Exhibit A to Subpart B of Part 1924 - Letter to Borrower Regarding Releases of Farm Income To Pay Family Living and Farm Operating Expenses

UNITED STATES DEPARTMENT OF AGRICULTURE Farmers Home Administration or its successor agency under Public Law 103-354 (Insert Address) (Date) Borrower's Name) (Address)

Dear ___:

Public Law 100-233 requires the Agency to notify you that you are entitled to have Agency release proceeds from the sale of crops, livestock, and livestock products planned to be marketed in the regular course of business including ASCS and CCC payments, so that you can pay essential family living and farm operating expenses. The releases will continue until such time as your account should become in default and Agency has to accelerate your account.

To provide these releases to you, Agency regulations require that you fill out Form FmHA 1962-1 to explain what items of Agency security you intend to sell during this crop year. Please see attachment 1 of this letter for an explanation of this form. We request that you contact this office within 10 days of when you receive this letter so that we can complete this form and you can receive releases on a timely basis.

Sincerely,

County Supervisor Attachment 1 to Exhibit A

Periodically, you will be asked to complete Form FmHA 1962-1, “Agreement for the Use of Proceeds/Release of Chattel Security,” which will document the agreement between you and the Agency as to how proceeds from the sale of chattel property which serves as security for your Agency loans will be released. You will also need to list those buyers to whom you plan to sell your farm products. This plan will give you and the Agency a clear idea of what income you expect from your operation and how those proceeds will be used. The plan will set forth the amount of money required for paying essential family living, farm operating expenses, and debt service payments. You and the Agency must agree on how much money will be released from your crop proceeds. Such releases must be in accordance with Agency regulations.

If the County Supervisor is unable to agree with and approve your plan for the use of the sales proceeds, you will receive a letter explaining why the County Supervisor is unable to approve your plan and how you may appeal the County Supervisor's decision. While an appeal is pending, Agency will release sales proceeds to be used to pay essential family living and farm operation expenses.

Once a plan has been agreed on, it is important that you abide by the plan. The plan can always be revised or changed, as circumstances require, provided you and Agency can agree to the revisions.

Planned sales can be listed by month, by quarter or by whatever period suits your operation the best. The form does not have to be completed to show each individual animal, bushel, bale, etc. The form is a plan: it contains only projections. We expect your projections to be realistic and based on your past experience, but we know that you cannot predict exactly how many bushels per acre you will harvest, exactly how many animals you will wean, etc. We also realize that you cannot predict prices to the penny. Sometimes you will have a buyer for your products who is not listed on the form. All we expect of you is to be as accurate as you can. Later, if the plan needs to be changed, you and the County Supervisor can work together to revise it. Many revisions can be agreed on over the telephone and a trip to the County Office is not always needed. You are not required to check with Agency before making a sale just because the price you expected to receive is different from what you had planned to receive. However, a difference in price might require your plan to be revised, so Agency wants to be told about the difference as soon as possible after the sale is made. you are expected to obtain Agency approval before making a major change in your operation or before you use sale proceeds in a way different than you agreed to.

If at all possible, you should let Agency know if you are going to sell to a buyer who is not listed on the form. The attached chart gives certain examples when you must get prior consent from the Agency and when you may advise Agency after the sales of your farm products.

What To Do If You Want To Take Actions That Are Different Than What Is Listed on Your Form FmHA 1962-1Get prior consentGive notice afterwardsYou Must Get Agency PRIOR CONSENT if You Want to:You Can Take Action and Then Give Agency Notice AFTERWARDS if You Want to:1) Sell, exchange, consume, or otherwise dispose of property that is not listed on your Form FmHA 1962-1;4) Dispose of your property at a time that is different than what you listed in the “MONTH” section of your Form FmHA 1962-1;2) Dispose of chattel security in a way not listed in the “HOW” section of your Form FmHA 1962-1 (for example, feed corn to livestock instead of selling it;5) Sell (or exchange) your property to a person or business that is not listed in the “POTENTIAL PURCHASERS” section of your Form FmHA 1962-1;3) Use proceeds in a way not listed in the “USE OF PROCEEDS” section of your Form FmHA 1962-1 (for example, use proceeds to buy equipment instead of to pay debt).6) Sell, exchange, consume, or otherwise dispose of a quantity of property that is different than what you listed in the “QUANTITY” section of your Form FmHA 1962-1;7) Accept a price for your property that is different than what you listed in the “AMOUNT OF PROCEEDS” section of your Form FmHA 1962-1.