7 USC 7235 - Loan deficiency payments

Collapse to view only § 7235. Loan deficiency payments

§ 7231. Availability of nonrecourse marketing assistance loans
§ 7232. Loan rates for marketing assistance loans
§ 7233. Term of loans
§ 7234. Repayment of loans
§ 7235. Loan deficiency payments
§ 7236. Special marketing loan provisions for upland cotton
§ 7236a. Special competitive provisions for extra long staple cotton
§ 7237. Availability of recourse loans for high moisture feed grains and seed cotton and other fibers

§ 7231. Availability of nonrecourse marketing assistance loans

(a) Nonrecourse loans available

(b) Eligible production

The following production shall be eligible for a marketing assistance loan under subsection (a):

(1) In the case of a marketing assistance loan for a contract commodity, any production by a producer on a farm containing eligible cropland covered by a production flexibility contract.

(2) In the case of a marketing assistance loan for extra long staple cotton and oilseeds, any production.

(d) Additional outlays prohibited

(Pub. L. 104–127, title I, § 131, Apr. 4, 1996, 110 Stat. 905.)

§ 7232. Loan rates for marketing assistance loans

(a) Wheat

(1) Loan rate

Subject to paragraph (2), the loan rate for a marketing assistance loan under section 7231 of this title for wheat shall be—

(A) not less than 85 percent of the simple average price received by producers of wheat, as determined by the Secretary, during the marketing years for the immediately preceding 5 crops of wheat, excluding the year in which the average price was the highest and the year in which the average price was the lowest in the period; but

(B) not more than $2.58 per bushel.

(2) Stocks to use ratio adjustment

If the Secretary estimates for any marketing year that the ratio of ending stocks of wheat to total use for the marketing year will be—

(A) equal to or greater than 30 percent, the Secretary may reduce the loan rate for wheat for the corresponding crop by an amount not to exceed 10 percent in any year;

(B) less than 30 percent but not less than 15 percent, the Secretary may reduce the loan rate for wheat for the corresponding crop by an amount not to exceed 5 percent in any year; or

(b) Feed grains

(1) Loan rate for corn

Subject to paragraph (2), the loan rate for a marketing assistance loan under section 7231 of this title for corn shall be—

(A) not less than 85 percent of the simple average price received by producers of corn, as determined by the Secretary, during the marketing years for the immediately preceding 5 crops of corn, excluding the year in which the average price was the highest and the year in which the average price was the lowest in the period; but

(B) not more than $1.89 per bushel.

(2) Stocks to use ratio adjustment

If the Secretary estimates for any marketing year that the ratio of ending stocks of corn to total use for the marketing year will be—

(A) equal to or greater than 25 percent, the Secretary may reduce the loan rate for corn for the corresponding crop by an amount not to exceed 10 percent in any year;

(B) less than 25 percent but not less than 12.5 percent, the Secretary may reduce the loan rate for corn for the corresponding crop by an amount not to exceed 5 percent in any year; or

(3) Other feed grains

(1) Loan rate

Subject to paragraph (2), the loan rate for a marketing assistance loan under section 7231 of this title for upland cotton shall be established by the Secretary at such loan rate, per pound, as will reflect for the base quality of upland cotton, as determined by the Secretary, at average locations in the United States a rate that is not less than the smaller of—

(A) 85 percent of the average price (weighted by market and month) of the base quality of cotton as quoted in the designated United States spot markets during 3 years of the 5-year period ending July 31 of the year preceding the year in which the crop is planted, excluding the year in which the average price was the highest and the year in which the average price was the lowest in the period; or

(B) 90 percent of the average, for the 15-week period beginning July 1 of the year preceding the year in which the crop is planted, of the 5 lowest-priced growths of the growths quoted for Middling 13⁄32-inch cotton C.I.F. Northern Europe (adjusted downward by the average difference during the period April 15 through October 15 of the year preceding the year in which the crop is planted between the average Northern European price quotation of such quality of cotton and the market quotations in the designated United States spot markets for the base quality of upland cotton), as determined by the Secretary.

(2) Limitations

(d) Extra long staple cotton

The loan rate for a marketing assistance loan under section 7231 of this title for extra long staple cotton shall be—

(1) not less than 85 percent of the simple average price received by producers of extra long staple cotton, as determined by the Secretary, during 3 years of the 5-year period ending July 31 of the year preceding the year in which the crop is planted, excluding the year in which the average price was the highest and the year in which the average price was the lowest in the period; but

(2) not more than $0.7965 per pound.

(e) Rice

(f) Oilseeds

(1) Soybeans

The loan rate for a marketing assistance loan under section 7231 of this title for soybeans shall be—

(A) not less than 85 percent of the simple average price received by producers of soybeans, as determined by the Secretary, during the marketing years for the immediately preceding 5 crops of soybeans, excluding the year in which the average price was the highest and the year in which the average price was the lowest in the period; but

(B) not less than $4.92 or more than $5.26 per bushel.

(2) Sunflower seed, canola, rapeseed, safflower, mustard seed, and flaxseed

The loan rate for a marketing assistance loan under section 7231 of this title for sunflower seed, canola, rapeseed, safflower, mustard seed, and flaxseed, individually, shall be—

(A) not less than 85 percent of the simple average price received by producers of sunflower seed, individually, as determined by the Secretary, during the marketing years for the immediately preceding 5 crops of sunflower seed, individually, excluding the year in which the average price was the highest and the year in which the average price was the lowest in the period; but

(B) not less than $0.087 or more than $0.093 per pound.

(3) Other oilseeds

(Pub. L. 104–127, title I, § 132, Apr. 4, 1996, 110 Stat. 905.)

§ 7233. Term of loans

(a) Term of loan

(b) Special rule for cotton

(Pub. L. 104–127, title I, § 133, Apr. 4, 1996, 110 Stat. 907.)

§ 7234. Repayment of loans

(a) Repayment rates for wheat, feed grains, and oilseedsThe Secretary shall permit a producer to repay a marketing assistance loan under section 7231 of this title for wheat, corn, grain sorghum, barley, oats, and oilseeds at a rate that is the lesser of—

(1) the loan rate established for the commodity under section 7232 of this title, plus interest (as determined by the Secretary); or

(2) a rate that the Secretary determines will—

(A) minimize potential loan forfeitures;

(B) minimize the accumulation of stocks of the commodity by the Federal Government;

(D) allow the commodity produced in the United States to be marketed freely and competitively, both domestically and internationally.

(b) Repayment rates for upland cotton and riceThe Secretary shall permit producers to repay a marketing assistance loan under section 7231 of this title for upland cotton and rice at a rate that is the lesser of—

(1) the loan rate established for the commodity under section 7232 of this title, plus interest (as determined by the Secretary); or

(2) the prevailing world market price for the commodity (adjusted to United States quality and location), as determined by the Secretary.

(d) Prevailing world market priceFor purposes of this section and section 7236 of this title, the Secretary shall prescribe by regulation—

(1) a formula to determine the prevailing world market price for each loan commodity, adjusted to United States quality and location; and

(2) a mechanism by which the Secretary shall announce periodically the prevailing world market price for each loan commodity.

(e) Adjustment of prevailing world market price for upland cotton

(1) In generalDuring the period ending July 31, 2003, the prevailing world market price for upland cotton (adjusted to United States quality and location) established under subsection (d) shall be further adjusted if—

(A) the adjusted prevailing world market price is less than 115 percent of the loan rate for upland cotton established under section 7232 of this title, as determined by the Secretary; and

(B) the Friday through Thursday average price quotation for the lowest-priced United States growth as quoted for Middling (M) 13⁄32-inch cotton delivered C.I.F. Northern Europe is greater than the Friday through Thursday average price of the 5 lowest-priced growths of upland cotton, as quoted for Middling (M) 13⁄32-inch cotton, delivered C.I.F. Northern Europe (referred to in this section as the “Northern Europe price”).

(2) Further adjustmentExcept as provided in paragraph (3), the adjusted prevailing world market price for upland cotton shall be further adjusted on the basis of some or all of the following data, as available:

(A) The United States share of world exports.

(B) The current level of cotton export sales and cotton export shipments.

(C) Other data determined by the Secretary to be relevant in establishing an accurate prevailing world market price for upland cotton (adjusted to United States quality and location).

(3) Limitation on further adjustmentThe adjustment under paragraph (2) may not exceed the difference between—

(A) the Friday through Thursday average price for the lowest-priced United States growth as quoted for Middling 13⁄32-inch cotton delivered C.I.F. Northern Europe; and

(B) the Northern Europe price.

(Pub. L. 104–127, title I, § 134, Apr. 4, 1996, 110 Stat. 908.)

§ 7235. Loan deficiency payments

(a) Availability of loan deficiency payments

Except as provided in subsection (d), the Secretary may make loan deficiency payments available to—

(1) producers who, although eligible to obtain a marketing assistance loan under section 7231 of this title with respect to a loan commodity, agree to forgo obtaining the loan for the commodity in return for payments under this section; and

(2) effective only for the 2000 and 2001 crop years, producers that, although not eligible to obtain such a marketing assistance loan under section 7231 of this title, produce a contract commodity.

(b) Computation

A loan deficiency payment under this section shall be computed by multiplying—

(1) the loan payment rate determined under subsection (c) for the loan commodity; by

(2) the quantity of the loan commodity produced by the eligible producers, excluding any quantity for which the producers obtain a loan under section 7231 of this title.

For purposes of this section, the loan payment rate shall be the amount by which—

(1) the loan rate established under section 7232 of this title for the loan commodity; exceeds

(2) the rate at which a loan for the commodity may be repaid under section 7234 of this title.

(d) Exception for extra long staple cotton

(e) Transition

(f) Beneficial interest

(g) Effective date for payment rate determination

For the 2001 crop year, the Secretary shall determine the amount of the loan deficiency payment to be made under this section to the producers on a farm with respect to a quantity of a loan commodity using the payment rate in effect under subsection (c) as of the earlier of the following:

(1) The date on which the producers marketed or otherwise lost beneficial interest in the crop of the loan commodity, as determined by the Secretary.

(2) The date the producers requested the payment.

(Pub. L. 104–127, title I, § 135, Apr. 4, 1996, 110 Stat. 909; Pub. L. 106–224, title II, § 206, June 20, 2000, 114 Stat. 405; Pub. L. 107–171, title I, § 1205(f)(2), May 13, 2002, 116 Stat. 159.)

§ 7236. Special marketing loan provisions for upland cotton

(a) Cotton user marketing certificates

(1) IssuanceDuring the period ending July 31, 2003, the Secretary shall issue marketing certificates or cash payments, at the option of the recipient, to domestic users and exporters for documented purchases by domestic users and sales for export by exporters made in the week following a consecutive 4-week period in which—

(A) the Friday through Thursday average price quotation for the lowest-priced United States growth, as quoted for Middling (M) 13⁄32-inch cotton, delivered C.I.F. Northern Europe exceeds the Northern Europe price by more than 1.25 cents per pound; and

(B) the prevailing world market price for upland cotton (adjusted to United States quality and location) does not exceed 134 percent of the loan rate for upland cotton established under section 7232 of this title.

(2) Value of certificates or payments

(3) Administration of marketing certificates

(A) Redemption, marketing, or exchange

(B) Designation of commodities and products

(b) Special import quota

(1) Establishment

(A) In general

(B) Program requirements

(D) Season-ending United States stocks-to-use ratio

(2) Quantity

(3) Application

(4) Overlap

(5) Preferential tariff treatmentThe quantity under a special import quota shall be considered to be an in-quota quantity for purposes of—

(A)section 2703(d) of title 19;

(B)section 3203 of title 19;

(C)section 2463(d) of title 19; and

(D) General Note 3(a)(iv) to the Harmonized Tariff Schedule.

(6) “Special import quota” defined

(7) Limitation

(1) In generalThe President shall carry out an import quota program that provides that whenever the Secretary determines and announces that the average price of the base quality of upland cotton, as determined by the Secretary, in the designated spot markets for a month exceeded 130 percent of the average price of such quality of cotton in the markets for the preceding 36 months, notwithstanding any other provision of law, there shall immediately be in effect a limited global import quota subject to the following conditions:

(A) Quantity

(B) Quantity if prior quota

(C) Preferential tariff treatmentThe quantity under a limited global import quota shall be considered to be an in-quota quantity for purposes of—

(i)section 2703(d) of title 19;

(ii)section 3203 of title 19;

(iii)section 2463(d) of title 19; and

(iv) General Note 3(a)(iv) to the Harmonized Tariff Schedule.

(D) DefinitionsIn this subsection:

(i) SupplyThe term “supply” means, using the latest official data of the Bureau of the Census, the Department of Agriculture, and the Department of the Treasury—(I) the carry-over of upland cotton at the beginning of the marketing year (adjusted to 480-pound bales) in which the quota is established;(II) production of the current crop; and(III) imports to the latest date available during the marketing year.

(ii) DemandThe term “demand” means—(I) the average seasonally adjusted annual rate of domestic mill consumption during the most recent 3 months for which data are available; and(II) the larger of—(aa) average exports of upland cotton during the preceding 6 marketing years; or(bb) cumulative exports of upland cotton plus outstanding export sales for the marketing year in which the quota is established.

(iii) Limited global import quota

(E) Quota entry period

(2) No overlap

(Pub. L. 104–127, title I, § 136, Apr. 4, 1996, 110 Stat. 909; Pub. L. 105–86, title VII, § 731, Nov. 18, 1997, 111 Stat. 2108; Pub. L. 105–277, div. A, § 101(a) [title VII, § 762], Oct. 21, 1998, 112 Stat. 2681, 2681–36; Pub. L. 106–78, title VIII, § 806, Oct. 22, 1999, 113 Stat. 1179.)

§ 7236a. Special competitive provisions for extra long staple cotton

(a) Competitiveness program

(b) Payments under program; trigger

Under the program, the Secretary shall make payments available under this section whenever—

(1) for a consecutive 4-week period, the world market price for the lowest priced competing growth of extra long staple cotton (adjusted to United States quality and location and for other factors affecting the competitiveness of such cotton), as determined by the Secretary, is below the prevailing United States price for a competing growth of extra long staple cotton; and

(2) the lowest priced competing growth of extra long staple cotton (adjusted to United States quality and location and for other factors affecting the competitiveness of such cotton), as determined by the Secretary, is less than 134 percent of the loan rate for extra long staple cotton.

(d) Payment amount

(e) Form of payment

(Pub. L. 104–127, title I, § 136A, as added Pub. L. 106–113, div. B, § 1000(a)(5) [title I, § 104(c)], Nov. 29, 1999, 113 Stat. 1536, 1501A–291.)

§ 7237. Availability of recourse loans for high moisture feed grains and seed cotton and other fibers

(a) High moisture feed grains

(1) Recourse loans availableFor each of the 1996 through 2002 crops of corn and grain sorghum, the Secretary shall make available recourse loans, as determined by the Secretary, to producers on a farm containing eligible cropland covered by a production flexibility contract who—

(A) normally harvest all or a portion of their crop of corn or grain sorghum in a high moisture state;

(B) present—

(i) certified scale tickets from an inspected, certified commercial scale, including a licensed warehouse, feedlot, feed mill, distillery, or other similar entity approved by the Secretary, pursuant to regulations issued by the Secretary; or

(ii) field or other physical measurements of the standing or stored crop in regions of the United States, as determined by the Secretary, that do not have certified commercial scales from which certified scale tickets may be obtained within reasonable proximity of harvest operation;

(C) certify that they were the owners of the feed grain at the time of delivery to, and that the quantity to be placed under loan under this subsection was in fact harvested on the farm and delivered to, a feedlot, feed mill, or commercial or on-farm high-moisture storage facility, or to a facility maintained by the users of corn and grain sorghum in a high moisture state; and

(D) comply with deadlines established by the Secretary for harvesting the corn or grain sorghum and submit applications for loans under this subsection within deadlines established by the Secretary.

(2) Eligibility of acquired feed grainsA loan under this subsection shall be made on a quantity of corn or grain sorghum of the same crop acquired by the producer equivalent to a quantity determined by multiplying—

(A) the acreage of the corn or grain sorghum in a high moisture state harvested on the producer’s farm; by

(B) the lower of the farm program payment yield or the actual yield on a field, as determined by the Secretary, that is similar to the field from which the corn or grain sorghum was obtained.

(3) “High moisture state” defined

(b) Recourse loans available for seed cotton

(1) Upland cotton

(2) Extra long staple cotton

(1) Recourse loans available

(2) Loan rate

(3) Term of loan

(4) Waiver of interest

(d) Repayment rates

(Pub. L. 104–127, title I, § 137, Apr. 4, 1996, 110 Stat. 912; Pub. L. 105–277, div. A, § 101(a) [title XI, § 1126], Oct. 21, 1998, 112 Stat. 2681, 2681–46.)