FACT SHEET

UNITED STATES DEPARTMENT OF AGRICULTURE

FARM SERVICE AGENCY

Page 1

March 2013

Rice Nonrecourse Marketing Assistance Loans & Loan Deficiency Payments

Overview

The Food, Conservation, and 

Energy Act of 2008 (2008 Act) 

authorizes nonrecourse marketing assistance loans (MALs) and 

loan deficiency payments (LDPs) 

for the 2008 through 2012 crops 

of rice. The American Taxpayer 

Relief Act of 2012 extends the 

MAL and LDP provisions to the 

2013 crop year.

Nonrecourse MALs and LDPs are 

administered by the Farm Service 

Agency (FSA) on behalf of

the Commodity Credit Corporation (CCC). See the fact sheet 

“Nonrecourse Marketing Assistance Loans/Loan Deficiency Payments” for additional information 

about MALs and LDPs.

Rice Nonrecourse Marketing Assistance Loans

Rice nonrecourse MALs provide 

eligible producers with interim 

financing on their production. Instead 

of selling the crop immediately at 

harvest, producers may pledge their 

production as loan collateral, receiving loan proceeds equal to the loan 

rate times the quantity placed under 

loan. 

Under marketing loan provisions, 

rice producers may repay a MAL 

at the lower of the loan rate plus accrued interest or the adjusted world 

price (AWP). If the AWP is lower 

than the loan rate, the amount by 

which the loan rate exceeds the AWP 

is the marketing loan gain (MLG) 

rate. 

Producers also are eligible for a loan 

deficiency payment (LDP) in lieu of 

obtaining a MAL. The LDP rate is 

the amount by which the loan rate 

exceeds the AWP — the same as the 

MLG rate.

Eligibility: Rice Quality Requirements

Rice (Oryza Sativa L.) must meet the 

definition for rough rice provided in 

the U.S. Standards for Rice, including rice of special grade designations. 

Grains referred to as wild rice (Zizania aquatic L.) are ineligible. 

Aromatic rice (such as Jasmine 

varieties) must be pledged under 

a loan agreement separate from 

non-aromatic rice and stored 

separately from non-aromatic rice. 

When aromatic rice is delivered to 

USDA’s CCC, it must be delivered 

to a CCC-approved facility able and 

willing to store such rice on an identity preserved basis, (i.e. aromatic 

rice may not be commingled with 

non-aromatic 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 

2009 through 2013 crops of long 

grain and medium/short grain rough 

rice is $6.50 per hundredweight 

(cwt). To achieve the national average rate and provide rate adjustments 

for different classes and milling 

qualities, separate loan rates are provided for whole and broken-milled 

rice kernels. For 2013-crop rice, the 

whole kernel loan rate is $10.34 per 

cwt for long grain and $9.72 per cwt 

for medium/short grain. The 2013 

broken kernel loan rate for all classes 

is $5.83 per cwt.

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 milling qualities for 

the prior five years. The farm-stored 

MAL rates for 2013-crop rough rice 

are: 

State Long 

Grain

($/cwt)

Medium/

Short 

Grain

($/cwt)

Arkansas 6.46 6.20

California 6.34 6.59

Louisiana 6.48 6.31

Mississippi6.61 6.50

Missouri 6.35 6.50

Texas 6.82 6.49

National 

Average

6.50 6.50

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 refers 

to the quantity of milled whole 

kernels and milled broken kernels resulting when a rough rice 

sample is well milled. As the share 

of whole kernels increases, the 

milling quality is deemed higher. 

Milled rice loan rates are computed using average milling yields by 

class and the national average loan 

rate of $6.50 per cwt.
FACT SHEET

Rice MALs and LDPs March 2013

2013 Rice Loan Rate Discounts

Warehouse and farm-stored rice 

loan rate discounts will not be 

assessed at loan disbursement. 

Discounts to the loan rate will 

only be assessed when the loan 

is liquidated by forfeiture or 

settled by delivery of the commodity to CCC. 

Loan rate discounts for grades 

lower than U.S. Grade #2 are 

$0.30 for Grade #3; $0.60 for 

Grade #4; $1.00 for Grade #5; 

$2.00 for Grade #6; and $5.50 

for Sample Grade. These discounts apply uniformly across 

all regions. The Grain Inspection, Packers and Stockyards 

Administration determine grade 

definitions. Standards for rough 

rice may be found at http://www.

gipsa.usda.gov/fgis/insp_weigh/

ricestandsvc.html. 

Discounts for smut content (per 

cwt of rough rice) 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. Rice containing more than 

3.0 percent smut is referred to 

as smutty rice. Smutty rice is 

sample grade and considered low 

quality rice for determining loan 

eligibility.

Low quality rice is eligible for 

loan at a rate equal to 20 percent 

of the loan rate. Because smutty 

rice is eligible for a nonrecourse 

loan, LDPs are available to 

producers at the same rate as 

commodities with low quality.

The national average rough rice 

loan rate is used to determine 

farm-stored loan proceeds in 

states other than the six major 

rice-producing states. Grade and 

quality factor discounts apply 

when rice is delivered to CCC. 

Other Loan Eligibility Requirements

Producer must:

• Have beneficial interest in 

the commodity on the date 

the loan or LDP is requested 

and, in the case of a loan, retain beneficial interest while 

the loan is outstanding and; 

• Ensure the grain meets CCC 

minimum grade and quality 

standards.

Loan Settlements

Loans mature on the last day of 

the ninth calendar month following the month in which the loan 

is approved. 

Producers may settle their outstanding nonrecourse loan:

• During the nine-month loan 

period by repaying the loan 

or;

• Upon maturity by forfeiting 

or settled by delivering the 

commodity to CCC.

Adjustments will be made, if 

applicable. 

Loan Repayment Rates

The loan repayment rate is the 

lower of (1) the loan rate plus accrued interest and other charges 

(per cwt) or (2) the AWP. Loan 

repayment rates are established 

for each class on a national basis 

and are available at each USDA 

Service Center based upon the 

price of rice sold in world markets, adjusted to U.S. quality and 

location.

Announcement of AWP and 

MLG/ LDP Rates

USDA determines the rice AWP 

on Tuesdays and announces the 

rice AWP every Wednesday at 7 

a.m. Eastern time, along with the 

applicable MLG and LDP rates. 

If the Tuesday preceding the announcement is a federal holiday 

or is not a government workday, 

the announcement is made on the 

next workday. Announced AWP 

and MLG/LDP rates are applicable until the next announcement. 

Producers can obtain these prices 

and rates from their local USDA 

Service Center or online. 

The rice AWP reflects the value 

of well-milled white rice sold in 

world markets, adjusted to U.S. 

quality and location. The quality and location adjustments are 

described in Title 7 of the Code 

of Federal Regulations (CFR) 

Part 1421, at the following Government Printing Office (GPO) 

internet site:

http://www.ecfr.gov/cgi-bin/textidx?c=ecfr&SID=1bb8eaf9dc8

621c23424fcde6d8468dd&tpl=/

ecfrbrowse/Title07/7cfr1421_

main_02.tpl

If the AWP is below the loan 

rate when the loan is repaid, the 

producer is allowed to retain 

the difference between the loan 

rate and the AWP. This retained 

amount is referred to as the 

MLG. If the producer elects to 

forego a loan on a quantity of 

rice otherwise eligible for loan, 

an LDP may be requested at the 

MLG rate applicable on the date 

of the request for the LDP. MLG 

and LDP rates are calculated and 

announced separately for long, 

and medium/short grain rice 

based on national average quali- Page 2
ties of rice and not adjusted for 

individual loans. 

These program announcements, 

as well as other agency news releases and media advisories, are 

available at the FSA home page 

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

Final Loan/LDP Availability 

Dates

The final rice loan/LDP availability date is May 31 of the 

calendar year after the calendar 

year the grain is harvested.

Production Evidence

Producers repaying a loan at less 

than the loan rate plus accrued 

interest and other charges, or 

receiving an LDP, must provide 

production evidence acceptable 

to CCC, such as evidence of 

sales, warehouse receipts, or load 

summary or assembly sheets. 

Adjusted Gross Income 

Producers or legal entities whose 

average adjusted gross non-farm 

income exceeds $500,000 are 

not eligible for MLGs or LDPs, 

but are eligible for MALs that 

must be repaid at principal plus 

interest.

Average Crop Revenue Election (ACRE)

MAL rate will be reduced by 30 

percent if production comes from 

a farm participating in the ACRE 

program. Alternative loan repayment rates will not be adjusted 

by 30 percent. The LDP rate for 

commodities produced on farms 

enrolled in ACRE must include 

the 30 percent reduction from the 

MAL rate before determining the 

LDP rate. See ACRE Program 

fact sheet.

The U.S. Department of Agriculture (USDA) 

prohibits discrimination against its customers, employees, and applicants for employment on the bases of race, color, national 

origin, age, disability, sex, gender identity, 

religion, reprisal, and where applicable, 

political beliefs, marital status, familial or 

parental status, sexual orientation, or all or 

part of an individual’s income is derived from 

any public assistance program, or protected 

genetic information in employment or in any 

program or activity conducted or funded by 

the Department. (Not all prohibited bases 

will apply to all programs and/or employment 

activities.)

If you wish to file a Civil Rights program 

complaint of discrimination, complete the 

USDA Program Discrimination Complaint 

Form, found online at http://www.ascr.

usda.gov/complaint_filing_cust.html, or at 

any USDA office, or call (866) 632-9992 to 

request the form. You may also write a letter 

containing all of the information requested 

in the form. Send your completed complaint 

form or letter to us by mail at U.S. Department of Agriculture, Director, Office of Adjudication, 1400 Independence Avenue, S.W., 

Washington, D.C. 20250-9410, by fax (202) 

690-7442 or e-mail at program.intake@usda.

gov.

USDA is an equal opportunity provider and 

employer.

FACT SHEET

Rice MALs and LDPs March 2013

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