What is in this article?:
- USDA announcement it was reducing commodity loan rates and suspending loan processing creates consternation in ag circles.
- Group of senators ask Agriculture Secretary Tom Vilsack for clarification of the Ag Department's Sept. 30 announcement.
- Farmers face "unrecoverable losses" due to the sudden suspension of the loan-making process.
A group of 14 senators, including Republicans Thad Cochran of Mississippi and Saxby Chambliss of Georgia, have now written Agriculture Secretary Tom Vilsack asking for an explanation of the moves to reduce commodity loan rates and suspend the loan program.
The letter said growers, merchants and marketing cooperatives were unable to make any contingency plans to mitigate the adverse impact of the last-minute announcement made on Sept. 30 without warning or consultation with Congress or the private sector.
“The decision to apply sequestration and delay loan processing just as harvest across much of the Sunbelt is gearing up is particularly damaging because it was made without warning,” the letter said. “This meant growers, marketing cooperatives, private merchandising firms and agribusinesses were unable to make any alternative plans to mitigate the financial hardship imposed by the decisions.”
The letter said the decision was surprising since sequestration was not applied to marketing assistance loans made for the 2012 crop or for the 2013 crop entered into the loan before Oct. 1. (A higher percentage of the nation’s corn and soybean crops compared to cotton and peanuts was harvested before Oct. 1.)
“The sudden and unexpected decision to reduce loans and stop loan processing has a significant impact on the availability of working capital, orderly marketing, and in some cases, results in unrecoverable income losses for farmers who forward-contracted their crops,” said National Cotton Council Chairman Jimmy Dodson, a South Texas cotton producer.