7 U.S.C. § 9035: Loan deficiency payments

Summary

The Secretary may let farmers who could get a marketing assistance loan choose instead to skip the loan and take a loan deficiency payment (LDP). Ungraded wool in unshorn pelts and hay or silage made from a loan commodity cannot get a marketing loan, but from 2014 through 2031 the Secretary may allow LDPs for those items. Extra long staple cotton is not eligible for LDPs. An LDP is the payment rate multiplied by the amount of the commodity the farmer produced that is not covered by a marketing loan. The payment rate is the difference between the loan rate and the loan repayment rate for that commodity (for unshorn pelts use the ungraded wool rates; for hay or silage use the rate for the crop it came from). The rate used is the one in effect on the day the farmer requests the payment.

Title 7, §9035

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 9031 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 9031 of this title.

(B)Loan deficiency payment

Effective for each of the 2014 through 2031 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 equal to the product obtained 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 9031 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 9032 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 9034 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 9032 of this title for ungraded wool; exceeds

(B)the rate at which a marketing assistance loan for ungraded wool may be repaid under section 9034 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 9032 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 9034 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 Provisions of law applicable to a loan commodity for the 2024 crop year pursuant to title I of Pub. L. 113–79 applicable to the 2025 crop year for that loan commodity, see section 4101(c)(1) of Pub. L. 118–158, set out in an Extension of Agricultural Programs note under section 9001 of this title. Provisions of law applicable to a loan commodity for the 2023 crop year pursuant to title I of Pub. L. 113–79 applicable to the 2024 crop year for that loan commodity, see section 102(c)(1) of Pub. L. 118–22, set out in an Extension of Agricultural Programs note under section 9001 of this title.

Amendments

2025—Subsec. (a)(2)(B). Pub. L. 119–21 substituted “2031” for “2023”. 2018—Subsec. (a)(2)(B). Pub. L. 115–334 substituted “2023” for “2018”.

§9035 Loan Deficiency Payments

Summary

Title 7, §9035

Notes & Related Subsidiaries

Editorial Notes

Amendments

Citations & Metadata