Exception to the Wool LDP

July 18, 2008 - The Food, Conservation and Energy Act of 2008 was enacted into law on May 22, 2008. The act authorizes Marketing Assistance Loans (MAL) and Loan Deficiency Payments (LDP) for the 2008 through 2012 crop years on graded and non-graded wool, unshorn pelts and mohair. With the filing on June 5, state and county offices were authorized to accept MAL and LDP requests.

The two weeks between May 22 and June 5 resulted in the need for an exception to the MAL and LDP rules for producers of wool, mohair and unshorn pelts who lost beneficial interest in the 2008 crop before June 5, 2008.

The following three scenarios were identified for Farm Service Agencies (FSA):

• IF a producer filed a 2008 crop CCC-633 EZ, page 1, before the May 23 expiration of the 2002 Farm Bill AND lost beneficial interest between May 24 and June 5, THEN the FSA office will issue the 2008 LDP request based on the rate in effect on the date beneficial interest is considered lost.
• IF a producer did not file a 2008 crop CCC-633 EZ, page 1, before the May 23 expiration of the 2002 Farm Bill AND beneficial interest was lost before June 5, THEN the FSA office will allow the producer to file a CCC-633 EZ AND issue the 2008 crop LDP based on the rate in effect on the date beneficial interest is considered lost.
• IF a producer filed a 2008 crop CCC-633 EZ, page 1 and/or 4, between May 24 and June 4 AND was denied the LDP request, THEN the FSA office will notify the producer that a new 2008 crop LDP request may be filed AND issue the 2008 LDP based on the rate in effect on the date beneficial interest is considered lost.

"Because wool is one of the few commodities that utilized the loan deficiency program in the spring of the year, it became necessary for FSA to bridge the gap between the expiration of the 2002 Farm Bill and the new Farm Bill in order to continue making these payments," commented Peter Orwick, executive director for the American Sheep Industry Association. "We are pleased that these exceptions offer a continuous program for sheep producers."
Staff contact: Peter Orwick, ext. 33

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