§ 1479.116 - 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; sugar beets; sunflower-oil; sunflower-seed; tobacco; 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.

(c) The producer must submit verifiable 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, peanuts, sugar beets, and tobacco 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 2003, 2004, and 2005 peanuts, quality adjustments shall be based on the difference between the actual sales price, or other proceeds, received and the price announced by CCC under section 1421.10 of part 1421 of this chapter, 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 2003, 2004, or 2005 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, affected production will be adjusted to zero. Any value received will be considered salvage.

(k) Quality adjustments for sugar beets shall be based on sugar content. The actual production for the producer shall be adjusted upward or downward to account for sugar content as determined by CCC.

(l) Quality adjustments for tobacco in crops years 2003, 2004, or 2005 shall be based on the difference between the revenue received and the support price except that the market price may be used instead of the support price where there is no support price, or where market prices normally exceed the support price.

(m) Any quantity of the crop determined to be salvage will not be considered production. Salvage values shall be factored by 0.60 times the producer's share. This amount will be deducted from the disaster payment.

(n) Quantity adjustments for diminished quality under this section will not be applied to crops that are, under § 1479.117, value loss crops.

(o) Quantity adjustments for diminished quality shall also not apply under this section to: honey, maple sap, turf-grass 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.