The Commodity Credit Corporation: In Brief

Summary

The Commodity Credit Corporation (CCC) has served as a mandatory funding mechanism for agricultural programs since 1933. The CCC Charter Act enables it to broadly support the U.S. agriculture industry through authorized programs including commodity and income support, natural resources conservation, export promotion, international food aid, disaster assistance, agricultural research, and bioenergy development.

While CCC is authorized to carry out a number of activities, it has no staff of its own. CCC is overseen by the Secretary of Agriculture and a board of directors, which are also U.S. Department of Agriculture (USDA) officials. CCC has $100 million in capital stock; buys, owns, sells, and donates commodity stocks; and provides loans for to farmer 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. This replenishes its borrowing authority from the Treasury and allows it to cover authorized expenditures that will not be recovered.

The majority of CCC activities are authorized through omnibus farm bills—most recently the Agricultural Act of 2014 (P.L. 113-79). Farm bill authorization allows programs to utilize CCC’s borrowing authority, thereby not requiring an annual appropriation for individual programs. The use of this mandatory authority has expanded over time and has led to tension between authorizing committees (namely the House and Senate Agriculture Committees) and appropriation committees. Ultimately, it is Congress that passes legislation and not individual committees. As Congress looks to debate the next farm bill, many wonder whether CCC will be used to fund other areas of agriculture policy or whether spending will be restricted similar to recent limiting provisions in annual appropriations.

The Charter Act also grants the Secretary of Agriculture broad powers and discretion in the use of CCC. Recently, the Secretary’s use of CCC to fund a bioenergy initiative has highlighted this discretion and created concern in Congress. Restrictions in annual appropriation legislation have reduced the Secretary’s use of CCC but not so much as to prevent the funding of recent cotton and dairy marketing assistance.