Term:
Loan deficiency payments
Definition:
Are a type of non-recourse loan whereby, for wheat, feed grain, upland cotton, rice and oilseeds, a producer may agree to forgo loan eligibility and receive an output subsidy, the rate of payment of which is the amount by which the applicable county's loan rate exceeds the marketing loan repayment rate. Producers may elect to apply for this payment during the loan availability period on a quantity of the programme crop not exceeding their loan-eligible production. This, combined with marketing loan gains, represent the benefits made available to US farmers when commodity prices fall relative to loan rates.
Domain:
Economics & National Accounts
Source:
OECD