SUBCHAPTER VIII—MISCELLANEOUS COMMODITY PROVISIONS
§7331. Options pilot program
(a) Pilot programs authorized
Until December 31, 2002, the Secretary of Agriculture may conduct a pilot program for 1 or more agricultural commodities supported under this chapter to ascertain whether futures and options contracts can provide producers with reasonable protection from the financial risks of fluctuations in price, yield, and income inherent in the production and marketing of the commodities. The pilot program shall be an alternative to other related programs of the Department of Agriculture.
(b) Distribution of pilot program
For each agricultural commodity included in the pilot program, the Secretary may operate the pilot program in not more than 300 counties, except that not more than 25 of the counties may be located in any 1 State. The pilot program for a commodity shall not be operated in any county for more than 3 of the 1996 through 2002 calendar years.
(c) Eligible participants
In operating the pilot program, the Secretary may enter into contract with a producer who—
(1) is eligible for a production flexibility contract, a marketing assistance loan, or other assistance under this chapter;
(2) volunteers to participate in the pilot program during any calendar year in which a county in which the farm of the producer is located is included in the pilot program;
(3) operates a farm located in a county selected for the pilot program; and
(4) meets such other eligibility requirements as the Secretary may establish.
(d) Notice to producers
The Secretary shall provide notice to each producer participating in the pilot program that—
(1) the participation of the producer is voluntary; and
(2) neither the United States, the Commodity Credit Corporation, the Federal Crop Insurance Corporation, the Department of Agriculture, nor any other Federal agency is authorized to guarantee that participants in the pilot program will be better or worse off financially as a result of participation in the pilot program than the producer would have been if the producer had not participated in the pilot program.
(e) Contracts
The Secretary shall set forth in each contract under the pilot program the terms and conditions for participation in the pilot program and the notice required by subsection (d).
(f) Eligible markets
Trades for futures and options contracts under the pilot program shall be carried out on commodity futures and options markets designated as contract markets under the Commodity Exchange Act (
(g) Recordkeeping
A producer participating in the pilot program shall compile, maintain, and submit (or authorize the compilation, maintenance, and submission) of such documentation as the regulations governing the pilot program require.
(h) Use of Commodity Credit Corporation
The Secretary shall fund and operate the pilot program through the Commodity Credit Corporation, except that the amount of Commodity Credit Corporation funds used to carry out this section shall not exceed, to the maximum extent practicable, $9,000,000 for fiscal year 2001, $15,000,000 for fiscal year 2002, and $2,000,000 for fiscal year 2003. To the maximum extent practicable, the Secretary shall operate the pilot program in a budget neutral manner.
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Editorial Notes
References in Text
For definition of "this chapter", referred to in subsecs. (a) and (c)(1), see note set out under
The Commodity Exchange Act, referred to in subsec. (f), is act Sept. 21, 1922, ch. 369,
Codification
Section is comprised of section 191 of
Amendments
2000—Subsec. (b).
Subsec. (c)(2).
Subsec. (h).
Statutory Notes and Related Subsidiaries
Effective Date of 2000 Amendment
Amendment by
§7332. Risk management education
In consultation with the Commodity Futures Trading Commission, the Secretary shall provide such education in management of the financial risks inherent in the production and marketing of agricultural commodities as the Secretary considers appropriate. As part of such educational activities, the Secretary may develop and implement programs to facilitate the participation of agricultural producers in commodity futures trading programs, forward contracting options, and insurance protection programs by assisting and training producers in the usage of such programs. In implementing this authority, the Secretary may use existing research and extension authorities and resources of the Department of Agriculture.
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§7333. Administration and operation of noninsured crop assistance program
(a) Operation and administration of program
(1) In general
(A) Coverages
In the case of an eligible crop described in paragraph (2), the Secretary of Agriculture shall operate a noninsured crop disaster assistance program to provide coverages based on individual yields (other than for value-loss crops) equivalent to—
(i) catastrophic risk protection available under section 508(b) of the Federal Crop Insurance Act (
(ii) except in the case of crops and grasses used for grazing, additional coverage available under subsections (c) and (h) of section 508 of that Act (
(B) Administration
The Secretary shall carry out this section through the Farm Service Agency (referred to in this section as the "Agency").
(C) Data collection and sharing
The Secretary shall coordinate with the Administrator of the Risk Management Agency on the type and format of data received under the noninsured crop disaster assistance program that—
(i) best facilitates the use of that data in developing policies or plans of insurance offered under the Federal Crop Insurance Act (
(ii) ensures the availability of that data on a regular basis.
(D) Coordination
The Secretary shall coordinate between the agencies of the Department that provide programs or services to farmers and ranchers that are potentially eligible for the noninsured crop disaster assistance program under this section—
(i) to make available coverage under—
(I) the fee waiver under subsection (k)(2); or
(II) the premium discount under subsection (l)(3); and
(ii) to share eligibility information to reduce paperwork and avoid duplication.
(2) Eligible crops
(A) In general
Subject to subparagraph (B), in this section, the term "eligible crop" means each commercial crop or other agricultural commodity that is produced for food or fiber (except livestock) for which catastrophic risk protection under subsection (b) of section 508 of the Federal Crop Insurance Act (
(B) Crops specifically included
The term "eligible crop" shall include floricultural, ornamental nursery, and Christmas tree crops, turfgrass sod, seed crops, aquaculture (including ornamental fish), sea grass and sea oats, camelina, sweet sorghum, biomass sorghum, and industrial crops (including those grown expressly for the purpose of producing a feedstock for renewable biofuel, renewable electricity, or biobased products).
(C) Combination of similar types or varieties
At the option of the Secretary, all types or varieties of a crop or commodity, described in subparagraphs (A) and (B), may be considered to be a single eligible crop under this section.
(3) Cause of loss
To qualify for assistance under this section, the losses of the noninsured commodity shall be due to drought, flood, or other natural disaster, as determined by the Secretary.
(4) Program reduction in benefits relating to crop production on native sod
(A) Definition of native sod
In this paragraph, the term "native sod" means land—
(i) on which the plant cover is composed principally of native grasses, grasslike plants, forbs, or shrubs suitable for grazing and browsing; and
(ii) that has never been tilled, or the producer cannot substantiate that the ground has ever been tilled, for the production of an annual crop as of the date of enactment of this paragraph.
(B) Reduction in benefits
(i) In general
(I) Agricultural Act of 2014
During the first 4 crop years of planting, as determined by the Secretary, native sod acreage that has been tilled for the production of an annual crop during the period beginning on February 8, 2014, and ending on December 20, 2018, shall be subject to a reduction in benefits under this section as described in this subparagraph.
(II) Subsequent years
Native sod acreage that has been tilled for the production of an eligible crop after December 20, 2018, shall be subject to a reduction in benefits under this section as described in this subparagraph for not more than any 4 crop years—
(aa) during the first 10 crop years after the initial tillage; and
(bb) during which a crop on that acreage is enrolled under subsection (l)(2) or (k).
(ii) De minimis acreage exemption
The Secretary shall exempt areas of 5 acres or less from clause (i).
(iii) Reduction
For purposes of the reduction in benefits for the acreage described in clause (i)—
(I) the approved yield shall be determined by using a yield equal to 65 percent of the county expected yield; and
(II) the service fees or premiums for crops planted on native sod shall be equal to 200 percent of the amount determined in subsections 1 (l)(2) or (k), as applicable, but in no case shall exceed the amount determined in subsection (l)(2)(B)(ii).
(C) Application
This paragraph shall only apply to native sod acreage in the States of Minnesota, Iowa, North Dakota, South Dakota, Montana, and Nebraska.
(b) Application for noninsured crop disaster assistance
(1) Timely application
To be eligible for assistance under this section, a producer shall submit an application for noninsured crop disaster assistance at a local office of the Department. The application shall be in such form, contain such information, and be submitted by an appropriate deadline before the beginning of the coverage period, as determined by the Secretary.
(2) Records
To be eligible for assistance under this section, a producer shall provide annually to the Secretary records of crop acreage, acreage yields, and production for each crop, as required by the Secretary.
(3) Acreage reports
A producer shall provide annual reports on acreage planted or prevented from being planted, as required by the Secretary, by the designated acreage reporting date for the crop and location as established by the Secretary.
(4) Streamlined submission process
The Secretary shall establish a streamlined process for the submission of records and acreage reports under paragraphs (2) and (3) for diverse production systems such as those typical of urban production systems, other small-scale production systems, and direct-to-consumer production systems.
(c) Loss requirements
(1) Cause
To be eligible for assistance under this section, a producer of an eligible crop shall have suffered a loss of a noninsured commodity as the result of a cause described in subsection (a)(3).
(2) Assistance
(A) In general
On making a determination described in subsection (a)(3), the Secretary shall provide assistance under this section to producers of an eligible crop that have suffered a loss as a result of the cause described in subsection (a)(3).
(B) Aquaculture producers
On making a determination described in subsection (a)(3) for aquaculture producers, the Secretary shall provide assistance under this section to aquaculture producers from all losses related to drought.
(3) Prevented planting
Subject to paragraph (1), the Secretary shall make a prevented planting noninsured crop disaster assistance payment if the producer is prevented from planting more than 35 percent of the acreage intended for the eligible crop because of drought, flood, or other natural disaster, as determined by the Secretary.
(4) Area trigger
The Secretary shall provide assistance to individual producers without any requirement of an area loss.
(d) Payment
The Secretary shall make available to a producer eligible for noninsured assistance under this section a payment computed by multiplying—
(1) the producer's share of the total acres devoted to the eligible crop; by
(2) the quantity that is less than 50 percent of the approved yield for the crop, as determined by the Secretary; by
(3)(A) in the case of each of the 1996 through 1998 crop years, 60 percent of the average market price for the crop (or any comparable coverage determined by the Secretary); or
(B) in the case of each of the 1999 and subsequent crop years, 55 percent of the average market price for the crop (or any comparable coverage determined by the Secretary); by
(4) a payment rate for the type of crop (as determined by the Secretary) that—
(A) in the case of a crop that is produced with a significant and variable harvesting expense, reflects the decreasing cost incurred in the production cycle for the crop that is—
(i) harvested;
(ii) planted but not harvested; and
(iii) prevented from being planted because of drought, flood, or other natural disaster (as determined by the Secretary); and
(B) in the case of a crop that is not produced with a significant and variable harvesting expense, as determined by the Secretary.
(e) Yield determinations
(1) Establishment
The Secretary shall establish approved yields for purposes of providing noninsured crop disaster assistance under this section.
(2) Actual production history
(A) In general
The Secretary shall determine an approved yield using the actual production history of the producer over a period of not less than the 4 previous consecutive crop years and not more than 10 consecutive crop years.
(B) Calculation
Subject to paragraph (3), the approved yield for the year in which noninsured crop disaster assistance is sought shall be equal to the average of the actual production history of the producer during the period considered.
(3) Assignment of yield
If a producer does not submit adequate documentation of production history to determine a crop yield under paragraph (2), the Secretary shall assign to the producer a yield equal to not less than 65 percent of the county expected yield (adjusted to reflect actual production reflected in the records acceptable to the Secretary for continuous years), as specified in regulations issued by the Secretary based on production history requirements.
(4) Prohibition on assigned yields in certain counties
(A) In general
(i) Documentation
If sufficient data are available to demonstrate that the acreage of a crop in a county for the crop year has increased by more than 100 percent over any year in the preceding 7 crop years or, if data are not available, if the acreage of the crop in the county has increased significantly from the previous crop years, a producer must provide such detailed documentation of production costs, acres planted, and yield for the crop year for which benefits are being claimed as is required by the Secretary. If the Secretary determines that the documentation provided is not sufficient, the Secretary may require documenting proof that the crop, had the crop been harvested, could have been marketed at a reasonable price.
(ii) Prohibition
Except as provided in subparagraph (B), a producer who produces a crop on a farm located in a county described in clause (i) may not obtain an assigned yield.
(B) Exception
A crop or a producer shall not be subject to this subsection if—
(i) the planted acreage of the producer for the crop has been inspected by a third party acceptable to the Secretary; or
(ii)(I) the County Executive Director and the State Executive Director recommend an exemption from the requirement to the Administrator of the Agency; and
(II) the Administrator approves the recommendation.
(5) Limitation on receipt of subsequent assigned yield
A producer who receives an assigned yield for the current year of a natural disaster because required production records were not submitted to the local office of the Department shall not be eligible for an assigned yield for the year of the next natural disaster unless the required production records of the previous 1 or more years (as applicable) are provided to the local office.
(6) Yield variations due to different farming practices
The Secretary shall ensure that noninsured crop disaster assistance accurately reflects significant yield variations due to different farming practices, such as between irrigated and nonirrigated acreage.
(f) Contract payments
A producer who has received a guaranteed payment for production, as opposed to delivery, of a crop pursuant to a contract shall have the production of the producer adjusted upward by the amount of the production equal to the amount of the contract payment received.
(g) Use of Commodity Credit Corporation
The Secretary may use the funds of the Commodity Credit Corporation to carry out this section.
(h) Exclusions
Noninsured crop disaster assistance under this section shall not cover losses due to—
(1) the neglect or malfeasance of the producer;
(2) the failure of the producer to reseed to the same crop in those areas and under such circumstances where it is customary to reseed; or
(3) the failure of the producer to follow good farming practices, as determined by the Secretary.
(i) Payment and income limitations
(1) Definitions
In this subsection, the terms "legal entity" and "person" have the meanings given those terms in
(2) Payment limitation
The total amount of payments received, directly or indirectly, by a person or legal entity (excluding a joint venture or general partnership) for any crop year may not exceed—
(A) in the case of catastrophic coverage under subsection (c), $125,000; and
(B) in the case of additional coverage under subsection (l), $300,000.
(3) Limitation on multiple benefits for same loss
(A) In general
Except as provided in subparagraph (B), if a producer who is eligible to receive benefits under this section is also eligible to receive assistance for the same loss under any other program administered by the Secretary, the producer shall be required to elect whether to receive benefits under this section or under the other program, but not both.
(B) Exception
Subparagraph (A) shall not apply to emergency loans under subtitle C of the Consolidated Farm and Rural Development Act (
(4) Adjusted gross income limitation
A person or legal entity that has an average adjusted gross income in excess of the average adjusted gross income limitation applicable under section 1308–3a(b)(1)(A) 2 of this title, or a successor provision, shall not be eligible to receive noninsured crop disaster assistance under this section.
(5) Regulations
The Secretary shall issue regulations prescribing such rules as the Secretary determines necessary—
(A) to ensure a fair and equitable application of
(B) to ensure that payments under this section are attributed to a person or legal entity (excluding a joint venture or general partnership) in accordance with the terms and conditions of
(j) Omitted
(k) Service fee
(1) In general
To be eligible to receive assistance for an eligible crop for a crop year under this section, a producer shall pay to the Secretary (at the time at which the producer submits the application under subsection (b)(1)) a service fee for the eligible crop in an amount that is equal to the lesser of—
(A) $325 per crop per county; or
(B) $825 per producer per county, but not to exceed a total of $1,950 per producer.
(2) Waiver
The Secretary shall waive the service fee required under paragraph (1) in the case of a limited resource, beginning, or socially disadvantaged farmer, as defined by the Secretary, or a veteran farmer or rancher (as defined in
(3) Use
The Secretary shall deposit service fees collected under this subsection in the Commodity Credit Corporation Fund.
(l) Payment equivalent to additional coverage
(1) In general
The Secretary shall make available noninsured assistance under this subsection (other than for crops and grasses used for grazing) at a payment amount that is equivalent to an indemnity for additional coverage under subsections (c) and (h) of section 508 of the Federal Crop Insurance Act (
(A) the producer's share of the total acres devoted to the crop;
(B) the amount that—
(i) the additional coverage yield, which shall be equal to the product obtained by multiplying—
(I) an amount not less than 50 percent nor more than 65 percent, as elected by the producer and specified in 5-percent increments; and
(II) the approved yield for the crop, as determined by the Secretary; exceeds
(ii) the actual yield;
(C) 100 percent of the average market price, contract price, or other premium price (such as a local, organic, or direct market price, as elected by the producer) for the crop, as determined by the Secretary; and
(D) a payment rate for the type of crop, as determined by the Secretary, that reflects—
(i) in the case of a crop that is produced with a significant and variable harvesting expense, the decreasing cost incurred in the production cycle for the crop that is, as applicable—
(I) harvested;
(II) planted but not harvested; or
(III) prevented from being planted because of drought, flood, or other natural disaster, as determined by the Secretary; or
(ii) in the case of a crop that is produced without a significant and variable harvesting expense, such rate as shall be determined by the Secretary.
(2) Service fee and premium
To be eligible to receive a payment under this subsection, a producer shall pay—
(A) the service fee required by subsection (k); and
(B) the lesser of—
(i) the sum of the premiums for each eligible crop, with the premium for each eligible crop obtained by multiplying—
(I) the number of acres devoted to the eligible crop;
(II) the yield, as determined by the Secretary under subsection (e);
(III) the coverage level elected by the producer;
(IV) the average market price, as determined by the Secretary;
(V) a 5.25-percent premium fee; and
(VI) the producer's share of the crop; or
(ii) the product obtained by multiplying—
(I) a 5.25-percent premium fee; and
(II) the applicable payment limit.
(3) Limited resource, beginning, veteran, and socially disadvantaged farmers
The coverage made available under this subsection shall be available to limited resource, beginning, and socially disadvantaged farmers, as determined by the Secretary, and veteran farmers or ranchers (as defined in
(
Editorial Notes
References in Text
The Federal Crop Insurance Act, referred to in subsec. (a)(1)(C)(i), is subtitle A of title V of act Feb. 16, 1938, ch. 30,
The date of enactment of this paragraph, referred to in subsec. (a)(4)(A)(ii), is the date of enactment of
The Consolidated Farm and Rural Development Act, referred to in subsec. (i)(3)(B), is title III of
Codification
Section is comprised of section 196 of
Amendments
2018—Subsec. (a)(1)(C), (D).
Subsec. (a)(2)(A).
"(i) for which catastrophic risk protection under section 508(b) of the Federal Crop Insurance Act (
"(ii) for which additional coverage under subsections (c) and (h) of section 508 of that Act (
"(iii) that is produced for food or fiber."
Subsec. (a)(4)(B)(i).
Subsec. (a)(4)(B)(iii)(I).
Subsec. (b)(1).
Subsec. (b)(4).
Subsec. (d)(1).
Subsec. (d)(2).
Subsec. (d)(3), (4).
Subsec. (e)(1).
Subsec. (e)(2).
Subsec. (e)(3).
Subsec. (i)(2).
Subsec. (k)(1)(A).
Subsec. (k)(1)(B).
Subsec. (k)(2).
Subsec. (l)(1).
Subsec. (l)(2)(B)(i)(VI).
Subsec. (l)(3).
Subsec. (l)(4).
Subsec. (l)(5).
2014—Subsec. (a)(1).
Subsec. (a)(2)(A)(ii), (iii).
Subsec. (a)(2)(B).
Subsec. (a)(4).
Subsec. (a)(4)(A)(ii).
Subsec. (a)(4)(B).
Subsec. (a)(4)(B)(i).
"(I) this section; and
"(II) the Federal Crop Insurance Act (
Subsec. (a)(4)(B)(iii).
Subsec. (a)(4)(C).
Subsec. (i)(2).
Subsec. (k)(2).
Subsec. (l).
2008—Subsec. (a)(2)(B).
Subsec. (a)(4).
Subsec. (c)(2).
Subsec. (i)(1), (2).
Subsec. (i)(4).
Subsec. (i)(5).
Subsec. (k)(1).
2002—Subsec. (a)(2)(B).
2000—Subsec. (a)(2)(C).
Subsec. (b)(1).
Subsec. (b)(2).
Subsec. (b)(3).
Subsec. (c).
Subsec. (k).
1998–Subsec. (i)(3).
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date of 2000 Amendment
Amendment by
Consideration of Losses in Fiscal Year 2014 and Subsequent Fiscal Years
For losses under section 1501 of
Transition Provisions
[
Section as in effect on day before June 20, 2000, to continue to apply with respect to 1999 crop year, and to apply with respect to 2000 crop year, to extent application of an amendment by
1 So in original. Probably should be "subsection".
2 See References in Text note below.
§7334. Repealed. Pub. L. 115–334, title II, §2814, Dec. 20, 2018, 132 Stat. 4602
Section,