centralized cotton redemption

Centralized Cotton RedemptionCentralized Cotton Redemption

What is CCR?What is CCR?

• Centralized Cotton Redemption (CCR) System

• Provides a centralized process for buyers to

redeem upland cotton

• Single redemption from multiple loans and multiple

counties

• Use of an Electronic Agent Designation (EAD)

Centralized Cotton Redemption (CCR)

What is CCR?What is CCR?

• Limited to upland cotton loans disbursed in County

Office (Expanding to include LSA loans)

• Commodity Certificate exchange when AWP is less

than National Average Loan Rate

• Principal plus interest when AWP is equal to or

greater than National Average Loan Rate

Centralized Cotton Redemption (CCR)

Development of CCRDevelopment of CCR

• Development began in 2000

• Programmed by EDS

• Resides in COPS

• CCR was implemented in 2 phases

– Phase 1

• Beta test October, 2003

– Phase 2

• Full nation-wide implementation July, 2004

Implementation PlanImplementation Plan

• Participating buyers recommended by FSA and the National Cotton Council

• 20 Counties participating in Beta Test

• 5 buyers participating in Beta Test

– Dunavant Enterprises, Inc.

– Cargill Cotton

– Paul Reinhart, Inc

– Volcot Cotton

– Weil Brothers-Cotton, Inc.

CCR Activity IncreasesCCR Activity Increases

Beta10-1-03 to 6-30-04

2004 Crop YR

7-1-04 to 6-30-05

2005 Crop YR

7-1-05 to 6-30-06

2006 Crop YR

7-1-06 to 6-18-07

Merchants 2 11 22 30

% of COF Loans

44% 69% 88%

Invoices 32 642 577 751

Bale Count 2,805 1.7 million 1.8 million 3.2 million

Redemption Amount

$736,935 $300 million $357 million $639 million

CCR MilestonesCCR Milestones

• Largest week of activity - May 14 – 18, 2007

– 104 invoices

– 20 buyers

– $262.7 million

– 1.3 million bales


• Largest day of activity - May 17, 2007

– 9 merchants

– 38 invoices

– 578,980 bales

– $113,132,763.96


• Largest Invoice

– 8 states

– 68 counties

– 1888 loans

– 97,131 bales

– $18,943,529.65

• 7 of 68 counties – more than 100 loans

– 1 county – 199 loans

Authorization to RedeemAuthorization to Redeem

• All bales redeemed in CCR must meet two

authorization requirements:

– Designated as CCR eligible

– Electronic Agent Designation (EAD) holder

on file in COPS

• Producer must grant authorization

CCR EligibleCCR Eligible

• May designate at time of loan

– Flag set in APSS during loan making process and sent to COPS

• Authorize by signing CCC-605

– Authorization granted as part of agent designation

– Copy of CCC-605 submitted to County Office

– County Office updates EAD status flag to “Y”

Electronic Agent DesignationElectronic Agent Designation

• Electronic Agent Designation (EAD) is an electronic

CCC-605

• Authorizes agent to use CCR

• Producer names Agent and authorizes EAD with single

signature on CCC-605

What is an Electronic Agent Designation ?


• Agent can redeem cotton using CCR

• Agent can deliver paper copy of CCC-605 and funds to

County Office

• Producer may cancel CCC-605 at FSA County Office and

redeem the cotton himself

What is an Electronic Agent Designation ?


• CCC-605 may be converted to EAD anytime by an initial

or subsequent agent

• Request the Provider to update EWR record with the

Agent’s Holder ID

• Agent requesting initial EAD must retain the original copy

of the CCC-605

• Provider submits EAD Holder ID to COPS

How does EAD Work?


• Once CCC-605 is converted to EAD, option to purchase

is passed to a subsequent agent electronically.

• Current EAD Holder notifies Provider of subsequent EAD

Holder

• Subsequent EAD Holder does not have to maintain

paper copy of the CCC-605

How does a Subsequent Agent Receive EAD?

Using CCRUsing CCR

• The Buyer transmits an electronic file to COPS listing receipts and projected payoff date.

• COPS generates an invoice based upon the Buyer’s request.

• The Buyer wires the required funds by the payoff date.

• COPS automatically releases the receipts to the Buyer.

How does a Buyer redeem cotton using CCR ?

CCR Transaction FileCCR Transaction File

• FTP file listing of up to 100,000 receipts

• File contains a Header record:

– Total receipt count

– Buyer ID number.

– Payoff date within the current AWP period (Friday to Thursday).

– Date of file transmission

Preparing Transaction File


• File contains a Detail record for each receipt:

– Gin Code Number

– Gin Tag Number

– Crop Year

– Warehouse Code Number

– Warehouse Receipt Number

– Buyers EAD Holder ID



• To be valid, each bale must

– be under a County Office issued loan

– not in forfeiture status

– not be in a pending status for another CCR request

– be a valid EWR



• To be valid, each bale must

– reflect CCC as the current holder

– not have any critical COPS errors

– EAD indicator of “Y”

– EAD holder ID that matches COPS


Creating CCR InvoiceCreating CCR Invoice

• Calculate repayment for valid bales

• Uses effective AWP for requested repayment date

– requested date must be within current AWP

period (Friday to Thursday)

– repayment amount valid only if funds are

received before next AWP announcement

• Calculate storage credit on repayment date plus 2

day

Repayment Calculations


• Invoice / Collection Letter created and posted to

COPS

– payment due date

– repayment amount

– invoice number

– invoice expiration date

Posting CCR Invoice


• Acknowledgement File sent to buyer

• COPS sends e-mail to:

– Buyer to view and download invoice/collection

letter from COPS website

– Administrative County Office that disbursed to

alert of pending CCR redemption

Notifying Buyer and County Office


• Bales are placed in “pending” status when invoice

is created

– no changes allowed, including EAD holder

– no additions or deletions of bales to invoice

– no changes to payoff date

Bales Placed in Pending Status


• Invoice is valid for 21 days

• Buyer may cancel an Invoice anytime before

payment is submitted

• “Pending” status removed when invoice is

cancelled

Cancellation of CCR Invoice

Submitting RepaymentSubmitting Repayment

• Buyer wires funds based on the Collection Letter

instructions to the Federal Reserve Bank

• Collection is posted to COPS which triggers

release of receipts

Accepting Payment


• Accept funds wired before due date

• No recalculation

– same AWP

– same storage credit

• Bales automatically released later of:

– date payment is processed

– original due date

Accepting Early Repayment


• Accept payments past due date

• Recalculated based on

– AWP in effect on wire date

– storage credit for wire date plus 2 days

Accepting Late Payment

Submitting RepaymentsSubmitting Repayments

• Will redeem bales covered by sufficient funds

• Select bales starting in order of

– state

– county

– warehouse code

– receipt number

• New invoice required for remaining bales

Insufficient Funds

Submitting RepaymentsSubmitting Repayments

• Refunded to the merchant by direct deposit to

merchant’s account

• Manual process

• Future enhancement for automated process

Overpayments

Releasing ReceiptsReleasing Receipts

• Release automatically triggered when funds are

posted in COPS

• COPS emails Buyer of release of receipts and

refund due, if applicable

• Electronic CCC-500 data available for download

next day

Processing Release of Receipts

Contingency Plan – What Happens When COPS Is Down?Contingency Plan – What Happens When COPS Is Down?

• CCC-734 process for periods of time when systems are not operational

– Fax CCC-734

– Email redemption file

– Wire funds to Federal Reserve

• Process unseen by County Office

Processing CCR in the County OfficeProcessing CCR in the County Office

• Loan must be liquidated in APSS

• COF receives email that CCR repayment has been

completed

• CCR repayment file available in COPS

• COF downloads CCR file and transfers to S/36

using Cotton PC Software

Processing CCR in the County OfficeProcessing CCR in the County Office

• New menu option, Option 3, Centralized Repayment

• APSS repayment fields are pre-filled with CCR file

data

– automatically selects bales

• No calculations - accepts data from CCR file

• COPS tracks loan liquidation records from APSS

using indicator COPS R121

Favorable CommentsFavorable Comments

• Merchant

– “as important as EWR”

• County Office

– "It is a great system that has significantly simplified our cotton loan repayment processing."

• State Office

– “awesome process and I would put CCR up against ANY web application as being the best”

centralized cotton redemption

Documents

electronic ccc

agent designationcopy

initial ead

ead work

ead holder id

current ead holder

cotton himselfwhat

ccrproducer names agent