[Code of Federal Regulations]
[Title 7, Volume 10]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1412.503]

[Page 404-406]
 
                          TITLE 7--AGRICULTURE
 
  CHAPTER XIV--COMMODITY CREDIT CORPORATION, DEPARTMENT OF AGRICULTURE
 
PART 1412_DIRECT AND COUNTER-CYCLICAL PROGRAM AND PEANUT QUOTA BUYOUT 
 
Subpart E_Financial Considerations Including Sharing Direct and Counter-
                            Cyclical Payments
 
Sec.  1412.503  Counter-cyclical payment provisions.

    (a) For the 2002 through 2007 contracts, a counter-cyclical payment 
shall be made to eligible producers on a farm enrolled in a contract 
with respect to covered commodities for which payment yield and base 
acres are established, and with respect to peanuts on a farm enrolled in 
a contract for 2003 through 2007:
    (1) Only if the effective price for the covered commodity or 
peanuts, as determined in accordance with paragraph (b) of this section, 
is less than the target price of the covered commodity or peanuts, 
respectively, as determined in accordance with paragraph (c) of this 
section.
    (2) As soon as practical, as determined by the Deputy Administrator, 
after the end of the 12-month marketing year for the covered commodity 
or peanuts, as applicable.
    (b) For the purposes of paragraphs (a) and (g) of this section, the 
effective price for a covered commodity and peanuts, respectively, is 
equal to the sum of the following:
    (1) The higher of:
    (i) The national average market price received by producers during 
the 12-month marketing year for the covered commodity or peanuts, as 
applicable, as determined by the Secretary; or
    (ii) For 2002 and 2003 crop years the following rates:
    (A) Wheat--$2.80/bu.
    (B) Corn--$1.98/bu.
    (C) Grain sorghum--$1.98/bu.
    (D) Barley--$1.88/bu.
    (E) Oats--$1.35/bu.
    (F) Upland cotton--$0.52/lb.
    (G) Rice--$6.50/cwt.
    (H) Soybeans--$5.00/bu.
    (I) Other oilseeds--$0.0960/lb.
    (J) Peanuts--$355.00/ton.
    (iii) For 2004 through 2007 crop years the following rates:
    (A) Wheat--$2.75/bu.
    (B) Corn--$1.95/bu.
    (C) Grain sorghum--$1.95/bu.
    (D) Barley--$1.85/bu.
    (E) Oats--$1.33/bu.
    (F) Upland cotton--$0.52/lb.
    (G) Rice--$6.50/cwt.
    (H) Soybeans--$5.00/bu.
    (I) Other oilseeds--$0.0930/lb.
    (J) Peanuts--$355.00/ton.
    (2) The direct payment rate for the covered commodity as provided in 
Sec.  1412.502(d).
    (c) For the purposes of paragraphs (a) and (g) of this section, the 
target prices are as follows:
    (1) For 2002 and 2003 crop years:
    (i) Wheat--$3.86/bu.
    (ii) Corn--$2.60/bu.
    (iii) Grain sorghum--$2.54/bu.
    (iv) Barley--$2.21/bu.
    (v) Oats--$1.40/bu.
    (vi) Upland cotton--$0.7240/lb.
    (vii) Rice--$10.50/cwt.
    (viii) Soybeans--$5.80/bu.
    (ix) Other oilseeds--$0.0980/lb.
    (x) Peanuts--$495.00/ton.
    (2) For 2004 through 2007 crop years:
    (i) Wheat--$3.92/bu.
    (ii) Corn--$2.63/bu.
    (iii) Grain sorghum--$2.57/bu.
    (iv) Barley--$2.24/bu.
    (v) Oats--$1.44/bu.
    (vi) Upland cotton--$0.7240/lb.
    (vii) Rice--$10.50/cwt.
    (viii) Soybeans--$5.80/bu.
    (ix) Other oilseeds--$0.1010/lb.
    (x) Peanuts--$495.00/ton.
    (d) The payment rate used to calculate counter-cyclical payments 
with respect to covered commodities and peanuts for which payment yields 
and base acres are established on a farm enrolled in a contract is equal 
to the result of:
    (1) The target price of the covered commodity as determined in 
accordance with paragraph (c) of this section, minus
    (2) The effective price of the covered commodity as determined in 
accordance with paragraph (b) of this section.
    (e) For 2002 through 2007 contracts, when counter-cyclical payments 
are required in accordance with paragraph (a) of this section, subject 
to the limitation in accordance with Sec.  1412.501 and

[[Page 405]]

part 1400 of this chapter, the final counter-cyclical payment amount to 
be paid to producers on a farm enrolled in a contract with respect to 
the covered commodities and peanuts for which payment yields and base 
acres are established shall be equal to the product of:
    (1) The payment rate determined in accordance with paragraph (d) of 
this section, multiplied by
    (2) The payment acres of the covered commodity and peanuts, as 
applicable, minus any acre reduction in accordance with Sec.  
1412.407(g), multiplied by
    (3)(i) The payment yield for the covered commodity or peanuts on the 
farm enrolled in a contract as determined in accordance with Sec.  
1412.303 and subpart G of this part if the owner of the farm elected 
base acreage for the farm in accordance with Sec.  1412.201(a)(2), or 
the owner elected to not update the payment yields for the covered 
commodities on the farm, or
    (ii) The updated payment yield for the covered commodity on the farm 
enrolled in a contract as determined in accordance with Sec.  1412.303 
if the owner of the farm elected base acreage for the farm in accordance 
with Sec.  1412.201(a)(1) and elected to update the yields for the 
covered commodities on the farm in accordance with Sec.  1412.303, minus
    (4) Any reduction calculated in accordance with subpart F of this 
part that was not satisfied by a reduction in the direct payments for 
the farm calculated in accordance with Sec.  1412.502(e), minus
    (5) Any partial advance payment received in accordance with 
paragraphs (f) or (g) of this section.
    (f) For 2002 through 2006 contracts, advance counter-cyclical 
payments shall be paid, at the request of the producer, if the Secretary 
determines that a counter-cyclical payment for the covered commodity or 
peanuts, respectively, will be required in accordance with paragraph 
(a)(1) of this section.
    (1) The first advance counter-cyclical payment shall:
    (i) Be calculated in accordance with paragraphs (e)(1) through (4) 
of this section;
    (ii) Be an amount determined by the Secretary not to exceed 35 
percent of the projected counter-cyclical payment for the covered 
commodity or peanuts, respectively;
    (iii) Not be made earlier than October 1 after the end of the 
contract year in which the counter-cyclical payment was earned; and
    (iv) To the maximum extent practical, be made no later than October 
31 after the end of the contract year in which the counter-cyclical 
payment was earned.
    (2) The second partial advance counter-cyclical payment shall:
    (i) Be calculated in accordance with paragraphs (e)(1) through (4) 
of this section.
    (ii) Be an amount determined by the Secretary not to exceed the 
result of:
    (A) 70 percent of the projected counter-cyclical payment, including 
any revision thereof, for the covered commodity or peanuts, 
respectively, minus
    (B) The amount of payment made under paragraph (f)(1) of this 
section; and
    (iii) Not be made earlier than February 1 after the end of the 
contract year in which the counter-cyclical payment was earned.
    (g) For 2002 contract, the counter-cyclical payment amount to be 
paid to the historic peanut producer shall be made using the base and 
yield established for the historic peanut producer, in accordance with 
subpart G of this part.
    (h) For 2007 contracts, an advance counter-cyclical payment shall be 
paid, at the request of the producer, if the Secretary determines that a 
counter-cyclical payment for the covered commodity or peanuts will be 
required in accordance with paragraph (a)(1) of this section. The 
advance payment shall:
    (1) Be calculated in accordance with paragraphs (e)(1) through 
(e)(4) of this section;
    (2) Not exceed 40 percent of the projected counter-cyclical payment 
for the covered commodity or peanuts, respectively, as determined by the 
Secretary; and
    (3) Be made after the first 6 months of the marketing year of the 
covered commodity or peanuts, as applicable.
    (i) If a producer declines to accept, or is determined to be 
ineligible for all or

[[Page 406]]

any part of the producer's share of the counter-cyclical payment 
computed for the farm in accordance with the provisions of this section:
    (1) The payment or portions thereof shall not become available for 
any other producer; and
    (2) The producer shall refund to CCC any amounts representing 
payments that exceed the payments determined by CCC to have been earned 
under the program authorized by this part. Part 1403 of this chapter 
shall be applicable to all unearned payments.
    (i)(A) The payment of any amount due any producer on a farm enrolled 
in a contract shall be made only after all the producers subject to the 
contract are determined to be in full compliance with the contract and 
the requirements in this part.
    (B) A producer on a farm enrolled in a contract may receive a 
payment amount due without regard to the eligibility of other producers 
on the farm if:
    (1) The producer is in full compliance with the contract and the 
requirements in this part;
    (2) The payment of such amount does not adversely affect nor defeat 
the purpose of the program, as determined by the Deputy Administrator, 
or designee; and
    (3) The payment is approved by the Deputy Administrator, or 
designee.
    (j) The producers on a farm who receive any advance counter-cyclical 
payment shall refund the portion of such advance payments that exceeds 
the actual counter-cyclical payment to be made for the covered commodity 
or peanuts, as applicable.