CCC Sets November Interest Rates

WASHINGTON - Nov 1/04 - SNS -- The USDA's Commodity Credit Corporation (CCC) boosted interest rates for 1995 and prior crop year commodity loans it has disbursed.

During November 2004 the rate is 2.250%, up from 2.000% in October 2004. For 1996 and subsequent crop year commodity and marketing assistance loans, the interest rate for loans disbursed during November 2004 is 3.250%, up from 3.000% in October 2004.

The interest rate for farm storage facility loans approved in November 2004 is 3.750%, down from 3.875% in October 2004. The interest rate for sugar storage facility loans for November 2004 is 4.500%, down from 4.625% in October 2004.

Past monthly releases announcing interest rates charged by CCC on commodity and marketing assistance loans disbursed for that particular month reflected 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% -- 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.