---
kind: "section"
citation: "7 U.S.C. § 7935"
title: "7"
title_heading: "Agriculture"
number: "7935"
heading: "Loan deficiency payments"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/7/7935"
units:
  - "Chapter 106 — Commodity Programs"
  - "Subchapter II — Marketing Assistance Loans and Loan Deficiency Payments"
---

# §7935. Loan deficiency payments

- (a) **Availability of loan deficiency payments—**
  - (1) **In general—** Except as provided in [subsection (d)](#d), the [Secretary](/usc/7/7901.md?p=13) may make loan deficiency payments available to [producers](/usc/7/7901.md?p=12) on a farm that, although eligible to obtain a marketing assistance loan under [section 7931 of this title](/usc/7/7931.md) with respect to a [loan commodity](/usc/7/7901.md?p=8), agree to forgo obtaining the loan for the commodity in return for loan deficiency payments under this section.
  - (2) **Unshorn pelts, hay, and silage—** Nongraded wool in the form of unshorn pelts and hay and silage derived from a [loan commodity](/usc/7/7901.md?p=8) are not eligible for a marketing assistance loan under [section 7931 of this title](/usc/7/7931.md). However, effective for the 2002 through 2007 crop years, the [Secretary](/usc/7/7901.md?p=13) may make loan deficiency payments available under this section to [producers](/usc/7/7901.md?p=12) on a farm that produce unshorn pelts or hay and silage derived from a [loan commodity](/usc/7/7901.md?p=8).
- (b) **Computation—** A loan deficiency payment for a [loan commodity](/usc/7/7901.md?p=8) or commodity referred to in [subsection (a)(2)](#a-2) shall be computed by multiplying—
  - (1) the payment rate determined under [subsection (c)](#c) for the commodity; by
  - (2) the quantity of the commodity produced by the eligible [producers](/usc/7/7901.md?p=12), excluding any quantity for which the [producers](/usc/7/7901.md?p=12) obtain a marketing assistance loan under [section 7931 of this title](/usc/7/7931.md).
- (c) **Payment rate—**
  - (1) **In general—** In the case of a [loan commodity](/usc/7/7901.md?p=8), the payment rate shall be the amount by which—
    - (A) the loan rate established under [section 7932 of this title](/usc/7/7932.md) for the [loan commodity](/usc/7/7901.md?p=8); exceeds
    - (B) the rate at which a marketing assistance loan for the [loan commodity](/usc/7/7901.md?p=8) may be repaid under [section 7934 of this title](/usc/7/7934.md).
  - (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 7932 of this title](/usc/7/7932.md) for ungraded wool; exceeds
    - (B) the rate at which a marketing assistance loan for ungraded wool may be repaid under [section 7934 of this title](/usc/7/7934.md).
  - (3) **Hay and silage—** In the case of hay or silage derived from a [loan commodity](/usc/7/7901.md?p=8), the payment rate shall be the amount by which—
    - (A) the loan rate established under [section 7932 of this title](/usc/7/7932.md) for the [loan commodity](/usc/7/7901.md?p=8) from which the hay or silage is derived; exceeds
    - (B) the rate at which a marketing assistance loan for the [loan commodity](/usc/7/7901.md?p=8) may be repaid under [section 7934 of this title](/usc/7/7934.md).
- (d) **Exception for extra long staple cotton—** This section shall not apply with respect to [extra long staple cotton](/usc/7/7901.md?p=7).
- (e) **Effective date for payment rate determination—** The [Secretary](/usc/7/7901.md?p=13) shall determine the amount of the loan deficiency payment to be made under this section to the [producers](/usc/7/7901.md?p=12) on a farm with respect to a quantity of a [loan commodity](/usc/7/7901.md?p=8) or commodity referred to in [subsection (a)(2)](#a-2) using the payment rate in effect under [subsection (c)](#c) as of the date the [producers](/usc/7/7901.md?p=12) request the payment.
- (f) **Special loan deficiency payment rules—**
  - (1) **First-time loan commodities—** For the 2002 crop of wool, mohair, honey, dry peas, lentils and small chickpeas, in the case of [producers](/usc/7/7901.md?p=12) of such a crop that would be eligible for a loan deficiency payment under this section except for the fact that the [producers](/usc/7/7901.md?p=12) lost beneficial interest in the crop prior to the date of publication of the regulations implementing this section, the [producers](/usc/7/7901.md?p=12) shall be eligible for a loan deficiency payment as of the date [producers](/usc/7/7901.md?p=12) marketed or otherwise lost beneficial interest in the crop, as determined by the [Secretary](/usc/7/7901.md?p=13).
  - (2) **Omitted—**

## Source credit

(Pub. L. 107–171, title I, § 1205, May 13, 2002, 116 Stat. 158.)

## Notes

### Editorial Notes

### Codification

Section is comprised of section 1205 of Pub. L. 107–171. Subsec. (f)(2) of section 1205 of Pub. L. 107–171 amended section 7235 of this title.