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(1) AVAILABILITY.—The Secretary may make
loan deficiency payments available to producers on a
farm that, although eligible to obtain a marketing as-
sistance loan for peanuts under subsection (a), agree
to forgo obtaining the loan for the peanuts in return
for loan deficiency payments under this subsection.
(2) COMPUTATION.—A loan deficiency payment
under 
this 
subsection 
shall 
be 
computed 
by
multiplying—
(A) the payment rate determined under
paragraph (3) for peanuts; by
(B) the quantity of the peanuts produced by
the producers, excluding any quantity for which
the producers obtain a marketing assistance loan
under subsection (a).
(3) PAYMENT RATE.—For purposes of this sub-
section, the payment rate shall be the amount by
which—
(A) the loan rate established under sub-
section (b); exceeds
(B) the rate at which a loan may be repaid
under subsection (d).
(4) EFFECTIVE DATE FOR PAYMENT RATE DE-
TERMINATION.—
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(A) IN GENERAL.—The Secretary shall de-
termine the amount of the loan deficiency pay-
ment to be made under this subsection to the
producers on a farm with respect to a quantity
of peanuts using the payment rate in effect
under paragraph (3) as soon as practicable after
the date on which the producers on the farm lose
beneficial interest.
(B) APPLICABILITY.—This paragraph does
not apply for the 2009 through 2012 crop years.
(f) COMPLIANCE WITH CONSERVATION AND WETLANDS
REQUIREMENTS.—As a condition of the receipt of a mar-
keting assistance loan under subsection (a), the producer
shall comply with applicable conservation requirements
under subtitle B of title XII of the Food Security Act of
1985 (16 U.S.C. 3811 et seq.) and applicable wetland pro-
tection requirements under subtitle C of title XII of that
Act (16 U.S.C. 3821 et seq.) during the term of the loan.
(g) REIMBURSABLE AGREEMENTS AND PAYMENT OF
ADMINISTRATIVE EXPENSES.—The Secretary may imple-
ment any reimbursable agreements or provide for the pay-
ment of administrative expenses under this part only in
a manner that is consistent with such activities in regard
to other commodities.
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SEC. 1308. ADJUSTMENTS OF LOANS.
(a) ADJUSTMENT AUTHORITY.—The Secretary may
make appropriate adjustments in the loan rates for peanuts
for differences in grade, type, quality, location, and other
factors.
(b) MANNER
OF
ADJUSTMENT.—The adjustments
under subsection (a) shall, to the maximum extent prac-
ticable, be made in such a manner that the average loan
level for peanuts will, on the basis of the anticipated inci-
dence of the factors, be equal to the level of support deter-
mined in accordance with this subtitle and subtitles B
through E.
(c) ADJUSTMENT ON COUNTY BASIS.—
(1) IN GENERAL.—The Secretary may establish
loan rates for a crop of peanuts for producers in indi-
vidual counties in a manner that results in the lowest
loan rate being 95 percent of the national average
loan rate, if those loan rates do not result in an in-
crease in outlays.
(2) PROHIBITION.—Adjustments under this sub-
section shall not result in an increase in the national
average loan rate for any year.
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Subtitle B—Average Crop Revenue
Program
SEC. 1401. AVAILABILITY OF AVERAGE CROP REVENUE PAY-
MENTS.
(a) AVAILABILITY AND ELECTION OF ALTERNATIVE
APPROACH.—
(1) AVAILABILITY OF AVERAGE CROP REVENUE
PAYMENTS.—As an alternative to receiving payments
or loans under subtitle A with respect to all covered
commodities and peanuts on a farm (other than loans
for graded and nongraded wool, mohair, and honey),
the Secretary shall give the producers on the farm an
opportunity to make a 1-time election to instead re-
ceive average crop revenue payments under this sec-
tion for—
(A) the 2010, 2011, and 2012 crop years;
(B) the 2011 and 2012 crop years; or
(C) the 2012 crop year.
(2) ELECTION; TIME FOR ELECTION.—
(A) IN GENERAL.—The Secretary shall pro-
vide notice to producers regarding the oppor-
tunity to make the election described in para-
graph (1).
(B) NOTICE
REQUIREMENTS.—The notice
shall include—
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(i) notice of the opportunity of the pro-
ducers on a farm to make the election; and
(ii) information regarding the manner
in which the election must be made and the
time periods and manner in which notice of
the election must be submitted to the Sec-
retary.
(3) ELECTION DEADLINE.—Within the time pe-
riod and in the manner prescribed pursuant to para-
graph (2), the producers on a farm shall submit to the
Secretary notice of the election made under para-
graph (1).
(4) EFFECT OF FAILURE TO MAKE ELECTION.—
If the producers on a farm fail to make the election
under paragraph (1) or fail to timely notify the Sec-
retary of the election made, as required by paragraph
(3), the producers shall be deemed to have made the
election to receive payments and loans under subtitle
A for all covered commodities and peanuts on the
farm for the applicable crop year.
(b) PAYMENTS REQUIRED.—
(1) IN GENERAL.—In the case of producers on a
farm who make the election under subsection (a) to
receive average crop revenue payments, for any of the
2010 through 2012 crop years for all covered commod-
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ities and peanuts, the Secretary shall make average
crop revenue payments available to the producers on
a farm in accordance with this subsection.
(2) FIXED
PAYMENT
COMPONENT.—Subject to
paragraph (3), in the case of producers on a farm de-
scribed in paragraph (1), the Secretary shall make
average crop revenue payments available to the pro-
ducers on a farm for each crop year in an amount
equal to not less than the product obtained by
multiplying—
(A) $15 per acre; and
(B) 100 percent of the quantity of base
acres on the farm for all covered commodities
and peanuts (as adjusted in accordance with the
terms and conditions of section 1101 or 1302, as
determined by the Secretary).
(3) REVENUE COMPONENT.—The Secretary shall
increase the amount of the average crop revenue pay-
ments available to the producers on a farm in a State
for a crop year if—
(A) the actual State revenue for the crop
year for the covered commodity or peanuts in the
State determined under subsection (c); is less
than
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(B) the average crop revenue program guar-
antee for the crop year for the covered com-
modity or peanuts in the State determined under
subsection (d).
(4) TIME FOR PAYMENTS.—In the case of each of
the 2010 through 2012 crop years, the Secretary shall
make average crop revenue payments beginning Octo-
ber 1, or as soon as practicable thereafter, after the
end of the applicable marketing year for the covered
commodity or peanuts.
(c) ACTUAL STATE REVENUE.—
(1) IN
GENERAL.—For purposes of subsection
(b)(3)(A), the amount of the actual State revenue for
a crop year of a covered commodity shall equal the
product obtained by multiplying—
(A) the actual State yield for each planted
acre for the crop year for the covered commodity
or peanuts determined under paragraph (2); and
(B) the average crop revenue program har-
vest price for the crop year for the covered com-
modity or peanuts determined under paragraph
(3).
(2) ACTUAL
STATE
YIELD.—For purposes of
paragraph (1)(A) and subsection (d)(1)(A), the actual
State yield for each planted acre for a crop year for
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a covered commodity or peanuts in a State shall
equal (as determined by the Secretary)—
(A) the quantity of the covered commodity
or peanuts that is produced in the State during
the crop year; divided by
(B) the number of acres that are planted to
the covered commodity or peanuts in the State
during the crop year.
(3) AVERAGE CROP REVENUE PROGRAM HARVEST
PRICE.—
(A) IN GENERAL.—For purposes of para-
graph (1)(B), subject to subparagraph (B), the
average crop revenue program harvest price for
a crop year for a covered commodity or peanuts
in a State shall equal the harvest price that is
used to calculate revenue under revenue coverage
plans that are offered for the crop year for the
covered commodity or peanuts in the State under
the Federal Crop Insurance Act (7 U.S.C. 1501
et seq.).
(B) ASSIGNED
PRICE.—If the Secretary
cannot establish the harvest price for a crop year
for a covered commodity or peanuts in a State
in accordance with subparagraph (A), the Sec-
retary shall assign a price for the covered com-
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modity or peanuts in the State on the basis of
comparable price data.
(d) AVERAGE
CROP
REVENUE
PROGRAM
GUAR-
ANTEE.—
(1) IN GENERAL.—The average crop revenue pro-
gram guarantee for a crop year for a covered com-
modity or peanuts in a State shall equal 90 percent
of the product obtained by multiplying—
(A) the expected State yield for each planted
acre for the crop year for the covered commodity
or peanuts in a State determined under para-
graph (2); and
(B) the average crop revenue program pre-
planting price for the crop year for the covered
commodity or peanuts determined under para-
graph (3).
(2) EXPECTED STATE YIELD.—
(A) IN GENERAL.—For purposes of para-
graph (1)(A), subject to subparagraph (B), the
expected State yield for each planted acre for a
crop year for a covered commodity or peanuts in
a State shall equal the projected yield for the
crop year for the covered commodity or peanuts
in the State, based on a linear regression trend
of the yield per acre planted to the covered com-
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modity or peanuts in the State during the 1980
through 2006 period using National Agricultural
Statistics Service data.
(B) ASSIGNED
YIELD.—If the Secretary
cannot establish the expected State yield for each
planted acre for a crop year for a covered com-
modity or peanuts in a State in accordance with
subparagraph (A) or if the linear regression
trend of the yield per acre planted to the covered
commodity or peanuts in the State (as deter-
mined under subparagraph (A)) is negative, the
Secretary shall assign an expected State yield for
each planted acre for the crop year for the cov-
ered commodity or peanuts in the State on the
basis of expected State yields for planted acres
for the crop year for the covered commodity or
peanuts in similar States.
(3) AVERAGE
CROP
REVENUE
PROGRAM
PRE-
PLANTING PRICE.—
(A) IN GENERAL.—For purposes of para-
graph (1)(B), subject to subparagraphs (B) and
(C), the average crop revenue program pre-plant-
ing price for a crop year for a covered com-
modity or peanuts in a State shall equal the av-
erage price that is used to calculate revenue
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under revenue coverage plans that are offered for
the covered commodity in the State under the
Federal Crop Insurance Act (7 U.S.C. 1501 et
seq.) for the crop year and the preceding 2 crop
years.
(B) ASSIGNED
PRICE.—If the Secretary
cannot establish the pre-planting price for a crop
year for a covered commodity or peanuts in a
State in accordance with subparagraph (A), the
Secretary shall assign a price for the covered
commodity or peanuts in the State on the basis
of comparable price data.
(C) MINIMUM AND MAXIMUM PRICE.—In the
case of each of the 2011 through 2012 crop years,
the average crop revenue program pre-planting
price for a crop year for a covered commodity or
peanuts under subparagraph (A) shall not de-
crease or increase more than 15 percent from the
pre-planting price for the preceding year.
(e) PAYMENT AMOUNT.—If average crop revenue pay-
ments are required to be paid for any of the 2010 through
2012 crop years of a covered commodity or peanuts under
subsection (b)(3), in addition to the amount payable under
subsection (b)(2), the amount of the average crop revenue
payment to be paid to the producers on the farm for the
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crop year under this section shall be increased by an
amount equal to the product obtained by multiplying—
(1) the difference between—
(A) the average crop revenue program guar-
antee for the crop year for the covered com-
modity or peanuts in the State determined under
subsection (d); and
(B) the actual State revenue from the crop
year for the covered commodity or peanuts in the
State determined under subsection (c);
(2) 85 percent of the quantity of base acres on
the farm for the covered commodity or peanuts (as
adjusted in accordance with the terms and conditions
of section 1101 or 1302, as determined by the Sec-
retary);
(3) the quotient obtained by dividing—
(A)(i) the yield used to calculate crop insur-
ance coverage for the covered commodity or pea-
nuts on the farm under the Federal Crop Insur-
ance Act (7 U.S.C. 1501 et seq.) (commonly re-
ferred to as ‘‘actual production history’’); or
(ii) if actual production history for the cov-
ered commodity or peanuts on the farm is not
available, a comparable yield as determined by
the Secretary; by
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(B) the expected State yield for the crop
year, as determined under subsection (d)(2); and
(4) 90 percent.
(f) RECOURSE LOANS.—For each of the 2010 through
2012 crops of a covered commodity or peanuts, the Sec-
retary shall make available to producers on a farm who
elect to receive payments under this section recourse loans,
as determined by the Secretary, on any production of the
covered commodity.
SEC. 1402. PRODUCER AGREEMENT AS CONDITION OF AV-
ERAGE CROP REVENUE PAYMENTS.
(a) COMPLIANCE WITH CERTAIN REQUIREMENTS.—
(1) REQUIREMENTS.—Before the producers on a
farm may receive average crop revenue payments
with respect to the farm, the producers shall agree,
and in the case of subparagraph (C), the Farm Serv-
ice Agency shall certify, during the crop year for
which the payments are made and in exchange for the
payments—
(A) to comply with applicable conservation
requirements under subtitle B of title XII of the
Food Security Act of 1985 (16 U.S.C. 3811 et
seq.);
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(B) to comply with applicable wetland pro-
tection requirements under subtitle C of title XII
of that Act (16 U.S.C. 3821 et seq.); and
(C) that the individuals or entities receiving
payments are producers;
(D) to use the land on the farm, in a quan-
tity equal to the attributable base acres for the
farm and any base acres for peanuts for the
farm under part III of subtitle A, for an agricul-
tural or conserving use, and not for a non-
agricultural commercial, industrial, or residen-
tial use (including land subdivided and devel-
oped into residential units or other nonfarming
uses, or that is otherwise no longer intended to
be used in conjunction with a farming oper-
ation), as determined by the Secretary; and
(E) to effectively control noxious weeds and
otherwise maintain the land in accordance with
sound agricultural practices, as determined by
the Secretary, if the agricultural or conserving
use involves the noncultivation of any portion of
the land referred to in subparagraph (D).
(2) COMPLIANCE.—The Secretary may issue such
rules as the Secretary considers necessary to ensure
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producer compliance with the requirements of para-
graph (1).
(3) MODIFICATION.—At the request of the trans-
feree or owner, the Secretary may modify the require-
ments of this subsection if the modifications are con-
sistent with the objectives of this subsection, as deter-
mined by the Secretary.
(b) TRANSFER OR CHANGE OF INTEREST IN FARM.—
(1) TERMINATION.—
(A) IN GENERAL.—Except as provided in
paragraph (2), a transfer of (or change in) the
interest of the producers on a farm for which av-
erage crop revenue payments are made shall re-
sult in the termination of the payments, unless
the transferee or owner of the farm agrees to as-
sume all obligations under subsection (a).
(B) EFFECTIVE
DATE.—The termination
shall take effect on the date determined by the
Secretary.
(2) EXCEPTION.—If a producer entitled to an
average crop revenue payment dies, becomes incom-
petent, or is otherwise unable to receive the payment,
the Secretary shall make the payment, in accordance
with rules issued by the Secretary.
(c) ACREAGE REPORTS.—
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(1) IN GENERAL.—As a condition on the receipt
of any benefits under this subtitle, the Secretary shall
require producers on a farm to submit to the Sec-
retary annual acreage reports with respect to all
cropland on the farm.
(2) PENALTIES.—No penalty with respect to ben-
efits under subtitle shall be assessed against the pro-
ducers on a farm for an inaccurate acreage report un-
less the producers on the farm knowingly and will-
fully falsified the acreage report.
(d) TENANTS AND SHARECROPPERS.—In carrying out
this subtitle, the Secretary shall provide adequate safe-
guards to protect the interests of tenants and sharecroppers.
(e) SHARING OF PAYMENTS.—The Secretary shall pro-
vide for the sharing of average crop revenue payments
among the producers on a farm on a fair and equitable
basis.
(f) AUDIT AND REPORT.—Each year, to ensure, to the
maximum extent practicable, that payments are received
only by producers, the Secretary shall—
(1) conduct an audit of average crop revenue
payments; and
(2) submit to Congress a report that describes the
results of that audit.