
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 7USC1308a]

 
                          TITLE 7--AGRICULTURE
 
             CHAPTER 35--AGRICULTURAL ADJUSTMENT ACT OF 1938
 
 SUBCHAPTER II--LOANS, PARITY PAYMENTS, CONSUMER SAFEGUARDS, MARKETING 
                   QUOTAS, AND MARKETING CERTIFICATES
 
  Part A--Definitions, Loans, Parity Payments, and Consumer Safeguards
 
Sec. 1308a. Cost reduction options


(a) Authority of Secretary to take action

    Notwithstanding any other provision of law, whenever the Secretary 
of Agriculture determines that an action authorized under subsection 
(c), (d), or (e) of this section will reduce the total of the direct and 
indirect costs to the Federal Government of a commodity program 
administered by the Secretary without adversely affecting income to 
small- and medium-sized producers participating in such program, the 
Secretary shall take such action with respect to the commodity program 
involved.

(b) Reservation of Secretary's right to reopen or change contracts if 
        producer agrees

    In the announcement of the specific provisions of any commodity 
program administered by the Secretary of Agriculture, the Secretary 
shall include a statement setting forth which, if any, of the actions 
are to be initially included in the program, and a statement that the 
Secretary reserves the right to initiate at a later date any action not 
previously included but authorized by this section, including the right 
to reopen and change a contract entered into by a producer under the 
program if the producer voluntarily agrees to the change.

(c) Purchase from other sources of commodities covered by nonrecourse 
        loans

    When a nonrecourse loan program is in effect for a crop of a 
commodity, the Secretary may enter the commercial market to purchase 
such commodity if the Secretary determines that the cost of such 
purchases plus appropriate carrying charges will probably be less than 
the comparable cost of later acquiring the commodity through defaults on 
nonrecourse loans under the program.

(d) Reduction in settlement price of nonrecourse loans

    When the domestic market price of a commodity for which a 
nonrecourse loan program (including the program authorized by section 
1445e of this title) is in effect is insufficient to cover the principal 
and accumulated interest on a loan made under such program, thereby 
encouraging default by a producer, the Secretary may provide for 
settlement of such loan and redemption by the producer of the commodity 
securing such loan for less than the total of the principal and all 
interest accumulated thereon if the Secretary determines that such 
reduction in the settlement price will yield benefits to the Federal 
Government due to--
        (1) receipt by the Federal Government of a portion rather than 
    none of the accumulated interest;
        (2) avoidance of default; or
        (3) elimination of storage, handling, and carrying charges on 
    the forfeited commodity.

(e) Reopening of production control or loan programs to allow for 
        payment in kind

    When a production control or loan program is in effect for a crop of 
a major agricultural commodity, the Secretary may at any time prior to 
harvest reopen the program to participating producers for the purpose of 
accepting bids from producers for the conversion of acreage planted to 
such crop to diverted acres in return for payment in kind from Commodity 
Credit Corporation surplus stocks of the commodity to which the acreage 
was planted, if the Secretary determines that (1) changes in domestic or 
world supply or demand conditions have substantially changed after 
announcement of the program for that crop, and (2) without action to 
further adjust production, the Federal Government and producers will be 
faced with a burdensome and costly surplus. Such payments in kind shall 
not be included within the payment limitation of $50,000 per person 
established under section 1308 of this title, but shall be limited to a 
total $20,000 per year per producer for any one commodity.

(f) Other authorities of Secretary not affected

    The authority provided in this section shall be in addition to, and 
not in place of, any authority granted to the Secretary under any other 
provision of law.

(Pub. L. 99-198, title X, Sec. 1009, Dec. 23, 1985, 99 Stat. 1453; Pub. 
L. 101-134, Sec. 3, Oct. 30, 1989, 103 Stat. 781.)

                          Codification

    Section was enacted as part of the Food Security Act of 1985, and 
not as part of the Agricultural Adjustment Act of 1938 which comprises 
this chapter.


                               Amendments

    1989--Subsec. (d). Pub. L. 101-134, in introductory provisions, 
inserted ``(including the program authorized by section 1445e of this 
title)'' after ``nonrecourse loan program'' and substituted ``benefits'' 
for ``savings'' and struck out concluding provisions which read as 
follows: ``but the Secretary may not reduce the settlement price to less 
than the principal due on the loan''.
