7 U.S.C. § 8735 — Loan deficiency payments

(a) Availability of loan deficiency payments. (1) In general. Except as provided in subsection (d), the Secretary may offer loan deficiency payments to farm producers who could get a marketing assistance loan under section 8731 for a loan commodity, but instead agree to skip that loan in exchange for a payment under this section. (2) Unshorn pelts, hay, and silage. (A) Marketing assistance loans. Nongraded wool in the form of unshorn pelts, and hay or silage made from a loan commodity, normally cannot get a marketing assistance loan under section 8731. (B) Loan deficiency payment. But for the 2008 through 2012 crops, the Secretary may offer loan deficiency payments under this section to producers of unshorn pelts, hay, or silage. (b) Computation. A loan deficiency payment for a loan commodity, or for unshorn pelts, hay, or silage, is figured by multiplying: (1) the payment rate set under subsection (c) for that commodity; by (2) the quantity the eligible producers made, not counting any quantity for which they got a marketing assistance loan instead. (c) Payment rate. (1) In general. For a loan commodity, the payment rate is the amount by which (A) the loan rate under section 8732 for that commodity is more than (B) the rate at which a marketing assistance loan for it could be repaid under section 8734. (2) Unshorn pelts. For unshorn pelts, the payment rate is the amount by which (A) the loan rate under section 8732 for ungraded wool is more than (B) the rate at which a marketing assistance loan for ungraded wool could be repaid under section 8734. (3) Hay and silage. For hay or silage made from a loan commodity, the payment rate is the amount by which (A) the loan rate for that source commodity under section 8732 is more than (B) the repayment rate for that commodity under section 8734. (d) Exception for extra long staple cotton. This section does not apply to extra long staple cotton. (e) Effective date for payment rate determination. The Secretary must figure the loan deficiency payment using whatever payment rate is in effect, under subsection (c), on the date the producer asks for the payment.