Commodity Credit Corporation (CCC)

Commodity Credit Corporation (CCC)

Investopedia / Paige McLaughlin

What Is the Commodity Credit Corporation (CCC)?

The Commodity Credit Corporation (CCC) is a wholly-owned U.S. government corporation tasked with supporting the domestic agricultural sector. The CCC enacts its mandate by providing subsidies and incentives to U.S. agricultural producers. The CCC also assists the U.S Department of Agriculture (USDA) in developing foreign markets for agricultural exports, and providing food aid as part of international aid programs.

Key Takeaways

  • The CCC is a government corporation tasked with supporting U.S. agriculture.
  • It accomplishes this through subsidies and favorable loan programs to U.S. farmers.
  • The CCC is also active internationally, through food aid programs and efforts to modernize foreign agricultural practices.
  • President Franklin D. Roosevelt established the CCC in 1933.

Understanding the Commodity Credit Corporation (CCC)

The CCC coordinates with the USDA and is subject to the supervision and direction of the Secretary of Agriculture. It has a seven-member board of directors, all of whom are appointed by the U.S. president. The CCC does not have its own employees, instead relying on the employees of federal agencies, such as the Foreign Agricultural Service and the Farm Service Agency.

President Franklin D. Roosevelt established the CCC via executive order in 1933. The goal was to create price stability for the U.S. agricultural sector. In 1948, Congress passed the Commodity Credit Corporation Charter Act, which re-incorporated the CCC as a federal corporation.

Today, the CCC provides subsidies in the form of minimum support prices paid for American agricultural products. The support prices work in conjunction with import quotas, which are neccessary to prevent foreign producers from taking advantage of the higher prices available in the U.S. than what they could find elsewhere.

The CCC also acts to prevent prices from becoming too high. By buying and storing agricultural products at a minimum support price, the CCC is then able to sell those products if prices rise beyond a certain level. By adding additional supply to the market, this selling pressure can dampen prices, thus protecting consumers. In this manner, the CCC's interventions help to reduce volatility in food prices.

In addition to buying and selling American agricultural products, the CCC also supports domestic producers by providing loans at subsidized rates. These loans often fund crop production, with harvests used as collateral for the loan's principal.

Real World Example of the CCC

The Commodity Credit Corporation operates numerous programs, including those related to income support, disaster relief and conservation. Foreign assistance is also a significant focus. The CCC extends direct credit and guarantees commodity sales to foreign countries, and sends agricultural commodities to combat hunger and malnutrition. Assisting developing countries and emerging democracies under the Food for Progress Program is a component of the CCC's efforts to modernize and strengthen global agriculture.

Article Sources
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  1. U.S Department of Agriculture. "Commodity Credit Corporation." Accessed Feb. 9, 2021.

  2. Congressional Research Service. "The Commodity Credit Corporation: In Brief," Pages 1-2. Accessed Feb. 9, 2021.

  3. Library of Economics and Liberty. "Agricultural Price Supports." Accessed Feb. 9, 2021.

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