Illinois FSA March Newsletter

[March 27, 2018]    Message from the State Executive Director - As we look forward to 2018 spring planting and National Agricultural Day approaching next week on March 20th, FSA has so much to celebrate through its many successful previous years accomplishments.

In fiscal year 2017 alone, USDA Farm Loan programs provided $6 billion in support to producers across America, the second highest total in FSA history. FSA also distributed $1.6 billion in Conservation Reserve Program (CRP) payments to over 375,000 Americans to improve water quality, reduce soil erosion, and increase wildlife habitats. In addition for agricultural producers who suffered market downturns in 2016, USDA is issuing approximately $8 billion in payments under the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs.

The American agricultural producers play a huge part in rural America’s economic growth; job creation, and development, through the service they offer to millions of rural producers.

As we await the farm land in Illinois to dry out for spring planting, please contact your local County Farm Service Agency Office to sign your 2018 ARC/PLC contracts. I am very pleased to say that currently Illinois is right at, the half way point through this year's ARC/PLC sign up.

It is a great honor to administer programs that enable Illinois producers to manage their risks when the agricultural industry faces hardship.

On behalf of Illinois Farm Service Agency staff and myself, I would like to thank our agricultural producers for continuing to feed our nation and the world.

William Graff

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 the County Office by filing revised farm operating plans and/or supporting documentation, as applicable. Failure to timely notify the County Office may adversely affect payment eligibility.

Breaking New Ground

Agricultural producers are reminded to consult with FSA and NRCS before breaking out new ground for production purposes as doing so without prior authorization may put a producer’s federal farm program benefits in jeopardy. This is especially true for land that must meet Highly Erodible Land (HEL) and Wetland Conservation (WC) provisions.

Producers with HEL determined soils are required to apply tillage, crop residue and rotational requirements as specified in their conservation plan.

Producers should notify FSA as a first point of contact prior to conducting land clearing or drainage type projects to ensure the proposed actions meet compliance criteria such as clearing any trees to create new cropland, then these areas will need to be reviewed to ensure such work will not risk your eligibility for benefits.

Landowners and operators complete the form AD-1026 - Highly Erodible Land Conservation (HELC) and Wetland Conservation (WC) Certification to identify the proposed action and allow FSA to determine whether a referral to Natural Resources Conservation Service (NRCS) for further review is necessary.

Supervised Credit

Farm Service Agency (FSA) Farm Loan programs are considered supervised credit. Unlike loans from a commercial lender, FSA loans are intended to be temporary in nature. Therefore, it is our goal to help you graduate to commercial credit, and our farm loan staff is available to help borrowers through training and credit counseling.

The FSA team will help borrowers identify their goals to ensure financial success. Through this process, FSA staff will advise borrowers in developing strategies and a plan to meet your operation’s goals and graduate to commercial credit. Ultimately, the borrower is responsible for the success of the farming operation, but FSA’s staff will help in an advisory role to provide the tools necessary to help you achieve your operational goals and manage your finances.

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


Adjusted Gross Income Requirements

The average adjusted gross income (AGI) limitation for commodity and disaster programs under the 2014 Farm Bill was changed to a $900,000 limitation from all income sources. A person or legal entity, other than a joint venture or general partnership, is eligible to receive, directly or indirectly, certain program payments or benefits if the average adjusted gross income of the person or legal entity falls below the $900,000 threshold for the three taxable years preceding the most immediately preceding complete taxable year.

Reconstitutions

To be effective for the current Fiscal Year (FY), farm combinations and farm divisions must be requested by August 1 of the FY for farms subject to the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) program. A reconstitution is considered to be requested when all:

• of the required signatures are on form FSA-155

• other applicable documentation, such as proof of ownership, is submitted

Total Conservation Reserve Program (CRP) and non-ARC/PLC farms may be reconstituted at any time.

Reporting Wind Turbines Constructed on Cropland

Producers who have wind turbines constructed on their farms should notify the local Farm Service Agency office. Any area that is no longer considered suitable as cropland (producing annual or perennial crops) should be designated in FSA’s records and aerial photography maps. When base acres on a farm are converted to a non-agricultural commercial or industrial use, the total base acres on the farm must be reduced accordingly. Non-cropland areas used for wind turbines might impact payments calculated using base acres, such as Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC).

Loan Servicing

There are options for Farm Service Agency loan customers during financial stress. If you are a borrower who is unable to make payments on a loan, contact your local FSA Farm Loan Manager to learn about the options available to you.

Deadlines Approaching for FSA Livestock Disaster Assistance Programs

Livestock producers are reminded that deadlines for the Livestock Indemnity Program (LIP) are quickly approaching.

Producers with eligible livestock losses must submit a LIP application for payment by March 31, 2018. LIP provides assistance to eligible producers for livestock death losses in excess of normal mortality due to adverse weather and attacks by animals reintroduced into the wild by the federal government or protected by federal law.

For 2017, eligible LIP losses must occur on or after Jan. 1, 2017, and no later than 60 calendar days from the ending date of the applicable adverse weather event or attack. A notice of loss must be filed with FSA within 30 days of when the loss of livestock is apparent. Participants must provide the following supporting documentation to their local FSA office no later than 90 calendar days after the end of the calendar year in which the eligible loss condition occurred.

• Proof of death documentation

• Copy of growers contracts

• Proof of normal mortality documentation

Please contact your local FSA office to apply for LIP benefits.

Marketing Assistance Available for 2017 Crops

The 2014 Farm Bill authorized 2014-2018 crop year Marketing Assistance Loans (MALs) and Loan Deficiency Payments (LDPs).

MALs provide financing and marketing assistance for 2017 crop wheat, feed grains, soybeans and other oilseeds, pulse crops, wool and honey. MALs provide producers interim financing after harvest to help them meet cash flow needs without having to sell their commodities when market prices are typically at harvest-time lows.

A producer who is eligible to obtain an MAL, but agrees to forgo the loan, may obtain an LDP if such a payment is available.

To be eligible for an MAL or an LDP, producers must have a beneficial interest in the commodity, in addition to other requirements. A producer retains beneficial interest when control of and title to the commodity is maintained. For an LDP, the producer must retain beneficial interest in the commodity from the time of planting through the date the producer filed Form CCC-633EZ (page 1) in the FSA County Office. For more information, producers should contact their local FSA county office or view the LDP Fact Sheet.

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 $100,000 can be secured by a promissory note/security agreement 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, visit 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.

March Interest Rates and Important Dates

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

Phone: [phone]
Fax: [phone]

www.fsa.usda.gov/il

State Executive Director:
William J. Graff

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

Executive Officer:
Rick Graden

Administrative Officer:
Dan Puccetti

Division Chiefs:
Doug Bailey
John Gehrke
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).