§ 1425. — Producer rights and liabilities.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 7USC1425]
TITLE 7--AGRICULTURE
CHAPTER 35A--PRICE SUPPORT OF AGRICULTURAL COMMODITIES
SUBCHAPTER I--GENERAL PROVISIONS
Sec. 1425. Producer rights and liabilities
(a) Liability for deficiencies
Except as otherwise provided in section 1425a of this title, no
producer shall be personally liable for any deficiency arising from the
sale of the collateral securing any loan made under authority of this
Act unless such loan was obtained through fraudulent representations by
the producer. This provision shall not, however, be construed to prevent
the Commodity Credit Corporation or the Secretary from requiring
producers to assume liability for deficiencies in the grade, quality, or
quantity of commodities stored on the farm or delivered by them, for
failure properly to care for and preserve commodities, or for failure or
refusal to deliver commodities in accordance with the requirements of
the program. There is authorized to be included in the terms and
conditions of any such nonrecourse loan a provision whereby on and after
the maturity of the loan or any extension thereof Commodity Credit
Corporation shall have the right to acquire title to the unredeemed
collateral without obligation to pay for any market value which such
collateral may have in excess of the loan indebtedness.
(b) Sugarcane and sugar beets
The security interests obtained by the Commodity Credit Corporation
as a result of the execution of security agreements by the processors of
sugarcane and sugar beets shall be superior to all statutory and common
law liens on raw cane sugar and refined beet sugar in favor of the
producers of sugarcane and sugar beets and all prior recorded and
unrecorded liens on the crops of sugarcane and sugar beets from which
the sugar was derived. The preceding sentence shall not affect the
application of section 1421(e)(2) of this title.
(Oct. 31, 1949, ch. 792, title IV, Sec. 405, 63 Stat. 1054; Pub. L. 85-
835, title V, Sec. 502, Aug. 28, 1958, 72 Stat. 996; Pub. L. 99-198,
title X, Sec. 1004, Dec. 23, 1985, 99 Stat. 1447; Pub. L. 100-460, title
VI, Sec. 634(a), Oct. 1, 1988, 102 Stat. 2263; Pub. L. 102-237, title I,
Sec. 111(b), Dec. 13, 1991, 105 Stat. 1830.)
References in Text
This Act, referred to in subsec. (a), is act Oct. 31, 1949, ch. 792,
63 Stat. 1051, as amended, known as the Agricultural Act of 1949, which
is classified principally to this chapter (Sec. 1421 et seq.). For
complete classification of this Act to the Code, see Short Title note
set out under section 1421 of this title and Tables.
Amendments
1991--Subsec. (b). Pub. L. 102-237 amended subsec. (b) generally.
Prior to amendment, subsec. (b) read as follows:
``(1) Notwithstanding any other provision of law, the Secretary may
provide a negotiable certificate to any producer who repays, together
with interest, a price support loan made available to such producer
under any of the annual programs, for wheat, feed grains, upland cotton,
or rice established under this Act.
``(2) The amount of such certificates shall be equal to the amount
of the interest paid by the producer on such loan.
``(3) Such certificate shall be redeemable in wheat, feed grains,
upland cotton, or rice, as the case may be, owned by the Commodity
Credit Corporation.
``(4) The issuance of such certificate shall be subject to the
availability of commodities owned by the Corporation.''
1988--Subsec. (a). Pub. L. 100-460 substituted ``Except as otherwise
provided in section 1425a of this title, no producer'' for ``No
producer''.
1985--Pub. L. 99-198 temporarily designated existing provisions as
subsec. (a) and added subsec. (b). See Effective and Termination Dates
of 1985 Amendment note below.
1958--Pub. L. 85-835 authorized the Commodity Credit Corporation to
acquire title to agricultural commodities on which nonrecourse price-
support loans have been made without the necessity of computing and
making payments to the farmer.
Effective Date of 1988 Amendment
Section 634(a) of Pub. L. 100-460 provided that the amendment made
by that section is effective beginning with 1989 crop year for honey.
Effective and Termination Dates of 1985 Amendment
Section 1004 of Pub. L. 99-198 provided that the amendment made by
that section is effective only for 1986 through 1990 crops.
Exceptions From Transfer of Functions
Functions of Corporations of Department of Agriculture, boards of
directors and officers of such corporations; Advisory Board of Commodity
Credit Corporation; and Farm Credit Administration or any agency,
officer, or entity of, under, or subject to supervision of said
Administration excepted from functions of officers, agencies, and
employees transferred to Secretary of Agriculture by 1953 Reorg. Plan
No. 2, Sec. 1, effective June 4, 1953, 18 F.R. 3219, 67 Stat. 633, set
out as a note under section 2201 of this title.
Inapplicability of Section
Section inapplicable to 2002 through 2007 crops of covered
commodities, peanuts, and sugar and inapplicable to milk during period
beginning May 13, 2002, through Dec. 31, 2007, see section 7992(b)(10)
of this title.
Section inapplicable to 1996 through 2002 crops of loan commodities,
peanuts, and sugar and inapplicable to milk during period beginning Apr.
4, 1996, and ending Dec. 31, 2002, see section 7301(b)(1)(J) of this
title.
