H. R. 2419—28 
(2) COMPLIANCE.—The Secretary may issue such rules as 
the Secretary considers necessary to ensure producer compli-
ance with the requirements of paragraph (1). 
(3) MODIFICATION.—At the request of the transferee or 
owner, the Secretary may modify the requirements of this sub-
section if the modifications are consistent with the objectives 
of this subsection, as determined 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 in base acres for which direct payments or 
counter-cyclical payments are made, or on which average 
crop revenue election payments are based, shall result in 
the termination of the direct payments, counter-cyclical 
payments, or average crop revenue election payments to 
the extent the payments are made or based on the base 
acres, unless the transferee or owner of the acreage agrees 
to assume 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 a direct payment, 
counter-cyclical payment, or average crop revenue election pay-
ment dies, becomes incompetent, or is otherwise unable to 
receive the payment, the Secretary shall make the payment, 
in accordance with rules issued by the Secretary. 
(c) REPORTS.— 
(1) ACREAGE REPORTS.—As a condition on the receipt of 
any benefits under this subtitle or subtitle B, the Secretary 
shall require producers on a farm to submit to the Secretary 
annual acreage reports with respect to all cropland on the 
farm. 
(2) PRODUCTION REPORTS.—As a condition on the receipt 
of any benefits under this subtitle or subtitle B, the Secretary 
shall require producers on a farm that receive payments under 
section 1105 to submit to the Secretary annual production 
reports with respect to all covered commodities and peanuts 
produced on the farm. 
(3) PENALTIES.—No penalty with respect to benefits under 
this subtitle or subtitle B shall be assessed against the pro-
ducers on a farm for an inaccurate acreage or production report 
unless the producers on the farm knowingly and willfully fal-
sified the acreage or production report. 
(d) TENANTS AND SHARECROPPERS.—In carrying out this sub-
title, the Secretary shall provide adequate safeguards to protect 
the interests of tenants and sharecroppers. 
(e) SHARING OF PAYMENTS.—The Secretary shall provide for 
the sharing of direct payments, counter-cyclical payments, or aver-
age crop revenue election payments among the producers on a 
farm on a fair and equitable basis. 
SEC. 1107. PLANTING FLEXIBILITY. 
(a) PERMITTED CROPS.—Subject to subsection (b), any com-
modity or crop may be planted on base acres on a farm. 
(b) LIMITATIONS REGARDING CERTAIN COMMODITIES.— 
(1) GENERAL LIMITATION.—The planting of an agricultural 
commodity specified in paragraph (3) shall be prohibited on
H. R. 2419—29 
base acres unless the commodity, if planted, is destroyed before 
harvest. 
(2) TREATMENT
OF
TREES
AND
OTHER
PERENNIALS.—The 
planting of an agricultural commodity specified in paragraph 
(3) that is produced on a tree or other perennial plant shall 
be prohibited on base acres. 
(3) COVERED AGRICULTURAL COMMODITIES.—Paragraphs (1) 
and (2) apply to the following agricultural commodities: 
(A) Fruits. 
(B) Vegetables (other than mung beans and pulse 
crops). 
(C) Wild rice. 
(c) EXCEPTIONS.—Paragraphs (1) and (2) of subsection (b) shall 
not limit the planting of an agricultural commodity specified in 
paragraph (3) of that subsection— 
(1) in any region in which there is a history of double- 
cropping of covered commodities with agricultural commodities 
specified in subsection (b)(3), as determined by the Secretary, 
in which case the double-cropping shall be permitted; 
(2) on a farm that the Secretary determines has a history 
of planting agricultural commodities specified in subsection 
(b)(3) on base acres, except that direct payments and counter- 
cyclical payments shall be reduced by an acre for each acre 
planted to such an agricultural commodity; or 
(3) by the producers on a farm that the Secretary deter-
mines has an established planting history of a specific agricul-
tural commodity specified in subsection (b)(3), except that— 
(A) the quantity planted may not exceed the average 
annual planting history of such agricultural commodity 
by the producers on the farm in the 1991 through 1995 
or 1998 through 2001 crop years (excluding any crop year 
in which no plantings were made), as determined by the 
Secretary; and 
(B) direct payments and counter-cyclical payments 
shall be reduced by an acre for each acre planted to such 
agricultural commodity. 
(d) PLANTING TRANSFERABILITY PILOT PROJECT.— 
(1) PILOT
PROJECT
AUTHORIZED.—Notwithstanding para-
graphs (1) and (2) of subsection (b) and in addition to the 
exceptions provided in subsection (c), the Secretary shall carry 
out a pilot project to permit the planting of cucumbers, green 
peas, lima beans, pumpkins, snap beans, sweet corn, and toma-
toes grown for processing on base acres during each of the 
2009 through 2012 crop years. 
(2) PILOT PROJECT STATES AND ACRES.—The number of base 
acres eligible during each crop year for the pilot project under 
paragraph (1) shall be— 
(A) 9,000 acres in the State of Illinois; 
(B) 9,000 acres in the State of Indiana; 
(C) 1,000 acres in the State of Iowa; 
(D) 9,000 acres in the State of Michigan; 
(E) 34,000 acres in the State of Minnesota; 
(F) 4,000 acres in the State of Ohio; and 
(G) 9,000 acres in the State of Wisconsin. 
(3) CONTRACT
AND
MANAGEMENT
REQUIREMENTS.—To be 
eligible for selection to participate in the pilot project, the 
producers on a farm shall—
H. R. 2419—30 
(A) demonstrate to the Secretary that the producers 
on the farm have entered into a contract to produce a 
crop of a commodity specified in paragraph (1) for proc-
essing; 
(B) agree to produce the crop as part of a program 
of crop rotation on the farm to achieve agronomic and 
pest and disease management benefits; and 
(C) provide evidence of the disposition of the crop. 
(4) TEMPORARY REDUCTION IN BASE ACRES.—The base acres 
on a farm for a crop year shall be reduced by an acre for 
each acre planted under the pilot program. 
(5) DURATION OF REDUCTIONS.—The reduction in the base 
acres of a farm for a crop year under paragraph (4) shall 
expire at the end of the crop year. 
(6) RECALCULATION OF BASE ACRES.— 
(A) IN GENERAL.—If the Secretary recalculates base 
acres for a farm while the farm is included in the pilot 
project, the planting and production of a crop of a com-
modity specified in paragraph (1) on base acres for which 
a temporary reduction was made under this section shall 
be considered to be the same as the planting and production 
of a covered commodity. 
(B) PROHIBITION.—Nothing in this paragraph provides 
authority for the Secretary to recalculate base acres for 
a farm. 
(7) PILOT IMPACT EVALUATION.— 
(A) IN
GENERAL.—The Secretary shall periodically 
evaluate the pilot project conducted under this subsection 
to determine the effects of the pilot project on the supply 
and price of— 
(i) fresh fruits and vegetables; and 
(ii) fruits and vegetables for processing. 
(B) DETERMINATION.—An evaluation under subpara-
graph (A) shall include a determination as to whether— 
(i) producers of fresh fruits and vegetables are 
being negatively impacted; and 
(ii) existing production capacities are being sup-
planted. 
(C) REPORT.—As soon as practicable after conducting 
an evaluation under subparagraph (A), the Secretary shall 
submit to the Committee on Agriculture of the House of 
Representatives and the Committee on Agriculture, Nutri-
tion, and Forestry of the Senate a report that describes 
the results of the evaluation. 
SEC. 1108. SPECIAL RULE FOR LONG GRAIN AND MEDIUM GRAIN RICE. 
(a) CALCULATION METHOD.—Subject to subsections (b) and (c), 
for the purposes of determining the amount of the counter-cyclical 
payments to be paid to the producers on a farm for long grain 
rice and medium grain rice under section 1104, the base acres 
of rice on the farm shall be apportioned using the 4-year average 
of the percentages of acreage planted in the applicable State to 
long grain rice and medium grain rice during the 2003 through 
2006 crop years, as determined by the Secretary. 
(b) PRODUCER ELECTION.—As an alternative to the calculation 
method described in subsection (a), the Secretary shall provide
H. R. 2419—31 
producers on a farm the opportunity to elect to apportion rice 
base acres on the farm using the 4-year average of— 
(1) the percentages of acreage planted on the farm to long 
grain rice and medium grain rice during the 2003 through 
2006 crop years; 
(2) the percentages of any acreage on the farm that the 
producers were prevented from planting to long grain rice and 
medium grain rice during the 2003 through 2006 crop years 
because of drought, flood, other natural disaster, or other condi-
tion beyond the control of the producers, as determined by 
the Secretary; and 
(3) in the case of a crop year for which a producer on 
a farm elected not to plant to long grain and medium grain 
rice during the 2003 through 2006 crop years, the percentages 
of acreage planted in the applicable State to long grain rice 
and medium grain rice, as determined by the Secretary. 
(c) LIMITATION.—In carrying out this section, the Secretary 
shall use the same total base acres, payment acres, and payment 
yields established with respect to rice under sections 1101 and 
1102 of the Farm Security and Rural Investment Act of 2002 
(7 U.S.C. 7911, 7912), as in effect on September 30, 2007, subject 
to any adjustment under section 1101 of this Act. 
SEC. 1109. PERIOD OF EFFECTIVENESS. 
This subtitle shall be effective beginning with the 2008 crop 
year of each covered commodity through the 2012 crop year. 
Subtitle B—Marketing Assistance Loans 
and Loan Deficiency Payments 
SEC. 1201. AVAILABILITY OF NONRECOURSE MARKETING ASSISTANCE 
LOANS FOR LOAN COMMODITIES. 
(a) NONRECOURSE LOANS AVAILABLE.— 
(1) AVAILABILITY.—For each of the 2008 through 2012 crops 
of each loan commodity, the Secretary shall make available 
to producers on a farm nonrecourse marketing assistance loans 
for loan commodities produced on the farm. 
(2) TERMS
AND
CONDITIONS.—The marketing assistance 
loans shall be made under terms and conditions that are pre-
scribed by the Secretary and at the loan rate established under 
section 1202 for the loan commodity. 
(b) ELIGIBLE PRODUCTION.—The producers on a farm shall be 
eligible for a marketing assistance loan under subsection (a) for 
any quantity of a loan commodity produced on the farm. 
(c) COMPLIANCE WITH CONSERVATION AND WETLANDS REQUIRE-
MENTS.—As a condition of the receipt of a marketing 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 
protection requirements under subtitle C of title XII of that Act 
(16 U.S.C. 3821 et seq.) during the term of the loan.
H. R. 2419—32 
SEC. 1202. LOAN RATES FOR NONRECOURSE MARKETING ASSISTANCE 
LOANS. 
(a) 2008 CROP YEAR.—For purposes of the 2008 crop year, 
the loan rate for a marketing assistance loan under section 1201 
for a loan commodity shall be equal to the following: 
(1) In the case of wheat, $2.75 per bushel. 
(2) In the case of corn, $1.95 per bushel. 
(3) In the case of grain sorghum, $1.95 per bushel. 
(4) In the case of barley, $1.85 per bushel. 
(5) In the case of oats, $1.33 per bushel. 
(6) In the case of base quality of upland cotton, $0.52 
per pound. 
(7) In the case of extra long staple cotton, $0.7977 per 
pound. 
(8) In the case of long grain rice, $6.50 per hundredweight. 
(9) In the case of medium grain rice, $6.50 per hundred-
weight. 
(10) In the case of soybeans, $5.00 per bushel. 
(11) In the case of other oilseeds, $9.30 per hundredweight 
for each of the following kinds of oilseeds: 
(A) Sunflower seed. 
(B) Rapeseed. 
(C) Canola. 
(D) Safflower. 
(E) Flaxseed. 
(F) Mustard seed. 
(G) Crambe. 
(H) Sesame seed. 
(I) Other oilseeds designated by the Secretary. 
(12) In the case of dry peas, $6.22 per hundredweight. 
(13) In the case of lentils, $11.72 per hundredweight. 
(14) In the case of small chickpeas, $7.43 per hundred-
weight. 
(15) In the case of graded wool, $1.00 per pound. 
(16) In the case of nongraded wool, $0.40 per pound. 
(17) In the case of mohair, $4.20 per pound. 
(18) In the case of honey, $0.60 per pound. 
(b) 2009 CROP YEAR.—Except as provided in section 1105, for 
purposes of the 2009 crop year, the loan rate for a marketing 
assistance loan under section 1201 for a loan commodity shall 
be equal to the following: 
(1) In the case of wheat, $2.75 per bushel. 
(2) In the case of corn, $1.95 per bushel. 
(3) In the case of grain sorghum, $1.95 per bushel. 
(4) In the case of barley, $1.85 per bushel. 
(5) In the case of oats, $1.33 per bushel. 
(6) In the case of base quality of upland cotton, $0.52 
per pound. 
(7) In the case of extra long staple cotton, $0.7977 per 
pound. 
(8) In the case of long grain rice, $6.50 per hundredweight. 
(9) In the case of medium grain rice, $6.50 per hundred-
weight. 
(10) In the case of soybeans, $5.00 per bushel. 
(11) In the case of other oilseeds, $9.30 per hundredweight 
for each of the following kinds of oilseeds: 
(A) Sunflower seed.
H. R. 2419—33 
(B) Rapeseed. 
(C) Canola. 
(D) Safflower. 
(E) Flaxseed. 
(F) Mustard seed. 
(G) Crambe. 
(H) Sesame seed. 
(I) Other oilseeds designated by the Secretary. 
(12) In the case of dry peas, $5.40 per hundredweight. 
(13) In the case of lentils, $11.28 per hundredweight. 
(14) In the case of small chickpeas, $7.43 per hundred-
weight. 
(15) In the case of large chickpeas, $11.28 per hundred-
weight. 
(16) In the case of graded wool, $1.00 per pound. 
(17) In the case of nongraded wool, $0.40 per pound. 
(18) In the case of mohair, $4.20 per pound. 
(19) In the case of honey, $0.60 per pound. 
(c) 2010 THROUGH 2012 CROP YEARS.—Except as provided in 
section 1105, for purposes of each of the 2010 through 2012 crop 
years, the loan rate for a marketing assistance loan under section 
1201 for a loan commodity shall be equal to the following: 
(1) In the case of wheat, $2.94 per bushel. 
(2) In the case of corn, $1.95 per bushel. 
(3) In the case of grain sorghum, $1.95 per bushel. 
(4) In the case of barley, $1.95 per bushel. 
(5) In the case of oats, $1.39 per bushel. 
(6) In the case of base quality of upland cotton, $0.52 
per pound. 
(7) In the case of extra long staple cotton, $0.7977 per 
pound. 
(8) In the case of long grain rice, $6.50 per hundredweight. 
(9) In the case of medium grain rice, $6.50 per hundred-
weight. 
(10) In the case of soybeans, $5.00 per bushel. 
(11) In the case of other oilseeds, $10.09 per hundredweight 
for each of the following kinds of oilseeds: 
(A) Sunflower seed. 
(B) Rapeseed. 
(C) Canola. 
(D) Safflower. 
(E) Flaxseed. 
(F) Mustard seed. 
(G) Crambe. 
(H) Sesame seed. 
(I) Other oilseeds designated by the Secretary. 
(12) In the case of dry peas, $5.40 per hundredweight. 
(13) In the case of lentils, $11.28 per hundredweight. 
(14) In the case of small chickpeas, $7.43 per hundred-
weight. 
(15) In the case of large chickpeas, $11.28 per hundred-
weight. 
(16) In the case of graded wool, $1.15 per pound. 
(17) In the case of nongraded wool, $0.40 per pound. 
(18) In the case of mohair, $4.20 per pound. 
(19) In the case of honey, $0.69 per pound.
H. R. 2419—34 
(d) SINGLE COUNTY LOAN RATE FOR OTHER OILSEEDS.—The 
Secretary shall establish a single loan rate in each county for 
each kind of other oilseeds described in subsections (a)(11), (b)(11), 
and (c)(11). 
SEC. 1203. TERM OF LOANS. 
(a) TERM OF LOAN.—In the case of each loan commodity, a 
marketing assistance loan under section 1201 shall have a term 
of 9 months beginning on the first day of the first month after 
the month in which the loan is made. 
(b) EXTENSIONS PROHIBITED.—The Secretary may not extend 
the term of a marketing assistance loan for any loan commodity. 
SEC. 1204. REPAYMENT OF LOANS. 
(a) GENERAL RULE.—The Secretary shall permit the producers 
on a farm to repay a marketing assistance loan under section 
1201 for a loan commodity (other than upland cotton, long grain 
rice, medium grain rice, extra long staple cotton, and confectionery 
and each other kind of sunflower seed (other than oil sunflower 
seed)) at a rate that is the lesser of— 
(1) the loan rate established for the commodity under sec-
tion 1202, plus interest (determined in accordance with section 
163 of the Federal Agriculture Improvement and Reform Act 
of 1996 (7 U.S.C. 7283)); 
(2) a rate (as determined by the Secretary) that— 
(A) is calculated based on average market prices for 
the loan commodity during the preceding 30-day period; 
and 
(B) will minimize discrepancies in marketing loan bene-
fits across State boundaries and across county boundaries; 
or 
(3) a rate that the Secretary may develop using alternative 
methods for calculating a repayment rate for a loan commodity 
that the Secretary determines will— 
(A) minimize potential loan forfeitures; 
(B) minimize the accumulation of stocks of the com-
modity by the Federal Government; 
(C) minimize the cost incurred by the Federal Govern-
ment in storing the commodity; 
(D) allow the commodity produced in the United States 
to be marketed freely and competitively, both domestically 
and internationally; and 
(E) minimize discrepancies in marketing loan benefits 
across State boundaries and across county boundaries. 
(b) REPAYMENT RATES FOR UPLAND COTTON, LONG GRAIN RICE, 
AND MEDIUM GRAIN RICE.—The Secretary shall permit producers 
to repay a marketing assistance loan under section 1201 for upland 
cotton, long grain rice, and medium grain rice at a rate that is 
the lesser of— 
(1) the loan rate established for the commodity under sec-
tion 1202, plus interest (determined in accordance with section 
163 of the Federal Agriculture Improvement and Reform Act 
of 1996 (7 U.S.C. 7283)); or 
(2) the prevailing world market price for the commodity, 
as determined and adjusted by the Secretary in accordance 
with this section. 
(c) REPAYMENT RATES
FOR EXTRA LONG STAPLE COTTON.— 
Repayment of a marketing assistance loan for extra long staple
H. R. 2419—35 
cotton shall be at the loan rate established for the commodity 
under section 1202, plus interest (determined in accordance with 
section 163 of the Federal Agriculture Improvement and Reform 
Act of 1996 (7 U.S.C. 7283)). 
(d) PREVAILING WORLD MARKET PRICE.—For purposes of this 
section and section 1207, the Secretary shall prescribe by regula-
tion— 
(1) a formula to determine the prevailing world market 
price for each of upland cotton, long grain rice, and medium 
grain rice; and 
(2) a mechanism by which the Secretary shall announce 
periodically those prevailing world market prices. 
(e) ADJUSTMENT
OF PREVAILING WORLD MARKET PRICE
FOR 
UPLAND COTTON, LONG GRAIN RICE, AND MEDIUM GRAIN RICE.— 
(1) RICE.—The prevailing world market price for long grain 
rice and medium grain rice determined under subsection (d) 
shall be adjusted to United States quality and location. 
(2) COTTON.—The prevailing world market price for upland 
cotton determined under subsection (d)— 
(A) shall be adjusted to United States quality and 
location, with the adjustment to include— 
(i) a reduction equal to any United States Premium 
Factor for upland cotton of a quality higher than Mid-
dling (M) 13⁄32-inch; and 
(ii) the average costs to market the commodity, 
including average transportation costs, as determined 
by the Secretary; and 
(B) may be further adjusted, during the period begin-
ning on the date of enactment of this Act and ending 
on July 31, 2013, if the Secretary determines the adjust-
ment is necessary to— 
(i) minimize potential loan forfeitures; 
(ii) minimize the accumulation of stocks of upland 
cotton by the Federal Government; 
(iii) ensure that upland cotton produced in the 
United States can be marketed freely and competi-
tively, both domestically and internationally; and 
(iv) ensure an appropriate transition between cur-
rent-crop and forward-crop price quotations, except 
that the Secretary may use forward-crop price 
quotations prior to July 31 of a marketing year only 
if— 
(I) there are insufficient current-crop price 
quotations; and 
(II) the forward-crop price quotation is the 
lowest such quotation available. 
(3) GUIDELINES FOR ADDITIONAL ADJUSTMENTS.—In making 
adjustments under this subsection, the Secretary shall establish 
a mechanism for determining and announcing the adjustments 
in order to avoid undue disruption in the United States market. 
(f) REPAYMENT RATES FOR CONFECTIONERY AND OTHER KINDS 
OF SUNFLOWER SEEDS.—The Secretary shall permit the producers 
on a farm to repay a marketing assistance loan under section 
1201 for confectionery and each other kind of sunflower seed (other 
than oil sunflower seed) at a rate that is the lesser of— 
(1) the loan rate established for the commodity under sec-
tion 1202, plus interest (determined in accordance with section
H. R. 2419—36 
163 of the Federal Agriculture Improvement and Reform Act 
of 1996 (7 U.S.C. 7283)); or 
(2) the repayment rate established for oil sunflower seed. 
(g) PAYMENT OF COTTON STORAGE COSTS.— 
(1) 2008 THROUGH
2011
CROP
YEARS.—Effective for each 
of the 2008 through 2011 crop years, the Secretary shall provide 
cotton storage payments in the same manner, and at the same 
rates as the Secretary provided storage payments for the 2006 
crop of cotton, except that the rates shall be reduced by 10 
percent. 
(2) SUBSEQUENT CROP YEARS.—Beginning with the 2012 
crop year, the Secretary shall provide cotton storage payments 
in the same manner, and at the same rates as the Secretary 
provided storage payments for the 2006 crop of cotton, except 
that the rates shall be reduced by 20 percent. 
(h) AUTHORITY TO TEMPORARILY ADJUST REPAYMENT RATES.— 
(1) ADJUSTMENT
AUTHORITY.—In the event of a severe 
disruption to marketing, transportation, or related infrastruc-
ture, the Secretary may modify the repayment rate otherwise 
applicable under this section for marketing assistance loans 
under section 1201 for a loan commodity. 
(2) DURATION.—Any adjustment made under paragraph (1) 
in the repayment rate for marketing assistance loans for a 
loan commodity shall be in effect on a short-term and temporary 
basis, as determined by the Secretary. 
SEC. 1205. LOAN DEFICIENCY PAYMENTS. 
(a) AVAILABILITY OF LOAN DEFICIENCY PAYMENTS.— 
(1) IN GENERAL.—Except as provided in subsection (d), the 
Secretary may make loan deficiency payments available to pro-
ducers on a farm that, although eligible to obtain a marketing 
assistance loan under section 1201 with respect to a loan com-
modity, 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 sec-
tion 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 pro-
ducers 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 com-
modity or commodity referred to in subsection (a)(2) shall be com-
puted 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—
H. R. 2419—37 
(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 pay-
ment 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 pay-
ment. 
SEC. 1206. PAYMENTS IN LIEU OF LOAN DEFICIENCY PAYMENTS FOR 
GRAZED ACREAGE. 
(a) ELIGIBLE PRODUCERS.— 
(1) IN GENERAL.—Effective for the 2008 through 2012 crop 
years, in the case of a producer that would be eligible for 
a loan deficiency payment under section 1205 for wheat, barley, 
or oats, but that elects to use acreage planted to the wheat, 
barley, or oats for the grazing of livestock, the Secretary shall 
make a payment to the producer under this section if the 
producer enters into an agreement with the Secretary to forgo 
any other harvesting of the wheat, barley, or oats on that 
acreage. 
(2) GRAZING OF TRITICALE ACREAGE.—Effective for the 2008 
through 2012 crop years, with respect to a producer on a 
farm that uses acreage planted to triticale for the grazing 
of livestock, the Secretary shall make a payment to the producer 
under this section if the producer enters into an agreement 
with the Secretary to forgo any other harvesting of triticale 
on that acreage. 
(b) PAYMENT AMOUNT.— 
(1) IN GENERAL.—The amount of a payment made under 
this section to a producer on a farm described in subsection 
(a)(1) shall be equal to the amount determined by multiplying— 
(A) the loan deficiency payment rate determined under 
section 1205(c) in effect, as of the date of the agreement, 
for the county in which the farm is located; by 
(B) the payment quantity determined by multiplying—