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Centralized Cotton Redemption

Centralized Cotton Redemption

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Centralized Cotton Redemption

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  1. Centralized Cotton Redemption

  2. What is CCR? Centralized Cotton Redemption (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)

  3. What is CCR? Centralized Cotton Redemption (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

  4. Development 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

  5. Implementation 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.

  6. CCR Activity Increases

  7. CCR Milestones • Largest week of activity - May 14 – 18, 2007 • 104 invoices • 20 buyers • $262.7 million • 1.3 million bales

  8. CCR Milestones • Largest day of activity - May 17, 2007 • 9 merchants • 38 invoices • 578,980 bales • $113,132,763.96

  9. CCR Milestones • 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

  10. Authorization 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

  11. CCR 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”

  12. Electronic Agent Designation What is an Electronic 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

  13. Electronic Agent Designation 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

  14. Electronic Agent Designation How does EAD Work? • 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

  15. Electronic Agent Designation How does a Subsequent Agent Receive EAD? • 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

  16. Using CCR How does a Buyer redeem cotton using 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.

  17. CCR Transaction File Preparing 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

  18. CCR Transaction File 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

  19. CCR Transaction File Preparing Transaction File • 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

  20. CCR Transaction File Preparing Transaction File • 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

  21. Creating CCR Invoice Repayment Calculations • 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

  22. Creating CCR Invoice Posting CCR Invoice • Invoice / Collection Letter created and posted to COPS • payment due date • repayment amount • invoice number • invoice expiration date

  23. Creating CCR Invoice Notifying Buyer and County Office • 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

  24. Creating CCR Invoice Bales Placed in Pending Status • 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

  25. Creating CCR Invoice Cancellation of CCR Invoice • Invoice is valid for 21 days • Buyer may cancel an Invoice anytime before payment is submitted • “Pending” status removed when invoice is cancelled

  26. Submitting Repayment Accepting Payment • Buyer wires funds based on the Collection Letter instructions to the Federal Reserve Bank • Collection is posted to COPS which triggers release of receipts

  27. Submitting Repayment Accepting Early Repayment • 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

  28. Submitting Repayment Accepting Late Payment • Accept payments past due date • Recalculated based on • AWP in effect on wire date • storage credit for wire date plus 2 days

  29. Submitting Repayments Insufficient Funds • 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

  30. Submitting Repayments Overpayments • Refunded to the merchant by direct deposit to merchant’s account • Manual process • Future enhancement for automated process

  31. Releasing Receipts Processing Release of 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

  32. 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

  33. Processing 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

  34. Processing 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

  35. Favorable 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”