USDA's Commodity Credit Corporation (CCC) today announced interest rates for May 2013. The CCC borrowing rate-based charge for May 2013 is 0.125%, unchanged from April. For 1996 and subsequent crop year commodity and marketing assistance loans, the interest rate for loans disbursed during May 2013 is 1.125%, unchanged from last month. Interest rates for Farm Storage Facility Loans approved for May 2013 are as follows:
- 1.250% with seven-year loan terms, down from 1.375% in April
- 1.875% with 10-year loan terms, down from 2.000% in April
- 2.125% with 12-year loan terms, down from 2.250% in April
The interest rate for Sugar Storage Facility Loans for May 2013 is 2.375%, down from 2.500% last month. The maximum discount rate applicable for May 2013 for the Tobacco Transition Payment Program is 5%, unchanged from April 2013. This is based on the 3.250% 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.