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USDA presents CCC for January 2006

21 Jan '06
2 min read

United States Department of Agriculture (USDA) announced the interest rate for 1995 and prior crop year commodity loans disbursed by Commodity Credit Corporation (CCC) during January 2006 are 4.375 percent, unchanged from December 2005.

For 1996 and subsequent crop year commodity and marketing assistance loans, the interest rate for loans disbursed during January 2006 is 5.375 percent, unchanged from December 2005.

The interest rate for farm storage facility loans approved in January 2006 is 4.375 percent, down from 4.500 percent in December 2005. The interest rate for sugar storage facility loans for January 2006 is 4.625 percent, down from 4.750 percent in December 2005.

The maximum discount rate applicable for January 2006 for the Tobacco Transition Payment Program is 9.0 percent. This is based on the prime rate 7.25 percent plus 2 percent, rounded to the nearest whole number.

Past monthly releases announcing interest rates charged by CCC on commodity and marketing assistance loans disbursed for that particular month reflected the interest rate the U.S. Treasury charged CCC for that month. This was the interest rate specified by CCC since Jan. 1, 1982, but the process of establishing the interest rate was changed by a provision of the Federal Agriculture Improvement and Reform Act of 1996 (the Act), enacted on April 4, 1996.

Section 163 of the Act requires that monthly interest rates applicable to commodity and marketing assistance loans are to be 100 basis points - or 1 percent - greater than the rate determined under the applicable interest rate formula in effect on Oct. 1, 1995. This formula resulted in a rate equivalent to the amount the U.S. Treasury charged CCC for borrowing for the month.

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