EMERGENCY LOANS. EMERGENCY LOANS (EM). FSA provides emergency loans to help producers recover from production and physical losses due to drought, flooding, other natural disasters, or quarantine. Emergency Loan Regulations can be found in Handbook 3-FLP, Part 10. EM Overview.
Emergency loans may be made to farmers and ranchers who own or operate land located in a county declared:
1) a Presidential major disaster,
2) a USDA Secretarial disaster designation, now with Fast Track
3) a FSA Administrator's Physical Loss Notification (APLN) , for physical losses only,
4) a Quarantine designation requested from the Deputy Administrator for Farm Programs by the SED.
A flood washed Farmer Joe’s barn which was located in a low lying area of the farm.
Once rebuilt at a site out of the flood area, Farmer Joe plans to use the barn to store equipment in the winter but will use the barn for parties and events during the summer. Can Farmer Joe get an EM to rebuild his barn.
So the answer is.........
If Joe intends to use the rebuilt barn only for parties and events he can not obtain an EM loan. If however he intends to use the barn for storage of his farm equipment or other farm-related purpose (essential to farm operation) then he would be eligible for an EM loan.
Farmer Sandra planted corn for grain at the beginning of this year. However, she decides to chop her corn for silage because of the poor quality and lack of grain.
Can Farmer Sandra get a loss on her corn for grain or does the fact that she chopped it as silage represent a substitute crop?
So, can EM loan funds be used to help Sandra.....?
Because of her losses to the primary crop (corn ) planted, we would be able to make a loan for the losses to that crop minus the harvested salvage value (silage) and any insurance paid on the primary crop.
Farmer Dan has cows and due to lack of feed, and no way to purchase feed in his area, he decides to liquidate his cow herd. Can Farmer Dan receive an EM loan for those cows and calves sold.
Will we be able to help Farmer Dan with his cattle losses? Let’s find out..........
Farmer Dan can get an EM loan to cover his losses. Loan funds from calves (normal income security)can be used for any authorized operating purpose, however, funds from his cows (basic security) must be used to replace cows. Replacement cost minus actual value when sold will determine EM loan amount.
Farmer Anne owns an nursery where she grows trees and shrubs. Due to the drought Anne has increased watering costs and has not been able to sell her plants.
Can Farmer Anne obtain an EM for lost income due to unsold inventory.
Does farmer Anne have a loss which is eligible for an EM loan and if so what amount is available to her?
Well let’s find out..........
No, The fact that Farmer Anne had increased watering costs or that nobody wants to purchase her nursery stock during a drought is not a reason which would make her eligible for an EM.
Farmer Connie uses pasture for 6 months each year as part of her normal cattle operation. This year she could only graze her cattle for 2 months before her county was designated a Fast Track Disaster and she had to start buying feed.
Can Farmer Connie receive an EM loan to buy feed for her cattle now?
Did Farmer Connie’s loss of pasture qualify her for an EM loan? How would you calculate this loss?
Yes, Farmer Connie can obtain a loan now to purchase feed. The additional feeding period will be calculated by using the date the incident period began.
6 months = LFP established grazing period
2 months = time grazing before the beginning date of the disaster
4 months = 66% pasture loss and supplemental feeding time
(Price of feed per head) X (number of livestock) X (time additional feed needed due to loss of pasture) = cost of supplemental feed needed and EM loan amount available.
see Handbook 1-FLP, Exhibit 17 for current rate.