USDA's Commodity Credit Corporation announced November rates this morning and show no change from October. The borrowing rate-based charge for November 2010 will be 0.250%. Marketing assistance loans will stay at 1.250%.
In accordance with the 2008 Farm Bill, interest rates for Farm Storage Facility loans approved for November 2010 will be 1.875% with 7-year loan terms, dwon from 2.125% in October 2010; 2.5% with 10-year loan terms, down from 2.625% in October; and 2.75% with 12-year loan terms, down from 2.875%. The interest rate for Sugar Storage Facility Loans for November 2010 remains unchanged at 3.125%.
The maximum discount rate applicable for November for the Tobacco Transition Payment Program remains unchanged at 5%. This is based on the 3.25% prime rate 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.
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.
Further program information is available from USDA Farm Service Agency's (FSA) Financial Management Division at (703) 305-1386.