7 USC § 8735 - Loan deficiency payments

---
identifier: "/us/usc/t7/s8735"
source: "usc"
legal_status: "official_prima_facie"
title: "7 USC § 8735 - Loan deficiency payments"
title_number: 7
title_name: "AGRICULTURE"
section_number: "8735"
section_name: "Loan deficiency payments"
chapter_number: 113
chapter_name: "AGRICULTURAL COMMODITY SUPPORT PROGRAMS"
subchapter_number: "II"
subchapter_name: "MARKETING ASSISTANCE LOANS AND LOAN DEFICIENCY PAYMENTS"
positive_law: false
currency: "119-84"
last_updated: "2026-04-17"
format_version: "1.1.0"
generator: "[email protected]"
source_credit: "(Pub. L. 110–234, title I, § 1205, May 22, 2008, 122 Stat. 958; Pub. L. 110–246, § 4(a), title I, § 1205, June 18, 2008, 122 Stat. 1664, 1686.)"
---


# § 8735. Loan deficiency payments

**(a)** **Availability of loan deficiency payments**

**(1)** **In general** section 8731 of this title

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  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** section 8731 of this title

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 .

**(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.

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**Source Credit**: (Pub. L. 110–234, title I, § 1205, May 22, 2008, 122 Stat. 958; Pub. L. 110–246, § 4(a), title I, § 1205, June 18, 2008, 122 Stat. 1664, 1686.)

## Editorial Notes

### Codification

and  enacted identical sections.  was repealed by .

## Statutory Notes and Related Subsidiaries

### Effective Date

Enactment of this section and repeal of  by  effective , the date of enactment of , see , set out as a note under .