USDA Delay Frustrates Producers with Price Support Marketing Loans

Sep 26, 2000

USDA Delay Frustrates Producers with Price Support Marketing Loans
USDA now agrees with Combest idea: lien searches outmoded for some Marketing Loans

After five weeks of effort by House Ag Committee Chairman Larry Combest, producers will gain flexibility from the use of marketing certificates as a result of USDA's adoption of Combest's recommendation to waive the time-consuming commodity lien searches for producers seeking a price-supporting marketing loan that will be immediately repaid.

Producers have already faced delays from a blanket requirement that all commodities pledged as collateral in marketing loans be subjected to lien searches.  In making the belated announcement, USDA agreed with Chairman Combest that a lien search establishing financial claim to the crop as collateral for the marketing loan is irrelevant unless the producer forfeits the crop to the Commodity Credit Corporation.

Combest (R-TX) noted with regret the delay from USDA inaction affecting recent harvests, but sees a lasting impact for producers with improved service.

"USDA finally came around to seeing the value in re-thinking a routine that has become outmoded and cumbersome.  I brought this streamlined proposal to USDA in Washington five weeks ago, and meanwhile what we've lost is precious time and resources spent on the extra paperwork that comes with these lien searches.  This change allows marketing certificates to work in the manner they were designed, provides for the orderly and expeditious processing of marketing loans, and minimizes the difficulties for storage elevators when capacity is tied up for extended periods of time.  The crop can be moved onto market, the producer is paid, and in the process FSA will continue a well-deserved reputation for its focus on farmers," said Combest.

Congress allowed the U.S. Secretary of Agriculture the discretionary authority to utilize marketing certificates.   Marketing loans provide the producer with flexibility on when to strategically market for the best price by allowing producers to pledge their crop as collateral, and later repay the loan.