Waiving Lien Searches Gives Flexibility

September 27, 2000

USDA will waive commodity lien searches for producers seeking a marketing loan that will be repaid immediately. All commodities pledged as collateral in marketing loans were subject to lien searches before the waiver, says House Agriculture Committee Chairman Larry Combest (R-TX).

The decision will give producers more flexibility in using marketing certificates, says Combest. He says the lien search establishing financial claim to the crop as collateral for the marketing loan is irrelevant unless the producer forfeits the crop to the Commodity Credit Corporation. Combest sees what he calls a lasting impact for producers with improved service.

"USDA finally came around to seeing the value in re_thinking a routine that has become outmoded and cumbersome. I brought this streamlined proposal to USDA in Washington five weeks ago, and meanwhile what we’ve lost is precious time and resources spent on the extra paperwork that comes with these lien searches," Combest said. "This change allows marketing certificates to work in the manner they were designed, provides for the orderly and expeditious processing of marketing loans, and minimizes the difficulties for storage elevators when capacity is tied up for extended periods of time. The crop can be moved onto market, the producer is paid, and in the process FSA (USDA’s Farm Service Agency) will continue a well_deserved reputation for its focus on farmers."

Congress allowed the Secretary of Agriculture discretionary authority to utilize marketing certificates. Marketing loans provide the producer with flexibility on when to strategically market for the best price by allowing producers to pledge their crop as collateral, and later repay the loan.