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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available online at: www.fsa.usda.gov.