The Ironton News

SEED CORN LOAN
PLAN ANNOUNCED
The Federal seed corn loan program announced by the Agricultural Adjustment Administration in September will soon be under way, officials said this week. The necessary forms have been prepared and will be available for distribution within a very short time.
Through the operation of the new loan program and the publicity given to it, AAA officials are of the opinion that seed corn supplies next spring will be adequate in all areas except where no corn was produced this year. In the latter areas, it is probable that farmers will need from 500,000 to 1,000,000 bushels from outside sources. The new loan program assures producers that supplies of corn adaptable for seed will remain on the farm where it is needed and will prevent the skyrocketing of seed prices next spring.
The program consists of two types of loans on farm-stored seed corn: (1) a loan of $1.75 a bushel on field selected corn which meets proper germination and storage requirements, and (2), a loan of 55 cents a bushel on good quality cribbed corn which can be sorted for seed at a later date. Each loan agreement carries with it an option of right of purchase by the Government at a rate considerably above the loan value rate.
Though the 55-cent loan is designed as an emergency, drought measure, it will be conducted in much the same manner as the corn loan programs of the past three years which provided low-cost credit to thousands of farmers throughout the Middlewest. Though a number of States had warehouse laws and the means for financing commodity loans prior to 1933, it was not until the advent of the Roosevelt administration that farmers were provided with the use of these facilities.
Provides Low-Cost Credit
Farmers long held that they could market their crops more effectively, could iron out to some extent the wide fluctuations in price and could more adequately protect the country against shortage, if adequate low-cost credit were available on their commodities in storage at or near the farm. It was not until 1933, however, that the commodity loan was initiated by the Government when loans were made on warehoused cotton at 10 cents a pound and on farm-stored corn at the rate of 45 cents a bushel. If similar facilities had been provided a few years earlier, thousands of farmers would not have been forced by low prices to burn their corn and wheat as fuel.
Loans to corn farmers on their 1933 crop totalled about $120,500,000. It is estimated that producers taking advantage of this loan on 267,540,000 bushels of corn realized a net gain of nearly $82,000,000 over the value of their corn and the costs of the loan. The amount placed under seal, approximating one-tenth of the average annual corn crop, made it possible for farmers to carry their corn through to the 1934-35 feeding season when it was greatly needed as a result of the unprecedented drought in 1934.
A 55-cent a bushel loan on the 1934 crop totalled $11,041,500. The 213,000 farmers taking advantage of these two loans have repaid them in full.
The Government loans to producers on their 1935 crop amounted to nearly $15,500,000. Practically all of these loans have now been paid. Though they matured on July 1, 1936, liquidation was not pushed after the drought developed, thus enabling farmers to dispose of their supplies in orderly fashion. Some farmers had to release their corn prior to this date because of the need for feed and financial assistance or because their stored corn had been damaged or was threatened by damage as a result of high moisture content.