§1346 Penalties

Summary

If cotton marketing quotas are in place, a grower who markets more cotton than their allotment must pay a penalty. The penalty per pound is 50% of the parity price per pound for cotton on June 15 of the year the crop is grown. The penalty is figured on the normal yield from the extra acres planted above the farm’s allotment. If that extra amount later gets lowered under the rules, the grower gets back the difference. Interest at 6% per year is charged from the day the penalty is due until it is paid. Until the penalty is paid, all cotton the grower markets can be charged and the United States can place a lien on the whole crop. For the 1966 through 1970 upland cotton crops, a farm operator who gives up price support and applies for extra acreage from the national export market acreage reserve may plant up to their allotment plus any reserve acres given and export that crop without paying the penalty, if the farm had a 1965 allotment and the operator is the same person or their heir. The reserve was 250,000 acres for 1966. For later years the reserve depended on estimated carryover drop: if at least 1,000,000 bales then 250,000 acres; at least 750,000 but less than 1,000,000 bales then 187,500 acres; at least 500,000 but less than 750,000 bales then 125,000 acres; at least 250,000 but less than 500,000 bales then 62,500 acres; less than 250,000 bales then none. The Secretary gives out reserve acres based on applications, allows time to cancel and return acres, and can reassign returned acres. Operators who choose this cannot get price support on cotton from other farms they control. Extra acres won’t count toward future allotments. The operator or buyer must give a bond or pay instead that guarantees export without a government subsidy; failure to meet the bond terms makes the person liable for liquidated damages about equal to the penalty. Money collected under these rules goes to the Commodity Credit Corporation.