Producer rights and liabilities

Except as otherwise provided in section 1425a of this title , no producer shall be personally liable for any deficiency arising from the sale of the collateral securing any loan made under authority of this Act unless such loan was obtained through fraudulent representations by the producer. This provision shall not, however, be construed to prevent the Commodity Credit Corporation or the Secretary from requiring producers to assume liability for deficiencies in the grade, quality, or quantity of commodities stored on the farm or delivered by them, for failure properly to care for and preserve commodities, or for failure or refusal to deliver commodities in accordance with the requirements of the program. There is authorized to be included in the terms and conditions of any such nonrecourse loan a provision whereby on and after the maturity of the loan or any extension thereof Commodity Credit Corporation shall have the right to acquire title to the unredeemed collateral without obligation to pay for any market value which such collateral may have in excess of the loan indebtedness.

( Oct. 31, 1949, ch. 792 , title IV, § 405, 63 Stat. 1054 ; Pub. L. 85–835, title V, § 502 , Aug. 28, 1958 , 72 Stat. 996 ; Pub. L. 99–198, title X, § 1004 , Dec. 23, 1985 , 99 Stat. 1447 ; Pub. L. 100–460, title VI, § 634(a) , Oct. 1, 1988 , 102 Stat. 2263 ; Pub. L. 102–237, title I, § 111(b) , Dec. 13, 1991 , 105 Stat. 1830 .)