7 U.S.C. § 1425

Producer rights and liabilities

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(a) Liability for deficiencies

Except as otherwise provided in section 1425a of this title, no producer shall be personally liable for any deficiency arising from the sale of the collateral securing any loan made under authority of this Act unless such loan was obtained through fraudulent representations by the producer. This provision shall not, however, be construed to prevent the Commodity Credit Corporation or the Secretary from requiring producers to assume liability for deficiencies in the grade, quality, or quantity of commodities stored on the farm or delivered by them, for failure properly to care for and preserve commodities, or for failure or refusal to deliver commodities in accordance with the requirements of the program. There is authorized to be included in the terms and conditions of any such nonrecourse loan a provision whereby on and after the maturity of the loan or any extension thereof Commodity Credit Corporation shall have the right to acquire title to the unredeemed collateral without obligation to pay for any market value which such collateral may have in excess of the loan indebtedness.

(b) Sugarcane and sugar beets

The security interests obtained by the Commodity Credit Corporation as a result of the execution of security agreements by the processors of sugarcane and sugar beets shall be superior to all statutory and common law liens on raw cane sugar and refined beet sugar in favor of the producers of sugarcane and sugar beets and all prior recorded and unrecorded liens on the crops of sugarcane and sugar beets from which the sugar was derived. The preceding sentence shall not affect the application of section 1421(e)(2) of this title.

(Oct. 31, 1949, ch. 792, title IV, § 405, 63 Stat. 1054; Pub. L. 85–835, title V, § 502, Aug. 28, 1958, 72 Stat. 996; Pub. L. 99–198, title X, § 1004, Dec. 23, 1985, 99 Stat. 1447; Pub. L. 100–460, title VI, § 634(a), Oct. 1, 1988, 102 Stat. 2263; Pub. L. 102–237, title I, § 111(b), Dec. 13, 1991, 105 Stat. 1830.)Editorial NotesReferences in Text

This Act, referred to in subsec. (a), is act Oct. 31, 1949, ch. 792, 63 Stat. 1051, known as the Agricultural Act of 1949, which is classified principally to this chapter (§ 1421 et seq.). For complete classification of this Act to the Code, see Short Title note set out under section 1421 of this title and Tables.

Amendments

1991—Subsec. (b). Pub. L. 102–237 amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows:

“(1) Notwithstanding any other provision of law, the Secretary may provide a negotiable certificate to any producer who repays, together with interest, a price support loan made available to such producer under any of the annual programs, for wheat, feed grains, upland cotton, or rice established under this Act.

“(2) The amount of such certificates shall be equal to the amount of the interest paid by the producer on such loan.

“(3) Such certificate shall be redeemable in wheat, feed grains, upland cotton, or rice, as the case may be, owned by the Commodity Credit Corporation.

“(4) The issuance of such certificate shall be subject to the availability of commodities owned by the Corporation.”

1988—Subsec. (a). Pub. L. 100–460 substituted “Except as otherwise provided in section 1425a of this title, no producer” for “No producer”.

1985—Pub. L. 99–198 temporarily designated existing provisions as subsec. (a) and added subsec. (b). See Effective and Termination Dates of 1985 Amendment note below.

1958—Pub. L. 85–835 authorized the Commodity Credit Corporation to acquire title to agricultural commodities on which nonrecourse price-support loans have been made without the necessity of computing and making payments to the farmer.

Statutory Notes and Related SubsidiariesEffective Date of 1988 Amendment

Pub. L. 100–460, title VI, § 634(a), Oct. 1, 1988, 102 Stat. 2263, provided that the amendment made by section 634(a) is effective beginning with 1989 crop year for honey.

Effective and Termination Dates of 1985 Amendment

Pub. L. 99–198, title X, § 1004, Dec. 23, 1985, 99 Stat. 1447, provided that the amendment made by section 1004 is effective only for the 1986 through 1990 crops.

Inapplicability of Section

Section inapplicable to 2014 through 2018 crops of covered commodities, cotton, and sugar and inapplicable to milk during period beginning Feb. 7, 2014, through Dec. 31, 2018, see section 9092(b)(10) of this title.

Section inapplicable to 2008 through 2012 crops of covered commodities, peanuts, and sugar and inapplicable to milk during period beginning June 18, 2008, through Dec. 31, 2012, see section 8782(b)(10) of this title.

Section inapplicable to 2002 through 2007 crops of covered commodities, peanuts, and sugar and inapplicable to milk during period beginning May 13, 2002, through Dec. 31, 2007, see section 7992(b)(10) of this title.

Section inapplicable to 1996 through 2002 crops of loan commodities, peanuts, and sugar and inapplicable to milk during period beginning Apr. 4, 1996, and ending Dec. 31, 2002, see section 7301(b)(1)(J) of this title.

Executive DocumentsExceptions From Transfer of Functions

Functions of Corporations of Department of Agriculture, boards of directors and officers of such corporations; Advisory Board of Commodity Credit Corporation; and Farm Credit Administration or any agency, officer, or entity of, under, or subject to supervision of said Administration excepted from functions of officers, agencies, and employees transferred to Secretary of Agriculture by 1953 Reorg. Plan No. 2, § 1, effective June 4, 1953, 18 F.R. 3219, 67 Stat. 633, set out as a note under section 2201 of this title.

Notes of Decisions

Cited in 13 cases, 1951–2003 · leading case: Carruth v. United States, 224 Ct. Cl. 422 (Ct. Cl. 1980).

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Carruth v. United States, 224 Ct. Cl. 422 (Ct. Cl. 1980). “5 7 U.S.C. § 1425 (1976), 7 C.F.R. § 1446.10 (1979).”

Tennessee Burley Tobacco Growers' Ass'n, & Cross-Appellant v. Commodity Credit Corp., & Cross-Appellee, 350 F.2d 34 (6th Cir. 1965). · cites it 4× “” Although not holding as a matter of contract interpretation that Commodity had agreed to reimburse the Association for unapproved and unrecouped overhead expenses in excess of the amounts advanced, the court held that Commodity is liable for these expenses on two grounds:…”

Fritz Thompson & Dora M. Thompson v. Comm'r of Internal Revenue, 322 F.2d 122 (5th Cir. 1963). “7 U.S.C.A. § 1425 expressly provides that “No producer shall be personally liable for any deficiency arising from the sale of the collateral securing any loan made under authority of this Act [in the absence of fraudulent misrepresentation] * * By the Amendments August 28, 1958,…”

United States of Am., Cross-Appellee v. Coop. Grain & Supply Co., Cross-Appellants, 476 F.2d 47 (8th Cir. 1973). “§ 231 , 1 and the Agricultural *51 Act of 1949, 7 U.S.C. § 1425 . The gravamen of the Government’s complaint is that the defendants submitted false claims to the Government and obtained price support payments and other public funds that they should not have received.”

Reeser v. Koons, 213 N.E.2d 561 (Ill. 1966). · cites it 2× “" That the producer is not personally liable for the debt is confirmed by federal statute: "No producer shall be personally liable for any deficiency arising from the sale of the collateral securing any loan made under authority of this Act unless such loan was obtained through…”

Autrey v. Commodity Credit Corp., 143 F. Supp. 550 (W.D. Ark. 1956). · cites it 3× “In support of his action the plaintiff makes two contentions: First, that the rice was not fairly and properly sampled by Hebert, and that the grade obtained from that sample did not represent the true quality of the rice; and, second, that in any event no deficiency could be…”

Hiatt Grain & Feed, Inc. v. Bergland, 602 F.2d 929 (10th Cir. 1979). “7 U.S.C. § 1425 . We have mentioned at the outset the price support loans to cooperatives on farm products other than wheat and feed grains.”

Stewart v. United States, 100 F. Supp. 221 (D. Neb. 1951). “Title 7 U.S.C.A. § 1425 . In practical operation, when commodity prices at final sale times were unfavorable, the amounts received in the way of loans came to be the prices actually received by the producing borrowers for their crops.”

Bair v. Pac. Nw. Sugar Co. LLC, 85 F. App'x 555 (9th Cir. 2003). “Finally, the Growers argue that if we rely on the statute’s plain language in recognizing super-priority liens in favor of the CCC in the refined sugar, then we must also adhere to the plain language and determine that there is no coverage for the proceeds from that sugar.”

United States v. Irwin, 575 F. Supp. 405 (N.D. Tex. 1983). “The statutory authority is 7 U.S.C. § 1425 . While this defense would be valid in those cases where the producer elected not to pay the loans when due but to deliver the cotton to the Government instead, such a defense is not available under the facts of this case.”

St. Paul Fire & Marine Ins. v. Commodity Credit Corp., 474 F.2d 192 (5th Cir. 1973). “When the loan matures the farmer may elect to pay the debt and redeem the cotton. Alternatively, since CCC’s only recourse is against the collateral, the farmer may allow the cotton to pass to CCC upon loan maturity and retain his loan proceeds.”

Bair v. Pac. Nw. Sugar Co., 75 F. App'x 654 (9th Cir. 2003). “Finally, the Growers argue that if we rely on the statute’s plain language in recognizing super-priority hens in favor of the CCC in the refined sugar, then we must also adhere to the plain language and determine that there is no coverage for the proceeds from that sugar.”

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