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USDA announces Commodity Credit Corporation lending rates for July
Story Date: 7/2/2008
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Source: USDA, 7/1/08
The U.S. Department of Agriculture's Commodity Credit Corporation (CCC) today announced interest rates for July 2008. The CCC borrowing rate-based charge is 2.375, up from 2.000 percent in June 2008. For 1996 and subsequent crop year commodity and marketing assistance loans, the interest rate for loans disbursed during July 2008 is 3.375, up from 3.000 percent in June 2008.
The interest rate for farm storage facility loans approved for July 2008 is 3.625, up from 3.375 in June 2008. The interest rate for sugar storage facility loans for July 2008 is 4.625, up from 4.500 in June 2008.
The maximum discount rate applicable for July 2008 for the Tobacco Transition Payment Program is 7 percent, unchanged from June 2008. This is based on the 5 percent prime rate 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 reflect 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.
Further program information is available from USDA Farm Service Agency's (FSA) Financial Management Division at (703) 305-1386.
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