The U.S. Department of Agriculture today released details of its modifications to the loan repayment structure for marketing assistance and loan deficiency payments.
The USDA announced new methods for determining the repayment rates for producers for wheat, feed grains, pulse crops, oilseeds, wool, mohair and honey.
"The new method will moderate fluctuations of the loan repayment rate," said agriculture secretary Tom Vilsack. "In keeping with President Obama's commitment to American agriculture, this decision reduces the effects daily market volatilities have on loan repayment rates and provides more certainty for producers who have taken advantage of marketing assistance loans or loan deficiency payments."
Beginning April 15, 2009, for wheat, corn, grain sorghum, soybeans, barley, oats, canola, flaxseed and sunflower seed, USDA's Commodity Credit Corporation (CCC) will announce daily loan repayment rates based on the average market prices during the preceding 30 days and the preceding five days, USDA said.
The effective alternative repayment rate will be the lower of either the 30-day average or the 5-day average.
Vilsack said this new loan repayment method will minimize potential forfeitures and discrepancies in benefits across state and county boundaries.