Agricultural Marketing Assistance Loans and Loan Deficiency Payments

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Marketing assistance loans for the major crops were designed to facilitate orderly marketing by providing short-term financing so that farmers could pay their bills right after harvest and spread their sales over the entire marketing year. However, the persistence of very low commodity prices transformed the loan program into a major vehicle of farm income support. Marketing loan program benefits (primarily loan deficiency payments, LDPs) to farmers amounted to about $5.9 billion in 1999, and will exceed $6.5 billion in 2000. Such levels of use and high costs have revealed several administrative problems and given rise to several policy issues. … continued below

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6 pages.

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Womach, Jasper September 15, 2000.

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Marketing assistance loans for the major crops were designed to facilitate orderly marketing by providing short-term financing so that farmers could pay their bills right after harvest and spread their sales over the entire marketing year. However, the persistence of very low commodity prices transformed the loan program into a major vehicle of farm income support. Marketing loan program benefits (primarily loan deficiency payments, LDPs) to farmers amounted to about $5.9 billion in 1999, and will exceed $6.5 billion in 2000. Such levels of use and high costs have revealed several
administrative problems and given rise to several policy issues. Some policy makers have favored broadening the scope and enhancing the benefits of the program to achieve greater farm income support. Anticipated adverse market impacts have discouraged adoption of these proposals to date. A persistent policy issue is the payment limitation on marketing loan gains.

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Congressional Research Service Reports

The Congressional Research Service (CRS) is the public policy research arm of Congress. This legislative branch agency works exclusively for Members of Congress, their committees and their staff. This collection includes CRS reports from the mid-1960's through 2018—covering a variety of topics from agriculture to foreign policy to welfare.

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  • September 15, 2000

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  • June 10, 2005, 7:08 p.m.

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  • Jan. 25, 2017, 4:39 p.m.

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Womach, Jasper. Agricultural Marketing Assistance Loans and Loan Deficiency Payments, report, September 15, 2000; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metacrs1073/: accessed April 24, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.

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