7 CFR §760.2224

1. (a)Stage 2 payments for eligible NAP-covered yield-based crops and units without an approved NAP application for payment will be calculated according to this section.
2. (b)For the purpose of calculating payments under this section:
   1. (1)FSA will adjust the amount of production if necessary to reflect the amount substantiated by the producer's documentation; and
   2. (2)The SDRP liability is equal to the eligible acres, multiplied by the producer's approved yield, multiplied by the average market price, multiplied by the SDRP factor; and
   3. (3)Because NAP service fees and premiums are not calculated individually by crop and unit, the service fee and premium amount used to calculate a payment under this section will be zero if the producer has already received a payment for a NAP-covered crop under Stage 1.
3. (c)To calculate the Stage 2 payment, FSA will:
   1. (1)Determine the calculated loss by:
      1. (i)Converting the quality loss percentage to a decimal and subtracting the amount from 1;
      2. (ii)Multiplying the result of paragraph (c)(1)(i) of this section by the production, and then by the average market price;
      3. (iii)Multiplying the result of paragraph (c)(1)(ii) of this section by the unharvested payment factor, if applicable, and then subtracting the salvage value from the result;
      4. (iv)Multiplying the result of paragraph (c)(1)(iii) of this section by the producer's share; and
      5. (v)Subtracting the result of paragraph (c)(1)(iv) of this section from the SDRP liability;
   2. (2)Determine the potential NAP payment by:
      1. (i)Dividing the SDRP liability by the SDRP factor, and multiplying the result by the producer's coverage level under NAP;
      2. (ii)Multiplying the production by the average market price, and then subtracting that amount from the result of paragraph (c)(2)(i) of this section;
      3. (iii)Multiplying the result of paragraph (c)(2)(ii) of this section by the price election under NAP, and then by the unharvested payment factor;
      4. (iv)Subtracting the salvage value from the result of paragraph (c)(2)(iii) of this section and multiplying the result by the producer's share;
   3. (3)If the calculated loss minus the potential NAP payment is greater than zero, determine the factored gross Stage 2 payment by:
      1. (i)Subtracting the potential NAP payment from the calculated loss, and adding the NAP administrative fees and premiums; and
      2. (ii)Multiplying the result of paragraph (c)(3)(i) of this section by 35 percent to stay within available funding; and
   4. (4)If the amount of the calculated loss minus the potential NAP payment is equal to or less than zero, determine that the payment amount is zero.