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Consideration of Loans Obtained for Farming Operations The farmer may obtain credit or loans for the farming operation from banks, landlords, Farmer s Home Administration or other services and payments through the United States Department of Agriculture (USDA). The basic policy with regard to loans of any kind is that the loan cannot be regarded as income or as a resource when it is not available for current maintenance. Determining Farm Income The county Consolidated Farm Service Agency is the USDA umbrella agency that handles most of the programs that provide income to farmers. There are many different programs included And programs and funding can change from year to year according to Congressional appropriations, crop disasters and other factors. Programs handled by the Consolidated Farm Service Agency to provide income to farmers include: • Production Flexibility Contract Program (PFC) - payment is based on contracted acres • Loan Deficiency Payment (LDP) - income guarantee • Conservation Reserve Program (CRP) - land rented to government not to plant crops or to plant trees • Crop Disaster Program (CDP) - declared by the President • Loss payment for crop failure

4109 Volume III | Chapter 4 MISSISSIPPI [INCOME: EARNED INCOME] Revised:11-01-11

Non-insured program payments NOTE: Federal Crop Insurance is handled by a separate USDA office. When farm income must be verified through the county Consolidated Farm Service Agency, simply request verification of all government payments made to the individual through that office rather than requesting specific known programs. This general request will allow that office to verify all farm-related income, including designated sharecropper arrangements. Farm income is computed by deducting the expenses of production from the gross income received from the sale of the crop. The net income is divided by 12 to arrive at the average monthly income. If more than one assistance group is included in the farming operation, then the net income must be shared with those working members. There may be persons working in the farming operation that are not included in the assistance group, such as an adult son. Discussion with the family will determine the method of division. Deductible Expenses