§1308a Cost reduction options

Summary

The Secretary of Agriculture must use certain cost-cutting actions whenever they will lower the government’s total costs for a commodity program and will not hurt the income of small- and medium-sized producers. When announcing a program, the Secretary must say which cost options will be used at first and may keep the right to add others later. The Secretary may reopen or change a producer’s contract only if the producer agrees. The Secretary can buy a crop on the open market if buying now plus storage costs will likely cost less than taking the crop later through loan defaults. The Secretary can accept a loan settlement for less than the full principal and interest if doing so saves money by getting some interest instead of none, avoiding default, or stopping storage and handling costs. Before harvest, the Secretary may also take bids from producers to divert planted acres in exchange for payments in kind from surplus stocks when supply or demand changes would otherwise create a costly surplus. Those payments in kind are not counted in the regular per-person payment limit but are capped at $20,000 per year per producer for any one commodity. This authority adds to, and does not replace, other powers the Secretary already has.