NEWS
Farm Service Agency
Public Affairs Staff
1400 Independence Ave SW
Stop 0506, Room 3624-South
Washington, D.C. 20250-0506
Release No. 1457.06
Stevin Westcott (202) 720-4178
USDA ANNOUNCES COMMODITY CREDIT CORPORATION
LENDING RATES FOR JUNE 2006
WASHINGTON, June 1, 2006 -- The interest rate for
1995 and prior crop year commodity loans disbursed by
USDA�s Commodity Credit Corporation (CCC) during June
2006 is 5.000 percent, up from 4.875 percent in May 2006.
For 1996 and subsequent crop year commodity and marketing
assistance loans, the interest rate for loans disbursed
during June 2006 is 6.000 percent, up from 5.875 percent
in May 2006.
The interest rate for farm storage facility loans
approved in June 2006 is 5.000 percent, up from 4.875
percent in May 2006. The interest rate for sugar storage
facility loans for June 2006 is 5.250 percent, up from
5.000 percent in May 2006.
The maximum discount rate applicable for June 2006
for the Tobacco Transition Payment Program is 10.0
percent. This is based on the prime rate of 8 percent
plus 2 percent, rounded to the nearest whole number.
Past monthly releases announcing interest rates
charged by CCC on commodity and marketing assistance
loans disbursed for that particular month reflect the
interest rate the U.S. Treasury charged CCC for that
month. This was the interest rate specified by 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 April 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 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 USDA
Farm Service Agency�s Financial Management Division at
(703) 305-1386.
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NOTE: FSA�s news releases and media advisories are
available online at: www.fsa.usda.gov.
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