MAL Policy Review 2017 Crop Year Producer Eligibility Requirements

CCC-633 EZ Page 1 When producers are in the County Office reporting their acres for crop year 2017, have them sign CCC-633 EZ page 1. Also send a page 1 with them for their landlords receiving a share of the crop.

Producer Eligibility for MAL Disbursement Acreage report showing share in commodity Beneficial interest in commodity Compliance with following rules: Conservation Foreign person Controlled substance DCIA

Producer eligibility for MAL disbursement (Cont.) FSA-578 showing a share in MAL requested crop Statutory requirement that all cropland on the farm be reported by the applicable final reporting date If all cropland not reported by the applicable final reporting date, all production from that farm is ineligible for MAL To identify farms with unreported cropland, see 2-CP

Producer eligibility for MAL disbursement (Cont.) Prepare “Farms with Unreported Cropland” report either: on August 1st each year, or after applicable final reporting date Notify producers with unreported cropland See 2-CP subparagraph 318 B

Producer eligibility for MAL disbursement (Cont.) Beneficial interest is both: Control of the commodity Title to the commodity

Producer eligibility for MAL disbursement (Cont.) Conservation Compliance Compliance with conservation plan & AD-1026 required: from producer & all affiliated producers according to 6-CP for both MAL disbursement & market loan gain repayments

Producer eligibility for MAL disbursement (Cont.) Conservation Compliance (Cont.) IMPORTANT!!! Note: Entity percentage eligible for MAL disbursement and market loan gain repayments will be reduced if all affiliated producers have not completed AD-1026 & flags updated

Producer eligibility for MAL disbursement (Cont.) Other Eligibility Requirements – Compliance with: DCIA Foreign person rules Controlled substance rules Fraud provisions

Producer eligibility for MAL disbursement (Cont.) To determine Foreign Person Status, the following sections of CCC-902 must be completed before MAL Disbursement: CCC-902I for an Individual – Parts A, B – question 1, and if applicable 2 and 3, and Part I CCC-902E for an Entity – Parts A, B, C and L.

Producer eligibility for MAL disbursement (Cont.) Question A producer requests a MAL on his winter wheat in early June which he reported on a FSA-578. He has not yet planted his soybeans. Is this producer eligible for the MAL on his wheat when all of his crop acres have not been reported?

Producer eligibility for MAL disbursement (Cont.) Answer: YES… If all other eligibility requirements are met. NOTE: All crop acres on his farm (administered in the FSA Office) must be reported by the applicable final reporting date. If not reported, the wheat is not eligible for MAL, loan will be called and immediate repayment at principal plus interest will be required.

Producer eligibility for MAL disbursement (Cont.) Answer if this was for an LDP: YES… If all other eligibility requirements are met. NOTE: All crop acres on his farm (administered in the FSA Office) must be reported by the applicable final reporting date. If not reported, the wheat is not eligible for the LDP and the LDP payment will need to be refunded plus interest from the date of disbursement.

Producer eligibility for MLG Repayment, LDP & Graze-Out Producers must meet the following requirements before MLG repayments, LDP disbursements, and Graze-Out payments: Actively engaged in farming Cash rent tenant, and Member contribution provisions according to 5-PL with CCC-902 and CCC-901, if applicable, submitted and current for 2017 crop year

Producer eligibility for MLG Repayment, LDP & Graze-Out (Cont.) Notes: Applicable CCC-902 required with COC determination required Denied market gain, LDP and/or graze- out if determination not made and flags set according to 3-PL

Producer eligibility for MLG Repayment, LDP & Graze-Out (Cont.) Eligibility Requirements (Cont.) FSA-578 showing a share in crop with all cropland on that farm reported as verified with the Farms With Unreported Cropland Report in CARS according to 2-CP AD-1026 completed and in compliance according to 6-CP for producer and all affiliated persons in a legal entity DCIA compliance from producer certification

Producer eligibility for MLG Repayment, LDP & Graze-Out (Cont.) Eligibility Requirements (Cont.) Compliance with AGI requirements according to 5-PL, and 8-LP, with CCC-941 filed by producer and all interest holders in a legal entity. Note: IRS will verify information submitted for 2017 crop year. If not in compliance with AGI, still eligible for MAL, but not eligible for a MLG, LDP or graze-out.

Producer eligibility for MLG Repayment, LDP & Graze-Out (Cont.) Eligibility Requirements (Cont.) Payment Limitation available according to 5-PL, 7-CN paragraph 43, and 8-LP, subparagraph 34 A Notes: $125,000 annual limit for MLG, LDPs, ARC and PLC for a person or legal entity for all commodities except peanuts. Separate $125,000 annual limit for same programs for peanuts.

Producer eligibility for MLG Repayment, LDP & Graze-Out (Cont.) Eligibility Requirements (Cont.) Note: If payment limitation is exceeded, still eligible for MAL disbursement but: Cannot repay with a market gain Can forfeit or deliver to CCC Can use CCE’s

Producer eligibility for MLG Repayment, LDP & Graze-Out (Cont.) Eligibility Requirements (Cont.) Compliance with: controlled substance provisions fraud provisions foreign person rules according to 5-PL

Producer eligibility for MLG Repayment, LDP & Graze-Out (Cont.) Eligibility Requirements (Cont.) Note: The applicable eligibility flags for the producer and all affiliated members of an entity are checked for MALs repaid with a MLG through CLPS.

Producer eligibility for MLG Repayment, LDP & Graze-Out (Cont.) Eligibility Requirements (Cont.) Notes: LDP and Graze-Out payments are not automatically restricted by payment limitation, AGI or eligibility records in the eLDP system. County Offices must enter the disbursements in the Interim Attribution Process according to Notice PS-733 BEFORE certifying and signing all LDP and Graze-Out payments in NPS.

Producer eligibility for MLG Repayment, LDP & Graze-Out (Cont.) Question True or False - Form CCC-941 just needs to be completed and on file in the County office. The form is not sent anywhere for verification.

Producer eligibility for MLG Repayment, LDP & Graze-Out (Cont.) Answer: False – After the CCC-941 is completed, and compliance is indicated, it is sent to IRS for verification. If verified as AGI compliant, flag is automatically updated indicating compliance.

Commodity Certificate Exchange (CCE) Eligibility and Requirements for a Commodity Certificate Exchange (CCE) Commodity Certificate Exchange (CCE) Applies to harvested, shorn and/or ginned crops that are warehouse or farm stored in which the commodity is first placed under a MAL The same producer eligibility requirements as a MAL disbursement Applies only to outstanding nonrecourse MALs, not yet mature

Commodity Certificate Exchange (CCE) Eligibility and Requirements for a Commodity Certificate Exchange (CCE) (Cont.) Commodity Certificate Exchange (CCE) Uses the CCC-determined value based on the date the certificate is purchased and uses the following: AWP for rice and cotton NPP for peanuts PCP for all other MAL commodities Only applicable when the loan rate exceeds the applicable AWP, NPP, or PCP

Commodity Certificate Exchange (CCE) Eligibility and Requirements for a Commodity Certificate Exchange (CCE) (Cont.) Commodity Certificate Exchange (CCE) Must not be applied to any quantity for which an outstanding CCC-697 (lock-in) exists Requires a signed CCC-694-2 with the purchase price of the commodity certificate in the County Office on the day of redemption to immediately exchange the commodity certificate for loan collateral

Commodity Certificate Exchange (CCE) Eligibility and Requirements for a Commodity Certificate Exchange (CCE) (Cont.) Commodity Certificate Exchange (CCE) Commodity loan gains from CCEs are not subject to: Payment limitation Actively engaged, member contribution and cash rent tenant provisions AGI provisions

Eligibility and Requirements CCC reports to IRS the following for Federal income tax purposes: LDP’s and Graze-out payments Storage Credits Forfeitures and settlements Commodity loan gains from CCEs and MLG’s from cash redemptions.

Producer Eligibility Requirements Questions?

Producer Profile in eLDP For crop year 2017, the “Producer Profile” in eLDP will be used to determine reasonableness for MAL and LDP. Notice LP-2222, for multi-county producers will be reissued. .

Producer Profile in eLDP Only eligible intended use codes from CARS will populate the “Producer Profile” in eLDP, and transfer to CLPS for MALs. County Offices need to be aware of the eligible codes for MALs and can refer to Notice LP-2220 subparagraph 2B.