7 U.S.C. § 9040: Adjustments of loans

Summary

The Secretary may change loan rates for most farm commodities (not cotton) to account for differences in grade, type, quality, location, and other factors. Those changes should be done so the average loan level for the commodity, based on how often those factors occur, equals the support level set in the law. The Secretary can set county-by-county loan rates so the lowest county rate is 95 percent of the national average if doing so does not raise total government outlays. Such county adjustments cannot increase the national average loan rate in any year. For long grain and medium grain rice, adjustments are allowed only for grade and quality, including milling yields. For cotton, the Secretary may adjust loan rates for quality differences. These adjustments can use non-spot market price data as well as spot prices, fix how micronaire affects premiums or discounts for upland cotton with a staple length of 33 or above to avoid artificial splits, and include other changes the Secretary finds appropriate after consulting U.S. cotton industry representatives. Those consultations do not follow chapter 10 of title 5. The Secretary may later review, revise, or revoke any cotton quality adjustments.

Title 7, §9040

Agriculture, Source: USLM XML via OLRC

(a)Adjustment authority

Subject to subsection (e), the Secretary may make appropriate adjustments in the loan rates for any loan commodity (other than cotton) for differences in grade, type, quality, location, and other factors.

(b)Manner of adjustment

The adjustments under subsection (a) shall, to the maximum extent practicable, be made in such a manner that the average loan level for the commodity will, on the basis of the anticipated incidence of the factors, be equal to the level of support determined in accordance with this subchapter and subtitle C.

(c)Adjustment on county basis

(1)In general

The Secretary may establish loan rates for a crop for producers in individual counties in a manner that results in the lowest loan rate being 95 percent of the national average loan rate, if those loan rates do not result in an increase in outlays.

(2)Prohibition

Adjustments under this subsection shall not result in an increase in the national average loan rate for any year.

(d)Adjustment in loan rate for cotton

(1)In general

The Secretary may make appropriate adjustments in the loan rate for cotton for differences in quality factors.

(2)Types of adjustments

Loan rate adjustments under paragraph (1) may include—

(A)the use of non-spot market price data, in addition to spot market price data, that would enhance the accuracy of the price information used in determining quality adjustments under this subsection;

(B)adjustments in the premiums or discounts associated with upland cotton with a staple length of 33 or above due to micronaire with the goal of eliminating any unnecessary artificial splits in the calculations of the premiums or discounts; and

(C)such other adjustments as the Secretary determines appropriate, after consultations conducted in accordance with paragraph (3).

(3)Consultation with private sector (4) Review of adjustments

(A)Prior to revision

In making adjustments to the loan rate for cotton (including any review of the adjustments) as provided in this subsection, the Secretary shall consult with representatives of the United States cotton industry.

(B)Inapplicability of chapter 10 of title 5

Chapter 10 of title 5 shall not apply to consultations under this subsection.

(e)Rice

The Secretary shall not make adjustments in the loan rates for long grain rice and medium grain rice, except for differences in grade and quality (including milling yields).

Notes & Related Subsidiaries

Editorial Notes

References in Text

Subtitle C, referred to in subsec. (b), means subtitle C of title I of Pub. L. 113–79, Feb. 7, 2014, 128 Stat. 687, which amended section 1359bb, 1359ll, and 7272 of this title.

Amendments

2022—Subsec. (d)(3)(B). Pub. L. 117–286 substituted “chapter 10 of title 5” for “Federal Advisory Committee Act” in heading and “Chapter 10 of title 5” for “The Federal Advisory Committee Act (5 U.S.C. App.)” in text.

§9040 Adjustments of Loans