| The Farm Service Agency (FSA) administer the nonrecourse marketing assistance loan and loan deficiency payment (LDP) program for crop honey through 2012.
The honey nonrecourse marketing assistance loan and LDP program are available to eligible honey producers. The program helps to stabilize America's honey industry and ensure the well being of agriculture in the United States.
Honey nonrecourse MALs provide eligible producers with interim financing on their production and facilitate the orderly distribution of loan-eligible honey throughout the year. Instead of selling the honey immediately after harvest, a nonrecourse loan allows a producer with eligible honey to store the production, pledging the honey itself as collateral. The honey loan provides funding for an eligible producer to pay bills without having to sell the honey at a time of year when prices tend to be lowest. When market conditions may be more favorable, a producer may sell the honey and repay the loan with the proceeds of the sale. A producer may satisfy the loan obligation by delivering to CCC the quantity of honey pledged as collateral as full payment for the loan at maturity.
Market loan repayment provisions specify that, under certain circumstances, producers may repay loans at less than principal plus accrued interest and other charges, with repayment of some portion of the relevant interest and principal being waived.
To be eligible for a loan, a producer must have: 1) Produced honey in the United States during the calendar year for which the loan is requested, and extracted honey on or before December 31, of the applicable crop year; 2) Had a continuous beneficial interest in the honey through date of repayment of the loan; and 3) Been responsible for the financial risk of keeping the bees and producing the honey.
To be eligible for a loan, the honey must: (1) Have been produced by an eligible producer;
(2) Have been produced and extracted in the United States during the applicable calendar year;
(3) Be of merchantable quality deemed by CCC to be suitable for loan; and (4) Be stored in acceptable containers.
Eligible producers must submit requests for honey nonrecourse MALs on or before March 31 of the calendar year following the applicable crop year.
Loans mature on demand, but no later than the last day of the 9th month after the note and security agreement were approved.
The national average loan rate is 69 cents per pound for 2010 through 2012 crop years.
Producers who are eligible for nonrecourse marketing assistance loans may choose to receive loan deficiency payments (LDPs) in lieu of MALs. LDPs provide producers with price support during times of low market prices. LDP provisions are active when the alternative repayment rate at a given location is less than the base loan rate at the same location, i.e., when the payment rate is greater than zero. Premiums and discounts are not considered when determining the LDP rate. LDP provisions are in effect for a given loan-eligible quantity of honey until the final loan availability date.
For information on FSA programs or other policies and procedures contact the Gilmer-Calhoun FSA Office at (304) 462-7171 extension 2 or visit the office located in the Glenville Post Office Building, Room 122. Special accommodations will be made, upon request, for persons with disabilities, vision or hearing impairments. Please call if accommodations are required.
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