FSA Announces Sequester-Based Changes to 2013 Crop Marketing Assistance Loans

By Jim.Robinson|October 1, 2013

USDA’s Farm Service Agency (FSA) has announced several adjustments to commodity loan programs due to automatic funding reductions known as sequester that are mandated by the Balanced Budget and Emergency Deficit Control Act of 1985 and amended by the Budget Control Act of 2011.

The programs, which provide interim financing for agricultural commodities to be stored after harvest and sold throughout the year when unaffected by harvest-season pressure on prices, are subject to sequester reductions of 5.1 percent.

Since commodity loan programs operate on a crop year basis and September 30 marks the end of the federal fiscal year, the following adjustments will occur for the 2013 crop year:

Loan-making for all commodities will be suspended on October 1 and are targeted to resume mid-October.
Loan repayment and loan servicing for all disbursed commodity loans will continue.
Beginning in mid-October, the 2013 crop loans and loan deficiency payments (LDPs), if applicable, will receive 5.1 percent reductions.
Re-pledged 2012 crop sugar loans are not subject to sequester.
2013 crop loan rates are not affected.

Commodity loans issued by FSA, marketing associations and loan servicing agents are all subject to these reductions.