WASHINGTON, D.C. –Today, Congressman Sanford D. Bishop, Jr. (GA-02), on behalf of the peanut and cotton industries, urged Secretary of Agriculture Tom Vilsack to use his discretion and not impose a 5.1% reduction to the marketing assistance loan to growers and buyers. Secretary Vilsack announced on September 30, 2013 that as of October 1, 2013, the proceeds of marketing assistance loans (MAL’s) would be reduced by 5.1% and loan processing will be suspended for up to two weeks or more while computer software is updated - - both of which are exacerbated by the current government shutdown.
“While I understand there is a requirement to reduce outlays through sequestration, applying sequestration to [MALs] is unlikely to achieve any significant savings since loans are repaid with principal and interest,” wrote Congressman Bishop. “The impact of these actions will have a severe effect on the peanut and cotton industries in my district and nationwide, with a negligible contribution to budget savings.”
Each year during cotton and peanut harvest, marketing assistance loans allow growers to securely market their yield while still being able to run the day-to-day operations of a farm. Reductions in the marketing loan assistance program could likely force a de facto reduction in loan rates, resulting in price reduction by up to $18.11 per ton for peanut producers, while cotton producers could lose $13.00 per bale.
Congressman Bishop is a member of the U.S. House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies.
Please find the text of the letter to Secretary Vilsack attached.