Form FSA-2040 Agreement for Disposition of security/release of proceed

Form Approved - OMB No. 0560-765

This form is available electronically.

FSA-2040

U.S. DEPARTMENT OF AGRICULTURE
Farm Service Agency

(proposal 1)

Position 1

AGREEMENT AND RECORD OF THE DISPOSITION OF FSA
SECURITY/RELEASE OF PROCEEDS
PART A - GENERAL
1. Name

2. Date of Security Agreement

3. Beginning Date of this Agreement

PART B - NORMAL INCOME SECURITY
1. Expected Source of FSA Payment and Planned Releases
A.
Security Property

C.
Lien/Release Priority

3. Use of Proceeds

2. Actual Disposition
A.
Description of
Property

B.
Amount $

B.
How

C.
Amount $

A.
FSA Payment

B.
Operating
Expenses

D.
C.
Other Creditor
Owner
or
Withdrawals
Subordination

E.
Other

F.
G.
H.
Approved Initials Date
Y

N

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status, familial status, parental status, religion, sexual
orientation, genetic information, political beliefs, reprisal, or because all or part of an individual's income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative
means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD). To file a complaint of discrimination, write to USDA, Director, Office of Civil Rights, 1400
Independence Avenue, S.W., Washington, D.C. 20250-9410, or call (800) 795-3272 (voice) or (202) 720-6382 (TDD). USDA is an equal opportunity provider and employer.

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FSA-2040 (proposal 1)
PART C - BASIC SECURITY
1. Disposition
A.
Security
Agreement Line

2. Use of Proceeds
B.
Description

C.
How

D.
Date

E.
Amount $

A.
Amount of
Extra
Payment

B.
C.
Description Converted to
and Purchase
Normal
Price of
Income
Replacement
Security

D.
E.
F.
Approved Initials Date

Y

N

NOTE: The following statements are made in accordance with the Privacy Act of 1974 (5 USC 552a): the Farm Service Agency (FSA) is authorized by the
Consolidated Farm and Rural Development Act, (7 USC 1921 et seq , and the regulations promulgated thereunder, to solicit the information
requested on this form. The information requested is necessary for FSA to determine eligibility for financial assistance, service your loan, and conduct
statistical analyses. Supplied information maybe furnished to other Department of Agriculture agencies, the Department of the Treasury, the
Department of Justice or other law enforcement agencies, the Department of Defense, the Department of Housing and Urban Development, the
Department of Labor, the United States Postal Service, or other Federal, State, or local agencies as required or permitted by law. In addition,
information may be referred to interested parties under the Freedom of Information Act (FOIA), to financial consultants, advisors, lending institutions,
packagers, agents, and private or commercial credit sources, to collection or servicing contractors, to credit reporting agencies, to private attorneys
under contract with FSA or the Department of Justice, to business firms in the trade area that buy chattel or crops or sell them for commission, to
Members of Congress or Congressional staff members, or to courts or adjudicative bodies. Disclosure of the information requested is voluntary.
However, failure to disclose certain items of information requested, including your Social Security Number or Federal Tax Identification Number, may
result in a delay in the processing of this form or its rejection.
According to the Paperwork Reduction Act of 1995, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of
information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0560-765. The time
required to complete this information collection is estimated to average 20 minutes per response, including the time for reviewing instructions,
searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. RETURN
THIS COMPLETED FORM TO YOUR LOCAL FSA OFFICE.

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FSA-2040 (proposal 1)
PART D - AGREEMENT

1. Acknowledgement of Lien
In exchange for the loans I received from the United States Department of Agriculture, Farm Service Agency (FSA), I signed Security
Agreements with the United States of America. By signing the Security Agreements, I have given FSA a security interest in all the
property described in the Security Agreements. This property is called collateral which is categorized as either:
Basic security which is all farm machinery, equipment, vehicles, foundation and breeding livestock herds and flocks, including
replacements, and real estate that serves as security for the loans; or
Normal income security which is all security not considered basic security, including crops, livestock, poultry products, other
property covered by FSA liens that is sold in conjunction with the operation of my operation, and FSA Farm Program payments.
I agree that I will dispose of collateral for its fair market value.
I understand that the money from the sale of collateral must always be used to pay anyone who has a security interest that comes before
FSA's security interest. Both FSA and my name as payee must be listed on all checks, drafts, or money orders which I receive for the sale
of collateral unless all installments due, including any past due installments, have been paid. Checks made in accordance with an
assignment agreement do not have to include both names.
2. Normal Income Security Proceeds
This Agreement identifies proceeds from normal income security that will be used to make my payments to FSA. FSA will release
proceeds from the sale of normal income security not used to make FSA payments. FSA will release proceeds from the sale of normal
income security to pay essential family living and farm operating expenses.
3. Modifying this Agreement
If I want to change the manner which I intend to make my FSA installments, I must contact FSA to modify this Agreement. I may request
and report changes by telephone, letter, or visit to the FSA office. A trip to the FSA office is not always necessary. I understand that
when an agreement is reached on a requested change or when I report changes, FSA must revise the form, initial and date the change, and
mark the form "revised." I will also initial the change. My initials may be obtained by either (1) mailing a copy to me, or (2) asking me to
initial the revised form during my next visit to the FSA office.
If my requested or reported changes would result in a major change in my operation, FSA may request that I attend a conference. At that
conference, FSA and I will develop a new farm operating plan and revise this Agreement.
4. List of Potential Purchasers of My Farm Products
This is a list of purchasers who often buy farm products from me. I have included grain elevators, auction barns, and others who I expect
might buy from me.
A.
Farm Product

B.
Potential Purchaser

C.
Purchaser's Address

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FSA-2040 (proposal 1)

FSA realizes that I do not always know in advance who will buy my products. If I cannot identify specific potential purchasers, I have
described below how the farm products will be sold, for example, at a roadside stand, by advertising in the newspaper, or to neighbors.
D.
Farm Product

E.
Method of Sale

5. Release FSA's Security Interest
FSA consents to all sales, exchanges, and other dispositions of collateral, so long as I meet the terms of this Agreement. FSA agrees to
release its security interest in the collateral as agreed in loan and security instruments.
6. Failure to Reach Agreement
If FSA and I disagree on how to complete or make changes on this Agreement, FSA must send me a letter which describes the items on
which we do not agree. The letter must explain why we do not agree. The letter must also tell me how I may appeal FSA's decision. Until
the appeal is decided, FSA must release any other proceeds on which we have agreed.
When my appeal is decided, FSA will ask me to sign a new farm operating plan and a new Agreement, to reflect the decision on the
appeal. If I do not sign the new agreement, FSA will give me a copy of the new Agreement and tell me that FSA considers the new
Agreement to be binding. If I violate this Agreement, FSA will take the actions described below.
I understand that if I do not appeal or if I refuse to cooperate in completing this Agreement, FSA will complete the Agreement, sign it, and
send it to me. FSA must send a letter with the completed form explaining that FSA will consider the form to be binding on me. I
understand that if I violate the new agreement, FSA will take the actions described below.
7. Consequences of Violating This Agreement
If I sell, exchange, or dispose of collateral without FSA's approval, I will have violated this Agreement and FSA's security interest in the
collateral will not be released. FSA will ask me to pay an amount equal to the value I received for the collateral involved. I understand
that if I pay as FSA requests or provide enough information to allow FSA to approve the sale and use of proceeds, this will cure my
violation if it is a first offense. I understand that if I do not so cure a first offense, or if I commit a second offense whether I cure it or not, I
will be in non-monetary default, which FSA will consider when making eligibility determinations for any future requests for assistance.
Such offenses may adversely impact my future requests for FSA assistance. I realize that FSA may start legal procedures to sell all of my
other collateral and refer my case for possible criminal action against me. I understand that if I do not pay as requested, FSA may also
request that the purchaser of the collateral pay.
8. FSA Actions If My Loan Accounts are Accelerated
If I receive an Acceleration Notice from FSA, this Agreement automatically ends and FSA will no longer release any proceeds from the
disposition of collateral.
9. Acknowledgment
This signature is to acknowledge that I understand this Agreement and will keep to it.
A. Borrower's Signature

B. Date

10. Agency Official Name

11. Title

12. Agency Official Signature

13. Date