USDA Update

By Rod Johnson

September 1, 2004 is the deadline for producers to request NAP (Noninsured Crop Disaster Assistance Program) coverage for uninsurable winter wheat, winter barley, fall canola, winter triticale, and winter rye. Coverage for grass and alfalfa must be requested no later than December 1, 2004. The cost of NAP coverage is $100 per crop with a maximum of $300 per county and a maximum of $900 for producers with multiple counties. If you had NAP coverage in 2004 and want the exact same coverage in 2005, you only need to send in the appropriate amount of payment. If you want to change your coverage to different crops, you will need to sign a new application. Most other crops in Kiowa County have a deadline for requesting coverage of March 15, 2005.

The U.S. Department of Agriculture (USDA) Farm Service Agency (FSA) has a portion of its farm loan program funds specifically allocated for socially disadvantaged applicant (SDA) including minority and women producers announced Lewis Frank, State Executive Director for Colorado FSA.

By FSA definition, an applicant is considered socially disadvantaged if they are a member of a group whose members have been subjected to racial, ethnic, or gender prejudice because of their identity as a member of a group, without regard to their individual qualities. For entities including partnerships, cooperatives, trusts, limited liability corporations (LLC), corporations and joint operations, the majority interest in the entity must be held by socially disadvantaged individuals. FSA has identified socially disadvantaged individual groups as Women, Blacks, American Indians, Alaskan Natives, Hispanics, Asians, and Pacific Islanders.

FSA offers both direct and guaranteed farm loans. Farm loan funds can be used to purchase farms, livestock and equipment. They may also be used to operate the farm, build or repair farm service buildings, pay for soil and water conservation practices, and in some cases refinance debts.

For direct loans made by FSA to purchase a farm the terms may extend to 40 years with a current interest rate of 6.00 %. In some cases applicants may qualify for an interest rate as low as 5.00%. In addition, if an applicant is able to obtain financing from a private lender equal to 50 percent or more of the total funds needed to jointly finance the purchase of the farm, the interest rate on the FSA direct loan would be fixed at 5.00%.

"Applicants for direct real estate loans need to be aware that funding for this program is limited and may require them to wait for a period of time before funds are available and applications approved," said Frank.

Direct operating loans may be made for one to seven years with a current interest rate of 4.5% which is subject to change. If FSA’s regular interest rate increases to more than 5.00% these loans could be made at the limited resource rate as low as 5.00% depending on the farm operation's cash flow. FSA guaranteed loans are made by banks or other lenders and are guaranteed by FSA for up to 90 percent of any loss. The guaranteed loan program includes both operating and real estate loan programs.

SDA loan applicants do not receive automatic approval. Individuals must be U.S citizens with a satisfactory history of meeting credit obligations, have sufficient education, training or experience managing or operating a farm, possess legal capacity to incur debt, and be unable to obtain credit through traditional lending means.

"Qualified loan candidates are provided information and assistance to develop sound management practices, analyze problems and utilize available resources essential for successful farming in the ever-changing agricultural environment," said Frank.

For additional information concerning FSA’s farm loan programs, in Kiowa County, contact: Linda Dukes, Farm Loan Manager, at 336-3437 in Lamar.

The interest rate for commodity loans disbursed in August is 3.125 percent per annum. The interest rate for farm stored facility loans approved in August is 4.125 percent per annum.