the end-of-year review process.

Producers selected for end-of-year review must provide the County Committee with operating loan documents, income and expense ledgers, canceled checks for all expenditures, lease and purchase agreements, sales contracts, property tax statements, equipment listings, lease agreements, purchase contracts, documentation of who provided actual labor and management, employee time sheets or books, crop sales documents, warehouse ledgers, gin ledgers, corporate or entity papers, etc. A determination of not actively engaged in farming results in the producer being ineligible for any payment or benefit requiring a determination of actively engaged in farming. Noncompliance with AGI provisions, either by exceeding the applicable limitation or failure to submit a certification and consent for disclosure statement, will result in the determination of ineligibility for all program benefits subject to AGI provisions.

Program benefits shall be reduced in an amount that is commensurate with the direct and indirect interest held by an ineligible person or legal entity in any legal entity, general partnership, or joint operation that receives benefits subject to the average AGI limitations. If any changes occur that could affect an actively engaged in farming, cash-rent tenant, foreign person, or average Adjusted Gross Income (AGI) determination, producers must timely notify their County FSA Office by filing revised farm operating plans and/or supporting documentation, as applicable. Failure to timely notify the County FSA Office may adversely affect payment eligibility.

Policy Updates for Acreage Reporting

The USDA Farm Service Agency (FSA) recently made several policy updates for acreage reporting for cover crops, revising intended use, late-filed provisions, grazing allotments as well as updated the definitions of “idle” and “fallow.” 

Reporting Cover Crops:

FSA made changes to the types of cover crops. Cover crop types can be chosen from the following four categories:

• Cereals and other grasses - Any cover crop that is classified as a grass plant or cereal grain, and would include, but not be limited to, the following cover crops: cereal rye, wheat, barley, oats, black oats, triticale, annual ryegrass, pearl millet, foxtail millet (also called German, Italian or Hungarian millet), sorghum sudan grass, sorghum and other millets and grasses.
• Legumes - Any cover crop that is classified as a legume, including, but not limited to, clovers, vetches, peas, sun hemp, cowpeas, lentils and other legumes.

• Brassicas and other broadleaves - Any cover crop that is classified as a non-legume broadleaf, including, but not limited to, Brassicas such as radishes, turnips, canola, rapeseed, oilseed rape, and mustards, as well as other broadleaf plants such as phacelia, flax, sunflower, buckwheat, and safflower.
• Mixtures - Mixes of two or more cover crop species planted at the same time, for example, oats and radishes. If the cover crop is harvested for any use other than forage or grazing and is not terminated according to policy guidelines, then that crop will no longer be considered a cover crop and the acreage report must be revised to reflect the actual crop.

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. 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, 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. 

2017 Acreage Reporting Dates

In order to comply with FSA program eligibility requirements, all producers are encouraged to visit their local FSA office to file an accurate crop certification report by the applicable deadline. 

Acreage reporting dates vary by crop and by county so please contact your local FSA office for a list of county-specific deadlines.  

The following exceptions apply to acreage reporting dates: 

• If the crop has not been planted by the applicable acreage reporting date, then the acreage must be reported no later than 15 calendar days after planting is completed. 
• If a producer acquires additional acreage after the applicable acreage reporting date, then the acreage must be reported no later than 30 calendars days after purchase or acquiring the lease. Appropriate documentation must be provided to the county office. 
• If a perennial forage crop is reported with the intended use of “left standing,” or “seed,” then the acreage must be reported by July 15th. Noninsured Crop Disaster Assistance Program (NAP) policy holders should note that the acreage reporting date for NAP covered crops is the earlier of the applicable dates or 15 calendar days before grazing or harvesting of the crop begins. 

2017 Acreage Reporting Dates in Illinois are:

June 15, 2017
cucumbers (planted 5/1 – 5/31)

July 15, 2017
All other spring and summer planted crops (corn, soybeans,  pumpkins, sweet corn etc.)

August 15, 2017
cabbage (planted 6/1 – 7/20)

September 15, 2017
cucumbers (planted 6/1 – 8/15)

For questions regarding crop certification and crop loss reports, please contact your local FSA office.

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.   

Loans up to $50,000 can be secured by a promissory note/security agreement and loans between $50,000 and $100,000 may require additional security.  Loans exceeding $100,000 require additional security. 

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, visithttp://offices.usda.gov.

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 

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.

Foreign Buyers Notification

The Agricultural Foreign Investment Disclosure Act (AFIDA) requires all foreign owners of U.S. agricultural land to report their holdings to the Secretary of Agriculture.  Foreign persons who have purchased or sold agricultural land in the county are required to report the transaction to FSA within 90 days of the closing.  Failure to submit the AFIDA form could result in civil penalties of up to 25 percent of the fair market value of the property.  County government offices, realtors, attorneys and others involved in real estate transactions are reminded to notify foreign investors of these reporting requirements. 

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.

Controlled Substance

Program participants convicted under federal or state law of any planting, cultivating, growing, producing, harvesting or storing a controlled substance are ineligible for program payments and benefits.  If convicted of one of these offensives, the program participant shall be ineligible during that crop year and the four succeeding crop years for price support loans, loan deficiency payments, market loan gains, storage payments, farm facility loans, Non-insured Crop Disaster Assistance Program payments or disaster payments.  

Program participants convicted of any federal or state offense consisting of the distribution (trafficking) of a controlled substance, at the discretion of the court, may be determined ineligible for any or all program payments and benefits:  

• for up to 5 years after the first conviction
• for up to 10 years after the second conviction
• permanently for a third or subsequent conviction 

Program participants convicted of federal or state offense for the possession of a controlled substance shall be ineligible, at the discretion of the court, for any or all program benefits, as follows: 

• up to 1 year upon the first conviction
• up to 5 years after a second or subsequent conviction 

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. 

June Interest Rates and Important Dates to Remember

Illinois Farm Service Agency
3500 Wabash Ave.
Springfield, IL 62711

Phone:[phone] ext. 2
Fax: [phone]
www.fsa.usda.gov/il

Acting State Executive Director: Richard L. Graden

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

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 [phone] (Toll-free Customer Service), [phone] (Local or Federal relay), [phone] (Relay voice users).