Agricultural Terms That Every Farmer Should Know- Part 2

Hello!
In the last blog, we touched on the agricultural terms that farmers and agricultural professionals should know. This blog post is a continuation of the Law and Order series and without further ado; here are more terms that farmers should know. 
*Although some of these terms are more rampant in other countries, many of the principles
behind these still, apply.

Bound tariff rate(s):  These are Tariff rates resulting from the General Agreement on Tariffs
and Trade negotiations that are incorporated as part of a country’s schedule of concessions.
 
Branded commodity (ies) (beef, pork, lamb): A specifically labeled product that is
differentiated from commodity items by its brand name.
 
Bridge loan: A bridge loan is typical, a short-term loan provided by a commercial or
cooperative lender to a borrower approved for a Farm Service Agency direct loan to cover that
a period when funding for the approved direct credit was not yet available.
 

Bright-line: A theory of risk regulation.
 
Broker(s); brokerage: (1) A person or firm who is engaged for others, on a commission basis,
in negotiating contracts relative to the property of which he has no actual or constructive custody. 
 
Budgetary resources: All sources of authority provided to federal agencies that permit them to
incur financial obligations, including new budget authority, unobligated balances, direct
spending authority, and obligation limitations.

Buy-back: (1) A form of countertrade where the seller of a product (such as machinery,
equipment or technology), used as an input in the production of another product, agrees to
accept the resulting products as full or partial payment.
 
Buy-back contract: A transaction whereby an exporter, having sold a commodity for export to a
foreign buyer liquidates the export sale contract by making an offsetting purchase of the same
kind of product from the same international buyer.
 
C.i.f: Cost, Insurance, and Freight
 
Call price: This is the price level at which producers with grain in the Farmer-Owned Reserve
must repay the nonrecourse loan plus any accumulated interest.
 
Call; call option(s): In commodity options trading, an option that gives the buyer the right, but
not the obligation.
 
Cash (basis) method (accounting):  The accounting method used by most producers. All taxable income, whether received in cash or property, is included in revenue in the year actually or constructively received. 
 
Cash commodity(ies): An actual physical commodity being bought or sold.

Cash contract(ing): A sales agreement for either immediate or future delivery of a specific cash
commodity.

Cash crop(s): A crop grown solely for selling rather than for basic food and feed needs of the
producer.

Cash expenses: The outflows from production agriculture. These do not include depreciation
(that flowed out at some other point in time), perquisites to hired labor (not cash outflow or
already covered as a cash expense), and farm household expenses

Cash flow: The total funds generated internally by a firm for covering costs and investment.
Farming presents unique cash-flow problems when income is generated only at the end of a
production cycle.

Debeak: A poultry management practice designed to reduce the incidences of cannibalism and
other aggressive behavior towards poultry raised in close confinement.

Debt limit: This is the maximum amount of a federal debt that may legally be outstanding at any
time.

Debt settlement: The resolution of outstanding delinquent loans by the cancellation of the debt,
compromise, or total repayment.

Debt write-down: For outstanding delinquent farm loans, the reduction of both interest and
principal on the debt to a level that equals the value of the collateral securing the debt (recovery
value).

Debt/asset ratio: A measure used to determine the financial soundness of a farming
operation. Producers whose debts are equal to 70 percent or more of their assets are considered to be in financial difficulty.

Defer(red)(ring)(ral): (1) For the purpose of avoiding a loan default, the postponing until a later
time, such as the end of the original loan term, the repayment of delinquent loan installments.
Both principal and interest may be deferred, or the principal only may be delayed while the
interest charges continue to accrue.

Earmark(s): (1) The setting aside of funds for a specific purpose, use, or recipient. (2)
Commonly used to describe funds set aside for such purposes, such as research projects.

Economic union: This occurs when countries agree to coordinate economic policies such as interest rates, stable exchange rates, common policies on inflation, and, ultimately, a single currency. Additional policy coordination may be sought in coordinated education, workforce
training, unemployment benefits, pensions, health care, and other services.

Economies (diseconomies) of scale (size): The reduction in per-unit cost of
production associated with an increase in the optimal size of the operation, usually resulting
from specialization, division of labor, and technology. Diseconomies involve an increase in per-
the unit cost of production associated with non-optimal growth in size resulting from inadequate
management or other factors.

Source

Ag Law Glossary. (n.d.). Retrieved October 21, 2019, from https://nationalaglawcenter.org/ag-
law-glossary/

Post by Sughnen Yongo