[Federal Register: April 7, 2009 (Volume 74, Number 65)]
[Rules and Regulations]
[Page 15644-15657]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07ap09-4]
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DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Parts 1421 and 1434
RIN 0560-AH87
Marketing Assistance Loans and Loan Deficiency Payments
AGENCY: Commodity Credit Corporation, USDA.
ACTION: Final rule.
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SUMMARY: The Commodity Credit Corporation (CCC) is revising regulations
as required by the Food, Conservation, and Energy Act of 2008 (the 2008
Farm Bill) to administer the Marketing Assistance Loans (MAL) and Loan
Deficiency Payments (LDP) programs for wheat, feed grains, soybeans,
other oilseeds, peanuts, pulse crops, honey, wool and mohair. The 2008
Farm Bill generally extends the existing programs with some changes
that are implemented in this rule. The amendments in this rule will add
large chickpeas, beginning with the 2009 crop year, to the list of
pulse crops eligible for assistance and provide separate rates for long
and medium grain rice beginning with the 2008 crop year. The addition
of large chickpeas may increase the number of farmers and ranchers who
may receive FSA and CCC program benefits. The amendments will also, in
addition, to other amendments to the old rule and clarifications, allow
producers to store collateral in Federally and State-licensed
warehouses that do not have a CCC storage agreement, which may reduce
redundant licensing costs for warehouse operators while allowing
producers a greater choice of warehouses.
DATES: Effective Date: April 6, 2009.
FOR FURTHER INFORMATION CONTACT: Jose R. Gonzalez, Program Manager,
Marketing Assistance Loans and Loan Deficiency Payment Programs or
Tonye B. Gross, Program Manager, Peanut Program, Price Support
Division, FSA/USDA, STOP 0512, 1400 Independence Ave. SW., Washington,
DC 20250-0512; telephone (202) 690-2534; or (202) 720-4319, facsimile
(202) 690-3307; e-mails: Jose.Gonzalez@wdc.usda.gov or
Tonye.Gross@wdc.usda.gov. Persons with disabilities who require
alternative means of communication (Braille, large print, audio tape,
etc.) should contact the USDA Target Center at (202) 720-2600 (voice
and TDD).
SUPPLEMENTARY INFORMATION:
Background
The 2008 Farm Bill extends MAL and LDP programs for the 2008
through 2012 crop years. The 2008 Farm Bill generally extends the
existing programs, with some minor changes that are implemented in this
rule. In some cases, the 2008 Farm Bill gives the Secretary discretion
to select among different policy options; this rule implements such
discretionary changes. This rule also makes numerous housekeeping
changes to make administrative improvements, correct typographical
errors, remove expired regulations, and improve organization.
Producers of eligible commodities that are eligible for loans can
request MALs or LDPs on their commodities. MALs and LDPs are available
to eligible producers beginning with harvest or shearing season and
extending through the marketing year. MALs are 9-month loans with the
commodity pledged as collateral for the loan. MALs and LDPs must be
requested on or before the final
[[Page 15645]]
loan availability date for the applicable commodity. Producers may
repay the MAL at a rate that is the lesser of the loan rate plus
interest or alternative repayment rates as determined and announced by
the Department of Agriculture (USDA). MALs support America's farmers
and ranchers in several ways. They provide producers with interim
financing at and during the harvest or shearing season. They provide
significant income support when market prices are below statutory loan
rates. They facilitate the orderly marketing and distribution of loan
eligible commodities throughout the year, giving the producer the
flexibility on when to sell the crop. With MALs, the producer doesn't
have to sell the crop immediately after harvest, when prices are often
relatively low. Producers can settle their loan during the 9-month
period by either selling the commodity and repaying the loan or by
forfeiting the commodity to the CCC.
As an alternative to MAL, if a producer agrees to forgo MAL, the
producer may obtain LDP on their crop, if such LDP is currently
available for the applicable commodity and the producer is eligible for
MAL. LDPs allow the producer to receive a payment when the alternative
repayment rate posted for a commodity is below the loan rate for that
commodity. The payment is the established loan rate for the applicable
loan commodity less the repayment rate multiplied by the eligible
quantity of the commodity. Similar to the MAL program, LDPs provide
price income support to producers so they do not have to sell their
commodities when prices are low.
The specific statutory changes required by the 2008 Farm Bill and
discretionary changes affecting the MAL and LDP programs that are
implemented in this rule are described below.
Eligible Loan Commodities
Prior to the 2008 Farm Bill, MALs and LDPs were authorized for
wheat, feed grains, soybeans, other oilseeds, peanuts, pulse crops,
honey, wool and mohair. Feed grains included corn, grain sorghum,
barley, oats and rice. Other oilseeds included sunflower seed,
rapeseed, canola, safflower, flaxseed, mustard seed, crambe, and sesame
seed. Pulse crops included lentils, dry peas and small chickpeas. The
2008 Farm Bill reauthorizes MALs and LDPs for all the existing eligible
commodities. However, it has further defined the feed grain category
and expanded the pulse crop category. Rice is now further defined as
long grain rice and medium grain rice, with rates listed by type.
Medium grain rice also includes short grain rice. Beginning with the
2009 crop year, large chickpeas will be included as an eligible pulse
crop and will be eligible for MAL and LDP. This rule changes sections
1421.1, ``Applicability,'' 1421.3, ``Definitions,'' 1421.5, ``Eligible
Commodities,'' and 1421.9, ``Basic Loan Rates,'' to include large
chickpeas beginning with the 2009 crop year. This rule changes sections
1421.3, 1421.5, and 1421.10, ``Market Rates'' (renamed as ``Loan
Repayment Rates''), to specify provisions for long grain and medium
grain rice. This rule amends section 1421.7, ``Requesting Marketing
Assistance Loans and Loan Deficiency Payments,'' to add a final loan
availability date for crambe and sesame seed.
Other Eligibility Requirements for Producers
The 2008 Farm Bill changes eligibility provisions by removing the
eligibility of states, political subdivisions, and their agencies to
receive MALs or LDPs. This rule removes those entities from section
1421.4, ``Eligible Producers.''
Beneficial Interest
As used in 7 CFR part 1421, beneficial interest in a commodity
means that control of the commodity and title to the commodity remain
with the producer. Beneficial interest requirements remain largely
unchanged for all loan commodities in this rule, and producers must
retain beneficial interest in the commodity offered as collateral for a
MAL or LDP. We are amending section 1421.6, ``Beneficial Interest'', to
clarify that delivery of a commodity to a feed or grain bank will
result in the loss of beneficial interest. This rule also amends
section 1421.6 to clarify that if deferred price, forward, or price-
later contract is used, fulfillment of the delivery requirements of the
contract or receipt of payment for the contract will result in the loss
of beneficial interest as of the earlier of those events.
Average Crop Revenue Election (ACRE) Program
This final rule implements a provision of the new Average Crop
Revenue Election (ACRE) Program established by the 2008 Farm Bill.
Under the ACRE program, during each of the 2009 through 2012 crop
years, the applicable MAL rates for wheat, feed grains, soybeans, other
oilseeds, peanuts, and pulse crops, will be reduced by 30 percent for
commodities on a farm where producers make the irrevocable decision to
have the farm participate in ACRE. This rule amends section 1421.9,
``Basic Loan Rates,'' to include provisions for this new program. The
regulations for the ACRE program are being established through a
separate rulemaking that will amend 7 CFR part 1412.
Commodity Certificate Availability Will Be Phased Out
Commodity certificates are currently available to producers to
exchange for collateral for MAL. The exchange rate is the applicable
loan repayment rate on the date the commodity certificate is purchased.
The 2008 Farm Bill reauthorizes commodity certificates only through the
2009 crop year. The authority to make commodity certificates available
to producers will terminate effective with the ending of the 2009 crop
year. Therefore, this rule amends the regulations to remove provisions
for the availability of commodity certificates for crop years after
2009.
Adjusted Gross Income and Payment Limitations
For the 2008 crop only, the current payment limit on marketing loan
gains and LDPs remains at $75,000 per person and the three-entity rule
is also retained. Under the current three-entity rule, an individual
can receive a full payment directly and up to a half payment,
indirectly, for each of two additional entities. Producers with annual
adjusted gross income over $2.5 million, averaged over 3 years, are not
currently eligible for payments, unless more than 75 percent of the
adjusted gross income is from agriculture. For 2009 through 2012 crop
years, payment limitation and adjusted gross income requirements will
be modified as specified in sections 1603 and 1604 of the 2008 Farm
Bill. Starting with the 2009 crop year, CCC will no longer limit the
gains from marketing assistance loans and loan deficiency payments.
(Note: Payment limitation rules are established in 7 CFR part 1400 and
not within various commodity regulations, such as these regulations.
CCC is implementing changes to the payment limitation provisions
through a separate rulemaking.) This rule amends section 1421.409,
``Monitoring Payment Limitations,'' to state that payment limitations
are not applicable for the 2009 through 2012 crop years for designated
marketing associations for peanuts.
Warehouse Licensing Requirements
Current regulatory provisions require eligible commodities offered
as collateral for MALs to be stored in an on-farm storage structure or
a commercial warehouse approved by CCC. To be a CCC-approved warehouse,
[[Page 15646]]
warehouses must enter into a CCC storage agreement. This rule removes
an exception that allowed the use of unlicensed warehouses in certain
circumstances, because the 2008 Farm Bill removed that provision.
However, this rule amends the regulations to allow the use of State and
Federally licensed warehouses that do not have a CCC storage agreement.
This change is not required by the 2008 Farm Bill; however, this will
benefit warehouse operators and producers without increasing financial
risk for CCC. This rule amends multiple sections to remove references
to ``approved'' warehouses and add references to ``authorized''
warehouses instead.
Historically, approved warehouses have been warehouse operators who
have entered into storage agreements with CCC that set forth terms and
conditions regarding: (1) Financial aspects of the warehouse; (2) rates
that are applicable to the storage of CCC owned inventory and CCC loan
collateral; (3) handling and delivery charges with respect to these
commodities; and (4) related storage issues. These agreements were
required to protect CCC interests because, prior to the authorization
and use of MALs, producers tendered over 75 percent of the annual
production of some crops to CCC in some years.
Most States, as well as USDA, have a warehouse licensing program
for the storage of agricultural commodities. In most States, an entity
must have a State or Federal license to engage in storing these
commodities. These licensed entities issue warehouse receipts that
document ownership of commingled commodities. In those States that do
not have a licensing program, warehouses must follow State laws
relating to bailment and storage. The State laws relating to bailment
and storage vary from State to State.
In general, non-licensed entities in States with licensing programs
may not store agricultural commodities on behalf of producers, but may
purchase commodities from producers. Commercial feed lots, ethanol
plants, wool pools, and feed banks that are typical end users of the
commodity are not licensed warehouses. This rule removes a provision in
the regulations that allows the use of unlicensed warehouses for
storing MAL collateral, because, as indicated, that is no longer
authorized under the 2008 Farm Bill.
Starting with the 2009 crop year and throughout the remaining years
covered by the 2008 Farm Bill, CCC will no longer require a Federally
licensed warehouse operator to also maintain a CCC storage agreement,
except for peanuts. Warehouses licensed by USDA under the United States
Warehouse Act must meet conditions to obtain a Federal license, which
exceed those that must be met for obtaining a CCC storage agreement.
While the CCC storage agreement specifies storage rates that CCC will
pay in the unlikely event the commodity is forfeited to CCC, CCC moves
commodities it obtains when forfeited into the market as quickly as
possible. Thus, CCC incurs minimal storage costs. As of July 2008,
CCC's commodity inventories have been depleted. Accordingly, CCC has
determined that requiring a Federally licensed warehouse operator to
also maintain a CCC storage agreement provides no additional protection
to CCC's interests as a lender in the administration of the MAL
programs and, therefore, CCC will no longer require such warehouse
operators to also maintain a storage agreement. However, CCC may
reserve the right to continue to utilize storage agreements in those
instances where it is engaged in the long-term storage of commodities.
In a State with an operating warehouse licensing program, CCC will
no longer require the use of a CCC storage agreement for a State-
licensed warehouse. In such States, especially those with grain
indemnity funds that provide cash payments to depositors in the event
of the insolvency of the warehouse operator, CCC already has adequate
protection as a secured lender. There are redundant costs to the
warehouse operator in meeting and maintaining compliance with both the
State license and the CCC storage agreement. Even without the storage
agreement, CCC will still have clear title to the commodity in the
event of the insolvency of the warehouse operator. If the loan is
repaid, CCC has no interest at stake. Thus, for State-licensed
warehouses, a CCC storage agreement will not be required. However, CCC
may reserve the right to continue to utilize storage agreements in
those instances where it is engaged in the long-term storage of
commodities.
For warehouse operators in the small number of States that do not
have warehouse licensing programs, CCC may require these entities to
execute a CCC storage agreement before a producer may obtain a MAL with
respect to commodities stored in such warehouse, but may require that
the warehouse be approved in advance. A list of approved local
warehouses may be obtained from FSA State and county offices.
These changes will allow producers to obtain warehouse-stored loans
at all warehouses; both State and Federally licensed, which expands the
amount of storage available for use by producers who wish to obtain
such loans. This is particularly beneficial since commercial warehouse
capacity has declined over the past 15 years while the amount of
commodities produced in that time has increased. Marketing patterns
have changed during this time, for example, many buyers have turned to
a ``timed-to-arrive'' basis and do not maintain large stocks of
commodities at their facilities. These regulatory changes are
responsive to changing market conditions.
For peanuts, the 2008 Farm Bill requires that the facility in which
peanuts for MAL are stored meets certain conditions set by the
Secretary and that the facility agrees to provide storage on a non-
discriminatory basis.
Wool and Mohair
The 2008 Farm Bill reauthorizes provisions allowing producers to
pledge wool or mohair as collateral to secure a nonrecourse MAL. This
rule makes minor changes specific to those items, including changing
references to update specific crop years and changing the basis on
which the Secretary will announce alternative repayment rates from
``periodically'' to weekly in section 1421.10, ``Market Rates.'' This
rule also changes the title of the section on ``Market Rates'' to
``Loan Repayment Rates.''
Peanuts
The 2008 Farm Bill reauthorizes most of the provisions for peanuts,
with two major exceptions. First, the Farm Security and Rural
Investment Act of 2002 (Pub. L. 107-171, commonly known as the 2002
Farm Bill) required CCC for a time to pay for the storage, handling and
other associated costs for peanuts pledged under a MAL. This authority
terminated with the beginning of the 2007 crop of peanuts. Therefore,
for the 2007 crop, CCC required a peanut warehouse receipt showing
payment of storage charges through the loan period, and reduced the
loan amount for any unpaid storage charges. The 2008 Farm Bill,
beginning with the 2008 crop, requires CCC, at the time the peanuts are
placed in MAL, to pay for handling and other associated costs (but not
storage costs) for peanuts. The 2008 Farm Bill requires the repayment
of these costs when MALs are redeemed. Second, the 2008 Farm Bill
authorizes CCC to pay storage, handling, and other associated costs for
all peanut MALs that achieved maturity and are forfeited to CCC as a
settlement of the MAL. This rule makes changes to section 1421.10,
``Loan Repayment Rates,'' to implement
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these specific provisions of the 2008 Farm Bill.
National Loan Rates
The 2008 Farm Bill specifies the national loan rates for the 2008
through 2012 crop years for the eligible loan commodities. The loan
rates specified by the 2008 Farm Bill are as follows:
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Commodity 2008 Crop year 2009 Crop year 2010-2012 Crop years
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Wheat............................ $2.75/bu................. $2.75/bu................ $2.94/bu.
Corn............................. $1.95/bu................. $1.95/bu................ $1.95/bu.
Grain Sorghum.................... $1.95/bu................. $1.95/bu................ $1.95/bu.
Barley........................... $1.85/bu................. $1.85/bu................ $1.95/bu.
Oats............................. $1.33/bu................. $1.33/bu................ $1.39/bu.
Long Grain Rice.................. $6.50/cwt................ $6.50/cwt............... $6.50/cwt.
Medium Grain Rice................ $6.50/cwt................ $6.50/cwt............... $6.50/cwt.
Soybeans......................... $5.00/bu................. $5.00/bu................ $5.00/bu.
Other Oilseeds................... $9.30/cwt................ $9.30/cwt............... $10.09/cwt.
Peanuts.......................... $355.00/ton.............. $355.00/ton............. $355.00/ton.
Dry Peas......................... $6.22/cwt................ $5.40/cwt............... $5.40/cwt.
Lentils.......................... $11.72/cwt............... $11.28/cwt.............. $11.28/cwt.
Small Chickpeas.................. $7.43/cwt................ $7.43/cwt............... $7.43/cwt.
Large Chickpeas.................. N/A...................... $11.28/cwt.............. $11.28/cwt.
Graded Wool...................... $1.00/lb................. $1.00/lb................ $1.15/lb.
Nongraded Wool................... $0.40/lb................. $0.40/lb................ $0.40/lb.
Mohair........................... $4.20/lb................. $4.20/lb................ $4.20/lb.
Honey............................ $0.60/lb................. $0.60/lb................ $0.69/lb.
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The 2008 through 2009 crop year loan rates for MALs remained the
same for wheat, feed grains, soybeans, other oilseeds, peanuts, wool
and mohair from those established during the last year of the 2002 Farm
Bill in 2007. The 2010 through 2012 loan rates for MALs for wheat,
barley, oats, other oilseeds, graded wool and honey are increased as
shown in the previous table. The 2008 Farm Bill establishes two loan
rates for rice. Rice is divided into a long grain rice loan rate and
medium short grain loan rate. We are amending section 1421.5,
``Eligible Commodities,'' to reflect that the determination of class,
grade, and other quality factors for rice will be based on the U.S.
Standards for Rice. Large chickpeas, beginning with the 2009 crop year,
are now included as a pulse crop. The 2008 Farm Bill removed a pulse
crop loan rate provision requiring that the loan rates be based upon
U.S. feed grade for dry peas and U.S. number 3 grade for lentils and
small chickpeas. Effective with the 2008 crop (with the 2009 crop for
large chickpeas), pulse crop loan rates will reflect values of U.S.
grade number 1.
Adjustments of Loans (Premiums and Discounts)
The 2008 Farm Bill reauthorizes the provisions authorizing
adjustments of loan rates for any eligible loan commodity under this
regulation, except for rice, for differences in grade, type, quality,
location and other factors. Long grain and medium grain rice loan rates
will only be adjusted for grade and quality (including milling yields).
To the extent practicable, FSA will make adjustments to ensure that
weighted average base county loan rates are consistent and reflect
current market conditions. Specifically, for the 2008 crop year, USDA
will continue to apply appropriate premiums and discounts to loan rates
in the county where the commodity is stored. On a per-unit basis,
premiums are added to and discounts are subtracted from the loan rate
when the MAL is made for the 2008 crop year. If a producer chooses to
repay a MAL, these same premiums and discounts applied to the loan rate
at loan making are also applied to the loan repayment rate.
Beginning with the 2009 crop year, except for peanuts, and
throughout the remaining years of the 2008 Farm Bill, CCC will no
longer apply premiums and discounts to loan rates at loan making time.
CCC will apply premiums and discounts at the time of loan settlement or
loan forfeiture instead. Producers will settle their outstanding
nonrecourse MAL during the loan period by repaying MAL at applicable
repayment rate or upon maturity by forfeiting the commodity to CCC. At
forfeiture, the applicable loan rate in effect for the commodity will
be adjusted by premiums and discounts. This rule amends sections
1421.9, ``Basic Loan Rates,'' and 1421.112, ``Loan Settlement,'' to
implement these changes that are required by the 2008 Farm Bill.
Loan Repayment Rates
Currently, USDA permits eligible producers to repay MALs on wheat,
feed grains (except rice), soybeans, other oilseeds (except
confectionary and each other kind of sunflower seed (other than oil
sunflower seed)) at any time during the loan period at a rate that is
the lesser of: (1) Loan rate plus accrued interest or (2) a rate
determined by the Secretary that would minimize forfeitures,
accumulation of stocks, storage costs, impediments to the market and
discrepancies in benefits across State and county boundaries. For rice,
MALs are repaid at lesser of: (1) Loan rate plus accrued interest or
the adjusted world price (AWP). The 2008 Farm Bill maintains the two
existing loan repayment rate options, and mandates that the Secretary
add a third loan repayment option that allows the loan repayment rate
to be based on average market prices during the preceding 30-day-
period. For long grain rice and medium grain rice, the 2008 Farm Bill
requires USDA to permit eligible producers to repay MALs at any time
during the loan period at a rate that is the lesser of: (1) Loan rate
plus accrued interest or (2) the prevailing world market price adjusted
to U.S. quality and location, and often referred to as the adjusted
world price or AWP. For peanuts, the 2008 Farm Bill requires USDA to
permit eligible producers to repay MALs at any time during the loan
period at a rate that was the lesser of: (1) Loan rate plus accrued
interest or (2) a rate determined by the Secretary that would minimize
forfeitures, accumulation of stocks, storage costs, and impediments to
the market. For confectionary and other kinds of sunflower seeds, the
2008 Farm Bill requires USDA to permit eligible producers to repay MALs
at any time during the loan period at a rate that was the lesser of:
(1) Loan rate plus accrued
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interest or (2) a repayment rate established for oil sunflower seed.
This rule amends section 1421.10, ``Loan Repayment Rates,'' to reflect
these changes required by the 2008 Farm Bill.
Additionally, the 2008 Farm Bill provides authority to temporarily
adjust loan repayment rates. In the event of a severe disruption to
marketing, transportation, or related infrastructure, USDA may modify
the loan repayment rate applicable to eligible commodities. Any
adjustments made to the applicable eligible commodity loan repayment
rate will be short-term and temporary basis, as determined by USDA.
Such adjustments will be announced; they will not be in the
regulations.
Payments In Lieu of Loan Deficiency Payments for Grazed Acreage
The 2008 Farm Bill reauthorizes provisions for grazed acreage LDP.
The 2002 Farm Bill provided a payment program for producers who grazed
livestock on land that may otherwise be used to produce LDP eligible
crops, also known as ``graze-out'' provisions. Producers who would be
eligible for a wheat, barley, oats, or triticale LDP but instead use
those planted crops to graze livestock will be eligible for LDPs if
they agree to forgo harvesting of that acreage. We are making minor
amendments to 1421.304, ``Payment Amount'', to clarify grazing payment
provisions and to remove obsolete provisions for previous crop years.
Honey
The 2008 Farm Bill reauthorizes and extends existing honey
provisions. The existing way of determining honey producers'
eligibility and beneficial interest is to require them to comply with
the provisions in both 7 CFR parts 1434 and 1421. That policy is not
changing, although we are clarifying that policy by stating it
explicitly in the regulations. New provisions in this rule for 7 CFR
part 1421 also apply to honey producers even if they are not
specifically addressed under 7 CFR part 1434, for example, changes
discussed in this preamble for other eligibility requirements for
producers, beneficial interest, and adjusted gross income and payment
limitations. The increase in the national loan rate effective for 2010
through 2012 crop years (which is not in the regulations but is
specified in this preamble and in the 2008 Farm Bill) and the provision
allowing the Secretary to temporarily adjust loan repayment rates in
the event of a severe disruption to marketing, transportation, or
related infrastructure also apply to honey. This rule removes section
1434.22, ``Handling Payments and Collections not Exceeding $9.99,'' to
be consistent with part 1421. This rule also amends section 1434.15,
``Personal Liability,'' to reduce liquidated damages (penalties) for
violations to be consistent with similar provisions in part 1421.
Other Miscellaneous Changes
This rule amends section 1421.104 to state that CCC will conduct
lien searches on all commodities pledged as collateral for amounts
greater than $50,000, which is an increase from $25,000 in the current
regulations. Field offices should be able to process loan applications
more quickly if lien searches are limited to loans over $50,000. CCC
will still have the discretion to conduct lien searches for any loan
amount when it is determined that CCC's interest may be at risk.
This rule clarifies section 1421.104 about assessment authority
language. Commodity assessments, if applicable, are deducted from MAL
proceeds at loan making and furnished to appropriate National or State
assessment authorities.
CCC is also making a number of housekeeping changes to clean up the
regulations. For example, we are consolidating all the definitions and
abbreviations that are currently in separate sections for each subpart
into one section for this part. In general, CCC is making changes to
add clarity, make administrative improvements, correct typographical
errors, add consistency with current CCC and industry practices, remove
expired regulations, improve internal consistency, and improve
organization. These changes do not represent substantive policy or
administrative changes.
Notice and Comment
These regulations are exempt from notice and comment provisions of
the Administrative Procedure Act (5 U.S.C. 553), as specified in
section 1601(c) of the 2008 Farm Bill, which requires that the
regulations be promulgated and administered without regard to the
notice and comment provisions of Section 553 of title 5 of the United
States Code or the Statement of Policy of the Secretary of Agriculture
effective July 24, 1971, (36 FR 13804) relating to notices of proposed
rulemaking and public participation in rulemaking.
Executive Order 12866
This final rule is economically significant according to Executive
Order 12866 and has been reviewed by the Office of Management and
Budget (OMB). A cost-benefit assessment of the changes made by this
rule and is summarized below and is available from the contact above.
Summary of Economic Impacts
The Cost-Benefit Assessment includes discussions of statutorily-
mandated changes as well as discretionary changes for the MAL and LDP
Programs.\1\ The projected impacts from the use of discretionary
authority are expected to be relatively minor. Projected outlays
impacts were addressed in the cost benefit analysis completed for the
final rule for the Direct and Counter-cyclical Payment and Average Crop
Revenue Election Programs, which was published on December 29, 2008 (73
FR 79284-79306). The impacts from the regulatory changes addressed in
the two rules are inherently interrelated and not addressed as
individual impacts.
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\1\ Outlay impacts from 2008-Farm-Bill-mandated changes
regarding MAL and LDP programs are discussed in the cost benefit
assessment, but projected outlays impacts are addressed in the cost
benefit assessment associated with the statutory and regulatory
changes for the Direct and Counter-cyclical Payment and Average Crop
Revenue Election Programs (7 CFR part 1412). In addition, the
economic and budgetary impacts of mandatory changes, including
changes in national average loan rates, are discussed in that cost
benefit assessment as well. Statutory and regulatory changes
associated with payment limitations, direct attribution, and
adjusted gross income eligibility criteria are evaluated in the cost
benefit assessment that accompanies that regulation (7 CFR part
1400).
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The discretionary changes are:
Premiums and discounts: With exception of cotton and
peanuts, discontinue applying premiums and discounts at the time
warehouse-stored loans are made, and instead apply them only if loan
quantities are forfeited;
Loan repayment rates: For applicable commodities,
discontinue using prices from a single day to establish loan repayment
rates, and instead use the lesser of a statutorily-mandated 30-day
moving average of market prices adjusted for location and a
discretionary 5-day average of applicable terminal prices backed off to
the local level to establish alternative loan repayment rates;
Lien searches: Raise the minimum loan principal amount for
which lien searches are required from $25,000 to $50,000; and
Uniform Grain and Rice Storage Agreements (UGRSA's):
Discontinue the widespread use of UGRSA's with applicable warehouse
operators and instead apply such agreements on a case-by-case basis.
The premium and discount, lien search, and UGRSA changes are
expected to save some staff time, and the staff time will instead be
devoted to new tasks (for example, administering the new ACRE program
provisions) or
[[Page 15649]]
reducing backlogs (for example, inspecting all Federally-licensed
warehouses at least once annually under provisions of the United States
Warehouse Act (USWA)). Use of discretionary authority in implementing
the new loan repayment rate provisions is expected to reduce the day-
to-day (or, as applicable, week-to-week) variability in loan repayment
rates for wheat, feed grains, oilseeds, pulses, wool, and mohair. The
use of a 30-day average price and a 5-day average price in loan
repayment rate determinations is not expected to affect outlays.
However, the mandated use of a 30-day average price will cause the
repayment rate determination to be less transparent.
Federal Assistance Programs
The title and number of the Federal assistance program in the
Catalog of Federal Domestic Assistance to which this final rule applies
is 10.051--Commodity Loans and Loan Deficiency Payments.
Regulatory Flexibility Act
This rule is not subject to the Regulatory Flexibility Act because
CCC is not required to publish a notice of proposed rulemaking for this
rule.
Environmental Review
The environmental impacts of this rule have been considered in a
manner consistent with the provisions of the National Environmental
Policy Act (NEPA, 42 U.S.C. 4321-4347), the regulations of the Council
on Environmental Quality (40 CFR parts 1500-1508), and FSA regulations
for compliance with NEPA (7 CFR part 799). FSA has determined that this
rule would not constitute a major Federal action significantly
affecting the quality of the human environment, and therefore, no
environmental assessment or environmental impact statement will be
prepared.
Executive Order 12988
The final rule has been reviewed under Executive Order 12988. This
rule preempts State laws that are inconsistent with its provisions.
This rule is not retroactive and does not preempt State or local laws,
regulations, or policies unless they present an irreconcilable conflict
with this rule. Before any judicial action may be brought regarding the
provisions of this rule the administrative appeal provisions of 7 CFR
parts 11 and 870 must be exhausted.
Executive Order 12372
This program is not subject to Executive Order 12372, which
requires consultation with State and local officials. See the notice
related to 7 CFR part 3015, subpart V, published in the Federal
Register on June 24, 1983 (48 FR 29115).
Executive Order 13132
The policies contained in this rule do not have any substantial
direct effect on states, on the relationship between the national
government and the states, or on the distribution of power and
responsibilities among the various levels of government. Nor does this
rule impose substantial direct compliance costs on state and local
governments. Therefore, consultation with the states is not required.
Unfunded Mandates
This rule contains no Federal mandates under the regulatory
provisions of Title II of the Unfunded Mandates Reform Act of 1995
(UMRA) for State, local, and tribal government or the private sector.
In addition, CCC was not required to publish a notice of proposed
rulemaking for this rule. Therefore, this rule is not subject to the
requirements of sections 202 and 205 of the UMRA.
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)
Section 1601(c)(3) of the 2008 Farm Bill requires that the
Secretary use the authority in section 808 of title 5, United States
Code, which allows an agency to forgo SBREFA's usual 60-day
Congressional Review delay of the effective date of a major regulation
if the agency finds that there is a good cause to do so. This rule
affects a large number of agricultural producers who are dependent upon
these provisions for income support and need to know the details as
soon as possible because it has a profound effect on their planting and
marketing decisions. In any event, Section 1601 provides on its own
basis for the finding a good cause. Accordingly, this rule is effective
upon the date of filing for public inspection by the Office of the
Federal Register.
Paperwork Reduction Act
The regulations in this rule are exempt from requirements of the
Paperwork Reduction Act (44 U.S.C. Chapter 35), as specified in section
1601(c)(2) of the 2008 Farm Bill, which provides that these regulations
be promulgated and administered without regard to the Paperwork
Reduction Act.
E-Government Act Compliance
CCC is committed to complying with the E-Government Act, to promote
the use of the Internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
List of Subjects
7 CFR Part 1421
Barley, Feed grains, Grains, Loan programs--agriculture, Oats,
Oilseeds, Peanuts, Price support programs, Reporting and recordkeeping
requirements, Soybeans, Surety bonds, Warehouses, Wheat.
7 CFR Part 1434
Honey, Loan programs--agriculture, Price support programs,
Reporting and recordkeeping requirements.
0
For the reasons discussed above, this rule amends 7 CFR parts 1421 and
1434 as follows:
PART 1421--GRAINS AND SIMILARLY HANDLED COMMODITIES--MARKETING
ASSISTANCE LOANS AND LOAN DEFICIENCY PAYMENTS FOR 2008 THROUGH 2012
0
1. Revise the authority citation for part 1421 to read as follows:
Authority: 7 U.S.C. 7231-7237 and 7931-7936; 15 U.S.C. 714b and
714c, and Public Law 110-246.
0
2. Revise the part heading for 7 CFR part 1421 to read as shown above.
0
3. Amend Sec. 1421.1 as follows:
0
a. Revise the section heading to read as set forth below;
0
b. Revise paragraph (a) to read as set forth below; and
0
c. Remove paragraph (e).
Sec. 1421.1 Applicability and interest.
(a) The regulations of this subpart are applicable to the 2008
through 2012 crops of barley, small chickpeas, corn, grain sorghum,
lentils, oats, dry peas, peanuts, rice, wheat, wool, mohair, oilseeds
and other crops designated by Commodity Credit Corporation (CCC).
Additionally, large chickpeas are authorized for coverage for the 2009
through 2012 crop years. These regulations specify the general
provisions under which marketing assistance loans (MAL) and loan
deficiency payments (LDP) will be administered by CCC. Additional terms
and conditions are in the note and security agreement and the loan
deficiency payment application that must be executed by a producer to
receive marketing assistance loans and LDPs. In any case in which money
must be refunded to CCC in connection with this part, interest will be
due to run from the date of disbursement of the sum to be refunded.
This will apply,
[[Page 15650]]
unless waived by the Deputy Administrator, irrespective of any other
rule.
* * * * *
Sec. 1421.2 [Amended]
0
4. Amend Sec. 1421.2 by removing paragraph (c)(1) and redesignating
paragraphs (c)(2) and (c)(3) as (c)(1) and (c)(2), respectively.
0
5. Amend Sec. 1421.3 as follows:
0
a. Add new definitions, in alphabetical order, for the terms
``Administrative County Office,'' ``CCC,'' ``chickpeas,'' ``CMA,''
``COC,'' ``Control or Recording FSA County Office,'' ``crop,'' ``crop
year,'' ``current net worth ratio,'' ``Department,'' ``Deputy
Administrator,'' ``DMA Service County Office,'' ``drawdown account,''
``electronic warehouse receipt (EWR),'' ``FSA,'' ``high moisture
state,'' ``loan deficiency payment (LDP),'' ``loan settlement,''
``MAL,'' ``medium grain rice,'' ``rice,'' ``Secretary,'' ``security for
DMAs,'' and ``STC'' to read as set forth below;
0
b. Remove the definitions of ``field direct loan deficiency payment,''
``high moisture commodities,'' ``loan deficiency payment,'' and ``small
chickpea'';
0
c. Revise the definition of ``loan commodities,'' to read as set forth
below;
0
d. Amend paragraph (1) of the definition of ``other crops designated by
CCC'' by removing the word ``haulage'' and adding, in its place, the
word ``haylage'';
0
e. Amend the definition of ``pulse crops'' by removing the word
``small''; and
0
f. Amend the definition of ``wool'' by adding the words ``and includes,
unless noted otherwise, graded and nongraded wool'' before the period
at the end.
Sec. 1421.3 Definitions.
* * * * *
Administrative County Office is the FSA County Office where a
producer's FSA records are maintained.
* * * * *
CCC means the Commodity Credit Corporation.
* * * * *
Chickpeas means any chickpea that meets the definition of a
chickpea according to the Grain Inspection, Packers and Stockyards
Administration (GIPSA), Federal Grain Inspection Service (FGIS).
(1) Small chickpea falls below a 20/64th sieve.
(2) Large chickpea stays above a 20/64th sieve.
* * * * *
CMA means a cooperative marketing association that is subject to
regulations in Part 1425 of this chapter.
COC means the FSA county committee.
* * * * *
Control or Recording FSA County Office is the FSA County Office
that controls subsidiary files for producers designated as multi-county
producers.
Crop means with respect to a year, commodities harvested in that
year. That is, a reference to the 2009 crop of a commodity means
commodities that when planted were intended for harvest in calendar
year 2009.
Crop year means any time relevant to the relevant crop for that
year. Thus references to the 2009 crop year are used to include any
activities relevant to the 2009 crop.
Current net worth ratio means current assets minus current
liabilities, divided by current liabilities, based on the financial
statement provided in connection with a DMA application or a
recertification for DMA status.
Department means the United States Department of Agriculture.
Deputy Administrator means the Deputy Administrator for Farm
Programs, Farm Service Agency (FSA) or a designee of that person.
* * * * *
DMA Service County Office is an FSA County Office designated by CCC
to accept, process, and disburse bundled peanut MALs and LDPs to a DMA.
In the absence of a centralized MAL and LDP processing system for
peanuts, a service county FSA office is necessary for entering MALs and
LDPs made by DMAs into CCC accounting systems.
Drawdown account is an account titled to the DMA at a financial
institution and funded at the discretion of CCC for the purpose of
allowing the DMA to advance funds to producers who have applied for
MALs and LDPs before a subsequent MAL or LDP is made to the DMA by an
assigned FSA county office.
Electronic warehouse receipt (EWR) means a receipt electronically
filed in a central filing system by an approved provider as provided in
an executed, ``Farm Service Agency Provider Agreement to Electronically
File and Maintain Warehouse Receipts.''
FSA means the Farm Service Agency of the United States Department
of Agriculture.
High moisture state means corn or grain sorghum having a moisture
content in excess of CCC standards used to determine eligibility for
marketing assistance loans made by the Secretary.
* * * * *
Loan commodities means wheat, corn, grain sorghum, barley, oats,
rice, soybeans, other oilseeds, peanuts, wool, mohair, dry peas,
lentils, chickpeas, and other crops designated by CCC.
Loan deficiency payment (LDP) means a payment received in lieu of a
loan when the CCC-determined value is below the applicable county loan
rate.
Loan settlement means farm stored commodities delivered to CCC and
warehouse stored commodities forfeited to CCC, effective with the 2009
through 2012 crop years.
MAL means marketing assistance loan.
Medium grain rice for the purposes of this part includes both short
and medium grain rice as defined by the U.S. Standards for Rice.
* * * * *
Rice means, unless otherwise noted, long grain rice and medium
grain rice.
Secretary means the Secretary of the United States Department of
Agriculture, or the Secretary's delegate.
Security for DMAs means a certified or cashier's check payable to
CCC, an irrevocable commercial letter of credit in a form acceptable to
CCC, a performance or surety bond conditioned on the DMA fully
discharging all of its obligations under this part, or other form of
financial security as CCC may deem appropriate.
* * * * *
STC means the FSA State committee.
* * * * *
0
6. Amend Sec. 1421.4 as follows:
0
a. Amend paragraph (a)(1) by removing the words ``State or political
subdivision or agency thereof,'' and
0
b. Revise paragraph (a)(2) to read as set forth below.
Sec. 1421.4 Eligible producers.
(a) * * *
(2) Comply with all provisions of this part and, as applicable:
(i) 7 CFR part 12--Highly Erodible Land and Wetland Conservation;
(ii) 7 CFR part 707--Payments Due Persons Who Have Died,
Disappeared, or Have Been Declared Incompetent;
(iii) 7 CFR part 718--Provisions Applicable to Multiple Programs;
(iv) 7 CFR part 996--Minimum Quality and Handling Standards for
Domestic and Imported Peanuts Marketed in the United States;
(v) 7 CFR part 1400--Payment Limitation & Payment Eligibility for
2009 and Subsequent Crops, Programs, or Fiscal Years;
(vi) 7 CFR part 1402--Policy for Certain Commodities Available for
Sale;
(vii) 7 CFR part 1403--Debt Settlement Policies and Procedures;
[[Page 15651]]
(viii) 7 CFR part 1405--Loans, Purchases, and Other Operations;
(ix) 7 CFR part 1412--Direct and Counter-Cyclical Program and
Average Crop Revenue Election Program for the 2008 and Subsequent Crop
Years; and
(x) 7 CFR part 1423--Commodity Credit Corporation Approved
Warehouses.
* * * * *
0
7. Amend Sec. 1421.5 as follows:
0
a. Amend paragraph (a)(1) by removing the words ``canola,'' and
``small'';
0
b. Revise paragraph (c) to read as set forth below; and
0
c. Amend paragraph (f) by adding the word ``or'' immediately after the
word ``gift,''.
Sec. 1421.5 Eligible commodities.
* * * * *
(c)(1) To be an eligible commodity, the commodity must be
merchantable for food, feed, or other uses determined by CCC and must
not contain mercurial compounds, toxin producing molds, or other
substances poisonous to humans or animals. A commodity containing
vomitoxin, aflatoxin, or Aspergillus mold may not be pledged for a loan
made under this part, except as provided by CCC in the marketing
assistance loan note and security agreement.
(2) The determination of eligibility for rice includes class,
grade, grading factor, milling yields, and other quality factors and
will be based upon the U.S. Standards for Rice as applied to rough rice
whether or not such determinations are made on the basis of an official
inspection.
(3) The determination of eligibility for peanuts includes type,
quality, and quantity.
(4) With respect to barley, canola, corn, flaxseed, grain sorghum,
oats, rice, soybeans, sunflower seed for extraction of oil, wheat, and
other commodities designated by CCC, the determination of eligibility
will be based upon the Official U.S. Standards for Grain: U.S.
Standards for Whole Dry Peas, Split Peas, and Lentils for dry peas and
lentils; and the U.S. Standards for Beans for chickpeas, whether or not
such determinations are made on the basis of an official inspection.
(5) With regard to hull-less barley, hull-less oats, mustard seed,
rapeseed, safflower seed, flaxseed, and sunflower seed used for a
purpose other than to extract oil, the determination of eligibility
will be based on quality requirements established and announced by CCC,
whether or not such determinations are made on the basis of an official
inspection. The costs of an official quality determination may be paid
by CCC. The quality requirements that are used in administering
marketing assistance loans and loan deficiency payments for the
oilseeds in this paragraph are available in USDA State and county FSA
service centers.
(6) With regard to farm-stored peanuts, the determination of
eligibility will be determined at the time of delivery to CCC by a
Federal or State Inspector authorized or licensed by the Secretary.
* * * * *
0
8. Amend Sec. 1421.6 as follows:
0
a. In paragraphs (b)(5), (c)(5), and (h)(2) remove the word
``approved'' and add, in its place, the word ``authorized'' each time
it appears;
0
b. In paragraph (a), revise the second sentence to read as set forth
below;
0
c. In paragraphs (b)(5) and (c)(5), add the words ``feed or grain
bank'' immediately after the words ``feed mill,'' each time they
appear;
0
d. In paragraph (c)(5), remove the word ``unapproved'' and add, in its
place, the word ``unauthorized'';
0
e. In paragraph (h)(1)(i), add the words ``the earlier of receipt of
any payment or'' immediately before the word ``once'' and add the words
``of the delivery requirements'' immediately after the word
``fulfillment'';
0
f. In paragraph (h)(2), add the words ``if CCC determines such a
provision is required'' before the period at the end; and
0
g. In paragraph (i), remove the words ``loan and'' and add, in their
place, the words ``loan or'' and remove the words ``or payment'' and
add, in their place, the words ``or LDP''.
Sec. 1421.6 Beneficial interest.
(a) * * * For the purposes of this part, the term ``beneficial
interest'' refers to a determination by CCC that a person has title to
and control of the commodity that is tendered to CCC as collateral for
a marketing assistance loan or of the commodity that will be used to
determine a loan deficiency payment.
* * * * *
Sec. 1421.7 [Amended]
0
9. Amend Sec. 1421.7 as follows:
0
a. In paragraph (c), remove the words ``a crop of a'' and add, in their
place, the words ``an eligible'';
0
b. In paragraph (c)(1), add the words ``crambe, sesame seed''
immediately after the word ``rapeseed,'';
0
c. In paragraph (c)(2), remove the word ``small''; and
0
d. Remove paragraph (d).
Sec. 1421.8 [Amended]
0
10. Amend Sec. 1421.8 as follows:
0
a. In paragraph (a)(2), remove the reference ``Sec. 1421.106'' and
add, in its place, the references and words ``Sec. Sec. 1421.9,
1421.106, and 1421.107 as applicable'';
0
b. In paragraph (b)(1) introductory text, add the words ``loan
availability'' immediately after the word ``final'';
0
c. In paragraph (c)(1), remove the word ``approved'' and add, in its
place, the word ``authorized'' each time it appears;
0
d. Remove paragraph (c)(2) and redesignate paragraph (c)(3) as (c)(2);
and
0
e. In newly redesignated paragraph (c)(2), remove the words ``an
otherwise eligible commodity'' in the last sentence and add, in their
place, the words ``otherwise eligible''.
0
11. Amend Sec. 1421.9 as follows:
0
a. Revise paragraph (a) to read as set forth below;
0
b. In paragraph (b), remove the words ``small chickpeas,'' and add the
words ``chickpeas, crambe, sesame seed,'' in their place, and remove
the word ``at'' and add the word ``to'' in its place;
0
c. Revise paragraph (c) to read as set forth below; and
0
d. Add paragraphs (d) through (g) to read as set forth below.
Sec. 1421.9 Basic loan rates.
(a) Basic marketing assistance loan rates for a commodity may be
established on a National, State, regional, county basis or other
basis, will be at rates that comply with applicable statutes, and may
be adjusted by CCC to reflect grade, type, quality, location and other
factors applicable to the commodity and as otherwise provided in this
section.
* * * * *
(c)(1) Subject to adjustment under paragraph (g) of this section in
case of forfeiture, for all 2009 through 2012 crop year commodities,
except rice and peanuts, warehouse-stored loans will be disbursed at
levels based on the basic county marketing assistance loan rate for the
county where the commodity is stored. For the 2008 crop year only,
warehouse-stored loans will be disbursed at levels based on the basic
county marketing assistance loan rate for the county where the
commodity is stored, adjusted for the schedule of premiums and
discounts established for the commodity on the basis of grade, type,
and quality factors set forth on warehouse receipts or supplemental
certificates and for other factors, as determined and announced by CCC.
(2) Subject to adjustment under paragraph (g) of this section in
case of
[[Page 15652]]
forfeiture, for 2009 through 2012 crop years rice, warehouse-stored
loans will be disbursed at levels based on the milling yields times the
whole and broken kernel marketing assistance loan rates. For the 2008
crop year of rice only, warehouse-stored loans will be disbursed at
levels based on the milling yields times the whole and broken kernel
marketing assistance loan rates, adjusted for the schedule of discounts
on the basis of grade and quality factors set forth on warehouse
receipts or supplemental certificates and for other factors, as
determined and announced by CCC.
(3) For peanuts, warehouse-stored loans will be disbursed at levels
based on National loan rates by peanut type, adjusted for the schedule
of premiums and discounts on the basis of grade, quality, and other
factors set forth on warehouse receipts.
(d) The Secretary will establish a single loan rate in each county
for each kind of other oilseeds, such as but not limited to, sunflower,
rapeseed, canola, safflower, flaxseed, mustard seed, crambe, sesame
seed, and other oilseeds as designated by the Secretary.
(e) Adjustments by the Secretary to establish loan rates for loan
commodities, except rice, on a county basis will not be lower than 95
percent of the national average loan rate, if those loan rates do not
result in an increase in outlays. Adjustments in this section will not
result in an increase in the national average loan rate for any year.
(f) For the 2009 through 2012 crops, producers on farms in the
Acreage Crop Revenue Election program under part 1400 of this title
will receive a 30 percent reduction in loan rate as established under
this section for all loan commodities from the farm, except honey,
wool, and mohair.
(g) For the 2009 through 2012 crop years, premiums and discounts
will not be applicable for all eligible loan commodities, except for
peanuts, at loan disbursement; however, premiums and discounts will
apply if the eligible loan commodities are forfeited and delivered to
CCC and any deficiency must be repaid to CCC.
0
12. Revise Sec. 1421.10 to read as follows:
Sec. 1421.10 Loan repayment rates.
(a) For the 2008 through 2012 crops of barley, corn, grain sorghum,
oats, wheat, dry peas, lentils, chickpeas, oilseeds, wool, mohair, and
other crops as designated by CCC (other than peanuts, long grain rice,
medium grain rice, and confectionery and each other kind of sunflower
seed (other than oil sunflower seed)), a producer may repay a
nonrecourse marketing assistance loan at a rate that is the lesser of:
(1) The loan rate established for the commodity under Sec. 1421.9,
plus interest;
(2) A rate (as determined by the Secretary) that is calculated
based on average market prices for the loan commodity during a
preceding 30-day period and that the Secretary has determined 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: Minimize potential loan forfeitures;
minimize the accumulation of stocks of the commodity by the Federal
Government; minimize the cost incurred by the Federal Government in
storing the commodity; allow the commodity produced in the U.S. to be
marketed freely and competitively, both domestically and
internationally; and minimize discrepancies in marketing loan benefits
across State boundaries and across county boundaries.
(b) To the extent practicable, CCC will determine and announce
repayment rates under paragraphs (a)(2) and (a)(3) of this section
based upon market prices at appropriate U.S. markets as determined by
CCC and these repayment rates may be adjusted to reflect grade, type,
quality, location, and other factors for each crop of a commodity as
follows:
(1) On a weekly basis in each county for oilseeds, except canola,
flaxseed, soybeans, and sunflower seed;
(2) On a daily basis in each county for barley, canola, corn,
flaxseed, grain sorghum, oats, soybeans, sunflower seed and wheat; and
(3) On a weekly basis regionally for dry peas, lentils, chickpeas,
wool and mohair.
(c)(1) For the 2008 through 2012 crops of peanuts, a producer may
repay a nonrecourse loan at a rate that is the lesser of:
(i) The loan rate established for the commodity under Sec. 1421.9,
plus interest; or
(ii) A rate that the Secretary determines will: Minimize potential
loan forfeitures; minimize the accumulation of stocks of the commodity
by the Federal Government; minimize the cost incurred by the Federal
Government in storing the commodity; and allow the commodity produced
in the United States to be marketed freely and competitively, both
domestically and internationally.
(2) To the extent practicable, CCC will determine and announce
weekly alternative repayment rates for peanuts.
(d) For the 2008 through 2012 crop of peanuts, the Secretary will
require the repayment of handling and other associated costs paid under
Sec. 1421.104 for all peanuts pledged as collateral for a loan that
are redeemed under this section.
(e) The Secretary will permit producers to repay a marketing
assistance loan for long grain rice and medium grain rice at a rate
that is the lesser of:
(1) The loan rate established for the commodity under Sec. 1421.9,
plus interest; or
(2) The prevailing world market price for the commodity, as
determined and adjusted by the Secretary in accordance with this
section.
(f) For purposes of this section, the Secretary will prescribe--
(1) A formula to determine the prevailing world market price for
long grain rice and medium grain rice and
(2) A mechanism by which the Secretary will announce periodically
those prevailing world market prices.
(g) Adjustments will be made to the prevailing world market price
for long grain rice and medium grain rice.
(1) The prevailing world market price for long grain and medium
rice determined under paragraph (f) of this section will be adjusted to
U.S. quality and location.
(2) In making adjustments under this subsection, the Secretary will
establish a mechanism for determining and announcing the adjustments in
order to avoid undue disruption in the U.S. market.
(h)(1) The prevailing world market price for a class of rice will
be determined by CCC based upon a review of prices at which rice is
being sold in world markets and a weighting of such prices through the
use of information such as changes in supply and demand of rice, tender
offers, credit concessions, barter sales, government-to-government
sales, special processing costs for coatings or premixes, and other
relevant price indicators, and will be expressed in U.S. equivalent
values F.O.B. (free on board) vessel, U.S. port of export, per
hundredweight as follows:
(i) U.S. grade No. 2, 4 percent broken kernels, long grain milled
rice;
(ii) U.S. grade No. 2, 4 percent broken kernels, medium grain
milled rice; and
(iii) U.S. grade No. 2, 4 percent broken kernels, short grain
milled rice.
(2) Export transactions involving rice and all other related market
information will be monitored on a continuous basis. Relevant
information may be
[[Page 15653]]
obtained for this purpose from USDA field reports, international
organizations, public or private research entities, international rice
brokers, and other sources of reliable information.
(3) The prevailing world market price for a class of rice adjusted
to U.S. quality and location, the adjusted world price (AWP), as
determined under paragraph (h)(5) of this section, will apply to this
section.
(4) The adjusted world price for each class of rice will equal the
prevailing world market price for a class of rice (U.S. equivalent
value) as determined under paragraphs (h)(1) and (h)(2) of this section
and adjusted to U.S. quality and location as follows:
(i) The prevailing world market price for a class of rice will be
adjusted to reflect an F.O.B. mill position by deducting from such
calculated price an amount that is equal to the estimated national
average costs associated with:
(A) The use of bags for the export of U.S. rice, and
(B) The transfer of such rice from a mill location to F.O.B. vessel
at the U.S. port of export with such costs including, but not limited
to, freight, unloading, wharfage, insurance, inspection, fumigation,
stevedoring, interest, banking charges, storage, and administrative
costs.
(ii) The price determined under paragraph (h)(4)(i) of this section
will be adjusted to reflect the market value of the total quantity of
whole kernels contained in milled rice by deducting the world value of
broken kernels it contains, with the value of the broken kernels
determined by multiplying a formulaic quantity of broken kernels (4
percent per hundredweight) by the world market value of broken kernels.
The world market value of broken kernels will be based upon the
relationship of whole and broken kernel world prices as estimated from
observations of prices at which rice is being sold in world markets.
(iii) The price determined under paragraph (h)(4)(ii) of this
section will be adjusted to reflect the per-pound market value of whole
kernels by dividing the price by the quantity of whole milled kernels
contained in the milled rice (96 percent per hundredweight).
(iv) The price determined under paragraph (h)(4)(iii) of this
section will be adjusted to reflect the market value of whole kernels
contained in 100 pounds of rough rice by multiplying such price by the
estimated national average quantity of whole kernel rice by class
obtained from milling 100 pounds of rough rice.
(v) The price determined under paragraph (h)(4)(iv) of this section
will be adjusted to reflect the total market value of rough rice by:
(A) Adding to such price:
(1) The market value of bran contained in the rough rice, computed
by multiplying the domestic unit market value of bran by the estimated
national average quantity of bran produced in milling 100 pounds of
rice; and
(2) The market value of broken kernels contained in the rough rice,
computed by multiplying the estimated world market value of broken
kernels by the estimated national average quantity of broken kernels
produced in milling 100 pounds of rice;
(B) Deducting from such price an estimated cost of milling rough
rice; and an estimated cost of transporting rough rice from farm to
mill locations.
(5) The adjusted world price for each class of rice, loan rate
basis, will be determined by CCC and announced, to the extent
practicable, on or after 7 a.m. Eastern Standard Time each Wednesday or
more frequently as determined necessary by CCC, continuing through the
later of:
(i) The last Wednesday of July in the year in which the crop rice
loan matures;
(ii) The last Wednesday of the latest month the crop rice loans
mature, or
(iii) In the event that Tuesday is not a normal business day, the
determination may be made on the next work day, on or after 7 a.m.
Eastern Standard Time.
(i) The producer may repay a marketing assistance loan under this
section 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 Sec. 1421.9,
plus interest, or
(2) The repayment rate established for oil sunflower seed.
(j)(1) On a form prescribed by CCC, a producer may request to lock
in the applicable repayment rate for a period of 60 calendar days or
for the remaining life of the loan term, whichever is less, provided
that no request may be granted within 14 calendar days of the end of
the loan.
(2) The request to lock in the applicable repayment rate must be
received in the FSA county service center that disbursed the loan.
(3) The repayment rate that is locked in will be the rate in effect
when the request to lock in is approved.
(4) The repayment rate may be locked in on outstanding farm-stored
or warehouse-stored loans.
(5) The repayment rate that is locked in will expire as provided in
paragraph (j)(1) of this section.
(6) The requests can only be completed one time for a designated
quantity.
(7) The requests can be made in person or by facsimile.
(8) The requests cannot be canceled, terminated, or changed after
approval.
(9) The locked in applicable repayment rate will not transfer to
any loan disbursed outside of the originating county where the
commodity was stored.
(10) Once a repayment rate is locked in it cannot be extended.
(k) If a producer fails to repay a marketing assistance loan within
the time prescribed by CCC under the terms and conditions of the
request to lock in a market loan repayment rate, the producer may repay
the loan:
(1) On or before maturity, at the lesser of:
(i) Principal plus interest as determined by CCC; or
(ii) The repayment rate in effect on the day the repayment is
received in the FSA County Service Center.
(2) After maturity, at principal plus interest.
(l) When the proceeds of the sale of the commodity are needed to
repay all or a part of a farm-stored loan, the producer must request
and obtain prior written approval on a CCC-approved form and comply
with the terms and conditions of such form, to remove a specified
quantity of the commodity from storage. Approval does not constitute
release of CCC's security interest in the commodity or release of
producer liability for amounts due CCC for the marketing assistance
loan indebtedness if payment in full is not received by the county
office. Failure to repay a marketing assistance loan within the time
period prescribed by CCC in the case of a farm-stored loan and delivery
of the pledged collateral to a buyer is a violation of the agreement.
In the case of such violation, the producer must repay the loan
principal and interest or another amount as determined by the Deputy
Administrator, FSA, as specified in Sec. 1421.109.
(m) The producer may obtain county committee approval of a release
of all or part of pledged collateral for a warehouse-stored loan at or
before the maturity of such loan by paying to CCC:
(1) The principal amount of the marketing assistance loan and
charges plus interest or
(2) An amount less than the principal amount of the marketing
assistance loan and charges plus interest under the
[[Page 15654]]
terms and conditions specified by CCC at the time the producer redeems
the collateral for such loan.
(n) A partial release of marketing assistance loan collateral must
cover all of the commodity represented by one warehouse receipt.
Warehouse receipts redeemed by repayment of the marketing assistance
loan must be released only to the producer. However, such receipt may
be released to persons designated in a written authorization that is
filed with the county office by the producer within 15 days before the
date of repayment.
(o) The note and security agreement will not be released until the
marketing assistance loan has been satisfied in full.
(p)(1) If the commodity is moved from storage without obtaining
prior approval to move such commodity, such removal will constitute
unauthorized removal or disposition, as applicable under Sec.
1421.109(b), unless the removal occurred on a non-workday and the
producer notified the county office on the next workday of such
removal.
(2) Any loan quantities involved in a violation of Sec. 1421.109
must be repaid under Sec. 1421.109(e).
(q) 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. Any adjustment made to the repayment rate for
marketing assistance loans for a loan commodity under Sec. 1421.5 will
be in effect on a short-term and temporary basis, as determined by the
Secretary.
0
13. Amend Sec. 1421.13 as follows:
0
a. Revise the heading to read as set forth below;
0
b. Remove paragraph (a);
0
c. Redesignate paragraph (b) as paragraph (a); and
0
d. In newly designated paragraph (a)(2), remove the word ``is'' and add
the word ``are'' in its place.
Sec. 1421.13 Special loan deficiency payments.
* * * * *
Sec. 1421.101 [Amended]
0
14. Amend Sec. 1421.101 paragraph (a)(1) first sentence by removing
the word ``approved'' and adding the word ``disbursed'' in its place.
Sec. 1421.102 [Amended]
0
15. Amend Sec. 1421.102 as follows:
0
a. In paragraph (a)(2)(ii), remove the words ``average marketing
assistance'';
0
b. In paragraph (a)(3), remove the word ``base''; and
0
c. In paragraph (a)(4), remove the words ``marketing assistance''.
0
16. Amend Sec. 1421.103 as follows:
0
a. Revise the heading to read as set forth below;
0
b. In paragraph (a) introductory text, remove the word ``Approved'' and
add the word ``Authorized'' in its place;
0
c. In paragraph (a)(3), remove the word ``approved'' and add the word
``authorized'' in its place; and
0
d. Revise paragraph (c) to read as set forth below.
Sec. 1421.103 Authorized storage.
* * * * *
(c)(1) Authorized warehouse storage consists of warehouses that:
(i) If Federally licensed, are in compliance with 7 CFR part 735 or
(ii) If not Federally licensed, are in compliance with State laws
and that issue warehouse receipts that meet the criteria specified in
Sec. 1421.107.
(iii) If not Federally licensed or in compliance with State Laws
and issue warehouse receipts that meet the criteria specified in Sec.
1421.107, have entered into a storage agreement with CCC.
(2) Notwithstanding paragraph (c)(1) of this section, if storing
peanuts, the warehouse must in all cases have entered into a storage
agreement with CCC. For storing other crops, notwithstanding paragraph
(c)(1) of this section, CCC may, on a case-by-case basis, still require
a warehouse operator that would qualify under paragraphs (c)(1)(i) or
(ii) of this section to enter into a storage agreement if deemed
necessary by the Deputy Administrator to be needed to protect CCC's
interests.
0
17. Amend Sec. 1421.104 as follows:
0
a. In paragraph (a)(1), remove the amount ``$25,000,'' each time it
appears, and add the amount ``$50,000,'' in its place;
0
b. Revise paragraph (b), introductory text, to read as set forth below;
0
c. In paragraph (b)(2), remove the semicolon at the end of the sentence
and replace it with a period;
0
d. Remove paragraph (b)(3); and
0
e. Revise paragraph (c) to read as set forth below.
Sec. 1421.104 Marketing assistance loan making.
* * * * *
(b) Fees, charges, interest, and all applicable approved commodity
assessment collections must be paid by the producer to CCC at a rate
CCC determines or, in the case of assessments, at a rate approved by
the assessment authority. Such fees, charges, and interest include:
* * * * *
(c) For the 2008 through 2012 crop years, to ensure proper storage
of peanuts for which a loan is made under this section, the Secretary
will pay reasonable handling and other associated costs (other than
storage) incurred at the time at which the peanuts are placed in a
warehouse stored loan. Such rates will be available in the State and
county FSA offices.
* * * * *
Sec. 1421.106 [Amended]
0
18. Amend Sec. 1421.106 as follows:
0
a. In paragraph (d) in the first sentence, remove the words ``Handling
and storage'' and add the word ``Storage'' in their place; and
0
b. Remove paragraph (g).
0
19. Amend Sec. 1421.107 as follows:
0
a. In paragraph (b) in the third sentence, remove the word ``approved''
and add the word ``authorized'' in its place;
0
b. In paragraph (d), remove the words ``approved warehouse that has a
storage agreement with CCC shall,'' add the words ``authorized
warehouse must'' in their place, and remove the words ``under such
agreement'';
0
c. In paragraph (g)(1) introductory text, remove the words ``the
applicable CCC storage agreement or'';
0
d. In paragraph (g)(1)(ii), remove the word ``CCC'' and add, in its
place, the words ``licensing authority'';
0
e. In paragraph (h)(2)(i), remove the reference ``(g)(2)(iv)'' and add,
in its place, a reference ``(h)(2)(iv)'';
0
f. In paragraph (h)(2)(ii), remove the reference ``(g)(2)(i)'' and add,
in its place, a reference ``(h)(2)(i)'';
0
g. In paragraph (h)(2)(iv) introductory text, remove the reference
``(g)(2)(iii)'' and add, in its place, a reference ``(h)(2)(iii)'';
0
h. In paragraph (h)(2)(iv)(A)(7), remove the word ``percen'' and add,
in its place, the word ``percent'';
0
i. Revise the first sentence of paragraph (i)(2) to read as set forth
below; and
0
j. In paragraph (j), remove the reference ``paragraph (f)'' and add in
its place the reference ``paragraph (g)''.
Sec. 1421.107 Warehouse receipts.
* * * * *
(i) * * *
(2) Warehouse receipts and the commodities represented by such
receipts may be subject to a lien for warehouse charges. * * *
* * * * *
Sec. 1421.108 [Amended]
0
20. Amend Sec. 1421.108 as follows:
0
a. In paragraph (c) in the first sentence, remove the words ``CCC-
approved'' and add in their place the word ``authorized''; and
[[Page 15655]]
0
b. In paragraph (c), third sentence, remove the word ``to'' the second
time it appears.
0
21. Amend Sec. 1421.109 as follows:
0
a. In paragraph (a)(2), add the words ``in accordance with Sec.
1421.10'' before the period at the end;
0
b. In paragraph (a)(3), add a new sentence at the end to read as set
forth below;
0
c. Revise paragraph (b), introductory text, to read as set forth below;
0
d. In paragraph (c), remove the first sentence and the words
``Accordingly, if'' and add the word ``If'' in their place;
0
e. In paragraphs (e) and (f) introductory text remove the word
``commensurate'' and add, in its place, the word ``equivalent'';
0
f. In paragraph (h) add a new sentence at the end to read as set forth
below;
0
g. In paragraph (i)(1), add the word ``sufficient'' immediately before
the word ``evidence'';
0
h. In paragraph (j), remove the word ``lower'';
0
i. Revise paragraph (k), introductory text, to read as set forth below;
0
j. In paragraph (p), remove the phrases ``or loan deficiency payments''
and ``or loan deficiency payment application''; and
0
k. Revise paragraph (q) to read as set forth below.
Sec. 1421.109 Personal liability of the producer.
(a) * * *
(3) * * * If CCC determines that the producer has violated the
terms and conditions of the applicable forms prescribed by CCC,
liquidated damages will be assessed on the quantity of the commodity
that is involved in the violation.
(b) Such violations as referred to in paragraph (a)(3) of this
section may include, but are not limited to:
* * * * *
(h) * * * CCC will demand delivery of any remaining loan collateral
if not repaid within the 30 calendar day notification period.
* * * * *
(k) Producers denied or rejected for a farm-stored loan for any
reason under this section may apply for a warehouse-stored loan.
* * * * *
(q) Any or all of the liquidated damages assessed under this
section may be waived if the CCC determines that the violation occurred
inadvertently, accidentally, or unintentionally.
Sec. 1421.110 [Removed]
Sec. Sec. 1421.111 through 1421.114 [Redesignated as Sec. Sec.
1421.110 through 1421.113]
0
22. Remove Sec. 1421.110 and redesignate Sec. Sec. 1421.111 through
1421.114 as Sec. Sec. 1421.110 through 1421.113 respectively.
0
23. Amend newly designated Sec. 1421.110 as follows:
0
a. In paragraph (a), add the words ``for the 2008 and 2009 crop years''
immediately after the words ``outstanding marketing assistance loan'';
0
b. In paragraph (b) introductory text, remove the word ``lessor'' and
adding in its place the word ``lesser'';
0
c. In paragraph (c), remove the reference to ``Sec. 1421.110'' and
add, in its place, a reference to ``Sec. 1421.10''; and
0
d. Add paragraph (e) to read as set forth below.
Sec. 1421.110 Commodity exchange certificates.
* * * * *
(e) The authority to make commodity certificates available to the
producer will terminate effective the ending of the 2009 crop year.
0
24. Amend newly designated Sec. 1421.111 as follows:
0
a. Revise paragraph (b) to read as set forth below;
0
b. In paragraphs (c) introductory text, (c)(1), and (c)(2) remove the
word ``approved'' and add, in its place, the word ``authorized'' each
time it appears.
0
c. Redesignate paragraph (d) as paragraph (e) and add a new paragraph
(d) to read as set forth below; and
0
d. Add paragraph (f) to read as set forth below.
Sec. 1421.111 Loan settlement.
* * * * *
(b) Settlements made by CCC for eligible commodities that are
acquired by CCC and that are stored in an authorized warehouse will be
made on the basis of the entries in the applicable warehouse receipt,
supplemental certificate, and accompanying documents.
(1) All eligible commodities that are stored in other than
authorized warehouses must be delivered to CCC as CCC instructs.
Settlement will be based on entries in the applicable warehouse
receipt, supplemental certificate, and accompanying documents.
(2) For eligible loan commodities that are delivered from other
than an authorized warehouse, settlement will be made by CCC on the
basis of the basic marketing assistance loan rate that is in effect for
the commodity at the producer's customary delivery point, as determined
by CCC.
* * * * *
(d) For peanuts forfeited to CCC, the Secretary will pay reasonable
storage, handling, and other associated costs for all peanuts pledged
as collateral that are forfeited under this section.
* * * * *
(f) Beginning with the 2009 through 2012 crop years, premiums and
discounts will apply to all eligible loan commodities forfeited and
delivered to CCC. This will not require any additional adjustment for
peanuts to the extent that such premiums and discounts were accounted
for when the loan was made.
Sec. 1421.112 [Amended]
0
25. In newly designated Sec. 1421.112, amend paragraph (b)(1) by
removing the reference to ``Sec. 1421.112'' and adding, in its place,
a reference to ``Sec. 1421.111''.
Sec. 1421.113 [Amended]
0
26. In newly designated Sec. 1421.113, amend paragraph (b) by adding
the words ``at principal plus interest'' immediately after the word
``full''.
0
27. Amend Sec. 1421.200 by revising paragraph (c)(1) to read as
follows:
Sec. 1421.200 Applicability.
* * * * *
(c)(1) A producer must submit to the FSA Service Center a completed
request for a loan deficiency payment on forms prescribed by CCC. This
submission must be received on or before the date beneficial interest
is lost in the commodity and before the final loan availability date
for the commodity. Such completed and submitted forms indicate the
producer's intentions and further provide the terms and conditions of
the loan deficiency payment program. If all or any of the provisions of
this paragraph are not met by the producer, the producer may not obtain
the loan deficiency payment benefit.
* * * * *
0
28. Amend Sec. 1421.201 as follows:
0
a. Revise paragraph (b), introductory text, to read as set forth below;
0
b. Remove paragraphs (b)(1) and (b)(2), and (b)(3) introductory text;
and
0
c. Redesignate paragraphs (b)(3)(i), (ii), and (iii) as (b)(1), (2) and
(3), respectively.
Sec. 1421.201 Loan deficiency payment rate.
* * * * *
(b) The loan deficiency payment rate will be the rate in effect in
the county
[[Page 15656]]
where the commodity was marketed or stored on the date:
* * * * *
Sec. 1421.202 [Amended]
0
29. Amend Sec. 1421.202 paragraph (c) by removing the words ``approved
or unapproved'' and adding, in their place, the words ``authorized or
unauthorized''.
Sec. 1421.203 [Amended]
0
30. Amend Sec. 1421.203 as follows:
0
a. Amend paragraph (a)(1) by removing the words ``in determining'' and
adding, in their place, the words ``when determining eligibility for'';
0
b. Amend paragraph (a)(2) by removing the words ``eligible, if'' and
adding in their place the words ``eligible. If'';
0
c. Amend paragraph (c)(1) in the first sentence by removing the words
``in accordance with,'' and adding in its place, the words ``according
to'' and in the last sentence by adding the words ``any other''
immediately before the word ``charges'';
0
d. Amend paragraph (c)(2) by adding the words ``any other'' immediately
before the word ``charges'';
0
e. Amend paragraph (d) by removing the words ``taken applicable'' and
adding, in its place, the words ``assessed according'';
0
f. Amend paragraph (f)(1) by adding the word ``sufficient'' immediately
after the word ``provide''; and
0
g. Amend paragraph (g) by removing the word ``charges'' and adding, in
its place, the words ``liquidated damages''.
Subpart D--Grazing Payments for the 2008 Through 2012 Crop of Wheat,
Barley, Oats, and Triticale
0
31. The heading of subpart D is revised to read as shown above.
Sec. 1421.300 [Amended]
0
32. Amend Sec. 1421.300 in paragraph (a), first sentence, by removing
the years ``2002-2007'' and adding, in their place, the years ``2008
through 2012''.
Sec. 1421.302 [Removed]
Sec. Sec. 1421.303 through 1421.307 [Redesignated as Sec. Sec.
1421.302 through 1421.306]
0
33. Remove Sec. 1421.302 and redesignate Sec. Sec. 1421.303 through
1421.307 as Sec. Sec. 1421.302 through 1421.306.
Sec. 1421.302 [Amended]
0
34. Amend newly redesignated Sec. 1421.302 as follows:
0
a. Amend paragraph (a), first sentence, by removing the years ``2002
through 2007'' and adding, in their place, the years ``2008 through
2012'' and in the third sentence by removing the words ``the risk of
loss in'' and adding, in their place, the words ``control and title
of'';
0
b. Amend paragraph (e)(2) by removing the words ``control, title, and
risk of loss in'' and adding, in their place, the words ``control and
title of''; and
0
c. Amend paragraph (f) by removing the years ``2002-2007'' and adding,
in their place, the years ``2008 through 2012''.
0
35. Amend newly redesignated Sec. 1421.304 as follows:
0
a. In paragraph (a) revise the second sentence to read as set forth
below;
0
b. In paragraph (d), last sentence, remove the extra space before the
comma ``,'' in the last sentence immediately after the phrase
``otherwise be due'';
0
c. In paragraph (e), second sentence, remove the word ``The''
immediately before the word ``CCC'';
0
d. In paragraph (f), remove the words ``of the applicable crop year''
and add, in their place, the words ``of the calendar year following the
year the crop is normally harvested'';
0
e. in paragraph (g), add the word ``be'' immediately before the word
``ineligible'' and remove the word ``the'' immediately before the word
``CCC''; and
0
f. Remove paragraph (h).
Sec. 1421.304 Payment amount.
(a) * * * For triticale, the grazing rate will be equal to the loan
deficiency payment rate in effect for the predominant class of wheat in
the county where the farm is located as of the date the application is
filed.
* * * * *
Sec. 1421.306 [Amended]
0
36. Amend newly redesignated Sec. 1421.306 as follows:
0
a. In paragraph (a), remove the words ``or this subpart'' and add, in
their place, the words ``of this subpart,'' and remove the words
``late-payments'' and add, in their place, the words ``late-payment'';
0
b. In paragraph (c), first sentence, remove the words ``required of the
producer'' and add, in their place, the words ``required from the
producer''; and
0
c. In paragraph (d), remove the words ``7 CFR part 1403'' and add, in
their place, the words ``part 1403 of this chapter''.
Subpart E--[Amended]
0
37. Amend Subpart E as follows:
0
a. Remove the word ``DMA's'' and add, in its place, the word ``DMAs''
each time it appears;
0
b. Remove the word ``MAL's'' and add, in its place, the word ``MALs,''
each time it appears;
0
c. Remove the word ``LDP's'' and add, in its place, the word ``LDPs,''
each time it appears; and
0
d. Remove the word ``EWR's'' and add, in its place, the word ``EWRs,''
each time it appears.
Sec. 1421.400 [Amended]
0
38. Amend Sec. 1421.400 as follows:
0
a. In paragraph (a), remove the last sentence; and
0
b. Remove and reserve paragraph (b).
Sec. 1421.401 [Removed]
Sec. Sec. 1421.402 through 1421.418 [Redesignated as Sec. Sec.
1421.401 through 1421.417]
0
39. Remove Sec. 1421.401 and redesignate Sec. Sec. 1421.402 through
1421.418 as Sec. Sec. 1421.401 through 1421.417, respectively.
0
40. Amend newly redesignated Sec. 1421.401 by removing the word
``theFederal'' in paragraph (b)(1) and adding, in its place, the words
``the Federal''.
0
41. Amend newly redesignated Sec. 1421.409 by adding a sentence to the
end of the section to read as follows:
Sec. 1421.409 Monitoring and payment limitations.
* * * Payment limitations are not applicable for the 2009 through
2012 crop years.
Sec. 1421.419 [Removed]
Sec. Sec. 1421.420 through 1421.423 [Redesignated as Sec. Sec.
1421.418 through 1421.420]
0
42. Remove Sec. 1421.419 and redesignate Sec. Sec. 1421.420 through
1421.423 as Sec. Sec. 1421.418 through 1421.421, respectively.
Subpart F--[Removed]
0
43. Remove subpart F.
PART 1434--NONRECOURSE MARKETING ASSISTANCE LOANS AND LDP
REGULATIONS FOR HONEY
0
44. Revise the authority citation for part 1434 to read as follows:
Authority: 7 U.S.C. 7931 and Public Law 110-246.
0
45. Revise Sec. 1434.1 to read as set forth below:
Sec. 1434.1 Applicability.
(a) This part provides the terms and conditions of Commodity Credit
[[Page 15657]]
Corporation (CCC) nonrecourse marketing assistance loans or loan
deficiency payments for honey for the 2008 through 2012 crop years.
Marketing loan gains and loan deficiency payments for the 2008 crop
will be limited to the payment limitation rules applicable to the 2008
crop. Beginning with the 2009 crop year, there will not be payment
limits on marketing loan gains and loan deficiency payments.
(b) Producers must comply with all provisions of this part and part
1421 of this chapter.
0
46. Amend Sec. 1434.6 as follows:
0
a. Remove paragraph (b) and redesignate paragraphs (c) through (e) as
paragraphs (b) through (d), respectively;
0
b. In newly redesignated paragraph (b) introductory text, remove the
words ``control, title, and risk of loss in'' and add, in their place,
the words ``title and control of'';
0
c. Revise newly redesignated paragraph (b)(1) to read as set forth
below; and
0
d. In newly redesignated paragraph (b)(2), remove the words ``risk of
loss,''.
Sec. 1434.6 Beneficial interest.
* * * * *
(b) * * *
(1) Executes an option to purchase, whether or not a payment is
made by the potential buyer for such option to purchase, with respect
to such honey if all other eligibility requirements are met and the
option to purchase contains the following provision:
``Notwithstanding any other provision of this option to purchase
or any other contract, title and control of the honey and beneficial
interest in the honey, as specified in 7 CFR 1434.6, must remain
with the producer until the buyer exercises this option to purchase
the honey. This option to purchase will expire, notwithstanding any
action or inaction by either the producer or the buyer, at the
earlier of:
(1) The maturity of any Commodity Credit Corporation (CCC) loan
which is secured by such honey;
(2) The date the CCC claims title to such honey; or
(3) Such other date as provided in this option.''
* * * * *
0
47. Amend Sec. 1434.15 as follows:
0
a. Revise the section heading to read as set forth below;
0
b. Revise paragraph (c)(1) to read as set forth below; and
0
c. In paragraph (c)(2), remove the words ``25 percent'' and add, in
their place, the words ``10 percent''.
Sec. 1434.15 Personal liability.
* * * * *
(c) * * *
(1) Acted in good faith when the violation occurred, liquidated
damages will be assessed by multiplying the quantity involved in the
violation by 10 percent of the loan rate applicable to the loan note
for each offense.
* * * * *
0
48. Amend Sec. 1434.18 as follows:
0
a. In paragraph (a), add the words ``during the loan period''
immediately after the word ``loan''; and
0
b. Add paragraph (a)(3) to read as set forth below.
Sec. 1434.18 Loan repayments.
(a) * * *
(3) 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. Any adjustment made to the repayment rate for
marketing assistance loans for honey under this part will be in effect
on a short-term and temporary basis, as determined by the Secretary.
* * * * *
Sec. 1434.21 [Amended]
0
49. Amend Sec. 1434.21(a) by removing the years ``2002-2007'' and
adding, in their place, the words ``2008 through 2012''.
Sec. 1434.22 [Removed]
Sec. 1434.23 [Redesignated as Sec. 1434.22]
0
50. Remove Sec. 1434.22 and redesignate Sec. 1434.23 as Sec.
1434.22.
Signed in Washington, DC, on March 31, 2009.
Dennis J. Taitano,
Acting Executive Vice President, Commodity Credit Corporation.
[FR Doc. E9-7644 Filed 4-6-09; 8:45 am]
BILLING CODE 3410-05-P