7 U.S.C. § 9034: Repayment of loans

Summary

Gives farm producers rules for repaying marketing assistance loans. For most crops (except certain cottons, long- and medium-grain rice, peanuts, confectionery sunflower seed, and non-oil sunflower seeds), producers repay at the lowest of: the loan rate plus interest; a rate based on the average market price over the prior 30 days; or another rate the Secretary creates that is meant to reduce loan forfeitures, lower government stock and storage costs, keep U.S. crops marketable, and make payments consistent across states and counties. For upland cotton, long-grain rice, medium-grain rice, and extra long staple cotton, repayment is the lower of the loan rate plus interest or the “prevailing world market price” as set by a formula the Secretary makes and announces. If a producer repays an upland cotton loan using that world price, the Secretary must refund any difference between the lowest world price in the 30 days after repayment and the repayment rate. The world prices are adjusted for U.S. quality and location and may include marketing and transport costs. Extra adjustments for upland cotton may be made from February 7, 2014, through July 31, 2032, and for extra long staple cotton from July 4, 2025, through July 31, 2032, if needed to avoid forfeitures, excess government stocks, market problems, or to manage current vs. forward price quotes. Confectionery and other non-oil sunflower seed loans may be repaid at the lower of the loan rate plus interest or the oil sunflower seed repayment rate. Cotton storage payments are available like 2006 rates but reduced by 10% for crop years 2014–2025; for crop years 2026–2031 storage payments equal the lower of the submitted storage charge or a rate capped at $4.90 for California and Arizona and $3.00 for other States. Peanuts may be repaid at the lower of the loan rate plus interest or a Secretary-set rate designed to limit forfeitures, government stocks, and storage costs while keeping U.S. peanuts marketable. The Secretary may temporarily change repayment rates during severe disruptions to marketing, transportation, or related infrastructure for a short-term period.

Title 7, §9034

Agriculture, Source: USLM XML via OLRC

(a)General rule

The Secretary shall permit the producers on a farm to repay a marketing assistance loan under section 9031 of this title for a loan commodity (other than upland cotton, long grain rice, medium grain rice, extra long staple cotton, peanuts and confectionery and each other kind of sunflower seed (other than oil sunflower seed)) at a rate that is the lesser of— (1)

(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)Repayment rates for upland cotton, long grain rice, and medium grain rice

(1)In general

The Secretary shall permit producers to repay a marketing assistance loan under section 9031 of this title for upland cotton, long grain rice, and medium grain rice at a rate that is the lesser of— (A)

(B)(i)in the case of long grain rice and medium grain rice, the prevailing world market price for the commodity, as determined and adjusted by the Secretary in accordance with this section; or

(ii)in the case of upland cotton, the prevailing world market price for the commodity, as determined and adjusted by the Secretary in accordance with this section.

(2)Refund for upland cotton

In the case of a repayment for a marketing assistance loan for upland cotton at a rate described in paragraph (1)(B)(ii), the Secretary shall provide to the producer a refund (if any) in an amount equal to the difference between the lowest prevailing world market price, as determined and adjusted by the Secretary in accordance with this section, during the 30-day period following the date on which the producer repays the marketing assistance loan and the repayment rate.

(c)Repayment rates for extra long staple cotton

Repayment of a marketing assistance loan for extra long staple cotton shall be at a rate that is the lesser of— (1)

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

(d)Prevailing world market price

(1)In general

For purposes of this section and section 9037 of this title, the Secretary shall prescribe by regulation—

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

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

(2)Upland cotton

In the case of upland cotton, for any period when price quotations for Middling (M) 13⁄32-inch cotton are available, the formula under paragraph (1)(A) shall be based on the average of the 3 lowest-priced growths that are quoted.

(e)Adjustment of prevailing world market price for upland cotton, extra long staple cotton, long grain rice, and medium grain rice

(1)Rice

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)Upland cotton

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 February 7, 2014, and ending on July 31, 2032, if the Secretary determines the adjustment is necessary—

(i)to minimize potential loan forfeitures;

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

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

(iv)to 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)Extra long staple cotton

The prevailing world market price for extra long staple cotton determined under subsection (d)—

(A)shall be adjusted to United States quality and location, with the adjustment to include 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 July 4, 2025, and ending on July 31, 2032, if the Secretary determines the adjustment is necessary—

(i)to minimize potential loan forfeitures;

(ii)to minimize the accumulation of stocks of extra long staple cotton by the Federal Government;

(iii)to ensure that extra long staple cotton produced in the United States can be marketed freely and competitively; and

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

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

(4)Guidelines for additional adjustments

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)Repayment rates for confectionery and other kinds of sunflower seeds

The Secretary shall permit the producers on a farm to repay a marketing assistance loan under section 9031 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)

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

(g)Payment of cotton storage costs

(1)Crop years 2014 through 2025

Effective for each of the 2014 through 2025 crop years, the Secretary shall make cotton storage payments available 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)Payment of cotton storage costs

Effective for each of the 2026 through 2031 crop years, the Secretary shall make cotton storage payments for upland cotton and extra long staple cotton available in the same manner as the Secretary provided storage payments for the 2006 crop of upland cotton, except that the payment rate shall be equal to the lesser of— (A)

(B)in the case of storage in—

(i)California or Arizona, a payment rate of $4.90; and

(ii)any other State, a payment rate of $3.00.

(h)Repayment rate for peanuts

The Secretary shall permit producers on a farm to repay a marketing assistance loan for peanuts under section 9031 of this title at a rate that is the lesser of— (1)

(2)a rate that the Secretary determines will—

(A)minimize potential loan forfeitures;

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

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

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

(i)Authority to temporarily adjust repayment rates

(1)Adjustment authority

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 9031 of this title for a loan commodity.

(2)Duration

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

Codification Provisions of law applicable to a loan commodity for the 2024 crop year pursuant to title I of Pub. L. 113–79 applicable to the 2025 crop year for that loan commodity, see section 4101(c)(1) of Pub. L. 118–158, set out in an Extension of Agricultural Programs note under section 9001 of this title. Provisions of law applicable to a loan commodity for the 2023 crop year pursuant to title I of Pub. L. 113–79 applicable to the 2024 crop year for that loan commodity, see section 102(c)(1) of Pub. L. 118–22, set out in an Extension of Agricultural Programs note under section 9001 of this title.

Amendments

2025—Subsec. (b). Pub. L. 119–21, § 10310(1), designated existing provisions as par. (1) and inserted heading, redesignated former par. (1) as subpar. (A) of par. (1) and realigned margins, added subpar. (B) of par. (1), added par. (2), and struck out former par. (2) which read as follows: “the prevailing world market price for the commodity, as determined and adjusted by the Secretary in accordance with this section.” Subsec. (c). Pub. L. 119–21, § 10310(2), substituted “shall be at a rate that is the lesser of—” for “shall be at”, inserted par. (1) designation before “the loan rate”, and added par. (2). Subsec. (d). Pub. L. 119–21, § 10310(3), designated existing provisions as par. (1) and inserted heading, redesignated former pars. (1) and (2) as subpars. (A) and (B), respectively, of par. (1) and realigned margins, substituted “medium grain rice, and extra long staple cotton” for “and medium grain rice” in subpar. (A), and added par. (2). Subsec. (e). Pub. L. 119–21, § 10310(4)(A), inserted “extra long staple cotton,” after “upland cotton,” in heading. Subsec. (e)(2). Pub. L. 119–21, § 10310(4)(B)(i), inserted “Upland” before “cotton” in heading. Subsec. (e)(2)(B). Pub. L. 119–21, § 10310(4)(B)(ii), substituted “2032” for “2024” in introductory provisions. Subsec. (e)(3), (4). Pub. L. 119–21, § 10310(4)(C), (D), added par. (3) and redesignated former par. (3) as (4). Subsec. (g). Pub. L. 119–21, § 10309(c), designated existing provisions as par. (1), inserted heading, and substituted “2025” for “2023” and added par. (2). 2018—Subsec. (e)(2)(B). Pub. L. 115–334, § 1201(b)(1), substituted “2024” for “2019” in introductory provisions. Subsec. (g). Pub. L. 115–334, § 1201(b)(2), substituted “2023” for “2018”. Subsec. (h)(1). Pub. L. 115–334, § 1202(b), substituted “subsection (a)(20) or (b)(20), as applicable, of section 9032” for “section 9032(a)(20)”.

§9034 Repayment of Loans

Summary

Title 7, §9034

Notes & Related Subsidiaries

Editorial Notes

Amendments

Citations & Metadata