11/18/2020 Rice: 1999 Marketing Assistance Loan and Loan Deficiency Payment Programs

https://web.archive.org/web/20001001194507/http://www.fsa.usda.gov:80/PAS/publications/facts/html/rice.htm 1/4

April 1999

Rice: 1999 Marketing Assistance Loan and Loan Deficiency

Payment Programs

Program Overview

The marketing assistance loan program provides loans to eligible

producers on rough rice provided as loan collateral at farm or warehouse

locations. Producers are allowed to deliver the rice to the Commodity

Credit Corporation (CCC) upon maturity of the loan as full repayment of

the loan obligation. These loans assist producers to extend marketing

periods and stabilize prices. A reduced repayment provision, when

applicable, helps U.S. rice prices remain competitive in world markets.

A loan deficiency payment (LDP) is a payment made to a producer who,

although eligible to obtain a marketing assistance loan, agrees to forgo

the loan in return for the LDP. LDPs are not available for rice previously

pledged as collateral for a price support loan. An LDP payment is

available only when the adjusted world price is below the loan rate.

Eligible Producer

A producer is eligible to receive a marketing assistance loan if the

producer shares in the risk of producing the rice on a farm and has

beneficial interest in the rice for which the loan is requested. Only rice

owned by the producer is eligible, and loans must be repaid before the

rice is sold or beneficial interest of the producer terminates. Also, the

farm must have an approved production flexibility contract. Approved

cooperatives may obtain loans on behalf of their eligible producer

members.

Acreage Certification Requirement

Producers are required to certify their acreage for crops for which

marketing assistance loan or LDP benefits will be requested. The final

date to certify rice acreage is July 15 before harvest.

Eligibility: Rice Quality Requirements
11/18/2020 Rice: 1999 Marketing Assistance Loan and Loan Deficiency Payment Programs

https://web.archive.org/web/20001001194507/http://www.fsa.usda.gov:80/PAS/publications/facts/html/rice.htm 2/4

Rice (Oryza Sativa) must meet the definition for rough rice provided in the

United States Standards for Rice and must have been produced in 1999.

Grains referred to as wild rice are ineligible.

Aromatic rice (such as Jasmine varieties) must be pledged under a loan

agreement separate from non-aromatic rice. Aromatic rice delivered to

CCC must be delivered to CCC-approved storage that is able to store

such rice. Producers shall not receive any credit for expenses incurred in

the delivery of aromatic rice to storage.

Loan Rate

The national average loan rate for the 1999-2002 crops of rice is $6.50 per

hundredweight (cwt). To achieve this national average rate and provide

rate adjustments for different classes and qualities of rice, separate loan

rates are provided for whole and broken milled rice kernels. For 1999-crop

rice, the whole kernel loan rates per pound are 10.66 cents for long grain

and 9.66 cents for medium and short grain. The broken kernel rate is 5.33

cents per pound. Additionally, discounts apply to rice that is U.S. Grade

#3 or lower.

Farm And Warehouse Stored Loan Rates

Loan rates for farm-stored rice (or rice for which the grade and milling

yield are not determined) are based on state average grade and milling

qualities for the prior three years. The farm-stored marketing assistance

loan rates for 1999-crop rice are:

Arkansas

California

Louisiana

Mississippi

Missouri

Texas

Other (USA Avg)

Long

 Grain 

($/cwt)

6.68

6.43

6.58

6.60

6.69

6.87

6.67

Medium

 Grain 

($/cwt)

6.30

6.07

6.10

6.12

6.12

6.15

6.12

Short

 

Grain 

($/cwt)

6.04

6.04

6.04

6.04

6.04

6.04

6.04

Loan rates for warehouse-stored rice are based on class, quality, and

milling yield determinations obtained from grading and milling a sample

of the individual lot of rice. The milling quality of rice is the quantity of

milled whole and milled broken kernels produced when rough rice is well

milled. Milling quality is determined by milling a sample of the rice. The

following example assumes that the milling of 1 cwt of long grain rice

yields 55 pounds of whole kernels, 15 pounds of broken kernels, and 30

pounds of hulls and bran (for which no loan value is provided). The loan

value for long grain rough rice of this milling quality would be calculated

as follows:

55 lbs whole x 10.66 cents/lb = $5.86

15 lbs broken x 5.33 cents/lb = 0.80

Loan value per cwt rough rice $6.66
11/18/2020 Rice: 1999 Marketing Assistance Loan and Loan Deficiency Payment Programs

https://web.archive.org/web/20001001194507/http://www.fsa.usda.gov:80/PAS/publications/facts/html/rice.htm 3/4

Applicable discounts may be applied to this rate for grade or smut. Costs

associated with storing rice while under loan are the responsibility of the

producer.

Discounts for Grade and Smut

Loan rates are subject to discounts for grade and smut content. Rice

must be U.S. Grade #5 or better for loan eligibility. Discounts for grade

(per cwt of rough rice) are 30 cents for Grade #3, 60 cents for Grade #4,

and $1.00 for Grade #5. If upon delivery to CCC, the rice is found to be

lower than Grade #5, the rice is discounted $2.00 for Grade #6 and $5.50

for sample grade. Sample grade rice may be subject to additional

discounts.

Smutty rice contains over 3.0 percent smut and is ineligible for loan.

Discounts (per cwt of rough rice) for smut content are 5 cents for 0.1 to

1.0 percent smut; 10 cents for 1.1 to 2.0 percent smut; and 15 cents for 2.1

to 3.0 percent smut.

Availability Period and Maturity

Loans and LDPs are available upon harvest of the rice through May 31 of

the following year. Loans mature on demand, but not later than the last

day of the 9th calendar month after the month in which the loan was

disbursed. Loans may be repaid at any time before the loan maturity date.

Loan Repayment And Settlement

A marketing assistance loan can be (1) repaid at the lower of the loan rate

plus accumulated interest or the adjusted world price of rice, or (2) settled

in full upon maturity by delivery to CCC of the rice provided as collateral

for the loan.

Announcement of World Price and LDP Rates

The world price of rice is announced every Tuesday at 3 p.m. Eastern

Standard Time, along with applicable marketing loan gains and LDP rates.

If the Tuesday is a Federal holiday or not a Government workday, the

announcements are made on the next workday. Announced world prices

and rates are applicable until the next announcement. Producers can

obtain these prices and rates from their local Farm Service Agency office.

The prices, as well as other agency news releases and media advisories,

are available on the World Wide Web at the Farm Service Agency home

page: http://www.fsa.usda.gov

If the world price is below the loan rate when the loan is repaid, the

producer is allowed to retain the difference between the loan rate and the

world price. This retained amount is referred to as the marketing loan

gain. Marketing loan gains and LDP rates are calculated and announced

separately for long, medium, and short grain rice based on national

average qualities of rice and are not adjusted for individual loans. Gains

and LDP rates are announced weekly along with the world price levels.
11/18/2020 Rice: 1999 Marketing Assistance Loan and Loan Deficiency Payment Programs

https://web.archive.org/web/20001001194507/http://www.fsa.usda.gov:80/PAS/publications/facts/html/rice.htm 4/4

Loan repayments at a rate less than the loan rate plus accumulated

interest are not accepted during the 1-hour period preceding the

announcement unless the repayment rate has been locked in using a CCC

681-1. (Loans repaid at the original loan rate plus interest are not subject

to this restriction.) Also, loans repaid under the marketing loan provision

require submission of acceptable production evidence.

World price levels are calculated based on the prices of milled rice in

major world markets and U.S. costs of exporting milled rice.

Interest Rate

The interest rate charged on loans is based on the rate charged by the

U.S. Treasury to CCC plus 1 percentage point. Any loans outstanding as

of December 31 will be subject to the January interest rate from January 1

until the loan is repaid.

LDPs for Rice Sold Upon Harvest

LDP provisions are active when the repayment rate at a given location is

less than the base loan rate at the same location.

Producers may receive LDPs for rice delivered directly from the field to a

processor, buyer, warehouse, or cooperative and receive the LDP rate

effective on the date of delivery. Request for such payments must be

made on or before the date of harvest. Rice quantities included under

such requests are not eligible for price support loans, even if the LDP rate

on the date of delivery is zero.

Limitation of Loan Gains and LDPs

Gains from repayment of one or more loans at a rate lower than the

original loan rate and from LDPs may not exceed $75,000 per person for

all marketing assistance loan commodities.

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color,

national origin, gender, religion, age, disability, political beliefs, sexual orientation, and marital or family status. (Not all prohibited

bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information

(braille, large print, audiotape, etc.) should contact USDA’s TARGET Center at 202-720-2600 (voice and TDD).

To file a complaint of discrimination, write USDA, Director, Office of Civil Rights, Room 326-W, Whitten Building, 1400

Independence Avenue, SW, Washington, D.C., 20250-9410, or call (202) 720-5964 (voice or TDD).

USDA is an equal opportunity provider and employer.

AG00169_.GI

(5375 bytes)

Download Print Version PDF (76k)

[ Return to Fact Sheet Index | FSA Home Page | Comments | USDA Home Page ]