§ 1445e. — Farmer owned reserve program.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 7USC1445e]
TITLE 7--AGRICULTURE
CHAPTER 35A--PRICE SUPPORT OF AGRICULTURAL COMMODITIES
SUBCHAPTER II--BASIC AGRICULTURAL COMMODITIES
Sec. 1445e. Farmer owned reserve program
(a) In general
The Secretary shall formulate and administer a farmer owned reserve
program under which producers of wheat and feed grains will be able to
store wheat and feed grains when the commodities are in abundant supply,
extend the time period for the orderly marketing of the commodities, and
provide for adequate carryover stocks to ensure a reliable supply of the
commodities.
(b) Terms of program
(1) Price support loans
In carrying out this program, the Secretary shall provide
extended price support loans for wheat and feed grains. An extended
loan shall only be made to a producer after the expiration of a 9-
month price support loan (hereafter in this section referred to as
the ``original loan'') made in accordance with this subchapter.
(2) Level of loans
Loans made under this section shall not be less than the then
current level of support under the wheat and feed grain programs
established under this subchapter.
(3) Other terms and conditions
The Secretary shall provide for--
(A) repayment of the extended price support loan 27 months
from the date on which the original loan expired unless, at the
discretion of the Secretary, the loan has been extended for one
6-month period;
(B) a rate of interest as provided under subsection (c) of
this section; and
(C) payments to producers for storage as provided in
subsection (d) of this section.
(4) Regional differences
The Secretary shall ensure that producers are afforded a fair
and equitable opportunity to participate in the program established
under this section, taking into account regional differences in the
time of harvest.
(c) Interest charges
(1) Levying of interest
The Secretary may charge interest on loans under this section
whenever the price of wheat or feed grains is equal to or exceeds
105 percent of the then current established price for the commodity.
(2) 90-day period
If interest is levied on the loans under paragraph (1), the
interest may be charged for a period of 90 days after the last day
on which the price of wheat or feed grains was equal to or in excess
of 105 percent of the established price for the commodities.
(3) Rate of interest
The rate of interest charged participants in this program shall
not be less than the rate of interest charged by the Commodity
Credit Corporation by the United States Treasury, except that the
Secretary may waive or adjust the interest as the Secretary
considers appropriate to effectuate the purposes of this section.
(d) Storage payments
(1) In general
The Secretary shall provide storage payments to producers for
storage of wheat or feed grains under the program established in
this section in such amounts and under such conditions as the
Secretary determines appropriate to encourage producers to
participate in the program.
(2) Timing
The Secretary shall make storage payments available to
participants in this program at the end of each quarter.
(3) Duration
The Secretary shall cease making storage payments whenever the
price of wheat or feed grains is equal to or exceeds 95 percent of
the then current established price for the commodities, and for any
90-day period immediately following the last day on which the price
of wheat or feed grains was equal to or in excess of 95 percent of
the then current established price for the commodities.
(e) Emergencies
Notwithstanding any other provision of law, the Secretary may
require producers to repay loans made under this section, plus accrued
interest and such other charges as may be required by regulation prior
to the maturity date thereof, if the Secretary determines that emergency
conditions exist that require that the commodity be made available in
the market to meet urgent domestic or international needs and the
Secretary reports the determination and the reasons for the
determination to the President, the Committee on Agriculture of the
House of Representatives, and the Committee on Agriculture, Nutrition,
and Forestry of the Senate at least 14 days before taking the action.
(f) Quantity of commodities in program
The Secretary may establish maximum quantities of wheat and feed
grains that may receive loans and storage payments under this program as
follows:
(1) The maximum quantities of wheat may not be established at
less than 300 million bushels, nor more than 450 million bushels.
(2) The maximum quantities of feed grains may not be established
at less than 600 million bushels, nor more than 900 million bushels.
(g) Announcement of program
(1) Time of announcement
The Secretary shall announce the terms and conditions of the
producer storage program for a crop of wheat and feed grains by--
(A) in the case of wheat, December 15 of the year in which
the crop of wheat was harvested; and
(B) in the case of feed grains, March 15 of the year
following the year in which the crop of corn was harvested.
(2) Discretionary entry
The Secretary may make extended loans available to producers of
wheat or feed grains if--
(A) the Secretary determines that the average market price
for wheat or corn, respectively, for the 90-day period prior to
the dates specified in paragraph (1) is less than 120 percent of
the current loan rate for wheat or corn, respectively; or
(B) as of the appropriate date specified in paragraph (1),
the Secretary estimates that the stocks-to-use ratio on the last
day of the current marketing year will be--
(i) in the case of wheat, more than 37.5 percent; and
(ii) in the case of corn, more than 22.5 percent.
(3) Mandatory entry
The Secretary shall make extended loans available to producers
of wheat or feed grains if the conditions specified in subparagraphs
(A) and (B) of paragraph (2) are met for wheat or feed grains,
respectively.
(4) Content of announcement
In the announcement, the Secretary shall specify the maximum
quantity of wheat or feed grains to be stored under this program
that the Secretary determines appropriate to promote the orderly
marketing of the commodities.
(h) Discretionary exit
A producer may repay a loan extended under this section at any time.
(i) Reconcentration of grain
The Secretary may, with the concurrence of the owner of grain stored
under this program, reconcentrate all such grain stored in commercial
warehouses at such points as the Secretary considers to be in the public
interest, taking into account such factors as transportation and normal
marketing patterns. The Secretary shall permit rotation of stocks and
facilitate maintenance of quality under regulations that assure that the
holding producer or warehouseman shall, at all times, have available for
delivery at the designated place of storage both the quantity and
quality of grain covered by the producer's or warehouseman's commitment.
(j) Management of grain
Whenever grain is stored under this section, the Secretary may buy
and sell at an equivalent price, allowing for the customary location and
grade differentials, substantially equivalent quantities of grain in
different locations or warehouses to the extent needed to properly
handle, rotate, distribute, and locate the commodities that the
Commodity Credit Corporation owns or controls. The purchases to offset
sales shall be made within 2 market days following the sales. The
Secretary shall make a daily list available showing the price, location,
and quantity of the transactions.
(k) Use of Commodity Credit Corporation
The Secretary shall use the Commodity Credit Corporation, to the
extent feasible, to fulfill the purposes of this section. To the maximum
extent practicable consistent with the fulfillment of the purposes of
this section and the effective and efficient administration of this
section, the Secretary shall utilize the usual and customary channels,
facilities, and arrangements of trade and commerce.
(l) Use of commodity certificates
Notwithstanding any other provision of law, if a producer has
substituted purchased or other commodities for the commodities
originally pledged as collateral for a loan made under this section, the
Secretary may allow a producer to repay the loan using a generic
commodity certificate that may be exchanged for commodities owned by the
Commodity Credit Corporation, if the substitute commodities have been
pledged as loan collateral and redeemed only within the same county.
(m) Additional authority
The authority provided by this section shall be in addition to other
authorities available to the Secretary for carrying out producer loan
and storage operations.
(n) Regulations
The Secretary of Agriculture shall issue such regulations as are
necessary to carry out this section not later than 60 days after
November 28, 1990.
(o) Review
In announcing the terms and conditions of the producer storage
program under this section, the Secretary shall review standards
concerning the quality of grain that shall be allowed to be stored under
the program, and such standards should encourage only quality grain, as
determined by the Secretary, to be pledged as collateral for such loans.
The Secretary shall review inspection, maintenance, and stock rotation
requirements and take the necessary steps to maintain the quality of
such grain.
(p) Crops
Notwithstanding any other provision of law, this section shall
become effective December 1, 1990.
(Oct. 31, 1949, ch. 792, title I, Sec. 110, as added Pub. L. 95-113,
title XI, Sec. 1101, Sept. 29, 1977, 91 Stat. 951; amended Pub. L. 96-
234, Secs. 1, 2, Apr. 11, 1980, 94 Stat. 333; Pub. L. 96-494, title II,
Secs. 203(a), 204, 205, Dec. 3, 1980, 94 Stat. 2571, 2572; Pub. L. 97-
24, Sec. 2, July 23, 1981, 95 Stat. 143; Pub. L. 97-98, title X,
Sec. 1001, Dec. 22, 1981, 95 Stat. 1257; Pub. L. 99-198, title X,
Sec. 1012(a), Dec. 23, 1985, 99 Stat. 1455; Pub. L. 100-203, title I,
Sec. 1108, Dec. 22, 1987, 101 Stat. 1330-6; Pub. L. 100-387, title III,
Sec. 303(b), Aug. 11, 1988, 102 Stat. 947; Pub. L. 101-624, title XI,
Sec. 1123, title XX, Sec. 2010, Nov. 28, 1990, 104 Stat. 3503, 3932;
Pub. L. 102-237, title I, Sec. 113(7), Dec. 13, 1991, 105 Stat. 1837.)
Amendments
1991--Subsec. (k). Pub. L. 102-237, Sec. 113(7)(C)(i), redesignated
subsec. (k), relating to review, as (o).
Subsec. (n). Pub. L. 102-237, Sec. 113(7)(A), substituted ``November
28, 1990'' for ``the date of enactment of this section''.
Subsec. (o). Pub. L. 102-237, Sec. 113(7)(C), redesignated subsec.
(k), relating to review, as (o), inserted heading, and substituted
``this section'' for ``subsection (e)(1)''.
Pub. L. 102-237, Sec. 113(7)(B), redesignated subsec. (o) as (p).
Subsec. (p). Pub. L. 102-237, Sec. 113(7)(B), redesignated subsec.
(o) as (p).
1990--Pub. L. 101-624, Sec. 1123, amended section generally,
substituting provisions relating to the farmer owned reserve program for
provisions relating to the establishment and maintenance of the producer
reserve program for wheat and feed grains.
Subsec. (k). Pub. L. 101-624, Sec. 2010, added subsec. (k) relating
to review.
1988--Subsec. (j). Pub. L. 100-387 temporarily added subsec. (j).
See Effective and Termination Dates of 1988 Amendment note.
1987--Subsec. (b)(A)(i). Pub. L. 100-203, Sec. 1108(1), substituted
``300 million bushels'' for ``17 percent of the estimated total domestic
and export usage of wheat during the then current marketing year for
wheat, as determined by the Secretary''.
Subsec. (b)(A)(ii). Pub. L. 100-203, Sec. 1108(2), substituted ``450
million bushels'' for ``7 percent of the estimated total domestic and
export usage of feed grains during the then current marketing year for
feed grains, as determined by the Secretary''.
1985--Subsec. (a). Pub. L. 99-198 in first sentence substituted
``abundant supply, extend'' for ``abundant supply and extend'' and
inserted ``, and provide for adequate, but not excessive, carryover
stocks to ensure a reliable supply of the commodities'' after ``for
their orderly marketing''.
Subsec. (b). Pub. L. 99-198 in third sentence substituted ``, with
extensions as warranted by market conditions'' for ``nor more than five
years'' in cl. (1), substituted ``when the total amount of wheat or feed
grains in storage under programs under this section is below the upper
limits for such storage as set forth in clauses (A) and (B) of
subsection (e)(2) of this section and the market price for wheat or feed
grains is below'' for ``before the market price for wheat or feed grains
has reached'' in cl. (4), substituted ``the higher of 140 percent of the
nonrecourse loan rate for the commodity or the established price for
such commodity, as determined under this subchapter'' for ``a specified
level, as determined by the Secretary'' in cl. (5), and at end inserted
provisions requiring Secretary to encourage participation in the
programs authorized under this section by offering producers increased
storage payments and loan levels, interest waivers, or such other
incentives as the Secretary determines necessary to maintain total
amount of storage at specified levels, whenever the total quantity of
wheat and feed grains stored under this section is less than 17 and 7
percent, respectively, of the estimated total usage thereof during the
then current marketing year, and the marketing price does not exceed 140
percent of the nonrecourse loan rate for the commodity, and inserted
provision requiring Secretary to ensure than producers are afforded a
fair and equitable opportunity to participate in each producer storage
program.
Subsec. (e). Pub. L. 99-198 designated existing provisions as par.
(1), inserted ``, subject to the upper limits on the total quantity of
wheat and feed grains that may be stored under storage programs
established under this section set out in paragraph (2)'' in second
sentence, struck out third sentence which authorized the Secretary to
place an upper limit of not less than seven hundred million bushels for
wheat and one billion bushels for feed grains placed in the reserve, and
added par. (2).
1981--Subsec. (a). Pub. L. 97-98 struck out discretionary authority
of Secretary with regard to permitting producers of feed grains to store
wheat and feed grains.
Subsec. (b). Pub. L. 97-98 substituted ``Secretary shall provide''
for ``Secretary may provide'', struck out ``at the same level of support
as provided by this Act'' after ``loans for wheat and feed grains'', and
substituted provisions that loans be made at such levels of support as
Secretary determines appropriate, except that the loan rate not be less
than the then current level of support under the wheat and feed grains
programs established under this subchapter for provisions relating to
the level of price support loans to be made available to producers for
the 1980 and 1981 crops of wheat and feed grains necessary to mitigate
the adverse effects of the restrictions on the export of agricultural
products to the Union of Soviet Socialist Republics and providing that
the level of price support loans for the 1980 and 1981 crops of wheat
and feed grains not be used in determining the levels at which producers
repay loans and redeem commodities prior to the maturity dates of the
loans or levels at which Secretary may call for the repayment of loans
prior to their maturity dates and ``program may provide'' for ``program
shall provide''.
Subsec. (b)(2). Pub. L. 97-98 substituted ``for storage in such
amounts and under such conditions as the Secretary determines
appropriate to encourage producers to participate in the program'' for
``of such amounts as the Secretary determines appropriate to cover the
cost of storing wheat and feed grains held under the program''.
Subsec. (b)(3). Pub. L. 97-98 substituted ``as determined under
subsection (c) of this section'' for ``determined by the Secretary based
upon the rate of interest charged the Commodity Credit Corporation by
the United States Treasury, except that the Secretary may waive or
adjust such interest''.
Pub. L. 97-24 struck out ``, and the Secretary shall waive such
interest on loans made on the 1980 and 1981 crops of wheat and feed
grains'' after ``a rate of interest determined by the Secretary based
upon the rate of interest charged the Commodity Credit Corporation by
the United States Treasury, except that the Secretary may waive or
adjust such interest''.
Subsec. (b)(4). Pub. L. 97-98 substituted ``if such loans'' for ``in
the event such loans'' and ``determined under clause (5) of this
sentence'' for ``specified in clause (5) of this subsection''.
Subsec. (b)(6). Pub. L. 97-98 struck out cl. (6) which authorized
the program to contain conditions prescribed by Secretary under which
Secretary may require producers to repay such loans, plus accrued
interest thereon, refund amounts paid for storage, and pay such
additional interest and other charges as may be required by regulation,
whenever Secretary determines that the market price for the commodity is
not less than such appropriate level, as determined by Secretary.
Subsec. (c). Pub. L. 97-98 substituted provision prescribing rate of
interest charged to participants in the program authorized by this
section for provision authorizing payments to producers of the 1979
crops of corn and wheat who did not comply with the 1979 program
requirements.
Subsec. (d). Pub. L. 97-98 added subsec. (d) and redesignated former
subsec. (d) as (e).
Subsec. (e). Pub. L. 97-98 redesignated former subsec. (d) as (e)
and substituted provision authorizing Secretary to place an upper limit
on the amount of wheat and feed grains placed in the reserve, with such
upper limit not less than seven hundred million bushels for wheat and
one billion bushels for feed grains, for provision authorizing the
maximum amount of wheat stored as not less than three hundred million
bushels nor more than seven hundred million bushels, with authority for
Secretary to adjust this amount as necessary to meet commitments by the
United States pursuant to international agreements. Former subsec. (e)
redesignated (f).
Subsec. (f). Pub. L. 97-98 redesignated former subsec. (e) as (f)
and substituted in provision preceding par. (1) ``the program
authorized'' for ``the extended loan program authorized'', ``110 per
centum'' for ``105 per centum'', ``Secretary may encourage repayment''
for ``Secretary may call for repayment'', and ``clause (5) of the third
sentence of subsection (b) of this section. The foregoing restriction''
for ``clause (6) of the second sentence of subsection (b) of this
section: Provided, That such restriction'' and in provision following
par. (3) ``clause (5) of the third sentence'' for ``clause (5) of the
second sentence''. Former subsec. (f) redesignated (g).
Subsec. (g). Pub. L. 97-98 redesignated former subsec. (f) as (g)
and substituted ``by the producer's or warehouseman's commitment'' for
``by his commitment''. Former subsec. (g) redesignated (h).
Subsec. (h). Pub. L. 97-98 redesignated former subsec. (g) as (h).
Former subsec. (h) redesignated (i).
Subsec. (i). Pub. L. 97-98 redesignated former subsec. (h) as (i)
and substituted ``To the maximum extent'' for ``In addition, to the
maximum extent''.
1980--Subsec. (b). Pub. L. 96-494, Sec. 203(a)(1), inserted two
provisos in provisions permitting Secretary to provide original or
extended price support loans for wheat and feed grains at the same level
of support as provided by this Act, in carrying out the producer storage
program, under terms and conditions designed to encourage producers to
store wheat and feed grains for extended periods of time to promote
orderly marketing when wheat or feed grains are in abundant supply.
Subsec. (b)(3). Pub. L. 96-494, Sec. 203(a)(2), inserted provisions
requiring Secretary to waive interest on loans made on the 1980 and 1981
crops of wheat and feed grains.
Subsec. (b)(5). Pub. L. 96-494, Sec. 204, substituted ``for the
commodity has attained a specified level'' for ``of wheat has attained a
specified level which is not less than 140 per centum nor more than 160
per centum of the then current level of price support for wheat or such
appropriate level for feed grains''.
Subsec. (b)(6). Pub. L. 96-494, Sec. 204, substituted ``such
appropriate level, as determined by the Secretary'' for ``175 per centum
of the then current level of the price support for wheat or such
appropriate level for feed grains as determined by the Secretary under
this Act''.
Subsecs. (c), (d). Pub. L. 96-234, Sec. 1, added subsec. (c) and
redesignated former subsecs. (c) and (d) as (d) and (e), respectively.
Subsec. (e). Pub. L. 96-494, Sec. 205(1), (2), substituted ``except
as otherwise provided under section 1736f-1 of this title and section
4001 of this title, whenever the extended loan program authorized by
this section is in effect, the Commodity Credit Corporation may not sell
any of its stocks of wheat or feed grains at less than 105 per centum of
the then current level at which the Secretary may call for repayment of
producer storage loans on the commodity prior to the maturity dates of
the loans, as determined under clause (6) of the second sentence of
subsection (b) of this section'' for ``whenever the extended loan
program authorized by this section is in effect, the Commodity Credit
Corporation may not sell any of its stocks of wheat or feed grains at
less than 150 percentum of the then current level of price support for
such commodity''.
Pub. L. 96-234, Sec. 1(1), (2), redesignated former subsec. (d) as
(e) and added cl. (3). Former subsec. (e) redesignated (f).
Subsec. (e)(3). Pub. L. 96-494, Sec. 205(3), in provisions preceding
subpar. (A), substituted ``sales of corn'' for ``sales of corn when sold
at not less than the release level under the extended loan program'',
and inserted ``when sold at not less than the price at which producers
may repay producer storage loans and redeem corn prior to the maturity
dates of loans, as determined under clause (5) of the second sentence of
subsection (b) of this section, or, whenever the fuel conversion price
(as defined in section 4005 of this title) for corn exceeds such price,
at not less than the fuel conversion price''.
Subsecs. (f) to (h). Pub. L. 96-234, Sec. 1(1), redesignated former
subsecs. (e) to (g) as (f) to (h), respectively.
Effective Date of 1990 Amendment
Amendment by section 1123 of Pub. L. 101-624 effective beginning
with 1991 crop of an agricultural commodity, with provision for prior
crops, see section 1171 of Pub. L. 101-624, set out as a note under
section 1421 of this title.
Effective and Termination Dates of 1988 Amendment
Section 303(b) of Pub. L. 100-387 provided that the amendment made
by that section is effective only for 1988 marketing year for wheat and
feed grains.
Effective Date of 1985 Amendment
Section 1012(a) of Pub. L. 99-198 provided that, except as provided
in section 1012(b) of Pub. L. 99-198 [set out below], the amendments by
section 1012(a) are effective beginning with 1986 crops.
Section 1012(b) of Pub. L. 99-198 provided that: ``The amendment
made by subsection (a)(2)(B) of this section [amending this section]
shall take effect with respect to any loan made under section 110 of the
Agricultural Act of 1949 (7 U.S.C. 1445e) the date for repayment of
which occurs after the date of enactment of this Act [Dec. 23, 1985].''
Effective Date of 1981 Amendment
Section 1001 of Pub. L. 97-98 provided that the amendment made by
that section is effective beginning with 1982 crops.
Effective Date of 1980 Amendment
Section 203(b) of Pub. L. 96-494 provided that: ``Subsection (a) of
this section [amending this section] shall become effective October 1,
1980, and any producers who, prior to such date, receive loans on the
1980 crop of the commodity as computed under the Agricultural Act of
1949, as [see Short Title note set out under section 1421 of this title]
amended prior to the enactment of this Act [see Short Title note set out
under section 4001 of this title], may elect after September 30, 1980,
to receive loans as authorized under subsection (a) of this section.''
Amendment by sections 204 and 205 of Pub. L. 96-494 effective Dec.
3, 1980, see section 213 of Pub. L. 96-494, set out as an Effective Date
note under section 4001 of this title.
Effective Date
Section effective Oct. 1, 1977, see section 1901 of Pub. L. 95-113,
set out as an Effective Date of 1977 Amendment note under section 1307
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)(5) 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)(E) of this
title.
Comparability of Storage Payments
Section 1124 of Pub. L. 101-624, as amended by Pub. L. 102-237,
title I, Sec. 114(a)(1), Dec. 13, 1991, 105 Stat. 1838, provided that:
``In making storage payments to producers under section 110 of the
Agricultural Act of 1949 (7 U.S.C. 1445e) and to commercial warehousemen
in accordance with the Commodity Credit Corporation Charter Act (15
U.S.C. 714 et seq.), the Commodity Credit Corporation and the Secretary
of Agriculture shall, to the extent practicable, ensure that the rates
of the storage payments made to producers are equivalent to average
rates paid for commercial storage, taking into account the current
demand for storage for commodities, efficiency, location, regulatory
compliance costs, bonding requirements, and impact of user fees as
determined by the Secretary, except that the rates paid to producers and
commercial warehousemen shall be established at rates that will result
in no increase in current or projected combined outlays of the Commodity
Credit Corporation for the storage payments made to producers and
commercial warehousemen as a result of the adjustment of storage rates
under this section.''
Repayment of Loans Without Penalty
Section 303(a) of Pub. L. 100-387 provided that: ``Effective for the
1988 marketing year for wheat or feed grains, once the market price
described in clause (5) of the third sentence of subsection (b) of
section 110 of the Agricultural Act of 1949 (7 U.S.C. 1445e) has been
reached at any time during such marketing year with respect to such
commodity, producers may repay loans made under section 110 for such
commodity during the remainder of such marketing year without the
payment of a penalty, regardless of the then current market price.''
Section Referred to in Other Sections
This section is referred to in sections 1308a, 1427, 1445k, 4001,
4002, 7301, 7992 of this title.
