§ 1446.309 - Immediate buyback and sale of loan peanuts to the storing handler.

(a) “Immediate buyback” purchase of additional peanuts—(1) Producer consent. Except as provided in this section, if the producer of a lot of additional peanuts has consented to an “immediate buyback” of such peanuts by a handler, as indicated by a designation recorded on the form FSA-1002, the handler that acts for the marketing association in advancing funds to the producer for a price support loan at the additional loan rate on such peanuts may purchase such peanuts from the marketing association for domestic edible use in accordance with instructions from the marketing association and at a price equal to 100 percent of the quota loan value of such peanuts plus a handling charge, as determined by the marketing association and approved by CCC, to cover all costs incurred with respect to such peanuts for inspection, warehousing, shrinkage, and other expenses.

(2) Time for buyback purchase. An “immediate buyback” purchase may be made only in connection with the marketing association involved in the price support loan and only on the date on which the peanuts were delivered by the producer as collateral for a price support loan. Such sales are for the account of CCC.

(3) Handler requirements. For each “immediate buyback,” the handler shall:

(i) Act for the marketing association by making a price support advance to the producer at the additional loan rate and in the same manner that would be applicable if an “immediate buyback” were not involved;

(ii) If applicable, use such handler's funds to pay to the producer any premiums that the parties had agreed upon in order to effect the delivery of such peanuts;

(iii) Pay for the peanuts by a check made payable to CCC. Such check must be from the handler's funds and in an amount equal to the quota loan value of the peanuts plus any handling charges; and

(iv) Transmit the handler's check and the applicable form FSA-1007 to the marketing association by midnight of the third workday (excluding Saturdays, Sundays, and Federal holidays) following the day the peanuts were inspected.

(4) Domestic edible use. The handler's check and the applicable form FSA-1007 will identify the peanuts as additional peanuts that may be used for domestic edible use.

(5) Loan pool credit. Irrespective of the segregation of such peanuts, the receipts from the “immediate buyback” sale will be credited to the additional loan pool for Segregation 1 peanuts and the peanuts will be treated as Segregation 1 peanuts for pool accounting purposes.

(6) Loan pool participation. If Segregation 2 or Segregation 3 peanuts are purchased by a handler under the “immediate buyback” provisions, the producer of such peanuts shall participate in the Segregation 1 additional loan pool in the same manner as would apply if such peanuts had been Segregation 1 peanuts.

(7) Additional restrictions on “immediate buyback” sales. (i) Additional peanuts of the type or Segregation contracted for export or crushing from a farm may not be purchased from such farm under the “immediate buyback” provisions of this section until all of the producer's contracts for additional peanuts for the relevant crop year have been satisfied for the type or Segregation to be used for the buyback, as evidenced by a contract balance of zero for that type or Segregation of peanuts on the farm's marketing card;

(ii) An immediate buyback that otherwise is prohibited by paragraph (a)(7)(i) of this section may be permitted by CCC in the case of any producer on a farm who does not share in the additional peanuts for which there is a contract.

(iii) An agreement between the handler and producer to void a contract that was approved in accordance with this part shall not reduce the balance shown on the producer's marketing card for contract additional peanuts and until such contract is renewed and satisfied the producer's additional peanuts of the same type or Segregation as were covered by that contract shall not be eligible for that crop year for purchase under an “immediate buyback.”

(b) Purchase of quota or additional loan peanuts. Quota loan peanuts, or additional loan peanuts that were not purchased by the handler under the “immediate buyback” provisions, may be bought for domestic edible use in accordance with this paragraph on an in-grade and in-weight basis.

(1) In-grade and in-weight purchases. A handler may purchase loan peanuts, either quota or additional, on an in-grade and in-weight basis for domestic edible use:

(i) Under terms and conditions established by the marketing association and CCC;

(ii) If such peanuts are eligible for domestic edible use; and

(iii) If such peanuts are stored in a warehouse that is operated by such handler.

(2) Pricing. Except with respect to “immediate buybacks,” as provided for in this section, the price for peanuts purchased on an in-grade and in-weight basis shall be determined by the marketing association or CCC, as applicable, for the account of CCC, but shall not be less than the applicable carrying charges plus, with respect to each lot of peanuts purchased:

(i) 105 percent of the quota loan value that was or would be applicable to the quantity of loan peanuts in such lot, if paid for not later than December 31 of the marketing year; or

(ii) 107 percent of the quota loan value that was or would be applicable to the quantity of loan peanuts in such lot, if paid for after December 31 of the marketing year.