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Price Support
COTTON AND RICE PROGRAMS

 

 
COTTON

 
USDA ISSUES PARTIAL 2008 CROP COUNTER-CYCLICAL PAYMENTS FOR UPLAND COTTON

 
WASHINGTON, Jan. 28, 2009 - Agriculture Secretary Tom Vilsack said today that the Commodity Credit Corporation (CCC) will make $490 million available in partial 2008 Counter-cyclical Program (CCP) payments to eligible producers with enrolled upland cotton base acres in the Direct and Counter-cyclical Program (DCP). The projected partial CCP rate for producers with enrolled upland cotton base acres is 5.03 cents per pound or 40 percent of the projected total rate of 12.58 cents per pound.

 

 
Fees and Charges Assessed by the Commodity Credit Corporation for Cotton Loans, Loan Forfeitures, and Relocation of Collateral

 
Background

 
USDA's Commodity Credit Corporation (CCC) marketing assistance loans (MAL) are a marketing tool producers can use to store their production after harvest, which increases their marketing opportunities. In place of using MALs, producers may elect to take a loan deficiency payment (LDP) that provides a payment equal to any net gain from a MAL.

 
This fact sheet explains various fees and charges associated with cotton MALs, LDPs, and the relocation of cotton loan collateral.

 

 
USDA Registry for Cotton Merchants

 
Overview

 
USDA's Farm Service Agency (FSA) maintains an internal-use-only national registry to help cotton merchants efficiently redeem cotton held as collateral by USDA.

 
Direct and Counter-cyclical Payment (DCP) Program

 
The Farm Security and Rural Investment Act of 2002 (2002 Act) replaced production flexibility contract (PFC) payments (created under the 1996 Act) with direct payments and added new counter-cyclical payments for the 2002-2007 crops. DCP payments are based on historical acreage bases and payment yields, not current production. In addition to upland cotton, other eligible commodities are wheat, corn, barley, grain sorghum, oats, rice, soybeans, other oilseeds, and peanuts.

 

 

 

 

 

 
RICE

 

 
Rice Nonrecourse Marketing Assistance Loan and Loan Deficiency Payment

 
Overview

 
The Agricultural Act of 2014 (2014 Farm Bill) authorizes nonrecourse marketing assistance loans (MALs) and loan deficiency payments (LDPs) for the 2014 through 2018 crops of rice.

 
Nonrecourse MALs and LDPs are administered by the Farm Service Agency (FSA) on behalf of the Commodity Credit Corporation (CCC).

 
See the fact sheet Nonrecourse Marketing Assistance Loans and Loan Deficiency Payments for general information about MALs and LDPs.

 
A fact sheet specific to rice is also available: Rice Nonrecourse Marketing Assistance Loans and Loan Deficiency Payments

 
Payment Limitations

 
For the 2014-2018 crop years, there are payment limitations on any benefit associated with the MAL or LDP programs. The total amount of payments received for all covered commodities except peanuts, directly or indirectly, by a person or legal entity (except joint ventures or general partnerships) for Price Loss Coverage, Agricultural Risk Coverage, marketing loan gains and LDPs is limited to no more than $125,000 annually. Producers exceed the limit are still eligible for MALs but must repay at principal plus interest. Peanut producers have a separate $125,000 payment limit for benefits received from the same programs.

 
See the Payment Limitation – 2014-2018 Fact Sheet for additional information for payment limitations for marketing loan gains and LDPs.

 
Adjusted Gross Income

 
For the 2014-2018 crop years, producers or legal entities whose average adjusted gross income (AGI) exceeds $900,000, are not eligible for marketing loan gains and LDP payments; but are eligible for MALs that must be repaid at principal plus interest.

 
Final Loan/LDP Availability Date for Rice

 
The rice crop loan/LDP availability date is May 31 of the calendar year after the calendar year the rice is harvested.

 
Loan Rates

 
The 2014 Farm Bill set the national loan rate for 2014-2018 crops of long grain and medium/short grain rough rice at $6.50 per hundredweight (cwt). To achieve the national average rate and provide rate adjustments for different classes and milling out-turns, separate loan rates are provided for whole kernels by class and broken rice.

 
Table 1 – 2014 Crop Milled Loan Values for Rice per Hundredweight (cwt)

 
Loan Values for Whole Kernel and Broken Rice
Rice Classes
2014 Crop
($ per cwt)
Long Grain –
Whole Kernels
$10.25
Medium/Short Grain -
Whole Kernels
$9.63
Broken Rice
$6.18
Loan Values for whole and broken kernel rice are used to determine loan proceeds for warehouse stored rice as the milling out-turns are determined when the rice is delivered to the warehouse and registered on the warehouse receipt.

 
Loan rates for farm-stored rice (or rice for which the grade and milling yield are not determined) are based on state average milling out-turns for the prior five years and the national whole and broken kernel loan rates for that current crop year.

 
Table 2 –2014 Crop Farm-Stored Loan Rates for Rice per Hundredweight (cwt)

 
State
2014 Crop
Long Grain ($ per cwt)
Medium/Short Grain ($ per cwt)
Arkansas
$6.46
$6.22
California
$6.33
$6.59
Louisiana
$6.46
$6.29
Mississippi
$6.63
$6.50
Missouri
$6.41
$6.50
Texas
$6.81
$6.48
National Average
$6.50
$6.50
The national average rough rice loan rate is used to determine the farm-stored loan proceeds in states other than the six major rice-producing states.

 
Handbook

 
2-LP Loans and Loan Deficiency Payments for Rice– This handbook provides general instructions and information for administrating loans and LDPs for Rice

 

 

 

 


Last Modified: 10/02/14 10:54:55 AM


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