FSA moviong toward electronic transfers

Payment centralization has occurred that affects Farm Service Agency payments and loan disbursements and repayments.

Paper checks will no longer be issued at an FSA county office. All program payments, commodity loan disbursements and facility loan disbursements will be issued by the Federal Reserve Bank through direct deposit electronic funds transfer or through the U.S. Treasury.

FSA county offices will process all payments through the Web-based National Payment System, which will transmit the payment record to the Federal Reserve Bank or U.S. Treasury for disbursement.

This new payment centralization will provide automated accounting initiatives to strengthen internal controls within FSA to mitigate the risk for erroneous payments.

Producers should be aware there may be a delay in receiving payments or loan proceeds in some situations. If the producer has a direct deposit on file and the payment does not need to be issued jointly, the payment should be received in the producer?s bank account usually within two days after the county office has electronically certified and approved the release of the payment through NPS.

When the payment needs to be issued jointly, such as to a bank or credit institution, or a producer does not have a direct deposit on file, then a paper check would be issued through U.S. Treasury after the county office has electronically certified and approved the payment though NPS. Processing time is at least 3 days for U.S. Treasury to issue the paper check and an additional two to seven days for mailing, thus creating a total delay of five to 10 days for a paper check to be received.

The county office can either request the paper check be sent directly to the producer or directly to the county office, depending on the situation.

In addition, when a producer is making a Commodity Credit Corp loan repayment, or a warehouse is making a loan repayment on commodity delivered under an Authorization for Delivery of Loan Collateral for Sale, the payment needs to be the exact amount needed to repay the specific quantity involved in the repayment.

It is important that producers and warehouse elevator personnel communicate closely with the applicable FSA county office before a loan is repaid to ensure the correct amount is submitted.

If there are any questions, contact your FSA county office.

Bill Harmon is executive director of the Marion County FSA office.

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