Agricultural Marketing Assistance Loans and Loan Deficiency Payments

Description:

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.
Creator(s):
Creation Date: September 15, 2000
Partner(s):
UNT Libraries Government Documents Department
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Collection(s):
Congressional Research Service Reports
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Creator (Author):
Womach, Jasper
Agricultural Marketing Assistance Loans and Loan Deficiency Payments
Creator (Author):
Resources, Science, and Industry Division
Publisher Info:
Place of Publication: Washington D.C., USA
Original Creation Date: September 15, 2000
Coverage:
Date
2000  
Description:

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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6 pages.
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Partner:
UNT Libraries Government Documents Department
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Collection:
Congressional Research Service Reports
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Identifier:
Resource Type: Report
Format: Text
Rights:
Access: Public