Sec. 1205. LOAN DEFICIENCY PAYMENTS
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## SEC. 1205 LOAN DEFICIENCY PAYMENTS **[**[7 U.S.C. 8735](/us/usc/t7/s8735)**]** ###
(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 1201 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 1201. #####
(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 1201. ###
(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 1202 for the loan commodity; exceeds #####
(B)the rate at which a marketing assistance loan for the loan commodity may be repaid under section 1204. ####
(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 1202 for ungraded wool; exceeds #####
(B)the rate at which a marketing assistance loan for ungraded wool may be repaid under section 1204. ####
(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 1202 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 1204. ###
(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.
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Sec. 1205
LOAN DEFICIENCY PAYMENTS
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