((a)) ** Availability of loan deficiency payments**

((1)) ** In general** Except as provided in subsection (d), the Secretary may make loan deficiency payments available to producers on a farm that, although eligible to obtain a marketing assistance loan under with respect to a loan commodity, agree to forgo obtaining the loan for the commodity in return for loan deficiency payments under this section.section 8731 of this title

((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 .section 8731 of this title

((B)) ** Loan deficiency payment** Effective for the 2008 through 2012 crop years, the Secretary may make loan deficiency payments available under this section to producers 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 commodity or commodity referred to in subsection (a)(2) shall be computed 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 .

((c)) ** Payment rate**

((1)) ** In general** In the case of a loan commodity, the payment rate shall be the amount by which—

((A)) the loan rate established under for the loan commodity; exceeds

((B)) the rate at which a marketing assistance loan for the loan commodity may be repaid under .

((2)) ** Unshorn pelts** In the case of unshorn pelts, the payment rate shall be the amount by which—

((A)) the loan rate established under for ungraded wool; exceeds

((B)) the rate at which a marketing assistance loan for ungraded wool may be repaid under .

((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 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 .

((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 payment 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 payment.