A new process making it easier for farmers to receive loan deficiency payments (LDPs) was recently announced by USDAâ€™s Farm Service Agency.
"In the past some producers have been unable to collect LDPs because they lost beneficial interest in the commodity before completing the required paperwork," says James Little. He is the administrator of FSA in Washington, D.C.
"However, now farmers will be able to fill out the new CCC-633 EZ form annually to express their intentions of receiving LDPs for eligible crops. This will help to ensure farmers receive benefits and meet all eligibility requirements for LDPs."
Previously, producers submitted a CCC-633 LDP or a CCC-709 Field Direct LDP form before losing beneficial interest in the harvested commodity to receive LDP benefits, explains Little.
You fill out the new form annually
Producers will now fill out the new CCC-633 EZ form each year to receive LDP benefits for eligible crops on all their farms and submit page 2 of the new form when the producer requests LDPs.
A producer must have beneficial interest in the commodity at the time the CCC-633 EZ is submitted. A producer retains beneficial interest in the commodity if all of the following remain with the producer: control of the commodity, risk of loss and title to the commodity.
Either at the time a producer first submits the CCC-633 EZ, or any time before the final loan availability date, the producer must request a payment for a specific quantity and provide acceptable production evidence. The LDP rate is based on the earlier of: date of request for payment or date of beneficial interest is lost.
Who is eligible for LDPs?
LDPs are obtained by producers who are eligible to obtain a marketing assistance loan but agree to forgo the loan. By filing a CCC-633 EZ, producers do not preclude themselves from obtaining marketing assistance loans on applicable crops. The LDP rate equals the amount by which the applicable loan rate where the commodity is stored exceeds the alternative loan repayment rate for the respective commodity.
In the past, some farmers inadvertently lost beneficial interest in their commodities before requesting LDPs making them ineligible to receive benefits.
The form will be effective for the 2005 and subsequent crop years. The CCC-633 EZ is available at www.fsa.usda.gov/dafp/psd.