(1) IN GENERAL.—Except as provided in para-
graph (2), the Secretary shall make assistance avail-
able under this section in the same manner as pro-
vided under section 815 of the Agriculture, Rural 
Development, Food and Drug Administration and 
Related Agencies Appropriations Act, 2001 (Public 
Law 106–387; 114 Stat. 1549A–55), including 
using the same loss thresholds for quantity and eco-
nomic losses as were used in administering that sec-
tion, except that the payment rate shall be 50 per-
cent of the established price, instead of 65 percent. 
(2) 
LOSS
THRESHOLDS
FOR
QUALITY 
LOSSES.—In the case of a payment for quality loss 
for a crop under subsection (a), the loss thresholds 
for quality loss for the crop shall be determined 
under subsection (d). 
(d) QUALITY LOSSES.— 
(1) IN GENERAL.—Subject to paragraph (3), 
the amount of a payment made to producers on a 
farm for a quality loss for a crop under subsection 
(a) shall be equal to the amount obtained by multi-
plying— 
(A) 65 percent of the payment quantity de-
termined under paragraph (2); by 
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(B) 50 percent of the payment rate deter-
mined under paragraph (3). 
(2) PAYMENT QUANTITY.—For the purpose of 
paragraph (1)(A), the payment quantity for quality 
losses for a crop of a commodity on a farm shall 
equal the lesser of— 
(A) the actual production of the crop af-
fected by a quality loss of the commodity on the 
farm; or 
(B) the quantity of expected production of 
the crop affected by a quality loss of the com-
modity on the farm, using the formula used by 
the Secretary to determine quantity losses for 
the crop of the commodity under subsection (a). 
(3) PAYMENT RATE.—For the purpose of para-
graph (1)(B) and in accordance with paragraphs (5) 
and (6), the payment rate for quality losses for a 
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. 
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(4) ELIGIBILITY.—For producers on a farm to 
be eligible to obtain a payment for a quality loss for 
a crop under subsection (a), the amount obtained by 
multiplying the per unit loss determined under para-
graph (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 by the producer, quality losses 
shall be based on the average local market discounts 
for reduced quality, as determined by the appro-
priate State committee of the Farm Service Agency. 
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(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— 
(A) the average local discounts actually ap-
plied to a crop; and 
(B) the discount schedules applied to loans 
made by the Farm Service Agency or crop in-
surance coverage under the Federal Crop Insur-
ance 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) PAYMENT LIMITATIONS.— 
(1) LIMIT ON AMOUNT OF ASSISTANCE.—As-
sistance provided under this section to a producer 
for losses to a crop, together with the amounts speci-
fied in paragraph (2) applicable to the same crop, 
may not exceed 95 percent of what the value of the 
crop would have been in the absence of the losses, 
as estimated by the Secretary. 
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(2) OTHER PAYMENTS.—In applying the limita-
tion in paragraph (1), the Secretary shall include the 
following: 
(A) Any crop insurance payment made 
under the Federal Crop Insurance Act (7 
U.S.C. 1501 et seq.) or payment under section 
196 of the Federal Agricultural Improvement 
and Reform Act of 1996 (7 U.S.C. 7333) that 
the producer receives for losses to the same 
crop. 
(B) The value of the crop that was not lost 
(if any), as estimated by the Secretary 
(f) 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 
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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 
on a farm if the producers enter into a contract with 
the Secretary under which the producers agree— 
(A) in the case of an insurable commodity, 
to obtain a policy or plan of insurance under 
the Federal Crop Insurance Act (7 U.S.C. 1501 
et seq.) providing additional coverage for the in-
surable commodity for each of the next 2 crops, 
at a coverage level that provides— 
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