Commodity Loans

If you have made the decision to store 2009 harvested grain, you need to very strongly consider the use of our nine month loan.  Loans allow you the option to maintain ownership of the grain in hopes of better marketing opportunities while offering you very low cost operating capital.  The December interest rate is 1.375%.
 

Warren County 2009 loan rates are $1.97 for corn and $5.09 for soybeans.  Loans mature at the end of the ninth month following the month of disbursement.  Loans may be repaid at anytime during the life of the loan.  Any bushel increment of a farm stored loan may be repaid, while a full warehouse receipt must be repaid.  Many of you have multiple receipts on a warehouse loan, so you have the option of making multiple repayments through the loan period. 

Lien searches and lien waivers are required prior to loan disbursement.  All cash rent landlords and lenders with crop liens will need to sign a lien waiver.  (Take your 2010 DCP contracts and cash rent lien waivers at the same time to save yourself a trip).  

 

Farm Storage Loan Program

FSA continues to have funding available for loans on farm storage facilities.  Eligible structures include grain bins, dryers, permanently affixed handling systems, concrete foundations, electrical, and any safety equipment.  These loans cover up to 85% of the eligible cost.

Loans approved for up to $100,000 have a 7 year repayment period and a 3.0% December interest rate.  Loans from $100,000 to $250,000 have a 10 year repayment and a 3.5% interest rate.  Loans from $250,000 to $500,000 have a 12 year repayment and a 3.75% interest.

A $100 loan fee, current financial statement, 2010 cash flow statement, and bin estimate gets an application started.  The loan must be approved prior to any delivery or payment for materials, so please time your application accordingly.

 

2010 Grants for Energy Efficient Grain Dryers

The Rural Energy for America Program provides grants and guaranteed loans for agricultural producers and rural small businesses to purchase and install renewable energy systems and make energy efficiency improvements.  The grants can be up to 25% of total eligible project costs, limited to $500,000 for renewable energy systems and $250,000 for energy efficiency improvements.  These grants can be combined with guaranteed loans for up to 50% of total eligible project costs.   Please contact Molly Hammond at the Illinois Rural Development State Office for more information:  (217) 403-6210  http://www.rurdev.usda.gov/rbs/farmbill/index.html  Illinois RD State Office:  http://www.rurdev.usda.gov/il/.

  

 

 

Radio ShowFor many years the Warren County FSA Office has had a weekly radio feature.  The features air on WRAM AM 1330 every Wednesday morning at 7:00 am.  FSA programs and updates are discussed.  The good people at WRAM radio have and continue to be very strong supporters of Warren County agriculture and in particular our local FSA office.  Listen in on Wednesday mornings!

 

COC Election

 Congratulations to Bill Kramer of Avon!  Bill was recently elected to serve LAA#3 on the Warren County FSA Committee.  Bill joins current Committee members Merrill Martin and Sarah Allaman.

 

 

2010 Annual Notice to Producers

Producers are reminded that no program benefits may be provided until all the necessary payment limitation and payment eligibility determinations have been made.  Producers will remain ineligible until all required forms for the specific farming operation are provided to the county office.  All required forms must be provided to the county office before current year program payments are issued.

Determinations are based on the facts as submitted by the producer.  Program determinations shall remain in effect for the current and subsequent years and a new farm operating plan will not be required unless a change occurs in your farming operation that would affect these determinations.  As a program participant, you are responsible for promptly notifying the County Farm Service Agency (FSA) office of any change that would affect an “actively engaged in farming”, cash rent tenant or foreign person determination.  Any unrevealed circumstances could require the application of a more restrictive rule.

The payment limitation and payment eligibility determinations may be initiated by the County Committee or initiated by the producer.  If requested by the producer, the request may be filed anytime before the final date for submitting CCC-902's, Farm Operating Plan for Payment Eligibility Review.

Any entity earning program benefits, except churches, or charitable, or non-profit organizations, must provide to the County Committee the names, addresses and ID numbers of the members of the entity.

Individuals and entities must be "actively engaged in farming" with respect to a farming operation in order to be eligible for specified payments and benefits.  To be "actively engaged in farming", the individual or entity must make significant contributions to the farming operation of: (1) capital, equipment, land, or a combination; and (2) personal labor or active personal management, or a combination.  For a legal entity, the interest holders must collectively make contributions of active personal labor and/or active personal management to the farming operation on a regular basis that are identifiable and documentable tasks, and are separate and distinct from that of any other interest holder.  Interest holders shall keep a record of activities related to the farming operation that are completed.  This record shall include the date the activity was conducted and the amount of time expended.

A person or legal entity that is a landowner, including landowners with an undivided interest in land, making a significant contribution of owned land to the farming operation, will be considered actively engaged in farming with respect to such owned land.  Producers who are determined as "NOT ACTIVELY ENGAGED IN FARMING" will be ineligible for direct and counter cyclical program payments, ACRE payments, and any payment or benefit requiring a determination of "actively engaged in farming."

Husband and wife rules changed for 2009 and subsequent years.  The change makes it easier for a spouse to satisfy the “actively engaged” program requirement.  Therefore, husbands and wives are encouraged to include both spouses on all eligibility and program documents.  If one spouse, or an estate of a deceased spouse, is determined to be actively engaged in farming, the other spouse is considered to have made a significant contribution of active personal labor and/or active personal management to the same farming operation.

Individuals and entities who rent land are subject to the Cash Rent Tenant Rule.  The Cash Rent Tenant Rule is applied to any rented land that is operated using a custom farming arrangement or cash rented land that is subleased to another operator.  To be actively engaged in farming under the Cash Rent Tenant Rule, the participant is required to provide a significant contribution of active personal labor, or a significant contribution of equipment, plus active personal management.

The rules for substantive change are more restrictive than in the past.  Any change in a farming operation that results in the increase in the number of persons or legal entities for payment limitation purposes must be bona fide and substantive.  Complete documentation of transactions to meet substantive change will be required to be submitted to FSA.

Transactions by sale or gift of land or equipment must be at arms length and fully documented.  Failure to meet substantive change will now result in a denial of the additional payment eligibility rather than the one year delay that was effective in years past.

Any person who is not a citizen of the United States or a lawful alien will be ineligible to receive payments, loans, and benefits on farms owned or operated by such person unless that person is providing land, capital, and a substantial amount of active personal labor to such farm.  For corporations and other legal entities, if more than 10 percent of the beneficial ownership of the entity is held by persons who are not citizens or lawful aliens, a reduction of payment will be made for each individual’s share if the member fails to provide a substantial contribution of active personal labor.

The certification of Average Adjusted Gross Income (AGI) on a CCC-926, or a certification by a CPA or attorney, is required annually by all participants.  Spot check procedure requires that all AGI certifications be verified by FSA once every three years.  When selected for the AGI spot check, participants will be required to provide copies of the income tax records, or a certification by a CPA or attorney, for the period of time covered by the CCC-926.

For commodity, price support, and disaster programs, the AGI limitation was reduced to a three-year average adjusted non-farm income of $500,000, such that a person or entity shall not be eligible for these programs if the non-farm AGI exceeds $500,000.  Also, under the new regulation, an individual or entity must have a 3-year average adjusted farm income less than or equal to $750,000, in order to qualify for direct payments issued under the Direct and Counter-Cyclical Program (DCP).  To be eligible for conservation programs, the average adjusted non-farm income limitation is $1 million with allowances for certain exceptions.

The definition of income derived from farming, ranching and forestry operations was expanded to also include, the packing, storing and transporting of agricultural commodities; production of livestock products; farm-based production of renewable energy; sale of land that has been used for agriculture, and in some instances, the sale of equipment to conduct farm, ranch, or forestry operations, and/or providing production inputs to farmers, ranchers and foresters.

Each payment made to a legal entity shall be attributed to those persons who have a direct or indirect ownership interest in the legal entity.  Each payment made directly to a person shall be combined with the pro rata interest of the person in payments received by a legal entity.  This change replaces the rule that only allowed three permitted entities to be paid.  The date for determining the ownership interest in an entity will be June 1.

Payment limitation rules affect several programs administered by FSA.  The payment limitation for DCP is $40,000 for direct payments and $65,000 for counter cyclical payments. Participation in the Average Crop Revenue Election (ACRE) will reduce the direct payment by 20%.  For ACRE only, the amount reduced from the direct payment will be added to the counter cyclical payment.  The Supplemental Agriculture Disaster Assistance program (SURE), the Livestock Indemnity Program (LIP), the Livestock Forage Disaster Program (LFP) and the Emergency Assistance for Livestock, Honey Bees and Farm Raised Fish Program (ELAP) have a combined $100,000 limit.   Market gains and Loan Deficiency Payments (LDP) are unlimited; Conservation Reserve Program (CRP) is $50,000; Environmental Quality Improvement Program (EQIP) is $300,000; and Noninsured Assistance Program (NAP) is $100,000.   The Tree Assistance Program (TAP) now has a $100,000 limit.  Please contact the county office for further information concerning the filing deadlines for each program.

Producers are further reminded that all CCC-902's, Farm Operating Plan for Payment Eligibility Review, are subject to spot check through the end-of-year review process.  If selected for spot check, producers may be required to provide sufficient evidence of identified and documented tasks for verification of active personal labor and/or management, such as, scale tickets, settlement sheets, seed, fertilizer, or other receipts, so the County Committee can make a determination that the farming operation is actually being performed as stated on the applicable

CCC-902, and if applicable, CCC-901 forms.