Deficiency payments equalled the difference between the target price and the higher of the loan rate or the market price. Planting flexibility or ability to adjust crop rotations increased significantly. PFCs are not tied to current production levels and are therefore decoupled. However, producers are eligible to receive their PFC payments regardless of whether or not a crop is planted. PFC have supported higher production via raising producer incomes and increasing the access to capital to maintain or expand the current level of operation.
Producers are more willing to make investments and lenders are more willing to make loans.
Marketing loan repayment and LDP provisions apply to each of these commodities except for cotton. Nonrecourse marketing loans were originally designed to provide producers with cash flow immediately after harvest, eliminating the need to sell the grain to pay bills when prices were at post-harvest lows. These loans allow producers to store the grain after harvest, pledging the crop as collateral, and market the crop in an orderly manner throughout the crop year. The producer could repay the loan plus interest with the proceeds of the sale. Marketing assistance loans for each of the 16 commodities are nonrecourse in nature.