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<br />Background Infonnaffon
<br />Commodity Cred1f Corporation
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<br />Interest on borrowings from the
<br />Treasury (and on capital stock) is paid
<br />at a rate based upon the average
<br />interest rate of all outstanding
<br />marketable obligations (of comparable
<br />maturity date) of the U. S. government
<br />as of the preceding month. Interest
<br />may also be paid on other notes and
<br />obligations at a rate prescribed by
<br />eee and approved by the Secretary of
<br />the Treasury.
<br />
<br />The Department of Agriculture and
<br />Related Agencies Appropriation Act,
<br />1966, made provision for terminating
<br />interest after June 30, 1964, on the
<br />portion of the eee's borrowings from
<br />the Treasury equal to the unreimbursed
<br />realized losses recorded on eee's
<br />books after the end of the fiscal year in
<br />which such losses are realized.
<br />
<br />Support Activities
<br />
<br />Commodity support operations,
<br />handled primarily through loan,
<br />purchase and payment programs,
<br />include those for wheat, corn, oilseeds,
<br />cotton (upland and extra long staple),
<br />rice, tobacco, milk and milk products,
<br />barley, oats, sorghum, peanuts, and
<br />sugar, Farmers may receive basic
<br />nonrecourse commodity loans on most
<br />commodities at a designated rate per
<br />unit (loan rate) by pledging and storing
<br />a quantity of a commodity as collateral.
<br />Effective with the 1996 Farm Bill
<br />(Federal Agriculture Improvement and
<br />Reform Act), eee now funds various
<br />conservation programs, such as
<br />Conservation Reserve Program,
<br />Wetlands Reserve Program, and the
<br />Environmental Quality Incentives
<br />Program,
<br />
<br />Proposals for support programs usually
<br />are prepared by FSA divisions in the
<br />form of a docket - a group of
<br />documents covering economic and
<br />other factors upon which the proposal
<br />is based, total funds required,
<br />proposed method of support,
<br />conditions of eligibility, basic operating
<br />
<br />provisions, and other information
<br />relative to the proposal.
<br />
<br />When a program is approved by the
<br />Board of Directors and/or the Secretary
<br />of Agriculture, USDA releases a public
<br />announcement, usually a press
<br />release, Regulations are published in
<br />the Federal Register, and detailed
<br />operating instructions are sent to
<br />personnel in charge of administering
<br />the program in Washington and field
<br />offices, FSA county office personnel
<br />assist farmers in the preparation of
<br />documents and keep them informed of
<br />program details,
<br />
<br />Inventory Operations
<br />
<br />eee is authorized to transport, store,
<br />process, and dispose of various
<br />agricultural commodities and their
<br />products, eee provides storage
<br />adequate to fulfill its program needs by
<br />contracting commercial warehouses to
<br />store agricultural commodities in
<br />county and terminal locations, In
<br />carrying out support programs, the
<br />eee acquires its inventory in two
<br />principal ways:
<br />
<br />''Takeove(' - If a producer does not
<br />redeem the commodity by loan
<br />repayment time, eee takes title and
<br />possession of the commodity which
<br />was pledged as collateral for the
<br />nonrecourse price-support loan,
<br />
<br />Nonrecourse loans are defined as
<br />loans that producers are not obligated
<br />to repay or fulfill. Instead, producers
<br />have the option to deliver and/or forfeit
<br />the collateral (the commodity) to eee,
<br />Settlement of the loan is then made at
<br />the loan rate based on the quantity and
<br />quality of the commodity involved,
<br />eee also offers recourse loans;
<br />however, the loans cannot be forfeited
<br />and commodities involved are not
<br />generally a source of eee inventory,
<br />
<br />Purchases - Support for milk and
<br />milk products is carried out through
<br />purchases of butter, cheese, and
<br />
<br />nonfat dry milk from processors and
<br />handlers,
<br />
<br />There are no eee support programs for
<br />processed products, other than dairy
<br />products. Sugar is processed raw cane
<br />sugar and refined beet sugar. Many
<br />commodities, such as wheat, corn, and
<br />oats are stored in raw, buik form by
<br />eee and require considerable
<br />processing before they can be used for
<br />food,
<br />
<br />Commodities and products acquired
<br />through purchase either go immediately
<br />into available outlets or are placed in
<br />eee's inventory,
<br />
<br />eee is authorized to contract for the
<br />use of privately owned facilities in
<br />carrying out its activities, eee also has
<br />authority to acquire personal property
<br />and to rent or lease office space
<br />necessary for its business, eec is
<br />prohibited from acquiring real properly,
<br />or any interest in property, except for
<br />the purpose of protecting its financial
<br />interests and for providing adequate
<br />storage to carry out its programs.
<br />
<br />Disposal Operations
<br />
<br />The sale, donation, or transfer of eee-
<br />owned commodities is handled by
<br />FSA's Kansas City Commodity Office
<br />(KCeO), 8930 Ward Parkway, Kansas
<br />City, MO; mailing address P,O, Box
<br />419205, Kansas City, MO, 64141-6205,
<br />
<br />Keeo makes sales at fixed prices or
<br />through competitive bids. Information
<br />on eCe-owned commodities available
<br />for sale, or barter (if authorized), is
<br />contained in a eee Sales List issued
<br />by USDA at the end of each month and
<br />effective for the following month.
<br />
<br />In pricing commodities for unrestricted
<br />domestic use, eee-owned commodities
<br />generally are sold at the market price,
<br />as CCC determines, but not less than
<br />the current county loan repayment rate
<br />in effect at time of sale, adjusted for
<br />location, applicable quality factors, plus
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