§8734 — Title 7 Agriculture | U.S. Code

Summary

Producers on a farm can repay a marketing assistance loan (under section 8731) at the lowest of a few possible rates, depending on the crop. For most commodities (not including certain cottons, rices, and some sunflower seeds) the choices are: the loan rate set under section 8732 plus interest calculated under section 7283; a rate the Secretary sets from the average market price over the past 30 days to reduce differences in benefits across states and counties; or another rate the Secretary creates to cut loan forfeitures, lower government stock and storage costs, keep U.S. crops marketable at home and abroad, and make benefits consistent across areas. For upland cotton and long‑ and medium‑grain rice, repayment is the lower of the loan rate plus interest or the Secretary’s prevailing world market price (as adjusted). Extra long staple cotton must be repaid at the loan rate plus interest. Confectionery and non‑oil sunflower seed may be repaid at the lower of the loan rate plus interest or the oil sunflower seed repayment rate. The Secretary must create a formula and a way to announce the prevailing world prices for upland cotton and those rices. World prices for the rices are adjusted for U.S. quality and location. Upland cotton’s world price is adjusted for U.S. quality and location, reduced by any U.S. premium for quality above Middling (M) 13/32‑inch, and reduced by average marketing costs (including transport); further temporary adjustments were allowed through July 31, 2013 under certain conditions. Cotton storage payments follow the 2006 payment method but were cut by 10 percent for 2008–2011 crop years and by 20 percent beginning in 2012. If marketing or transport is severely disrupted, the Secretary may temporarily change repayment rates for affected commodities.

Title 7, §8734

Agriculture — Source: USLM XML via OLRC

(a)The Secretary shall permit the producers on a farm to repay a marketing assistance loan under section 8731 of this title for a loan commodity (other than upland cotton, long grain rice, medium grain rice, extra long staple cotton, and confectionery and each other kind of sunflower seed (other than oil sunflower seed)) at a rate that is the lesser of—

(1)the loan rate established for the commodity under section 8732 of this title, plus interest (determined in accordance with section 7283 of this title);

(2)a rate (as determined by the Secretary) that—

(A)is calculated based on average market prices for the loan commodity during the preceding 30-day period; and

(B)will minimize discrepancies in marketing loan benefits across State boundaries and across county boundaries; or

(3)a rate that the Secretary may develop using alternative methods for calculating a repayment rate for a loan commodity that the Secretary determines will—

(A)minimize potential loan forfeitures;

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

(C)minimize the cost incurred by the Federal Government in storing the commodity;

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

(E)minimize discrepancies in marketing loan benefits across State boundaries and across county boundaries.

(b)The Secretary shall permit producers to repay a marketing assistance loan under section 8731 of this title for upland cotton, long grain rice, and medium grain rice at a rate that is the lesser of—

(1)the loan rate established for the commodity under section 8732 of this title, plus interest (determined in accordance with section 7283 of this title); or

(2)the prevailing world market price for the commodity, as determined and adjusted by the Secretary in accordance with this section.

(c)Repayment of a marketing assistance loan for extra long staple cotton shall be at the loan rate established for the commodity under section 8732 of this title, plus interest (determined in accordance with section 7283 of this title).

(d)For purposes of this section and section 8737 of this title, the Secretary shall prescribe by regulation—

(1)a formula to determine the prevailing world market price for each of upland cotton, long grain rice, and medium grain rice; and

(2)a mechanism by which the Secretary shall announce periodically those prevailing world market prices.

(e)(1)The prevailing world market price for long grain rice and medium grain rice determined under subsection (d) shall be adjusted to United States quality and location.

(2)The prevailing world market price for upland cotton determined under subsection (d)—

(A)shall be adjusted to United States quality and location, with the adjustment to include—

(i)a reduction equal to any United States Premium Factor for upland cotton of a quality higher than Middling (M) 13⁄32-inch; and

(ii)the average costs to market the commodity, including average transportation costs, as determined by the Secretary; and

(B)may be further adjusted, during the period beginning on the date of enactment of this Act and ending on July 31, 2013, if the Secretary determines the adjustment is necessary to—

(i)minimize potential loan forfeitures;

(ii)minimize the accumulation of stocks of upland cotton by the Federal Government;

(iii)ensure that upland cotton produced in the United States can be marketed freely and competitively, both domestically and internationally; and

(iv)ensure an appropriate transition between current-crop and forward-crop price quotations, except that the Secretary may use forward-crop price quotations prior to July 31 of a marketing year only if—

(I)there are insufficient current-crop price quotations; and

(II)the forward-crop price quotation is the lowest such quotation available.

(3)In making adjustments under this subsection, the Secretary shall establish a mechanism for determining and announcing the adjustments in order to avoid undue disruption in the United States market.

(f)The Secretary shall permit the producers on a farm to repay a marketing assistance loan under section 8731 of this title for confectionery and each other kind of sunflower seed (other than oil sunflower seed) at a rate that is the lesser of—

(1)the loan rate established for the commodity under section 8732 of this title, plus interest (determined in accordance with section 7283 of this title); or

(2)the repayment rate established for oil sunflower seed.

(g)(1)Effective for each of the 2008 through 2011 crop years, the Secretary shall provide cotton storage payments in the same manner, and at the same rates as the Secretary provided storage payments for the 2006 crop of cotton, except that the rates shall be reduced by 10 percent.

(2)Beginning with the 2012 crop year, the Secretary shall provide cotton storage payments in the same manner, and at the same rates as the Secretary provided storage payments for the 2006 crop of cotton, except that the rates shall be reduced by 20 percent.

(h)(1)In the event of a severe disruption to marketing, transportation, or related infrastructure, the Secretary may modify the repayment rate otherwise applicable under this section for marketing assistance loans under section 8731 of this title for a loan commodity.

(2)Any adjustment made under paragraph (1) in the repayment rate for marketing assistance loans for a loan commodity shall be in effect on a short-term and temporary basis, as determined by the Secretary.

Notes & Related Subsidiaries

Editorial Notes

References in Text

The date of enactment of this Act, referred to in subsec. (e)(2)(B), is the date of enactment of Pub. L. 110–246, which was approved June 18, 2008. Codification Pub. L. 110–234 and Pub. L. 110–246 enacted identical sections. Pub. L. 110–234 was repealed by section 4(a) of Pub. L. 110–246.

Statutory Notes and Related Subsidiaries

Effective Date

Enactment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as a note under section 8701 of this title.

§8734 Repayment of loans