TITLE 7 - AGRICULTURE

SUBTITLE B - REGULATIONS OF THE DEPARTMENT OF AGRICULTURE

CHAPTER XIV - COMMODITY CREDIT CORPORATION, DEPARTMENT OF AGRICULTURE

SUBCHAPTER B - LOANS, PURCHASES, AND OTHER OPERATIONS

PART 1480 - 2001 AND 2002 - CROP DISASTER PROGRAM

1480.17 - Quantity adjustments for diminished quality for certain crops.

  (a) For the crops identified in paragraph (b) of this section, subject to this part, the quantity of production of crops of the producer shall be adjusted to reflect diminished quality resulting from the disaster.

  (b) Crops eligible for quality adjustments to production are limited to: (1) Barley; canola; corn; cotton; crambe, flaxseed; grain sorghum; mustard seed; oats; peanuts; rapeseed; rice; safflower; soybeans; sunflower-oil; sunflower-seed; wheat; and (2) Crops with multiple market uses such as fresh, processed or juice, as supported by NASS data or other data as CCC determines acceptable.

  (3) Single market crops if the COC determines there is sufficient data to establish 5 quality loss levels.

  (c) The producer must submit documentation for determining the grade and other discount factors that were applied to the crop.

  (d) Quality adjustments will be applied to crops experiencing at least a 20 percent loss after production has been adjusted to standard moisture, when applicable.

  (e) For all crops listed in paragraph (b)(1) of this section, except for cotton, if a quality adjustment has been made for multi-peril crop insurance purposes, an additional adjustment will not be made.

  (f) Quality adjustments for crops, other than cotton and peanuts listed in paragraph (b)(1) of this section may be made by applying an adjustment factor based on dividing the CCC marketing assistance loan rate applicable to the crop and producer determined according to part 1421 of this chapter by the unadjusted county marketing assistance loan rate for the crop. For crops that receive a grade of sample and are marketed through normal channels, production will be adjusted as determined by CCC. County committees may, with state committee concurrence, establish county average quality adjustment factors.

  (g) Quality adjustments for cotton shall be based on the difference between: (1) The loan rate applicable to the crop and producer determined according to part 1427 of this chapter; and (2) The adjusted county loan rate. The adjusted county rate is the county loan rate adjusted for the 5-year county average historical quality premium or discount, as determined by CCC.

  (h) For 2001 quota and non-quota peanuts and 2002 peanuts, quality adjustments shall be based on the difference between the actual sales price, or other proceeds, received and the National average support price by type of peanut for the applicable crop year.

  (i) Quality adjustments for crops with multiple market uses such as fresh, processed and juice, shall be applied based on the difference between the producer's historical marketing percentage of each market use compared to the actual percentage for the 2001 or 2002 crop year.

These quality adjustments are built into the production loss determination. Production determinations from Federal crop insurance will not be used.

  (j) Except as determined by the Deputy Administrator, quality adjustments for aflatoxin shall be based on the aflatoxin level. The producer must provide the county committee with proof of a price reduction because of aflatoxin. The aflatoxin level must be 20 parts per billion or more before a quality adjustment will be made. The quality adjustment factor applied to affected production is .50 if the production is marketable. If the production is unmarketable due to aflatoxin levels of at least 20 parts per billion, production will be adjusted to zero. Any value received will be considered salvage.

  (k) Any quantity of the crop determined to be salvage will not be considered production. Salvage values shall be factored by 0.45 times the producer's share. This amount will be deducted from the disaster payment.

  (l) Quantity adjustments for diminished quality under this section will not be applied to crops that are, under 1480.18, value loss crops.

  (m) Quantity adjustments for diminished quality shall also not apply under this section to: honey, maple sap, turfgrass sod, crops marketed for a use other than an intended use for which there is not an established county price or yield, or any other crop that the Deputy Administrator deems it appropriate to exclude.

[68 FR 37943, June 26, 2003; 69 FR 250, Jan. 5, 2004]