The United States Department of Agriculture’s (USDA) Farm Service Agency (FSA) has initiated a distress loan program in Daniels County, the fifth county approved for the program this year, Montana FSA State Director Bruce Nelson announced today.
A distress loan program can only be initiated when there is a shortage of storage at harvest time and when a commodity is being stored on the ground or in temporary facilities. Last month, the distress loan program was initiated in Big Horn, Fergus, Petroleum and Sheridan counties.
“The Montana State FSA Office reviewed a request from Daniels County and found evidence to initiate the distress loan program,” Nelson said. “Daniels County producers who are interested in distress loans must make a request and sign the loan within 30 days of the completion of harvest of the commodity.”
Under the distress loan program, a producer can receive a loan on up to 75 percent of the quantity of a commodity that would be eligible for a marketing assistance loan. Distress loans mature no later than 90 days after disbursement. Producers must store the commodity so that it is protected from animals and in a location where water drainage will not seriously affect the quality or quantity of the commodity.
Under the distress loan program, a producer can receive a loan on up to 75 percent of the quantity of a commodity that would be eligible for a marketing assistance loan. Distress loans mature no later than 90 days after disbursement. Producers must store the commodity so that it is protected from animals and in a location where water drainage will not seriously affect the quality or quantity of the commodity.
If the commodity is later moved into eligible farm or warehouse storage, the commodity can be re-pledged to secure a marketing assistance loan. If re-pledged, the producer must either repay the distress loan with cash at principal plus interest or authorize an offset from the marketing assistance loan for the amount needed to repay the distress loan. The maturity date for the marketing assistance loan on the re-pledged commodity will be the last day of the 9th calendar month following the original distress loan disbursement date. If the producer does not re-pledge the commodity, the distress loan must be repaid by cash at principal upon maturity.
Source: USDA FSA
Posted by Haylie Shipp
