USDA Sets July Interest Rate

WASHINGTON - July 1/13 - SNS -- The USDA's Commodity Credit Corporation (CCC) set interest rates for July 2013.

The CCC borrowing rate-based charge for July 2013 is 0.125%, unchanged from 0.125 in June 2013. For 1996 and subsequent crop year commodity and marketing assistance loans, the interest rate for loans disbursed during July 2013 is 1.125%, unchanged from 1.125 in June 2013.

Interest rates for Farm Storage Facility Loans approved for July 2013 are as follows, 1.500% with seven-year loan terms, up from 1.250 in June 2013; 2.125% with 10-year loan terms, up from 1.750 in June 2013 and; 2.375% with 12-year loan terms, up from 2.000% in June 2013. The interest rate for Sugar Storage Facility Loans for July 2013 is 2.625%, up from 2.250 in June 2013.

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% — 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.