The CCC currently has a policy of selling forfeited commodities as soon as possible. Marketing loan provisions . However, as implemented, marketing loan provisions were designed to minimize government costs by allowing repayment of commodity loans at less than the original loan rate. This provision decreases the loan program's potential effect of supporting market prices because stock accumulation by the government through loan defaults is reduced. In so doing, marketing loans prevent a costly buildup of publicly owned stocks and allow prices to vary in response to market conditions.
Producers can receive marketing loan benefits in two ways.
In the first, farmers place their crop under the commodity loan program, as described above, by pledging and storing some of their production as collateral for the loan, and receiving a per-unit loan rate for the crop. When market prices are below the loan rate, farmers are allowed to repay the loan at a lower loan repayment rate. Prevailing world market prices for rice and upland cotton are calculated weekly. When a farmer repays the loan at a lower PCP or prevailing world market price, the difference between the loan rate and the loan repayment rate is called a marketing loan gain and represents a program benefit to producers. In addition, any accrued interest on the loan is waived.