E6-10367. Emergency Storage of Grain Collateral for Marketing Assistance Loans

AGENCY:

Commodity Credit Corporation, Farm Service Agency, USDA.

ACTION:

Notice.

SUMMARY:

The Commodity Credit Corporation (CCC) announces, for the 2006 crops of wheat, corn, and other feed grains, the acceptance of collateral for marketing assistance loans, warehouse receipts issued by a warehouse storing such commodity in outside storage, subject to the conditions outlined in this notice. This notice is intended to ensure adequate availability of storage space at harvest for producers seeking warehouse-stored marketing assistance loans for grain.

DATES:

Effective Date: July 3, 2006.

FOR FURTHER INFORMATION CONTACT:

Howard Froehlich, Warehouse and Inventory Division, Farm Service Agency, United States Department of Agriculture, 1400 Independence Avenue, SW., STOP 0553, Washington, DC 20250-0553, telephone [phone], FAX [phone], e-mail: [e-mail]. Persons with disabilities who require alternative means for communication for regulatory information (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at [phone] (voice and TDD).

SUPPLEMENTARY INFORMATION:

Background

To be eligible for a Marketing Assistance Loan under the loan provisions of 7 CFR part 1421, an eligible commodity must be stored in approved storage, which is either on-farm storage, or an approved warehouse that meets the CCC standards for approval of warehouses. Further, in accordance with the CCC Charter Act (15 U.S.C. 714 et seq.), CCC enters into storage agreements with private grain and rice warehouse operators to provide for the storage of commodities owned by CCC or pledged as security to CCC for marketing assistance loans.

To ease the demands made on approved warehouse space for the 2006 crop, the CCC will accept as collateral for marketing assistance loans for corn, wheat, and other feed grains, warehouse receipts issued by a warehouse that is storing such commodity in outside storage if the warehouse has executed a Uniform Grain and Rice Storage Agreement (UGRSA) with CCC and if the warehouse is either:

1. A Federally-licensed warehouse under the United States Warehouse Act (USWA) and is in compliance with the provisions of its USWA license; or

2. For all other warehouses, the warehouse is in compliance with State laws allowing the outside storage of such commodities.

USWA Emergency Storage Requirements

Warehouse operators requesting emergency storage space under the USWA must:

1. Receive USWA licensing authority approval for the use of emergency storage space;

2. Meet USWA's security, net worth, bonding, and insurance requirements as required for conventional storage space;

3. Provide written justification that a need for emergency storage exists in the local area including the exact location and quantity requested;

4. Meet USWA's requirement that emergency storage space be accessible for examination purposes;

5. Receive USWA approval for the emergency storage space prior to using such space;

6. Maintain a separate inventory record of all grain stored in emergency storage space as well as account for such grain in the Daily Position Record;

7. Agree that all emergency storage space will be deleted from the license no later than March 31, 2007; and

8. Emergency storage is limited to wheat, corn, and other feed grains unless otherwise allowed by the USWA.

Warehouse Operator's Liability

The use of emergency storage space does not relieve warehouse operators of their obligations under the USWA, State licensing authority (as applicable), or the UGRSA. Warehouse operators are responsible for the quantity and quality of grain stored in emergency storage space to the same extent as their liability for conventional storage space.

Signed at Washington, DC, June 23, 2006.

Teresa C. Lasseter,

Administrator, Farm Service Agency, and Executive Vice-President, Commodity Credit Corporation.