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

Summary

Farmers who could get a marketing assistance loan but choose not to can get a loan deficiency payment instead. Ungraded wool as unshorn pelts, and hay or silage made from a loan commodity, usually cannot get a marketing loan, but for the 2008 through 2012 crop years the Secretary may pay loan deficiency payments for those items. This does not apply to extra long staple cotton. The payment equals the payment rate times the eligible quantity produced on the farm, but it does not cover any amount that got a marketing loan. The payment rate is the loan rate for the commodity minus the rate required to repay a marketing loan for that commodity. For unshorn pelts, hay, and silage the matching loan rates for the related commodity are used. The rate in effect on the day the farmer requests the payment is the one used.

Title 7, §8735

Agriculture, Source: USLM XML via OLRC

(a)Availability of loan deficiency payments

(1)In general

Except as provided in subsection (d), the Secretary may make loan deficiency payments available to producers on a farm that, although eligible to obtain a marketing assistance loan under section 8731 of this title with respect to a loan commodity, agree to forgo obtaining the loan for the commodity in return for loan deficiency payments under this section.

(2)Unshorn pelts, hay, and silage

(A)Marketing assistance loans

Subject to subparagraph (B), nongraded wool in the form of unshorn pelts and hay and silage derived from a loan commodity are not eligible for a marketing assistance loan under section 8731 of this title.

(B)Loan deficiency payment

Effective for the 2008 through 2012 crop years, the Secretary may make loan deficiency payments available under this section to producers on a farm that produce unshorn pelts or hay and silage derived from a loan commodity.

(b)Computation

A loan deficiency payment for a loan commodity or commodity referred to in subsection (a)(2) shall be computed by multiplying—

(1)the payment rate determined under subsection (c) for the commodity; by

(2)the quantity of the commodity produced by the eligible producers, excluding any quantity for which the producers obtain a marketing assistance loan under section 8731 of this title.

(c)Payment rate

(1)In general

In the case of a loan commodity, the payment rate shall be the amount by which—

(A)the loan rate established under section 8732 of this title for the loan commodity; exceeds

(B)the rate at which a marketing assistance loan for the loan commodity may be repaid under section 8734 of this title.

(2)Unshorn pelts

In the case of unshorn pelts, the payment rate shall be the amount by which—

(A)the loan rate established under section 8732 of this title for ungraded wool; exceeds

(B)the rate at which a marketing assistance loan for ungraded wool may be repaid under section 8734 of this title.

(3)Hay and silage

In the case of hay or silage derived from a loan commodity, the payment rate shall be the amount by which—

(A)the loan rate established under section 8732 of this title for the loan commodity from which the hay or silage is derived; exceeds

(B)the rate at which a marketing assistance loan for the loan commodity may be repaid under section 8734 of this title.

(d)Exception for extra long staple cotton

This section shall not apply with respect to extra long staple cotton.

(e)Effective date for payment rate determination

The Secretary shall determine the amount of the loan deficiency payment to be made under this section to the producers on a farm with respect to a quantity of a loan commodity or commodity referred to in subsection (a)(2) using the payment rate in effect under subsection (c) as of the date the producers request the payment.

Notes & Related Subsidiaries

Editorial Notes

Codification Pub. L. 110–234 and Pub. L. 110–246 enacted identical sections. Pub. L. 110–234 was repealed by section 4(a) of Pub. L. 110–246.

Statutory Notes and Related Subsidiaries

Effective Date

Enactment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as a note under section 8701 of this title.

§8735 Loan Deficiency Payments