FSA Specialty Agricultural Loans — Boll Weevil Eradication, Apple Producer, and Seed Producer Emergency Programs
Legal Authority
- 7 U.S.C. § 1989 — FSA emergency loan authority: grants the Farm Service Agency authority to make emergency loans to farmers for losses caused by natural disasters, disease, or other specified emergencies; the foundational authority for specialty agricultural loan programs including boll weevil eradication loans, apple producer loans, and seed producer emergency programs
- 7 CFR Parts 771, 773, 774 — FSA regulations implementing specific specialty loan programs: Part 771 (boll weevil eradication loans for cotton farmers affected by eradication program costs), Part 773 (apple producer emergency loans for producers affected by market disruptions), Part 774 (seed producer emergency loans for producers facing shortfalls in seed supply)
Key Mechanics
These specialty loan programs address production disruptions that fall outside the standard FSA emergency loan framework. The boll weevil eradication loan program (Part 771) provides credit to cotton producers in areas undergoing mandatory boll weevil eradication programs, helping them finance the cost of traps, pesticide applications, and participation assessments while eradication is ongoing — costs that are obligatory for producers in the eradication zone but occur before the benefits (pest elimination, reduced insecticide costs) are realized. The apple producer and seed producer programs (Parts 773 and 774) are similar emergency credit vehicles created to address specific commodity crises in the early 2000s. All three programs require applicants to demonstrate program eligibility (active production operations in the relevant commodity), inability to obtain credit at reasonable terms elsewhere, and financial viability sufficient to repay the loan. FSA county offices administer applications.
Current Rule (2026)
| Parameter | Value |
|---|---|
| Citation | 7 CFR Parts 771, 773, 774 |
| Issuing agency | USDA Farm Service Agency (FSA) |
| Statutory authority | 7 U.S.C. § 1989 (FSA emergency loan authority) |
| Last major amendment | Various; Parts 773 and 774 reflect early-2000s emergency programs |
What This Rule Does
Congress has periodically directed FSA to create emergency loan programs targeting specific agricultural crises — a major pest eradication campaign, a market collapse hitting a single commodity, or a supplier bankruptcy leaving crop producers without payment. Three CFR Parts govern three such specialized loan programs:
7 CFR Part 771 — Boll Weevil Eradication Loan Program: FSA loans to boll weevil eradication organizations (cooperatives and state foundations) funding the national campaign to eradicate the cotton boll weevil, one of the most damaging agricultural pests in U.S. history. The program works alongside USDA's APHIS-led eradication effort by providing low-interest capital to the producer-funded organizations carrying out the eradication work.
7 CFR Part 773 — Special Apple Loan Program: Emergency direct loans to apple producers following severe market disruptions. Loans cap at $500,000 per producer (or $300 per acre of apple production, whichever is less) and are used for operational costs, farm reorganization, or expenses directly tied to growing and selling apples. The program reflects congressional recognition that specialty fruit producers, who cannot easily pivot to other crops, face unique vulnerability when market conditions collapse.
7 CFR Part 774 — Emergency Loan for Seed Producers Program: Direct emergency loans to seed producers who filed claims in the AgriBiotech, Inc. bankruptcy proceedings. AgriBiotech was a major seed company whose bankruptcy left seed growers holding uncollectable accounts receivable. Congress created this loan program to help those producers bridge the financial gap; loans are capped at 65% of the producer's documented bankruptcy claim.
Key Provisions — Boll Weevil Eradication Loans (Part 771)
- § 771.4 — Eligibility: applicants must be boll weevil eradication organizations that have already met APHIS's eligibility requirements for cost-share grants; APHIS certifies eligibility before FSA processes a loan application
- § 771.5 — Loan purposes: funds may be used for activities directly tied to eradication — purchasing or leasing equipment, traps, or pesticides; paying contractor or staff costs; and administrative expenses of running the eradication program
- § 771.6 — Environmental compliance: FSA cannot approve or close a boll weevil eradication loan until all required federal and state environmental reviews are complete; the eradication program involves pesticide application and habitat modification that trigger NEPA and other environmental requirements
- § 771.9 — Interest and terms: FSA sets a fixed interest rate based on government borrowing costs for similar-term loans; repayment terms must be structured so the eradication organization can realistically repay from program revenues
- § 771.14 — Annual monitoring: borrowers must meet with FSA representatives at least once a year to review finances and progress on eradication goals; FSA can accelerate the loan if the organization fails to maintain adequate progress or financial condition
Key Provisions — Special Apple Loans (Part 773)
- § 773.6 — Eligibility: must be a U.S. citizen (or qualifying entity), a commercial apple producer, able to demonstrate repayment capacity, and not be delinquent on any federal debt; standard FSA creditworthiness criteria apply
- § 773.7 — Loan uses: loan proceeds may pay for costs directly tied to growing or selling apples — farm reorganization, operational expenses, and equipment; proceeds cannot be used for non-apple agricultural activities or purposes unrelated to the apple operation
- § 773.8 — Loan limits: maximum $500,000 per producer; loan amount is also capped at $300 per acre of apple production, whichever is lower; FSA may make an exception to the security requirements when the exception is in the government's best financial interest
- § 773.19 — Interest and terms: fixed interest rate set at the time of approval; collateral requirements follow standard FSA non-program loan procedures (typically a lien on farm assets); FSA values collateral conservatively and may require additional security if the primary collateral is insufficient
- § 773.22 — Loan servicing: active loans are handled as non-program loans under 7 CFR Part 766; if a loan is not fully repaid when the program period ends, FSA services it as a regular farm loan
Key Provisions — Emergency Seed Producer Loans (Part 774)
- § 774.6 — Eligibility: applicants must be seed producers who filed a timely proof of claim in the AgriBiotech bankruptcy proceeding and who meet FSA's standard creditworthiness standards; the AgriBiotech bankruptcy nexus is the defining eligibility criterion
- § 774.8 — Loan limits: FSA will make a loan for up to 65% of the value of the producer's verified bankruptcy claim filed with the court; the cap ensures producers bear some risk that their bankruptcy claim may not be paid in full
- § 774.18 — Interest rate: loans tied to the AgriBiotech bankruptcy claim carry zero interest for 36 months or until the bankruptcy proceeding is settled — whichever occurs first; after that period, FSA sets a standard interest rate
- § 774.19 — Application processing: FSA processes applications in order of approval; if available funds are exhausted before all eligible applications are funded, remaining applicants are not funded; FSA maintains a waiting list if Congress appropriates additional funds
- § 774.23 — Loan servicing: after the interest-free period, loans are serviced as non-program loans under FSA's standard procedures; if a producer receives payment from the AgriBiotech bankruptcy estate, FSA may apply that recovery against the outstanding loan balance
How It Affects You
Boll Weevil Eradication Loans: These loans flow to the eradication organizations — state and regional cooperatives or foundations funded by cotton producer assessments — not to individual cotton farmers. Individual producers benefit indirectly: the eradication campaign eliminates one of the most costly pests in cotton production, and the loan program provides the capital for the eradication infrastructure. If you are a member of a boll weevil eradication organization, your organization's ability to secure FSA financing affects your per-acre assessment obligations and the timeline for achieving eradication.
Special Apple Loans: These loans are direct to individual producers. If you are an apple grower who experienced severe economic losses due to a market disruption and need operating capital tied specifically to your apple operation, this program provides an option when commercial credit is unavailable. The $500,000 cap and $300-per-acre limitation mean the program targets mid-size commercial operations.
Emergency Seed Producer Loans: These loans are specifically for seed growers who held claims in the AgriBiotech bankruptcy. If you were an AgriBiotech seed grower, the 36-month zero-interest feature was designed to help you bridge the gap while the bankruptcy proceedings resolved, using 65% of your verified claim as collateral for the loan. The program effectively let FSA act as a bridge lender while the bankruptcy estate was liquidated.
All three programs share standard FSA loan requirements: no delinquency on federal debt, demonstrated ability to repay, and collateral adequate to secure the loan. Appeals from FSA credit decisions are available through the USDA National Appeals Division under 7 CFR Part 11.
Statutory Authority
These rules implement:
- 7 U.S.C. § 1989 — FSA's general emergency loan authority, allowing the agency to make loans for agricultural purposes when commercial credit is unavailable; the specific programs are authorized by appropriations acts and emergency provisions in Farm Bills
- Farm Security and Rural Investment Act of 2002 (2002 Farm Bill) — Included authorization for the Special Apple Loan Program in response to market conditions for apple producers
- Emergency appropriations — The seed producer loan program was funded through emergency appropriations tied to the AgriBiotech bankruptcy
Recent Rulemakings
No major amendments since original promulgation. All three programs are closed to new enrollment based on their enabling legislation. The regulations remain in force for loan servicing, monitoring, and collections on outstanding balances.