Recourse loan program:
Under the FAIR Act of 1996, recourse loans are available to producers of high moisture corn and seed cotton, dairy processors, and sugar processors. The commodity is pledged as security, but in contrast to nonrecourse loans, the borrower must repay the loan with interest within a specified period. The recourse loan program for butter, nonfat dry milk, and cheese begins in 2000. Loans for sugar are recourse when the tariff-rate import quota is below 1.5 million short tons. However, such loans revert to nonrecourse status if the tariff-rate quota is equal to above 1.5 million short tons. The honey recourse loan program and the mohair recourse loan program are authorized for 1998 production only.
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