USDA loans
Throughout the first half of this year, we have reported on the rising costs of fertilizer and other inputs here on the Ag Law Blog. We talked about the introduction of the Lowering Input Costs for American Farmers Act here, we’ve discussed the class action lawsuits making price fixing allegations against fertilizer companies here, we’ve shared a blog post about the Iran conflict and its contribution to rising costs here, and we’ve discussed the issue on Farm Office live (you can view our previous videos and upcoming schedule here). The problem of rising input costs is certainly top of mind for many producers this Spring. It also appears to be on the mind of members of Congress. In addition to the Lowering Input Costs for American Farmers Act, the Homegrown Fertilizer Act was also introduced in March with the aim of increasing domestic fertilizer production and thus lowering fertilizer costs. The bill is bipartisan and co-sponsored by Senators Amy Klobuchar (D-MN), John Thune (R-SD) and Roger Marshall (R-KS).
How would the bill boost domestic fertilizer production?
If passed, the Homegrown Fertilizer Act would provide USDA grants and direct or guaranteed loans to “assist eligible entities in increasing or expanding the manufacturing, processing, and storage of fertilizer and nutrient alternatives in the United States.” An “eligible entity” must be located in the U.S. and must be one of the following: an independently owned and operated business, a nonprofit organization, a producer-owned cooperative or corporation, a certified benefit corporation, an Indian Tribe, or a State or local government. In an effort to increase competition, the bill expressly bars fertilizer manufacturers, processors, and distributors above a certain market share from receiving funds.
Under the bill, USDA grants of up to $100,000,000, could be awarded to eligible entities. However, those businesses, nonprofits, governments, Tribes, and cooperatives who are awarded grant money would also be responsible for procuring non-federal matching funds equal to the amount of the grant they receive. The bill prioritizes projects that improve fertilizer production methods, efficiency, and competition within the ag nutrient market, increase the number of fertilizer products available, reduce prices for farmers, and benefit agricultural commodity production in the United States. Fertilizer and nutrient businesses, nonprofits, cooperatives, etc. eligible for grants would be able to use the money for the following purposes:
- Building a new facility, buying an existing facility, or purchasing land for a facility;
- Covering predevelopment costs, such as engineering and other professional fees;
- Providing working capital to expand capacity or increase outputs;
- Modernizing or expanding an existing facility, including making updates to existing buildings or constructing new buildings on site;
- Purchasing or modernizing processing and manufacturing equipment;
- Developing, customizing, and installing equipment, devices, and technology to improve processing functions, worker conditions, or safety;
- Installing or updating equipment that reduces emissions, increases fertilizer use efficiency, or improves air and water quality;
- Ensuring legal compliance with packaging and labeling requirements, such as sealing, boxing, labeling, and conveying;
- Confirming legal compliance with occupational and safety regulations;
- Engaging in workforce recruitment, training, apprenticeships, and retention to ensure expansion projects are adequately staffed;
- Increasing domestic storage of fertilizer or nutrient alternatives; and
- Such other activities as the Secretary determines to be appropriate.
The hope of the sponsors is that USDA grants and loans used for the above purposes would bolster domestic fertilizer production, creating a more competitive marketplace for fertilizer, resulting in lower prices for farmers. You can read full text of the bill here. We will continue to follow this important issue for our readers.
Tags: fertilizer, Congressional legislation, legislation, USDA funding, USDA loans, USDA
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Written by Evin Bachelor, Law Fellow, OSU Extension Agricultural & Resource Law Program
The United States Department of Agriculture (USDA) announced last week that farmers.gov will now feature two new tools. One will help farmers navigate the application process for obtaining temporary agricultural workers under H-2A, and the second will help farmers understand and manage their USDA-backed farm loans. The press release explained that the USDA values the experience of its customers, and that it developed these tools after hearing feedback on the need for simple, technology based resources to help farmers. Unveiled in 2018, farmers.gov allows users to apply for USDA programs, process transactions, and manage their accounts.
Customized H-2A checklists based on the needs of an individual farmer
Many farmers need seasonal or temporary workers for planting, cultivating, and harvesting crops. The seasonal nature of agriculture can make it difficult for farmers to find an adequate supply of domestic labor willing to fill the temporary positions. To relieve this difficulty, the federal government created the H-2A temporary agricultural worker program to allow these farmers to hire workers from foreign countries to supplement the domestic labor market on a temporary or seasonal basis. Farmers must demonstrate that there are not enough U.S. workers able, willing, qualified, and available for the temporary work, and that the H-2A workers will not result in reduced wages for other U.S. workers.
Understanding the H-2A process has long been complex and confusing, but a new tool focused on education for smaller producers includes a revamped website and an interactive checklist tool. The new website explains the basics of the program, includes an interactive checklist tool to create custom checklists, and gives an estimate of the costs of hiring H-2A workers.
The interactive checklist tool is a helpful way for producers to learn about the steps they need to take to obtain the labor that they need. In the past, websites would rely heavily on producers to sift through information and determine the requirements that they needed to follow. Now, the interactive tool asks questions one at a time to generate a custom checklist.
When using the tool, producers will first be asked whether this will be their first time hiring workers using the H-2A Visa Program. If the producer answers yes, they will be asked when they need the labor. If the producer answers no to the first question, they will be asked whether they are extending the contract of workers that they are currently employing. Ultimately, the producer will be asked when they need the labor. At the end of the questions, the tool will provide a checklist that the producer will use to determine what steps he or she needs to take to obtain H-2A labor. The checklists are designed to be easy to understand and to make the process less confusing.
View information about your USDA-backed farm loan online
The USDA offers farm ownership and operating loans through the Farm Services Agency to family-size farmers and ranchers who cannot obtain commercial credit. Farmers.gov now allows producers to view information about these USDA-backed farm loans through a secure online account. Producers can view loan information, history, and payments from a desktop computer, tablet, or smartphone. Producers will need to sign up for a USDA online account in order to create an account profile with a password.
At this time, the program only allows producers doing business on their own behalf as individuals to view this information through farmers.gov. Other entities such as LLCs and trusts or producers acting on behalf of another cannot utilize this tool yet, although the USDA indicates that this is planned for in the future.
The USDA’s press release made clear that the addition of these tools represents a step toward providing better customer service and increased transparency. As only a step, producers can expect more tools and features to be added to farmers.gov in the future. As this happens, we will be sure to keep you up to date about the website’s new bells and whistles.
