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: http://dld.bz/…

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  2014
S M T W T F S
                  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
  • Biotech Label Battles Continue at Ballot Box
  • Cattle Industry, Land Group Presses Feds to Pull WOTUS Rule
  • USDA Moving Ahead with Beef Checkoff Plans
  • Politicos Weigh in on USDA APH Yield Exclusion
  • Views in Congress Vary on COOL
  • Vilsack Addresses Checkoff Controversy
  • GAO: 'USDA Needs to Better Communicate Climate Plan'
  • Offering Advice on Farm Bill Choices
  • Governors, Attorneys General say CWA Rule a Legal Threat to Farmers
  • Dem Senators ask President to Leave RFS Alone
  • Senators Push for Withdraw of Endangered Species Act Rule
  • ARC and the PLC Reference Price
  • Beef Promotion Leads to Beef Politics
  • Small Business Advocacy Group Calls for CWA Rule to be Withdrawn
  • CRP, Base Acres and Proof for Yield Updates
  • Business Groups: Withdraw WOTUS Rule
  • Photo Fees on Public Lands? C'Mon, Man!
  • USDA ARC-PLC Rollout and Decision Tools for Farmers
  • Point, Counterpoint on EPA's Waters of the U.S. Rule
  • Point, Counterpoint on EPA's Waters of the U.S. Rule