[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: 7CFR1421.112]

[Page 446-447]
 
                          TITLE 7--AGRICULTURE
 
  CHAPTER XIV--COMMODITY CREDIT CORPORATION, DEPARTMENT OF AGRICULTURE
 
PART 1421_GRAINS AND SIMILARLY HANDLED COMMODITIES_MARKETING ASSISTANCE LOANS 
 
                  Subpart B_Marketing Assistance Loans
 
Sec.  1421.112  Loan settlement.

    (a) The value of the settlement of marketing assistance loan shall 
be made by CCC on the following basis:
    (1) For nonrecourse marketing assistance loans, the schedule of 
premiums and discounts for the commodity provided that:
    (i) If, the value of the collateral at settlement is less than the 
amount due, the producer shall pay to CCC the amount of such deficiency 
and charges, plus interest on such deficiency; or
    (ii) If, the value of the collateral at settlement is greater than 
the amount due, such excess shall be retained by CCC and CCC shall have 
no obligation to pay such amount to any party.
    (2) For recourse marketing assistance loans, the proceeds from the 
sale of the commodity provided that:
    (i) If, the value of the collateral at settlement is less than the 
amount due, the producer shall pay to CCC the amount of such deficiency 
and charges, plus interest on such deficiency; or
    (ii) If, the proceeds received from the sale of the commodity are 
greater than the sum of the amount due, plus any cost incurred by CCC in 
conducting the sale of the commodity, the amount of such excess shall be 
paid to the producer or, if applicable, to a secured creditor of the 
producer.
    (3) If CCC sells the commodity described in paragraph (a)(1) and 
(a)(2) of this section in settlement of the marketing assistance loan, 
the sales proceeds shall be applied to the amount owed CCC by the 
producer. The producer shall be responsible for any costs

[[Page 447]]

incurred by CCC in completing the sale and CCC will deduct the amount of 
these costs from the sales proceeds. If CCC sells any commodity obtained 
by delivery or forfeiture under a non-recourse marketing assistance 
loan, CCC will, in all instances, retain all proceeds obtained from the 
sale of the commodity and will not make any payment of any amount of 
such proceeds to any party, including the producer who had satisfied 
their obligation under the loan through forfeiture of the commodity to 
CCC.
    (b) Settlements made by CCC for eligible commodities that are 
acquired by CCC and that are stored in an approved warehouse shall be 
made on the basis of the entries in the applicable warehouse receipt, 
supplemental certificate, and accompanying documents.
    (c) Settlements made by CCC for peanuts acquired by CCC and stored 
in an approved warehouse shall be based on the settlement value at the 
time of the loan disbursement and the entries in the applicable 
warehouse receipt, supplemental certificate, and accompanying documents 
subject to adjustments for changes in quality and other factors.
    (1) All eligible commodities that are stored in other than approved 
warehouses shall be delivered to CCC as CCC instructs. Settlement shall 
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 approved warehouse, settlement shall 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) In all cases, settlements may be adjusted for changes in quality 
and other factors affecting the value of the commodity.

[67 FR 63511, Oct. 11, 2002, as amended at 71 FR 32425, June 6, 2006]