USDA Sets Interest Rates on Loans

WASHINGTON - Jun 1/06 - SNS -- Interest rates charged for 1995 and prior crop year commodity loans disbursed by USDA's Commodity Credit Corporation (CCC) during June 2006 is 5.000%, up from 4.875% 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%, up from 5.875% in May 2006.

The interest rate for farm storage facility loans approved in June 2006 is 5.000%, up from 4.875% in May 2006. The interest rate for sugar storage facility loans for June 2006 is 5.250%, up from 5.000% in May 2006.

The maximum discount rate applicable for June 2006 for the Tobacco Transition Payment Program is 10.0%. This is based on the prime rate of 8% plus 2%, 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.