NEWS
Farm Service Agency
Public Affairs Staff
1400 Independence Ave SW
Stop 0506, Room 3624-South
Washington, D.C. 20250-0506

CORRECTION
                                         Release No. 1606.03

                              Jillene Johnson (202) 720-9733
                                jillene_johnson@wdc.usda.gov

          USDA ANNOUNCES COMMODITY CREDIT CORPORATION
                  LENDING RATES FOR JULY 2003

      WASHINGTON, July 1, 2003 -- The interest rate for
1995 and prior crop year commodity loans disbursed by
USDA's Commodity Credit Corporation (CCC) during July 2003
is 1 percent, down from 1.25 percent in June 2003.  For
1996 and subsequent crop year commodity and marketing
assistance loans, the interest rate for loans disbursed
during July 2003 is 2 percent, down from 2.25 percent in
June 2003.  The interest rate for farm storage facility
loans approved in July 2003 is 2.875, down from 3.25
percent in June 2003.  The interest rate for sugar storage
facility loans is 3.875 per annum, down from 4.375 in June
2003.

      Past monthly releases announcing interest rates
charged by CCC on commodity and marketing assistance loans
disbursed for that particular month reflected the interest
rate charged the CCC by the U.S. Treasury for that month. 
This was the interest rate specified by the 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
Apr. 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 the CCC for borrowing for
the month.

      The provisions of Section 163 of the Act are not
retroactive.  Accordingly, this and subsequent monthly
interest rate announcements will carry two sets of rates:
one for 1995 and prior crop year commodity loans and one
for 1996 and subsequent crop year commodity and marketing
assistance loans.

      Further program information is available from Sally
Nunn at (703) 305-1386, e-mail
sally_nunn@wdc.usda.gov

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