7 U.S.C. § 7934 — Repayment of loans

(a) General rule. For most loan commodities — but not upland cotton, rice, extra long staple cotton^*, or confectionery and other non-oil sunflower seed — the Secretary^* must let farmers repay their marketing loan at whichever is lower:
(1) the loan rate set under section 7932, plus interest figured under section 7283; or
(2) a rate the Secretary picks instead, chosen to do five things: (A) cut down on farmers giving up (forfeiting) their crops to the government; (B) keep the government from piling up stockpiles of the commodity; (C) keep down the government's cost of storing the commodity; (D) let the commodity be sold freely and competitively, both in the U.S. and abroad; and (E) keep the loan benefits roughly even across different states and counties.

(b) Upland cotton and rice. For these two commodities, farmers repay at whichever is lower: the loan rate plus interest, or the "prevailing world market price" (adjusted for U.S. quality and location), as the Secretary determines it.

(c) Extra long staple cotton. This commodity has no lower option — it must be repaid at the full loan rate plus interest, always.

(d) Setting the world market price. The Secretary must write regulations that create (1) a formula for figuring out the prevailing world market price for upland cotton and rice, and (2) a system for announcing that price regularly.

(e) Extra adjustment for upland cotton (May 13, 2002 through July 31, 2008). The world market price for upland cotton gets adjusted further if two things are both true: (A) the price, before this adjustment, is below 115% of the upland cotton loan rate, and (B) the Friday-through-Thursday average price quotation for the lowest-priced United States growth, quoted for Middling (M) 1 3/32-inch cotton delivered C.I.F. Northern Europe, is higher than the Friday-through-Thursday average price of the five lowest-priced upland-cotton growths, quoted for Middling (M) 1 3/32-inch cotton delivered C.I.F. Northern Europe (called the "Northern Europe price"). If both are true, the Secretary adjusts the price further using data such as the U.S. share of world cotton exports and current export sales and shipments — but this further adjustment can never be bigger than the gap between the U.S. price and the Northern Europe price.

(f) Confectionery and other sunflower seed. Farmers growing confectionery sunflower seed or other non-oil sunflower seed kinds repay at whichever is lower: the loan rate plus interest, or the repayment rate set for regular oil sunflower seed.

(g) Dry peas, lentils, and small chickpeas. Repayment for these three crops uses the same quality grades set in section 7932(d).

(h) 2001 good-faith exception. This is a one-time rule for the 2001 crop only. If a farmer already sold or lost the loan commodity^* before repaying an old loan made under section 7231, and the Secretary decides the farmer acted in good faith, the farmer can repay using the rate that was in effect on the date they lost the commodity, under the older section 7234.