USC Subchapter III

USC Subchapter III
in effect

7 U.S.C. § 7231 Availability of nonrecourse marketing assistance loans

(a) Nonrecourse loans availableFor each of the 1996 through 2002 crops of each loan commodity, the Secretary shall make available to producers on a farm nonrecourse marketing assistance loans for loan commodities produced on the farm. The loans shall be made under terms and conditions that are prescribed by the Secretary and at the loan rate established under section 7232 of this title for the loan commodity. (b) Eligible productionThe following production shall be eligible for a marketing assistance loan under subsection (a):(1) In the case of a marketing assistance loan for a contract commodity, any production by a producer on a farm containing eligible cropland covered by a production flexibility contract. (2) In the case of a marketing assistance loan for extra long staple cotton and oilseeds, any production. (c) Compliance with conservation and wetlands requirementsAs a condition of the receipt of a marketing assistance loan under subsection (a), the producer shall comply with applicable conservation requirements under subtitle B of title XII of the Food Security Act of 1985 (16 U.S.C. 3811 et seq.) and applicable wetland protection requirements under subtitle C of title XII of the Act (16 U.S.C. 3821 et seq.) during the term of the loan. (d) Additional outlays prohibitedThe Secretary shall carry out this subchapter in such a manner that there are no additional outlays under this subchapter as a result of the reconstitution of a farm that occurs as a result of the combination of another farm that does not contain eligible cropland covered by a production flexibility contract.

7 U.S.C. § 7232 Loan rates for marketing assistance loans

(a) Wheat(1) Loan rateSubject to paragraph (2), the loan rate for a marketing assistance loan under section 7231 of this title for wheat shall be—(A) not less than 85 percent of the simple average price received by producers of wheat, as determined by the Secretary, during the marketing years for the immediately preceding 5 crops of wheat, excluding the year in which the average price was the highest and the year in which the average price was the lowest in the period; but (B) not more than $2.58 per bushel. (2) Stocks to use ratio adjustmentIf the Secretary estimates for any marketing year that the ratio of ending stocks of wheat to total use for the marketing year will be—(A) equal to or greater than 30 percent, the Secretary may reduce the loan rate for wheat for the corresponding crop by an amount not to exceed 10 percent in any year; (B) less than 30 percent but not less than 15 percent, the Secretary may reduce the loan rate for wheat for the corresponding crop by an amount not to exceed 5 percent in any year; or (C) less than 15 percent, the Secretary may not reduce the loan rate for wheat for the corresponding crop. (b) Feed grains(1) Loan rate for cornSubject to paragraph (2), the loan rate for a marketing assistance loan under section 7231 of this title for corn shall be—(A) not less than 85 percent of the simple average price received by producers of corn, as determined by the Secretary, during the marketing years for the immediately preceding 5 crops of corn, excluding the year in which the average price was the highest and the year in which the average price was the lowest in the period; but (B) not more than $1.89 per bushel. (2) Stocks to use ratio adjustmentIf the Secretary estimates for any marketing year that the ratio of ending stocks of corn to total use for the marketing year will be—(A) equal to or greater than 25 percent, the Secretary may reduce the loan rate for corn for the corresponding crop by an amount not to exceed 10 percent in any year; (B) less than 25 percent but not less than 12.5 percent, the Secretary may reduce the loan rate for corn for the corresponding crop by an amount not to exceed 5 percent in any year; or (C) less than 12.5 percent, the Secretary may not reduce the loan rate for corn for the corresponding crop. (3) Other feed grainsThe loan rate for a marketing assistance loan under section 7231 of this title for grain sorghum, barley, and oats, respectively, shall be established at such level as the Secretary determines is fair and reasonable in relation to the rate that loans are made available for corn, taking into consideration the feeding value of the commodity in relation to corn. (c) Upland cotton(1) Loan rateSubject to paragraph (2), the loan rate for a marketing assistance loan under section 7231 of this title for upland cotton shall be established by the Secretary at such loan rate, per pound, as will reflect for the base quality of upland cotton, as determined by the Secretary, at average locations in the United States a rate that is not less than the smaller of—(A) 85 percent of the average price (weighted by market and month) of the base quality of cotton as quoted in the designated United States spot markets during 3 years of the 5-year period ending July 31 of the year preceding the year in which the crop is planted, excluding the year in which the average price was the highest and the year in which the average price was the lowest in the period; or (B) 90 percent of the average, for the 15-week period beginning July 1 of the year preceding the year in which the crop is planted, of the 5 lowest-priced growths of the growths quoted for Middling 13⁄32-inch cotton C.I.F. Northern Europe (adjusted downward by the average difference during the period April 15 through October 15 of the year preceding the year in which the crop is planted between the average Northern European price quotation of such quality of cotton and the market quotations in the designated United States spot markets for the base quality of upland cotton), as determined by the Secretary. (2) LimitationsThe loan rate for a marketing assistance loan for upland cotton shall not be less than $0.50 per pound or more than $0.5192 per pound. (d) Extra long staple cottonThe loan rate for a marketing assistance loan under section 7231 of this title for extra long staple cotton shall be—(1) not less than 85 percent of the simple average price received by producers of extra long staple cotton, as determined by the Secretary, during 3 years of the 5-year period ending July 31 of the year preceding the year in which the crop is planted, excluding the year in which the average price was the highest and the year in which the average price was the lowest in the period; but (2) not more than $0.7965 per pound. (e) RiceThe loan rate for a marketing assistance loan under section 7231 of this title for rice shall be $6.50 per hundredweight. (f) Oilseeds(1) SoybeansThe loan rate for a marketing assistance loan under section 7231 of this title for soybeans shall be—(A) not less than 85 percent of the simple average price received by producers of soybeans, as determined by the Secretary, during the marketing years for the immediately preceding 5 crops of soybeans, excluding the year in which the average price was the highest and the year in which the average price was the lowest in the period; but (B) not less than $4.92 or more than $5.26 per bushel. (2) Sunflower seed, canola, rapeseed, safflower, mustard seed, and flaxseedThe loan rate for a marketing assistance loan under section 7231 of this title for sunflower seed, canola, rapeseed, safflower, mustard seed, and flaxseed, individually, shall be—(A) not less than 85 percent of the simple average price received by producers of sunflower seed, individually, as determined by the Secretary, during the marketing years for the immediately preceding 5 crops of sunflower seed, individually, excluding the year in which the average price was the highest and the year in which the average price was the lowest in the period; but (B) not less than $0.087 or more than $0.093 per pound. (3) Other oilseedsThe loan rates for a marketing assistance loan under section 7231 of this title for other oilseeds shall be established at such level as the Secretary determines is fair and reasonable in relation to the loan rate available for soybeans, except in no event shall the rate for the oilseeds (other than cottonseed) be less than the rate established for soybeans on a per-pound basis for the same crop.

7 U.S.C. § 7233 Term of loans

(a) Term of loanIn the case of each loan commodity (other than upland cotton or extra long staple cotton), a marketing assistance loan under section 7231 of this title shall have a term of 9 months beginning on the first day of the first month after the month in which the loan is made. (b) Special rule for cottonA marketing assistance loan for upland cotton or extra long staple cotton shall have a term of 10 months beginning on the first day of the month in which the loan is made. (c) Extensions prohibitedThe Secretary may not extend the term of a marketing assistance loan for any loan commodity.

7 U.S.C. § 7234 Repayment of loans

(a) Repayment rates for wheat, feed grains, and oilseedsThe Secretary shall permit a producer to repay a marketing assistance loan under section 7231 of this title for wheat, corn, grain sorghum, barley, oats, and oilseeds at a rate that is the lesser of—(1) the loan rate established for the commodity under section 7232 of this title, plus interest (as determined by the Secretary); or (2) a rate 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; and (D) allow the commodity produced in the United States to be marketed freely and competitively, both domestically and internationally. (b) Repayment rates for upland cotton and riceThe Secretary shall permit producers to repay a marketing assistance loan under section 7231 of this title for upland cotton and rice at a rate that is the lesser of—(1) the loan rate established for the commodity under section 7232 of this title, plus interest (as determined by the Secretary); or (2) the prevailing world market price for the commodity (adjusted to United States quality and location), as determined by the Secretary. (c) Repayment rates for extra long staple cottonRepayment of a marketing assistance loan for extra long staple cotton shall be at the loan rate established for the commodity under section 7232 of this title, plus interest (as determined by the Secretary). (d) Prevailing world market priceFor purposes of this section and section 7236 of this title, the Secretary shall prescribe by regulation—(1) a formula to determine the prevailing world market price for each loan commodity, adjusted to United States quality and location; and (2) a mechanism by which the Secretary shall announce periodically the prevailing world market price for each loan commodity. (e) Adjustment of prevailing world market price for upland cotton(1) In generalDuring the period ending July 31, 2003, the prevailing world market price for upland cotton (adjusted to United States quality and location) established under subsection (d) shall be further adjusted if—(A) the adjusted prevailing world market price is less than 115 percent of the loan rate for upland cotton established under section 7232 of this title, as determined by the Secretary; and (B) the Friday through Thursday average price quotation for the lowest-priced United States growth as quoted for Middling (M) 13⁄32-inch cotton delivered C.I.F. Northern Europe is greater than the Friday through Thursday average price of the 5 lowest-priced growths of upland cotton, as quoted for Middling (M) 13⁄32-inch cotton, delivered C.I.F. Northern Europe (referred to in this section as the “Northern Europe price”). (2) Further adjustmentExcept as provided in paragraph (3), the adjusted prevailing world market price for upland cotton shall be further adjusted on the basis of some or all of the following data, as available:(A) The United States share of world exports. (B) The current level of cotton export sales and cotton export shipments. (C) Other data determined by the Secretary to be relevant in establishing an accurate prevailing world market price for upland cotton (adjusted to United States quality and location). (3) Limitation on further adjustmentThe adjustment under paragraph (2) may not exceed the difference between—(A) the Friday through Thursday average price for the lowest-priced United States growth as quoted for Middling 13⁄32-inch cotton delivered C.I.F. Northern Europe; and (B) the Northern Europe price.

7 U.S.C. § 7235 Loan deficiency payments

(a) Availability of loan deficiency paymentsExcept as provided in subsection (d), the Secretary may make loan deficiency payments available to—(1) producers who, although eligible to obtain a marketing assistance loan under section 7231 of this title with respect to a loan commodity, agree to forgo obtaining the loan for the commodity in return for payments under this section; and (2) effective only for the 2000 and 2001 crop years, producers that, although not eligible to obtain such a marketing assistance loan under section 7231 of this title, produce a contract commodity. (b) ComputationA loan deficiency payment under this section shall be computed by multiplying—(1) the loan payment rate determined under subsection (c) for the loan commodity; by (2) the quantity of the loan commodity produced by the eligible producers, excluding any quantity for which the producers obtain a loan under section 7231 of this title. (c) Loan payment rateFor purposes of this section, the loan payment rate shall be the amount by which—(1) the loan rate established under section 7232 of this title for the loan commodity; exceeds (2) the rate at which a loan for the commodity may be repaid under section 7234 of this title. (d) Exception for extra long staple cottonThis section shall not apply with respect to extra long staple cotton. (e) TransitionA payment to a producer eligible for a payment under subsection (a)(2) that harvested a commodity on or before the date that is 30 days after the promulgation of the regulations implementing subsection (a)(2) shall be determined as the date the producer lost beneficial interest in the commodity, as determined by the Secretary. (f) Beneficial interestSubject to subsection (e), a producer shall be eligible for a payment under this section only if the producer has a beneficial interest in the commodity, as determined by the Secretary. (g) Effective date for payment rate determinationFor the 2001 crop year, the Secretary shall determine the amount of the loan deficiency payment to be made under this section to the producers on a farm with respect to a quantity of a loan commodity using the payment rate in effect under subsection (c) as of the earlier of the following:(1) The date on which the producers marketed or otherwise lost beneficial interest in the crop of the loan commodity, as determined by the Secretary. (2) The date the producers requested the payment.

7 U.S.C. § 7236 Special marketing loan provisions for upland cotton

(a) Cotton user marketing certificates(1) IssuanceDuring the period ending July 31, 2003, the Secretary shall issue marketing certificates or cash payments, at the option of the recipient, to domestic users and exporters for documented purchases by domestic users and sales for export by exporters made in the week following a consecutive 4-week period in which—(A) the Friday through Thursday average price quotation for the lowest-priced United States growth, as quoted for Middling (M) 13⁄32-inch cotton, delivered C.I.F. Northern Europe exceeds the Northern Europe price by more than 1.25 cents per pound; and (B) the prevailing world market price for upland cotton (adjusted to United States quality and location) does not exceed 134 percent of the loan rate for upland cotton established under section 7232 of this title. (2) Value of certificates or paymentsThe value of the marketing certificates or cash payments shall be based on the amount of the difference (reduced by 1.25 cents per pound) in the prices during the 4th week of the consecutive 4-week period multiplied by the quantity of upland cotton included in the documented sales. (3) Administration of marketing certificates(A) Redemption, marketing, or exchangeThe Secretary shall establish procedures for redeeming marketing certificates for cash or marketing or exchange of the certificates for agricultural commodities owned by the Commodity Credit Corporation or pledged to the Commodity Credit Corporation as collateral for a loan in such manner, and at such price levels, as the Secretary determines will best effectuate the purposes of cotton user marketing certificates, including enhancing the competitiveness and marketability of United States cotton. Any price restrictions that would otherwise apply to the disposition of agricultural commodities by the Commodity Credit Corporation shall not apply to the redemption of certificates under this subsection. (B) Designation of commodities and productsTo the extent practicable, the Secretary shall permit owners of certificates to designate the commodities and products, including storage sites, the owners would prefer to receive in exchange for certificates. (C) TransfersMarketing certificates issued to domestic users and exporters of upland cotton may be transferred to other persons in accordance with regulations issued by the Secretary. (b) Special import quota(1) Establishment(A) In generalThe President shall carry out an import quota program during the period ending July 31, 2003, as provided in this subsection. (B) Program requirementsExcept as provided in subparagraph (C), whenever the Secretary determines and announces that for any consecutive 4-week period, the Friday through Thursday average price quotation for the lowest-priced United States growth, as quoted for Middling (M) 13⁄32-inch cotton, delivered C.I.F. Northern Europe, adjusted for the value of any certificate issued under subsection (a), exceeds the Northern Europe price by more than 1.25 cents per pound, there shall immediately be in effect a special import quota. (C) Tight domestic supplyDuring any month for which the Secretary estimates the season-ending United States upland cotton stocks-to-use ratio, as determined under subparagraph (D), to be below 16 percent, the Secretary, in making the determination under subparagraph (B), shall not adjust the Friday through Thursday average price quotation for the lowest-priced United States growth, as quoted for Middling (M) 13⁄32-inch cotton, delivered C.I.F. Northern Europe, for the value of any certificates issued under subsection (a). (D) Season-ending United States stocks-to-use ratioFor the purposes of making estimates under subparagraph (C), the Secretary shall, on a monthly basis, estimate and report the season-ending United States upland cotton stocks-to-use ratio, excluding projected raw cotton imports but including the quantity of raw cotton that has been imported into the United States during the marketing year. (2) QuantityThe quota shall be equal to 1 week’s consumption of upland cotton by domestic mills at the seasonally adjusted average rate of the most recent 3 months for which data are available. (3) ApplicationThe quota shall apply to upland cotton purchased not later than 90 days after the date of the Secretary’s announcement under paragraph (1) and entered into the United States not later than 180 days after the date. (4) OverlapA special quota period may be established that overlaps any existing quota period if required by paragraph (1), except that a special quota period may not be established under this subsection if a quota period has been established under subsection (c). (5) Preferential tariff treatmentThe quantity under a special import quota shall be considered to be an in-quota quantity for purposes of—(A) section 2703(d) of title 19; (B) section 3203 of title 19; (C) section 2463(d) of title 19; and (D) General Note 3(a)(iv) to the Harmonized Tariff Schedule. (6) “Special import quota” definedIn this subsection, the term “special import quota” means a quantity of imports that is not subject to the over-quota tariff rate of a tariff-rate quota. (7) LimitationThe quantity of cotton entered into the United States during any marketing year under the special import quota established under this subsection may not exceed the equivalent of 5 week’s consumption of upland cotton by domestic mills at the seasonally adjusted average rate of the 3 months immediately preceding the first special import quota established in any marketing year. (c) Limited global import quota for upland cotton(1) In generalThe President shall carry out an import quota program that provides that whenever the Secretary determines and announces that the average price of the base quality of upland cotton, as determined by the Secretary, in the designated spot markets for a month exceeded 130 percent of the average price of such quality of cotton in the markets for the preceding 36 months, notwithstanding any other provision of law, there shall immediately be in effect a limited global import quota subject to the following conditions:(A) QuantityThe quantity of the quota shall be equal to 21 days of domestic mill consumption of upland cotton at the seasonally adjusted average rate of the most recent 3 months for which data are available. (B) Quantity if prior quotaIf a quota has been established under this subsection during the preceding 12 months, the quantity of the quota next established under this subsection shall be the smaller of 21 days of domestic mill consumption calculated under subparagraph (A) or the quantity required to increase the supply to 130 percent of the demand. (C) Preferential tariff treatmentThe quantity under a limited global import quota shall be considered to be an in-quota quantity for purposes of—(i) section 2703(d) of title 19; (ii) section 3203 of title 19; (iii) section 2463(d) of title 19; and (iv) General Note 3(a)(iv) to the Harmonized Tariff Schedule. (D) DefinitionsIn this subsection:(i) SupplyThe term “supply” means, using the latest official data of the Bureau of the Census, the Department of Agriculture, and the Department of the Treasury—(I) the carry-over of upland cotton at the beginning of the marketing year (adjusted to 480-pound bales) in which the quota is established; (II) production of the current crop; and (III) imports to the latest date available during the marketing year. (ii) DemandThe term “demand” means—(I) the average seasonally adjusted annual rate of domestic mill consumption during the most recent 3 months for which data are available; and (II) the larger of—(aa) average exports of upland cotton during the preceding 6 marketing years; or (bb) cumulative exports of upland cotton plus outstanding export sales for the marketing year in which the quota is established. (iii) Limited global import quotaThe term “limited global import quota” means a quantity of imports that is not subject to the over-quota tariff rate of a tariff-rate quota. (E) Quota entry periodWhen a quota is established under this subsection, cotton may be entered under the quota during the 90-day period beginning on the date the quota is established by the Secretary. (2) No overlapNotwithstanding paragraph (1), a quota period may not be established that overlaps an existing quota period or a special quota period established under subsection (b).

7 U.S.C. § 7236a Special competitive provisions for extra long staple cotton

(a) Competitiveness programNotwithstanding any other provision of law, during the period beginning on October 1, 1999, and ending on July 31, 2003, the Secretary shall carry out a program to maintain and expand the domestic use of extra long staple cotton produced in the United States, to increase exports of extra long staple cotton produced in the United States, and to ensure that extra long staple cotton produced in the United States remains competitive in world markets. (b) Payments under program; triggerUnder the program, the Secretary shall make payments available under this section whenever—(1) for a consecutive 4-week period, the world market price for the lowest priced competing growth of extra long staple cotton (adjusted to United States quality and location and for other factors affecting the competitiveness of such cotton), as determined by the Secretary, is below the prevailing United States price for a competing growth of extra long staple cotton; and (2) the lowest priced competing growth of extra long staple cotton (adjusted to United States quality and location and for other factors affecting the competitiveness of such cotton), as determined by the Secretary, is less than 134 percent of the loan rate for extra long staple cotton. (c) Eligible recipientsThe Secretary shall make payments available under this section to domestic users of extra long staple cotton produced in the United States and exporters of extra long staple cotton produced in the United States who enter into an agreement with the Commodity Credit Corporation to participate in the program under this section. (d) Payment amountPayments under this section shall be based on the amount of the difference in the prices referred to in subsection (b)(1) during the fourth week of the consecutive 4-week period multiplied by the amount of documented purchases by domestic users and sales for export by exporters made in the week following such a consecutive 4-week period. (e) Form of paymentPayments under this section shall be made through the issuance of cash or marketing certificates, at the option of eligible recipients of the payments.

7 U.S.C. § 7237 Availability of recourse loans for high moisture feed grains and seed cotton and other fibers

(a) High moisture feed grains(1) Recourse loans availableFor each of the 1996 through 2002 crops of corn and grain sorghum, the Secretary shall make available recourse loans, as determined by the Secretary, to producers on a farm containing eligible cropland covered by a production flexibility contract who—(A) normally harvest all or a portion of their crop of corn or grain sorghum in a high moisture state; (B) present—(i) certified scale tickets from an inspected, certified commercial scale, including a licensed warehouse, feedlot, feed mill, distillery, or other similar entity approved by the Secretary, pursuant to regulations issued by the Secretary; or (ii) field or other physical measurements of the standing or stored crop in regions of the United States, as determined by the Secretary, that do not have certified commercial scales from which certified scale tickets may be obtained within reasonable proximity of harvest operation; (C) certify that they were the owners of the feed grain at the time of delivery to, and that the quantity to be placed under loan under this subsection was in fact harvested on the farm and delivered to, a feedlot, feed mill, or commercial or on-farm high-moisture storage facility, or to a facility maintained by the users of corn and grain sorghum in a high moisture state; and (D) comply with deadlines established by the Secretary for harvesting the corn or grain sorghum and submit applications for loans under this subsection within deadlines established by the Secretary. (2) Eligibility of acquired feed grainsA loan under this subsection shall be made on a quantity of corn or grain sorghum of the same crop acquired by the producer equivalent to a quantity determined by multiplying—(A) the acreage of the corn or grain sorghum in a high moisture state harvested on the producer’s farm; by (B) the lower of the farm program payment yield or the actual yield on a field, as determined by the Secretary, that is similar to the field from which the corn or grain sorghum was obtained. (3) “High moisture state” definedIn this subsection, the term “high moisture state” means corn or grain sorghum having a moisture content in excess of Commodity Credit Corporation standards for marketing assistance loans made by the Secretary under section 7231 of this title. (b) Recourse loans available for seed cotton(1) Upland cottonFor each of the 1996 through 2002 crops of upland cotton, the Secretary shall make available recourse seed cotton loans, as determined by the Secretary, to producers on a farm containing eligible cropland covered by a production flexibility contract. (2) Extra long staple cottonFor each of the 1996 through 2002 crops of extra long staple cotton, the Secretary shall make available recourse seed cotton loans, as determined by the Secretary, on any production. (c) Recourse loans available for mohair(1) Recourse loans availableNotwithstanding any other provision of law, during fiscal year 1999, the Secretary shall make available recourse loans, as determined by the Secretary, to producers of mohair produced during or before that fiscal year. (2) Loan rateThe loan rate for a loan under paragraph (1) shall be equal to $2.00 per pound. (3) Term of loanA loan under paragraph (1) shall have a term of 1 year beginning on the first day of the first month after the month in which the loan is made. (4) Waiver of interestNotwithstanding subsection (d), the Secretary shall not charge interest on a loan made under paragraph (1). (d) Repayment ratesRepayment of a recourse loan made under this section shall be at the loan rate established for the commodity by the Secretary, plus interest (as determined by the Secretary).

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