PRIA, Government Policy, Made Personal

Summary

Allows the Secretary of Agriculture to run a pilot project, until December 31, 2002, that tests whether futures and options can help farmers protect against price, yield, and income swings for one or more supported commodities. The pilot is an alternative to other USDA programs. For each commodity, the program can run in up to 300 counties, with no more than 25 counties in any one State, and no county may be in the program for more than 3 of the 1996 through 2002 calendar years. Farmers can join if they are eligible for certain farm programs, volunteer, have a farm in a selected county, and meet any extra rules the Secretary sets. Participants must get written notice that joining is voluntary and no federal agency guarantees they will do better financially. Contracts must state the program terms and include that notice. Trades must occur on official commodity futures and options exchanges. Farmers must keep and send required records. The program is run and funded through the Commodity Credit Corporation, with CCC funding limits of $9,000,000 for fiscal year 2001, $15,000,000 for fiscal year 2002, and $2,000,000 for fiscal year 2003, and should be operated as budget neutral to the maximum extent practicable.

Title 7, §7331

Agriculture, Source: USLM XML via OLRC

(a)Pilot programs authorized

Until December 31, 2002, the Secretary of Agriculture may conduct a pilot program for 1 or more agricultural commodities supported under this chapter to ascertain whether futures and options contracts can provide producers with reasonable protection from the financial risks of fluctuations in price, yield, and income inherent in the production and marketing of the commodities. The pilot program shall be an alternative to other related programs of the Department of Agriculture.

(b)Distribution of pilot program

For each agricultural commodity included in the pilot program, the Secretary may operate the pilot program in not more than 300 counties, except that not more than 25 of the counties may be located in any 1 State. The pilot program for a commodity shall not be operated in any county for more than 3 of the 1996 through 2002 calendar years.

(c)Eligible participants

In operating the pilot program, the Secretary may enter into contract with a producer who—

(1)is eligible for a production flexibility contract, a marketing assistance loan, or other assistance under this chapter;

(2)volunteers to participate in the pilot program during any calendar year in which a county in which the farm of the producer is located is included in the pilot program;

(3)operates a farm located in a county selected for the pilot program; and

(4)meets such other eligibility requirements as the Secretary may establish.

(d)Notice to producers

The Secretary shall provide notice to each producer participating in the pilot program that—

(1)the participation of the producer is voluntary; and

(2)neither the United States, the Commodity Credit Corporation, the Federal Crop Insurance Corporation, the Department of Agriculture, nor any other Federal agency is authorized to guarantee that participants in the pilot program will be better or worse off financially as a result of participation in the pilot program than the producer would have been if the producer had not participated in the pilot program.

(e)Contracts

The Secretary shall set forth in each contract under the pilot program the terms and conditions for participation in the pilot program and the notice required by subsection (d).

(f)Eligible markets

Trades for futures and options contracts under the pilot program shall be carried out on commodity futures and options markets designated as contract markets under the Commodity Exchange Act (7 U.S.C. 1 et seq.).

(g)Recordkeeping

A producer participating in the pilot program shall compile, maintain, and submit (or authorize the compilation, maintenance, and submission) of such documentation as the regulations governing the pilot program require.

(h)Use of Commodity Credit Corporation

The Secretary shall fund and operate the pilot program through the Commodity Credit Corporation, except that the amount of Commodity Credit Corporation funds used to carry out this section shall not exceed, to the maximum extent practicable, $9,000,000 for fiscal year 2001, $15,000,000 for fiscal year 2002, and $2,000,000 for fiscal year 2003. To the maximum extent practicable, the Secretary shall operate the pilot program in a budget neutral manner.

Notes & Related Subsidiaries

Editorial Notes

References in Text

For definition of “this chapter”, referred to in subsecs. (a) and (c)(1), see note set out under section 7201 of this title. The Commodity Exchange Act, referred to in subsec. (f), is act Sept. 21, 1922, ch. 369, 42 Stat. 998, which is classified generally to chapter 1 (§ 1 et seq.) of this title. For complete classification of this Act to the Code, see section 1 of this title and Tables. Codification Section is comprised of section 191 of Pub. L. 104–127. Subsec. (i) of section 191 of Pub. L. 104–127 repealed provisions set out as a note under section 1421 of this title.

Amendments

2000—Subsec. (b). Pub. L. 106–224, § 134(1), substituted “300 counties, except that not more than 25” for “100 counties, except that not more than 6” in first sentence. Subsec. (c)(2). Pub. L. 106–224, § 134(2), inserted before semicolon at end “during any calendar year in which a county in which the farm of the producer is located is included in the pilot program”. Subsec. (h). Pub. L. 106–224, § 134(3), inserted before period at end of first sentence “, except that the amount of Commodity Credit Corporation funds used to carry out this section shall not exceed, to the maximum extent practicable, $9,000,000 for fiscal year 2001, $15,000,000 for fiscal year 2002, and $2,000,000 for fiscal year 2003”.

Statutory Notes and Related Subsidiaries

Effective Date

of 2000 AmendmentAmendment by Pub. L. 106–224 effective Oct. 1, 2000, see section 171(b)(1)(A) of Pub. L. 106–224, set out as a note under section 1501 of this title.

§7331 Options Pilot Program