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

Summary

Sets the rules for how farmers must pay back marketing assistance loans for different crops. For most loan commodities, farmers can repay at the lowest of three rates: the loan rate plus interest; a rate based on average market prices during the previous 30-day period that aims to reduce differences in benefits across States and counties; or a rate the Secretary creates by other methods that meet five goals (cut loan forfeitures, cut Federal stocks and storage costs, allow U.S. crops to be sold competitively at home and abroad, and reduce benefit differences across areas). For upland cotton, long grain rice, and medium grain rice, repayment is the lower of the loan rate plus interest or the prevailing world market price as set by the Secretary. Extra long staple cotton must be repaid at the loan rate plus interest. Confectionery and non-oil sunflower seed can be repaid at the lower of the loan rate plus interest or the repayment rate for oil sunflower seed. The Secretary must make a formula and a way to announce the world market prices. World prices for the two rices are adjusted for U.S. quality and location. Upland cotton world prices are adjusted for U.S. quality and location, must include a reduction equal to any United States Premium Factor for quality higher than Middling (M) 13/32-inch and include average marketing costs such as transportation, and may have additional adjustments through July 31, 2013 under stated conditions. For the 2008 through 2011 crops, cotton storage payments follow the 2006 crop rules but are cut by 10 percent. Beginning with the 2012 crop year, those payments are cut by 20 percent. If there is a severe disruption to marketing or transport, the Secretary may temporarily change repayment rates for a short time.

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