What Is the Commodity Credit Corporation (CCC)?
In practice, the CCC enacts its mandate by providing various subsidies and incentives to American agricultural producers. The CCC also helps in supporting agricultural exports and international aid programs.
- The CCC is a government body dedicated to supporting the American agricultural sector.
- It accomplishes this through a series of subsidies, price-control mechanisms, and favorable loan programs.
- The CCC is also active internationally, through food aid programs and efforts to modernize foreign agricultural practices.
Understanding the Commodity Credit Corporation (CCC)
The CCC acts in coordination with the United States Department of Agriculture (USDA) and is presided over by the Secretary of Agriculture alongside its own Board of Directors. The CCC does not have its own employees, instead relying on the employees of other federal agencies such as the Foreign Agricultural Service and the Farm Service Agency.
Founded in 1933 by President Franklin Delano Roosevelt, the CCC was created to provide stability and support to the American agricultural sector. Today, this is accomplished by providing various subsidies to the sector in the form of minimum "support prices" paid for American agricultural products and quotas on the importation of competing foreign goods.
The CCC also takes measures to prevent agricultural prices from becoming too high. By buying and storing agricultural products at a minimum support price, the CCC is able to them sell those products if prices rise beyond a certain level. By adding additional supply to the marketplace, this selling pressure can help reduce prices, potentially protecting consumers. In this manner, the CCC's interventions can help reduce the level of volatility in food prices.
In addition to buying and selling their products, the CCC also supports the American agricultural sector by providing loans at subsidized rates. These loans are often used to fund the production of crops, with the resulting crop being used as collateral for the loan principal.
Real World Example of the CCC
In 1948, the CCC was reincorporated as a Federal corporation within the Department of Agriculture by the Commodity Credit Corporation Charter Act. This law was then amended by the Presidential Appointment Efficiency and Streamlining Act that went into affect in Aug. 2012. This amendment extended the CCC's support for agricultural producers by way of loans, purchases, payments, and other activities.
Today, the Commodity Credit Corporation operates numerous domestic programs, including those related to income support, disaster relief, and conservation. Foreign assistance is also a significant focus for the CCC. It 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 also a component of the CCC's efforts to modernize and strengthen global agriculture.