FAQ: Who is eligible to apply for USDA Emergency Loans? How does FSA determine if your drought loss is bad enough to qualify these low interest rate loans?
Answer: USDA recently designated 62 additional counties in Iowa as part of a Secretarial Natural Disaster Designation. That means farm operators who have suffered major production and/or physical losses caused by drought beginning August 7, 2012 and continuing may be eligible for low-interest emergency loans from USDA's Farm Service Agency.
This designation makes the remaining producers in Iowa eligible for these loans, says John Whitaker, state executive director for FSA in Iowa.
The USDA Secretarial Natural Disaster Designation determination of August 15, 2012 lists 35 Iowa counties as primary disaster areas:
* These primary counties are: Adair, Adams, Audubon, Buena Vista, Calhoun, Carroll, Cass, Cerro Gordo, Cherokee, Clay, Crawford, Dallas, Floyd, Franklin, Fremont, Greene, Guthrie, Hancock, Harrison, Humboldt, Ida, Louisa, Mills, Monona, Montgomery, O'Brien, Osceola, Page, Pocahontas, Pottawattamie, Sac, Shelby, Washington, Webster and Wright.
Thirty-two Iowa counties are contiguous to this designated disaster area, making these producers also potentially eligible for the program based on this designation.
* The contiguous counties are: Boone, Bremer, Butler, Chickasaw, Des Moines, Dickinson, Emmet, Grundy, Hamilton, Hardin, Henry, Howard, Iowa, Jefferson, Johnson, Keokuk, Kossuth, Lyon, Madison, Mitchell, Muscatine, Palo Alto, Plymouth, Polk, Ringgold, Sioux, Taylor, Union, Warren, Winnebago, Woodbury, and Worth.
This designation makes remaining producers in Iowa eligible for these loans
"With this designation, all producers who have suffered a loss due to a natural disaster are eligible to apply for an FSA Emergency Loan," says Whitaker. "With the various designations that have been issued recently, producers should contact their local FSA office to determine the application deadline that applies to them."
FSA may make emergency loans to eligible family farmers which will enable them to return to their normal operations if they sustained qualifying losses resulting from natural disaster. Whitaker explains there are two kinds of FSA emergency loans:
* Physical loss loans may be made to eligible farmers to enable them to repair or replace damaged or destroyed physical property, including livestock losses, essential to the success of the farming operation. Examples of property commonly affected include; essential farm buildings, fixtures to real estate, equipment, livestock, perennial crops, fruit and nut bearing trees, and harvested or stored crops.
* For production loss loans the disaster yield must be at least 30% below the normal production yield of the crop, on a crop or crops that make up a basic part of the total farming operation.
The applicant must be unable to obtain credit from other usual sources to qualify for the FSA Farm Loan Program assistance. The interest rate for emergency loans is 2.25% currently. Each applicant applying for credit will be given equal consideration without regard to race, creed, color, marital status, or national origin.
The repayment for most disaster loans are based on the useful life of the security, the applicant's repayment ability and the type of loss. If the loan is secured only on crops, it must be repaid when the next crop year's income is received. Loans to replace fixtures to real estate may be scheduled for repayment for up to 40 years.
The final date for making application under this designation is April 15, 2013. Interested farmers may contact their local county FSA office for further information on eligibility requirements and application procedures for these and other programs. For a list of disaster designations for Iowa go to www.fsa.usda.gov/ia.