The Commodity Credit Corporation (CCC)
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The Commodity Credit Corporation (CCC)
January 14, 2021
Updated May 15, 2025
(R44606)
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agricultural programs since 1933. The CCC Charter Act enables the CCC to broadly support the agricultural programs since 1933. The CCC Charter Act enables the CCC to broadly support the
Megan Stubbs
U.S. agriculture industry for authorized purposes and programs including commodity and income U.S. agriculture industry for authorized purposes and programs including commodity and income
Specialist in Agricultural
support, natural resources conservation, export promotion, international food aid, disaster support, natural resources conservation, export promotion, international food aid, disaster
Conservation and Natural
assistance, agricultural research, and bioenergy development.assistance, agricultural research, and bioenergy development.
Resources Policy
While CCC is authorized to carry out a number of activities, it has no staff of itsWhile CCC is authorized to carry out a number of activities, it has no staff of its own. Rather, own. Rather,
U.S. Department of Agriculture (USDA) employees and facilities carry out all of its activities. U.S. Department of Agriculture (USDA) employees and facilities carry out all of its activities.
CCC is overseen by the Secretary of Agriculture and a board of directors, which are also USDA CCC is overseen by the Secretary of Agriculture and a board of directors, which are also USDA
officials. CCC has officials. CCC has$100 million in capital stock; buys, owns, sells, and donates agricultural commodities; and provides loans capital stock; buys, owns, sells, and donates agricultural commodities; and provides loans
and payments to farmers and ranchers. It has a permanent indefinite borrowing authority of $30 billion from the U.S. Treasury. By law, it to farmers and ranchers. It has a permanent indefinite borrowing authority of $30 billion from the U.S. Treasury. By law, it
receives an annual appropriation equal to the amount of the previous yearreceives an annual appropriation equal to the amount of the previous year’'s net realized loss (see inset figure). This s net realized loss (see inset figure). This
replenishes its borrowing authority from the Treasury and allows it to cover authorized expenditures that will not be replenishes its borrowing authority from the Treasury and allows it to cover authorized expenditures that will not be
recovered. Variations in its annual appropriation each year recovered. Variations in its annual appropriation each yeardoesdo not indicate any action by Congress to change program not indicate any action by Congress to change program
support but rather reflect changes in farm program payments and other discretionary uses of CCCsupport but rather reflect changes in farm program payments and other discretionary uses of CCC’'s authority that fluctuate s authority that fluctuate
based on economic circumstances and weather conditions.based on economic circumstances and weather conditions.
The majority of CCC activities are authorized through
FY2005-FY2020FY2006-FY2025 (est.)
(est.)
omnibus farm bills—most recently the Agriculture
Improvement Act of 2018 (2018 farm bill, P.L. 115-334).
Farm bill authorization directs programs to utilize CCC’s
borrowing authority, thereby dispensing with the need for
an annual appropriation for individual programs. The use of
this mandatory authority has expanded over time.
The CCC Charter Act also grants the Secretary of
Agriculture broad powers and discretion to use the CCC.
This discretionary use was restricted in annual
appropriations acts from FY2012 through FY2017,
effectively reducing the Secretary’s options to use CCC.
The FY2018 Consolidated Appropriations Act (P.L. 115-
141) did not include these restrictions, and the Trump
Administration subsequently used CCC’s authority to
address market impacts of retaliatory tariffs imposed by
China and certain other U.S. trading partners on an array of
U.S. agricultural commodities in 2018 and 2019. USDA
Sources: Compiled by CRS from U.S. Department of
used its administrative discretion again in 2020 to authorize
Agriculture (USDA), Farm Service Agency (FSA), Commodity
Estimates Book, FY2008-FY2017 President’s Budgets (Output 3);
CCC funding for initiatives to respond to economic
USDA, FSA, Data Master, FY2008 through FY2017 President’s
disruptions related to the Coronavirus Disease 2019
Budgets; and USDA, Office of the Chief Economist, personal
(COVID-19) pandemic.
communication, 9/30/2020.
Notes: The darker shaded portion of Income & Commodity
Congressional support for discretionary use of CCC
Support indicates assistance programs created by USDA in
typically varies depending on purpose and distribution of
FY2018-FY2020 for trade mitigation and coronavirus relief. The
the expenditure. The use of CCC’s discretionary authority
Other category includes funding for export activities,
in recent years is perhaps less controversial than the total
horticulture and specialty crop programs, bioenergy assistance,
amount authorized. USDA’s discretionary use of the CCC
research, and rural development. The negative administrative
Charter Act authority in FY2018-FY2020 has brought CCC
expense in FY2011 through FY2014 represents net gains in
close to its borrowing authority limit of $30 billion. If the
years where the receipt of funding exceeded net expenses. The
borrowing authority limit were to be reached before
net realized loss estimated for FY2020 is above the $30 bil ion
Congress appropriates the net realized loss reimbursement,
borrowing limit due, in part, to a mid-year appropriation that
reimbursed a portion of the loss before the end of the fiscal
all functions and operations of CCC would be suspended,
including those authorized in the 2018 farm bills. This has
year.
led Congress to alter the timing of CCC’s appropriation so as not to delay its activities.
Congressional Research Service
link to page 4 link to page 5 link to page 6 link to page 7 link to page 9 link to page 10 link to page 10 link to page 11 link to page 11 link to page 12 link to page 13 link to page 14 link to page 10 link to page 12 link to page 7 link to page 16 The Commodity Credit Corporation (CCC)
Contents
Origin of the CCC ........................................................................................................... 1
CCC Charter Act............................................................................................................. 2
Congressional y Authorized Activities .......................................................................... 3
Discretionary Use ...................................................................................................... 4
Management of CCC ....................................................................................................... 6
Financing CCC ............................................................................................................... 7
Borrowing Authority .................................................................................................. 7
Net Expenditures.................................................................................................. 8
Net Realized Losses.............................................................................................. 8
Non-Borrowing Authority Appropriations ..................................................................... 9
Considerations for Congress ........................................................................................... 10
Conclusion................................................................................................................... 11
Figures
Figure 1. CCC’s Borrowing Authority ................................................................................ 7
Figure 2. CCC Realized Losses ......................................................................................... 9
Tables
Table 1. Examples of USDA’s Discretionary Use of CCC ..................................................... 4
Contacts
Author Information ....................................................................................................... 13
Congressional Research Service
link to page 7 The Commodity Credit Corporation (CCC)
he Commodity Credit Corporation (CCC) has served as the financial institution for he Commodity Credit Corporation (CCC) has served as the financial institution for
carrying out federal farm commodity price support and production programs since 1933. It carrying out federal farm commodity price support and production programs since 1933. It
T is a wholly government-owned entity that exists solely to finance authorized programs that is a wholly government-owned entity that exists solely to finance authorized programs that
support U.S. agriculture. It is subject to the supervision and direction of the Secretary of support U.S. agriculture. It is subject to the supervision and direction of the Secretary of
Agriculture at the U.S. Department of Agriculture (USDA). The CCC mission was conceived Agriculture at the U.S. Department of Agriculture (USDA). The CCC mission was conceived
mainly as one of commodity support, but over time it has expanded to include an increasingly mainly as one of commodity support, but over time it has expanded to include an increasingly
broad array of programs, including export and commodity programs, resource conservation, broad array of programs, including export and commodity programs, resource conservation,
disaster assistance, agricultural research, and bioenergy development.disaster assistance, agricultural research, and bioenergy development.
While CCC operates according to a large number of statutory authorities, its broad powers While CCC operates according to a large number of statutory authorities, its broad powers al ow
allow it to carry out it to carry outalmost any operation requiredmany operations to meet the objectives of supporting U.S. agriculture. to meet the objectives of supporting U.S. agriculture.
This broad mandate, and its significant borrowing authority, has This broad mandate, and its significant borrowing authority, hastraditional ytraditionally drawn little drawn little
attention. For most of its history, CCCattention. For most of its history, CCC’'s responsibilities have been expanded through legislative s responsibilities have been expanded through legislative
directives such as the farm directives such as the farmbil bill. From FY2012 through FY2017, Congress took actions to limit . From FY2012 through FY2017, Congress took actions to limit
the discretionary usesthe use of CCC funds of CCC funds by USDA through restrictions in appropriations language. Beginning in through restrictions in appropriations language. Beginning in
FY2018, Congress lifted these restrictions, FY2018, Congress lifted these restrictions, al owing for additional discretionary use. The Trump
Administration used CCC’allowing for USDA to use CCC's broad powers and discretionary authority for various payments and purchases related to supporting U.S. agriculture.1 The expanded use of CCC since FY2018s broad powers and discretionary authority to make bil ions of dollars
in direct payments and undertake commodity purchases in response to trade retaliation against
U.S. agricultural exports and to mitigate economic losses to the agricultural sector from the
Coronavirus Disease 2019 (COVID-19) pandemic.1
The recent expansion in the uses of CCC has generated questions about what the CCC is, how it has generated questions about what the CCC is, how it
operates, what its current uses are, and what it may be used for in the future. This report provides operates, what its current uses are, and what it may be used for in the future. This report provides
a brief review of CCCa brief review of CCC’'s unique history, funding structure, general operation, and recent issues s unique history, funding structure, general operation, and recent issues
associated with its useassociated with its use. Other CRS reports cover in detail programs and activities authorized
through CCC.2 and possible future restrictions.2
Origin of theCCC
Commodity Credit Corporation For over a decade prior to the creation of CCC in 1933, the farm economy struggled with low For over a decade prior to the creation of CCC in 1933, the farm economy struggled with low
levels of income from depressed commodity prices and increasing costs for supplies and services. levels of income from depressed commodity prices and increasing costs for supplies and services.
The first major federal effort to boost commodity prices was through the Federal Farm Board, The first major federal effort to boost commodity prices was through the Federal Farm Board,
established by the Agricultural Marketing Act of 1929.established by the Agricultural Marketing Act of 1929.33 An inadequate and ultimately failed effort An inadequate and ultimately failed effort
to eliminateto eliminate commodity surpluses was attempted by making loans to cooperative associations for the purpose surpluses was attempted by making loans to cooperative associations for the purpose
of carrying out surplus purchase operations. Without the ability to control production, it was of carrying out surplus purchase operations. Without the ability to control production, it was
impossible to eliminateimpossible to eliminate surplus stocks. This led to proposals to regulate the harvested acreage of surplus stocks. This led to proposals to regulate the harvested acreage of
farm commodities and the quantities sold. The concept of acreage and marketing controls was farm commodities and the quantities sold. The concept of acreage and marketing controls was
incorporated in to the Agricultural Adjustment Act of 1933 (AAA).incorporated in to the Agricultural Adjustment Act of 1933 (AAA).4
4
The AAAThe AAA sought to reduce production by paying producers to participate in acreage control sought to reduce production by paying producers to participate in acreage control
programs. Funding came from a tax on companies that processed farm products. Additional programs. Funding came from a tax on companies that processed farm products. Additional
provisions of the law dealt with fair marketing practices and voluntary agreements between provisions of the law dealt with fair marketing practices and voluntary agreements between
producers and handlers of commodities to regulate marketing. producers and handlers of commodities to regulate marketing.A financial institution was needed
to carry out the legislation, and this was accomplished with the creation of the Commodity Credit
1 T hese payments are discussed further in the “ Discretionary Use” section.
2 For additional information regarding programs and activities authorized through CCC, see CRS farm bill and farm
support reports at http://www.crs.gov/iap/agriculture-and-food.
3 P.L. 71-10; 46 Stat. 11.
4 P.L. 73-10; 48 Stat. 31.
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The Commodity Credit Corporation (CCC)
CorporationCCC was created as the financial institution to carry out and fund the activities of the AAA. Executive Order 6340 of October 17, 1933, directed the incorporation of CCC in the . Executive Order 6340 of October 17, 1933, directed the incorporation of CCC in the
state of Delaware.state of Delaware.55
The Delaware charter authorized CCC, among other things, to buy and The Delaware charter authorized CCC, among other things, to buy andsel sell farm commodities; farm commodities;
lend; undertake activities for the purpose of increasing production, stabilizing prices, and lend; undertake activities for the purpose of increasing production, stabilizing prices, and insuring
ensuring adequate supplies; and facilitate the efficient distribution of agricultural commodities. It was adequate supplies; and facilitate the efficient distribution of agricultural commodities. It was
original y capitalized originally capitalized in 1933 with $3 in 1933 with $3 mil ion million appropriated by Congress. In 1936, sufficient stock appropriated by Congress. In 1936, sufficient stock
was acquired to raise the capitalization to $100 was acquired to raise the capitalization to $100mil ion. million. Its capital stock remains at this level.Its capital stock remains at this level.66 In In
1939, Executive Order 8219 ordered that 1939, Executive Order 8219 ordered thatal all rights of the United States arising out of the rights of the United States arising out of the
ownership of CCC be transferred to the Secretary of Agriculture.ownership of CCC be transferred to the Secretary of Agriculture.7
7
At that time, low prices became so critical for cotton and corn producers that waiting for another At that time, low prices became so critical for cotton and corn producers that waiting for another
season for supply controls to impact the market was judged to be untenable. With the season for supply controls to impact the market was judged to be untenable. With the
establishment of CCC, it became possible to make establishment of CCC, it became possible to make price-support loans, now commonly referred , now commonly referred
to as nonrecourse loans, to as nonrecourse loans,al owingallowing farmers to obtain cash using crops as collateral. These loans farmers to obtain cash using crops as collateral. These loans
provided farmers funds to hold their products off the market until prices improved. The first loans provided farmers funds to hold their products off the market until prices improved. The first loans
were made to cotton farmers for more than the market price. Since loans were higher than the were made to cotton farmers for more than the market price. Since loans were higher than the
market price and the loans were nonrecourse, they could be satisfied by forfeiting the cotton market price and the loans were nonrecourse, they could be satisfied by forfeiting the cotton
pledged as collateral against the loan, thereby serving as a form of price support and effectively pledged as collateral against the loan, thereby serving as a form of price support and effectively
establishing a floor price for the domestic market.establishing a floor price for the domestic market.88 Funding for these first loan operations came Funding for these first loan operations came
from a tax on commodity processing and from CCCfrom a tax on commodity processing and from CCC’'s $3 s $3 mil ionmillion capital account, which was capital account, which was
appropriated under authority of the National Industrial Recovery Act and the Fourth Deficiency appropriated under authority of the National Industrial Recovery Act and the Fourth Deficiency
Act.9
Act.9
Constitutional difficulties with some provisions of the AAA, and practical shortcomings with Constitutional difficulties with some provisions of the AAA, and practical shortcomings with
other elements of the law, led to additionalother elements of the law, led to additional legislation in the 1930s that continues to provide legislation in the 1930s that continues to provide
permanent authority for many USDA activities. Subsequent omnibus permanent authority for many USDA activities. Subsequent omnibus“"farm farm bil s”bills" set most of the set most of the
policy goals and program constraints for farm price and income support operations that are policy goals and program constraints for farm price and income support operations that are
funded through CCCfunded through CCC..
CCC Charter Act
The Government Corporation Control Act of The Government Corporation Control Act of194510194510 (GCCA) required (GCCA) required al all wholly owned wholly owned
government corporations to be reincorporated as agencies or instrumentalities of the United
5 Executive Order 6340, “Creating the Commodity Credit Corporation,” Public Papers of the Presidents of the United
States: Franklin D. Roosevelt (Washington: GPO, October 16, 1933).
6 T he Reconstruction Finance Corporation originally acquired the $100 million capitalization stock. T he Reconstruction
Finance Corporation was a New Deal–era government corporation that provided financial support and loans, including
the recapitalization of banks.
7 Executive Order 8219, 4 Federal Register 3565, August 10, 1939. Executive Order 7848, 3 Federal Register 632,
March 22, 1938, had previously designated the Secretary of the T reasury as the holder of CCC’s ca pital stock.
8 David Godfrey, “T he Commodity Credit Corporation,” T exas T ech University, 1974, http://hdl.handle.net/10601/
1696.
9 48 Stat. 195, and 48 Stat. 274, respectively.
10 T he GCCA (31 U.S.C. §§9101-9110) standardized budget, auditing, debt management, and depository practices for
government corporations. T he GCCA is not a general incorporation act such as those in effect in the states. T he charter
for each federal government corporation is the separate enabling legislation passed by Congress. T he GCCA also does
not offer a general definition of what constitutes a government corporation. It simply enumerates the organizations
covered by the act. For additional information, see U.S. Government Accounta bility Office (GAO), Governm ent
Corporations: Profiles of Existing Governm ent Corporations, GAO/GGD 96-14, December 1995,
https://www.gao.gov/products/GGD-96-14.
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The Commodity Credit Corporation (CCC)
government corporations to be reincorporated as agencies or instrumentalities of the United States. Accordingly, Congress passed the Commodity Credit Corporation Charter Act of 1948 States. Accordingly, Congress passed the Commodity Credit Corporation Charter Act of 1948
(Charter Act).(Charter Act).11 Al 11 All CCC rights, duties, assets, and liabilitiesCCC rights, duties, assets, and liabilities were assumed by the federal were assumed by the federal
corporation, and the Delaware corporation was dissolved.corporation, and the Delaware corporation was dissolved.
Government Corporations in General
Government corporationsGovernment corporations have existed for over a century. The exact number of government corporations have existed for over a century. The exact number of government corporations
depends on how they are defined (ranging from around a dozen to over 40). Whiledepends on how they are defined (ranging from around a dozen to over 40). While no single definition exists, they no single definition exists, they
are general yare generally defined as agencies of the federal government established by Congress defined as agencies of the federal government established by Congress to performto perform a public purpose. a public purpose.
Commonly,Commonly, they provide a market-orientedthey provide a market-oriented product or serviceproduct or service and are intended to produce revenue that meets and are intended to produce revenue that meets
or approximates its expenditures. or approximates its expenditures.General y, Generally, government corporations must submit annual management reports government corporations must submit annual management reports
to Congress and are assigned to committeesto Congress and are assigned to committees of subject matter jurisdiction.of subject matter jurisdiction. Many have a board of directorsMany have a board of directors and are and are
overseen overseen by political appointees or executive branch officials.by political appointees or executive branch officials. Commonly,Commonly, government corporations are perceived government corporations are perceived
as discreteas discrete entities with individual administrative requirementsentities with individual administrative requirements defined in law.defined in law.12
12
According to the Charter Act, the purpose of CCC is to stabilize, support, and protect farm According to the Charter Act, the purpose of CCC is to stabilize, support, and protect farm
income and prices; assist in maintaining balanced and adequate supplies of agricultural income and prices; assist in maintaining balanced and adequate supplies of agricultural
commodities; and facilitate the orderly distribution of commodities. A list of some of CCCcommodities; and facilitate the orderly distribution of commodities. A list of some of CCC’s
's authorities (paraphrased from Section 5 of the Charter Act, 15 U.S.C. §authorities (paraphrased from Section 5 of the Charter Act, 15 U.S.C. §714(c)714c) conveys a sense of ) conveys a sense of
its broadly stated powers:its broadly stated powers:
Support agricultural commodity Support agricultural commodity prices13prices through loans, purchases, payments, and through loans, purchases, payments, and
other operations.other operations.
13
Make availableMake available materials and facilities in connection with the production and materials and facilities in connection with the production and
marketing of agricultural products.marketing of agricultural products.
Procure commodities for sale to other government agencies; foreign Procure commodities for sale to other government agencies; foreign
governments; and domestic, foreign, or international relief or rehabilitation governments; and domestic, foreign, or international relief or rehabilitation
agencies and for domestic requirements.agencies and for domestic requirements.
Remove and dispose of surplus agricultural commodities.Remove and dispose of surplus agricultural commodities.
Increase the domestic consumption of commodities by expanding markets or Increase the domestic consumption of commodities by expanding markets or
developing new and additional markets, marketing facilities, and uses for developing new and additional markets, marketing facilities, and uses for
commodities.commodities.
Export, or cause to be exported, or aid in the development of foreign markets for Export, or cause to be exported, or aid in the development of foreign markets for
commodities.commodities.
Carry out authorized conservation or environmental programs. Carry out authorized conservation or environmental programs.
Carry out other operations specifically authorized by Congress. Congressionally Authorized Activities
The majority of CCC operations are governed by statutory authorities that The majority of CCC operations are governed by statutory authorities thatspecifical y direct direct
USDA on how to administer CCC activities and in what amounts to fund them. Over time, USDA on how to administer CCC activities and in what amounts to fund them. Over time,
Congress has added new activities to CCCCongress has added new activities to CCC’'s original mission, including conservation, specialty s original mission, including conservation, specialty
crop support, and bioenergy development (see text box below). Most of these activities are crop support, and bioenergy development (see text box below). Most of these activities are
authorized in authorized in periodic omnibus farm bills.14 In carrying out theseomnibus farm bil s occurring every four to five years.14 In carrying out these
11 P.L. 80-89; 62 Stat. 1070; 15 U.S.C. §714.
12 GAO, Federally Created Entities: An Overview of Key Attributes, GAO-10-97, October 2009, pp. 13-16,
https://www.gao.gov/products/GAO-10-97.
13 Amendments to the Charter Act in 2004 preclude tobacco from being considered within the definition of
“agricultural commodities” (P.L. 108-357).
14 CRS Report RS22131, What Is the Farm Bill?.
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link to page 7 The Commodity Credit Corporation (CCC)
operations, CCC is directed, to the maximum extent practicable, to use the usual and customary operations, CCC is directed, to the maximum extent practicable, to use the usual and customary
channels, facilities, and arrangements of trade and commerce.channels, facilities, and arrangements of trade and commerce.15
15 Examples of CCC Activities and Programs
CCC is authorized to fund a broad array of programsCCC is authorized to fund a broad array of programs supporting U.S.supporting U.S. agriculture. These programs are agriculture. These programs are typical y
typically authorized through omnibus farm authorized through omnibus farmbil s. bills, most recently the 2018 farm bill (CRS Report R45525, The 2018 Farm Bill (P.L. 115-334): Summary and Side-by-Side Comparison). A general description of the assistance A general description of the assistance offered and examples that has been congressionally authorized and examples of associated of associated
programs are listed below.programs are listed below. This is not an exhaustive list.This is not an exhaustive list. For additional information on these and other CCC -
funded programs, see CRS farm bil reports at http://www.crs.gov/iap/agriculture-and-food.
Commodity and Income Support provides provides farm payments and loans when crop prices or revenues decline farm payments and loans when crop prices or revenues decline
for major commodityfor major commodity crops—including wheat, corn, soybeans, peanuts, and rice—as crops—including wheat, corn, soybeans, peanuts, and rice—as wel well as other support as other support
mechanisms mechanisms for dairy, cotton, and sugar (e.g.,for dairy, cotton, and sugar (e.g., Agriculture Agriculture Risk Coverage,Risk Coverage, Price Loss Coverage,Price Loss Coverage, and Dairy Margin and Dairy Margin
Coverage).Coverage).
Conservation provides financial and technical assistance for voluntary participation in resourceprovides financial and technical assistance for voluntary participation in resource conservation conservation
programs to protect soil,programs to protect soil, water, wildlife,water, wildlife, and other natural resourcesand other natural resources on private lands (e.g., on private lands (e.g., Environment alEnvironmental Quality Quality
Incentives Program,Incentives Program, Conservation ReserveConservation Reserve Program, and Agricultural Conservation Easement Program).Program, and Agricultural Conservation Easement Program).
Disaster provides payments for livestock provides payments for livestock and crop production lossesand crop production losses resulting fromresulting from weather events and disease weather events and disease
outbreaks (e.g., Livestockoutbreaks (e.g., Livestock Forage Forage Disaster Program,Program, Noninsured Crop DisasterNoninsured Crop Disaster Assistance Program,Assistance Program, and Tree Assistance and Tree Assistance
Program).Program).
Export and Foreign Food Assistance promotes promotes U.S. agricultural products abroad, develops export markets, U.S. agricultural products abroad, develops export markets,
and supports international food assistance programs (e.g.,and supports international food assistance programs (e.g., Agricultural Trade PromotionAgricultural Trade Promotion Program and Food for Program and Food for
PeaceProgress Program). Program).
Bioenergy provides assistance for the research, provides assistance for the research, development,development, and adoption of renewable energy—primarily and adoption of renewable energy—primarily
biofuels (e.g., Biorefinerybiofuels (e.g., Biorefinery Assistance Program, Assistance Program and Rural Energy for America Rural Energy for America Program, and Biomass Crop Assistance
Program).
Program). Specialty Crops supports research,supports research, market promotionmarket promotion (including organic certification),(including organic certification), and pest and disease and pest and disease
prevention for fruits, vegetables,prevention for fruits, vegetables, tree nuts, floriculture,tree nuts, floriculture, and other ornamental products (e.g.,and other ornamental products (e.g., Specialty Crop Block Specialty Crop Block
Grant Program and Specialty Crop Research Initiative).Grant Program and Specialty Crop Research Initiative).
Discretionary Use
The broad
Discretionary Use (Section 5 Authority)
The CCC authorities provided to the Secretary CCC authorities provided to the Secretary under the CCC Charter Act also al ow
USDAof Agriculture under Section 5 of the CCC Charter Act allows the Secretary a level of discretion to carry out many broad operations in support of U.S. agriculture. a level of discretion to carry out many broad operations in support of U.S. agriculture.
This discretion This discretion (sometimes referred to as Section 5 authority) has been used during CCC's history for various purposes, including purchases of food for distribution, responses tohas been used throughout CCC’s history for a number of different purposes,
including responses to natural disasters, adverse economic conditions, and to fund USDA adverse economic conditions, and to fund USDA
priorities (priorities (seesee Table 1). The scope and scale of this . The scope and scale of this discretion traditional yuse traditionally has been targeted to has been targeted to
specific events, crops, or domestic needs.specific events, crops, or domestic needs.
Table 1. Examples of USDA’'s Discretionary Use of CCC
FY2015-FY2015-FY2020
FY2024 Fiscal Year
Program Name
Authorized Funding Level
2015
Biofuels
Biofuels Infrastructure Partnership ProgramInfrastructure Partnership Program
$100 mil ion
2016
Cotton Ginning Cost Share
$327 mil ion
2017
Dairy Assistance Program – Puerto Rico
$12 mil ion
2018
Cotton Ginning Cost ShareCotton Ginning Cost Share
$215 mil ion
2018
Food Purchase and Distribution ProgramFood Purchase and Distribution Program
$1,200 mil ion
2018
Market Facilitation Program
$12,000 mil ion
15 15 U.S.C. §714c.
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The Commodity Credit Corporation (CCC)
Fiscal Year
Program Name
Authorized Funding Level
2019
Food Purchase and Distribution Program
$1,400 mil ion
2019
Market Facilitation Program
$16,000 mil ion
2020
Higher Blends Infrastructure Incentive Program
$100 mil ion
2020
Seafood Assistance Program
$530 mil ion
2020
Coronavirus Food Assistance Program 1
$6,500 mil ion
2020
Coronavirus Food Assistance Program 2
$14,000 mil ion
Source: USDA, Office of the Chief Economist, personal communication, 9/30/2020.
Notes: The authorized level of funding, as announced by USDA, is included. Actual expenditures may vary from authorized level of funding, as announced by USDA, is included. Actual expenditures may vary from
authorized levels.authorized levels.
Congress can alter USDA’s discretionary Reallocations from unused announced funding are not included. This table is not comprehensive, and no comprehensive list of USDA's discretionary use of CCC is publicly available.
Congress can alter USDA's use of CCC authority through direct amendments to the use of CCC authority through direct amendments to the
CCC Charter Act or through limitation, such as in appropriations, on how CCC funds may be CCC Charter Act or through limitation, such as in appropriations, on how CCC funds may be
used. The latter occurred from FY2012 to FY2017, when Congress limited USDAused. The latter occurred from FY2012 to FY2017, when Congress limited USDA’'s discretion to s discretion to
use CCCuse CCC’'s authority to remove surplus commodities and support prices. The limitation was s authority to remove surplus commodities and support prices. The limitation was
included in annual appropriation acts (see text box below).included in annual appropriation acts (see text box below).
How and Why Was CCC Restricted?
prohibited the use of select discretionary prohibited the use of select discretionary
authority under authority underthe CCC. This restrictionCCC. This restriction was specific to any surplus removalwas specific to any surplus removal activities or price support activities activities or price support activities
under Section 5 of the Commodityunder Section 5 of the Commodity Credit Corporation Charter ActCredit Corporation Charter Act (15 U.S.C. §714c).(15 U.S.C. §714c).1616 This restriction This restriction did not did not
affect USDAaffect USDA’s 's ability to administerability to administer authorized programs under the 2014 farm authorized programs under the 2014 farm bil (bill (P.L. 113-79P.L. 113-79).17
).17
This recurringThis recurring provision was a reaction to administrativeprovision was a reaction to administrative activities activities fol owing following 2009 crop losses,2009 crop losses, in which the Obamain which the Obama
Administration Administration announced that it would implementannounced that it would implement a disastera disaster program under program under “"Section 32Section 32”" authority. authority.1818 In 2010, In 2010,
USDA spent $348 USDA spent $348mil ion million distributed across three categories:distributed across three categories: (1) select crop (1) select crop productionproducers (upland cotton, rice, (upland cotton, rice,
soybeans, and sweet potatoes),soybeans, and sweet potatoes),1919 (2) poultry producers, and (3) aquaculture producers. USDA used CCC (2) poultry producers, and (3) aquaculture producers. USDA used CCC
authority to makeauthority to make required purchases that purchases that usual y would beusually would have otherwise been made with Section 32 funds for domestic made with Section 32 funds for domestic feeding feeding
programs.programs.20
20 Critics of the 2009 disaster assistance, in Congress and elsewhere,Critics of the 2009 disaster assistance, in Congress and elsewhere, objected to USDAobjected to USDA using its authority to make using its authority to make
such payments without a legislativesuch payments without a legislative mandate. Concerns at that time about the limitsmandate. Concerns at that time about the limits on CCCon CCC’'s mandate were s mandate were
related to assistance—orrelated to assistance—or lack thereof—for cottonseed payments, dairy assistance, and biofuel infrastructure.lack thereof—for cottonseed payments, dairy assistance, and biofuel infrastructure.
The FY2018 Consolidated Appropriations Act (P.L. 115-141) did not include these restrictions, The FY2018 Consolidated Appropriations Act (P.L. 115-141) did not include these restrictions,
thereby therebyal owing USDAallowing the Secretary of Agriculture full use of the CCC Charter Act full use of the CCC Charter Act’'s discretionary authority. s discretionary authority. USDA utilized
this authority in the summer of 2018, when it announced that itThe Secretary of Agriculture used this authority in 2018 and 2019, when it was announced that USDA would be taking several actions to would be taking several actions to
16 For example, see Section 715 of the Consolidated Appropriations Act of 2016 ( P.L. 114-113) or Section 715 of the
Consolidated Appropriations Act of 2017 (P.L. 115-31).
17 Appropriations acts also limited clause 3 of Section 32, which provides that funds may be used to reestablish
farmers’ purchasing power by making payments in connection with the normal production of any agricultural
commodity for domestic consumption (7 U.S.C. §612c).
18 USDA’s Section 32 program is funded by a permanent appropriation of 30% of the previous year’s customs receipts,
less certain mandatory transfers. Section 32 funds are used for a variety of activities, including child nutrition
programs, the purchase of commodities for domestic food programs, and farm disaster relief. For more information, see
CRS Report RL34081, Farm and Food Support Under USDA’s Section 32 Program .
19 On October 22, 2010, USDA announced it would begin making payments to producers in eligible counties under the
Crop Assistance Program using payment rates established for each crop. A fact sheet is available at
http://www.fsa.usda.gov/Internet/FSA_File/cap10pfs.pdf.
20 USDA, Background on 2009 Disaster Assistance, http://www.agri-pulse.com/uploaded/Disaster_Backgrounder.pdf.
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The Commodity Credit Corporation (CCC)
assist farmers in response to economic trade damage from retaliatory tariffs that targeted various assist farmers in response to economic trade damage from retaliatory tariffs that targeted various
U.S. products.U.S. products.2121 USDA used its discretion under the CCC Charter Act to authorize up to $ USDA used its discretion under the CCC Charter Act to authorize up to $12
bil ion in28 billion in total assistance—referred to as the assistance—referred to as the “"trade aidtrade aid”" package—for certain agricultural package—for certain agricultural
commodities.22 This authority was used again in summer 2019, when USDA announced a second
trade aid package authorizing up to an additional $16 bil ion in assistance.23
USDA used its administrative discretion again in 2020commodities.22 Secretaries of Agriculture have continued to use their administrative discretion to authorize funding and food purchases in to authorize funding and food purchases in
response to economic disruptions related to the COVID-19 pandemic. On April 17, 2020, USDA
announced a $19 bil ion Coronavirus Food Assistance Program (CFAP), composed of $16 bil ion
of direct payments to farmers and $3 bil ion of commodity purchases.24 Of the total $19 mil ion
for CFAP, $6.5 bil ion was from the Secretary’s discretionary use of CCC authority (with the rest
from multiple coronavirus supplemental appropriations). On September 17, 2020, USDA
announced a second round of CFAP payments (CFAP 2) authorizing up to $14 bil ion in direct
support using the discretionary authority of the CCC Charter Act.25response to economic disruptions and administrative priorities (see Table 1).
Management of CCC
The Charter Act makes CCC an agency and instrumentality of the United States within USDA, The Charter Act makes CCC an agency and instrumentality of the United States within USDA,
subject to the supervision and direction of the Secretary of Agriculture. A board of directors subject to the supervision and direction of the Secretary of Agriculture. A board of directors
appointed by the President, consisting of the Secretary and seven other USDA officials, is appointed by the President, consisting of the Secretary and seven other USDA officials, is
responsible for the management of CCC.responsible for the management of CCC.2623 CCC officers and advisors—also USDA officials—are CCC officers and advisors—also USDA officials—are
charged with maintaining liaisons with other governmental and private trade operations on the charged with maintaining liaisons with other governmental and private trade operations on the
CCC’CCC's behalf.s behalf.
The CCC has no personnel of its own. Rather, USDA employees and facilities carry out The CCC has no personnel of its own. Rather, USDA employees and facilities carry out al all of its of its
activities. Administrative functions activities. Administrative functionsgeneral y fal generally fall to the USDA agencies directed to administer the to the USDA agencies directed to administer the
various CCC programs. The majority of its functions are administered by the Farm various CCC programs. The majority of its functions are administered by the Farm Production
and Conservation (FPAC) Business Center.27 Other agencies also administer CCC programs,
including the Farm Service Agency (FSA),Service Agency (FSA).24 Other agencies also administer CCC programs, including the Natural Resources Conservation Service, the the Natural Resources Conservation Service, the
Agricultural Marketing Service, the Foreign Agricultural Service, and the Agricultural Marketing Service, the Foreign Agricultural Service, and theUnited States Agency
for International Development (USAID)Food and Nutrition Service. CCC reimburses other agencies for their administrative . CCC reimburses other agencies for their administrative
costs. costs.
CCC cannot acquire property or interest in property unless it is related to providing storage for CCC cannot acquire property or interest in property unless it is related to providing storage for
program implementation or protecting CCCprogram implementation or protecting CCC’'s financial interests.s financial interests.2825 CCC is CCC is al owedallowed to rent or lease to rent or lease
space necessary to conduct business (e.g., warehousing of commodities).
21 For more information, see CRS Insight IN10880, China’s Retaliatory Tariffs on Selected U.S. Agricultural Products.
22 For more information, see CRS Report R45310, Farm Policy: USDA’s 2018 Trade Aid Package.
23 For more information, see CRS Report R45865, Farm Policy: USDA’s 2019 Trade Aid Package.
24 For more information, see CRS Report R46347, COVID-19, U.S. Agriculture, and USDA’s Coronavirus Food
Assistance Program (CFAP).
25 USDA, Coronavirus Food Assistance Program 2, “Funding and Authorities” tab, https://www.farmers.gov/cfap.
26 15 U.S.C. §714g.
27 Prior to a USDA reorganization in 2017, the majority of CCC functions were administered by FSA. Following the
creation of the FPAC Business Center, the bylaws of CCC were amended in 2018, placing the Chief Operating Off icer
of the FPAC Business Center as Executive Vice President of the CCC. According to the 2018 bylaws, “the Executive
Vice President shall have general supervision and direction of the day -to-day conduct of the business of the
Corporation and its officers.” USDA, CCC, “ Bylaws of the Corporation,” May 4, 2018, https://www.usda.gov/sites/
default/files/documents/usda-ccc-bylaws.pdf.
28 15 U.S.C. §714b(h).
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The Commodity Credit Corporation (CCC)
Financing CCC
space necessary to conduct business (e.g., warehousing of commodities). Financing CCC CCC is responsible for the direct spending and credit guaranteesCCC is responsible for the direct spending and credit guarantees used to finance the federal used to finance the federal
government’government's agricultural commodity price supports agricultural commodity price support and related activities that are undertaken by and related activities that are undertaken by
authority of agricultural legislationauthority of agricultural legislation (such as farm (such as farm bil sbills) or the Charter Act itself. It is, in brief, a ) or the Charter Act itself. It is, in brief, a
broadly empowered financial institution. The money that CCC needs comes from its own funds broadly empowered financial institution. The money that CCC needs comes from its own funds
(including its $100 (including its $100mil ion million capital stock, capital stock,
appropriations from Congress, and its appropriations from Congress, and its
Figure 1. CCC’s Borrowing Authority
earnings from sales and fees) and from earnings from sales and fees) and from
1938-2020
borrowings. In accordance with government borrowings. In accordance with government
accounting statutes and regulations, CCC is accounting statutes and regulations, CCC is
required to submit an annual business-type required to submit an annual business-type
budget statement to Congress. This is budget statement to Congress. This is
typical y released annual ytypically released annually with the President' with the
President’s budget request.s budget request.29
26
The Office of Management and Budget The Office of Management and Budget
(OMB) also plays a role in how CCC funds (OMB) also plays a role in how CCC funds
are administered through an apportionment are administered through an apportionment
process, which process, whichal owsallows OMB to set a limit on OMB to set a limit on
the funds available for obligation and the funds available for obligation and
subsequent outlay.subsequent outlay.3027 OMB apportions funds OMB apportions funds
for select CCC programs and operating for select CCC programs and operating
expenditures.31expenditures.28 OMB is precluded, however, OMB is precluded, however,
Source: CRS from USDA, “Reports of Financial
from apportioning funds “for price support
Conditions and Operations of the CCC,” various
and surplus removal of agricultural
years.
commodities” and therefore may not limit
Notes: The graph il ustrates from apportioning funds "for price support and surplus removal of agricultural commodities" and therefore may not limit funds for this purpose unless it relates to administrative expenses.29
Borrowing Authority and Related Appropriations
the year in which
funds for this purpose unless it relates to
legislation authorized an increaseauthorized an increase in the in the nominal borrowing borrowing
administrative expenses.32
authority. Priorauthority. Prior to 1938, CCC had no specific to 1938, CCC had no specific
borrowing authority. In 1954, Congress passed two borrowing authority. In 1954, Congress passed two
increases,increases, one to $8.5 one to $8.5 bil ionbillion and a second to $10 and a second to $10
billion.
Borrowing Authority
bil ion.
CCC borrows from the U.S. Treasury to finance its programs. CCC has permanent indefinite CCC borrows from the U.S. Treasury to finance its programs. CCC has permanent indefinite
authority to borrow from the Treasury (and also private lending institutions) within limits set by authority to borrow from the Treasury (and also private lending institutions) within limits set by
CongressCongress in statute. As the amount of money . As the amount of moneyneededused to carry out its activities has grown over time, the to carry out its activities has grown over time, the
borrowing limit has steadily increased borrowing limit has steadily increased (Figure 1). At present, CCC’s borrowing authority is
limited to $30 bil ion,33 an amount that has remained unchanged since 1987.
29 CCC budget documents may be found at http://www.fsa.usda.gov/about-fsa/budget-and-performance-management/
budget/ccc-budget-essentials/index.
30 GAO, Commodity Credit Corporation: Information on the Availability, Use, and Management of Funds,
GAO/RCED-98-114, April 1998, http://www.gao.gov/assets/230/225533.pdf.
31 In accordance with the Antideficiency Act, as amended (31 U.S.C. §1512), among others.
32 31 U.S.C. §1511(b)(1)(A).
33 15 U.S.C. §714b(i).
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(Figure 1). CCC's borrowing authority has been capped at $30 billion since 1987.30
Most CCC-funded programs are classified as mandatory spending programs and therefore do not Most CCC-funded programs are classified as mandatory spending programs and therefore do not
require annual appropriations in order to operate. Mandatory spending, however, is subject to require annual appropriations in order to operate. Mandatory spending, however, is subject to
budget enforcement procedures such as budget enforcement procedures such as cut-as-you-go (CUTGO) and pay-as-you-go (PAYGO) rules.pay-as-you-go (PAYGO) rules.34
31
CCC activity is often described using two similar but different measures. The first is CCC activity is often described using two similar but different measures. The first is net
expenditures, which is a combination of outlays and receipts. The second is , which is a combination of outlays and receipts. The second is net realized losses, ,
which are expenditures that which are expenditures that wil will never be recovered.never be recovered.
Net Expenditures
CCC recoups some money from authorized activities (e.g., sale of commodity stocks, loan CCC recoups some money from authorized activities (e.g., sale of commodity stocks, loan
repayments, and fees), though not nearly as much money as it spends, resulting in net repayments, and fees), though not nearly as much money as it spends, resulting in net
expenditures. Net expenditures include expenditures. Net expenditures includeal all cash outlays minus cash outlays minus al all cash receipts, commonly cash receipts, commonly
referred to as referred to as“"cash flow.cash flow.”" CCC outlays or expenditures represent the total cash outlays of the CCC outlays or expenditures represent the total cash outlays of the
CCC-funded programs (e.g., loans made, conservation program payments, commodity purchases, CCC-funded programs (e.g., loans made, conservation program payments, commodity purchases,
and disaster payments). Outlays are offset by receipts (e.g., loan repayment, sale of commodities, and disaster payments). Outlays are offset by receipts (e.g., loan repayment, sale of commodities,
and fees). In practice a portion of these net expenditures may be recovered in future years (e.g., and fees). In practice a portion of these net expenditures may be recovered in future years (e.g.,
through loan repayments).through loan repayments).
Net Realized Losses
CCC also has net realized losses, also referred to as nonrecoverable losses. These refer to the CCC also has net realized losses, also referred to as nonrecoverable losses. These refer to the
outlays that CCC outlays that CCCwil will never recover, such as never recover, such as the cost of commodities sold or donated, commodities sold or donated,
uncollectible loans, storage and transportation costs, interest paid to the Treasury, program uncollectible loans, storage and transportation costs, interest paid to the Treasury, program
payments, and operating expenses. The net realized loss is the amount that CCC, by law, is payments, and operating expenses. The net realized loss is the amount that CCC, by law, is
authorized to receive through appropriations to replenish its borrowing authority (authorized to receive through appropriations to replenish its borrowing authority (seesee Figure 2).32
Figure 2).35
The annual appropriation for CCC varies each year based on the net realized loss of the previous
year.36 For example, the FY2020 appropriation (P.L. 116-94) provides an indefinite appropriation,
covering the net realized loss for FY2019 of $26.3 bil ion, which was more than twice the net
realized loss in FY2018 of $10.9 bil ion. The increase does not indicate any action by Congress to
change program support; it reflects changes in farm program payments and other discretionary
uses of CCC’s authority that fluctuated based on economic circumstances and weather conditions.
Also, CCC’s assets, which include loans and commodity inventories, are not considered to be
“losses” until CCC ultimately disposes of the asset (e.g., by sales, exports, or donations). Once
CCC has disposed of these assets, its total losses are realized and are added to other program
expenses less any other program income.
34 In general, pay-as-you-go (PAYGO) rules require legislation that is projected to increase mandatory spending or
reduce revenues to also include offsetting provisions over a specified period. For more information on the House and
Senate PAYGO rules, see CRS Report R41510, Budget Enforcem ent Procedures: House Pay-As-You-Go (PAYGO)
Rule and CRS Report RL31943, Budget Enforcem ent Procedures: The Senate Pay-As-You-Go (PAYGO) Rule,
respectively. For information on how budget enforcement affects the farm bill, see CRS Report R45425, Budget Issues
That Shaped the 2018 Farm Bill.
35 15 U.S.C. §713a-11.
36 According to a GAO report, CCC changed the manner in which it calculates its request for an appropriation to cover
its net realized losses in 1998 in response to recommendations from USDA’s Office of Inspector General. Prior to
1998, the annual appropriat ion request included estimates for prior and future losses. T his resulted in an over -
appropriation of about $5 billion in FY1996 due to overestimates of CCC’s prior and future losses. GAO, Commodity
Credit Corporation: Inform ation on the Availability, Use, and Managem ent of Funds, GAO/RCED-98-114, April 1998.
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The Commodity Credit Corporation (CCC)
Figure 2. CCC Realized Losses
FY2005-FY2020
Sources: Compiled by CRS from USDA, FSA, Commodity Estimates Book, FY2008-FY2017 President’s Budgets
(Output 3); USDA, FSA, Data Master, FY2008 through FY2017 President’s Budgets; and USDA, Office of the
Chief Economist, personal communication, 9/30/2020.
Notes: FY2016-FY2020 are actual and estimated net aggregate funding totals provided by the Office of the Chief
Economist on September 30, 2020. The darker shaded portion of the Income and Commodity Support category
includes assistance programs created by USDA in FY2018-FY2020 for trade mitigation and coronavirus relief
(discussed further under the “Discretionary Use” section). The Other category includes funding for export
activities, horticulture and specialty crop programs, bioenergy assistance, research, and rural development. The
negative administrative expense in FY2011 through FY2014 represents net gains in years where the receipt of
funding (e.g., interest expense and Tobacco Trust Fund payments) exceeded net expenses (e.g., salaries and
overhead). The net realized loss estimated for FY2020 is above the $30 bil ion borrowing limit due, in part, to a
mid-year appropriationdue, in part, to a midyear appropriation in 2020 that reimbursed that reimbursed a portion of the lossa portion of the loss before the end of the fiscal year.
Appropriations to Reimburse Net Realized Loss
before the end of the fiscal year (discussed further
in the “Reimbursement Timing: Anomalies and Mid-Year Appropriations” text box, below).
Non-Borrowing Authority Appropriations
Some CCC operations are financed through appropriated funds and are unrelated to the
permanent indefinite borrowing authority described above.37 These activities include a specific
statutory authority for separate reimbursement—for example, export credit guarantee programs,
foreign donations, concessional sales under the Food for Peace Program (P.L. 83-480, also known
as P.L. 480), and disaster aid.
37 USDA, Office of Inspector General, Commodity Credit Corporation’s Financial Statements for Fiscal Year 2018 ,
Audit Report 06403-0001-11, November 2018, https://www.usda.gov/oig/webdocs/06403-0001-11.pdf.
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CCC has what it refers to as a “parent/child” account relationship with USAID. CCC al ocates
funds (as the parent) to USAID (as the child) to fund P.L. 480 Title II and Bil Emerson
Humanitarian Trust transportation costs and other administrative costs in connection with foreign
commodity donations. CCC then reports USAID’s budgetary and proprietary activities in its
financial statements.38
Reimbursement Timing: Anomalies and Mid-Year Appropriations
Congress has annual y appropriated CCC funding to cover its net realized losses incurred in the previous fiscal incurred in the previous fiscal
year. The total amount appropriated is based on the required financial statement and audit of the CCC year. The total amount appropriated is based on the required financial statement and audit of the CCCfol owing
following the completion of a fiscal year.the completion of a fiscal year. 34 The financial statement and audit The financial statement and audit typical y istypically are not completed until several not completed until several months
fol owing months following the end of the fiscal year, thereby resulting in a gap between the end of the fiscal year and the receipt of the end of the fiscal year, thereby resulting in a gap between the end of the fiscal year and the receipt of
the annual appropriated reimbursement.the annual appropriated reimbursement.
Many farm program payments are requiredMany farm program payments are required to be made to be made annual yannually in October (e.g., Agricultural in October (e.g., Agricultural Risk Coverage, Price Risk Coverage, Price
Loss Loss Coverage, Conservation Stewardship Program,Coverage, Conservation Stewardship Program, and the Conservation Reserveand the Conservation Reserve Program).Program).35 In most years, CCC In most years, CCC
has enough roomhas enough room within the borrowing authority limitwithin the borrowing authority limit to make these payments before receivingto make these payments before receiving its annual its annual
appropriated reimbursement.appropriated reimbursement. In years of high expenditures, In years of high expenditures, however, CCC could reach its borrowing authority CCC could reach its borrowing authority
limit limit before receivingbefore receiving its appropriation.its appropriation. If this were to happen, al 36 If CCC reaches its borrowing limit, all functions and operations of CCC would be functions and operations of CCC would be
suspended until the borrowing authority is restored through the reimbursementsuspended until the borrowing authority is restored through the reimbursement that is pursuant to an that is pursuant to an
appropriation.appropriation.
The timing of this appropriation may be altered if Congress The timing of this appropriation may be altered if Congressauthorizes reimbursement beforewere to authorize reimbursement before the conclusion of the the conclusion of the
annual financial statement or at a timeannual financial statement or at a time other than the conclusion of the fiscal year.other than the conclusion of the fiscal year. Both of these timing Both of these timing
adjustments have occurred in recent years.adjustments have occurred in recent years.
Anomaly –
In the absence of In the absence of a finalan enacted Agriculture Agriculture appropriation at the beginning of a fiscal year, Congressappropriation at the beginning of a fiscal year, Congress may may
pass a continuing resolutionpass a continuing resolution (CR) to continue operations and prevent a government shutdown. In general, a (CR) to continue operations and prevent a government shutdown. In general, a
CR continues the funding rates and conditions that wereCR continues the funding rates and conditions that were in the previous yearin the previous year’'s appropriation. In some cases, s appropriation. In some cases,
exceptions (or exceptions (oranomalies"anomalies") are also included in CRs to provide changes and exceptions to the general funding ) are also included in CRs to provide changes and exceptions to the general funding
rate or to address special circumstances.rate or to address special circumstances. In FY2017 and FY2019-FY2021, CCC expenditures for the previous In FY2017 and FY2019-FY2021, CCC expenditures for the previous
fiscal year were high enough that Congress included an anomaly in CRs fiscal year were high enough that Congress included an anomaly in CRsal owingallowing CCC to receive CCC to receive its annual its annual
reimbursement beforereimbursement before completion of the required completion of the required financial statement and audit. The anomaly did not change financial statement and audit. The anomaly did not change
the amount reimbursedthe amount reimbursed or the financial reporting requirement,or the financial reporting requirement, only the timing of when CCC could receive only the timing of when CCC could receive
reimbursement.reimbursement. Under a CR without the anomaly, CCC Under a CR without the anomaly, CCC would stil receive could still receive its annual reimbursement its annual reimbursement
fol owingfollowing the completion the completion of the required financial statement and audit. Congress may also include an anomaly of the required financial statement and audit. Congress may also include an anomaly
in a regular appropriation that could shift the timing of when CCC could receivein a regular appropriation that could shift the timing of when CCC could receive reimbursement .
Mid-Year Appropriation – reimbursement.
borrowing funds from the U.S. Treasury as borrowing funds from the U.S. Treasury as
needed to carry out its activities. The net realizedneeded to carry out its activities. The net realized loss is provided through appropriations and reimbursedloss is provided through appropriations and reimbursed to to
the Treasury, effectivelythe Treasury, effectively lowering the CCClowering the CCC’'s outstanding debit. s outstanding debit. Typical yTypically, the reimbursement the reimbursement occurs occurs annual y
annually through the annual appropriations process; however, Congressthrough the annual appropriations process; however, Congress can choose to authorize a reimbursementcan choose to authorize a reimbursement of CCC'of
CCC’s net realized lossess net realized losses before before the end of the fiscal year, thereby reducing CCCthe end of the fiscal year, thereby reducing CCC’'s debit and s debit and al owing
allowing additional expenditures in a given fiscal year. This occurred in FY2020, when the CARES Act (additional expenditures in a given fiscal year. This occurred in FY2020, when the CARES Act ( P.L. 116-136P.L. 116-136, ,
§11002) §11002)al owedallowed for up to $14 for up to $14 bil ion billion of CCCof CCC’'s net realized lossess net realized losses to be reimbursedbe reimbursed as of the June 2020 financial as of the June 2020 financial
report. This report. Thismid-year appropriation supplemental appropriation did not permanently raisedid not permanently raise the CCCthe CCC’'s borrowing authority limits borrowing authority limit but rather but rather
paid off a portion of its debit earlierpaid off a portion of its debit earlier than usual, than usual, al owingallowing it to incur more expenses within it to incur more expenses within FY202 0FY2020 and FY2021. This is why . This is why
the estimate for FY2020 inthe net realized loss for FY2020 and FY2021 in Figure 2 is above the $30 is above the $30 bil ionbillion borrowing authority threshold. Supplemental appropriations to reimburse the CCC are uncommon; most of which having occurred in the 1980s.37
Non-Borrowing Authority Appropriations
borrowing authority threshold.
Considerations for Congress
The mandatory funding nature of CCC activities may make it an attractive funding mechanism.
Any expansion of mandatory funding authority by Congress, however, is subject to budget
enforcement rules and may require a spending/revenue offset or a waiver of budgetary rules.
Recent congressional action restoring CCC’s authority has al owed for USDA’s use of CCC to
38 OMB, Financial Reporting Requirements, Circular No. A-136 (Revised), June 28, 2019,
https://www.whitehouse.gov/wp-content/uploads/2019/06/OMB-Circular-A-136.pdf. For additional information on
CCC-funded activities at USAID, see CRS Report R45422, U.S. International Food Assistance: An Overview.
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mitigate commodity price declines from retaliatory tariffs on a variety of U.S. agricultural
products. It has also al owed for an expeditious response to market disruptions created by the
coronavirus pandemic. Both of these actions were undertaken using CCC’s discretionary s discretionary
authority; therefore, no authority; therefore, nocongressional budget offset was requiredbudget offset was required. The CCC’s permanent,
under congressional budget procedures. CCC's indefinite funding authority means that expenditures for USDAindefinite funding authority means that expenditures for USDA’s two trade aid packages and
CFAP payments are to be automatical y's CCC uses were automatically reimbursed as a net realized loss. Without offsets, this reimbursed as a net realized loss. Without offsets, this
increases total federal spending.increases total federal spending.
The use of CCC’s discretionary authority in recent years is perhaps less controversial than the
total amount authorized. USDA’s discretionary use of CCC authority has effectively doubled the
annual net realized loss.39 This increase in spending brings CCC close to its borrowing authority
limit of $30 bil ion. If the borrowing authority limit were reached before Congress appropriates
the net realized loss reimbursement, al functions and operations of CCC would be suspended,
including those authorized in the 2018 farm bil .40 In recent years, this potential consequence has
resulted in congressional action to alter the timing of CCC’s appropriation so as not to delay its
activities.
Congressional support for discretionary use of CCC typical y varies depending on the purpose
and distribution of expenditures.41 Some in Congress have questioned how USDA has used CCC,
but few have advocated for a renewed restriction or repeal of the discretionary authority.
Congressional actions by the 116th Congress, such as a required expansion in the FY2019
supplemental appropriations of payments under the trade aid program,
Congress has restricted the use of CCC in the past and may consider future restrictions as a cost saving measure for budget reconciliation, to offset other spending (e.g., through farm bill reauthorization), or for deficit reduction. Such a restriction was proposed in the 118th Congress as part of the House ordered to be reported farm bill.42 The bill proposed restricting USDA's discretionary use of CCC between FY2025 through FY2034, which was estimated to save $5.4 billion over the 10-year scoring period.43 The savings would have partially offset additional spending on other farm support measures.44 Restrictions on CCC's discretionary use authority, however, could impact USDA's ability to respond to adverse economic conditions facing U.S. agriculture, such as trade disruptions, or to make commodity purchases.
congressional support for the trade aid packagecongressional support for the trade aid package.42 Similarly, the mid-year reimbursement under
the CARES Act could also signal congressional support of the 116th Congress for USDA’s
discretionary use of CCC’s authority, especial y in times of emergency. Legislation was also
introduced in the 116th Congress that would have expanded CCC’s authorized uses and increased
its borrowing authority limit.43
Conclusion
CCC is a government-owned and broadly empowered financial institution that has a mandate to
support U.S. agriculture. Its activities are derived from long-standing , some in Congress still questioned the amount and distribution of expenditures, yet wanted to avoid the consequence of reaching the borrowing limit and the effects on other CCC programs.47
During the Biden Administration, CCC funds were used to create market opportunities for U.S. agricultural and forest products produced using climate-smart production practices. Although the development of markets is an included use of CCC Section 5 authority, the approach of the initiative to incentivize commodities produced using climate-smart practices caused some in Congress to question its validity.48 The Government Accountability Office determined that USDA's use of CCC's Section 5 authority for the initiative was an authorized use.49 Legislation has been introduced that would expand CCC's authorized uses, and other legislation proposes to restrict it.50
Congress. Congress.While it is the primary funding mechanismIt is one of several mandatory funding mechanisms used in omnibus farm bills but is not the largest when measured by funds obligated.53 The nature of its borrowing authority and use of funding can raise questions about how CCC's functional operations support some of USDA's core farm program activities and whether they should or could be expanded or reduced.
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For example, the farm bill directs that for certain farm commodity programs, such as the Price Loss Coverage program "the payments shall be made beginning October 1, or as soon as practicable thereafter, after the end of the applicable marketing year for the covered commodity" (7 U.S.C. §9016(e)).
36.
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In the 1980s, CCC received nine supplemental appropriations to cover losses that exceeded the borrowing authority limit at the time. Congress increased the borrowing authority limit three times in the same period (1982, 1983, and 1987; see Figure 1).
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used in omnibus farm bil s, its existence,
use, and operations are frequently misunderstood and often confused with USDA itself. One
reason for this confusion may be because much of CCC’s functional operations support USDA’s
39 See the darker shaded portion of the Income and Commodity Support category of Figure 2. T his includes assistance
programs created by USDA in FY2018-FY2020 for trade mitigation and coronavirus relief through discretionary use of
CCC authorities.
40 Agriculture Improvement Act of 2018; P.L. 115-334.
41 For example, see Letter from Debbie Stabenow, U.S. Senator, Charles E. Schumer, U.S. Senator and Minority
Leader, and Richard Durbin, U.S. Senator et al. to Sonny Perdue, Secretary of Agriculture, November 12, 2019,
https://www.agriculture.senate.gov/mfp-letter; and Letter from John Hoeven, U.S. Senator, Mitch McConnell, U.S.
Senator and Majority Leader, and John Boozman, U.S. Senator et al. to Nancy Pelosi, Speaker of the U.S. House of
Representatives, September 17, 2019, https://republicans-agriculture.house.gov/UploadedFiles/CCC_Letter.pdf.
42 Section 103 of the FY2019 supplemental appropriation (P.L. 116-20) amends the Market Facilitation Program’s
(MFP) adjusted gross income (AGI) requirement to (1) change the tax years used to calculated AGI to 2013, 2014, and
2015 and (2) allow MFP payments for those with AGI more than $900,000 if at least 75% of their AGI came from
farming, ranching, or forestry-related activities. For additional information on MFP, see CRS In Focus IF11289, Farm
Policy: Com parison of 2018 and 2019 MFP Program s and CRS In Focus IF11245, FY2019 Supplemental
Appropriations for Agriculture.
43 For example, H.R. 8406, S. 4800, and S. 4156 would have expanded CCC’s authorized uses, among other changes,
and H.R. 6728 and H.R. 7679 would have increased the borrowing authority limit.
Congressional Research Service
11
The Commodity Credit Corporation (CCC)
program activities––CCC has no staff of its own; rather, it operates primarily through USDA
agencies.
The broad authorities that Congress has granted to CCC al ow it to carry out almost any operation
that is consistent with the objective of supporting U.S. agriculture. At the same time, these broad
powers and the CCC’s borrowing authority have made it an object of attention, and of
controversy at times, among the legislative and executive branches and with some interest groups.
Congressional Research Service
12
The Commodity Credit Corporation (CCC)
Author Information
Megan Stubbs
Specialist in Agricultural Conservation and Natural
Resources Policy
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should n ot be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material.
Congressional Research Service
R44606 · VERSION 6 · UPDATED
13
Contents
- Origin of the Commodity Credit Corporation
- CCC Charter Act
- Congressionally Authorized Activities
- Discretionary Use (Section 5 Authority)
- Management of CCC
- Financing CCC
- Borrowing Authority and Related Appropriations
- Net Expenditures
- Net Realized Losses
- Appropriations to Reimburse Net Realized Loss
- Reimbursement Timing
- Non-Borrowing Authority Appropriations
- Considerations for Congress
- Conclusion
Summary
The Commodity Credit Corporation (CCC) has served as a mandatory funding mechanism for The Commodity Credit Corporation (CCC) has served as a mandatory funding mechanism foragricultural programs since 1933. The CCC Charter Act enables the CCC to broadly support the agricultural programs since 1933. The CCC Charter Act enables the CCC to broadly support the
U.S. Department of Agriculture (USDA) employees and facilities carry out all of its activities. U.S. Department of Agriculture (USDA) employees and facilities carry out all of its activities.
officials. CCC has officials. CCC has
and payments to farmers and ranchers. It has a permanent indefinite borrowing authority of $30 billion from the U.S. Treasury. By law, it to farmers and ranchers. It has a permanent indefinite borrowing authority of $30 billion from the U.S. Treasury. By law, it
receives an annual appropriation equal to the amount of the previous yearreceives an annual appropriation equal to the amount of the previous year
replenishes its borrowing authority from the Treasury and allows it to cover authorized expenditures that will not be replenishes its borrowing authority from the Treasury and allows it to cover authorized expenditures that will not be
recovered. Variations in its annual appropriation each year recovered. Variations in its annual appropriation each year
support but rather reflect changes in farm program payments and other discretionary uses of CCCsupport but rather reflect changes in farm program payments and other discretionary uses of CCC
based on economic circumstances and weather conditions.based on economic circumstances and weather conditions.
CCC Net Realized Loss, CCC Net Realized Loss,
Sources: Compiled by CRS from USDA, Farm Service Agency (FSA), Commodity Estimates Book, FY2008-FY2017 President's Budgets (Output 3); USDA, FSA, Data Master, FY2008 through FY2017 President's Budgets; and USDA, FY2016 through FY2025 Explanatory Notes-Commodity Credit Corporation, "Account 1: Net Realized Losses." FY2024 and FY2025 estimates are from the FY2025 Explanatory Notes.
Notes: Total funding for CCC is constrained by the $30 billion borrowing limit that does not adjust for inflation. The totals presented are nominal budget authority in billions of dollars not adjusted for inflation. The net realized loss estimated for FY2020 and FY2021 is above the $30 billion borrowing limit due, in part, to a midyear appropriation in FY2020 that reimbursed a portion of the loss before the end of the fiscal year. Actual losses occur in the fiscal year prior to the year of appropriation.
The majority of CCC activities are authorized through omnibus farm bills—most recently the Agriculture Improvement Act of 2018 (2018 farm bill, P.L. 115-334) and related extensions (P.L. 118-158, Division D; and P.L. 118-22, Division B, §102). Farm bill authorization directs programs to use CCC's borrowing authority, thereby dispensing with the need for an annual appropriation for individual programs. The use of this mandatory spending authority has expanded over time.
The CCC Charter Act also grants the Secretary of Agriculture broad powers and discretion to use the CCC, sometimes referred to as Section 5 authority, to fund activities that support agriculture. The mandatory funding nature of CCC activities may make CCC an attractive funding mechanism but one that is subject to budget enforcement rules if used by Congress. USDA's use of CCC is not subject to the same congressional budget procedures; therefore, certain USDA actions may increase federal spending without needing to be offset under congressional budget enforcement rules.
This discretionary use has been restricted by Congress in the past, which can reduce the Secretary's options to use CCC. Since FY2018, no restriction has been placed on USDA's use of CCC, and both the Trump and Biden Administrations have used CCC for various purposes to support U.S. agriculture. Congress may consider future restrictions as a cost saving measure for budget reconciliation, to offset other spending (e.g., through farm bill reauthorization), or for deficit reduction. Restrictions on CCC's discretionary use authority could impact USDA's ability to respond to adverse economic conditions facing U.S. agriculture, such as trade disruptions or commodity purchases. Congressional support for discretionary use of CCC typically varies depending on amount and purpose. CCC funding and activities authorized by USDA are at the discretion of the Secretary of Agriculture and may change or be suspended by the Secretary of Agriculture at any time (e.g., the current Administration may change or suspend actions taken by a previous Administration).
Tcarrying out federal farm commodity price support and production programs since 1933. It carrying out federal farm commodity price support and production programs since 1933. It
Agriculture at the U.S. Department of Agriculture (USDA). The CCC mission was conceived Agriculture at the U.S. Department of Agriculture (USDA). The CCC mission was conceived
mainly as one of commodity support, but over time it has expanded to include an increasingly mainly as one of commodity support, but over time it has expanded to include an increasingly
allow it to carry out it to carry out
This broad mandate, and its significant borrowing authority, has This broad mandate, and its significant borrowing authority, has
attention. For most of its history, CCCattention. For most of its history, CCC
directives such as the farm directives such as the farm
operates, what its current uses are, and what it may be used for in the future. This report provides operates, what its current uses are, and what it may be used for in the future. This report provides
a brief review of CCCa brief review of CCC
Origin of the
Commodity Credit Corporation For over a decade prior to the creation of CCC in 1933, the farm economy struggled with low For over a decade prior to the creation of CCC in 1933, the farm economy struggled with low
levels of income from depressed commodity prices and increasing costs for supplies and services. levels of income from depressed commodity prices and increasing costs for supplies and services.
established by the Agricultural Marketing Act of 1929.established by the Agricultural Marketing Act of 1929.
to eliminateto eliminate
of carrying out surplus purchase operations. Without the ability to control production, it was of carrying out surplus purchase operations. Without the ability to control production, it was
impossible to eliminateimpossible to eliminate
provisions of the law dealt with fair marketing practices and voluntary agreements between provisions of the law dealt with fair marketing practices and voluntary agreements between
producers and handlers of commodities to regulate marketing. producers and handlers of commodities to regulate marketing.
The Delaware charter authorized CCC, among other things, to buy and The Delaware charter authorized CCC, among other things, to buy and
ensuring adequate supplies; and facilitate the efficient distribution of agricultural commodities. It was adequate supplies; and facilitate the efficient distribution of agricultural commodities. It was
was acquired to raise the capitalization to $100 was acquired to raise the capitalization to $100
1939, Executive Order 8219 ordered that 1939, Executive Order 8219 ordered that
season for supply controls to impact the market was judged to be untenable. With the season for supply controls to impact the market was judged to be untenable. With the
to as nonrecourse loans, to as nonrecourse loans,
provided farmers funds to hold their products off the market until prices improved. The first loans provided farmers funds to hold their products off the market until prices improved. The first loans
were made to cotton farmers for more than the market price. Since loans were higher than the were made to cotton farmers for more than the market price. Since loans were higher than the
market price and the loans were nonrecourse, they could be satisfied by forfeiting the cotton market price and the loans were nonrecourse, they could be satisfied by forfeiting the cotton
establishing a floor price for the domestic market.establishing a floor price for the domestic market.
from a tax on commodity processing and from CCCfrom a tax on commodity processing and from CCC
appropriated under authority of the National Industrial Recovery Act and the Fourth Deficiency appropriated under authority of the National Industrial Recovery Act and the Fourth Deficiency
other elements of the law, led to additionalother elements of the law, led to additional
permanent authority for many USDA activities. Subsequent omnibus permanent authority for many USDA activities. Subsequent omnibus
CCC Charter Act
The Government Corporation Control Act of The Government Corporation Control Act of
(Charter Act).(Charter Act).
Government Corporations in General
depends on how they are defined (ranging from around a dozen to over 40). Whiledepends on how they are defined (ranging from around a dozen to over 40). While
Commonly,Commonly,
or approximates its expenditures. or approximates its expenditures.
to Congress and are assigned to committeesto Congress and are assigned to committees
as discreteas discrete
income and prices; assist in maintaining balanced and adequate supplies of agricultural income and prices; assist in maintaining balanced and adequate supplies of agricultural
commodities; and facilitate the orderly distribution of commodities. A list of some of CCCcommodities; and facilitate the orderly distribution of commodities. A list of some of CCC
's authorities (paraphrased from Section 5 of the Charter Act, 15 U.S.C. §authorities (paraphrased from Section 5 of the Charter Act, 15 U.S.C. §
agencies and for domestic requirements.agencies and for domestic requirements.
commodities.commodities.
The majority of CCC operations are governed by statutory authorities that The majority of CCC operations are governed by statutory authorities that
USDA on how to administer CCC activities and in what amounts to fund them. Over time, USDA on how to administer CCC activities and in what amounts to fund them. Over time,
Congress has added new activities to CCCCongress has added new activities to CCC
authorized in authorized in periodic omnibus farm bills.14 In carrying out these
15 Examples of CCC Activities and Programs
typically authorized through omnibus farm authorized through omnibus farm
programs are listed below.programs are listed below.
Commodity and Income Support provides provides
for major commodityfor major commodity
Coverage).Coverage).
Conservation
programs to protect soil,programs to protect soil,
Incentives Program,Incentives Program,
Disaster provides payments for livestock provides payments for livestock
outbreaks (e.g., Livestockoutbreaks (e.g., Livestock
Program).Program).
Export and
and supports international food assistance programs (e.g.,and supports international food assistance programs (e.g.,
Bioenergy provides assistance for the research, provides assistance for the research,
biofuels (e.g., Biorefinerybiofuels (e.g., Biorefinery
Program). Specialty Crops supports research,supports research,
prevention for fruits, vegetables,prevention for fruits, vegetables,
Grant Program and Specialty Crop Research Initiative).Grant Program and Specialty Crop Research Initiative).
This discretion This discretion (sometimes referred to as Section 5 authority) has been used during CCC's history for various purposes, including purchases of food for distribution, responses to
priorities (priorities (
FY2024 Fiscal Year
Program Name
Total Authorized Funding Level
2015
$100 million
2016, 2018
$542 million
2018-2019
$2,600 million
2018-2019
Market Facilitation Program
$28,000 million
2020
Higher Blends Infrastructure Incentive Program
$100 million
2020
Seafood Assistance Program
$530 million
2020
Coronavirus Food Assistance Program (CFAP)
$6,500 million
2021
Drought Recovery & Water Smart Practices
$500 million
2021-2024
School Food/Child Nutrition Support
$4,000 million
2022
Partnerships of Climate-Smart Commodities
$3,500 million
2023
Food Aid to Address Global Hunger
$1,060 million
2023-2024
Regional Agricultural Trade Promotion Program
$1,680 million
Source: Compiled by CRS from USDA press releases, Federal Register notices, and budget documents.
Notes: The nominalauthorized levels.authorized levels.
CCC Charter Act or through limitation, such as in appropriations, on how CCC funds may be CCC Charter Act or through limitation, such as in appropriations, on how CCC funds may be
used. The latter occurred from FY2012 to FY2017, when Congress limited USDAused. The latter occurred from FY2012 to FY2017, when Congress limited USDA
use CCCuse CCC
Restrictions on CCC Use: FY2012-FY2017
Each annual appropriation between FY2012 and FY2017 temporarilyEach annual appropriation between FY2012 and FY2017 temporarilyauthority under authority under
under Section 5 of the Commodityunder Section 5 of the Commodity
affect USDAaffect USDA
This recurringThis recurring
USDA spent $348 USDA spent $348
soybeans, and sweet potatoes),soybeans, and sweet potatoes),
authority to makeauthority to make
programs.programs.
20 Critics of the 2009 disaster assistance, in Congress and elsewhere,Critics of the 2009 disaster assistance, in Congress and elsewhere,
such payments without a legislativesuch payments without a legislative
related to assistance—orrelated to assistance—or
thereby thereby
U.S. products.U.S. products.
Management of CCC
The Charter Act makes CCC an agency and instrumentality of the United States within USDA, The Charter Act makes CCC an agency and instrumentality of the United States within USDA,
subject to the supervision and direction of the Secretary of Agriculture. A board of directors subject to the supervision and direction of the Secretary of Agriculture. A board of directors
appointed by the President, consisting of the Secretary and seven other USDA officials, is appointed by the President, consisting of the Secretary and seven other USDA officials, is
responsible for the management of CCC.responsible for the management of CCC.
charged with maintaining liaisons with other governmental and private trade operations on the charged with maintaining liaisons with other governmental and private trade operations on the
activities. Administrative functions activities. Administrative functions
Agricultural Marketing Service, the Foreign Agricultural Service, and the Agricultural Marketing Service, the Foreign Agricultural Service, and the
CCC cannot acquire property or interest in property unless it is related to providing storage for CCC cannot acquire property or interest in property unless it is related to providing storage for
program implementation or protecting CCCprogram implementation or protecting CCC
space necessary to conduct business (e.g., warehousing of commodities). Financing CCC CCC is responsible for the direct spending and credit guaranteesCCC is responsible for the direct spending and credit guarantees used to finance the federal used to finance the federal
authority of agricultural legislationauthority of agricultural legislation
broadly empowered financial institution. The money that CCC needs comes from its own funds broadly empowered financial institution. The money that CCC needs comes from its own funds
(including its $100 (including its $100
accounting statutes and regulations, CCC is accounting statutes and regulations, CCC is
required to submit an annual business-type required to submit an annual business-type
(OMB) also plays a role in how CCC funds (OMB) also plays a role in how CCC funds
are administered through an apportionment are administered through an apportionment
process, which process, which
the funds available for obligation and the funds available for obligation and
for select CCC programs and operating for select CCC programs and operating
Figure 1. CCC's Borrowing Authority
1938-2025
Source: CRS from USDA, Reports of Financial Conditions and Operations of the CCC, various years.
Notes: The graph illustrates the year in which legislationborrowing authority. In 1954, Congress passed two borrowing authority. In 1954, Congress passed two
increases,increases,
billion.
authority to borrow from the Treasury (and also private lending institutions) within limits set by authority to borrow from the Treasury (and also private lending institutions) within limits set by
CongressCongress in statute. As the amount of money . As the amount of money
require annual appropriations in order to operate. Mandatory spending, however, is subject to require annual appropriations in order to operate. Mandatory spending, however, is subject to
expenditures, which is a combination of outlays and receipts. The second is , which is a combination of outlays and receipts. The second is net realized losses, ,
Net Expenditures
expenditures. Net expenditures include expenditures. Net expenditures include
referred to as referred to as
CCC-funded programs (e.g., loans made, conservation program payments, commodity purchases, CCC-funded programs (e.g., loans made, conservation program payments, commodity purchases,
and disaster payments). Outlays are offset by receipts (e.g., loan repayment, sale of commodities, and disaster payments). Outlays are offset by receipts (e.g., loan repayment, sale of commodities,
Net Realized Losses
outlays that CCC outlays that CCC
payments, and operating expenses. The net realized loss is the amount that CCC, by law, is payments, and operating expenses. The net realized loss is the amount that CCC, by law, is
Figure 2. CCC Realized Losses
FY2006-FY2025
Sources: Compiled by CRS from USDA, Farm Service Agency (FSA), Commodity Estimates Book, FY2008-FY2017 President's Budgets (Output 3); USDA, FSA, Data Master, FY2008 through FY2017 President's Budgets; and USDA, FY2016 through FY2025 Explanatory Notes-Commodity Credit Corporation, "Account 1: Net Realized Losses." FY2024 and FY2025 estimates are from the FY2025 Explanatory Notes.
Notes: Total funding for CCC is constrained by the $30 billion borrowing limit that does not adjust for inflation. The totals presented are nominal budget authority in billions of dollars not adjusted for inflation. The net realized loss estimated for FY2020 and FY2021 is above the $30 billion borrowing limitThe annual appropriation for CCC varies each year based on the net realized loss of the previous year.33 For example, the FY2021 appropriation (P.L. 116-260) covered the net realized loss for the previous year of $31.8 billion. This reduced by more than half the next year, to cover a net realized loss of $14.4 billion. The decline does not indicate any action by Congress to change program support; it reflects changes in farm program payments and other uses of CCC's authority that fluctuated based on economic circumstances and weather conditions. Also, CCC's assets, which include loans and commodity inventories, are not considered to be "losses" until CCC ultimately disposes of the asset (e.g., by sales, exports, or donations). Once CCC has disposed of these assets, its total losses are realized and are added to other program expenses less any other program income.
Reimbursement Timing Congress has annually appropriated CCC funding to cover its net realized lossesyear. The total amount appropriated is based on the required financial statement and audit of the CCC year. The total amount appropriated is based on the required financial statement and audit of the CCC
following the completion of a fiscal year.the completion of a fiscal year.
the annual appropriated reimbursement.the annual appropriated reimbursement.
Many farm program payments are requiredMany farm program payments are required
has enough roomhas enough room
appropriated reimbursement.appropriated reimbursement.
suspended until the borrowing authority is restored through the reimbursementsuspended until the borrowing authority is restored through the reimbursement
appropriation.appropriation.
The timing of this appropriation may be altered if Congress The timing of this appropriation may be altered if Congress
annual financial statement or at a timeannual financial statement or at a time
adjustments have occurred in recent years.adjustments have occurred in recent years.
Anomaly
pass a continuing resolutionpass a continuing resolution
CR continues the funding rates and conditions that wereCR continues the funding rates and conditions that were
exceptions (or exceptions (or
rate or to address special circumstances.rate or to address special circumstances.
fiscal year were high enough that Congress included an anomaly in CRs fiscal year were high enough that Congress included an anomaly in CRs
the amount reimbursedthe amount reimbursed
reimbursement.reimbursement.
in a regular appropriation that could shift the timing of when CCC could receivein a regular appropriation that could shift the timing of when CCC could receive
Supplemental Appropriation
CCC operates as a line of credit,CCC operates as a line of credit,needed to carry out its activities. The net realizedneeded to carry out its activities. The net realized
the Treasury, effectivelythe Treasury, effectively
annually through the annual appropriations process; however, Congressthrough the annual appropriations process; however, Congress
allowing additional expenditures in a given fiscal year. This occurred in FY2020, when the CARES Act (additional expenditures in a given fiscal year. This occurred in FY2020, when the CARES Act (
§11002) §11002)
report. This report. This
paid off a portion of its debit earlierpaid off a portion of its debit earlier
Some CCC operations are financed through appropriated funds and are unrelated to the permanent indefinite borrowing authority described above. These activities have included specific statutory authorities for separate reimbursements—for example, export credit guarantee programs, foreign donations, concessional sales under the Food for Peace Program (P.L. 83-480, also known as P.L. 480), and disaster aid.
Historically, CCC had what was referred to as a "parent/child" account relationship with U.S. Agency for International Development (USAID). CCC allocated funds (as the parent) to USAID (as the child) to fund P.L. 480 Title II and Bill Emerson Humanitarian Trust transportation costs and other administrative costs in connection with foreign commodity donations. CCC then reported USAID's budgetary and proprietary activities in its financial statements.38 On January 20, 2025, President Trump began taking actions affecting U.S. foreign assistance and USAID. As of this writing, USAID's role in providing foreign assistance and the use of CCC for these purposes is evolving.39
Congress may also appropriate funding to programs or activities authorized to receive CCC funds but not drawn from the borrowing authority. For example, the act commonly referred to as the Inflation Reduction Act of 2022 (IRA, P.L. 117-169) authorized additional funding for conservation, rural development, and forestry programs that are authorized to receive CCC funds. Funding provided by the IRA is in addition to funding received through CCC.40
Considerations for Congress The mandatory funding nature of CCC activities may make it an attractive funding mechanism for both Congress and the Secretary of Agriculture. Any expansion of activities or programs authorizing mandatory funding by Congress is subject to budget enforcement rules and may require a spending/revenue offset or a waiver of congressional budgetary rules. USDA's discretionary use of CCC is not subject to the same congressional budget offset requirements; therefore, certain USDA actions can increase federal spending without budget enforcement procedures requiring offsets. Both the Trump and Biden Administrations used CCC for various purposes to support U.S. agriculture.41 These administrative actions were undertaken using CCC'authority; therefore, no authority; therefore, no
under congressional budget procedures. CCC's indefinite funding authority means that expenditures for USDAindefinite funding authority means that expenditures for USDA
Congressional support for discretionary use of CCC typically varies depending on the amount used and for what purpose.
During the first Trump Administration, the total amount authorized by USDA through CCC for the trade aid package was more than previous individual discretionary uses of CCC.45 This increase in spending brought CCC close to its borrowing authority limit of $30 billion; congressional action altered the timing of CCC's appropriation and of a supplemental appropriation that restored CCC's borrowing authority.46 While these congressional actions by the 116th Congress could be viewed as could be viewed ascongressional support for the trade aid packagecongressional support for the trade aid package
CCC funding and activities authorized by a Secretary of Agriculture, including current and past Secretaries, are at the discretion of the current Secretary of Agriculture. Previously announced uses may change or be suspended by an Administration at the Secretary of Agriculture's discretion.51 Congress may continue or amend these activities through legislation; funding to do so may be subject to congressional budgetary constraints. Despite the temporary nature of the activities authorized by the Secretary through CCC, funds are available until expended once transferred from CCC to a USDA agency for implementation. If funding authorized for a purpose during a previous Administration is not carried out by the subsequent Administration, USDA is not to return the funds to CCC but rather may use the funds for other programs or purposes authorized under CCC Section 5 authority or return the funds to the Treasury.52
Conclusion CCC is a government-owned and broadly empowered financial institution supporting U.S. agriculture. Its activities are derived from authorities granted by authorities granted byCongress. Congress.
The authorities that Congress has granted to CCC allow it to carry out many operations that are consistent with the objective of supporting U.S. agriculture. These same broad powers and the CCC's borrowing authority have also made CCC an object of attention, and of controversy at times, among the legislative and executive branches, stakeholders, and some interest groups.
Footnotes
These payments are discussed in the "Discretionary Use" section.
Other CRS reports cover in detail programs and activities authorized through the Commodity Credit Corporation (CCC). For additional information regarding programs and activities authorized through CCC, see CRS farm bill and farm support reports at http://www.crs.gov/iap/agriculture-and-food.
P.L. 71-10; 46 Stat. 11.
P.L. 73-10; 48 Stat. 31.
Executive Order 6340, "Creating the Commodity Credit Corporation," Public Papers of the Presidents of the United States: Franklin D. Roosevelt (Washington: GPO, October 16, 1933).
The Reconstruction Finance Corporation originally acquired the $100 million capitalization stock. The Reconstruction Finance Corporation was a New Deal–era government corporation that provided financial support and loans, including the recapitalization of banks.
Executive Order 8219, 4 Federal Register 3565, August 10, 1939. Executive Order 7848, 3 Federal Register 632, March 22, 1938, had previously designated the Secretary of the Treasury as the holder of CCC's capital stock.
David Godfrey, "The Commodity Credit Corporation," Texas Tech University, 1974, http://hdl.handle.net/10601/1696.
48 Stat. 195, and 48 Stat. 274, respectively.
The Government Corporation Control Act of 1945 (GCCA, 31 U.S.C. §§9101-9110) standardized budget, auditing, debt management, and depository practices for government corporations. The GCCA is not a general incorporation act such as those in effect in the states. The charter for each federal government corporation is the separate enabling legislation passed by Congress. The GCCA also does not offer a general definition of what constitutes a government corporation. It simply enumerates the organizations covered by the act. For additional information, see General Accounting Office, Government Corporations: Profiles of Existing Government Corporations, GAO/GGD 96-14, December 1995, https://www.gao.gov/products/GGD-96-14.
P.L. 80-806; 62 Stat. 1070; 15 U.S.C. §714.
Government Accountability Office (GAO), Federally Created Entities: An Overview of Key Attributes, GAO-10-97, October 2009, pp. 13-16, https://www.gao.gov/products/GAO-10-97.
Amendments to the Commodity Credit Corporation Charter Act in 2004 preclude tobacco from being considered within the definition of "agricultural commodities" (P.L. 108-357).
CRS In Focus IF12047, Farm Bill Primer: Background and Status.
15 U.S.C. §714c.
For example, see Section 715 of the Consolidated Appropriations Act of 2016 (P.L. 114-113) or Section 715 of the Consolidated Appropriations Act of 2017 (P.L. 115-31).
Appropriations acts also limited clause 3 of Section 32, which provides that funds may be used to reestablish farmers' purchasing power by making payments in connection with the normal production of any agricultural commodity for domestic consumption (7 U.S.C. §612c).
U.S. Department of Agriculture's (USDA) Section 32 program is funded by a permanent appropriation of 30% of the previous year's customs receipts, less certain mandatory transfers. Section 32 funds are used for a variety of activities, including child nutrition programs, the purchase of commodities for domestic food programs, and farm disaster relief. For more information, see CRS Report R48141, Trends in USDA Procurement of U.S. Food and Agricultural Products.
On October 22, 2010, USDA announced it would begin making payments to producers in eligible counties under the Crop Assistance Program using payment rates established for each crop. A fact sheet is available at http://www.fsa.usda.gov/Internet/FSA_File/cap10pfs.pdf.
USDA, Background on 2009 Disaster Assistance, http://www.agri-pulse.com/uploaded/Disaster_Backgrounder.pdf.
For more information, see CRS Insight IN10880, China's Retaliatory Tariffs on Selected U.S. Agricultural Products.
For more information, see CRS Report R45310, Farm Policy: USDA's 2018 Trade Aid Package; and CRS Report R45865, Farm Policy: USDA's 2019 Trade Aid Package.
15 U.S.C. §714g.
The bylaws of CCC name the administrator of the Farm Service Agency (FSA) as executive vice president of CCC, which "shall have general supervision and direction of the day-to-day conduct of the business of the Corporation and its officers." USDA, CCC, Bylaws of the Corporation, May 3, 2022, https://www.usda.gov/sites/default/files/documents/usda-ccc-bylaws.pdf.
15 U.S.C. §714b(h).
CCC budget estimates can be found annually at USDA, Office of Budget and Program Analysis, https://www.usda.gov/about-usda/general-information/staff-offices/office-budget-and-program-analysis.
General Accounting Office, Commodity Credit Corporation: Information on the Availability, Use, and Management of Funds, GAO/RCED-98-114, April 1998, http://www.gao.gov/assets/230/225533.pdf.
In accordance with the Antideficiency Act, as amended (31 U.S.C. §1512), among other statutory requirements.
31 U.S.C. §1511(b)(1)(A).
15 U.S.C. §714b(i).
In general, pay-as-you-go (PAYGO) rules require legislation that is projected to increase mandatory spending or reduce revenues to also include offsetting provisions over a specified period. For more information on the House and Senate PAYGO rules, see CRS Report R41510, House Rule XXI, Clause 10: The CUTGO Rule and CRS Report RL31943, Budget Enforcement Procedures: The Senate Pay-As-You-Go (PAYGO) Rule, respectively. For information on how budget enforcement affects the farm bill, see CRS In Focus IF12233, Farm Bill Primer: Budget Dynamics.
15 U.S.C. §713a-11.
According to a General Accounting Office report, CCC changed the manner in which it calculates its request for an appropriation to cover its net realized losses in 1998 in response to recommendations from USDA's Office of Inspector General. Prior to 1998, the annual appropriation request included estimates for prior and future losses. This resulted in an over-appropriation of about $5 billion in FY1996 due to overestimates of CCC's prior and future losses. General Accounting Office, CCC: Information, GAO/RCED-98-114.
15 U.S.C. §713a-11. Audits are in accordance with 31 U.S.C. §9105.
The Congressional Budget Office (CBO) baseline projection for CCC estimates these first quarter of the fiscal year outlays in its estimate of the availability of funds for discretionary use. CBO, Baseline Projection for USDA Farm Programs, "Appendix B. Assumptions for Estimating CCC Section 5 Use Under the $30 Billion Borrowing Limit," January 2025, https://www.cbo.gov/data/baseline-projections-selected-programs#23.
USDA, Office of Inspector General, Commodity Credit Corporation's Financial Statements for Fiscal Years 2024 and 2023, Audit Report 06403-0007-11, November 2024, https://usdaoig.oversight.gov/reports/audit/commodity-credit-corporations-financial-statements-fiscal-years-2024-and-2023.
For additional information, see CRS In Focus IF10261, U.S. Agency for International Development: An Overview.
For example, P.L. 117-169, §21001, directs "using the facilities and authorities of the Commodity Credit Corporation" (but not the funds), as compared to other provisions of farm bills that state to "use the funds, facilities, and authorities of the Commodity Credit Corporation" (e.g., 16 U.S.C. §3841).
For example, during the first Trump Administration, USDA used CCC to mitigate commodity price declines from retaliatory tariffs on a variety of U.S. agricultural products. See USDA, "[Archived] Market Facilitation Program," https://www.farmers.gov/archived/protection-recovery/mfp. An example during the Biden Administration was CCC's use to issue payments for agricultural producers to implement "climate-smart" production practices. See USDA, "[Archived] Partnerships for Climate-Smart Commodities Project Summaries," https://web.archive.org/web/20250110181709/https://www.usda.gov/climate-solutions/climate-smart-commodities.
H.R. 8467; §1608.
CBO, "Estimate of H.R. 8467 Relative to CBO's June 2024 Baseline Projections," November 8, 2024, https://www.cbo.gov/publication/60972.
For more information, see "Budgetary Impact" in CRS Report R48167, The 2024 Farm Bill: H.R. 8467 Compared with Current Law.
For additional information on MFP, see CRS In Focus IF11289, Farm Policy: Comparison of 2018 and 2019 Market Facilitation Programs; and CRS In Focus IF11245, FY2019 Supplemental Appropriations for Agriculture.
See "Reimbursement Timing" section; §119 of the FY2020 continuing appropriations act (P.L. 116-59); §118 of the FY2021 continuing appropriations act (P.L. 116-159); and §11002 of the CARES Act (P.L. 116-136).
For example, see Letter from Sen. Debbie Stabenow et al. to Sonny Perdue, Secretary of Agriculture, November 12, 2019, https://www.agriculture.senate.gov/mfp-letter; and Letter from Sen. John Hoeven et al. to Nancy Pelosi, Speaker of the U.S. House of Representatives, September 17, 2019, https://republicans-agriculture.house.gov/UploadedFiles/CCC_Letter.pdf.
See Letter from Rep. Dan Newhouse et al. to Tom Vilsack, Secretary of the U.S. Department of Agriculture, October 28, 2022, https://westerncaucus.house.gov/uploadedfiles/10.28.22_ccc_climate_smart_commodities_letter_signed.pdf; and Letter from Sen. Chuck Grassley and Rep. Chip Roy to Chuck Schumer, Majority Leader of the U.S. Senate and Mike Johnson, Speaker of the House of Representatives, December 7, 2023, https://www.grassley.senate.gov/imo/media/doc/grassley_roy_to_congressional_leaders_-_farm_bill.pdf.
GAO, Decision: U.S. Department of Agriculture—Use of Commodity Credit Corporation Funds for Various Programs, B-334146.1, September 20, 2023.
For example, in the 118th Congress, H.R. 6690 and S. 2876 would have expanded CCC's authorized uses, and H.R. 8467 and S. 2244 would have restricted CCC use.
For example, the Local Food Purchase Assistance Cooperative Agreement Program (LFPA) was authorized during the Biden Administration and cancelled during the Trump Administration. According to media reports, a USDA spokesperson was quoted as saying, "These programs [LFPA], created under the former Administration via Executive authority, no longer effectuate the goals of the agency." Marcia Brown, "USDA Cancels $1B in local food purchasing for schools, food banks," Politico, March 10, 2025.
GAO, Decision: USDA—Use of CCC, B-334146.1.
For more on total funding for agricultural activities, see CRS Report R48431, Agriculture and Related Agencies: FY2025 Appropriations.