Commodity Certificate Option Worth Investigating

Local FSA offices can provide details. Tom J. Bechman

Published on: Oct 25, 2004

Just because you're bumping up against payment limitations through the loan deficiency program (LDP), doesn't mean you're out of options. There are still ways to avoid selling your crop below the government loan rate without the opportunity to recoup at least the difference.

Don Hunton, Indiana Farm Service Agency (FSA), reminds farmers that there is a $75,000 payment limitation. That's a limit per entity, as defined by FSA rules.

However, Congress provided another alternative some time ago. Once you've exhausted your limit using LDP, you can utilize commodity certificates instead.

While the rules are somewhat complicated, local FSA office staff can explain the procedure, and help you determine if this certificate option will help you market as effectively as possible.

While the certificate route helps you, especially if you're bumping up against the payment limitation, it also helps the government. The program was set up, Hunton says, because otherwise, if the market went south, the government could end up owning a lot of grain. The last thing the government wants is to be forced to actually take physical control of corn and soybeans.

Watch for updates on eLDP and commodity certificates in upcoming issues of the new-look Indiana Prairie Farmer. Marketing editor John Otte is chronicling how well eLDP is performing, and analyzing how soon this new technology make become the norn. In addition, he will report the nuts and bolts needed to make the certificate program work for you.