Editorial Note on Subchapter B of Chapter XIV
Editorial Note: For Federal Register citations to regulations affecting previous program years not included in this volume, see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *www.govinfo.gov .*

§ 1421.10 Loan repayment rates. ( a ) For the applicable crop years of barley, corn, grain sorghum, oats, wheat, dry peas, lentils, chickpeas, oilseeds, wool, mohair, and other crops as designated by CCC (other than peanuts, long grain rice, medium grain rice, and confectionery and each other kind of sunflower seed (other than oil sunflower seed)), a producer may repay a nonrecourse MAL at a rate that is the lesser of: ( 2 ) A rate (as determined by the Secretary) that is calculated based on average market prices for the loan commodity during a preceding 30-day period and that the Secretary has determined will minimize discrepancies in marketing loan benefits across State boundaries and across county boundaries; or ( 3 ) A rate that the Secretary may develop using alternative methods for calculating a repayment rate for a loan commodity that the Secretary determines will: Minimize potential loan forfeitures; minimize the accumulation of stocks of the commodity by the Federal Government; minimize the cost incurred by the Federal Government in storing the commodity; allow the commodity produced in the U.S. to be marketed freely and competitively, both domestically and internationally; and minimize discrepancies in marketing loan benefits across State boundaries and across county boundaries. ( b ) To the extent practicable, CCC will determine and announce repayment rates under paragraphs (a)(2) and (a)(3) of this section based upon market prices at appropriate U.S. markets as determined by CCC and these repayment rates may be adjusted to reflect grade, type, quality, location, and other factors for each crop of a commodity as follows: ( 1 ) On a weekly basis in each county for oilseeds, except canola, flaxseed, soybeans, and sunflower seed; ( 2 ) On a daily basis in each county for barley, canola, corn, flaxseed, grain sorghum, oats, soybeans, sunflower seed and wheat; and ( 3 ) On a weekly basis regionally for dry peas, lentils, chickpeas, wool and mohair. ( 1 ) A producer may repay a nonrecourse MAL for peanuts at a rate that is the lesser of: ( i ) The loan rate established for the commodity under § 1421.9, plus interest; or ( ii ) A rate that the Secretary determines will: Minimize potential loan forfeitures; minimize the accumulation of stocks of the commodity by the Federal Government; minimize the cost incurred by the Federal Government in storing the commodity; and allow the commodity produced in the United States to be marketed freely and competitively, both domestically and internationally. ( 2 ) To the extent practicable, CCC will determine and announce weekly alternative repayment rates for peanuts. ( d ) For peanuts, the Secretary will require the repayment of handling and other associated costs paid under § 1421.104 for all peanuts pledged as collateral for a MAL that are redeemed under this section. ( e ) The Secretary will permit producers to repay a MAL for long grain rice and medium grain rice at a rate that is the lesser of: ( 1 ) The loan rate established for the commodity under § 1421.9, plus interest; or ( 2 ) The prevailing world market price for the commodity, as determined and adjusted by the Secretary in accordance with this section. ( f ) For purposes of this section, the Secretary will prescribe— ( 1 ) A formula to determine the prevailing world market price for long grain rice and medium grain rice and ( 2 ) A mechanism by which the Secretary will announce periodically those prevailing world market prices. ( g ) Adjustments will be made to the prevailing world market price for long grain rice and medium grain rice. ( 1 ) The prevailing world market price for long grain and medium rice determined under paragraph (f) of this section will be adjusted to U.S. quality and location. ( 2 ) In making adjustments under this subsection, the Secretary will establish a mechanism for determining and announcing the adjustments in order to avoid undue disruption in the U.S. market. ( h ) ( 1 ) The prevailing world market price for a class of rice will be determined by CCC based upon a review of prices at which rice is being sold in world markets and a weighting of such prices through the use of information such as changes in supply and demand of rice, tender offers, credit concessions, barter sales, government-to-government sales, special processing costs for coatings or premixes, and other relevant price indicators, and will be expressed in U.S. equivalent values F.O.B. (free on board) vessel, U.S. port of export, per hundredweight as follows: ( i ) U.S. grade No. 2, 4 percent broken kernels, long grain milled rice; ( ii ) U.S. grade No. 2, 4 percent broken kernels, medium grain milled rice; and ( iii ) U.S. grade No. 2, 4 percent broken kernels, short grain milled rice. ( 2 ) Export transactions involving rice and all other related market information will be monitored on a continuous basis. Relevant information may be obtained for this purpose from USDA field reports, international organizations, public or private research entities, international rice brokers, and other sources of reliable information. ( 3 ) The prevailing world market price for a class of rice adjusted to U.S. quality and location, the adjusted world price (AWP), as determined under paragraph (h)(5) of this section, will apply to this section. ( 4 ) The adjusted world price for each class of rice will equal the prevailing world market price for a class of rice (U.S. equivalent value) as determined under paragraphs (h)(1) and (h)(2) of this section and adjusted to U.S. quality and location as follows: ( i ) The prevailing world market price for a class of rice will be adjusted to reflect an F.O.B. mill position by deducting from such calculated price an amount that is equal to the estimated national average costs associated with: ( A ) The use of bags for the export of U.S. rice, and ( B ) The transfer of such rice from a mill location to F.O.B. vessel at the U.S. port of export with such costs including, but not limited to, freight, unloading, wharfage, insurance, inspection, fumigation, stevedoring, interest, banking charges, storage, and administrative costs. ( ii ) The price determined under paragraph (h)(4)(i) of this section will be adjusted to reflect the market value of the total quantity of whole kernels contained in milled rice by deducting the world value of broken kernels it contains, with the value of the broken kernels determined by multiplying a formulaic quantity of broken kernels (4 percent per hundredweight) by the world market value of broken kernels. The world market value of broken kernels will be based upon the relationship of whole and broken kernel world prices as estimated from observations of prices at which rice is being sold in world markets. ( iii ) The price determined under paragraph (h)(4)(ii) of this section will be adjusted to reflect the per-pound market value of whole kernels by dividing the price by the quantity of whole milled kernels contained in the milled rice (96 percent per hundredweight). ( iv ) The price determined under paragraph (h)(4)(iii) of this section will be adjusted to reflect the market value of whole kernels contained in 100 pounds of rough rice by multiplying such price by the estimated national average quantity of whole kernel rice by class obtained from milling 100 pounds of rough rice. ( v ) The price determined under paragraph (h)(4)(iv) of this section will be adjusted to reflect the total market value of rough rice by: ( A ) Adding to such price: ( 1 ) The market value of bran contained in the rough rice, computed by multiplying the domestic unit market value of bran by the estimated national average quantity of bran produced in milling 100 pounds of rice; and ( 2 ) The market value of broken kernels contained in the rough rice, computed by multiplying the estimated world market value of broken kernels by the estimated national average quantity of broken kernels produced in milling 100 pounds of rice; ( B ) Deducting from such price an estimated cost of milling rough rice; and an estimated cost of transporting rough rice from farm to mill locations. ( 5 ) The adjusted world price for each class of rice, loan rate basis, will be determined by CCC and announced, to the extent practicable, on or after 7 a.m. Eastern Standard Time each Wednesday or more frequently as determined necessary by CCC, continuing through the later of: ( i ) The last Wednesday of July in the calendar year following the year the rice crop was harvested, or in which the rice MAL matures, ( ii ) The last Wednesday of the latest month the rice MAL matures, or ( iii ) If Tuesday is not a normal business day, the price determination may be made on the next work day and announced the following day, on or after 7 a.m. Eastern Standard Time. ( i ) The producer may repay a MAL under this section for confectionery and each other kind of sunflower seed (other than oil sunflower seed) at a rate that is the lesser of: ( 1 ) The loan rate established for the commodity under § 1421.9, plus interest, or ( 2 ) The repayment rate established for oil sunflower seed. ( j ) ( 1 ) On a form prescribed by CCC, a producer may request to lock in the applicable repayment rate for a period of 60 calendar days or for the remaining life of the MAL term, whichever is less, provided that no request may be granted within 14 calendar days of the end of the MAL. ( 2 ) The request to lock in the applicable repayment rate must be received in the FSA county service center that disbursed the MAL. ( 3 ) The repayment rate that is locked in will be the rate in effect when the request to lock in is approved. ( 4 ) The repayment rate may be locked in on outstanding farm-stored or warehouse-stored loans. ( 5 ) The repayment rate that is locked in will expire as provided in paragraph (j)(1) of this section. ( 6 ) The requests can only be completed one time for a designated quantity. ( 7 ) For multiple locked in requests, the oldest unexpired locked in repayment rate is applied first. ( 8 ) The completed and signed form can be submitted in person, by facsimile, or electronically. ( 9 ) The requests cannot be canceled, terminated, or changed after approval. ( 10 ) The locked in applicable repayment rate will transfer to any MAL disbursed outside of the originating county where the commodity was stored. ( 11 ) Once a repayment rate is locked in it cannot be extended. ( k ) If a producer fails to repay a MAL within the time prescribed by CCC under the terms and conditions of the request to lock in a market loan repayment rate, the producer may repay the MAL: ( 1 ) On or before maturity, at the lesser of: ( i ) Principal plus interest as determined by CCC; or ( ii ) The repayment rate in effect on the day the repayment is received in the FSA County Service Center. ( 2 ) After maturity, at principal plus interest. ( l ) When the proceeds of the sale of the commodity are needed to repay all or a part of a farm-stored MAL, the producer must request and obtain prior written approval on a CCC-approved form and comply with the terms and conditions of such form, to remove a specified quantity of the commodity from storage. Approval does not constitute release of CCC's security interest in the commodity or release of producer liability for amounts due CCC for the MAL indebtedness if payment in full is not received by the FSA county office. Failure to repay a MAL within the time period prescribed by CCC in the case of a farm-stored loan and delivery of the pledged collateral to a buyer is a violation of the agreement. In the case of such violation, the producer must repay the loan principal and interest or another amount as determined by the Deputy Administrator, FSA, as specified in § 1421.109. ( m ) The producer may obtain county committee approval of a release of all or part of pledged collateral for a warehouse-stored MAL at or before the maturity of such MAL by paying to CCC: ( 1 ) The principal amount of the marketing assistance loan and charges plus interest or ( 2 ) An amount less than the principal amount of the MAL and charges plus interest under the terms and conditions specified by CCC at the time the producer redeems the collateral for such MAL. ( n ) A partial release of marketing assistance loan collateral must cover all of the commodity represented by one warehouse receipt. Warehouse receipts redeemed by repayment of the marketing assistance loan must be released only to the producer. However, such receipt may be released to persons designated in a written authorization that is filed with the county office by the producer within 15 days before the date of repayment. ( o ) The note and security agreement will not be released until the marketing assistance loan has been satisfied in full. ( p ) ( 1 ) If the commodity is moved from storage without obtaining prior approval to move such commodity, such removal will constitute unauthorized removal or disposition, as applicable under § 1421.109(b), unless the removal occurred on a non-workday and the producer notified the county office on the next workday of such removal. ( 2 ) Any MAL quantities involved in a violation of § 1421.109 must be repaid under § 1421.109(e). ( q ) In the event of a severe disruption to marketing, transportation, or related infrastructure, the Secretary may modify the repayment rate otherwise applicable under this section for marketing assistance loans. Any adjustment made to the repayment rate for marketing assistance loans for a loan commodity under § 1421.5 will be in effect on a short-term and temporary basis, as determined by the Secretary. [74 FR 15652, Apr. 7, 2009, as amended at 80 FR 122, 129, Jan. 2, 2015]