USDA - Program Plan
FSA Farm Direct Operating Loans Recovery Plan
Last updated: 2009-05-15Table of Contents
Click on each of the links below to read the part of the Plan relating to each topic.
Objectives
Program Purpose
The Farm Direct Operating Loan (OL) program is designed to assist eligible family farmers and ranchers in building and sustaining successful farm operations
Public Benefits
Proceeds are used to purchase items necessary for family farmers to continue operations. As such, they may be used to purchase livestock, farm equipment, feed, seed, fuel, farm chemicals, insurance, and other operating expenses. Loans may also be used to pay for minor improvements to buildings, costs associated with land and water development, family subsistence, and to refinance debts under certain conditions.
Given the timing of the additional loan funds made available through the Recovery Act, much of the funding will be used to cover spring planting expenses. These funds will have an immediate impact on main street businesses in rural communities.
Measures
The measures have been revised to enrich the performance metrics for Recovery targets. In some instances, targets will not be available until additional baseline data has been collected.
Schedule and Milestones
The Recovery Act funds are targeted to minority and beginning farmers.
The funds were first applied to the existing Operating Loan backlog of approximately 1,783 loan applications.
Additional funds are being used to fund incoming loan applications.
Performance metrics are monitored on an ongoing basis, with formal reporting performed monthly, quarterly, and annually.
| Milestone | Completion Date |
|---|---|
| FSA will initially use Recovery Act funds to address the existing OL backlog, which was 1,783 loans valued at $130 million on March 4. Funds are targeted to minority and beginning farmers as required by the CONACT. | 2009-03-10 |
| Once the Operating Loan backlog is eliminated, FSA will continue to use stimulus money to fund applications received on a daily basis until the annual appropriation is available. Funds are targeted to minority and beginning farmers as required by the CONACT. | 2009-03-31 |
| After all FY 2009 appropriated funds are used, FSA will fund Operating Loan requests with the remainder of stimulus funds if any funds remain. | Not Available |
Projects and Activities
Kinds and Scope of Program Activities
This program is established to provide operating capital for family farmers and ranchers. Theses benefits are only available to small family farmers and ranchers that meet all existing eligibility requirements. Borrowers will primarily use the operating loan (OL) proceeds to purchase livestock, farm equipment, and pay operating expenses. FSA anticipates that approximately 3,000 low-income family farmers and ranchers will receive financial assistance as a result of the additional Direct Operating Loan funding made available through the Recovery Act.
• Estimated Amount of Funding (per award type): $173,367,000
• Estimated $ Total - Non-Federal Recipients: $173,367,000
• Estimated $ Total - In House Activity: $0
• Targeted Type of Recipient/Beneficiaries: Recovery Act funds will be targeted to both beginning and socially disadvantaged farmers and ranchers according to the existing program requirements established in the CONACT.
• Methodology for Award Selection: Loans will be issued to eligible borrowers on a first come, first served basis. The maximum loan amount is $300,000.
Review Process
The obligation and disbursement of operating loans will be evaluated through existing evaluation/review processes as loans funded through the Recovery Act will be subject to the same stringent monitoring and oversight requirements as all FSA farm loan programs.
FSA has a robust internal control program for its farm loan programs, which consists of:
• OMB Circular A-123 reviews
• Farm Loan Program Risk Assessment (FLPRA)
• County Operations Review (COR) program
• National Office Loan Origination File Reviews
Cost and Performance Plan
Performance metrics are monitored on an ongoing basis, with formal reporting performed monthly, quarterly, and annually.
Transparency:
Dennis Taitano serves as the Farm Service Agency’s executive accountable for ensuring proper implementation of ARRA. FSA has established its own public-facing website which will report additional information on the Agency’s success in ARRA-related matters. http://www.fsa.usda.gov/recovery
- Plan to Organize Program Cost: Accounting System Actions
- Short-term Strategy:
- FSA will utilize existing Treasury symbols and coding until the long-term solution can be implemented.
- Loans made from Stimulus funding will be identified by the timeframe of obligations and by a flag that will be placed on each loan.
- Some servicing actions on direct operating loans will be restricted in order to maintain the integrity of the Stimulus funding identification system until the long-term solution is implemented.
- FSA will utilize existing Treasury symbols and coding until the long-term solution can be implemented.
- Long-term Strategy:
- The current accounting system will be modified for the new Treasury symbol and unique coding of the Stimulus funding.
- All activity processed under the short-term strategy will be reprocessed to move it to the correct Treasury symbol.
- Revisions to servicing reports will be identified and prioritized in order to schedule them into production.
- This process is projected to be completed within 60 days of receipt of the coding.
- The current accounting system will be modified for the new Treasury symbol and unique coding of the Stimulus funding.
The Agency will report the distribution of funds by State and report use of funds on an aggregate basis (uses are primarily operating expenses, machinery, and livestock). All funds will be used for the purchase of inputs needed to operate a family sized farm.
FSA's existing loan policies require borrowers to prepare a business plan, which provides a detailed description of how loan funds will be used. Borrowers must advise FSA if they plan to use the loan proceeds for purposes other than those documented on the loan application. To ensure funds are used as intended, FSA conducts mid-year and end of year compliance reviews.
Accountability:
Agency managers are responsible for implementing, improving, and monitoring program activities.
Individual performance plans of all managers and employees are tied to the Agency mission and goals contained in the FSA Strategic Plan. FSA Notice PM-2606, "FSA Performance Management Program," contains detailed guidance on development of employee performance plans, including the requirement that performance be linked to the Agency's strategic goals and objectives. Direct Loan Program performance targets are established at the national level, within each State Office, and for individual offices. The ability to meet or not meet goals is reflected in individual performance evaluations. To assist in monitoring program performance, status reports and a comprehensive Monthly Management Summary Report are sent to managers in the field for review and action on a monthly basis.
Energy Efficiency Spending Plans
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Program Plan Award Types
Direct Loans
Recipient Applicant Type:
Beneficiary Type:
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Source: Data provided by the Agency through the Office of Management and Budget.
