As noted a few weeks ago, I’m currently doing a blog series on government agencies affecting our nation’s food and agriculture system. I think it’s a helpful exercise to know who the players are and what each agency is does.
Cows from the Rincker Ranch in Shelbyville, Illinois
The Farm Service Agency (“FSA”) reports to the Under Secretary of the Farm and Foreign Agricultural Services (“FFAS”) of the U.S. Department of Agriculture (“USDA”). FSA oversees several agriculture programs including credit and loan programs, conservation programs, and disaster and farm marketing programs. State and county field offices distribute FSA programs to agriculture producers at the local level. In New York, the FSA state office is located in Syracuse. A map of New York State Farm Loan Teams can be found here .
The heart and soul of the FSA is the management of farm loan programs. FSA is the lendor of last resort for many farms – to be eligible for a federal farm loan, a farmer must be unable to secure private lending to purchase, sustain or expand the family farm. FSA loans are temporary in nature and its goal is to help the farm graduate to private commercial lending. It offers different main types of loan programs including:
1. Guaranteed Loan Program –FSA approves all eligible loans. The loans are serviced by commercial lenders, such as the Farm Credit System, and guaranteed by the FSA up to 95% of the lender’s loan again.
2. Direct Loan Program—Direct loans are serviced by FSA using government monies. FSA is charged with the responsibility of providing credit counseling and supervision to its borrowers by evaluating the adequacy of the farmer’s real estate, machinery, equipment, management and production goals.
3. Land Contract Guarantee Program – FSA provides land contract guarantees to the owner of a farm or ranch who wishes to sell his/her property to a beginning farmer or socially disadvantaged farmer (e.g., race or sex). In this case, the seller can request either a Prompt Payment Guarantee (up to the amount of three amortized annual installments plus cost of real estate taxes and insurance) or Standard Guarantee (90% of the outstanding principal balance on a land contract with a private loan servicing agent).
Within these programs, FSA offers different types of loans including (1) farm ownership loans, (2) operating loans, (3) emergency loans, and (4) conservation loans.
To expand, FSA also oversees several conservation programs including:
- Conservation Reserve Program (“CRP”),
- Conservation Reserve Enhancement Program (“CREP”),
- Emergency Conservation Program (“ECP”),
- Farmable Wetlands Program (“FWP”),
- Grassland Reserve Program (“GRP”), and
- Source Water Protection Program.
CRP land is the most recognized program managed by FSA- this is where farmers voluntarily “rest” their farmland between 10 to 15 years to control soil erosion, develop wildlife, and other environmental benefits. FSA is also the agency charged with the responsibility to manage farm payments including the Direct and Counter-Cyclical Program (“DCP”) and Average Crop Revenue Election (“ACRE”) payments.
Furthermore, FSA manages a myriad of disaster assistance loan programs including:
1. Emergency Loan Program (from physical losses due to drought, flooding and other natural disasters);
2. Disaster Set-Aside Program (to help producers with existing loans with FSA who are unable to make scheduled payments due to a disaster);
3. Emergency Conservation Program (“ECP”) (when a farmers and was damaged by a natural disaster and he/she needs to implement conservation practices);
4. Noninsured Disaster Assistance Program (“NAP”) (to help farmers with crop losses when federal crop insurance is not available);
5. Supplemental Revenue Assistance Payments (“SURE”) (to assist producers who suffered crop losses within counties declared a disaster by the USDA);
6. Tree Assistance Program (“TAP”) (providing payments to orchardists and nursery tree farms for qualified tree losses from a natural disaster within counties declared a disaster by the USDA);
7. Emergency Forest Restoration Program (“EFRP”) (giving payments to nonindustrial private forest (“NIPF”) owners to carry out emergency measures to restore land damaged by a natural disaster);
8. Livestock Forage Disaster Assistance Program (“LFP”) (providing monies to livestock producers who suffered grazing losses due to drought on private lands or fire on federally grazed lands (e.g., Forest Service grazing permit);
9. Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish Program (“ELAP”) (providing payments for grazing and feed losses due to blizzards and wildfires);
10. Livestock Indemnity Program (“LIP”) (giving monies to livestock farmers for animal death losses in excess of normal mortality due to adverse weather conditions);
11. Haying and Grazing of Conservation Reserve Program (“CRP”) (allowing qualified livestock producers to hay or graze CRP land during an emergency); and,
12. Emergency Assistance for Livestock, Honeybees and Farm-Raised Fish Program (“ELAP”) (providing monies for death or feed losses of honey bees and farm-raised fish in counties declared a disaster by the USDA).
Come back next week for an overview of the Foreign Agriculture Service (“FAS”).