crop of a commodity on a farm shall be equal to the 
difference between— 
(A) the per unit market value that the 
units of the crop affected by the quality loss 
would have had if the crop had not suffered a 
quality loss; and 
(B) the per unit market value of the units 
of the crop affected by the quality loss. 
(4) ELIGIBILITY.—For producers on a farm to 
be eligible to obtain a payment for a quality loss for 
a crop under subsection (c)(2), the amount obtained 
by multiplying the per unit loss determined under 
paragraph (1) by the number of units affected by 
the quality loss shall be at least 25 percent of the 
value that all affected production of the crop would 
have had if the crop had not suffered a quality loss. 
(5) MARKETING CONTRACTS.—In the case of 
any production of a commodity that is sold pursuant 
to 1 or more marketing contracts (regardless of 
whether the contract is entered into by the pro-
ducers on the farm before or after harvest) and for 
which appropriate documentation exists, the quan-
tity designated in the contracts shall be eligible for 
quality loss assistance based on the 1 or more prices 
specified in the contracts.
(6) OTHER PRODUCTION.—For any additional 
production of a commodity for which a marketing 
contract does not exist or for which production con-
tinues to be owned and produced by the producers 
on a farm, quality losses shall be based on the aver-
age local market discounts for reduced quality, as 
determined by the appropriate State committee of 
the Farm Service Agency. 
(7) QUALITY ADJUSTMENTS AND DISCOUNTS.— 
The appropriate State committee of the Farm Serv-
ice Agency shall identify the appropriate quality ad-
justment and discount factors to be considered in 
carrying out this subsection, including the average 
local discount or loans made by the Farm Service 
Agency or crop insurance coverage under the Fed-
eral Crop Insurance Act (7 U.S.C. 1501 et seq.). 
(8) ELIGIBLE
PRODUCTION.—The Secretary 
shall carry out this subsection in a fair and equitable 
manner for all eligible production, including the pro-
duction of fruits and vegetables, other specialty 
crops, and field crops. 
(e) ELIGIBILITY FOR ASSISTANCE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the producers on a farm shall not be eli-
gible for assistance under this section with respect
to losses to an insurable commodity or noninsurable 
commodity if the producers on the farm— 
(A) in the case of an insurable commodity, 
did not obtain a policy or plan of insurance for 
the insurable commodity under the Federal 
Crop Insurance Act (7 U.S.C. 1501 et seq.) for 
the crop incurring the losses; 
(B) in the case of a noninsurable com-
modity, did not file the required paperwork, and 
pay the administrative fee by the applicable 
State filing deadline, for the noninsurable com-
modity under section 196 of the Federal Agri-
culture Improvement and Reform Act of 1996 
(7 U.S.C. 7333) for the crop incurring the 
losses; 
(C) had average adjusted gross income (as 
defined by section 1001D(a) of the Food Secu-
rity Act of 1985 (7 U.S.C. 1308–3a(a)), of 
greater than $2,500,000 in 2004; or 
(D) were not in compliance with highly 
erodible land conservation and wetland con-
servation provisions. 
(2) CONTRACT
WAIVER.—The Secretary may 
waive paragraph (1) with respect to the producers