Ag Policy Blog
Chris Clayton DTN Ag Policy Editor

Saturday 10/19/13

Senators Question USDA Cut on Marketing Loans

A bi-partisan group of 15 senators from southern states want to know why USDA applied sequestration reductions to Marketing Assistance Loans.

USDA sent out a notice Sept. 30 stating that marketing loans would be reduced by 5.1% and loans would be delayed while software is updated.

Fourteen of the senators stated in a letter to Agriculture Secretary Tom Vilsack that cutting the loan would hurt farmers and businesses by "substantially reducing cash flow during harvest which make require some to secure unanticipated loans from other, more costly credit sources." Further, there would be income losses for growers who have forward contracted their crops using an option-to-purchase contract. Also, the changes in loans could alter the terms of future contracts.

In a news release, Sen. Thad Cochran, R-Miss., ranking member of the Senate Agriculture Committee, stated the decision by USDA could result in price reductions for peanut and cotton yields.

The senators also questions why the decision was made so late without any early warning. USDA effectively announced the cut in loans one day before it went into effect. The senators questioned the lack of transparency. "Most notable is the fact that the news release did not specify whether loan redemptions would also be impacted by sequestration. This will have a direct bearing on how growers, marketing cooperatives, private merchandizing firms, and agribusinesses adjust their current and future marketing strategy."

The senators had several questions, including asking, why was sequestration applied only to new loans after Oct. 1? Why wasn't the announcement made earlier? Why weren't software changes done earlier to avoid delays in loan processing? Did USDA consider the impact on farmers and agribusinesses?

Cochran and Sen. Saxby Chambliss, R-Ga., ranking member on the Agriculture Subcommittee on Commodities, Markets, Trade and Risk Management took the lead on the letter. Also signing were John Boozman, R-Ark., Richard Burr, R-N.C., John Cornyn , R-Texas, Lindsey Graham, R-S.C., Kay Hagan, D-N.C.), James Inhofe , R-Okla., Johnny Isakson, R-Ga., Mary Landrieu, D-La., Mark Pryor, D-Ark., Richard Shelby, R-Ala., David Vitter, R-La., and Roger Wicker, R-Miss.

Sen. Jeff Sessions, R-Ala., wrote his own letter to Vilsack raising similar questions.

USDA's Sept. 30 news release on marketing loans:…

Follow me on Twitter @ChrisClaytonDTN

Posted at 1:44PM CDT 10/19/13 by Chris Clayton
Post a Blog Comment:
Your Comment:
DTN reserves the right to delete comments posted to any of our blogs and forums, for reasons including profanity, libel, irrelevant personal attacks and advertisements.
Blog Home Pages
November  2015
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30               
Subscribe to Ag Policy Blog RSS
Recent Blog Posts
  • FAA Task Force Releases Recommendations on UAS Registration
  • Groups Ask Senate Leaders to Defend Crop Insurance
  • FDA Approves Genetically Engineered Salmon as Groups Quickly Move to Sue
  • Groups Push for Greater Biotech Oversight
  • Sweetening up the National Discourse by Fighting Over Sugar
  • Tax Committees Signal Agreement on Some Tax Extenders
  • Plans to Cut Crop Insurance Got You Down? Let's Talk
  • House Rejects Heavier Semi-Trailer Weights on Interstates
  • House Highway Bill is Eastbound and Down
  • Senators Get Floor Debate on WOTUS
  • USDA Rolls Out New Website for Young and Beginning Farmers
  • Crop Insurance Cuts Reversed
  • Crop Insurance Cuts Could Put Budget Deal in Jeopardy
  • Researchers Create Headlines Tying Processed and Red Meat to Cancer
  • Vilsack Pushing on TPP; USDA Invests in Rural Power Grid
  • FAA to Require Drone Registration
  • The Brief War on Pork
  • Senator: When Are ARC and PLC Checks Going Out?
  • Sixth Circuit WOTUS Ruling Hailed as Ag Victory
  • Sequester Cuts and Other Farm Program Disparities