FSA Programs for Beginning Producers

Lacy Roberts, FSA Farm Loan Manager

I’m a new producer – now what?• Visit your local office• Things to bring

• Copies of leases

• Forms to fill out with FSA to get started• 902 - Farm Operating Plan• AD-1026 – Highly Erodible Land and Wetland Certification• CCC-941 – AGI certification• May need recon form to create your own “Farm” • Power of Attorney for signature authority - optional

Now I’m a “farmer”• FSA establishes your Farm• You receive a Farm number(s) and maps• Certification Deadline

• Grass and Fall Seeded Crops – November 15• Ex: Winter Wheat for Hay or Grain

• NAP Honey – January 2 (or 30 calendar days after placement of hives)• Established Stand Alfalfa Seed, Fall Alfalfa Seed, and Cherries – January 15• Spring Seeded Crops – July 15

Each field needs coded:

Grain Coding:

Other items to add on each field:• Shares on each field if not 100% to you• Any cover crops• Prevented planting• Irrigated/Non-Irrigated fields• Final Seeding date

FSA Programs to consider• Livestock Forage Disaster Program (LFP)• Livestock Indemnity Program (LIP)• Emergency Assistance for Livestock, Honeybees and Farm-Raised Fish

Program (ELAP)• Noninsured Crop Disaster Assistance Program (NAP)• Farm Storage Facility Loan (FSFL)• Conservation Reserve Program (CRP)• Agriculture Risk Coverage (ARC) & Price Loss Coverage (PLC)• Farm Loans• And more….

Livestock Forage Disaster Program• For grazing losses on dryland pasture due to qualifying drought• Loss of grazing on federally managed lands due to qualifying fire• Eligible livestock: alpacas, beef cattle buffalo, beefalo, dairy cattle,

deer, elk, emus, equine, goats, llamas, poultry, reindeer, sheep or swine

• Must be owned, purchased or under contract to purchase at least 60 days prior to beginning of drought

• Livestock sold due to qualifying disaster may be eligible• Have to be for commercial use (not recreation or pleasure)

Livestock Forage Disaster Program• Based on U.S. Drought Monitor during county’s grazing period

• D2 (severe drought) – 8 consecutive weeks – One monthly payment• D3 (extreme drought) – Any amount of time – Three monthly payments• D3 (extreme drought) – At least 4 weeks – Four monthly payments• D4 (exceptional drought) – Any amount of time – Four monthly payments• D4 (exceptional drought) – At least 4 weeks – Five monthly payments

Livestock Forage Disaster Program• Payments = (Lessor of)

• # of head x LFP monthly payment rate per head x # of monthly payments x 60%

• Normal carrying capacity of grazing land x LFP monthly value of forage x # of monthly payments x 60%

• Limit of five monthly payments for the same eligible livestock• Example for 2016:

• 100 cows x $32.36 (payment rate per head) x 4 monthly payments x 60% = $7,766

• (2,000 acres/ 30 Acres per AU = 67 max AUs) x $32.36 (monthly value of forage) x 4 monthly payments x 60% = $5203

• LFP payments are subject to sequestration

Livestock Forage Disaster Program• Need proof of number of livestock on hand at beginning of disaster• $125,000 limit between LFP, LIP and ELAP• Submit LFP application within 30 days of end of calendar year when

grazing loss occurred – Jan. 31, 2017 for 2016

Livestock Indemnity Program (LIP)• Deadline: Notice of Loss must be filed within 30 days of loss• Helps cover losses due to weather related event• Payment rates for 2016:

• Adult Bull - $1,987.89/hd• Adult Cow - $1,529.15• Less than 400 lbs. - $757.79• 400-799 lbs. - $819.65• 800 lbs. Nonadult - $1120.38

Eligible Weather Events• Hurricanes• Floods• Blizzards• Disease• Wildfires• Extreme heat• Extreme cold

Must have died:• As a direct result of an eligible weather event or animal attack• No later than 60 days after event or attack

• Ex: frostbit hooves & lungs• Has to be directly attributed to

• In calendar year requesting payment

Extreme Cold - MT• Extreme cold requirements for beef losses:

• Less than 400 lbs. (-20 wind chill)• 400 to 800 lbs. (-20 wind chill)• 800 lbs. + (-40 wind chill)• Adult cow (-40 wind chill)• Adult bull (-40 wind chill)

Proof of Death for 2015 & beyond• Must provide verifiable documentation

• Must show directly related to event or attack• Verifiable evidence may include or combination of:

• Rendering receipts• Vet records• Tax records• Insurance documents• Written contracts• Bank or loan documents• Purchase records• Production records• Property tax records

Producer Records• If there is no verifiable proof of death records documentation

including for normal mortality, they can provide reliable records along with beginning and ending inventory records as proof of death.

• Reliable records:• Contemporaneous producer records existing at time of event• Pictures with date• Brand inspection records• Herd improvement records• Other similar reliable documents.

Proof and Reasonableness of Livestock Inventory• Verifiable documents for inventories:

• Vet records• Canceled check documents• Balance sheets• Inventory records for tax purposes• Loan records• Bank statements• Property tax records• Brand inspection records• Sales and purchase receipts• Private insurance documents• Chattel inspections

Losses due to predators• Losses due to reintroduced predators

• Wolves and avian predators.

• Must be confirmed kills by:• APHIS.• DNRC• Other sources as determined by Deputy Administrator.

• Not eligible if already compensated under another program

ELAP – Emergency Assistance for Livestock, Honeybees and Farm-Raised Fish Program• Eligible livestock losses (not covered under LFP or LIP) due to eligible adverse

weather or loss conditions may include:• Grazing losses during the normal grazing period (not drought)• Purchased and mechanically harvested forage and feed stuffs damaged or destroyed• Additional cost of purchasing livestock feed above normal quantities

• Eligible loss conditions may include:• Hail• Wildfires on private land• Floods, etc.

• Report losses the earlier of 30 calendar days of when the loss is apparent or November 1 after the end of the program year in which the loss occurred.

• Application for Payment Deadline is November 1 after the end of the program year in which the loss occurred

Nov. 1, 2017 for FY2017 Nov. 1, 2016 for FY2016 - passed

NAP Noninsured Crop Disaster Assistance Program• Covers crops for which crop insurance is not available

• Ex: Grass Hay, grazing, annual crops intended for harvest as forage, etc.

• Deadlines: • Sept. 30 for Annual Fall Seeded crops, perennial forage and grazing, mixed

forage crops, rye, speltz, triticale, wheat and garlic • December 1st for honey• March 15th for all other crops

• Service fees waived and premiums reduced by 50% for Beginning Farmers and Ranchers, Traditionally Underserved and Limited Resource producers

NAP Noninsured Crop Disaster Assistance Program

• To participate producers must: • file an application for coverage by the applicable sales

closing date for the crop• certify acreage timely• report losses within 15 calendar days of disaster

occurrence or date of loss or damage to the crop first becomes apparent

• report crop production the later of the subsequent year acreage reporting date or 60 calendar days after the normal harvest date

NAP Noninsured Crop Disaster Assistance Program

• Coverage levels available under NAP:

• Catastrophic level (CAT) coverage based on the amount of loss that exceeds 50% of the expected production at 55% of the average market price for the crop.

• Buy-up coverage (excludes grazing)

FSFLs - Farm Storage Facility Loan Program

• Can be used to store hay, grains, pulses, honey and much more• Maximum loan - $500,000• Loan terms – 7, 10, or 12 years• Very low interest rates

Conservation Reserve Program• New – Grassland CRP• 14 – 15 year contracts• Limits future use of the land while continuing grazing and haying• Ranked based on relative benefits for land offered:

• Expiring CRP or GRP• Existing grassland• Multi-species cover and native species presence• Livestock grazing operation• State Focus area• Beginning producer, Veteran or Traditionally Underserved producer

• Payments are less than 75% of the grazing value of the land

ARC/PLC• Requires base acres• Farm must be enrolled in ARC or PLC – Enrollment must be completed

annually• ARC-CO triggers payments in years where the crop revenue in the

county falls below the established guaranteed revenue. • ARC-IC triggers payments in years where the individual’s crop revenue

for their farming operation falls below their established guaranteed revenue.

• PLC triggers payments when the National MYA price falls below the statutory reference price.

Farm Loan Assistance Available• Operating Loans

• Youth• Operating & Term• Microloans

• Farm Ownership• Down Payment• Regular

• Emergency Loan• Guarantee Loans

• Operating• Farm Ownership

General Eligibility• Denied commercial credit• Acceptable credit history• No prior debt forgiveness• No delinquent federal debt or judgments• Have sufficient experience• Family farm sized operation• Must be owner-operator after loan closing

Youth Loans

• $5,000• Up to seven years• Ag Related Project• 2.625% Interest Rate• 10-20 years old• Member of 4-H or FFA• Need Project Advisor

Operating Loans• Annual Operating Expenses• Repay in less than 18 months• 2.125% Interest Rate

Term Operating Loans• Purchase:

• Livestock• Machinery, equipment

• Refinance farm debt• Term – 1 to 7 years• Interest Rate – 2.125%• Limit - $300,000

Microloans• Less Paperwork!• Purchase:

• Livestock• Machinery, Equipment• Real Estate

• Operating needs• Term – 1 to 7 yrs.• Interest Rate – 2.125%• Limit - $50,000

Down Payment Farm Ownership Program

• Purchase real estate and improvements• (Including trust land)

• Beginning Farmer or Traditionally Underserved• Applicant – 5% Down Payment• FSA – 45% or up to $300,000

• Term – 20 years• Interest – 1.5% Fixed

• Other lender – 50% or balance• Term – 30 years

Beginning Farmer Eligibility• Operated less than 10 years but more than three years• Does not own a farm larger than 30% of the median sized farm in

county• Substantially participates in the operation

Joint Financing• FSA

• Up to 50% of purchase price• 2.5% interest• Up to 40 year term

• Commercial financing• At least 50% of purchase price• Can be Seller Financing

• No down payment requirements• Purchase – land, improvements

Farm Ownership• Purchase Real Estate and Improvements• Term – Up to 40 years• Interest Rate – 3.125%• Limit - $300,000• Joint Financing Possible

Fractionated Land• New program rolling out now• Will be done thru intermediary lenders

• Native American Community Development Corporation (NACDC) in Browning was approved as the first and only lender so far!!

• Revolving loan fund• Need to be able to own at least 51% of the land to be purchased• Land must be used for agriculture purposes

Emergency Loans• Loan Uses

• Restore or replace destroyed property• Pay all or part of production costs associated with disaster year• Pay family living• Reorganize operation• Refinance debts

Emergency Loans Cont’d• EM specific Loan Eligibility

• Need Secretarial or Presidential Designation• Suffered at least a 30% loss OR• Substantial loss to livestock, livestock products, real estate or chattel property• Need three commercial denial letters

• Loan Limit • 100% of actual production or physical loss OR• $500,000 maximum

Emergency Loans Cont’d• Terms

• Up to seven years for non-real estate losses• Up to 40 years for real estate losses

• Interest Rate – 3.125% Fixed – Chattel• 3.125% - Real Estate

Transfer & Assumptions• Can assume loans from a current borrower

• At new rates and terms OR• Existing rates and terms

• Works good if funding is short

Guarantee Loans• Apply to your lender and they apply to FSA for up to a 95% guarantee• Can provide guaranteed:

• Line of Credits• Term Operating• Farm Ownership

Things to consider• October 1 – Beginning of Fiscal Year• Applications are funded according to date of application• Visit with your lender to consider all options – Establish long term

relation• Think long term

• Management History• Credit History• Record Keeping

More Information:Glacier County

Farm Service AgencyOne 3rd St. NE

Cut Bank, MT 59427406-873-5618

www.usda.govUSDA IS AN EQUAL OPPORTUNITY EMPLOYER, PROVIDER AND LENDER