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 This news bulletin provides a list of important FSA annual
policy reminders. Many of these reminders include important
information that will assist you in maintaining federal farm
program eligibility for your operation. Sending all program
reminders in this one, nationally-issued news bulletin places
all of the annual reminders in one location providing a single
reference on maintaining eligibility for USDA programs.
If you have any questions, please contact your local FSA office.
You can find contact information at Farmers.gov/service-center-locator.
For more information visit the FSA website fsa.usda.gov or ask a
specific question online at
http://askfsa.custhelp.com/.
Administrative Policy Reminders
Changing Bank Accounts
FSA program payments are issued electronically into your bank
account. In order to make timely payments, you need to notify
your FSA servicing office if you close your account or if your
bank information is changed for whatever reason (such as your
financial institution merging or being purchased). Payments can
be delayed if FSA is not notified of changes to account and bank
routing numbers.
For some programs, payments are not made until the following
year. For example, payments for crop year 2018 through the
Agriculture Risk Coverage and Price Loss Coverage program aren’t
paid until 2019. If the bank account was closed due to the death
of an individual or dissolution of an entity or partnership
before the payment was issued, please notify your local FSA
office as soon as possible to claim your payment.
Civil Rights/Discrimination Complaint Process
As a participant or applicant for programs or activities
operated or sponsored by USDA you have a right to be treated
fairly. If you believe you have been discriminated against
because of your race, color, national origin, gender, age,
religion, disability, or marital or familial status, you may
file a discrimination complaint. The complaint should be filed
with the USDA Office of Civil Rights within 180 days of the date
you became aware of the alleged discrimination. To file a
complaint of discrimination, write U.S. Department of
Agriculture, Director, Office of Adjudication,1400 Independence
Avenue, SW, Washington DC 20250-9410 or call 202-260-1026 (voice
or TDD), USDA is an equal opportunity provider, employer and
lender. A complaint must be filed within 180 calendar days from
the date the complainant knew, or should have known, of the
alleged discrimination.
Power of Attorney
FSA has a power of attorney form available that enables persons
and legal entities to designate another person to conduct
business on behalf of the person or legal entity. If you are
interested, please contact our office or any FSA office near you
for more information. FSA’s power of attorney form and
provisions do not apply to farm loan programs.
Reasonable Accommodations
Special accommodations will be made upon request for individuals
with disabilities, vision impairment or hearing impairment. If
accommodations are required, individuals should contact the
county FSA office directly or by phone or Federal Relay Service
at 1-800-877-8339.
Farm Program Policy Reminders
Annual Review of Payment Eligibility for New Crop Year
Participants of FSA programs who request program benefits are
required to submit a completed CCC-902 (Farming Operation Plan)
and CCC-941 Average Gross Income (AGI) Certification and Consent
to Disclosure of Tax Information to be considered for payment
eligibility and payment limitation applicable for the program
benefits.
Participants are not required to annually submit new CCC-902s
for payment eligibility and payment limitation purposes unless a
change in the farming operation occurs that may affect the
determination of record. A valid CCC-902 filed by the
participant is considered to be a continuous certification used
for all payment eligibility and payment limitation
determinations applicable for the program benefits requested.
Participants are responsible for ensuring that all CCC-902 and
CCC-941 and related forms on file in the county office are
updated, current, and correct. Participants are required to
timely notify the county office of any changes in the farming
operation that may affect the determination of record by filing
a new or updated CCC-902 as applicable.
Changes that may require a NEW determination include, but are
not limited to, a change of:
*Shares of a contract, which may reflect:
-A land lease from cash rent to share rent
-A land lease from share rent to cash rent (subject to the cash
rent tenant rule)
-A modification of a variable/fixed bushel-rent arrangement
*The size of the producer’s farming operation by the addition or
reduction of cropland that may affect the application of a
cropland factor
*The structure of the farming operation, including any change to
a member's share
*The contribution of farm inputs of capital, land, equipment,
active personal labor, and/or active personal management
*Farming interests not previously disclosed on CCC-902 including
the farming interests of a spouse or minor child
*Financial status that may affect the 3-year average for the
determination of average AGI or other changes that affects
eligibility under the average adjusted gross income limitations.
Participants are encouraged to file or review these forms within
the deadlines established for each applicable program for which
program benefits are being requested.
Payment Limitation
Program payments may be 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
The Bipartisan Budget Act (BBA) of 2018, which was signed into
law on Feb. 9, 2018, included provisions that changed or even
removed payment limitations for certain programs. For more
information on payment limitations by program, contact your
local FSA office.
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.
Payment eligibility and payment limitation forms submitted by
persons and legal entities are subject to spot check through the
end-of-year review process.
Persons or legal entities 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 person or legal entity 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 payments are 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.
Acreage Reporting
Timely filing an accurate crop and acreage report by the acreage
reporting date at your local FSA office can prevent the loss of
benefits for a variety of programs.
Failed acreage is acreage that was timely planted with the
intent to harvest, but because of disaster related conditions,
the crop failed before it could be brought to harvest.
Prevented planting must be reported no later than 15 days after
the final planting date. Annual acreage reports are required for
most FSA programs. Annual crop report deadlines vary based on
region, crop, perennial vs. annual crop type, NAP or non-NAP
crop and fall or winter seeding. Consult your local FSA office
for deadlines in your area.
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 spring. 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.
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, Noninsured 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
Reconstitutions
To be effective for the current Fiscal Year (FY), farm
combinations and farm divisions must be requested by August 1 of
the FY. 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
Farm Service Agency (FSA) and Risk Management Agency (RMA) to
Prevent Fraud, Waste, and Abuse
FSA and RMA jointly support the prevention of fraud, waste and
abuse of the Federal Crop Insurance Program. FSA has been, and
will continue to, assist RMA and insurance providers by
monitoring crop conditions throughout the growing season. FSA
will continue to refer all suspected cases of fraud, waste and
abuse directly to RMA. Producers can report suspected cases to
the county office staff, the RMA office or the Office of the
Inspector General.
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 trans actions are reminded to
notify foreign investors of these reporting requirements.
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.
Signature Policy
Using the correct signature when doing business with FSA can
save time and prevent a delay in program benefits. The following
are FSA signature guidelines:
Married individuals must sign their given name.
Example—Mary Doe and John Doe are married. When signing FSA
forms, each must use their given name, and may not sign with the
name of their spouse. Mrs. Mary Doe may not sign documents as
Mrs. John Doe.
For a minor, FSA requires the minor's signature and one from the
minor’s parent.
Note, by signing a document with a minor, the parent is liable
for actions of the minor and may be liable for refunds,
liquidated damages, etc.
When signing on one’s behalf the signature must agree with the
name typed or printed on the form or be a variation that does
not cause the name and signature to be in disagreement. Example
- John W. Smith is on the form. The signature may be John W.
Smith or J.W. Smith or J. Smith. Or Mary J. Smith may be signed
as Mrs. Mary Joe Smith, M.J. Smith, Mary Smith, etc.
FAXED signatures will be accepted for certain forms and other
documents provided the acceptable program forms are approved for
FAXED signatures. Producers are responsible for the successful
transmission and receipt of FAXED information.
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Examples of documents not approved for FAXED signatures include:
Promissory note
Assignment of payment
Joint payment authorization
Acknowledgement of commodity certificate purchase
Spouses may sign documents on behalf of each other for FSA and
CCC programs in which either has an interest, unless written
notification denying a spouse this authority has been provided
to the county office.
Spouses cannot sign on behalf of each other as an authorized
signatory for partnerships, joint ventures, corporations or
other similar entities. Likewise, a spouse cannot sign a
document on behalf of the other in order to affirm the
eligibility of oneself.
Any member of a general partnership can sign on behalf of the
general partnership and bind all members unless the Articles of
Partnership are more restrictive. Spouses may sign on behalf of
each other’s individual interest in a partnership, unless
notification denying a spouse that authority is provided to the
county office. Acceptable signatures for general partnerships,
joint ventures, corporations, estates, and trusts must consist
of an indicator “by” or “for” the individual’s name,
individual’s name and capacity, or individual’s name, capacity,
and name of entity.
For additional clarification on proper signatures contact your
local FSA office.
Conservation Reserve Program (CRP) - Annual Certification
Before an annual rental payment can be issued, participants must
certify to contract compliance using either the FSA-578, Report
of Acreage, or CCC-817U, Certification of Compliance for CRP.
Beginning with 2016, once certified, a CRP acreage report is
considered continuous unless there is a CRP revision. Annual
reports on FSA-578 or CCC-817U are not required in this case.
Highly Erodible Land (HEL) and Wetland Conservation
Compliance
Landowners and operators are reminded that in order to receive
payments from USDA, compliance with Highly Erodible Land (HEL)
and Wetland Conservation (WC) provisions are required. Farmers
with HEL determined soils are reminded of tillage, crop residue,
and rotation requirements as specified per their conservation
plan. Producers are to notify the USDA Farm Service Agency prior
to conducting land clearing or drainage projects to insure
compliance. Failure to obtain advance approval for any of these
situations can result in the loss of eligibility and all Federal
payments.
Highly Erodible Land and Wetland Conservation Certification
Must be Filed to Receive FSA Benefits
The 2014 Farm Bill requires farmers to have a Highly Erodible
Land Conservation and Wetland Conservation Certification
(AD-1026) on file with their local Farm Service Agency (FSA)
office in order to maintain eligibility for premium support on
federal crop insurance.
Since enactment of the 1985 Farm Bill, eligibility for most
commodity, disaster and conservation programs has been linked to
compliance with the highly erodible land conservation and
wetland conservation provisions. The 2014 Farm Bill continues
the requirement that producers adhere to conservation compliance
guidelines to be eligible for most programs administered by FSA
and the Natural Resources Conservation Service (NRCS). This
includes financial assistance from the Agriculture Risk Coverage
(ARC) and Price Loss Coverage (PLC) programs, the Conservation
Reserve Program (CRP), livestock disaster assistance programs,
Marketing Assistance Loans (MALs) and most programs implemented
by FSA. It also includes the Environmental Quality Incentives
Program (EQIP), the Conservation Stewardship Program and other
conservation programs implemented by NRCS.
The AD-1026 form must be submitted before the Risk Management
Agency deadline of June 1, 2018. This is a continuous
certification that only requires updates when changes occur. A
producer will be ineligible for any premium support paid by
Federal Crop Insurance Corporation on their policy or plan of
insurance if they do not have a completed AD-1026 on file with
FSA certifying compliance on or before the premium billing date
for their policy or plan of insurance, unless otherwise
exempted.
When a farmer completes and submits the AD-1026 certification
form, FSA and NRCS staff will review the associated farm records
and outline any additional actions that may be required to meet
the required conservation compliance provisions.
Form AD-1026 is available at USDA Service Centers and online at:
fsa.usda.gov. Please contact your local USDA Service Center for
more information.
Nonrecourse Marketing Assistance Loans and Loan Deficiency
Payments
The 2018 Farm Bill extends loan authority through 2023 for
Marketing Assistance Loans (MALs) and Loan Deficiency Payments (LDPs)
for wheat, corn, grain sorghum, barley, oats, upland cotton,
extra-long staple cotton, long grain rice, medium grain rice,
soybeans, other oilseeds (including sunflower seed, rapeseed,
canola, safflower, flaxseed, mustard seed, crambe and sesame
seed), dry peas, lentils, small chickpeas, large chickpeas,
graded and non-graded wool, mohair, unshorn pelts, honey and
peanuts.
To be eligible for a MAL or LDP, producers must comply with
conservation and wetland protection requirements and submit an
acreage report to account for all cropland on all farms.
Additionally, they must have and retain beneficial interest in
the commodity until the MAL is repaid or the Commodity Credit
Corporation (CCC) takes title to the commodity while also
meeting Adjusted Gross Income (AGI) limitations.
LDPs and marketing loan gains available now through 2023 are not
subject to adjusted gross income and payment limitation,
including actively engaged in farming.
In addition to producer eligibility, the commodity must have
been produced, mechanically harvested, or shorn from live
animals by an eligible producer and be in storable condition. It
also must be merchantable for food, feed or other uses, as
determined by CCC. Nonrecourse MALs must meet specific CCC
minimum grade and quality standards.
Recourse marketing assistance loans are also available for
commodities that may be of lower quality due to an element such
as high moisture, commodities harvested as other than grain,
seed cotton in module form, or for contaminated commodities that
are still within merchantable levels of tolerance. Recourse MALs
can only be repaid at principal plus accrued interest.
If beneficial interest in the commodity is lost, the commodity
loses eligibility for a MAL or LDP and remains ineligible even
if the producer later regains beneficial interest. To retain
beneficial interest, the producer must have control and title to
the commodity. The producer must be able to make all decisions
affecting the commodity including movement, sale and the request
for a MAL or LDP. The producer must not have sold or delivered
the commodity or warehouse receipt to the buyer.
Producers are responsible for any loss in quantity or quality of
commodities pledged as collateral for a farm-stored or warehouse
stored loan. CCC will not assume any loss in quantity or quality
of the loan collateral regardless of storage location.
The 2018 Farm Bill sets national loan rates. County and regional
loan rates are based on each commodity’s national loan rate, and
they vary by county or region and are based on the average
prices and production of the county or region where the
commodity is stored.
For all loan-eligible commodities, pledged for a non-recourse
loan, except extra-long staple (ELS) cotton, a producer may
repay a MAL any time during the loan period at the lesser of the
loan rate plus accrued interest and other charges or an
alternative loan repayment rate as determined by CCC.
Producers may obtain MALs or receive LDPs on all or part of
their eligible production anytime during the loan availability
period. The loan availability period runs from when the
commodity is normally harvested (or sheared for wool) until
specified dates in the following calendar year.
The final loan/LDP availability dates for the respective
commodities are:
March 31 - Barley, Canola, Crambe, Flaxseed, Honey, Oats,
Rapeseed, See Cotton Sesame seed and Wheat
May 31 - Corn, Dry peas, Grain sorghum, Lentils, Mustard seed,
Long grain rice, Medium grain rice, Safflower, Small chickpeas,
Large chickpeas, Cotton, Soybeans and Sunflower seed
National loan rates for 2019-2023 crops (per
production unit) are as follows:
Program Incentives for Underserved Producers
The USDA Farm Service Agency (FSA) reminds producers that FSA offers
support to beginning farmers and ranchers, socially disadvantaged
farmers and ranchers, and military veteran farmers and ranchers
through program incentives in existing farm programs.
USDA defines socially disadvantaged farmers and ranchers as a group
whose members have been subjected to racial, ethnic, or gender
prejudice because of their identity as members of the group without
regard to their individual qualities. For farm program purposes,
this category includes African Americans, American Indians and
Alaskan Natives, and Hispanics and Asians and Pacific Islanders.
Farm program provisions for women producers vary from program to
program.
Farm Loan Policy Reminders
Loans for Targeted Underserved Producers
The USDA Farm Service Agency (FSA) reminds producers that FSA offers
targeted farm ownership and farm operating loans to assist
underserved applicants as well as beginning farmers and ranchers.
USDA defines underserved applicants as a group whose members have
been subjected to racial, ethnic, or gender prejudice because of
their identity as members of the group without regard to their
individual qualities. For farm loan program purposes, targeted
underserved groups are women, African Americans, American Indians
and Alaskan Natives, Hispanics and Asians and Pacific Islanders.
Underserved or beginning farmers and ranchers who cannot obtain
commercial credit from a bank can apply for either FSA direct loans
or guaranteed loans. Direct loans are made to applicants by FSA.
Guaranteed loans are made by lending institutions who arrange for
FSA to guarantee the loan. FSA can guarantee up to 95 percent of the
loss of principal and interest on a loan. The FSA guarantee allows
lenders to make agricultural credit available to producers who do
not meet the lender's normal underwriting criteria.
The direct and guaranteed loan program provides for two types of
loans: farm ownership loans and farm operating loans. In addition to
customary farm operating and ownership loans, FSA now offers
Microloans through the direct loan program. The focus of Microloans
is on the financing needs of small, beginning farmer, niche and
non-traditional farm operations. Microloans are available for both
ownership and operating finance needs. To learn more about
microloans, visit www.fsa.usda.gov/microloans.
To qualify as a beginning producer, the individual or entity must
meet the eligibility requirements outlined for direct or guaranteed
loans. Additionally, individuals and all entity members must have
operated a farm for less than 10 years. Applicants must materially
or substantially participate in the operation.
For more information on FSA’s farm loan programs and targeted
underserved and beginning farmer guidelines, visit
www.fsa.usda.gov/farmloans.
Farm Loan Program Guide and Compass
FSA offers online resources that can help producers understand our
programs.
The Your Guide to FSA Farm Loans guidebook simplifies information on
the types of farm loans available; how to apply for a guaranteed
loan, direct loan, or land contract guarantee; what you can expect
once you submit your application; and most importantly, your rights
and responsibilities as an FSA customer.
The Your FSA Farm Loan Compass guidebook simplifies information
regarding the responsibilities of FSA loan borrowers and the loan
servicing options available to them.
Spanish language versions of the Your Guide to FSA Farm Loans and
Your FSA Farm Loan Compass guidebooks are available as well.
Disaster Set-Aside (DSA) Program
FSA borrowers with farms located in designated primary or contiguous
disaster areas who are unable to make their scheduled FSA loan
payments should consider the Disaster Set-Aside (DSA) program.
DSA is available to producers who suffered losses as a result of a
natural disaster and is intended to relieve immediate and temporary
financial stress. FSA is authorized to consider setting aside the
portion of a payment/s needed for the operation to continue on a
viable scale.
Borrowers must have at least two years left on the term of their
loan in order to qualify.
Borrowers have eight months from the date of the disaster
designation to submit a complete application. The application must
include a written request for DSA signed by all parties liable for
the debt along with production records and financial history for the
operating year in which the disaster occurred. FSA may request
additional information from the borrower in order to determine
eligibility.
All farm loans must be current or less than 90 days past due at the
time the DSA application is complete. Borrowers may not set aside
more than one installment on each loan.
The amount set-aside, including interest accrued on the principal
portion of the set-aside, is due on or before the final due date of
the loan.
Farm Loan Graduation Reminder
FSA Direct Loans are considered a temporary source of credit that is
available to producers who do not meet normal underwriting criteria
for commercial banks.
FSA periodically conducts Direct Loan graduation reviews to
determine a borrower’s ability to graduate to commercial credit. If
the borrower’s financial condition has improved to a point where
they can refinance their debt with commercial credit, they will be
asked to obtain other financing and partially or fully pay off their
FSA debt.
By the end of a producer’s operating cycle, the Agency will send a
letter requesting a current balance sheet, actual financial
performance and a projected farm budget. The borrower has 30 days to
return the required financial documents. This information will be
used to evaluate the borrower’s potential for refinancing to
commercial credit.
If a borrower meets local underwriting criteria, FSA will send the
borrower’s name, loan type, balance sheet and projected cash flow to
commercial lenders. The borrower will be notified when loan
information is sent to local lenders.
If any lenders are interested in refinancing the borrower’s loan,
FSA will send the borrower a letter with a list of lenders that are
interested in refinancing the loan. The borrower must contact the
lenders and complete an application for commercial credit within 30
calendar days.
If a commercial lender rejects the borrower, the borrower must
obtain written evidence that specifies the reasons for rejection and
submit to their local FSA farm loan office.
If a borrower fails to provide the requested financial information
or to graduate, FSA will notify the borrower of noncompliance, FSA’s
intent to accelerate the loan, and appeal rights.
[USDA Farm Service Agency] |
