| MMM 417 |
October 3, 2002
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Peanut Marketing Assistance Loan and LDP Program[1]
Scott A. Mickey, Extension Ag Economist
H.M. Harris, Jr. Professor
Ø Eligible producers who produce and harvest peanuts can request a 9-month marketing assistance loan or agree to forgo the loan to obtain LDP (Notice LP-1857).
Ø A producer must have beneficial interest in the commodity to be eligible.
o A producer has beneficial interest if they have:
1. Control of the commodity,
2. Risk of loss, and
3. Title to the commodity.o Beneficial interest must be retained by the producer from harvest continuously through
1. The date an LDP is requested, or2. The earlier of the dates that the loan is repaid or CCC takes title to the commodity.o Beneficial interest is lost if:
1. Peanuts are delivered to a buying point and marketed.
2. Equity in the commodity is sold
3. Producer signs a contract that contains language which supports loss of beneficial interest.
o The Act provides that producers who lost beneficial interest in 2002 crop peanuts before submitting an LDP request be made eligible to receive LDP. Affected producers must submit a CCC-633 LDP to their county office.
Ø Peanut loans or LDP must be requested by January 31, 2003 for peanuts harvested in 2002.
Ø Marketing assistance warehouse-stored loans cannot be issued until the producer provides the County Office with the warehouse receipt.
Ø Peanut wagons located on the farm are eligible farm-storage structures (notice LP-1862). Check with your local FSA office before storing on wagons.
Ø Producers will repay outstanding peanut loans at a rate that is the lesser of principal plus interest or the National Posted Price (NPP). The NPP is announced every Tuesday and 3:00 pm and remains in effect until midnight the following Tuesday.
Ø Producers may forgo the loan program in return for LDP on eligible peanuts.
o Producers who will lose beneficial interest at the buying point must complete CCC-709. The producer can terminate CCC-709 until harvest begins.
o Basic LDP may be requested for any stored quantity for which producer has beneficial interest. CCC-633 LDP requests cannot be canceled at any time.
Ø There is a $75,000 payment limitation for marketing loan gains and LDP’s for peanuts, wool, mohair, and honey.
o The use of the three-entity rule may double this limitation to $150,000.
o Commodity certificates may help negate the LDP payment limitation. However, in order for a commodity certificate to be issued, the crop must be eligible for a CCC loan.
For more information, contact Scott Mickey, Agri-Business Management Association of SC (803) 775-4580.
[1] The authors thank Nathan Smith from the University of Georgia for his contribution on this memo.
Clemson University Cooperative Extension Service offers its programs to people of all ages, regardless of race, color, sex, religion, national origin, disability, political beliefs, sexual orientation, marital or family status and is an equal opportunity employer.
Clemson University Cooperating with U.S. Department of Agriculture, South Carolina Carolina Counties, Extension Service, Clemson, South Carolina. Issued in Furtherance of Cooperative Extension Work in Agriculture and Home Economics, Acts of May 8 and June 30, 1914.
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