The Commodity Credit Corporation (CCC)
January 14, 2021
The Commodity Credit Corporation (CCC) has served as a mandatory funding mechanism for
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
Specialist in Agricultural
support, natural resources conservation, export promotion, international food aid, disaster
Conservation and Natural
assistance, agricultural research, and bioenergy development.
Resources Policy

While CCC is authorized to carry out a number of activities, it has no staff of its own. Rather,
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
officials. CCC has $100 million in capital stock; buys, owns, sells, and donates agricultural commodities; and provides loans
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 year’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
recovered. Variations in its annual appropriation each year does not indicate any action by Congress to change program
support but rather reflect changes in farm program payments and other discretionary uses of CCC’s authority that fluctuate
based on economic circumstances and weather conditions.
The majority of CCC activities are authorized through
CCC Net Realized Loss, FY2005-FY2020 (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.
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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
T 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
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
broad array of programs, including export and commodity programs, resource conservation,
disaster assistance, agricultural research, and bioenergy development.
While CCC operates according to a large number of statutory authorities, its broad powers al ow
it to carry out almost any operation required to meet the objectives of supporting U.S. agriculture.
This broad mandate, and its significant borrowing authority, has traditional y drawn little
attention. For most of its history, CCC’s responsibilities have been expanded through legislative
directives such as the farm bil . From FY2012 through FY2017, Congress took actions to limit
the discretionary uses of CCC funds through restrictions in appropriations language. Beginning in
FY2018, Congress lifted these restrictions, al owing for additional discretionary use. The Trump
Administration used CCC’s 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
operates, what its current uses are, and what it may be used for in the future. This report provides
a brief review of CCC’s unique history, funding structure, general operation, and recent issues
associated with its use. Other CRS reports cover in detail programs and activities authorized
through CCC.2
Origin of the CCC
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.
The first major federal effort to boost commodity prices was through the Federal Farm Board,
established by the Agricultural Marketing Act of 1929.3 An inadequate and ultimately failed effort
to eliminate 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
impossible to eliminate 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
incorporated in to the Agricultural Adjustment Act of 1933 (AAA).4
The AAA 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
provisions of the law dealt with fair marketing practices and voluntary agreements between
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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Corporation. Executive Order 6340 of October 17, 1933, directed the incorporation of CCC in the
state of Delaware.5
The Delaware charter authorized CCC, among other things, to buy and sel farm commodities;
lend; undertake activities for the purpose of increasing production, stabilizing prices, and insuring
adequate supplies; and facilitate the efficient distribution of agricultural commodities. It was
original y capitalized in 1933 with $3 mil ion appropriated by Congress. In 1936, sufficient stock
was acquired to raise the capitalization to $100 mil ion. Its capital stock remains at this level.6 In
1939, Executive Order 8219 ordered that al rights of the United States arising out of the
ownership of CCC be transferred to the Secretary of Agriculture.7
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
establishment of CCC, it became possible to make price-support loans, now commonly referred
to as nonrecourse loans, al owing 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
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
pledged as collateral against the loan, thereby serving as a form of price support and effectively
establishing a floor price for the domestic market.8 Funding for these first loan operations came
from a tax on commodity processing and from CCC’s $3 mil ion capital account, which was
appropriated under authority of the National Industrial Recovery Act and the Fourth Deficiency
Act.9
Constitutional difficulties with some provisions of the AAA, and practical shortcomings with
other elements of the law, led to additional legislation in the 1930s that continues to provide
permanent authority for many USDA activities. Subsequent omnibus “farm bil s” set most of the
policy goals and program constraints for farm price and income support operations that are
funded through CCC.
CCC Charter Act
The Government Corporation Control Act of 194510 (GCCA) required al 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)

States. Accordingly, Congress passed the Commodity Credit Corporation Charter Act of 1948
(Charter Act).11 Al CCC rights, duties, assets, and liabilities were assumed by the federal
corporation, and the Delaware corporation was dissolved.
Government Corporations in General
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). While no single definition exists, they
are general y defined as agencies of the federal government established by Congress to perform a public purpose.
Commonly, they provide a market-oriented product or service and are intended to produce revenue that meets
or approximates its expenditures. General y, government corporations must submit annual management reports
to Congress and are assigned to committees of subject matter jurisdiction. Many have a board of directors and are
overseen by political appointees or executive branch officials. Commonly, government corporations are perceived
as discrete entities with individual administrative requirements defined in law.12
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
commodities; 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. §714(c)) conveys a sense of
its broadly stated powers:
 Support agricultural commodity prices13 through loans, purchases, payments, and
other operations.
 Make available materials and facilities in connection with the production and
marketing of agricultural products.
 Procure commodities for sale to other government agencies; foreign
governments; and domestic, foreign, or international relief or rehabilitation
agencies and for domestic requirements.
 Remove and dispose of surplus agricultural commodities.
 Increase the domestic consumption of commodities by expanding markets or
developing new and additional markets, marketing facilities, and uses for
commodities.
 Export, or cause to be exported, or aid in the development of foreign markets for
commodities.
 Carry out authorized conservation or environmental programs.
Congressionally Authorized Activities
The majority of CCC operations are governed by statutory authorities that specifical y direct
USDA on how to administer CCC activities and in what amounts to fund them. Over time,
Congress has added new activities to CCC’s original mission, including conservation, specialty
crop support, and bioenergy development (see text box below). Most of these activities are
authorized in omnibus 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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operations, CCC is directed, to the maximum extent practicable, to use the usual and customary
channels, facilities, and arrangements of trade and commerce.15
Examples of CCC Activities and Programs
CCC is authorized to fund a broad array of programs supporting U.S. agriculture. These programs are typical y
authorized through omnibus farm bil s. A general description of the assistance offered and examples of associated
programs are listed below. 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 farm payments and loans when crop prices or revenues decline
for major commodity crops—including wheat, corn, soybeans, peanuts, and rice—as wel as other support
mechanisms for dairy, cotton, and sugar (e.g., Agriculture Risk Coverage, Price Loss Coverage, and Dairy Margin
Coverage).
Conservation provides financial and technical assistance for voluntary participation in resource conservation
programs to protect soil, water, wildlife, and other natural resources on private lands (e.g., Environment al Quality
Incentives Program, Conservation Reserve Program, and Agricultural Conservation Easement Program).
Disaster provides payments for livestock and crop production losses resulting from weather events and disease
outbreaks (e.g., Livestock Forage Program, Noninsured Crop Disaster Assistance Program, and Tree Assistance
Program).
Export and Foreign Food Assistance promotes U.S. agricultural products abroad, develops export markets,
and supports international food assistance programs (e.g., Agricultural Trade Promotion Program and Food for
Peace Program).
Bioenergy provides assistance for the research, development, and adoption of renewable energy—primarily
biofuels (e.g., Biorefinery Assistance Program, Rural Energy for America Program, and Biomass Crop Assistance
Program).
Specialty Crops supports research, market promotion (including organic certification), and pest and disease
prevention for fruits, vegetables, tree nuts, floriculture, and other ornamental products (e.g., Specialty Crop Block
Grant Program and Specialty Crop Research Initiative).
Discretionary Use
The broad CCC authorities provided to the Secretary under the CCC Charter Act also al ow
USDA a level of discretion to carry out many broad operations in support of U.S. agriculture.
This discretion has been used throughout CCC’s history for a number of different purposes,
including responses to natural disasters, adverse economic conditions, and to fund USDA
priorities (see Table 1). The scope and scale of this discretion traditional y has been targeted to
specific events, crops, or domestic needs.
Table 1. Examples of USDA’s Discretionary Use of CCC
FY2015-FY2020
Fiscal Year
Program Name
Authorized Funding Level
2015
Biofuels Infrastructure 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 Share
$215 mil ion
2018
Food 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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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 levels.
Congress can alter USDA’s discretionary 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
used. The latter occurred from FY2012 to FY2017, when Congress limited USDA’s discretion to
use CCC’s authority to remove surplus commodities and support prices. The limitation was
included in annual appropriation acts (see text box below).
How and Why Was CCC Restricted?
Each annual appropriation between FY2012 and FY2017 temporarily prohibited the use of select discretionary
authority under the CCC. This restriction was specific to any surplus removal activities or price support activities
under Section 5 of the Commodity Credit Corporation Charter Act (15 U.S.C. §714c).16 This restriction did not
affect USDA’s ability to administer authorized programs under the 2014 farm bil (P.L. 113-79).17
This recurring provision was a reaction to administrative activities fol owing 2009 crop losses, in which the Obama
Administration announced that it would implement a disaster program under “Section 32” authority.18 In 2010,
USDA spent $348 mil ion distributed across three categories: (1) select crop production (upland cotton, rice,
soybeans, and sweet potatoes),19 (2) poultry producers, and (3) aquaculture producers. USDA used CCC
authority to make required purchases that usual y would be made with Section 32 funds for domestic feeding
programs.20
Critics of the 2009 disaster assistance, in Congress and elsewhere, objected to USDA using its authority to make
such payments without a legislative mandate. Concerns at that time about the limits on CCC’s mandate were
related to assistance—or lack thereof—for cottonseed payments, dairy assistance, and biofuel infrastructure.
The FY2018 Consolidated Appropriations Act (P.L. 115-141) did not include these restrictions,
thereby al owing USDA full use of the CCC Charter Act’s discretionary authority. USDA utilized
this authority in the summer of 2018, when it announced that it 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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assist farmers in response to economic trade damage from retaliatory tariffs that targeted various
U.S. products.21 USDA used its discretion under the CCC Charter Act to authorize up to $12
bil ion in assistance—referred to as the “trade aid” 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 2020 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.25
Management of CCC
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
appointed by the President, consisting of the Secretary and seven other USDA officials, is
responsible for the management of CCC.26 CCC officers and advisors—also USDA officials—are
charged with maintaining liaisons with other governmental and private trade operations on the
CCC’s behalf.
The CCC has no personnel of its own. Rather, USDA employees and facilities carry out al of its
activities. Administrative functions general y fal to the USDA agencies directed to administer the
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), the Natural Resources Conservation Service, the
Agricultural Marketing Service, the Foreign Agricultural Service, and the United States Agency
for International Development (USAID). CCC reimburses other agencies for their administrative
costs.
CCC cannot acquire property or interest in property unless it is related to providing storage for
program implementation or protecting CCC’s financial interests.28 CCC is al owed 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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Financing CCC
CCC is responsible for the direct spending and credit guarantees used to finance the federal
government’s agricultural commodity price support and related activities that are undertaken by
authority of agricultural legislation (such as farm bil s) or the Charter Act itself. It is, in brief, a
broadly empowered financial institution. The money that CCC needs comes from its own funds
(including its $100 mil ion capital stock,
appropriations from Congress, and its
Figure 1. CCC’s Borrowing Authority
earnings from sales and fees) and from
1938-2020
borrowings. In accordance with government
accounting statutes and regulations, CCC is
required to submit an annual business-type
budget statement to Congress. This is
typical y released annual y with the
President’s budget request.29
The Office of Management and Budget
(OMB) also plays a role in how CCC funds
are administered through an apportionment
process, which al ows OMB to set a limit on
the funds available for obligation and
subsequent outlay.30 OMB apportions funds
for select CCC programs and operating

expenditures.31 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 the year in which
funds for this purpose unless it relates to
legislation authorized an increase in the borrowing
administrative expenses.32
authority. Prior to 1938, CCC had no specific
borrowing authority. In 1954, Congress passed two
increases, one to $8.5 bil ion and a second to $10
Borrowing Authority
bil ion.
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
Congress. As the amount of money needed to carry out its activities has grown over time, the
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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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
budget enforcement procedures such as pay-as-you-go (PAYGO) rules.34
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 net realized losses,
which are expenditures that wil never be recovered.
Net Expenditures
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
expenditures. Net expenditures include al cash outlays minus al cash receipts, commonly
referred to as “cash flow.” CCC outlays or expenditures represent the total cash outlays of the
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 fees). In practice a portion of these net expenditures may be recovered in future years (e.g.,
through loan repayments).
Net Realized Losses
CCC also has net realized losses, also referred to as nonrecoverable losses. These refer to the
outlays that CCC wil never recover, such as the cost of commodities sold or donated,
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
authorized to receive through appropriations to replenish its borrowing authority (see 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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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 appropriation that reimbursed a portion of the 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
year. The total amount appropriated is based on the required financial statement and audit of the CCC fol owing
the completion of a fiscal year. The financial statement and audit typical y is not completed until several months
fol owing 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.
Many farm program payments are required to be made annual y in October (e.g., Agricultural Risk Coverage, Price
Loss Coverage, Conservation Stewardship Program, and the Conservation Reserve Program). In most years, CCC
has enough room within the borrowing authority limit to make these payments before receiving its annual
appropriated reimbursement. In years of high expenditures, however, CCC could reach its borrowing authority
limit before receiving its appropriation. If this were to happen, al functions and operations of CCC would be
suspended until the borrowing authority is restored through the reimbursement that is pursuant to an
appropriation.
The timing of this appropriation may be altered if Congress authorizes reimbursement before the conclusion of the
annual financial statement or at a time other than the conclusion of the fiscal year. Both of these timing
adjustments have occurred in recent years.

Anomaly – In the absence of a final Agriculture appropriation at the beginning of a fiscal year, Congress may
pass a continuing resolution (CR) to continue operations and prevent a government shutdown. In general, a
CR continues the funding rates and conditions that were in the previous year’s appropriation. In some cases,
exceptions (or anomalies) are also included in CRs to provide changes and exceptions to the general funding
rate or to address special circumstances. In FY2017 and FY2019-FY2021, CCC expenditures for the previous
fiscal year were high enough that Congress included an anomaly in CRs al owing CCC to receive its annual
reimbursement before completion of the required financial statement and audit. The anomaly did not change
the amount reimbursed or the financial reporting requirement, only the timing of when CCC could receive
reimbursement. Under a CR without the anomaly, CCC would stil receive its annual reimbursement
fol owing the completion 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 receive reimbursement .

Mid-Year Appropriation – CCC operates as a line of credit, borrowing funds from the U.S. Treasury as
needed to carry out its activities. The net realized loss is provided through appropriations and reimbursed to
the Treasury, effectively lowering the CCC’s outstanding debit. Typical y the reimbursement occurs annual y
through the annual appropriations process; however, Congress can choose to authorize a reimbursement of
CCC’s net realized losses before the end of the fiscal year, thereby reducing CCC’s debit and al owing
additional expenditures in a given fiscal year. This occurred in FY2020, when the CARES Act ( P.L. 116-136,
§11002) al owed for up to $14 bil ion of CCC’s net realized losses be reimbursed as of the June 2020 financial
report. This mid-year appropriation did not permanently raise the CCC’s borrowing authority limit but rather
paid off a portion of its debit earlier than usual, al owing it to incur more expenses within FY202 0. This is why
the estimate for FY2020 in Figure 2 is above the $30 bil ion 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
authority; therefore, no congressional budget offset was required. The CCC’s permanent,
indefinite funding authority means that expenditures for USDA’s two trade aid packages and
CFAP payments are to be automatical y reimbursed as a net realized loss. Without offsets, this
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, could be viewed as
congressional 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 authorities granted by
Congress. While it is the primary funding mechanism 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.
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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.

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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
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Congressional Research Service
R44606 · VERSION 6 · UPDATED
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