§1308a Cost Reduction Options

Summary

Lets the Secretary of Agriculture take steps to lower the federal cost of farm programs, as long as those steps do not hurt the income of small- and medium-sized producers. The Secretary must include in program announcements which cost-saving actions are being used at first and may later add other authorized actions. The Secretary can reopen and change a producer’s contract only if the producer agrees. The Secretary may buy a crop on the open market instead of waiting for loan defaults if that will cost less. The Secretary may accept a smaller repayment on a nonrecourse loan to avoid a producer default when market prices are too low, if that saves the government money by getting some interest, stopping defaults, or avoiding storage and handling costs. Before harvest, the Secretary can reopen programs to take bids from producers who will divert acres in return for payment in kind from Commodity Credit Corporation stocks when supply or demand has sharply changed and a costly surplus is likely. Those in-kind payments do not count toward regular payment limits but are capped at $20,000 per year per producer for each commodity. These powers are in addition to other legal authorities the Secretary already has.