Loans for Farmers
“Selling loan” system lies in the heart of in the mechanisms of product-specific support for the United States. This loan comes into force when the market price drops, the farmer is guaranteed a minimum level of income from the sale of agricultural products on the market.
A farmer can obtain a “sales loan” through the Commodity Credit Corporation after harvesting at the current borrowing rate secured by products. The loan is repaid by covering the principal debt and interest rate.
In the event of market prices’ decrease, the ownership of the harvested crop may be transferred to the Commodity Credit Corporation, or the payment of a loan may be based on local market prices, without charging interest on the loan.
At market prices above collateral, farmers can get the secured products back, repay the loan and interest, and sell the products on the free market.
In the period 2012-2014, with the help of the “sales loan” program, subsidies were provided for barley, canola, peas, coffee, cotton, flax seeds, honey, lentils, oats, peanuts, rice, sorghum, soy beans, sugar, sunflower, wheat, wool.
In the United States, subsidies for agricultural insurance costs are widespread. The crop insurance program covers the risks associated with loss of both crop and income. The farmer receives a subsidy from the state for the purchase of an agricultural insurance policy.
There are several subprograms that provide support for the production of a particular type of crop.
In the analyzed period, subsidized insurance costs for crops such as alfalfa, almonds, apples, apricots, avocados, bananas, barley, beans, blueberries, buckwheat, cabbage, rape, cherry, pepper, coffee, corn, cotton, cranberries, wild rice , green peas, dates, flax seeds, grapefruit, grapes, honey, lemons, mangoes, oranges, etc.
The program of choosing insurance coverage depending on average income from the harvested crop (ACRE) allows providing farmers with the opportunity to get subsidies in cases when the level of lost income (loss) in a given region (state) and farm falls below income standards established on the basis of changing average harvests and prices. The size of payments is limited by the basic historical data of agricultural producers.
Producers of farm animals and products US livestock can also get state support. In 2014, subsidies were provided for the breeding of alpacas, cattle, bison, deer, emu, pigs, llamas, sheep and poultry. Farmers are entitled to state financial assistance in case of cattle death. The amount of payment is 75% of the market value of livestock.
In addition to the listed measures for subsidizing, certain goods price support is provided: until 2013, for dairy products (butter, skimmed milk powder, cheese) and sugar, in 2014 only for sugar.
In addition, annual domestic market quotas are determined for sugar, which are designed to limit future sales and prevent the transfer of ownership of sugar to the Commodity Credit Corporation in the event of a penalty.
Category: Online Loans
Tags: loans online, Micro loans